Research from Digital Finance Forum has shown that while almost two-thirds (63%) of fintech founders believe that the UK is currently the world leader in fintech, on a five year horizon only one in three are optimistic or very optimistic about the UK’s position as a global leader in fintech.
Over two-thirds (69%) of fintech founders said that they are worried or extremely worried about the negative impact of Brexit on their business. Despite Brexit worries, however, over 60% of respondents are more optimistic about their businesses now than they were at the start of the year.
Biggest challenges facing UK fintechs
Two-thirds of those surveyed (66%) said that hiring enough good people (across all disciplines and roles) is the biggest challenge they currently face. 56% identified hiring engineering and product professionals is a key challenge, while 29% said that raising growth capital is a considerable challenge for their business.
Other concerns included being able to hire professionals with appropriate domain knowledge of financial services, raising growth capital, and handling the Know Your Customer (KYC) and anti-money laundering (AML) requirements of larger financial institutions that they work with.
The role of government
When asked what the UK government can do to help the fintech sector, some 64% said it could improve the visa system. Respondents want to make it easier to recruit talent from abroad by reducing the time it takes to approve visa applications, and fast-track more visa routes for highly skilled technology professionals.
45% said that financial regulations need to continue to allow fintechs to compete. The government needs to continue to modernise financial regulation, taking better into account the needs of fintech businesses and new financial innovations, to help create a level playing field.
The third most popular answer, selected by 41%, was that the government should recognise the importance of technology and have a member of cabinet specifically (and solely) focused on it - a Secretary of State for Technology. This could also alleviate the burden of fintech responsibility being shared between the Treasury and the DCMS.
A large number of respondents (43%) thought that Open Banking could be significantly expanded to have entities such as utilities providers and insurers also open up their data. This could create a world of further possibilities from the concept of open data and allow for greater competition and innovation.
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