A new report published by the City of London Corporation and Innovate Finance in partnership with EY has recommended urgent action be taken if the UK is to ensure the continued success of the fintech sector.
The report, named, UK FinTech Report: Moving Mountains and Moving Mainstream provides six key considerations for government to support the sector.
The UK fintech sector, heralded by the report as one of the best in the world, generated £11bn in revenue in 2019. The sector accounted for 8% of total financial services output last year. In addition, the sector attracted £3.6bn in investment.
The report also highlights that traditional finance firms invested £95bn in digital transformation initiatives in 2019.
The report coincides with the launch of HM Treasury’s review of the UK fintech sector to be chaired by Ron Kalifa, chairman of Network International and NED at the Bank of England. The organisations behind the report, the City of London Corporation and Innovate Finance will form the secretariat for the HM Treasury review.
Key considerations for UK fintech sector
The report delivers six key considerations for the continued success and growth of the UK fintech sector. It references other comparable international markets in building its recommendations.
The considerations include providing the sector with scale-up support, improved access to talent, support for regional fintech clusters, improved digital infrastructure and the support and awareness required to increase demand.
The report also highlights the need to consider how the UK establishes itself as an attractive destination for fintechs and how the sector can support fintechs in expanding overseas.
Opportunity to build on success
Speaking to the press, Innovate Finance CEO, Charlotte Crosswell said, “We have the opportunity to build on our success, and this report gives us valuable insights into various markets around the world who are going through similar change. We can learn from them, take stock of the best we have and ensure that we are using all the tools we have at our disposal to drive excellence and innovation in our own market.”
Chair of HM Revenue’s independent review, Ron Kalifa said, “Tech based solutions in financial services have experienced wide scale adoption in the UK. For this activity to continue to translate into economic growth, we need to ensure our start-ups can scale up, expand internationally and level up the whole country.”
Economic recovery from COVID-19
“Throughout the current pandemic we have seen an acceleration in demand for digital transformation across financial services”, says Catherine McGuinness, Policy Chair at the City of London Corporation.
“The development of FinTech in the UK has been a huge success story. So as we look to support the recovery of the global economy, the time is now right for us to focus on how we can continue to provide the solutions that businesses and consumers require.”
You can access the fintech report at the City of London Corporation website.