The Kalifa Review of UK Fintech: UK Fintech’s difficult second decade?

An independent review on key priority areas for the UK Fintech industry, commissioned by the Chancellor at Budget 2020 and prepared by Ron Kalifa OBE, was published this morning.

The report concludes that UK Fintech has had a bumper decade. Private and public innovation have led to the UK Fintech industry being the envy of the world. However, the report also highlights that the industry is at a key inflection point of opportunity and risk. While its enviable current position provides the opportunity for further growth and achievement, threats to UK Fintech’s position can be identified in a number of quarters and require “immediate action” including (i) competition from other jurisdictions, (ii) regulatory uncertainty created by Brexit, and (iii) Covid.

If the opportunities can be taken, the rewards lie in increased jobs and contribution to the economy, trade benefits achieved by UK Fintech scaling up globally and helping the nation ‘build back better’ by improving access for all citizens and small businesses to more, better and cheaper financial services.

In order to achieve this, the report makes recommendations in five key areas:

  • Policy and regulation
  • Skills
  • Investment
  • International
  • National connectivity

Among some of the more eye-catching proposals are the suggestions for a new regulatory framework for emerging technology, the implementation of a ‘scalebox’ to focus on scaling innovative technology, creating a new visa stream for global Fintech talent, improving the listing environment for Fintechs through, for example, free float reduction, dual class shares and relaxation of pre-emption rights and the creation of a £1bn “Fintech Growth Fund” to help bolster start-ups.

All of this will need digesting, not least by government. But it provides a tantalising framework for scaling and driving the UK fintech sector forward at pace.