Budget 2020: Innovate Finance’s Perspective

By Innovate Finance

Today, Innovate Finance welcomes the focus on FinTech in the Chancellor’s budget. There are a number of key initiatives announced that impact the sector. These include:

  • an independent major review of UK FinTech, chaired by Ron Kalifa, OBE
  • a review of the EMI scheme, that will provide additional support for high-growth FinTechs
  • increased support for venture capital and growth finance, with a £200million injection into British Business Bank
  • a continued focus on regional growth which benefits FinTech, including a focus on R&D, tech and life sciences investment as well as a series of new appointments to boost regional trade.

A review of the Enterprise Management Incentive (EMI) scheme

We are delighted that a review of the EMI scheme has been included as this is something we have been advocating for since the autumn of last year, when Innovate Finance delivered a signed letter, backed by industry, to Number 10. This proposed review recognises the importance of high-growth businesses in FinTech, and the value our sector now has to the UK economy.

Venture capital and growth finance

We have also long-called for additional support to the British Business Bank and today’s announcement of a further £200million allocation in funds is a significant boost to the availability of venture capital and growth finance for UK FinTech.

FinTech across the UK

The continued support for encouraging economic growth across the UK’s nations and regions is to be welcomed. Announcements focused on funding for infrastructure and financial settlements for metro mayors – including a new directly elected Mayor for West Yorkshire – and the appointment of new regional trade envoys builds on this growth. Following the creation of the FinTech National Network last year, Innovate Finance continues to focus on regional growth in FinTech and we look forward to working with these new appointees.

An independent major review of UK FinTech

The inclusion of an independent major review of UK FinTech, chaired by Ron Kalifa, is especially welcomed by Innovate Finance.

This in-depth look at the sector comes at a time as we witness the increasing impact of FinTech within financial services. We are confident that this timely and important review will underpin the future growth and prosperity of the sector across the whole of the UK, and we firmly believe this announcement is a real recognition of our collective work to provide strategic direction to the sector.

We all recognise that we are at a crucial moment in FinTech’s development. UK companies are now entering a phase of maturity that requires action to ensure that entrepreneurs can not only establish and scale their businesses in their home market, but also export their products and services internationally.

To that end, Innovate Finance already works closely with industry, government and regulators to identify and spotlight the growth opportunity for UK FinTech, ensuring it remains competitive on the global stage. We expect the review to do exactly that – by seeking to expand skills and talent available for the sector; improve access to capital funding and investment; connect our national and regional FinTech hubs; analyse our approach to policy and regulation for the sector; and highlight our international attractiveness and competitiveness.

By better understanding the needs, requirements and key focus areas for the sector, we will boost the UK FinTech industry and in turn support the economy as a whole. This should bring benefits not just to London and the South East, but also to those vibrant FinTech hubs across the UK.

FinTech and new innovations in financial services have the immense potential to transform people’s lives and drive prosperity throughout the United Kingdom. This will in turn benefit underserved individuals, businesses and wider communities across the country. Improving access to affordable credit, reducing the cost of payments, and providing new data-intuitive and transparent approaches to how we interact with financial products and services are just a few of the examples of how the FinTech sector is helping in the promotion of financial inclusion and greater transparency.

It is therefore paramount that we continue to look at the opportunities FinTech offers.

Innovate Finance is delighted to support these initiatives, especially the independent major review of FinTech, and we look forward to working with Ron Kalifa, our members, and key industry leaders to provide the UK FinTech sector with a comprehensive blueprint for future growth and stability.

To read our CEO, Charlotte Crosswell’s Budget statement, please click here.

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