Securing a sector deal offers the UK the greatest chance of maintaining its status as a global fintech hub, according to a report commissioned by the City of London Corporation.
The Value of FinTech report, produced by KPMG, states that a sector deal would ensure the UK has a single, consistent policy position backing the sector.
Sector deals, announced in January 2017 as part of the government’s proposals for a modern industrial strategy, are designed to better support sectors through policy, regulation, funding, capital, infrastructure and talent.
The report authors said the fintech industry should help the government to enhance regional integration and develop a single public policy in order to drive harmonisation.
A sector deal is one of 10 recommendations outlined in the report, all of which are designed to help make sure the UK maintains its status as a global fintech leader.
The other recommendations include making it easier for fintechs to gain authorisation, introducing measures to unlock institutional markets and a review into how to retain the best talent after Brexit.
It also suggests the government explores a match-making programme to accelerate fintechs’ growth. According to the research, 81 per cent of financial services firms believe their future approach to fintech will be through partnerships.
It comes after Andrew Hauser, executive director for banking, payments and financial resilience at the Bank of England, said central banks must play a key role in the development of fintech and “cannot afford to stand on the sidelines”.
Catherine McGuinness, policy chairman at the City of London Corporation, said while there is a lot of focus on the customer, businesses need to embrace fintech too.
“I hope that industry and government seriously consider these recommendations in this report, especially the possibility of a sector deal. If they do then I am sure that fintech will continue to go from strength to strength in the years to come,” she said.
Paul Merrey, strategy partner at KPMG UK, said fintech is making a difference by improving financial inclusion, the customer experience and transparency.
According to the report, businesses with complex systems and manual processes, such as insurers, have benefitted from digital platforms that reduce their workloads and help them to serve customers more efficiently.
“Many countries are now taking steps to attract and retain fintech companies. A sector deal would be a major boost to the UK’s ability to maintain its status as a global fintech leader,” Merrey added.
Fintech in the UK contributed £6.6bn to the economy last year and it employs over 60,000 people.
Developed financial markets, readily available capital and investment, government backing, a sound regulatory environment, talented workers and world-class infrastructure are all cited as reasons for the UK’s leading fintech position.