“Whatever happens with Brexit, financial services will remain one of our largest and most important industries.” These words resonated around Mansion House last week in the annual speech delivered to the finance industry by the Chancellor Phillip Hammond.
Safe to say, there is no disputing that. The UK is a world leading financial hub, with a historical pedigree and a track record of businesses choosing this country to start, scale and headquarter their business.
Ever since the doldrums of the financial crisis, Britain’s position as a global financial powerhouse has been supercharged by the success of our fintech industry – one of our greatest success stories of late. Companies in this field have spearheaded global financial innovation, created thousands of new jobs, and played a significant role in boosting the country’s economy.
Fintech has rejuvenated Britain’s success in the finance world, building on a decade’s long foundation of setting the global agenda in the field.
So, what next? As governing bodies and regulators gaze forward to ensure Britain’s stature in finance remains strong, what does the future hold for fintech?
Success to date has in large part arrived through a carefully constructed and expertly implemented regulatory framework – enabling challenger banks, remittance providers and the many fintech pioneers to lay their foundations and prepare to scale.
The likes of Starling, OakNorth, Iwoca and Funding Circle have reaped the benefits of a flexible and agile regulatory system that works in favour of innovation. Britain now stands as the trailblazer in global fintech, and more ideas are being generated every day.
Moving forward, it is important that this regulatory environment (including the FCA sandbox and their international leadership in Global Financial Innovation Network’s global sandbox) remains protected and open to innovation.
To this end, the Chancellor has launched a review of the payments landscape, looking at how to build on and support the dizzying array of new business models in this sector.
Smart and open regulation is what ultimately gives us the edge over competitors in Europe and across the pond, and it’s great to see the Chancellor and the Bank of England further committing to policies that encourage responsible innovation.
And it’s not just openness when it comes to regulation that makes a difference. Access to open borders and the international talent pool is vital to the success of fintech in the UK.
At Innovate Finance we have continued to work closely with senior Home Office officials through the Employers’ Advisory Group – ensuring that the needs of industry are clarified, acknowledged and appropriate policy recommendations put forth.
Immigration policy questions, however, will continue to loom large in light of Brexit uncertainty, and it’s therefore all the more important we grow the talent pipeline with a greater range of diverse talent at home as well.
The financial services sector, and fintech in particular, has long been struggling with diversity. At present, only 17 per cent of senior executives in UK fintech are female. We need policies that drive recruitment of diverse talent, both to tackle the gender imbalance and tap into the workforce with other skills backgrounds.
Yes, we need computer scientists who are already armed with the skills to manipulate new technologies and create new products. But we need to be thinking about creating a diverse, rather than homogeneous workforce. Recruiting from a range of disciplinary backgrounds is key, and retraining those from university level upwards should be front of mind.
Only with this approach can we match the rapid growth of the sector, and the demand for talent it is generating.
If we succeed in maximising the potential of fintech, we will stop thinking about it as a jewel in the UK tech crown. We must move away from viewing it as a promising sector that operates in tandem with traditional finance, and rather something that has the power to transform society – beyond what it has already done for the UK economy and global reputation.
Fintech is a prime example of how technology can be used to address imbalances in society through enabling financial inclusion. Whether it’s enhancing financial wellness, improving literacy, or banking the unbanked, tech platforms are a real game changer.
Boosting fintech and allowing it to thrive will ultimately benefit business, the economy and society as a whole. It is clear that we must do all we can to future-proof the sector, and steps taken last week by the Chancellor and the Bank of England are exactly what was needed.
The task now for the incoming Chancellor, whoever that will be, is to carry on that legacy and build on the success of policymakers working closely with industry to protect and nourish UK fintech – it will benefit us all.
Charlotte Crosswell is chief executive of Innovate Finance