Kalifa Review: How can the UK cement its status as a global fintech superstar?

London is a city of convergence.  

It’s a place where traditional industries such as fashion, healthcare and education are colliding with innovation to form bold new ideas and technologies. Perhaps none more so than in financial services, where London’s global financial centre, mixed with its thriving technology hub, has cemented the UK as a leader in Fintech.  

But it’s important that we do not rest on our laurels. On 26 February 2021 Ron Kalifa OBE, non-executive director of the Court of Directors at the Bank of England and the vice-chairman of WorldPay, released his independent Fintech Strategic Review - the Kalifa Review - featuring recommendations to ensure the UK maintains its global leadership in the sector.  

Thanks to powerhouses like Transferwise, Starling,  Onfido, Monzo, Checkout.com and Revolut, the UK represents more than 10% of the global market share in Fintech. London led in Europe for Fintech investment in 2020 with $4.3bn, almost half of all European Fintech investment. Fintech deals also accounted for 41% of all VC investment into London last year. 

At London & Partners, we support high-growth fintechs through the Mayor’s International Business Programme - our free, 12-month scaleup programme - which has helped more than 120 London-based fintech companies internationalise to date (including unicorn companies like Revolut, Checkout.com and Monzo).  However, we don’t act alone. We support these Fintechs by collaborating with others across the UK ecosystem – Innovate Finance, Department for International Trade, City of London, Tech London Advocates to name but a few. Going forward we are keen to collaborate with other UK tech clusters to help bring the recommendations in the Kalifa review to life and generate even greater results for the UK economy. 

We recently launched the ‘Fintech Club’ - a new series of enriching, closed-door meetings and virtual networking opportunities, designed to convene our community of entrepreneurs, investors and industry experts, whose common goal is to solve some of the biggest challenges in financial services through technology. 

 Yesterday’s ‘Fintech Club’ was treated to a conversation on the all-important findings and implications of the review. We had the pleasure of hearing from Ron Kalifa - the author himself - amongst other contributors and industry experts, such as:  

• Charlotte Crosswell, CEO of Innovate Finance 
• Sherry Coutu CBE, Serial Entrepreneur & Angel Investor 
• Anne Glover, CEO at Amadeus Capital Partners 
• Tim Levene, CEO of Augmentum Fintech 
• Anita Kimber, Partner at EY 
• Philippa Martinelli, Advisor & Fintech Specialist at DIT 
• Lee Jones, UK Digital Skills Lead at Microsoft 

United by their passion for the industry at large and nurturing future Fintech talent, one thing was abundantly clear from the discussions: That there is great potential to connect the prominent Fintech sector in London with growing tech clusters across the UK and set the standards for global markets.

To do this, the Kalifa Review lays out a five-point plan to mitigate risk and take advantage of new opportunities: 

1. Policy and Regulation: Kalifa proposes developing and adopting common data standards and prioritising Smart Data, with a specific focus on open banking and promoting better communication between open banking-friendly Fintechs and bigger financial institutions. Following the success of the FCA’s regulatory sandbox, Kalifa also proposes a ‘scalebox’ to help fintechs grow and expand their operations, supporting fintech innovation. 
2. Skills: to ensure UK fintechs have the right supply of domestic and international talent, the Review suggests retraining workers to meet the needs of the fintech sector, with the launch of a series of low-cost education courses to do so. It also proposes the creation of a new visa route to ensure the UK remains a top international competitor: the ‘Fintech Scaleup Stream’ will give those with the required skills automatic visa qualification and support the fintechs hiring tech talent abroad. This is welcome news to our community of scale ups. 
3. Investment: Kalifa proposes a ￡1bn Fintech Growth Fund to help homegrown firms scale, completing the funding ladder from start-ups right through to IPO, with suggested changes to encourage UK Fintechs to list on the London Stock Exchange. Kalifa also suggests expanding the popular R&D tax credits which has been used by 97% of founders. 
4. International: Kalifa proposes reviewing the current “Fintech International Action Plan” to include the launch of an international Fintech portal showcasing UK fintech scene globally. The review also calls for closer international collaboration trough the Centre for Finance, Innovation and Technology (CFIT) and the launch of an International Fintech Taskforce to gather fintech and industry input to achieve progress against the plan. This is such a key recommendation to maintain our global competitiveness. 
5. National connectivity: to leverage the output of fintechs across the UK and facilitate connectivity amongst them, the Review suggests the creation of ten Fintech clusters, with London listed as the main hub, followed by the Pennines (Manchester and Leeds), Scotland and Birmingham. Other emerging clusters include Bristol and Bath, Newcastle and Durham, Cambridge, Reading and West of London, Wales and Northern Ireland.   

Now is the time to work together, invest in this crucial sector and drive good global growth for the UK. 

Perhaps only time will tell how the government, public sector and industry will collectively respond to these recommendations, but the future of UK Fintech certainly looks bright.