Innovate Finance sets out fintech agenda for new PM
Fintech industry body Innovate Finance has highlighted six areas for Prime Minister Liz Truss to prioritise in a bid to “cement the UK as the world’s leading financial centre”.
Top of the agenda is harnessing fintech to address the cost-of-living crisis. Innovate Finance highlighted the multiple demographics that fintech can reach and its ability to “diagnose financial vulnerability through data analysis”.
The trade body called on the government to create a wholesale fund for alternative lenders (perhaps building on existing British Business Bank (BBB) schemes), which could unlock lending capacity to small firms.
It explained that in 2020, despite the Bank of England introducing a Term Funding Scheme which enabled big banks to access cheaper wholesale funding, alternative lenders were exempt. They also have limited access to the BBB’s Recovery Loan Scheme.
“In the coming months we as a society will face new challenges, and fintechs have a critical role in supporting the consumer. Equally, it is important that we act now to encourage and harness even further innovation across the sector if we are to cement the UK as the world’s leading financial centre”, the statement said.
Read more: Innovate Finance chief says regulatory reform will help build fintech prowess
The trade body also called on government to foster a proactive regulatory regime to encourage greater innovation in the sector.
It argued that, while it supports the Financial Services and Markets Bill, it believes it could be bolder, strengthening the proposed competitiveness objective and extending the framework to the Bank of England and the Payments Systems Regulator.
It called for greater ambition around open banking, digital ID and financial crime and fraud, supporting the Data Protection and Digital Information Bill and highlighting how digital ID will be critical to the emergence of any future centralised national cryptocurrency, or Central Bank Digital Currency.
Furthermore, the trade body said the UK was lagging in terms of crypto-assets and related exchanges and infrastructure.
“The US and Singapore – both with common law legal systems – are on the verge of leapfrogging us with regulatory frameworks for the new technology”, it said, calling on the government to expand existing plans for making the UK the best place to start and grow a crypto firm, with an actionable plan and timetable.
It went to call on the government to ensure fintech has access to the best talent and skills, from around the globe, while continuing to grow apprenticeships in the UK that meet skills needs and working with universities to promote innovation and create a talent pipeline.
Referencing the Kalifa Review of fintech, the statement called for continued action to develop the UK listing environment, including digitisation of shareholding and implementing reforms of pre-emption rights.
Finally, it highlighted the need for the government to capitalise on the strength of the UK fintech ecosystem to position the UK as the leading green finance centre. “Fintechs are already providing transformational net zero services to financial institutions in the US and elsewhere”, it said.
After becoming prime minister yesterday, Truss held her first cabinet meeting this morning and is set to appoint junior ministers this afternoon.
Read more: What to expect from the new Prime Minister