The UK is a world leader in Fintech innovation. As highlighted in the Innovate Finance pre-statement submission to the Chancellor the Government's policy leadership on completion and innovation have been critical in achieving that status.
With a reported dip in confidence post Referendum the Fintech sector was looking to the Chancellor for positive assurance that this support is set to continue. Although low on detail around the specific initiatives the policy statement that the sector was looking for is clearly there – the Chancellor is committed to maintaining the UK's position as a global leader in Fintech innovation.
- £500,000 a year will be provided for Fintech specialists via the DIT, a positive indicator of commitment to promotion of the UK as a global Fintech hub
- An annual "State of UK Fintech" report on key metrics for investors has been commissioned and will be produced by E&Y and Innovate Finance. This is arguably business as usual given regular Government commissioning of reports on the sector in recent years, but again commitment to that continuity is positive
- Consistent with the overall direction of travel of Government policy and in recognition of the substantial Fintech sector activity outside the capital a network of regional envoys will be launched to support and promote Fintech activity in the regions
- HM Treasury will lead a review of long term finance for growing firms and £400m will be invested in VC funds via the British Business Bank to unlock new investment in innovative firms scaling up. This is an interesting shift of focus from start-ups to scale ups with the Chancellor referring to the initiatives as "a first step to tackle the longstanding problem of our fastest growing technology firms being snapped up by bigger companies, rather than growing to scale" His statements have been interpreted by some to be linked to the acquisition of ARM by SoftBank in the days after the Referendum and a potential future policy objective of keeping more UK technology innovation in the hands of UK owned companies. The £400m is arguably a small sum which would only go some way to plugging the potential funding gap from the European Investment Fund post Brexit, but the policy statement is clear and welcomed
- Another significant announcement for the Fintech sector is an agreement with the Joint Money Laundering Steering Group (JMLSG) that they will modernise their guidance on electronic ID verification. This will clear the way for establishing relationships with financial service providers without paper-based processes, removing barriers for Fintech businesses operating on-line only services.
These initiatives set within the context of an additional £2bn annually for R&D and £740m to support rollout of full-fibre connections and future 5G communications have been widely welcomed by the UK Fintech sector. Passporting and continued access to global Fintech talent remain concerns for the sector but within the bounds of current possibilities the Chancellor's statements have given the Fintech sector reason to be positive about the future.