The Government Office of Science has published the findings and recommendation from its review of Financial Technology (FinTech). Anthemis Group was part of the expert panel that advised and contributed to the drafting of the report and the evidence papers that provide context and support for the recommendations in the report. In particular, we focused on the evolution of business models for the 21st century, in addition to helping review other facets of the report. Read the full report HERE.
Recommendations from the report were included in the Budget 2015, announced on the 18th of March, including:
- investigate the feasibility of developing a regulatory ‘sandbox’ for financial services innovators
- identify ways to support the adoption of new technologies to facilitate the delivery of regulatory requirements – so-called ‘RegTech’
- FinTech regional strategies
Key messages:
- The FinTech sector comprises a wide range of activities and companies with the potential to bring increased competition and innovation in financial services markets, to the benefit of UK customers. The government wants the UK to be the world’s leading FinTech hub, and is now taking steps to supports innovation across the whole of the UK while safeguarding financial stability and consumer protection. In support of this, this Budget announces that:
- the Financial Conduct Authority’s (FCA) ‘Project Innovate’ will work with HMT and the Prudential Regulation Authority (PRA) to investigate the feasibility of developing a regulatory ‘sandbox’ for financial services innovators
- the FCA, working with the PRA, will also identify ways to support the adoption of new technologies to facilitate the delivery of regulatory requirements – so-called ‘RegTech’
- Innovate Finance has agreed to deliver its FinTech regional strategy through a series of local partnerships; the first partnership has already been established in Leeds, and further partnerships will be established in Manchester and Edinburgh by April, and in Newcastle, Bristol and other centres before the end of the year
Key facts/ stats:
- The UK is a world leader in the development and commercialisation of new financial business models and disruptive innovation, known collectively as ‘FinTech’.
- The innovations emerging from the FinTech sector carry enormous transformative power for the financial sector with the potential for new financial business models and more customer driven services.
- The UK has a competitive edge with its world-class science and research base, and its position as the world’s leading global financial services centre.
- And with a market estimated to be worth £20bn in annual revenue and growing, the UK and Ireland is the fastest-growing region for FinTech investment globally.
- At the launch of Innovate finance in August 2015 the chancellor commissioned the Government Chief Scientific Adviser Sir Mark Walport to carry out a review the launch of the FinTech trade body, Innovate Finance, in August 2014.
- The review examines the enablers and barriers that will shape the UK FinTech sector out to 2025.
- An expert advisory group, seminars and evidence from academia, industry and government have provided the evidence for this review.
- The report makes 10 recommendations aimed building on the Governments existing initiatives to cement the UK’s position as a world leader in FinTech and makes the case for Government, business and academia to work together to achieve this goal.