The Strategy emphasises the UK government’s continued push to create a world-leading FinTech sector.
At the second International Fintech Conference held on 22 March 2018, Philip Hammond, Chancellor of the Exchequer, announced the launch of the UK’s first Fintech Sector Strategy. The Strategy includes the following key measures:
- A new Cryptoassets Task Force — consisting of HM Treasury, the Bank of England, and the Financial Conduct Authority (FCA) — will be set up to help the UK manage risks relating to cryptoassets and to harness potential benefits of the underlying technology.
- “Robo-regulation” pilot schemes will be developed to assist regulated firms in complying with regulation, by creating software that would automatically ensure regulated firms follow the relevant rules. It is hoped this will help reduce compliance costs for newer and smaller firms, who are often disproportionately burdened, as well as potentially improving the accuracy of data submissions.
Other measures include introducing a set of industry standards to facilitate partnership between FinTech firms and existing banks, as well as the creation of “shared platforms” to aid new and small FinTech firms in setting up their systems. The former is sponsored by the UK’s largest banks, and it is expected that the standards will be published by the end of 2019. Both measures will be welcome developments for start-ups, who often struggle to develop the necessary infrastructure during their early stages.
At the conference, the Chancellor and Scott Morrison, Treasurer of the Commonwealth of Australia, signed a new “Fintech Bridge” agreement to help the UK and Australia in harmonising policies across various FinTech issues, and to increase regulatory cooperation. The Fintech Bridge will also help to open up a new market for UK FinTech firms to expand internationally, by selling their products and services in Australia. Part of this agreement consists of a new Enhanced Cooperation Agreement between the FCA and the Australian regulator. Although the FCA has in recent years signed a number of cooperation agreements with regulators overseas, this agreement goes further. For example, the agreement envisages that the regulators will assist businesses in participating in each other’s regulatory sandbox, and look for ways to speed up the licensing process for FinTech firms already licensed in the other’s jurisdiction.
Secretary of State for Digital, Culture, Media and Sport, Matt Hancock, also announced at the conference that Tech City UK — a government-backed initiative — will help build a world-leading Fintech Programme across the UK to support FinTech start-ups to grow and flourish.
The launch of the Fintech Sector Strategy is a welcome development for the UK FinTech industry, as well as the financial services industry more widely. It demonstrates the continued importance of FinTech development to the UK government’s agenda, and the government’s commitment to maintaining its position at the cutting edge of the digital revolution.