In 2020, the UK Government commissioned an Independent Fintech Strategic Review chaired by industry leader Ron Kalifa. The Review has concluded and was published today.
In summary, the Review's recommendations are captured in a five point plan, focussing on:
1. Policy and regulation:
- Establishing a "Digital Economy Taskforce"
- Implementing a "scalebox" to support scaling innovative technology
- Ensuring fintech is integral to international trade policy
- Delivering a relevant regulatory framework
- Retraining and upskilling adults
- A new visa stream for access to global talent
- Supporting the development of home grown fintech talent
- Expanding tax breaks (including R&D, EIS and VCTs
- A "Fintech Growth Fund" of £1bn institutional capital
- Improve the listing environment for those firms looking to IPO
- Delivering an international action plan for fintech
- Launching a "Fintech Credential Portfolio"
- Driving international collaboration, such as with an International Fintech Taskforce
5. National connectivity:
- Nurturing high growth potential of the top 10 fintech clusters
- National co-ordination through the Centre for Finance, Innovation & Technology
- Accelerating investment in fintech clusters
Our initial thoughts
We welcome the comprehensive nature of the Review. These five areas have been long discussed within the industry and between industry and policymakers, but their relative obviousness does not denude their importance and relevance.
It is good to see that the recommendations collectively focus on driving collaboration to accelerate the industry momentum of previous years. It will truly require a collective national effort - including fintechs, investors, professional advisers, academia, government and regulators - to drive the combination of:
- a proportionate and digitally-relevant regulatory environment
- investor-friendly policies, to support those who take risks and who innovate
- access to funding, especially to support scaling businesses
- targeted support for skills and talent, drawing on home-grown skills and an ability for firms to hire the best international talent
- regional collaboration and co-ordination, to make this truly a national programme
We are also pleased that it recognises the global nature of the fintech industry. International connectivity is essential for both UK fintechs to expand overseas and for inward investment.
Risks ahead? It is essential that those driving the implementation forward focus on action and not just words, on delivery rather than PR. It is also vital that this programme is delivered across the UK as a whole, and involves a broad range of viewpoints from across the fintech ecosystem. Also, the aim really should be to deliver against the full range of recommendations rather than cherry-picking - all focus areas are important and necessary.
It feels like a generational opportunity to ramp up the sector. Pulling together, let's make it happen.
We will follow up with more analysis on the Review and its application in due course.
Martin is Head of Fintech at Burges Salmon. He spent over seven years working in senior positions in global fintech businesses and was involved in various pan-industry initiatives to support the development of the sector as a whole. This included specific work in relation to peer-to-peer and crowdfunding, international trade and tax policy, as well as general industry support (including as a founding member of the Fintech Delivery Panel).
Link to the review here: The UK Strategic Fintech Review (the Kalifa Review)
This is a pivotal moment for the UK. There are significant opportunities offered by fintech ... The Kalifa review offers a roadmap to achieving this. Catherine McGuinness, City of London Corporation