The continuing impact of technology and the unprecedented changes it has had on our lives has only been accelerated by the Covid-19 pandemic. Over the past year, technology has been critical to our lifestyles. It has kept us connected with family and friends, enabled us to work from home, and to carry out those once routine tasks ranging from banking to food shopping.
It is only natural that technology will also play a vital role in driving the post-pandemic recovery across all sectors of the economy, including financial services.
Last Friday, the Government underlined the valuable role of our financial technology industry by publishing the Kalifa Review of UK Fintech, with the City of London Corporation and Innovate Finance as its secretariat. The Review sets out a plan for the UK to retain its global leadership in Fintech by assisting our firms in the sector to scale up, access the talent and finance they need, and deliver better outcomes for people and businesses.
Even before the pandemic, the UK had already made significant progress in establishing a thriving Fintech ecosystem, encompassing both emerging start-ups and our more traditional financial institutions. The depth and breadth of our expertise in both finance and technology, coupled by our progressive world leading regulation and our ability to nurture innovation has established the UK as a global leader in Fintech. Indeed, the UK holds 10 per cent of the global market share in Fintech and the sector contributes more than £11bn a year to the UK economy.
As for the capital, Fintech is a key part of the London tech ecosystem, attracting 91 per cent of the funding invested in UK and receiving $3.7bn across 310 deals.
However, we need to do more to capitalise on this success and use London as a launchpad for national growth. As the Kalifa Review shows, there is vast potential for Fintech which goes well beyond the capital. There are successful Fintech hubs across the UK in cities such as Birmingham, Manchester, Edinburgh and Belfast, so it vital we all collaborate together closely.
The Kalifa Review finds that we are entering a crucial moment in the development of Fintech. Recommendations include introducing a new visa stream to enhance access to global talent for Fintech scaleups, creating a £1bn-pound Fintech ‘growth fund’ and amending UK listings rules.
The sector has a vital role in driving economic growth and supporting a strong sustainable recovery. We need to ensure that our entrepreneurs can scale up, expand internationally and deliver on Fintech’s potential to bring prosperity and inclusion to all parts of the UK.
This Review marks an important step in the Government’s plan to make the UK the most open and dynamic place in the world to operate a financial services business.
If the UK takes the right steps now, we can build upon our existing success in this market and continue to attract investment into the sector. We urge the Government to support the Kalifa Review’s recommendations and follow its roadmap to turbocharging this vibrant sector.