Kalifa Review of UK FinTech calls for independent taskforce

By Sunniva Kolostyak

The UK government needs to establish a Digital Economy Taskforce, an independent review of the FinTech scene drafted by Worldpay chairman Ron Kalifa has suggested.

The long-awaited Kalifa Review of UK FinTech, commissioned by the Chancellor at Budget 2020, identifies priority areas to support the growth and widespread adoption of UK FinTech. It has presented a five-point plan highlighting the need to create jobs, boost trade and extend the sector’s competitive edge.

Its recommendations cover policy and regulation, skills, investment, international, and national connectivity: amendments to UK listing rules to make the UK a more attractive location for Initial Public Offerings; improvements to tech visas to attract global talent and boost the FinTech workforce; creation of a regulatory FinTech ‘scalebox’ to provide additional support to growth stage FinTechs; and a Centre for Finance, Innovation, and Technology, to strengthen national coordination across the fintech ecosystem to boost growth.

In the report, Kalifa explained that FinTech is not a niche within financial services but rather a permanent technological revolution to the way we do finance – which means the UK will need to take a holistic approach, providing FinTech scaleups with capital, skills, and the right policy and regulation.

He said: “If the UK is to retain its position as a global leader in financial services, then we must lead this technological revolution. Just as we led in previous industrial revolutions, we must do so again in this one.”

“Above all, it is about building markets for this innovation to grow into. A great product will not succeed without a strong customer base, adequate regulation, access to data, skills and capital,” Kalifa stated. “FinTech is about change. It is about new firms and established ones, large companies and small and the roles of both public and private sector. At present, these elements and their well-intentioned supporters are not pulling together in a single vision.”

Also commenting on the review, Rishi Sunak, Chancellor of the Exchequer, said: “FinTech is one of the UK’s great success stories and will help us seize new opportunities around the world.

“We must now build on our global reputation for fostering innovative start-ups and ensure firms can access the talent, finance and support they need to scale up here in the UK.

“This review will make an important contribution to our plan to retain the UK’s FinTech crown, create more skilled jobs, and deliver better financial services for people and businesses.”

The Kalifa Review contains the following recommendations:

Regulation

• Deliver a digital finance package that creates a new regulatory framework for emerging technology
• Implement a “Scalebox” that supports firms focusing on scaling innovative technology
• Establish a Digital Economy Taskforce (DET) to ensure alignment across government
• Ensure that fintech forms an integral part of trade policy

Skills

• Retrain and upskill adults in support of UK fintech by ensuring access to short courses from high-quality education providers at low cost
• Create a new visa Stream to enhance access to Global Talent for fintech scaleups
• Build a pipeline of fintech talent by supporting fintech scaleups to offer embedded work placements to Further Education and Higher Education students and Kickstarters

Investment

• Expand R&D tax credits, Enterprise Investment Scheme and Venture Capital Trusts
• Unlock institutional capital to create a £1bn “FinTech Growth Fund” of sufficient scale to act as the catalyst in developing a world leading ecosystem
• Improve the listing environment through free float reduction, dual class shares and relaxation of pre-emption rights
• Create a global family of fintech indices to enhance sector visibility

International

• Deliver an international action plan for fintech
• Launch an international “FinTech Credential Portfolio” (FCP) to support international credibility and increase ease of doing business
• Drive international collaboration through the Centre for Finance, Innovation and Technology, and launch an International FinTech Taskforce

National connectivity

• Nurture the high growth potential of the top 10 fintech clusters
• Drive national coordination strategy through Centre for Finance, Innovation and Technology
• Accelerate the development and growth of fintech clusters through further investment, such as in R&D