Plans to boost UK fintech and financial services set out by Chancellor

Ambitious new plans to help fintechs scale up and ensure the UK remains at the forefront of digitalising finance have been announced by the Chancellor.

Speaking at Fintech Week, the Chancellor Rishi Sunak set out proposals to enhance the UK’s competitive advantage in fintech, from regulatory support and reforms to help firms grow, to a new taskforce to lead the UK’s work on a central bank digital currency.

The Chancellor confirmed the UK will be taking forward many of the recommendations made in the recent Fintech Review, led by Ron Kalifa, and the Listing Review, led by Lord Hill.

Chancellor of the Exchequer, Rishi Sunak said: "Our vision is for a more open, greener, and more technologically advanced financial services sector. The UK is already known for being at the forefront of innovation, but we need to go further. The steps I’ve outlined, to boost growing fintechs, push the boundaries of digital finance and make our financial markets more efficient, will propel us forward. And if we can capture the extraordinary potential of technology, we’ll cement the UK’s position as the world’s pre-eminent financial centre.

To support fintech firms to scale up, the Financial Conduct Authority (FCA) will take forward a ‘scale box’ - a package of measures to enhance its pioneering regulatory sandbox, which has been invaluable for allowing start-ups to test new propositions, and to provide a one-stop shop for growth stage firms.

It will also launch the second phase of its Digital Sandbox to enable firms to test concepts that tackle sustainability and climate change-related challenges, helping to deliver a greener financial sector that supports the transition to net zero.

The Chancellor also backed the creation of an industry-led Centre for Finance, Innovation and Technology (CFIT) and committed to work with regional and national fintech bodies to make it a reality. The CFIT would work closely with the regional hubs to identify and address sector challenges in support of fintech growth across the UK.

These initiatives build on announcements made in the budget to help fintech firms access the talent they need, which included a new ‘scale up’ visa stream allowing skilled people with a job offer at a recognised UK ‘scale up’ to qualify for a fast-track visa without sponsorship or third party endorsement.

The Chancellor also set out new initiatives to ensure the UK remains at the cutting edge of digitalising financial services.

A new Taskforce, bringing together HM Treasury and the Bank of England, will be established to explore a possible UK central bank digital currency (CBDC). Two new forums will also be established to engage technical experts, and key stakeholders (including financial institutions, merchants, business users, civil society groups, and consumers) through the process.

To support private sector innovation, firms exploring how to use technologies like distributed ledger (DLT) to improve financial market infrastructure will have access to a new sandbox. This new regime will be inspired by the FCA’s sandbox and HM Treasury will work together with the Bank of England and the FCA to deliver this. In addition, the Bank of England has launched a new ‘omnibus’ account to allow access to innovative financial market infrastructure providers that can support delivery of faster, cheaper, 24-hour wholesale payment and settlement using central bank money.

In a further boost for companies seeking to raise money in the UK, the Chancellor confirmed how the Government will take forward all the recommendations directed towards it by the Listing Review.

As part of this, the UK will consult on changes to its prospectus regime – which governs the information a company must publish when raising finance - this summer, to ensure the rules are not overly burdensome but provide investors with the information they need, tailored to the type of transaction.

The consultation will also explore how to make it easier for companies to provide the forward-looking financial information investors want to see, which would particularly benefit technology and life sciences companies with high-growth potential, and their investors.

A group of experts will also be convened to look at how to improve the efficiency of rights issues – when a listed company invites its existing shareholders to purchase additional new shares – and the role technology could play in streamlining the process, as recommended by the Review.