The United Kingdom has established a role as a global fintech leader and the government is committed to continuing this leadership, according to Harriett Baldwin, MP at HM Treasury.
Baldwin announced several new steps the country is taking in this direction at Innovate Finance’s Global Summit at Guildhall in London. The U.K. leads in a variety of fintech specialties, such as alternative lending, e-commerce, digital currencies and others.
Baldwin applauded the line-up of summit speakers, including digital currencies, blockchain, alternative finance and companies focused on expanding banking to the world’s 2 million unbanked.
“What is clear is that there is huge excitement about the potential for fintech to make profound changes to the way we go about our financial affairs,” she said, according to prepared remarks. “It is right that the U.K. continues to be at the very heart of that.”
Fintech generated £6.6 billion in 2015 revenue with 60,000 employees, she noted. The number of U.K. fintech employees surpasses that of Australia, Hong Kong and Singapore combined.
Baldwin announced measures to ensure the U.K. continues its fintech leadership.
The U.K. will create an industry-led fintech panel that will work with Innovate Finance and Tech City UK and other fintech representatives. The panel will oversee strategy and will have its own support function, which includes monitoring initiatives. The panel will improve the time to market for industry and government activities.
A key initiative is an open banking standard that will allow innovators to provide value-added consumer services. The Open Banking Working Group is working to determine the next steps in this initiative.
Baldwin cited overwhelming support for a pensions dashboard to allow people to access pension data easily through the Financial Advice Market Review. This effort could help people better understand what actions they can take to ensure a comfortable retirement income.
That is why I am delighted to act as ministerial champion to support industry in designing and delivering the dashboard, and I hope that we can collaborate to bring this technology to consumers.
Government must play a role to ensure the correct framework by which customers’ data can be shared safely, she said.
The government has committed to ensuring exceptional digital technology talent through the U.K. visa system.
The Tech Nation Visa Scheme improved in October of 2015 to include additional qualifying criteria for digital experts following feedback from the digital community. This will enable a wide range of fintech specialists to receive visas to work in the U.K.
The EY report noted the U.K. has a leading regulatory system in the Financial Conduct Authority (FCA). Fintechs have lauded the FCA’s work in helping them navigate regulatory issues through Project Innovate. Regulators worldwide are replicating the Innovate Hub model.
The FCA is exploring ways to support adoption of new technologies to facilitate the delivery of regulatory requirements. The government has created a “regulatory sandbox” to enable businesses a “safe space” to test products and services. The sandbox will begin accepting applications May 9.
The government recognizes fintech startups can find other aspects of the regulatory landscape challenging, like finding professional services. The government will work to address this need.
Industry will create an information hub to make it easier to for fintechs to navigate the wide range of service providers.
Recognizing professional services can be costly, the government will partner with industry to begin a program to bring professional service providers and fintechs together. This could emulate existing programs such as EY’s fintech talent program that provides staff to fintechs on a pro-bono basis.
The government will make as many services available to firms as possible.
The government also wants to help fintech firms reach every part of the U.K. and overseas.
Baldwin said she is interested in continuing the growth of regional fintech hubs throughout the country and is open to ideas on what the government can do to encourage this. This could include links between industry and academia, research hubs, or enlisting envoys to promote fintechs in the regions.
So I am today asking you, the industry, to share your experience and your ideas for how we can best ensure continued and sustainable growth of fintechs all across the U.K.
Under an initiative called “fintech bridges,” HM Treasury will partner with UK Trade and Investment to create “fintech bridges” with priority markets. The bridges will help fintech firms grow globally, and will attract international fintech firms to the U.K.
The new program expands on the FCA’s Project Innovate that fosters competition in consumers’ interests by connecting U.K. businesses with the proper regulators. The program also helps non-UK. innovators enter the U.K. market.
The new initiatives continue a pattern the U.K. has followed in recent years to advance fintech. The U.K. Treasury issued a public call in November 2014, seeking inputs for ways to effectively regulate digital currency, CCN reported.
In March 2015, a 28-page document was released by HM Treasury as a direct result of the public call, detailing its plans to foster an environment for legitimate users of digital currency while ensuring that criminal activities making use of digital currencies are restricted to a minimum. Furthermore, the government noted the promise that came with “distributed ledger technology.”
The government also increased funding for research into digital currency technology by £10 million.
Featured image from Shutterstock and Wikimedia.