Review of sector
Fast-track visa in FinTech’s ‘Big Bang’ growth plan
Stephen Ingledew: ‘fast growth’ (pic: Terry Murden)
Fintech companies expect to benefit from a “Big Bang” package of support, including more help to attract overseas talent and easier access to finance.
An independent Financial Strategic Review, commissioned by the Treasury, says the UK fintech sector can help lift the country out of its pandemic slump and recommends ways to help firms scale up, access the talent and finance they need, and deliver better financial services.
A fast-track visa route, making it easier for fintech firms to attract highly skilled migrants, is expected to be announced by the Chancellor in next week’s Budget.
Highly skilled migrants with a job offer from a recognised UK ‘scale ups’ – innovative high-growth businesses including fintech and cyber firms – will qualify for a fast-track visa, without the need for sponsorship or third-party endorsement.
It also proposes a £1 billion growth fund, expanded R&D tax relief and changes to listing rules.
The moves are seen as a necessary injection of help to avoid the UK sliding down the international fintech pecking order.
The review, led by WorldPay chairman Ron Kalifa, found that 42% of fintech workers come from overseas and argued it is crucial that UK firms can attract and retain global talent in order to grow and stay internationally competitive.
It states that the UK is at a “pivotal moment” and presents a wide-ranging strategy and delivery model to build on its existing attractiveness to start-up firms and become the best place for a fintech business to reach global scale.
It marks an important step in Chancellor Rishi Sunak’s plan to make the UK the most open and dynamic place in the world to operate a financial services business. The government will now examine the recommendations and respond in due course.
Louise Brett, head of FinTech at Deloitte, which contributed to the review, said: “Today marks the UK FinTech sector’s ‘Big Bang’ moment, setting out a strategy that will accelerate growth over the next three years and be an enabler for post-pandemic recovery.
“FinTech is providing opportunities for levelling up, not only regionally but also across society.”
Stephen Ingledew, executive chairman of Fintech Scotland and a member of the FSR working group, said: “Fintech has the potential to revolutionise how we live, whether it’s paying for our shopping or managing our money or setting up a business.
“Fintech innovation is fast growing right across the UK and offers great potential for Scotland through investment, innovation and jobs.
“We have been fully involved in the Review to share our learnings from the last three years, in which we’ve managed to build an inclusive and vibrant cluster, a model which the Review recognises can help foster innovation and collaboration in boosting recovery of the UK economy.”
The number of UK FinTechs has doubled since 2014, to c.2,500, with an annualised growth rate of 16% over the past decade. Deloitte’s analysis suggests that the UK FinTech sector could employ a further 50,000 people over the next three years, with potential economic uplift of up to £3bn over the same period.
A third of all FinTechs are now outside London. Scotland has seen an increase from 26 to 155 over three years.
However, of new financial companies selling shares to fund expansion and innovation in fintech, the US-based Nasdaq index attracted 40% of new listings compared to just 5% in the UK. Hence the need to revise the listing rules to encourage more firms to seek new growth capital.
Mr Kalifa 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.”
Mr Sunak added: “Fintech is one of the UK’s great success stories and will help us seize new opportunities around the world.
Rishi Sunak: ‘important contribution’
“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.”
James Varga, founder of Direct ID and Loral Quinn, founder of Sustainably, two Scotland-based firms, contributed to the FSR and welcomed the recommendations on behalf of the fintech community.
Mr Varga said, “We have known for some time that fintech has been one of the fastest growing parts of the economy driving innovation across the country and the findings of this report illustrate why the future of fintech is very bright indeed and, with the right drivers, can continue as one of the UK’s biggest success stories.”
Ms Quinn said, “The FSR is a boost for fintech entrepreneurs across the country and the package of recommendations will enable innovative small and medium enterprises to accelerate growth nationally and globally.”
- 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