Trade group TheCityUk is calling for an overhaul of fintech regulations as the Covid-19 pandemic upends traditional models of finance.
With 1600 fintech firms operating in the country, TheCityUK argues that the sector needs further regulatory support as the pandemic fast-forwards technological trends and adoption in all parts of the economy.
Miles Celic, chief executive officer, TheCityUK, says: “The UK’s regulatory sandbox approach has been hugely successful and internationally acclaimed, but is starting to show limitations as the sector grows and matures. A broader framework needs to be developed with industry to reflect the expansion of the FinTech sector and ongoing regulatory development of maturing firms.”
A report produced in collaboration with PA Consulting, found that firms find regulatory hurdles a barrier to growth and difficult to understand. The sector is calling for fintech regulation to be consolidated and made more user friendly, particularly if the UK is to maintain its global leadership in the fintech market.
The report focuses on four key elements which are seen as essential to supporting the next stage of UK fintech growth:
- clarifying regulatory support and engagement
- building on success by delivering new initiatives
- integrating innovation across the supervisory framework
- and strengthening support of FinTech expansion into overseas markets.
Alex McGill, financial services expert, PA Consulting, says: "The UK government and regulators have been fundamental to the success of the UK’s FinTech industry, but there is room for improvement to ensure our approach to regulation and innovation remains world leading. This report highlights pragmatic and actionable recommendations that industry and government can take to ingeniously work in partnership with global regulators."