Fintech will have a central role to play amid a host of government initiatives to help turn around the UK’s flagging record on productivity, according to chancellor Philip Hammond.
In his speech to the first-ever International Fintech Conference – held in London on 12 April – Hammond said that the UK “must constantly move onward to remain the best place in the world to start and grow a tech business”.
Highlighting steps that the government has already taken to help fintech, Hammond said: “In the past year, we have introduced a new investors’ relief to support investment into firms looking to scale up.
“[We have also] provided £400m of new capital to the British Business Bank to leverage £1bn of investment in UK technology businesses.
“And through our proposal for the Royal Bank of Scotland, we will see funding for a series of initiatives – worth around £750m – to boost competition in the UK business banking market, and to stimulate further investment in fintech of the future.
“But we can do more.”
Hammond cited the government’s Plan for Britain, its National Productivity and Investment Fund, and new ‘T-level’ training qualifications for 16- to 19-year-olds as forward-thinking schemes that will naturally benefit the fintech sector.
In addition, he noted, “we must embrace the technological change that has the potential to transform our economy for the better. That is why I have also announced an Industrial Strategy Challenge Fund to keep the UK at the forefront of disruptive technology.”
Turning to private-sector efforts to stimulate fintech, the chancellor hailed Barclays’ announcement that it will launch its own, specialist accelerator in May.
Poised to be the largest facility of its kind in Europe, the new hub – London Rise – will provide more than 500 workspaces for innovative start-ups.
Hammond also paid tribute to HSBC and Tradeshift’s collaboration on a new ‘procure-to-pay’ tool, due to go live in July. This will enable firms to manage all of their supply chain and working capital requirements from one platform, on any device.
The team-up, he said, was “a great example of a partnership between a banking giant and a fintech entrepreneur to develop practical solutions to support everyday businesses”.
Hammond added that to resolve its productivity crisis, the UK “will have to strive and graft and fight to seize opportunities, and make the most of them. That means growing and strengthening the areas – like fintech – in which we enjoy a comparative advantage.”
However, others were not so sure whether that advantage continues to apply, in light of the UK’s pending departure from the EU.
Speaking to Reuters on the sidelines of the conference, Taavet Hinrikus – co-founder of major London-based fintech Transferwise – said that he will move his firm out of the UK while the Brexit process is unfolding.
In Hinrikus’ view, “Uncertainty means that maybe if you’re building the next fintech business, you shouldn't build it in London today until everything clears up again, and we understand what’s going to happen with access to talent and so on.”