Janine Hirt
CEO, Innovate Finance
When it comes to fintech, it is critical to continue with a proactive regulatory environment in the UK which both protects the consumer and enables innovation to flourish.
The UK has always led the way on forward-thinking, effective and proactive financial regulation. The FCA’s sandbox, allowing businesses to test innovative propositions in a safe environment, is a prime example, having now been replicated by numerous other countries around the world.
Creating a strong regulatory environment
Against a backdrop of stiffening international competition, the UK needs to press ahead to maintain its position as the pre-eminent regulatory environment for fintech. The FCA’s recent announcement of a regulatory nursery was welcomed, as was the confirmed move towards creating a “Scalebox”, a key recommendation of the Kalifa Review, designed to give more tailored regulatory support for firms in the high growth stage.
Open finance, an area where the UK is world-leading, also has the potential to unlock huge product innovation through shared data. It is a key ingredient for providing more tailored financial services to consumers and giving them a much more accurate and detailed view of their finances.
The concept of more tailored financial services leads to the broader issue of financial wellness, which has become even more important as we seek to build back better and recover from the pandemic. A number of fintech companies have developed propositions aimed squarely at improving financial health, including helping consumers manage their cash flow and save more, or ensuring access to loans and cash flow for our SMEs, which is critical to the UK’s overall economic strength and prosperity. While regulation must put the protection of the consumer at the forefront, it is important to remember that many of these new entrants, new products and new technologies indeed serve to benefit individuals and SMEs by providing better access and experience, and making financial services overall more democratic and transparent.
Unlocking fintech’s true potential
The effectiveness of fintech lenders in distributing the emergency COVID-19 loans, at speed and at scale, demonstrated the power of the industry to support small businesses and created a renewed focus on the role technology could play in increasing financial wellness. This is just one of many examples showing how society is benefiting from the innovation taking place in our financial services industry.
The effectiveness of fintech lenders in distributing the emergency COVID-19 loans, at speed and at scale, demonstrated the power of the industry to support small businesses and created a renewed focus on the role technology could play in increasing financial wellness.
The Kalifa Review highlighted the potential for UK fintech to take centre stage.
Ultimately, we are all working towards the same end goal: to ensure the UK retains its position as the pre-eminent global hub for fintech and, more importantly, to ensure the consumer benefits from the great innovation currently transforming the financial services sector. The Kalifa Review puts forward a clear vision for how industry, government, and the regulators can work together to make this a reality.