As the chancellor reminded in his speech: “Fintech contributes nearly $7bn to the UK economy each year. London is home to 17 of the top 50 international fintech firms and in 2017, funding in the technology sector more than doubled.
“But none of this progress can be taken for granted. The very nature of the industry means that it moves quickly and is fiercely competitive. So let me restate my commitment and determination. Currently, every hour a new tech business is founded in the UK. My ambition is to see that it becomes every half-hour.”
To ensure this growth, Hammond announced the government’s first Fintech Sector Stratgey, which will see the creation of a cryptoassets task force, consisting of the Treasury, Bank of England (BoE) and the Financial Conduct Authority (FCA). The aim is that it will “harness the potential benefits of the underlying technology, while guarding against potential risks,” Hammond claimed.
According to Steve Swain, CEO of cross-blockchain lending platform Lendingblock, there is a wealth of innovation in cryptocurrency, not to mention opportunity. However, he explained that, “in order for the market to reach the next stage of maturity, there has to be greater security and stability, and that means regulation.
“The countries that are proactive in accepting that cryptocurrency is here to stay and work with the market rather than against it, are the ones that will be able to capture and benefit from all the potential the technology holds. The UK has a great history of embracing fintech advances and to ride this next wave of innovation, initiatives like the cryptoassets task force are absolutely vital.”
The FCA and BoE will also soon be looking at automating regulatory compliance and a new code of industry standards will allegedly make it easier and cheaper for companies to partner with existing banks. “Robo-regulation” schemes were likewise announced, whereby software would track compliance. This, Hammond said, would save companies time and money.
Hoping to ensure such companies are able to expand internationally, the UK will be in collaboration with Australia. And closer to home, the next few months will see the government appoint three “regional fintech envoys,” who will see to it that the benefits of fintech are felt across the nation.
“The pace of change in financial services is only increasing as financial innovation continues to transform the competitive landscape,” SteelEye’s CEO, Matt Smith, told Real Business upon hearing the news. “With key regulations such as MiFID II, PSD2 and GDPR soon coming into force, financial firms and fintechs are increasingly becoming a political priority.
“It comes as no surprise then that Hammond not only announced a fintech strategy, but recently revealed the imminent launch of a Fintech Strategy Group to help boost innovation and continue the UK’s domination of the sector. At this time of intense scrutiny and regulation in the financial services industry, it’s crucial that companies work not against but alongside and in support of, regulators, in order to realise increased transparency and the creation of a fairer, more competitive market.