Chair: Anthony Hilton, Financial & Business Commentator, Evening Standard Panellists: David Craig, President for Financial & Risk, Thomson Reuters; Eileen Burbidge, UK Treasury Special Envoy for FinTech; Mark Hoban, Chairman of the International Regulatory Strategy Group (IRSG), and; Dr Andrew Sentance CBE, Senior Economic Adviser, PwC
This panel session focused on the emerging challenges and opportunities for the UK as the leading international financial centre, with much discussion focused around FinTech. The UK’s global strengths are long-established and include strong market infrastructure, a deep pool of capital and talent, as well as a very sophisticated and widely respected financial and related professional services industry.
There was much discussion around the UK’s position as the world's leading exporter of business and professional services, especially to the Europe as well as the how the confluence of cultural factors, talents and capital have resulted in the rise of innovative technologies, in particular FinTech. Cybersecurity, Green Finance and Islamic Finance were also identified by the panellists as fast-growing segments of the UK-based financial and related professional services industry and ones that presented great opportunity for the future.
Panellists noted similarities between Silicon Valley’s leading role in driving high-tech innovation and development in the 1990s and London’s emergence as a FinTech hub today. The growth of FinTech and technological innovation in the UK was discussed in depth, as well as the sector’s potential to drive jobs and growth. There was a sense that the current ‘Findustrial’ revolution is strongly related to the UK’s business and innovation-friendly environment, but also to financial institutions’ ability to attract talent from across Europe.
Developments in FinTech have stemmed from the existing service gap between new players and traditional banking institutions. The success of peer-to-peer lending and crowdfunding platforms – which provided £3.3bn of financing across the UK in 2015 – was mentioned. In addition, the Financial Conduct Authority's (FCA's) competition mandate and concurrent powers allow the UK regulator to be particularly responsive to technological change. The regulatory sandbox, which was launched by the FCA in May 2016, was quoted as a good example of the important role the UK regulator can play in supporting innovation.
Panellists explored the challenges ahead for the FinTech sector following the outcome of the EU referendum for the UK to leave the EU. It was suggested that the exit negotiations should not be considered as a disruption, but rather as an adjustment. The months ahead will be a crucial time for the UK FinTech sector and cooperation between the industry, Government and the regulators will be of utmost importance to ensure that the burgeoning developments in FinTech combine with London’s traditional strengths as the leading international financial centre.
A review of listing and tax regimes could also maximise the UK’s attractiveness for venture capitalists in a post-Brexit world, and ensure that both front-end and back-end developers are properly funded.