The Kalifa Review will keep the UK open to fintech investment, innovation and opportunity

By Laurent Descout on Tuesday 9 March 2021

OpinionAlternative LendingDigital BankingSavings and Investment

Ron Kalifa’s UK Fintech Review has been greeted relatively well across the market. It identifies many of the foreseen headaches anticipated by the fallout from Brexit and the pandemic and paves the way for the UK’s fintech scene to maintain its global crown, writes Laurent Descout, Co-Founder and CEO of Neo.

The Kalifa Review will keep the UK open to fintech investment, innovation and opportunity
Image source: Photo by fauxels from Pexels

Over the past 12 months, there has been a lot of speculation about London losing its place as the centre of the fintech world. As a fintech based in Barcelona but with a presence in London and Cambridge, we don’t anticipate this being the case.

There is no other city in Europe comparable to London’s regulatory environment, diversity of banks, businesses and start-up companies. This is why countless fintech founders choose London to start and scale their businesses. The cooperation between innovation/challenger companies and traditional financial institutions is second to none and will continue to be the driving force behind London being a global fintech hub.

Laying out the steps

This brings us to the much-anticipated Kalifa Review. The report offers a blueprint for growing and maintaining the UK’s fintech sector as a strategic asset and bolstering its presence across the globe.

There are many areas where the report ticks the right boxes. It acknowledges that the UK is at a crossroads and its status is under threat if complacency creeps in; it identifies and proposes solutions to some of the key foundations and building blocks that will enable the industry to grow rapidly; and its recommendations are pragmatic and highlight the need for cooperation between the public and private sectors.

Attracting investment is a key consideration for fintechs when setting up their base and this report hits the mark in this respect. For early-stage companies, the Kalifa Review seeks to establish a £1 billion “Fintech Growth Fund”. This would be a market-led fund primarily backed by institutional investors.

For later-stage companies, it proposes a shake-up of listings rules, making it easier to go through the IPO process. By laying out a path for flexible and supportive investment opportunities, the review is paving the way for many more UK fintechs to spring up and grow faster as public companies in the next few years.

Motivating the job market

But fintech is as much about the people it employs as it is the technology it develops. The UK has always been an attractive home for people looking to work in fintech. With the proposed new visa programme outlined in the report, the UK recognises the value of attracting some of the best talent across the globe. This is a clear signal that the UK remains open for business.

Finally, the report focuses on ensuring the entirety of the UK will benefit – something we are particularly pleased to see. The UK’s fintech scene may be concentrated in London but there are many brilliant people developing cutting-edge solutions up and down the UK. This review identifies ways to build on this.

The proposed creation of fintech “hubs” around the UK will support and scale “regional specialisms” unique to the UK, such as intellectual property created in UK universities. By expanding the nation’s top fintech clusters, cities such as Oxford, Cambridge, Edinburgh, Belfast, Manchester and others all stand to benefit.

There is no doubt that the next few years are set to be very important. No country in Europe rivals the scale of the fintech industry in the UK and Kalifa’s review has clearly shown the UK’s intention to maintain this edge.

The UK should look to continue its openness and connectivity with other fintech hubs and institutions across Europe and the world. This will further cement its position as one of the most dynamic and welcoming places to start and grow a financial technology business.

By both encouraging non-UK workers with the aforementioned visa programme and the creation of regional fintech clusters, the UK will broaden its talent pool and ensure the future of UK fintech is in safe hands.

 

Laurent Descout is CEO of Neo. The views and opinions expressed are not necessarily those of AltFi.

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