Fintech Sector Strategy is good for the industry, says Starling
Government hopes to extend fintech outside London
With the UK acknowledged as a leader in the financial technology (fintech) space and finance playing an important role in the country's GDP, the government has long been keen to support firms working to develop the industry. One of its recent approaches was the launch of the new Fintech Sector Strategy (FSS) last month.
The FSS will help the UK to remain at the "forefront of harnessing the potential benefits of the underlying technology, while guarding against potential risks," said Chancellor Philip Hammond.
More than nine per cent of the UK's GDP rests in financial services, and about 130,000 of the 1.1 million people employed in the financial sector work in fintech. Much of the work is based in London, where technology has been picked out as a crucial factor in supporting growth.
Starling Bank is one of the disruptive, mobile-only banks working in the fintech space; and CIO John Mountain thinks that the new Strategy will help the industry to spread beyond the capital:
"The UK is undoubtedly leading the way in fintech. This Strategy will help to take it to the next level by including the rest of the UK in what has been to date a London-centric plan."
He added that the Strategy may also help to develop the industry in other ways, especially when it comes to engagement with older financial institutions:
"One of the key issues in the sector has always been the engagement model between fintechs and banks, as traditional high street banks have often been slow to engage and innovate. The new fintech industry standards will address these challenges, and help companies like Starling to deliver new competitive products to a wider base of consumers."
New standards are being introduced to help fintech firms work with banks, and Mountain was similarly positive about them, believing that - like PSD2 and the GDPR - they will encourage innovation. "We need to continue to do more to ensure the small companies can participate and benefit in [the] same markets as the large incumbents," he said.
An as-yet unproven part of the FSS is the proposed use of ‘robo-regulation' schemes, which will use software solutions to help financial services companies comply with the new rules.
"In regards to the subject of robo-regulation, I welcome anything that would streamline or automate parts of starting up and running new fintech businesses in the UK," Mountain told us.