UK Treasury moves to stimulate the next wave of fintech innovation

UK Treasury moves to stimulate the next wave of fintech innovation

The UK Treasury is to conduct a long-term review of the UK's payments landscape and regulatory framework in order to lay the ground work for a new wave of fintech innovation.

The proposals were outlined by UK Chancellor Philip Hammond at a Mansion House Dinner speech Thursday evening.

"We are seeing, all around us, unprecedented FS innovation," he told the audience. "As new businesses dismantle distribution chains, create new ways to serve the market, and meet demands that did not even exist a few short months ago.

But as the first wave of FinTech innovation matures, we must now evolve our policy and regulation too, to make sure it remains fit for purpose."

Hammond says the Government will initially consult with the Financial Conduct Authority on ways to extend the Open Banking model to SMEs, as well as consumers, creating a new agenda for 'Open Finance'.

The second step will be to launch a "major, long-term review" into the future of the regulatory framework.

"This review will deliver a regulatory system that continues to enable, rather than stifle, innovation," says Hammond. "I have heard the message from business that there is a critical need for greater 'air traffic control' to manage the cumulative impact of regulatory change emanating from different sources."

The first phase of the review will take action to improve coordination between the regulatory authorities - starting with a summit of all the relevant regulators at No. 11 Downing Street in a few weeks’ time, leading to a Treasury call for evidence before the summer.

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