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The UK government has announced its strategy for the financial technology (fintech) sector, which will attempt to create an environment in which fintech firms can prosper.
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Initiatives include automating regulatory compliance and a cryptocurrency taskforce.
Chancellor of the exchequer Phillip Hammond said the government was committed to building the most pro-growth and pro-innovation regulatory environment in the world for fintech.
“I’m pleased to announce that the FCA [Financial Conduct Authority] and Bank of England will take the first steps towards automating regulatory compliance...reducing costs for financial services firms, and removing a key barrier for fintechs as they enter financial services markets.”
Fintech contributes nearly $7bn to the UK economy each year, and London is home to more than 250,000 software developers, according to Hammond.
A new code of industry standards will be established to make it easier and cheaper for fintech firms to partner with established financial services providers.
The government will also appoint envoys to England, Wales and Northern Ireland to promote the adoption of fintech by regional banks and building societies. This is in addition to existing Scottish envoys.
Hammond said there would also be a focus on increasing global collaboration in fintech. He added that the UK had just signed a fintech agreement with Australia to add to existing deals with Singapore, China, Korea and Hong Kong.
“[Australia] is our most ambitious collaboration to date, bringing together regulators, policy-makers and private sector leaders to collaborate on growing our respective fintech markets in tandem,” said Hammond.
Read more about fintech in the UK
- An international fintech delegation to UK: now you see them, now you don’t. Just like that.
- Most UK businesses are using financial technology products and services in some way, with cost savings being the main attraction.
- Investment in UK fintech dropped in 2016, but is still ahead of 2014 numbers, according to figures from FinTech Global.
“Fintech offers the chance to connect the world, deliver financial services and innovations that can drive widespread growth and prosperity, create millions of jobs, and build stronger, fairer, faster financial services that serve the common interests of all the peoples of this interconnected planet,” he added.
Part of the strategy sees the launch of the government’s Cryptoassets Task Force, comprising HM Treasury, the Bank of England and the Financial Conduct Authority. According to the fintech strategy report, the taskforce will “explore further the risks of cryptoassets, [such as bitcoin], and the potential benefits of the underlying distributed ledger technology, as well as to assess the future response of the appropriate authorities, including around regulation.”
The Cryptoassets Task Force will report back in the summer.