Peer-to-peer lenders, institutional investors, fintech lobbyists and other industry stakeholders have welcomed the recommendations made in the Kalifa Review, calling it a “vital intervention” that will create a thriving fintech sector.
Innovate Finance acted as the secretariat to the review alongside the City of London Corporation, and provided data and insights to aid Kalifa’s research. Chief executive Charlotte Crosswell said that the Kalifa Review is “a vital intervention that has the potential to set the strategic direction of UK fintech for decades to come.”
“The sector has seen incredible growth, and fintech firms across the UK are ambitious in building, developing and scaling their businesses,” Crosswell added.
“The way that consumers and businesses are interfacing with financial services is rapidly evolving.
“We must respond to this changing dynamic and ensure we look to the fintech sector to advance these solutions. This will result in the creation of new digital jobs, inspire a next generation of entrepreneurs, and in turn enable the growth of global champions.”
P2P lending platform Funding Circle also endorsed the review.
“The pandemic has accelerated the adoption of online lending and shown how critical fintech lenders are in supporting SMEs,” said Lisa Jacobs, Funding Circle Europe managing director.
“We believe this shift is permanent, and the sector will have a vital role to play in the UK’s national recovery. We welcome this timely and important strategic review, and look forward to working with Ron Kalifa, and HM Treasury to ensure UK fintech continues to transform the customer experience.”
Imran Gulamhuseinwala, trustee, Open Banking Implementation Entity (OBIE), added that he was particularly pleased to see recognition by the Government on the global impact of the UK’s approach to open banking.
Among its recommendations, the Kalifa Review called for industry-wide coalitions on key issues like financial inclusion, SME lending, open finance and digital IDs.
“As we look at smart data and open finance, then the recommendation for a similar mandated regime as delivered by open banking will allow the ecosystem to flourish even further,” said Gulamhuseinwala.
“Much of our initial work has been around building standards, but we are now seeing the fruits of our labour with more than three million consumers or SMEs using open banking enabled products. It is just a matter of time until tens of millions of users are benefiting from products powered by open banking.
“If we can leverage this success for Kalifa’s vision, we will ensure an innovative, fair and inclusive future for fintech in the UK.”
It is also hoped that the fintech review could lead to increased interest from institutional investors.
“Institutional investors are increasingly aware of the opportunities in later-stage UK fintech,” said Ian Connatty, managing director of British Patient Capital.
“We have deployed over £1bn since our inception in 2018 and, while we are sector agnostic, a significant portion of our underlying portfolio companies are fintechs.
“A trend common to all tech scale-ups is that these companies are remaining private for longer. One way for institutional investors to gain exposure to these companies, capturing the value created as they rapidly grow, is through venture growth funds.
“It’s a huge opportunity.”