A new UK fintech review has set out its ambitious plans to stimulate the sector following the economic challenges of Brexit and COVID-19. But will it foster greater inclusion for minorities in the industry?
The independent but government-backed review led by entrepreneur Ron Kalifa OBE aims to make British fintech a world leader in its space, where it already has an over 10% share of the global market.
The review was published after the UK fintech sector received $4.1 billion in investment last year, which was “more than the next 4 European countries combined”. It is probably why the review’s proponents believe it can become the world’s premier fintech centre.
The publication of the review follows chancellor Rishi Sunak’s aim to make the UK an international financial services hub. The review sets out plans to create a highly-skilled fintech workforce to rival others.
The review’s recommendations include a “fintech scale-up” visa system to attract fintech experts from around the world and the creation of a “£1 billion-pound fintech growth fund to help firms grow independently.”
The review: the potential for gender and racial inclusion
A key theme in the review is “skills”, and having “the right supply of domestic and international talent,” balanced with “the means to train and upskill our current and future workforce.” – Could this mean the fintech review will stimulate greater diversity and inclusion in the sector?
If actioned, these recommendations could make British fintech a more diverse industry by encouraging international talent to work in the UK. But if efforts are made to upskill tomorrow’s workforce domestically, more homegrown candidates from different backgrounds may enter the sector.
Currently, there is a gender diversity problem in UK fintech, and despite female representation slowly growing, it’s still far off from parity with men. In 2019, women held 21.9% of leadership positions in financial services; unsurprisingly, these numbers dropped further at the board-level.
A way organisations can act upon the review’s recommendations is to help more women consider taking STEM subjects. A PwC report that surveyed around 2,000 A-level and university students found that only a third of women envisioned a career in the technology sector, half that of men. The sector was also only the “first choice” for 3% of women involved in the study.
On the racial front, any funds created by the government to support fintech firms, such as the one highlighted in the review, need to consider the inequalities faced by BAME business founders, who are statistically less likely to access funding than their white counterparts.
Response to the review
Responding to the review, Ammar Akhtar, CEO of Yobota, a London-based lending and banking platform, said: “This review is essential to the UK retaining its position as a global fintech leader. International connectedness has been recognised as a key long-term driver of this, and while the UK’s fintech sector is the emblem of progress, it cannot flourish without a deep pool of global talent.
“A diverse talent pool is an often overlooked driving force of fintech innovation. I believe it is as important as the other key enablers of industry growth, such as strong capital investment and supporting infrastructure.
“Navigating a complex and costly visa system risks deterring potential talent, and we must make it easier for companies to establish and nurture an ambitious and dynamic workforce. This is just as crucial for established companies as it is for startups: indeed, talent breeds talent, with existing workers acting as ambassadors to share their passion for innovation.”
Rishi Sunak, Chancellor of the Exchequer, said: “Fintech is one of the UK’s great success stories and will help us seize new opportunities around the world. We must now build on our global reputation for fostering innovative start-ups and ensure firms can access the talent, finance, and support they need to scale up here in the UK. This review will make an important contribution to our plan to retain the UK’s fintech crown, create more skilled jobs, and deliver better financial services for people and businesses.”
Ron Kalifa said: “Fintech has the power to change lives, both in terms of job creation and better wages that are so essential to our recovery; and making financial services more accessible and relevant to people’s lives.
“Britain has a proud record of starting-up and scaling-up some of the best-known fintech products, but we cannot rest on our laurels. The next powerhouses will not be created by accident.
“We must continue to nurture our start-up culture, but crucially we must also give our high growth firms the support to become global giants.
“With the right reforms that encourage entrepreneurialism, investment and make it easy to attract and invest in talent, Britain can usher in a period of dominance that can help us build back better from COVID-19.”
Actioning change post-review
Should the recommendations set out in the review be put into practice, then the UK’s fintech sector could become one of the world’s most financially successful and inclusive hubs.
Central to this will be encouraging women and ethnic minorities to take STEM subjects at schools and universities. Promoting the UK as a fintech destination for professionals worldwide could encourage diversity of thought in the sector while ensuring BAME startup founders get fair access to funding could make British fintech truly live up to its innovative reputation.
To read the review in full, click here.