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Treasury kicks off review to boost UK fintech

The government yesterday turned the ignition on a review into UK fintech to support the ongoing success of the sector.

22nd Jul 2020
Staff Writer AccountingWEB
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NatWest and FreeAgent boost fintech partnership
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NatWest and FreeAgent boost fintech partnership

On Monday (20 July) HM Treasury launched a review of the UK fintech industry to fulfil a Budget commitment from Chancellor Rishi Sunak to accelerate growth in the sector. Interim recommendations will likely be available by the end of 2020, with the full review expected to report back to HM Treasury at the start of 2021.

The review, announced by the economic secretary to the treasury and city minister John Glen, will be chaired by former Worldpay CEO Ron Kalifa, with Innovate Finance and the City of London Corporation as secretariats. 

According to Kalifa, the fintech review will “establish priority areas for industry, policymakers, and regulators to explore in order to support the ongoing success of the UK fintech sector”.

Glen and Kalifa met with both secretariats on Monday for an inaugural governance board meeting that outlined five key areas for the review: 

  • Skills and talent
  • Capital funding and investment
  • National connectivity and regional fintech hubs
  • Policy and regulation for the sector
  • Global international attractiveness and competitiveness.

“In the coming months we will be inviting our members to take part in webinars and roundtables on the review so that you can provide your input and feedback,” said Innovate Finance CEO Charlotte Crosswell.

Why fintech?

Currently, UK fintech industry contributes an estimated £7bn to the UK economy and employs around 60,000 people. The sector attracted £4.1bn in venture capital in 2019 and has grown nearly 70% since 2015. 

According to Glen, the fintech sector’s economic clout makes it “vital in ensuring both that the country bounces back post-Coronavirus, and continues to be at the forefront of financial innovation now we have left the EU”.

According to Crosswell, fintech has reached a crucial point in its development. “In recent weeks we have seen successful partnerships between fintech firms and larger institutions. UK fintech companies are now entering a phase of maturity that requires action to ensure that entrepreneurs [can] scale their businesses in their home market [and] export their products and services internationally.”

In other news yesterday, HMRC released its tax administration plan for the next decade, including a wider rollout for MTD. Given technology's tendency to cross boundaries between different functions, the links between open banking, online payments and tax administration may start to take shape as these two initiatives unfold.

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