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Will the CFIT tackle growth barriers and accelerate the UK fintech sector?

Madhvi Mavadiya

Madhvi Mavadiya

Head of Content, Finextra

The Centre for Finance, Innovation and Technology (CFIT), a UK quango charged with unblocking barriers to growth for fintech, has opened a National Hub in Leeds. The creation of the CFIT was a key recommendation of the 2021 Kalifa Review of UK Fintech. HM Treasury gave the green light to the project in the 2021 Spending Review, allocating £5 million to fund its creation.

This is an excerpt from The Future of Fintech in the UK 2023: An Innovate Finance Global Summit and UK Fintech Week special edition' report.

CFIT’s core objectives are to bring together time-limited ‘coalitions’ of experts to address barriers to fintech sector growth; and to support the creation of high-income, tech-based employment nationwide; firms achieving global scale; and improving access by citizens and small businesses to financial services.
CFIT will announce the establishment of financial innovation hubs with comprehensive reach across the UK’s nations and regions - including in key growth centres such as Leeds. The city has seen enormous fintech growth since 2020, with its number of fintech firms more than doubling to 107, and valuation of firms doubling to reach £710 million - supporting over 7,500 jobs.

Giovanni Daprà, co-founder and chief executive, Moneyfarm, called out the fact that while London is and will remain the central hub for fintech in the UK, “clusters have emerged across cities including Manchester, Birmingham, Edinburgh, Glasgow and, to an extent, Bristol, Cambridge and Reading. Much of this success can be attributed to the UK’s already existing prowess in financial services, combined with access to a large pool of capital and talent. To remain a robust centre of excellence in the sector, it is vital that the UK continues to attract global investments with the view to scaling up services through overseas expansion.”

Daprà also mentioned that the macroeconomic factors that have slowed investments down and how despite that, fintech remains an attractive proposition. Alongside the creation of CFIT, “it is vital that the government continues to deliver on the regulatory environment to support investments in the sector.” This will hopefully “tackle barriers to growth and accelerate the UK fintech sector.”

Jamie Morton, VP of sales UK, TrueLayer, also believes that CFIT will a “positive step, and will act as a proactive advocate for UK fintech and a supportive regulatory environment.” Morton added that there is much to learn from how “Britain led the way in open banking regulation and continues to do so.”

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