Financial innovation hubs are planned for selected cities nationwide, with placements available at leading fintech companies via universities as part of government-backed plans. The plans represent the push to encourage financial innovation, which a new Centre will manage for Finance, Innovation and Technology (CFIT). One role will be collaborating with the government, regulators and the Bank of England to improve measures and rulings in the industry. Andrew Griffith, the city minister said the plans would support government ambitions to improve productivity by enhancing skills and making the UK and technology and science leader. It would help the broader concept of pursuing growth in the financial services industry.
Charlotte Crosswell, the new chair of CFIT and previous chair of the Open Banking Implementation Entity explained that the centre would focus on plans for a fintech growth fund, highlighting the significant opportunity for UK pension funds to invest small amounts into these growth areas. The centre was a proposal of the Kalifa Review into fintech in 2021, which warned that a digital boom was critical for the UK to remain competitive in the industry. The Government intends to allocate £5 million in seed funding, with a further £500,000 from the City of London Corporation, the governing authority for the London financial centre.
CFIT roles will include delivering cross-industry ‘coalitions’ from finance, technology and academia to address the barriers hindering growth. The Centre is due to announce plans to create a series of financial innovation hubs in selected cities, including Leeds, Manchester, Bristol and others in Wales, Northern Ireland and Scotland. It also offers student placements at some of the top businesses in the financial services industry in partnership with leading universities. Crosswell explains that we’re in a global race for new talent and believes we must encourage the next gen of entrepreneurs to the industry nationwide. Despite a rising number of successful UK fintech startups, the potential for more liquid capital markets worldwide and regulatory uncertainties have reduced the number of public listings in London.
Often investors are looking overseas, and there is a risk of IPOs moving further away. The UK attracted $12.5 billion in fintech investment last year via 545 fundraising deals. However, late-stage fintech businesses have struggled over the last year, with rising inflation pushing investors toward a route of short-term profitability.
Ezechi Britton, the CEO of CFIT and fintech entrepreneur, believes that the UK is the best place to scale for a fintech company, but with the wealth of talent and innovation in this industry, the UK must provide the right conditions for the fintech industry to progress and achieve its full potential.
