The UK government has said it would offer a fast-track visa scheme for jobs at high-growth companies after a government-backed review warned that financial technology firms will struggle with Brexit and tougher competition for global talent.
Chancellor Rishi Sunak said that now the UK has left the EU, it wants to make sure its immigration system helps businesses attract the best hires.
“This new fast-track scale-up stream will make it easier for FinTech platforms to recruit innovators and job creators, who will help them grow,” Sunak said in a statement.
Over 40% of fintech staff in Britain come from overseas, and the new visa scheme, open to migrants with job offers at high-growth firms that are scaling up, will start in March 2022.
Brexit cut FinTech’s’ access to the European Union single market and made it far harder to employ staff from the bloc, leaving the UK (slightly) less attractive for the industry.
The review published on Friday and headed by Ron Kalifa, former Chief Executive Officer of payments FinTech Worldpay, set out a “strategy and delivery model” that also includes a new 1 billion pound (approximately $1.39 billion) start-up fund.
“It’s about underpinning financial services and our place in the world, and bringing innovation into mainstream banking,” Kalifa told journalists at our partner news agency Reuters.
Britain has a 10% share of the global FinTech market, generating approximately $15.6 billion in revenue.
The review said Brexit, heavy investment in FinTech by Australia, Canada and Singapore, and the need to be nimbler as COVID-19 accelerates digitalisation of finance, all mean the sector’s future in Britain is not assured.
It also recommends more flexible listing rules for FinTechs to catch up with New York City.
“We recognise the need to make the UK attractive a more attractive location for IPOs,” said the UK financial services minister John Glen, adding that a separate review on listings rules would be published shortly.
“Those findings, along with Ron’s report today, should provide an excellent evidence base for further reform.”
Britain pioneered “sandboxes” to allow FinTechs to test products on real consumers under supervision, and the review says regulators should move to the next stage and set up “scale-boxes” to help FinTechs navigate red tape to grow.
“It’s a question of knowing who to call when there’s a problem,” said Kay Swinburne, vice chair of financial services at consultants KPMG and a contributor to the review.
A UK FinTech wanting to serve clients in the European Union would have to open a hub in the bloc, an expensive undertaking for a start-up.
“Leaving the EU and access to the single market going away is a big deal, so the UK has to do something significant to make FinTechs stay here,” Swinburne said.
The review seeks to join the dots on FinTech policy across government departments and regulators, and marshal private sector efforts under a new Centre for Finance, Innovation and Technology (CFIT).
“There is no framework but bits of individual policies, and nowhere does it come together,” said Rachel Kent, a lawyer at Hogan Lovells and contributor to the review.
The team at Platform Executive hope you have enjoyed this news article. Translation from English to other languages via Google Cloud Translation. Initial reporting via our official content partners at Thomson Reuters. Reporting by Huw Jones. Editing by Jane Merriman and John Stonestreet.
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