A major new report on the UK’s fintech sector has found that, while the UK continues to lead in fintech, according to a long-awaited government-backed review of the sector.
The 108-page Kalifa Review, released on Friday, lays out a five-point plan for the continued development of fintech in the UK. The review was commissioned in 2020 to identify priority areas to support the UK fintech sector.
The report recommends the creation of a fintech growth fund, allowing UK pension funds to invest in early stage companies and disincentivise them from quickly selling to wealthy foreign competitors. It also recommends that a retraining programme be set up to encourage further education colleges to help workers understand new tech skills.
Further recommendations include the development of ten new fintech “clusters” across the UK and the establishment of a Centre for Finance, Innovation and Technology to coordinate and encourage growth across the sector.
Ron Kalifa OBE, former head of payments firm Worldpay, warned that the UK attracted only 4.5% of new financial company IPO listings between 2015 and 2020, falling far behind the 39% that floated on Nasdaq and the NYSE.
“Britain has a proud record of starting-up and scaling-up some of the best known fintech products, but we cannot rest on our laurels,” Kalifa warned in a statement. “The next powerhouses will not be created by accident.
“We must continue to nurture our start-up culture, but crucially we must also give our high growth firms the support to become global giants.”
After the 2008 financial crisis, fintech emerged as one of the UK’s most fast-expanding industries. It is now worth £11 billion and accounts for 10% of the global market, with high-profile London-based firms such as Monzo, Revolut and Checkout.com making the capital an international hub for fintech.