During the review, we met with over 320 stakeholders from over 200 firms and considered many written submissions and supporting documents. I would like to thank everyone for their time and valued participation in this significant work. The report was published today and is available here.
Fintech is a major force for good. It has created jobs, revolutionised access to financial products for consumers and vastly improved back office processes for businesses. It has made available more finance for SMEs. Fintech will also be at the fore in the design and delivery of CBDC-related services. As aptly said by Kay: "There’s a raft of potential benefits. Fintech can help drive efficiency across financial services, support financial inclusion, prevent fraud, improve operational resilience and promote competition. With the right support, it can be a driver of economic growth".
The strength of our incumbent financial services market has provided fertile ground for fintechs. Our government and regulators have also turbo charged the growth in the UK fintech industry. For example, open banking, the FCA's Project Innovate, the regulatory sandbox, the new digital sandbox pilot and the PRA and FCA’s New Bank Start Up Unit all demonstrate the regulators' innovative approach and have been the envy of the world.
We are now at an inflection point. COVID-19 has fast forwarded the digitalisation of businesses and, following its departure from the EU, the UK now has a free hand to shape its regulatory environment. This is an opportunity to develop further a nurturing, and efficient, environment for fintechs - underpinned by gold standard regulation which maintains the perfect balance between risk management and freedom to innovate.
Our government and regulators have already shown that they excel at this. They do not disappoint as they embrace this opportunity by commissioning the Kalifa review to harness industry views on the necessary steps in further support for one of our leading ecosystems.
The industry appreciates this opportunity to feed into the future – they too have risen to the challenge. They have been unfailingly generous with their time and even more so, their ideas.
Legislative and regulatory policy is a key enabler in propelling us to an even brighter future. One which creates more jobs, attracts more investment and, crucially, supports financial inclusion.
We call on the government and regulators to respond in kind to bolster an enabling environment that encourages growth and reinforces our international competitiveness.
We expect the government to respond to the Review in the coming months.
To discuss the potential impact of the recommendations on your business, please get in touch with any of the contacts above.
Hogan Lovells is running a webinar series on the FinTech Strategic Review (Policy and Regulation Chapter). Our first webinar is a virtual panel discussion covering key findings from the Policy and Regulation chapter. This panel discussion will be followed by a series of webinars in the next couple of weeks focussing on Cryptoassets, Payments, Digital ID, Open Finance and Artificial Intelligence. Further information is available here.
Authored by Rachel Kent.