The Digital Finance Forum (DFF), a network of the UK’s fintech founders, has published a study concluding that one in three UK fintech founders are optimistic about the country’s ability to retain its leading position in fintech in the next five years. Nearly two thirds of the respondents consider the UK to be the current world leader in fintech.
The study reveals a number of issues that fintech founders see as key challenges for their businesses and the sector, such as access to talent and capital, as well as Brexit uncertainty.
Three in five (61 percent) cite the difficulty of “hiring enough good people” and “hiring engineering and product professionals” as hurdles that threaten to dampen the UK’s fintech dominance. More than a quarter of fintech founders (29 percent) worry that a lack of access to capital will negatively impact their businesses. Also, Brexit uncertainty is a factor in the founders' concerns about the future, with over two thirds of respondents (69 percent) saying they are worried or extremely worried about the impact of the EU exit on their businesses. At the same time, most (over 60 percent) are more optimistic about their businesses now than they were at the start of the year.
The study also outlines a range of ideas for how the government can help the sector, including:
- Two thirds of founders (66 percent) urge the government to improve the visa system now to make hiring from abroad easier and faster. In the words of two founders: “Open the borders to high skill, high demand workers” and “create technology visa.”
- Many founders say the government must listen more to the founders that are at the coalface of the fintech industry and are the best placed to represent sector interests and input into policy. “I’m 100 percent in favour of having fintech founders representing and advising the government - it’s the founders themselves that have the best understanding of the fintech space.”
- Almost half of the founders call for a Secretary of State for Technology to represent technology industry interests at Cabinet level and alleviate the burden of sharing fintech responsibility between the Treasury and DCMS.
- Many founders believe that the government needs to continue evolving financial regulation to allow fintech businesses to better compete with market incumbents (45 percent). Specifically two in five (43 percent) suggest that Open Banking could be expanded to include other providers to share their data (such as insurers and utility providers).
Christian Faes, chair of DFF and co-founder & CEO of LendInvest, commented: “The Digital Finance Forum is facilitating a dialogue and asking those who are actually at the coalface of building the Fintech sector, what they think and how the government might be able to help. Some great ideas have been put forward in this survey. The UK must not be complacent about being the world leader in Fintech - and there’s definitely a feeling from Fintech founders, as revealed through this survey, that this threatens to be the case. There is clearly an opportunity with the new government to make the Fintech sector a priority again.”