The Labour party’s first mission of government is to create the highest sustained growth in the G7. This is a very welcome objective, as growth is essential to promoting economic prosperity and to relaunch the UK’s global competitiveness. Achieving growth, however, will not be an easy challenge as a delicate balance is required between delivering long-term growth whilst finding some short-term wins too: avoiding recession, reducing interest rates, maintaining inflation, creating jobs, attracting investment, growing the economy quarter by quarter. Chancellor Rachel Reeves and economic secretary Tulip Siddiq need economic growth both gradually and suddenly. There’s not many sectors they can rely on to achieve both of these things simultaneously, but the UK FinTech sector is one of them.
We welcome the Chancellor’s assertion that the financial services sector is a “crown jewel” of the UK economy. It has enduring power, with the last ten years showing that FinTech is not a fad. UK FinTech has created businesses that are not absorbed by incumbents. They instead stand alongside them: 18 of the UK’s 43 “unicorns” – companies worth over $1bn – are FinTech companies, which is a disproportionate amount of our technology success stories. It’s something we can genuinely claim to be the best in the world at, and this is not hyperbole. When investors look for sustainable FinTech businesses that offer innovation, talent, profitability, the UK stands toe-to-toe with Silicon Valley, Singapore and every other major FinTech hub globally.
The numbers back this up. Over the last six months, the UK has attracted more FinTech funding than the rest of EMEA combined. The UK has seen a near year-on-year tripling of FinTech investment to $7.3bn in the first half of 2024. That investment is injected into the UK economy, supporting hundreds of towns and cities, thousands of businesses and tens of thousands of jobs.
When commentators talk about the long-term future bets of the economy, they often mention AI and net zero. But FinTech should also be mentioned in this conversation, not just as an additional pillar, but one that is deeply interoperable with these other future bets. FinTech will likely become one of the biggest proponents of AI, using it to radically improve the quality of financial services products and strengthen protections for customers. Green finance could be the next dominant area forattracting investment into the UK. Not only do these bets boost investment and GDP, it will also help the UK attract the best talent from around the world, who will always want to work for the best companies on the biggest issues. Equally, entrepreneurs will want to take advantage of the UK’s talent pool, its unrivalled concentration of investors, regulators, policymakers and professional services available. When you quantify the potential of UK FinTech, it equates to an extra £328bn to the UK economy over five years.
But success is never guaranteed. Previous governments have supported the UK FinTech sector through its growth journey, but just because the sector has matured, that doesn’t mean their work is done. Our competitors are getting closer to us and if we stand still we will fall behind. The government needs to foster support for FinTechs at all steps of their growth journey, from attracting entrepreneurs to the UK to start their businesses, to helping them launch globally, then ensuring their long-term futures remain in our country.
We can create new growth opportunities for UK FinTechs through regulation to unlock innovation. Creating a long-term regulatory framework for Open Banking and ensuring the UK remains the global leader in API based banking. Through this, there is an opportunity to create home-grown payment networks, powered by Open Banking, that compete with the likes of iDEAL, Blik & Bizum in Europe, UPI in India and Pix in Brazil. Additionally, Open Finance can foster competition in traditionally concentrated sectors such as insurance, credit, pensions, savings, and investments while keeping customer outcomes at the core of its focus.
Creating a pragmatic regulatory framework for cryptoassets that fosters growth and innovation, positions the UK as a dynamic global crypto hub, and attracts institutional investment into the sector, while ensuring consumers have suitable protections. Creating areas of innovation allows new businesses to bloom, existing businesses to expand and customers to have greater choice and better products.
It should not be forgotten that for many of our most successful FinTechs, their founders chose the UK as the place to start their business. Revolut, Wise, Checkout. com, Zego. We need to continue this by ensuring the UK can match their global ambitions. We are competing with Paris and Frankfurt, who offer passporting to 500 million customers across the EU. We can rival this by establishing access to key emerging markets globally, to unlock the next billion customers for UK FinTechs and ensuring that our standards for regulation are seen as the gold standard globally. An international trade strategy with a specific vision for FinTech growth is vital.
Finally, once we attract entrepreneurs to the UK, we need to keep them here. The UK can only claim to be the global FinTech hub if it can provide the pathway for growth from inception to IPO. Good work has been done on this over the past few years, but there is more to be done for the UK to become a true competitor to the US.
The UK is Revolut’s home, and with over 9 million customers, is our largest customer base. I believe that the future success of Revolut is absolutely aligned with the success of the UK economy. Therefore, we are committed to working with this government to unlock growth opportunities, create the best and cheapest products for our customers and make Revolut the safest place to keep your money. As the UK’s largest FinTech, Europe’s most valuable private technology company and a UK startup that has expanded into 41 countries globally, we believe we have a role to play to support this government’s objectives and stand ready to do whatever we can to help them achieve these objectives.
