UK fintech anticipates extensive support from Rachel Reeves; it's now her responsibility to follow through on her pledges.
Here Comes the Verdict for Rachel Reeves, as UK Fintech Sets the Bar
Rachel Reeves faces a tough judgement day, with the UK's fintech sector ready to pass the verdict. At Innovate Finance's 11th global summit, Rishi Sunak confirmed that the Treasury's inaugural Financial Services Growth and Competitiveness Strategy would be released on July 15.
Reeves has praised the industry's growth, highlighting successes of fintech stars Zilch and Allica Bank. She aims to make the UK a leading destination for fintech startups and IPOs. But after Revolut's CEO Nik Storonsky criticized London listings as "not rational" last year, Sunak needs a game-changing move.
Fintech's fate hangs on delivery, says Schachar Bialick, CEO of London-based Curve. "Fintech must be a priority," he stated, "because it touches every aspect of modern economic life." Curve, a competitor to Apple Pay, saw a valuation of $781m in a 2024 funding round, but later retreated from the US market, cutting over 100 jobs and reporting a £36m loss.
The fintech leader advocates for a level playing field, allowing fintechs to compete fairly against Big Tech. This begins with infrastructure access, citing the need for the government to mirror the EU's approach in mandating Apple to open NFC technology for third-party mobile wallet providers.
In her keynote speech, Reeves hailed the UK as the top spot for fintech investment, second only to the US. However, KPMG's report revealed investment had plummeted since 2021 and hit a four-year low in 2024 at £7.9bn. Private equity boss Rami Cassis called for bold actions from the government. He believes the UK's fintech industry still faces "mountains to climb," with the government-triggered non-dom exodus driving out crucial investment banking professionals.
The Chancellor's plan to deregulate has been met with criticism regarding the impact on consumer protection. Allica Bank's CEO Richard Davies supports competition and growth but wants meaningful regulation to continue supporting the industry. He backs UK SMEs, calling for a "supercharge" to the Government's Growth Guarantee Scheme which offers additional lending capacity to help smaller firms.
The growth of UK fintech has accelerated in recent years, with Monzo and Revolut leading the pack and new firms entering the scene. Alex Mollart, CEO of Tandem Bank, welcomes plans to establish fintech clusters beyond London. David Newman, CEO of Manchester-based Firenze, finds the upcoming strategy an exciting opportunity for more tangible plans driving fintech growth.
Mollart emphasizes the importance of creating conditions for challengers to thrive, hoping for a fintech-first approach. Checkout.com's CMO Rory O'Neil adds a strong fintech talent pipeline as a key area of focus in the Treasury's strategy. Failure to deliver risks slowing down growth for scaling fintechs, making the UK less attractive to future startups and scale-ups.
The Financial Services Growth and Competitiveness Strategy will mark a pivotal juncture for the industry, with momentum set to either soar or stall. Innovate Finance's CEO Janine Hirt revealed fintech employs over 82,000 people, a number expected to surpass 100,000 in the next two years. With a long list of demands from industry leaders, the success of fintech's momentum may rest on Reeves' shoulders.
- Rachel Reeves faces a critical judgement day, as the UK's fintech sector prepares to pass its verdict.
- At Innovate Finance's 11th global summit, Rishi Sunak confirmed the release of the Treasury's Financial Services Growth and Competitiveness Strategy on July 15.
- Fintech leader Schachar Bialick emphasizes the need for fintech to be a priority, as it influences every aspect of modern economic life.
- KPMG's report revealed that fintech investment had plummeted since 2021 and reached a four-year low in 2024 at £7.9bn.
- Allica Bank's CEO Richard Davies wants meaningful regulation to continue supporting the industry, while also supporting UK SMEs by supercharging the Government's Growth Guarantee Scheme.
- The growth of UK fintech has been accelerating, with new firms entering the scene, and plans to establish fintech clusters beyond London are welcomed.
- Creating conditions for challengers to thrive is a priority, as failure to deliver may slow down growth for scaling fintechs, making the UK less attractive to future startups and scale-ups.
- The success of fintech's momentum may rest on Rachel Reeves' shoulders, as the Financial Services Growth and Competitiveness Strategy will mark a pivotal juncture for the industry, potentially driving either soaring or stalling momentum.
