Ron Kalifa fights for fintech sector in the wake of Brexit

Rick Steves

In 2020, investment into UK fintech stood at $4.1 billion in 2020, which is more than the next 4 European countries combined.

The United Kingdom is navigating through troubled waters as leaving the European Union is naturally resulting in uncertainty, including in the fintech sector.

This has called for an independent review to set out a plan to retain its leadership in fintech despite the new challenges in the aftermath of Brexit.

The independent review was already submitted and addresses the challenges of startups to scale up, access the talent and finance they need, and deliver better financial services.

Recommendations by the review led by Ron Kalifa include a ‘scale box’ for growing firms and changes to UK listings rules. The country has over 10 percent of the global market share in fintech and the sector is worth more than £11 billion a year to the UK economy. In 2020, investment into UK fintech stood at $4.1 billion in 2020, which is more than the next 4 European countries combined.

The strategy offered by Ron Kalifa aims to create highly skilled jobs across the UK, boost trade and extend a competitive edge over other leading fintech hubs. Recommendations include:

introducing a new ‘fintech scale up’ visa route for specialists from around the world
implementing a ‘scale box’ to provide regulatory support for growing firms
improving UK listings rules with free float reduction and dual class shares
creating a £1 billion-pound fintech ‘growth fund’ to help firms grow independently
establishing a private sector-led Centre for Finance, Innovation and Technology to support national coordination and growth in fintech across the UK

Rishi Sunak, Chancellor of the Exchequer, said: “Fintech is one of the UK’s great success stories and will help us seize new opportunities around the world. 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.

“This review will make an important contribution to our plan to retain the UK’s fintech crown, create more skilled jobs, and deliver better financial services for people and businesses”, Mr. Sunak added.

Ron Kalifa OBE said: “Fintech has the power to change lives, both in terms of job creation and better wages that are so essential to our recovery; and making financial services more accessible and relevant to people’s lives. Britain has a proud record of starting-up and scaling-up some of the best-known fintech products, but we cannot rest on our laurels. The next powerhouses will not be created by accident.”

“We must continue to nurture our start-up culture, but crucially we must also give our high growth firms the support to become global giants. With the right reforms that encourage entrepreneurialism, investment and make it easy to attract and invest in talent, Britain can usher in a period of dominance that can help us build back better from Covid-19.”

This is a pivotal moment for the UK. There are significant opportunities offered by fintech, but it is vital to offer an environment that supports innovation. The independent review expects the plan to result in the creation of new digital jobs, inspire the next generation of entrepreneurs, and in turn enable the growth of global champions.

A number of high-profile names in the fintech world have shared their support for the review, including Checkout.com CEO Guillaume Pousaz and Wise CEO Kristo Käärmann.

John R. Bryson, Professor of Enterprise and Economic Geography at the University of Birmingham, has stated that London is unlikely to be ousted as the global financial center in the Brexit aftermath.

Mr. Bryson said that Amsterdam’s emergence as the primary center for European share trading suggests that the European Union will never develop a global financial center that displaces London for four reasons.

“First, the European Commission (EC), and the member states, would have to agree to focus all financial service activities in a single center. A decision would have to be made to position Amsterdam, Frankfurt, Paris, Milan, or Dublin as the emergent European Global Financial Centre. The politics within the EU would never enable such a decision to be made. Europe will continue to have several smaller competing financial centers”, said Mr. Bryson.

For the second reason, the Professor points to the major governance problem in the European Union. As a confederation, the EU does not have the flexibility of a country in matters in which there is a division of power between member states and the European Commission (EC). The EU is slow in decision-making and negotiations. The delays over the COVID-19 vaccination program prove the lack of agility.

In the Global Financial Centres (GFC) September 2020 index, London was ranked second to New York, with Amsterdam coming at at 22, Dubai at 17, and Singapore at 6. This is the third reason: “London needs to think and act globally rather than locally to maintain its position as one of the leading global financial centers. London has three advantages that are not held by any other European centre – existing scale and networks, a supportive legal system and ‘speedboat’ agility”.

The fourth and last reason for London’s top position as the financial center instead of Amsterdam is the UK legal system, which is based on common law. The EU and its member states are based on civil law, where codes, regulations, and laws can be applied to any conceivable circumstances. Common law develops as the socio-economy develops, which encourages innovation.

In conclusion, Mr. Bryson’s take is that the UK’s agile decision-making is a threat to the EU’s ‘tanker like’ speed as the financial industry positions itself in the post-pandemic.

Read this next

Industry News

21 Republican representatives want to “End the Fed”

“Americans are suffering under crippling inflation, and the Federal Reserve is to blame.”

Retail FX

Scope Markets launches unleveraged trading

“Whilst our traditional contract for difference (CFD) products continue to prove incredibly popular, the Invest account is unleveraged and only allows ‘long’ positions to be taken, a combination that significantly reduces the risk of capital losses.”

blockdag

Unlocking Profit Potential: Earn Returns with DecodeEX Experience Bonus!

DecodeEX, the innovative brokerage subsidiary of Decode Global, announced its experience bonus campaign, offering every user the opportunity to maximize their strategic trading potential with up to $10,000 in experience bonus. 

Market News

Pretiorates’ Thoughts 28 – Precious metals and base metals out of control

Ten days ago we mentioned in Pretiorates’ Thoughts 26: Chapter 2 should start with Precious Metals.

Retail FX

Webull launches discount brokerage in Malaysia

“Making investing more inclusive and accessible to all, Webull Malaysia brings best-in-class tools and information to empower investors of all levels with knowledge and skills to help them make better investment decisions and achieve their investment goals.”

Digital Assets

Hidden Road adds OKX’s Nitro Spreads into prime brokerage

“Hidden Road continually seeks to increase market access and capital efficiency through expanded prime brokerage offerings. Integrating OKX’s Nitro Spreads product builds upon this philosophy by extending our counterparties’ ability to execute risk-managed arbitrage strategies.”

blockdag

Dev Release 31: BlockDAG’s SHA-3 Upgrades Propel Crypto Mining Innovation as Miner Sales Approach 5800 Units

Learn about BlockDAG’s 31st Development Release, which includes advanced SHA-3 updates and a significant increase in miner sales, driving advancements.

blockdag

BlockDAG Dominates 2024 Crypto Trends: Surpasses $28M in Presales Amid Strategic Partnerships

Explore BlockDAG, Shiba Inu, and Kaspa Killer’s rise in 2024’s crypto market, focusing on BlockDAG’s $28M presales, strategic partnerships, and innovative technology.

blockdag

BlockDAG’s $30 by 2030 Valuation Prediction and Roadmap Reveal Gains Traction From Filecoin and XLM Investors

Discover why BDAG’s $30 price prediction by 2030 outshines Filecoin Investors’ hopes and XLM’s recent surge with a booming presale and clear roadmap.

<