Earlier this week, Liz Truss successful Boris Johnson as British Prime Minister, beating his rival Rishi Sunak in the race to become leader of the Conservative Party. But what does his nomination mean for the UK fintech community? The industry shares its point of view.
Simon Curéton, CEO, Financing Options
“We welcome Liz Truss’ evident passion for the city as a ‘crown jewel’ and are confident that she has the fintech community as much as the institutions in place in mind as she sets her economic agenda in the following months.
“When Sir Ron Kalifa’s Review of UK Fintech was published last year, it recognized that there were many opportunities to make the UK the epicenter of financial innovation and highlighted the strengthening of our presence on global markets, which we hope she will take with her from the foreign office.
“There are reasons the UK financial sector is so admired overseas, including the rule of law, regulation and expertise that resides in the Square Mile and beyond. Its promised ‘war on technocrats’ must be fought carefully, but it represents a chance to position the UK as a leader in realizing the benefits of open banking and in adopting the technologies that will make the take faster and more robust lender decision making than ever before.
“We face a global financing gap, exacerbated by the energy crisis, and SMEs remain at the heart of all global economies. The more we do to foster an environment in which small businesses are helped and not hindered, the better it will be for the UK, business owners and the ability of the fintech community to export its prowess to other major economies.
Romi SavovaCEO, PensionBee
“Newly appointed Prime Minister Liz Truss will have a host of immediate decisions to make, in order to bring certainty and stability to businesses and consumers, in these tumultuous times.
“As we have a supply problem, I urge the new Prime Minister to prioritize policies that support consumers and businesses in the short term, rather than measures that kill demand.
“It is imperative that the government does not tip the economy into an unnecessary recession by raising taxes. The new Prime Minister should not be afraid to borrow a little more; and choosing versatile short-term policy measures that are quick to implement but just as quick to reverse, such as reducing VAT.
“Under this latest administration, I hope the new Minister for Pensions and Financial Inclusion will focus on putting consumers back at the heart of pensions, by finally legislating a 10-day pension change guarantee.
Chaim Hack, business development manager, Coremont
“Actions always speak louder than words and in the weeks and months to come we will have clues about what program the new Conservative government will put in place and how it will support the fintech sector.
“Whether it’s digital bank Chase setting up shop in Birmingham or local businesses such as Revolut expanding rapidly, the UK fintech sector still has huge undiscovered potential. Indeed, companies British fintech companies received £7.6 billion in funding in the first half of 2022, the second-largest in the world after the £20.8 billion raised by US companies.
“Additionally, data compiled by industry body, Innovate Finance, showed that for the first half of the year, global fintech investment reached £57.6 billion. The opportunity to boost the fintech industry and developing it much more is here – now it’s up to PM Truss to enact the policies.
Thomas TudehopeGlobal Head of Public Policy, Luna
“Luno looks forward to working with Ms. framework and his team to design a regulatory framework for crypto that will drive economic growth, create thousands of jobs, and protect consumers.
“As outlined in our recent response to Parliament’s inquiry into the crypto industry, Luno believes there is an urgent need to develop and implement a regulatory framework that protects consumers, ensures that all crypto companies operate to the highest standards and enables UK businesses to plan with the certainty needed if we position the country as a global leader in the digital asset ecosystem.
Bo Brustkern, CEO, Fintech Nexus
From a regulatory perspective, our thesis continues to do well: the UK is (still) among the most hospitable places to build innovative fintech.
“If Liz Truss takes economics seriously (no doubt about it!), then embracing the ‘new’ fintech – aka crypto, aka Web3 – may be a decision she’s ready to make.
“A strong move in this direction would define the next decade of financial innovation (and beyond) for the UK, and would undoubtedly help cement London’s place in the changing global financial order.”
“Innovate Finance would like to congratulate new Premier Liz Truss on her appointment. We look forward to continuing to work with her and the government to further strengthen the UK’s position as a global fintech hub and to realize the full potential of fintech to create a more democratic financial services sector, inclusive and effective that works best for everything.
“The fintech ecosystem has enjoyed and benefited from the strong support of the UK government over the years. However, much more needs to be done to ensure that we unlock the full potential of innovation to create a better financial services industry for all, and as such, it is imperative that we maintain the current momentum.
simon taylorstrategy & content manager, Sardineand co-founder of 11:FS
“UK fintech has a reputation for being one of the most exciting in the world. But with a new Prime Minister, Liz Truss, will things get better or worse? The UK fintech sector exploded with the first mainstream fintech companies like Sage, Revolut, Monzo and Starling capturing global attention and massive payment companies like Checkout reaching multi-billion dollar valuations over the past decade.
But after Brexit, the UK had four key issues: access to talent, access to growth capital, access to the European market and responsiveness/openness of regulators. So will Liz Truss change things?
1. Worldview Matters
Liz Truss won her party’s support by promising low taxes and support for businesses. I read this as being more friendly to “the city” than fintech companies disrupting it. I hope I am wrong on this point, because the fintech industry can be an engine of growth.
2. There are fruits handy to deliver
The Khalifa Review published in February 2021. It sets out policy recommendations on talent, capital and rosters. Most of them have not been implemented. The government has been frozen by Brexit, the pandemic and now leadership changes and Ukraine. It’s time to deliver.
3. Smashing regulators together might not solve anything
Truss wants to merge CIF, PRA and bank of england in one. This move might make life easier for some in big finance, but I find it hard to see it as anything other than cost cutting. Compared to the US, the UK regulatory environment is incredibly simple.
Read Taylor’s comments in full in her LinkedIn post.
The Prime Minister’s to-do list: How Liz Truss can continue the UK’s fintech success story