- The ‘FinTech Plan for Government’ sets out priority actions new the Labour government can take to maintain the UK’s global leadership in FinTech and support the government's mission to grow the UK economy and create opportunity for all
- The plan focuses on regulatory changes that would unlock growth for the UK economy without requiring additional public spending or tax cuts
- FinTech has been a significant success story for the UK over the last 10 years, creating over 75,000 jobs, driving financial inclusion and growth across the country, leading on lending for British SMEs and building the second largest market globally
London, 10th July 2024 - Innovate Finance, the industry body for UK FinTech, has today launched its FinTech Plan for Government on the steps needed to build on the UK’s leading status as a FinTech hub.
The plan sets out three core ambitions to maximise FinTech’s contribution to the government’s mission to grow the economy and create opportunity for all. The focus is on making the UK the world’s first smart data economy, ensuring the UK is the safest place to use digital finance and cementing the UK as the global leader in adopting new technologies in financial services. If realised, these ambitions could add £328 billion to the UK economy over five years.
The plan showcases the positive contribution of the FinTech sector to the economy and supports the government's mission to achieve the highest sustained economic growth in the G7. It highlights the opportunity for partnership with FinTech firms to help deliver Government goals, with significant reach across the economy and the ability to deliver faster, more tailored and more efficient solutions than traditional incumbents.
The FinTech Plan for Government sets out actions for the first 100 days of the new government and over the medium term to achieve three big goals that will maintain the UK’s global leadership in FinTech and maximise its contribution to the economy and society:
- Build the world’s first smart data economy
- Make the UK the most secure place in the world for consumers and businesses to use digital finance
- Make the UK the world leader in adopting new technology in financial services, by embracing innovation and equipping consumers with essential digital and financial skills
The FinTech sector plays a positive role in contributing to UK growth, with over 76,000 jobs, over half of all UK unicorn companies (more than any other sector), and over $5bn of inward investment in 2023, more than any other country outside the United States.[1] FinTech supports growth across the UK economy, with tools that improve productivity for financial services, large corporates and SMEs (such as open banking, payments solutions, crime prevention, and automated compliance and accounting); and provides 60% of lending to British SMEs.
The latest Innovate Finance’s FinTech Investment Landscape H1 2024 reveals that in the first half of 2024 investment in UK FinTech is down by 37% from H2 2023. The UK remains second globally in FinTech investment, behind only the US, and still the top destination in Europe securing more capital than the rest of European countries combined.
Janine Hirt, CEO at Innovate Finance, said: “We are delighted to launch our FinTech Plan for Government, setting out a clear, actionable programme for the new government to support the continued growth of the UK FinTech ecosystem.
“Our plan highlights three big ambitions, namely making the UK the world’s first smart data economy, ensuring the UK is the safest place to use digital finance and cementing the UK as the global leader in adopting new technologies in financial services. If realised, these ambitions could add £328 billion to the UK economy over five years.
“The UK FinTech sector is driving a more sustainable and more democratic financial services sector, and the data reflects this: 60% of all SME lending across the UK today is being done by FinTech, powering forward the engine of our economy. 8 out of every 10 adults in the UK are using at least one FinTech tool on a regular basis. More than a quarter of UK FinTechs are directly addressing inequality, and more than 97% of all UK FinTech is having a medium to very high positive impact on the United Nations Sustainable Development Goals. FinTechs put the consumer first, decrease cost, and increase efficiency - and in doing so create a financial sector that works better for everyone.
“However, our research shows increasing global competition for FinTech investment, demonstrating the ever greater need for the UK policy and regulatory environment to take action to maintain our lead in FinTech and in financial services more widely. The UK has a window of opportunity to forge ahead which it cannot afford to miss.
“We would love to see early commitment from government to supporting the growth of the FinTech sector by introducing Smart Data legislation in the King’s Speech, reviewing the proposed implementation of the new mandatory reimbursement scheme for authorised push payments, committing to delivery of the Mansion House Pensions Compact to increase access to growth capital, and focusing regulators on innovation and growth.
“The majority of our proposals show how the government can take bold action without incurring direct costs to the public finances, and where quick wins could be delivered without the need for primary legislation. We look forward to working in partnership with the government on ensuring the UK builds on its place as a leading FinTech sector to foster innovation and growth in financial services.”
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Notes to editors
The FinTech Plan for Government is accessible on the Innovate Finance website here.
The FinTech Investment Landscape H1 2024 is accessible on the Innovate Finance website here.
Media contact
Seven Hills – innovatefinance@wearesevenhills.com
About Innovate Finance
Innovate Finance is the independent industry body that represents and advances the global FinTech community in the UK. Its mission is to accelerate the UK’s leading role in the financial services sector by directly supporting the next generation of technology-led innovators.
Innovate Finance’s membership ranges from seed stage startups and global financial institutions to investors, professional services firms, and global FinTech hubs. All benefit from Innovate Finance’s unique position as the single point of access to promote enabling policy and regulation, talent and skills, business opportunity and growth, and investment capital.
By bringing together and connecting the most forward-thinking participants in financial services, Innovate Finance is helping create a global financial services sector that is more transparent, more sustainable and more inclusive.
More information at www.innovatefinance.com
[1] Department for Business & Trade, FinTech: Opportunity highlights, https://www.great.gov.uk/international/content/investment/sectors/fintech/ Innovate Finance, FinTech Investment Landscape Report, https://www.innovatefinance.com/capital/fintech-investment-landscape-2023/
