UK Government Launches FinTech Sector Strategy
03/22/2018HM Treasury has published a document entitled "FinTech Sector Strategy: Securing the Future of U.K. FinTech" to coincide with the U.K. government's second International Fintech Conference.
The Strategy Paper provides an overview of the work already conducted by successive U.K. governments to support the FinTech sector by promoting competition and removing barriers to entry. Drawing on the findings of the 2017 "UK FinTech Census," which set out a comprehensive review of the sector and the challenges it faces, the government has identified further action it might take to remove barriers to entry and growth faced by FinTech firms. These further actions focus on reducing the cost of regulatory compliance, ensuring access to skilled talent, improving FinTech firms' access to equity finance, improving the take-up of new FinTech services, increasing competition and providing access to new markets.
In support of these areas of focus, the Strategy Paper makes a number of announcements:
(i) Automating regulatory compliance using machine-readable rules: the Financial Conduct Authority will publish, in Summer 2018, its findings and next steps following its call for input in February 2018 on a proof of concept for Model Driven Machine Executable Regulatory Reporting. The government has also announced that the FCA is working with several banks with a view to using the new reporting technology from around September - December 2018.
(ii) Accessing skilled talent: the government has announced a Connect With Work Program, which will be delivered by the government's FinTech Delivery Panel in conjunction with Barclays. The program will assist FinTech firms in attracting suitable candidates.
(iii) Improving take-up of new FinTech services and increasing competition: the Strategy Paper discusses the managed rollout of the Open Banking initiative, which the government views as central to its approach to stimulating customer adoption and competition. The government also announces work to investigate the potential of new "shared platform" utilities, in particular in the areas of collateral management, fraud management, loans processing, trade finance, RegTech, identity management and transaction monitoring. The government will publish a report later in 2018 recommending two areas for further exploration via collaboration between the government and industry.
(iv) Providing access to markets: The government is engaged in a project in collaboration with the British Standards Institute, sponsored by five major banks, to develop a set of industry standards by the end of 2019. The sponsoring banks have committed to implementing the industry standards, which will clarify the expectations of incumbent financial services firms when entering into partnerships with FinTech firms. The government has also announced the establishment of a Department for International Trade FinTech Steering Board, which will help FinTechs move into new markets. DIT will also invest additional resources to help firms expand into countries with whom the U.K. has a FinTech bridge.
The Strategy Update also considers new opportunities offered by U.K. FinTech, including the need to understand and engage with emerging technologies. In light of this, the government has announced it will establish a Crypto-assets Task Force, consisting of representatives from HM Treasury, the Bank of England and the FCA. The Task Force will explore further the risks of crypto-assets, the potential benefits of distributed ledger technology, the future response of the authorities to crypto-assets and potential future regulation of the sector. The Task Force will issue a report in Summer 2018.
View the Strategy Paper.
View the 2017 UK FinTech Census.TOPIC: FinTech