UK gov pledges £1 billion to support fintech startups

The UK's fintech sector is set to receive considerable financial and regulatory support from the government, which includes a £1 billion fund to support startups

An independent review led by former Worldpay CEO Ron Kalifa has laid out a plan to help the government boost growth, employment and economic output in the entire fintech sector, which is already worth more than £11 billion a year to the UK economy.

Along with the £1 billion support fund and the previously revealed fast-tracked visa scheme, the recommendations also include a 'scale box' that will offer regulatory support and a private sector-led Centre for Finance, Innovation and Technology to help boost national coordination and growth across the UK.

Details of Kalifa's review surfaced earlier in the week with suggestions it would be included in Chancellor Rishi Sunak's budget, set for 3 March. The publication of the full set of recommendations has confirmed that with Sunak stating that it will make an "important contribution" to the government's plans for the sector.

"Fintech is one of the UK's great success stories and will help us seize new opportunities around the world," Sunak said. "We must now build on our global reputation for fostering innovative start-ups and ensure firms can access the talent, finance and support they need to scale up here in the UK.

A number of established fintech firms, such as Transferwise and Revolut, praised the review. Monzo, which announced job cuts during the first half of 2020 as its business was heavily impacted by both the pandemic, also welcomed the recommendations.

"At Monzo, we're really proud to be part of an industry that is always working to change finance for the better and give consumers more options," said TS Anil, Monzo CEO. "It's why we're supportive of this review's recommendations which would help the next generation of financial technology companies get off the ground while enabling established companies, like Monzo, to take it to the next level."

The review was also welcomed by the founder of Tech London Advocates, Russ Shaw, who said it would make UK fintech "synonymous" with growth and innovation.

"The report's recommendations will help businesses overcome the immediate challenges posed by Brexit and the pandemic," Shaw said.

"It is innovative British fintech startups, scale-ups and unicorns which will need further access to sizeable pools of capital, diverse highly-skilled talent and the right regulatory environment to thrive in the face of an adverse economic climate and compete on the global stage with other fintech hubs around the world."