Innovate Finance publishes fintech agenda for new prime minister

Fintech industry body Innovate Finance has highlighted six areas for Prime Minister Liz Truss to prioritize in a bid to “cement the UK as the world’s leading financial centre”.

At the top of the agenda is leveraging fintech to address the cost of living crisis. Innovate Finance highlighted the many demographics fintech can reach and its ability to “diagnose financial vulnerability through data analytics”.

The trade body called on the government to create a wholesale fund for alternative lenders (perhaps building on existing British Business Bank (BBB) ​​arrangements), which could unlock lending capacity to small firms.

It explained that in 2020, despite the Bank of England introducing a Term Funding Scheme which enabled large banks to access cheaper wholesale funding, alternative lenders were exempt. They also have limited access to BBB’s recovery loan scheme.

“In the coming months, we as a society will face new challenges, and fintech has a decisive role in supporting the consumer. Equally, it is vital that we act now to encourage and harness even more innovation across the sector if we are to cement the UK as the world’s leading financial centre, the statement said.

Read more: Innovate Finance chief says regulatory reform will help build fintech prowess

The trade body also called on the government to promote a proactive regulatory regime to encourage greater innovation in the sector.

It argued that while it supports the Financial Services and Markets Bill, it believes it could be bolder, strengthening the proposed competitiveness target and expanding the framework of the Bank of England and the Payments Systems Regulator.

It called for greater ambition around open banking, digital ID and financial crime and fraud, supporting the Data Protection and Digital Information Bill and highlighting how digital ID will be crucial to the rise of any future centralized national cryptocurrency, or central bank digital currency.

Furthermore, the trade body said that the UK is lagging behind in terms of cryptoassets and related exchanges and infrastructure.

“The US and Singapore – both with common legal systems – are on the verge of leapfrogging us with regulatory frameworks for the new technology”, it says, urging the government to expand existing plans to make the UK the best place to start and develop a crypto company, with an action plan and schedule.

It went on to call on the government to ensure fintech has access to the best talent and skills, from around the world, while continuing to grow apprenticeships in the UK that meet skills needs and working with universities to drive innovation and create a talent pipeline.

Citing the Kalifa Review of fintech, the statement called for continued action to develop the UK IPO environment, including the digitization of share records and the implementation of pre-emptive rights reforms.

Finally, it highlighted the need for the government to harness the strength of the UK fintech ecosystem to position the UK as the leading green finance centre. “Fintechs are already delivering transformative net zero services to financial institutions in the US and elsewhere,” it said.

After becoming Prime Minister yesterday, Truss held his first Cabinet meeting this morning and will appoint junior ministers this afternoon.

Read more: What can you expect from the new Prime Minister?