By John Reynolds on 16th October 2019
UK fintech say it is “imperative” that government supports the fintech industry to help it challenge incumbent banks.
Two of the UK’s leading fintech companies have welcomed the government's Financial Services Bill but warned that it is "imperative” that the government continues to support the fintech industry to challenge incumbent banks.
The Financial Services Bill, laid out in this week's Queen's Speech, aims to bring "certainty, stability and new opportunities" to the UK banking industry.
The Bill is geared to ensuring the UK's financial rules continue after Brexit as well as the UK remaining open to international markets.
The Bill will be debated on and voted on by MPs.
Nick Lee, Head of Regulatory Affairs at OakNorth Bank, said: "We await further details but at OakNorth we applaud any government initiative that encourages competition and growth in the UK financial services and fintech sectors."
"Ensuring that the UK continues to have a vibrant, diverse, innovative and world leading financial services/fintech sector is critical to the success of UK PLC."
Lee said OakNorth welcomed efforts by the government to strengthen the UK's financial ties internationally, pointing out that it licensed its credit platform to other banks and financial institutions across the world.
"Anything that can help build bridges between international financial centres can only help the UK fintech and financial services sectors expand on their success to date and grow globally,” Lee added.
But Lee highlighted that it was important that innovation and growth in the fintech industry was "not impeded".
"It is imperative that the government continues to play its part in supporting these sectors to ensure that businesses within them are able to scale up and challenge incumbents in the UK and overseas,” he added.
The arrival of the Financial Services Bill follows a previous Financial Services Bill which was pulled earlier this year, after ministers feared the government was likely to to defeated on an amendment requiring Jersey, Guernsey and the Isle of Man to stamp out on money laundering.
Thomas Tudehope, Head of Public Affairs at Revolut, welcomed the Bill, stressing the importance that the UK maintains its status as the "world leader" in regulatory standards.
Tudehope said: "The UK is the best place to start and grow a fintech firm and the country now attracts more investment than New York and employs over 70,000 people.”
“We hope that this new Financial Services Bill and any complimentary review of the sector that might underling it will continue to help business grow and employ even more people across the UK."
As part of the Bill, the government has pledged to make easier the process which allows investment funds to be sold in the UK.
The bill will also implement the Basel standards to strengthen the regulation of global banks, forcing banks to hold much more capital to prevent a repeat of the financial crisis.
Lee added: "London is Europe’s leading financial hub and also one of the most important financial centres in the world. To ensure this remains the case, it is imperative that the UK’s regulatory framework remains equivalent to the Basel Standards."