Saturday, Oct 24, 2020
International Finance
Exclusive Fintech

Review launched to support growth in the UK fintech sector

UK fintech
The estimated worth of the UK fintech sector is £7 billion and employs around 60,000 people in the country

The UK funding sector is demonstrating slow performance on the back of the protracted pandemic. It is reported that investments in the country’s fintech sector has reduced 30 percent in the second quarter of the year. Also, early-stage startups are the worst affected in the sector owing to the pandemic.

Last week, a review in the UK fintech sector was launched to explore and identify opportunities that will enhance its growth in the coming years. The Fintech Strategic Review will develop priority areas for industry, policy makers and regulators to support the sector’s  performance growth.

In this context, James Barker, Commercial Director EMEA Mambu, said, “There are many factors at play in helping to ensure that the UK fintech sector continues to grow and succeed. The three main considerations are market access, regulation and investing in skills.With Brexit looming, the first hurdle is paving UK access to EU and global financial markets. In order for the UK to gain entry into other markets our tech innovators need to be able to create products that aren’t just relevant to local regulations but fluid across borders. If after Brexit, we diverge massively from the EU or face significant barriers to trade, the cost of UK-founded businesses regionalising their tech for EU use may increase and place additional pressure.

“Second, the regulatory body is reviewing many new banking and lender applicants. The feedback we are receiving from the market is that this process can be somewhat opaque, meaning it’s hard to say how long it will last which makes it more difficult for neo-banks and lenders to plan, both financially and operationally. If the process was more clearly defined, then operating the financial runway could be calculated more accurately, allowing banks and lenders to engage with other suppliers and investors.”

Interestingly, the estimated worth of the UK fintech sector is £7 billion and employs around 60,000 people across the country. The review is expected to help the sector to significantly improve, media reports said.

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