• The Government should come up with the right kind of policy and regulation.
• It ought to promote skills, taking in both domestic and international talent.
• On the subject of investment, it should build a 'funding ladder' that goes from start-ups right through to IPOs.
• There should be an international strategy.
• Connectivity' between British FinTechs ought to be encouraged.

On the subject of policy and regulation, the report wants the Government to do the following.

• Come up with a digital finance package that creates a new regulatory framework for emerging technology. The idea is to prioritise new areas for growth and cross-industry challenges such as financial inclusion, while propagating digital ID and data standards.
• Implement a 'scalebox' that supports firms that want to 'scale up' their innovative technology. This means more resources for the Regulatory Sandbox (see below), making the digital sandbox pilot permanent, introducing measures to support partnerships between incumbents and FinTech and RegTech firms, and providing additional support for regulated firms during their first spurts of growth.
• Establish a Digital Economy Taskforce (DET), giving government departments and regulators important FinTech-related jobs and functions. Kalifa wants the DET to these efforts into a 'policy roadmap' for 'tech and digital' and, in particular, a digital finance package. The idea is to provide a ‘single customer view’ of the Government’s regulatory strategy to do with technology and a single touchpoint for the private sector to approach.
• Ensure that FinTech forms an integral part of trade policy, including parts of its future trade agreements that might benefit FinTech.

The report also looks forward to better attitudes at the Competition and Markets Authority and a measure of 'consolidation,' i.e. mergers. It wants the Government to offer FinTech firms tax breaks and create a global family of FinTech indices on various exchanges.

Praise for the FCA

The report praises the fact that the Financial Conduct Authority’s pro-competition impulse has led it to support new FinTech firms and nurture them. In 2016, it opened the world’s first regulatory 'sandbox,' which was foreign regulators subsequently copied.

Similarly, the Bank of England and the FCA’s ‘New Bank Start-up Unit’ provides additional support and advice for firms that want to gain banking licences. This, in turn, is accelerating the digital transformation of banks, asset managers and insurers as they strive to meet changing demands from HNW consumers and others.

Big Tech is moving into this space, highlighting the value of data-led solutions in financial services. The strength of the UK's incumbent financial services sector has allowed FinTech to find extremely fertile ground for growth. It has also created opportunities for start-ups to cross-pollinate their businesses into broader technology, using cross-cutting applications like big data, AI and quantum computing.

The UK, then, sees itself now as the FinTech hub of the day, coupled as it is with the gigantic financial services ecosystem of London, where so-called “unicorns” such as Wise, Onfido, Checkout.com and Revolut have based themselves. This, according to the report, has resulted in the following achievements.

• Representing 10% of global market share and £11 billion in annual revenues, the UK is a dominant force in FinTech.
• The total technical expenditure by financial firms in the UK was £95 billion in 2019.
• Corporates are all keen users of FinTech. British citizens are becoming digitally active and 71% are now using the services of at least one fintech company.
• Investment in British FinTech stood at $4.1 billion in 2020 – more than the next five European countries combined.