The Fintech Scene in the U.K.: A 2020 Overview

With the rapid growth of fintech, the U.K. has emerged as a global leader, boasting a market share of 10% and an impressive $95 billion spent on fintech ventures in 2019 alone. However, as Chancellor Rishi Sunak commissioned the Kalifa Review shortly after the 2020 budget announcement, it became evident that the fintech landscape was not just about enjoying past successes.

Challenges Ahead: What’s Brewing for U.K. Fintech?

The Kalifa review identified three major threats that could jeopardize the U.K.’s position: the COVID-19 pandemic, the implications of Brexit, and rising international competition. As the world went into lockdown, the dramatic rise in digital technology adoption provided both a unique opportunity and a risk that the U.K. must address.

“The UK’s position is well established, but its future is not assured.” – Kalifa Review

Five Pillars for Fintech Growth

To fortify its fintech sector and rise to the future challenges, the Kalifa Review outlined five key strategies:

• Policy and Regulation: Call for a regulatory framework tailored to emerging technologies, the creation of a ‘scalebox,’ and ensuring that the fintech voice is included in trade policy discussions.
• Skills Development: Emphasis on educational services aimed at retraining and upskilling adults, with a dedicated pipeline for fintech talent.
• Investment Ventures: Suggestions to expand existing investment schemes, and a substantial call for a £1 billion fintech growth fund.
• International Collaboration: An action plan that enhances the global credibility of U.K. fintech, along with better utilization of existing innovation centers.
• National Connectivity: Support for the top fintech clusters within the U.K. to harness their growth potential and drive local economies.

Homegrown Success: Spotlight on Fintech Clusters

Among the thriving fintech ecosystems in the U.K., Edinburgh is noteworthy with the increase of fintech firms from 26 to 151 in just two years. Initiatives like enterprise funding have fueled this explosive growth. Other cities including Cardiff, Manchester, Leeds, and Birmingham are also on the watchlist for potential growth.

Voices from the Industry: Experts Weigh In

Industry leaders like Nik Storonsky from Revolut and Ashok Vaswani from Barclays have both expressed optimism regarding the Kalifa Review’s direction.

“It is essential to preserve and strengthen the UK’s position as the first choice to launch and grow a fintech business.” – Nik Storonsky

This sentiment reflects a commitment to innovation and the need for the government to ensure a supportive environment in a post-Brexit world.