The British fintech community was all aflutter last week, as the eagerly-awaited Kalifa report on its post-Brexit future was released.
The Kalifa Review of UK Fintech, published on February 26, received an overwhelmingly positive response from across the financial services industry, especially the fintech community itself. Described as “thoughtful”, “ambitious” and “comprehensive”, many are pinning their hopes on ex-CEO of Worldpay Ron Kalifa’s roadmap to help the UK sustain its position as an attractive home for fintechs and a global leader in financial services post-Brexit.
CEO of consumer banking and payments at Barclays, Ashok Vaswani, summed up this aspiration in the report: “We hope this review will help create the right conditions for UK fintechs to grow and succeed and look forward to working with the government and the fintech ecosystem to ensure the UK retains its position as a global centre for fintech and innovation.”
UK fintech represents 10% of global market share and £11bn in revenue. In 2020, investment into UK fintech stood at $4.1bn — more than the next five European countries combined, according to the report.
The review focused on five areas: policy and regulation, skills, investment, international and national connectivity. It has set out a number of concrete proposals, including implementing a “scalebox” to support fintechs scaling new solutions, establishing a Digital Economy Taskforce, launching an international Fintech Credential Portfolio and an International Fintech Taskforce, and fostering 10 fintech clusters across the country.
Recommendations around the investment arena attracted a lot of attention, including a £1bn Fintech Growth Fund and improving the listing environment. The institutional investment vehicle will help firms move from start-ups through to initial public offerings, so that the larger fintechs don’t feel the need to go elsewhere to list, such as the US.
Improvements to the listing regime include free float reduction, dual class shares and a relaxation of pre-emption rights; these are expected to dovetail with the UK Listings Review, chaired by Lord Jonathan Hill, former EU commissioner, which is expected to be published this week.
Improvements to the listing regime include free float reduction, dual class shares and a relaxation of pre-emption rights
The Kalifa Review’s proposals for digital upskilling and global talent attraction were also widely applauded by the wider community. The report advocated retraining and upskilling adults, as well as work placements for further and higher education students.
But it was the special fast-track visa scheme for fintech workers that made the UK community breathe a collective sigh of relief. Tapping the global tech talent pool has been one of the biggest worries in a post-Brexit world, exacerbated by many firms having to overcome visa hurdles for EU talent for the first time in four decades. Foreign workers represents around 42% of UK fintech employees, according the report. And many have voiced concerns that other fintech hubs will benefit from a tougher stance on UK immigration.
It is also hoped that such a specialised visa regime would help address diversity, an area where fintechs continues to lag behind even the incumbent banking community.
UK chancellor Rishi Sunak is expected to announce the new visa scheme in the budget tomorrow (March 3). Importantly, it should also offer a route to citizenship for those judged eligible. Most people will not uproot their families and come to the UK on a short-term visa, knowing that they will be deported when it expires; instead they will look for other, more accommodating jurisdictions.
Other countries have also rolled out similar schemes, including France (Tech Visa), Canada (Global Talent Stream) and Australia (Global Talent Programme). The UK needs to think whether will this narrowly defined visa be enough to sustain the whole ecosystem that underpins the fintech community. This environment includes various sectors such as academia, legal and professional services, consultancies/advisors, marketing, analysts, etc. To remain a global fintech hub, the UK government will also need to address the visa requirements of the wider support network.
Joy Macknight is editor of The Banker. Follow her on Twitter @joymacknight
Register to receive the Editor’s blog and in-depth coverage from the banking industry through the weekly e-newsletter.
