Long reads

The Westminster Series: Lord Holmes on UK Fintech Week

Chris Holmes

Chris Holmes

Peer, House of Lords

UK Fintech Week brings together the brightest and the best from the fintech ecosystem to discuss and debate crucial issues facing the sector and beyond. Themes this year are fintech hyper-growth and exits, investment trends and trade, Kalifa one year on, open finance, crypto and CBDCs, sustainable fintech and keeping up with regulation. UK Fintech Week gives us an opportunity to assess where we are and look ahead.

The UK continues to be a leader in financial innovation.

Its place at the centre of global financial services, with supportive regulation, access to world-class talent, and a rich investment landscape has created a perfect environment for start-ups and established companies. One year on from Ron Kalifa’s excellent report into UK fintech, it is encouraging to see how many of his clear recommendations have been taken up by Government, not least support for a Centre for Finance, Innovation and Technology (CFIT). Fintech has the potential to fuel post pandemic brighter futures for the benefit of us all. 

Covid-19 accelerated the pace of digital adoption, six million UK residents downloaded a banking app for the first time during the pandemic. Fintech, at its best, has so much potential for good through promoting financial inclusion and services that can offer, for example, access to credit for those without a clear credit history, access to more affordable credit and more convenient and cheaper services including payments and money transfers.

However, in the digital revolution we must ensure inclusion and accessibility is hardwired from the start. A new RSA report has found ten million people would struggle to cope in a cashless society despite only 17% of payments currently made with notes and coins.

That is why I tabled an amendment to the Financial Services Bill - now Act - that enabled cashback without purchase. I am also campaigning for a review of Access to Digital Payments, in the same mould as the Access to Cash Review. We need to proactively engage with this issue and make sure no one is left behind.

Embedded finance is also on the agenda at UK Fintech week, and I’m delighted to be speaking on a panel at IFGS in which we will be discussing why embedded finance is such a hot topic and looking at emerging trends and current use cases.

The embedded finance sector is predicted to be worth $3.6 trillion by 2030 and holds so much potential to empower the consumer and provide a more holistic view of finances. Demonstrating the value to the customer and delivering excellent UX, personalised automated finance management tools is key. We are increasingly seeing products that can take a full picture of salary, spending habits, investments, savings, even taxation and utilise variable recurring payments to help consumers manage their money. I’m looking forward to hearing from other panellists on their insights and predictions in this area.

The Future Regulatory Framework (FRF) Review provides an important opportunity to determine how the financial services regulatory framework should adapt to the UK’s new position outside of the European Union (EU), and how to ensure the framework is fit for the future. Another Financial Services Bill is expected in the upcoming Queens Speech and I look forward to taking the opportunity to propose amendments that will drive forward some of the longer-term initiatives proposed in the Kalifa Review. 

Solutions to address crypto, digital assets and digital ID need a greater focus.

Globally, it is a period of significant regulatory change to the crypto-asset sector, and it is vital that we foster the right environment for this sector to mature and grow in the UK. The UK fintech sector has the potential not only to drive global technological change but also to help the UK deliver its jobs and growth agenda. We need a bold vision and we need to make the most of our assets, combining the fine reputation of the Bank of England with the best of our new technologies, brains, and industry we have the potential to completely reset of the relationship between citizen and state, for the benefit of both.

We have a world-class fintech eco-system and it’s now more important than ever that we all play our part, build on the positive momentum and consolidate our position as the best place to start, build and scale a fintech business. UK Fintech Week promises an incredible opportunity to listen, learn, connect, collaborate, innovate and be inspired, I hope to see you there!

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