A body representing some of the UK’s leading fintech bosses has attacked the government for inaction in closing a significant growth funding gap in the sector, in a new report released today.
Fintech Founders, whose steering committee features founders of leading fintechs LendInvest, Thought machine, and ComplyAdvantage, said the industry still faced a major dearth of funding which would cripple its growth ambitions if left unaddressed.
The calls come as the industry prepares to mark a year on from the Kalifa Review of Fintech, which identified a £2bn growth capital gap and laid out a series of recommendations to close it. Fintech Founders say the recommendations have not been acted on.
“The UK currently has a strong international position when it comes to fintech, but we risk throwing this away,” said Christian Faes, co-founder of fintech LendInvest and Chair of Fintech Founders.
“If the Government is serious about fintech it needs to act to make sure that UK fintech companies can access the funds they need to grow and compete. The Kalifa Review was promising but a year on and hardly anything has actually been done by the UK Government.”
Faes said that government needs to stop “talking the talk and start walking the walk” if the UK is to retain its status as a global hub for financial innovation.
The group of founders laid out a series of recommendations to government in a report released today, including extending existing tax incentives to companies and unlocking more sources of long-term capital.
While the group said there is no “silver bullet” to closing the funding gap, it recommended changing existing investment rules around pension funds as one solution.
Government closed a consultation over the loosening of the pension charge cap last month which could potentially unlock pension funding to flow into fast growth tech firms via venture capital and private equity funds.
Ron Kalifa, who authored the fintech review last year, told City A.M. last month that loosening the cap would be crucial to unlocking potentially billions of pounds of capital to flow into the UK fintech sector.
The calls from Fintech Founders come after fintech industry body Innovate Finance convened a letter from the industry this week praising the progress made on the review but urging government to accelerate its efforts.