21 May The UK as a world leader in Financial Technologies - report
Financial technologies (FinTech) integrate finance and technology in ways that will disrupt traditional financial models and businesses and provide an array of new services to businesses and consumers. The hybridisation of technology with the traditional processes of finance – working capital, supply chain, payments processing, deposit accounts, life assurance and so on – replaces traditional structures and ways of working with new technology-based processes. The innovations emerging from the FinTech sector carry enormous transformative power for the financial sector.
They also bring new risks that must, as far as possible, be anticipated, prevented and managed. The UK has a competitive edge with its world-class science and research base, its position as the world’s leading global financial services centre, and a regulatory system that recognises and promotes innovation. With a market currently estimated to be worth £20bn in annual revenue and growing, the UK and Ireland is the fastest-growing region for FinTech investment globally. The Government’s stated ambition is for the UK to cement its world-leading position in developing FinTech, and to become a global hub for financial innovation. To succeed, it will be necessary to foster the best investment environment, the right tax system, the appropriate regulatory framework and the best infrastructure for FinTech companies to flourish within the UK. However, this is still a young and developing sector and the UK will need to work hard to secure its place in the face of competition from the rest of the world.
There are also emergent risks inherent in such an innovative and fast-moving sector. Concerns about data privacy, impacts on people and the workplace, inappropriate risk-taking by consumers and the impact of decentralised digital currencies on monetary policy are just some of the challenges that will need to be addressed by the Government, business and academia working in partnership.
The Chancellor commissioned the Government Chief Scientific Adviser to lead a review into the technologies, enablers and barriers that will shape the FinTech sector out to 2025. An expert advisory group, seminars and evidence from academia, industry and the Government have provided the evidence for this review. This executive summary sets out the ten recommendations of our work.
These are supported by six chapters with the following themes:
• Vision
• Technology
• Work, People and Policy
• Business Models
• Globalisation and UK FinTech
• RegTech: The Future of Financial Regulation
For more details on UK FinTech report, click here
