THE UK government is set to launch its first-ever fintech strategy, which will aim to make it easier for firms in the sector to comply with regulations and to partner with banks.
Reports earlier this week indicated that Chancellor Philip Hammond is planning a raft of changes to the government’s approach to fintech, including a new taskforce to look at cryptocurrencies.
The strategy, which is set to be announced at the government’s second International Fintech Conference on Thursday, will pilot a scheme called ‘robo-regulation’ that will build software to ensure fintech start-ups can automatically follow regulations.
The strategy will also include three fintech regional envoys to “ensure the benefits of fintech are felt across the UK” and a set of industry standards which will enable fintech firms to partner with existing banks more easily.
In order to support the growth of small fintech firms, industry and government will work together to create ‘shared platforms’ to help remove the barriers they face, the announcement said.
And a new programme, developed by the government’s fintech delivery panel, will be created to help fintech firms to take advantage of the UK’s diverse workforce.
“From the Square Mile in London to Scotland’s Silicon Glen, the UK leads the world in harnessing the power of fintech as we create an economy fit for the future,” said Hammond. “I am committed to helping the sector grow and flourish, and our ambitious sector strategy sets out how we will ensure the UK remains at the cutting edge of the digital revolution.”
“We are determined to make Britain the best place to start and grow a digital business while giving consumers more choice when it comes to managing their money,” said Matt Hancock, digital and culture secretary. “This new nationwide fintech programme will help startups right across the country flourish in the future and spread the benefits of this pioneering technology.”
The UK fintech sector contributes £6.6bn annually to the UK economy, and employs over 60,000 people across 1,600 companies, according to the Treasury. In the first three quarters of this year the sector received a record £2.1bn investment.
Georg Ludviksson, CEO & Founder at Meniga:
“London has traditionally been leading the fintech space within the EU and even world-wide which is why numerous globally ambitious fintech companies like ours have chosen London as their base. In the wake of Brexit, however, many fear that funding and talent will increasingly leave the island. Throughout the Brexit process, and perhaps long after, the UK must continue to reassure fintechs that London will remain the centre of gravity for financial innovation.
My company is an innovation partner to banks, which are increasingly working with fintechs to deploy innovative solutions faster than ever before. The UK has already taken the early lead in Europe in promoting open data, through the Open Banking initiative. Now, I am very pleased to see an outline of a plan from the British government to further strengthen the relationship between banks and fintechs which I believe solidifies London as a global hub for fintech.
Once outside the single market, the UK will become more reliant on collaboration with international markets and unilateral deals are better started sooner than later. We don’t believe this is limited to any one market, for instance Tel Aviv is becoming a hub for cryptocurrencies, while Singapore has been dubbed the Silicon Valley of the East. The fintech sector needs to bring together industry leaders, banking partners, and regulators to facilitate the right conditions for innovation to happen. One area beneficially positioned for take-off in the UK is a host of new retail banking services built on top of open data. If the UK’s financial sector manages to be the launch pad for this new generation of banking, the UK will keep its position as a fintech powerhouse.”