UK Gov’s Kalifa Fintech Review calls for sector innovation
that fintech is “not a niche within financial services”, Kalifa characterised the sector as being more akin to a tech-based revolution that has the potential to deliver better outcomes and, crucially, maintain the UK’s status as a world leader in finance.
Statistics seemingly validate Kalifa’s claims:
- The UK fintech market accounts for 10% of the global market share and generates £11bn in annual revenue
- 71% of UK citizens interact with at least one fintech
- UK fintech investment totalled US$4.1bn in 2020, which was “more than the next five European countries combined”
UK fintech: The future is not assured
Despite the Review’s positive initial findings, Kalifa caveats by stating that UK fintech is “at an inflection point of opportunity - and risk.” Fundamentally, the sector does not yet have a coherent vision for the future.
As such, he calls for innovation across the board and states that three primary factors - competition, Brexit and COVID - stand as important tests of the sector’s resilience. A has subsequently been sketched to reshape UK fintech; Kalifa recommends focusing on:
- Policy and regulation: creating new regulatory frameworks for emerging technology, maintaining fintech’s status as an integral part of trade policy, and establishing a Digital Economy Taskforce (DET) to ensure alignment.
- Skills: retraining and upskilling, more resources for education, and fintech work visas.
- Investment: unlocking capital to create a £1bn ‘Growth Fund’, enhancing sector visibility with a global family of indices, and expanding R&D tax credits.
- International: delivering an “international action plan”, launching an international ‘fintech credential portfolio’ (FCP), and driving collaboration.
- National connectivity: nurturing high growth potential clusters, accelerating the development of these same clusters through further investment, and driving a national coordination strategy.
Industry execs comment on the Kalifa report
“Fintech is about change. It is about new firms and established ones, large companies and small and the roles of both public and private sector. At present, these elements and their well-intentioned supporters are not pulling together in a single vision,” stated Kalifa.
A number of executives wrote to FinTech Magazine expressing their views on the Review’s findings. Here, we present a selection of those perspectives:
“The review provides crucial steps to demonstrate how the UK can continue to lead the fintech revolution. Like so many others we have chosen the UK as a base because we believe it has the talent, infrastructure and policies that will help fintechs thrive and build an inclusive community that equally supports businesses and the customers they serve” - Daumantas Dvilinskas, CEO,
“The Kalifa report sets out sensible recommendations, which as a growing employer in the FinTech space, we’d be excited to see in action. In particular, the recommendation to set up a training programme offering short courses to help workers learn essential tech skills will be important.
It is something the rest of the world should also look to implement. As the saying goes: “if you want to go somewhere quickly, go alone. If you want to go far, go together.” True innovation is achieved by giving back and investing in upskilling, which builds the next generation of digital leaders and innovators” - Anders la Cour, CEO,
“The UK Government should carefully consider Kalifa's proposals, closely cooperating with the private sector to quickly crystallise them into a smooth, realistic roadmap of new support for this crucial sector. Such a vote of confidence will ensure the message is communicated around the world: UK fintech is open for business.
"UK fintech is built on firm foundations of cutting-edge technology innovation and centuries-old expertise in financial services. With the pandemic accelerating customer appetite for convenient, tech-driven access to financial services, fintech firms are well placed to continue setting the pace for innovation and reimagining customer experience" - Josep Alvarez, UK Head of Banking Practice,
Findexable: COVID-19 hasn’t slowed down fintech investment
The release of Findexable’s 2021 Global Fintech Rankings report seems to confirm that the COVID-19 pandemic has had no deleterious effect on sector growth.
Compiled annually, Findexable’s report provides one of the most comprehensive surveys of global fintech. From regions to countries and individual cities, it compiles and analyses key performance data and gives insight into the leaders and up-and-comers.
In total, the company explored 264 cities across 83 countries and incorporated data from various media outlets, SEO databases, and over 60 fintech associations. CEO Simon Hardie spoke enthusiastically of the findings:
“The level of investment and activity in the fintech sector is hugely gratifying for those of us who have been championing the industry. It is especially good to see that the pandemic didn’t slow down, and may have in fact accelerated, the adoption of fintech in parts of the world that have previously been underserved.”
The leading hubs
Notably, there has been no movement in the 2021 list’s top three fintech hubs. While most others made incremental gains, it was Tel Aviv that made the most significant leap from 20th to 5th. Meanwhile, in a surprising shift, Singapore slipped from 4th to 10th:
- San Francisco Bay (same as 2020)
- London (same as 2020)
- New York (same as 2020)
- São Paulo (+1)
- Tel Aviv Area (+15)
- Berlin (+3)
- Boston (+1)
- Los Angeles (-2)
- Hong Kong (+2)
- Singapore (-6)
The leading countries
Findexable’s top 10 countries for fintech reflect the generally incremental shift observed among the hubs:
- US (same as 2020)
- UK (same as 2020)
- Israel (+9)
- Singapore (-1)
- Switzerland (same as 2020)
- Australia (+2)
- Sweden (same as 2020)
- The Netherlands (-2)
- Germany (+3)
- Lithuania (-6)
UK fintech has continued to ramp up at an accelerated pace: three new cities entered Findexable’s index for the first time, bringing the country’s total up to 13. The country remains fairly secure as Europe’s fintech leader, particularly as strong competitors like Lithuania fell in the rankings. However, Germany’s ascendance to the top 10 could indicate the beginning of a new challenger.
In North America, the US remains practically unchallenged by Canada. Meanwhile, both Australia and China have gained on Singapore, with the former seeming to be a likely APAC leader by 2022 if current trends continue.
As can be observed from the top countries and hubs, Israel’s fintech output has been proportionally one of the most impressive exhibited. It has claimed the top spot for MEA, followed by the UAE and Kenya - both of which also made significant gains. Finally, Brazil and Uruguay lead Latin America and the Caribbean.
Fintech: The global revolution
Reviewing the statistics compiled in Findexable’s report lends credence to Hardie’s words: fintech is greater than ever before and not even one of the world’s most disruptive events (COVID-19) has been able to prevent its growth.
Elliott Limb, Chief Customer Officer of Mambu, which sponsored the report, called every fintech part of a “global revolution” that is transforming financial services for the better.
“They are changing the way we save, spend, borrow, and invest money. Whether competing, cooperating or supporting traditional financial institutions, they are reshaping digital services for a real-time, on-demand world.
“Whether it is an aspiring unicorn, a neobank seeking new markets, a provider that wants to go digital, or a financial institution that wants to act like a fintech, you need a roadmap [...] a guide to where to begin and where to go. This is why a ranking system is important.