What to expect from Ron Kalifa’s fintech review

By Aisling Finn on Monday 22 February 2021

FeaturesDigital Banking

Ahead of the publication of the Fintech Strategic Review this Friday, AltFi took a look around to see what we can expect from the long-awaited review. 

What to expect from Ron Kalifa’s fintech review
Image source: Ron Kalifa/Innovate Finance

Nearly a year ago Rishi Sunak revealed his first budget as Chancellor of the Exchequer including the launch of an in-depth review of the UK’s fintech sector, spearheaded by Ron Kalifa OBE.

Kalifa is a non-executive director of the Court of Directors at the Bank of England and the vice-chairman of WorldPay, where he has been for the last 18 years.

The main aim of the review is to “identify what more industry and government can do to support growth and competitiveness, to ensure that the UK maintains its global leadership in this vital sector”

Since then, there has been a lot of speculation about what recommendations the review might include.

Funding

As of 24 January 2021, the government has dished out over £1bn in convertible loans to startups across the country as part of the Future Fund scheme. There has been a huge amount of speculation about whether or not there will be a further boost to fintech startups under the review.

It’s been reported that Kalifa will recommend the government will create a £1bn fund to help bolster startups, but unlike the Future Fund, the new pot of cash will not be a convertible loan.

The proposed fund will give fast-growing startups access to funding and encourage them to list on the London Stock Exchange (LSE).

According to reports, the pot of cash will be run by institutional investors who will be able to buy a stake in the rapidly-expanding fintechs that turn to the fund for investment.

As well as encouraging fintechs that receive investment from the fintech fund to go public in the UK market, Kalifa is also proposing changes to how companies list on the London Stock Exchange. 

In the review, new guidelines will be released about dual share structures that are more favourable to entrepreneurs, meaning they will be able to maintain control in their companies.

Open Banking

Kalifa will also, reportedly, recommend fintechs to work more closely with their incumbent counterparts to ensure the wider adoption of open banking across the financial industry.

By opening up more channels of communication between open banking-friendly fintechs and bigger financial institutions, Kalifa seems to be attempting to speed up the adoption of open banking, taking a step closer to the ever-elusive idea of open finance.

Regional hubs

As another recommendation of the review, Kalifa will push the government to create new regional fintech hubs, taking the emphasis off London as the central fintech hub and attempt to draw businesses to other areas of the country. 

Kalifa has reportedly outlined ten hubs around the country to enable other cities and towns to make their name as alternative financial hubs. 

Areas tipped for an innovation hub include Wales, where the likes of Starling and Monzo recently set up shop, and Edinburgh and Glasgow. 

The review will also reportedly propose changes to the current tech visa system here in the UK, to address fears that Brexit could deter top tech talent from applying.

Under the review, a new visa route will be proposed and there will also be plans for cheap training programmes to help workers become more digitally literate. 

The Kalifa review will be published Friday 26 February 2021. 

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