Only a quarter of UK fintech firms believe that the government has supported the sector well through the Covid-19 crisis, according to a survey of founders, with two thirds claiming that their voices are not properly heard in policy and regulatory circles.
Of more than 100 UK fintech founders surveyed by the Digital Finance Forum (DFF), just 25% believe the government has supported the sector well during the crisis, despite the fact that 75% think that the wider economy has been handled well.
Among the biggest challenges raised by respondents is accessing government support schemes, with 37% saying that they sought a loan during the pandemic but were unable to qualify for one.
Says the DFF report: "There was a distinct feeling [among respondents] that the system is rigged towards the big banks; and in many respects, against non-bank fintech lenders."
Asked what they want to see from government, founders called for access to Treasury funding lines and an end to the exclusion of the financial services sector from the Enterprise Investment Scheme and Seed Enterprise Investment Scheme.
Christian Faes, chairman, DFF and co-founder of LendInvest, says: “Key themes that came out from many of the respondents pointed to the fact that many fintechs are not on a level playing field with other startups when it comes to raising S/EIS funding; that it can take ‘way too long’ to obtain authorisations from the regulator; and that changes are need to ensure that the non-bank sector is on a more equal competitive footing to the larger incumbent banks.”
John Glen MP, Economic Secretary to the Treasury has offered a response to the findings, saying: “The Digital Finance Forum’s results reinforce my commitment to ensuring the UK’s pre-eminence as a place for fintechs to do business.
"We have recently launched a major independent fintech review which will consider how the UK can continue to foster innovation, maintain an ecosystem that supports growing firms, and promote the integration of new technologies across financial services."
Elsewhere, the survey found that nine out of 10 founders believe Covid-19 will make it harder to raise finance next year but four out of five still feel confident about the outlook for their business over the next 12 months.
More than a third express optimism that Covid-19 could provide new opportunities by accelerating digital adoption, while two in five are actively looking to grow their business in the coming months.