Liz Truss: Fintech friend or foe? The industry reacts to the new prime minister

Earlier this week, Liz Truss succeeded Boris Johnson as Prime Minister of Great Britain, beating rival Rishi Sunak in the fight to become leader of the Conservative Party. But what does her appointment mean for the UK fintech community? The industry shares their views.

Simon Cureton, CEO, Financing options

“We welcome Liz Truss’s clear passion for the City as a ‘jewel in the crown’ and trust that she will have the fintech community in mind as much as the established institutions as she sets out her economic agenda in the months ahead.

“When Sir Ron Kalifa’s Review of UK Fintech was published last year, she recognized that there are many opportunities to make the UK the epicenter of financial innovation and pointed to increasing our presence in global markets, which we hope she will take with her from the Foreign Office .

“There are reasons why the UK’s financial sector is so admired abroad, not least the rule of law, regulation and expertise that lies within the Square Mile and beyond. Her promised ‘war on technocrats’ should be handled with care, but this represents a chance to position the UK as a leader in realizing the benefits of open banking and embracing the technologies that will make lenders’ decision-making faster and more robust than ever.

“We face a global funding gap, which is only exacerbated by the energy crisis, and SMEs remain central to every world economy. The more we do to promote an environment where small businesses are helped, not hindered, the better off it will be for UK, business owners and the ability of the fintech community to export its prowess to other major economies.”

Romy SavovaCEO, PensionBee

“Newly appointed Prime Minister Liz Truss will have a number of immediate decisions to make, to provide security and stability for businesses and consumers alike, in these tumultuous times.

“Since we are experiencing a supply-side problem, I would urge the new Prime Minister to prioritize policies that support consumers and businesses in the short term, rather than measures that kill demand.

“It is important for the government not to tip the economy into an unnecessary recession by raising taxes. The new prime minister should not be afraid to borrow a little more; and choose versatile short-term policy measures that are quick to implement but just as quick to reverse, such as cutting VAT.

“Under this latest administration, I hope the new Minister for Pensions and Financial Inclusion will focus on putting consumers back at the heart of pensions, by finally legislating a 10-day pension switching guarantee.

Chaim Hack, head of business development, Coremont

“Actions always speak louder than words and in the coming weeks and months we will get some clues about what agenda the new Conservative government will put in place and how it will support the fintech sector.

“Whether it’s Chase digital bank setting up in Birmingham or local firms like Revolut growing at pace, the UK fintech sector still has huge untapped potential. In fact, UK fintech companies received £7.6 billion in funding during first half of 2022, second largest globally after £20.8bn raised by US firms.

“Furthermore, data compiled by industry body Innovate Finance showed that for the first half of the year, global fintech investment reached £57.6bn. The opportunity to turbocharge the fintech industry and grow it significantly more is there – now it’s up to PM Truss to adopt the guidelines.”

Thomas Tudehopeglobal head of public policy, Luna

“Luno looks forward to working with Ms Panties and her team to design a regulatory framework for crypto that will boost economic growth, create thousands of jobs and protect consumers.

“As detailed in our recent response to Parliament’s inquiry into the crypto sector, Luno believes there is an urgent need to develop and implement a regulatory framework that protects consumers, ensures that all crypto companies operate to the highest standards and enables UK firms to plan with the security required if we are to position the country as a world leader in the digital asset ecosystem.”

Bo Brustkern, CEO, Fintech Nexus

From a regulatory perspective, our mission continues to play out well: the UK is (still) among the most hospitable places to build innovative financial technologies.

“If Liz Truss takes the economy seriously (no doubt about it!), then embracing the ‘new new’ fintech – aka crypto, aka Web3 – might be a move she’s willing to take.

“A confident move in this direction will define the next decade of financial innovation (and beyond) for the UK, and will no doubt help cement London’s place in the world’s changing financial order.”

Innovative finance

“Innovate Finance would like to congratulate new Prime Minister Liz Truss on her appointment. We look forward to continuing to work with her and the Government to further strengthen the UK’s position as a world-leading fintech hub, and to realize the full potential of fintech to create a more democratic, inclusive and efficient financial services sector that works better for everyone.

“The fintech ecosystem has appreciated and benefited from the UK Government’s strong support over the years. However, there is still more to be done to ensure we unlock the full potential of innovation to create a better financial services sector for all, and as such is it is important that we maintain the current momentum.”

Simon Taylorhead of strategy and content, Sardineand co-founder of 11:FS

“UK fintech has a reputation as one of the most exciting globally. But with a new Prime Minister, Liz Truss will it get better or worse? The UK fintech sector boomed with early consumer fintech companies that Wise, Revolut, Monzo and Starling caught global attention, and massive payment companies like Checkout have reached multi-billion dollar valuations in the past decade.

But after Brexit, the UK had four key issues: access to talent, access to growth capital, access to the European market and regulators’ responsiveness/transparency. So will Liz Truss change things?

1. Worldview matters
Liz Truss won the party’s support by promising low taxes and support for business. I read this as supporting “the city” more than fintech companies disrupting it. I hope I’m wrong about this, because the fintech industry can be a growth engine.

2. There is low-hanging fruit to deliver
Khalifa Review published in February 2021. It set guidelines for recommendations on talent, capital and IPOs. Most of these have not been implemented. The government has been frozen by Brexit, the pandemic and now the change of leadership and Ukraine. Time to deliver.

3. Crashing regulators together may not solve anything
Truss wants to merge FCA, PRA and Bank of England to one. This move may make life easier for some in big finances, but I struggle to see it as anything more than a cost-saving move. Compared to the US, the UK regulatory environment is incredibly simple.

Read Taylor’s comments in full in his LinkedIn post.

The Prime Minister’s to-do list: How Liz Truss can continue the UK’s Fintech success story