Fintech Growth: UK Companies Welcome the Launch of a Fintech Sector Strategy
Following the recent launch of a Fintech Strategy, some UK-based companies have acknowledged that the strategy paves the way for an expansion beyond London. Starling Bank is one such company. Being a mobile-only bank that is highly disruptive and operational within the fintech space, the company's Chief Information Officer, John Mountain, feels that the fintech strategy will facilitate the growth of the sector to other parts of the country.
"The UK is undoubtedly leading the way in fintech. This strategy will help to take it to the next level by including the rest of the UK in what has been to date a London-centric plan," Mountain says. Coming just a couple of days after the G-20 summit closed with an acknowledgement that blockchain technology has the potential to increase financial system efficiency, most people view UK's move to launch its fintech strategy as an effort to position itself as a major fintech hub. Iagon CEO, Dr. Navjit Dhaliwal, says, "With the United Kingdom's decision to launch it’s FinTech Sector, focusing on the establishment of a crypto-assets task force, the country is undoubtedly looking to place itself ahead of the curve when it comes to the underlying blockchain technology that is poised to revolutionize the way that we handle finances around the globe."
Economic Value The UK has, for a long time, been viewed as a leader in, both, finance and fintech. In fact, the financial sector contributes 9% of the country's GDP and employs about 1.1 million people. Out of these, 130,000 work in the fintech sector.
But blockchain technology has not always been seen as revolutionary in the UK. Just a few months ago, the UK government was highly skeptical about cryptocurrencies. Theresa May, Britain's Prime Minister, had called for stringent regulation of the industry just two months ago following a highly speculative period that saw the value of Bitcoin hit the $19,000 mark in December, 2017.
Today, the country is keen to tap into blockchain having included the setting up of a committee to evaluate the potential risks and benefits of blockchain in the fintech strategy. According to Philip Hammond, the Exchequer Chancellor in the UK, the country is keen to harness the potential of blockchain and cryptocurrencies. Even so, Erhan Cakmak, the CEO of Pavo feels the country is likely to face competition from emerging fintech economies both in Europe and Asia.
"London, as a classic global financial center, is certainly well positioned to become a major hub of blockchain and crypto financial tech. However, as we keep hearing again and again here at Crypto Summit 2018 in Zurich, Switzerland and Singapore are the well-established leaders. The U.K. initiative, while promising, merely indicates how much work they have to do to catch up," Cakmak says.
Global Influence With its new approach to fintech, the UK is likely to influence other countries into developing strategies for their fintech sectors.
The Chief Strategic Officer at Fanfare, Benny Phang, says, "It’s great to see the UK finding its new leadership role in this space, and it might just succeed in convincing other governments to embrace blockchain technology and crypto assets and unlock the value and advantages it can bring, not just to the financial industry, but to every aspect of life.”
Dr. Dhaliwal holds a similar opinion. He says, "It is my opinion that other countries will develop similar strategic planning methods in order to reinforce their overall position in the global financial sector. This will allow them to improve their country's own economy as well as the evolving efficiency of their financial systems."
Disclaimer: David Drake is on the advisory board for most of the firms mentioned or quoted in this article.