While some progress has been made, it should be clear now that progress, as outlined by the Kalifa Review of Fintech, is falling short.
As has been widely discussed over the years, the UK is the leading global Fintech Hub. This has been accomplished due to several key variables: an already established global financial sector, an abundance of risk-taking entrepreneurs in financial services, and a government keen to support financial innovation. It appears the government has taken its foot off the accelerator and now must reinvigorate its commitment to fuel Fintech innovation so the UK may maintain its preeminent status in the Fintech realm.
Today, CI has received several more comments from Fintech CEOs reflecting on the one-year anniversary of the Review.
Eric Huttman, CEO of MilltechFX, said that Fintech is no longer a subsidiary of financial services, having garnered record levels of finding. Fintech is now an “omnipresent and essential component of the way we trade and do business.”
“Over the past 12 months, the UK has further consolidated its position as the global fintech hub with over USD 37 billion investment,” said Huttman. “The one-year anniversary of the Kalifa Review, however, is a timely reminder and wake-up call for firms still beholden to outdated legacy processes. We must focus our efforts on using fintech to help develop the real economy. That starts with the treasurers and asset managers who can face huge operational inefficiencies with their FX setups which directly affect their bottom line.”
Huttman declared that now is the time to leverage digital solutions and implement strategic change.
“If all parts of the financial services industry are to ‘build back better’ for their customers, the use of these technologies to establish a more efficient, transparent and cost-effective way of doing things will be vital.”
Martin Wilson, CEO of Digital Identity Net, said the anniversary of the Kalifa Review is a reminder that the UK must act to maintain its advantage as a global Fintech Hub:
“Investment into Fintechs rose sevenfold from 2020 and Open Banking, a key part of many Fintech services, also had a big year with one million users joining between September 2021 and January 2022. It now has five million regular users. Fintech is strategically important for the UK, but while the billions are flowing into fintechs in London, we also need to see the government, businesses and banks adopt and implement these new technologies to improve the way we do business as a country.”
Wilson said that the UK must push digital transformation as the country is ahead in many areas like trading and payments but behind in others – like digital identity.
” Other countries are leading the way. Belgium, Norway, and Sweden all have digital identity systems connected to their banks to protect consumers data and dramatically reduce fraud, which is a major and growing problem in the UK currently. The Bank-ID service in Sweden is accessed by its adult citizens on average twice a day and the Norwegian service has reportedly reduced payment fraud from 1% of daily value to a staggeringly low 0.00054%.”
Ralph Rogge, CEO & co-founder of Crezco, shared his opinion that the foundations for Fintech innovation were placed before the Kalifa report was published but tangible actions deriving from the report are hard to locate.
“There is a lot of talk about Open Finance, which is great, but anybody running an Open Banking company will tell you how much work is left to be done. The reduced access to the EU market (consumers and labourers) has increased short-term friction, costs, and uncertainty. If we do not want the next Revolut and Wise to be built abroad, we must ensure that the UK (now unshackled from the bureaucracy of the Continent), continues to lead the way in Fintech. This isn’t about raising awareness or recommendations, but action.”