The threat and opportunity
Investments are being made across the world in digital infrastructure to support innovation in financial services. Competitor jurisdictions such as Singapore, Australia and Canada are all investing heavily in capital, skills and direct support for FinTechs. In addition, the world class regulation that helped UK FinTechs to succeed has now been adopted by a large number of competitors. We also know that other countries are studying the Kalifa Review.
Brexit has created regulatory uncertainty in specific areas relevant to FinTech. Firms must navigate the immigration system for European Union talent for the first time – whilst rival jurisdictions are rolling out aggressive attempts to lure talent in.
Much of the initial growth was boosted by the UK’s natural advantages, with a large financial services sector, clustered around large pools of capital, skills and technology entrepreneurs. Added to that was pioneering regulation, an established legal system, attractive culture and even a time zone that helped those looking for global reach.
But we cannot stand still and there is an opportunity to grow internationally in two ways. Firstly, to attract in-bound global investment, which was c.$4bn in 2020. The UK has a strong environment and reputation for start-ups, however FinTechs looking to scale may see the UK as limited based on size; scaling opportunities must, by definition, include overseas expansion.
Secondly, we need to support out-bound growth. FinTech could become a real UK export success but we need to support this now. UK FinTechs need to continue to expand globally to grasp our rightful share of the £380bn revenue in 2030. A clearly defined, ambitious international FinTech agenda could result in increased market share from 10% to 12% and a £46bn FinTech market by 2030, fuelling even larger financial, innovation, technology and job growth for the UK.
The path to success
I worked alongside some of the UK’s most internationally active and successful FinTechs on the Kalifa Review. We produced some real tangible, pragmatic and executable recommendations to help UK FinTech grow its international footprint. Here are some of the key outputs: