The UK needs to do more to support the “entire lifecycle” of FinTech start-ups, according to Janine Hirt, CEO of industry non-profit Innovate Finance.
Speaking at a Westminster Business Forum policy conference on 21 June, Hirt said that the UK has made good progress in achieving the aims of the Kalifa Review of UK FinTech, which was published by the government in February 2021.
However, she added, “The Kalifa Review focused very strongly on the later-stage and high-growth FinTechs. But we also need to make sure that the UK remains one of the best places in the world for entrepreneurs to start up their businesses as well.
“Supporting them as they grow, to the point where we have IPOs, and making sure that we keep more of our FinTechs in the UK and listing here.”
The Financial Conduct Authority (FCA) has helped achieve progress in this area, she said, then added, “But we also need to make sure that we’re driving greater institutional investment into the ecosystem.
“We also need to talk about changing the mindset of some of our domestic investors, even the VCs and the private equities, alongside the institutional investors and pension funds.”
Partnerships will be another key opportunity for the sector, she said, both between start-ups and established banks and between different FinTechs. All of this will help create what she called “a more democratic financial services system”.
Hirt also expressed the view that FinTechs are a force for social good and inclusion, and not just economic gain.
“We saw during the COVID pandemic FinTechs step in and help all of us navigate through an unprecedented crisis,” she said.
“This should come as no surprise, because if we think back to the birth of the FinTech ecosystem as we see it today – the financial crash of 2007, the crisis of 2008 – we see a time when FinTechs brought more trust and resilience to the sector.
“And that has been followed up. We know that from 2007 to 2019, more than 65 percent of all SME lending across the UK was done by alternative lenders, challenger banks, and FinTechs.
“And now we’re coming out of the COVID pandemic, we’re unfortunately on the cusp of a massive cost of living crisis, with standards of living in the UK set to drop more than we have seen in 70 years.
“So, it’s absolutely critical that FinTechs focus on ensuring they are catering to both individuals and SMEs, helping them navigate through this crisis.
“This can be done by providing the tools and access to better, cheaper, more relevant products.”