The UK has a new Prime Minister, but will this help or hinder the UK’s rapidly growing fintech sector?
During the Conservative Party leadership campaign, incoming PM Liz Truss made a number of promises relating to the City of London and its financial services industry. Some will have been music to the ears of fintech and financial firms. In particular, proposals to cut red tape, post-Brexit obstacles and EU regulations.
Truss also revealed plans to merge together the Financial Conduct Authority (FCA), the Prudential Regulation Authority (PRA) and the Payments System Regulator (PSR) into one single body. In an interview with City AM, she also said:
“By unleashing investment and revitalising the City’s research expertise, we will be able to offer the tools businesses need to invest in the dynamic companies that will get our economy moving.”
Making the UK a crypto hotspot
One of the first things the newly elected PM should do, according to Innovate Finance CEO Janine Hirt – is develop a solid strategy for supporting the crypto assets sector. She explains:
“Previous Government plans for making the UK the best place to start and grow a crypto firm should be expanded to form a more comprehensive and coherent strategy, and accelerated to make faster progress, with an actionable plan and timetable.”
Unlocking the potential of open banking
Another key area ripe for expansion by the Government is open banking. A recent report by the Challenger Banking All Party Parliamentary Group (APPG) called for the UK’s open banking model to be widened.
Manoj Mistry from international bank association IBOS told Fintech Global:
“The election of Liz Truss as the new PM will hopefully see the acceleration of smart data sharing, driven by the government’s Smart Data Council which aims to develop an ecosystem that builds collaboration with industry across sectors. Fresh regulation is also needed as a matter of urgency. A new regulatory framework for open banking and smart data would provide certainty for industry players and protection to end users.”
A number of digital challenger banks have gained a positive foothold in the UK in recent years, but what has been described as ‘regulatory intransigence’ could be stifling progress.
The APPG also urged regulators to roll out a scheme for fintech firms similar to the Financial Services Compensation Scheme (FSCS) that banks use to protect consumer money.
A “Whitehall-wide strategic approach to supporting the sector”
Adnan Choudary, from money transfer specialist Wise, believes that the Government needs to develop a cohesive and integrated strategy to help the fintech sector realise it’s potential.
He says that Truss and her cabinet need to: “…proactively engage with industry, using our expertise to guide forward-thinking policy. This will ensure that new rules continue to promote innovation, growth, and attract investment for the industry.”