The FCA has created two ‘fintech bridges’ this year in order to reduce barriers to market entry and make it easier to share information about financial services innovations in each marketplace.
Thanks to these new relationships, the UK will now be able to work alongside other global fintech hubs more effectively. Singapore and Korea, for example, are now intrinsically linked with the UK’s fintech hub in London, helping our native start-ups to scale up through access to the Asian markets, and at the same time, attract companies and investors to our shores. The outcome of the EU referendum has made it a crucial time for the UK to bolster its fintech links across the world.
Forming these relationships with tech-savvy nations such as the Republic of Korea will not only improve our access to customers and funding, but also our access to talent. This latter point will become increasingly vital as the UK begins to formulate its post-Brexit plans.
The global growth of fintech
Whilst London’s status as the global fintech hub is currently undisputed, the rise of other areas such as Tel Aviv, San Francisco and of course the Asian markets could see a movement towards a number of fintech hubs spread across the globe.
The Asia-Pacific (APAC) region in particular has seen fintech being dominated by China and India due to new breakthroughs in fintech gaining in popularity in these regions. InsurTech, RiskTech and RegTech are the sector’s latest buzzwords, as each has been designed to help financial services firms in different areas. All of these technologies work in collaboration with traditional financial services, ultimately driving the movement towards industry collaboration.
On a wider note, the APAC region has also seen Sydney grow to be an up-and-coming fintech market, with the UK signing a similar agreement with the Australian Securities and Investments Commission (ASIC) to those with Singapore and Korea earlier this year. UKTI, the government’s trade and investment body at the Treasury, is looking to extend these relationships on a global scale, with India likely to be the next contender.
The future of the fintech industry will undoubtedly be helped by partnerships such as these FinTech Bridges, which will help the UK sector to innovate, compete and thrive, whilst ensuring that is remains the location of choice for fintech start-ups. And it is not just the UK which will benefit; partnerships of this nature will be crucial for fostering fintech innovation on a global scale in the future.
London’s position as the fintech capital of the world is bolstered by the FCA’s speedy, pro-innovation response to the sector’s unprecedented growth in the UK. As a result, the FCA is seen as a pioneer among financial regulators and is considered the world leader when it comes to regulating the fintech industry.
Its ‘Project Innovate’ initiative offers early advice and support to guide businesses through the regulatory process. This, when combined with the latest extension to this initiative - the regulatory sandbox - makes the UK a very attractive place for fintech providers, who are able to pilot innovative products, services and business models without incurring the usual regulatory consequences.
Flexibility from the government is only extending the UK’s lead in the fintech space. By increasing levels of fintech activity in cities outside of London through the Northern Powerhouse and Tech North strategies, start-ups understand that it is not always necessarily to look to London for scaling up, but that the UK as a whole has opportunities to offer. Businesses must begin to view the UK as an inter-connected fintech hub, with London at its heart.
The effect of fintech partnerships on the London market will only prove to be a positive: strengthening innovation and collaboration across the wider UK financial services industry will allow old and new technologies to work ‘as one’ for the benefit of both businesses and consumers alike. By working together both at home and abroad, the UK as a whole can be established as the fintech capital of the world.
Image Credit: Investment Zen / Flickr
Aamar Aslam, CEO of Funding Invoice