Major players in the sector are growing into serious outfits. Revolut is now the most valuable private tech company of all time, Wise is setting course on its next decade of business, and a suite of smaller firms being eyed up by investors.
Added to this, political figures are keener than ever to discuss the sector’s role in Britain’s economic future. In the wake of Brexit, ministers have set out on a charm offensive to align themselves with FinTech success stories as part of government’s narrative of the UK at the heart of financial and technical innovation. Whether large or small, government has positioned itself as an ally of these businesses and Britain as the place to be to start, grow and succeed.
This trend is set to continue with announcements planned at attracting talent through ‘new tech visas’ and a new fund aimed at investing in tech start-ups by taking a stake in them. A new consultation will also aim to create a more level playing field for new businesses by curtailing the market dominance of the largest foreign tech companies like Google and Apple.
Despite this overall positive picture there are still considerable challenges for the sector.
Many FinTech businesses are disrupting existing markets and making meaningful improvements for consumers. Whilst a set of engaged customers will reap the benefits of this approach, many do not, due to a lack of awareness, or fears of new brands. Though government will not drive uptake, it has yet to engage coherently in the meaningful action it can take, such as greater transparency or setting new consumers standards. This means that businesses are left communicating with often disengaged consumers on technical issues that they have little experience of, where strategic government intervention would drive consumer benefit.
Government is now also giving greater attention to other (more traditional) financial services to deliver its agenda for ‘left behind’ consumers, such as protecting physical cash infrastructure for those who still use it, or relying on banks to deliver home ownership through the 5% deposit scheme. Whilst this could reflect the strong contacts of existing financial services within government, it also shows that many within departments default to engaging traditional financial services instead of looking to new and innovative approaches.
As scrutiny of online economic harms grow and other issues emerge, FinTech needs to be on the front foot if it is to make its current good standing connect with the priorities of the government and result in meaningful change.
FinTech businesses have a clear and compelling story to tell on their success, benefit for consumers, and role in the future of Britain. As they look to expand beyond their current customer base, and take the UK by storm, businesses will need to work with government more closely. Not as a photo opportunity, but a constructive partner to resolve the challenges of the day.
This can be achieved, but it will need clear messaging, strong alliances, and a proposition that government can get behind.