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The PM’s To-Do List: How Liz Truss Can Continue The UK’s Fintech Success Story

Liz Truss became the UK’s new Prime Minister this week – the country’s 56th PM and its third female leader. So what will make Ms Truss’s life easier as she takes on leading the UK through one of the worst economic crisis in a generation? Roxana Mohammadian-Molina offers useful additions for the PM’s ‘to-do list’.

The UK is a dominant fintech force. So how can Liz Truss support an industry that generates £11billion in annual revenue and employs around 76,500 people in the UK?

Roxana Mohammadian-Molina is a fintech investor and chief strategy officer at London-based digital lending platform Blend. She is also a contributor to the Oxford Fintech Programme, and guest lecturer in Computational Market Structure for Fintech & the Digital Economy. 

Here she shares key items for the new Prime Minister to focus on.

Roxana Mohammadian-Molina
Roxana Mohammadian-Molina, CSO at Blend Network

Earlier this week Liz Truss became the third ever female Prime Minister in UK history to take office. But as the dust settles, the new PM is taking charge of a country facing huge economic challenges, with an inbox that may well leave her wondering why on earth she wanted the job in the first place.

From 10 per cent+ inflation and the worst cost-of-living crisis in a generation to public services falling apart; from international geopolitical headwinds to staffing and funding problems in social care, schools, universities and local government, Ms Truss will have to plug major holes with a sluggish economy. Let’s face it, she has a nightmare to-do list none of us would envy.

And while fintech may not be the item at the top of her agenda, I am confident Ms Truss will be an ally to our £11billion fintech industry. Back in 2018, when Ms Truss was Chief Secretary to the Treasury, she tweeted: “We should welcome cryptocurrencies in a way that doesn’t constrain their potential” and has been described as ‘a friend to fintech and crypto’.

Last year, she tweeted in response to Ron Kalifa’s Fintech Review: “We will work with the fintech sector to seize trade opportunities and open up markets around the world.” So, as our new PM hits the ground running and looks forward to several busy few months, I thought I would make it easy for her on the fintech front by writing down the three key items on her to-do list.

#1: Talent

First up on Ms Truss’ fintech to-do list is to address the pressing challenge of UK tech talent shortages. Solving this issue will require a blend of smart, forward-thinking policies to increase both homegrown talent – by investing in digital education to improve the domestic talent pipeline – and imported talent – by making it easier for foreign workers to work in the UK through schemes such as the Scaleup visa.

One example of a successful initiative designed to boost the domestic talent pipeline is Innovate Finance’s FinTech For Schools experience that aims to promote awareness of fintech in young people so that they may consider fintech as a career choice or seek to gain work experiences and insights. On the imported talent front, the new Scale-Up visa goes some way to reducing the blockers we have experienced since Brexit but the gap between existing talent and demand is still immeasurable.

However, more is needed, and I am confident the new PM and her team will appreciate the urgency of tackling the talent shortage. The reality is that for the UK to keep and grow its place as the fintech capital of the world on the international innovation stage, it is going to take much more than this.

#2: Fintech free zones to support levelling up

I strongly believe that fintech is a key tool in the government’s toolkit to turbocharge its levelling up efforts by enabling the creation of job, investment, and innovation superhubs across the UK regions. We would be forgiven for thinking that London is the UK’s only fintech hub, but the reality is that there are at least 25 clusters of fintech activity across the UK.

These clusters are at various stages of growth and development with different focus areas and specialisms such as lending and payments. From established clusters, such as Birmingham and Edinburgh, specialising in banking and payments, to emerging clusters such as Northern Ireland and Bristol specialising in wealthtech, AI and regtech.

Overall, fintech employs a workforce of almost 80,000 in the UK, over 50 per cent of which are based in clusters outside London and in the regions. To further support the geographical diversification of our fintech industry, fuel the creation of more local jobs directly and indirectly linked to fintech and power innovation, I urge the new PM and her team to consider fintech investment free zones with liberal and attractive operating conditions to attract more foreign direct investment (FDI) in fintech.

As board member of the Saudi British Joint Business Council and member of the Saudi UK Tech Hub, I have had the opportunity to witness first-hand the interest from foreign capital to invest in our world leading fintech industry and the endless appetite for partnering with our innovative high-growth fintechs to access British expertise. Strategic fintech investment free zones would provide an opportunity for our high-growth fintechs to scale nationally and internationally and to create jobs.

#3: Support for university spinouts

We don’t need to look far to see that many world-changing ideas spin out of research conducted at universities. British universities have a particularly strong reputation for partnering with the industry to conduct innovative research that eventually leads to innovation and new product development. According to the University Spinout report 2021, the total value of spinouts from 10 British universities over the past two decades has exceeded £18billion.

On average these 10 institutions, including University of Oxford, University of Cambridge, Imperial College London and the University of Southampton, have helped their spinouts turn every £1 of capital raised into £2.30 of value. Furthermore, we know that university spinouts are twice as likely to succeed when funded by UK funding agencies.

According to research by British Business Bank, spinouts with British Business Bank and Innovate UK funding exhibited stronger employment growth supported a larger number of jobs. The fintech industry in particular is full of successful spinouts such as Onfido, an identity verification firm that was created by three Oxford university students fresh out of university in 2012 and that has now raised $200million in total, with its last round including Microsoft, Salesforce and SBI among the investors.

Hence, the third item on Ms Truss’ fintech to-do list is to allocate more public investment to back innovative fintech businesses, which in turn will support local and regional innovation hubs.

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