The Financial Technology industry has been one of the most profound success stories of the UK economy in recent years. From a nascent industry in 2008, the UK received a record £7bn in investment in 2017, up 150% on 2016. In the first half of 2018, investors have poured over £12bn into the UK, suggesting that it is going to be yet another record breaking year for FinTech.
Part of this success owes itself to the UK’s prestigious record in financial services. The City of London has been a global financial centre for decades, though we are now seeing FinTech firms increasingly start up outside of London in cities such as Newcastle, Manchester and Bristol. This profound agglomeration of talent forms a positive feedback loop, encouraging the most talented individuals in financial services and technology from across the world to flock to the UK.
It is by no accident that the UK has grown into a global centre for fintech. The Government’s has developed a hospitable environment which makes the UK the most competitive place in the world for FinTech firms to invest and grow.
Rather than merely vague statements and ambitions, it has taken thought leadership in combination with innovative policies. One of the most important of these was the regulatory sandbox, which helps the FCA to keep pace with the changing regulatory needs of business by allowing businesses to test their products, services and business models before entering the real market.
To cement the UK’s position as a world leader we should ambitiously set the gold standard in every area, such as: a light-touch regulatory code for digital currencies/Initial Coin Offerings (ICO), a continued increase in the number of Tier 5 Exceptional Talent visas and a slew of new FinTech Bridge agreements.
The latter are little known, but highly important. In short, they act similar to free trade agreements, enabling greater cross-border trade and FinTech services. This intensifies competition and substantially lend weight to the UK’s status as the best place in the world for a FinTech company to startup or relocate.
I was glad to see that, in answer to some Parliamentary Questions I recently tabled, the Government says that it is committed to signing more such FinTech Bridge agreements, though disappointingly has no active discussions on additional FinTech Bridges at this time.
Whilst we already have agreements signed with countries home to significant FinTech industries, such as Singapore, South Korea and Australia, we need to sign even more to allow UK-based FinTechs to efficiently scale, which is essential given that the UK’s domestic market is smaller than that of our competitors for the crown of global centre of FinTech: the USA and China
I am confident that the UK can remain the best place in the world for FinTech but it will require proactive and innovative policy-making as the landscape evolves.
1. Adam Afriyie has been Member of Parliament for Windsor since 2005.
2. He has been Chairman of the All Party Parliamentary Group on Financial Technology since he founded the APPG in 2015.
3. To view more of Adam’s work in this area please click here.
To ask the Chancellor of the Exchequer, whether he has had discussions with his international counterparts on establishing new Fin Tech bridge agreements between their countries and the UK. (169243)
Tabled on: 03 September 2018
There have been no recent discussions between the Chancellor of the Exchequer and international counterparts on establishing new FinTech Bridge agreements since the signing of the UK-Australia FinTech Bridge in March 2018. However the UK remains committed to fostering international collaboration and exploring the scope for additional FinTech Bridge agreements where opportunities are present.
The answer was submitted on 10 Sep 2018 at 16:01.
To ask the Chancellor of the Exchequer, whether he has had discussions with the US Administration on establishing a FinTech bridge agreement between the UK and the USA. (169242)
Tabled on: 03 September 2018
UK and US government officials and regulators continue to engage on a range of financial services policy, including FinTech. There are no current plans for a UK-US FinTech Bridge.
The answer was submitted on 11 Sep 2018 at 17:03.