What the next Prime Minister needs to do to ensure fintech in the UK continues to thrive

Of course, with huge changes at the top of the government and right through the cabinet, new faces are already developing new policy directions for the country. There are high expectations for this new government, and major fiscal announcements have already shown they want to make changes. We have seen that the Prime Minister has committed to supporting “the city”, but this must include the fintech sector, and not just the Square Mile.

The previous government made good progress with the Kalifa Review, and its UK Listings Review, to make London an even more attractive destination to invest in the sector.

But the pace has slowed considerably.

With a new government, new cabinet and new ministers, we need a new approach: now is the time to build on existing achievements to truly cement the UK’s role as a leading global fintech hub.

1. Increase global support for UK fintechs

The UK government has a huge opportunity and responsibility to support the growth of UK fintech companies globally. Our financial services system is unparalleled, and we have a regulatory regime that is among the most innovative in the world.

We only need to look back to 2018, when Wise became the first technology company to obtain a settlement account with the Bank of England and secure direct access to the Faster Payments System (FPS) in the UK. This gave customers access to an uninterrupted 24/7 payment service that allowed payments to move instantly, at far lower costs and with far less risk. This was a monumental change in process – and it was the audacity of the Bank of England and Britain’s policy-making machinery that made this success possible.

The government must champion this, and focus on sharing these best practices globally. The government should work with central banks and regulators worldwide to demonstrate the benefits of its innovations, and showcase the strength of the fintech sector as a result. Building these relationships, and introducing UK fintechs to their counterparts in other markets, will support international expansion and support the UK’s financial economy.

Such a commitment to supporting the UK’s burgeoning fintech sector will undoubtedly see the industry continue to grow, taking the next step in leading the world in financial innovation.

2. Streamline communications across Whitehall

Good communication across departments is key to ensuring that the fintech policy is developed and delivered at pace. Currently, dedicated fintech teams are spread across HMT, DCMS, BEIS and DIT – all working to drive forward policy development in the sector. While this is great for specialist knowledge, it is important that these specialists sing from the same hymn sheet.

A Whitehall-wide strategic approach to support the sector will help achieve this. Setting clear government targets for support beyond the Kalifa Review, which are then shared across departments, will greatly improve the pace and significance of the work delivered. This should be combined with a proactive engagement strategy with the entire fintech industry. It will mean that the sector feels truly included in the policy development process. It will also allow departments to use the expertise of different companies to guide forward-looking policy.

This will ensure that new rules and opportunities come into force faster and more efficiently, while also promoting innovation, growth and attracting investment for the industry.

3. Finally, it needs to do more to feed the lifeblood of the fintech sector: talent

Since Brexit, talent has been noticeably harder to access and attract to the UK. With technology companies demanding growth, developers, analysts, product managers, technical engineers and many other roles are in higher demand than ever. To continue to build a world-class fintech industry in the UK, we need to ensure we have access to the talent that will enable us to create and grow world-class businesses.

The new scale-up visa regime, borne out by the Kalifa Review and launched earlier this year, is a positive start, but we need to go further. The government should urgently consider more flexible options through the visa system to help meet the real skills shortage the sector is facing. While that would solve the immediate problem, there is a long-term concern about the domestic talent pool that the technology and fintech sector desperately needs. A long-term strategy to invest in technological education across all age groups, from school to university, can be instrumental here.

This should be a top priority if the UK is to remain a leader in fintech. If not, we risk being overtaken by markets with an abundance of skilled tech talent.

The new prime minister has an unenviable list of immediate political and policy challenges to face, but that should not stop her government from considering the long-term health and prosperity of one of its most important growth industries.

During her premiership, we need to see a renewed enthusiasm and focus to support UK fintechs, and the start-up sector more broadly, to ensure that the backbone of UK entrepreneurship and innovation continues to thrive.