LONDON, Oct 12 (Reuters) - The City of London called on Thursday for a more joined-up approach to nurturing financial technology firms in a fast-growing sector that now faces threats from Brexit.
“Fintech” develops and offers personalised financial services like payments, loans and insurance via smartphones or the Internet, providing consumers with alternatives to high street banks.
The City, which runs the “Square Mile” financial district of London, published a report on UK fintech on Thursday commissioned from consultants KPMG.
It said that the fintech sector contributed 6.6 billion pounds to the British economy and employed 60,000 people in 2016, making it a leading global hub.
Its main recommendation is for the government to set up a fintech “sector deal” or single policy vision to coordinate standards, support hiring of staff from outside Britain, and improve access to markets.
“If they do, then I am sure that fintech will continue to go from strength to strength in the years to come,” City of London policy chief Catherine McGuinness said in a statement.
A sector deal is an idea that comes from the government’s industrial strategy discussion paper published in January.
It foresees a sector presenting broadly-backed proposals to the government to “transform and upgrade” the sector.
The government’s side of the bargain would be to tackle regulatory issues, make better use of existing funding, and help remove barriers to markets in other countries.
The report calls on the government to provide as much direction as possible on what Britain’s departure from the European Union will mean for fintech, in particular for hiring people from outside Britain.
Roughly 30 percent of founders of fintech firms in Britain are non-British.
Cities like Berlin, Luxembourg, Paris and Copenhagen are already wooing UK fintech firms which face potentially being cut off from EU customers after Brexit.
The EU itself is looking at ways to boost fintech firms inside the bloc, such as by coordinating regulatory approaches to avoid being at a disadvantage to Britain.
Fintech firms in Britain won’t have access to the European Investment Fund after Brexit, and the government should work with the state-owned British Business Bank to provide replacement capital or a fund for fintech after 2019, the 71-page report said. (Reporting by Huw Jones; Editing by Adrian Croft)