The last time the UK government switched from one of its major parties to another was in 2010. David Cameron’s Conservative party ended 13 years of Labour rule by Tony Blair and Gordon Brown. The country is predicted to make such a switch again with the general election, scheduled for July 4 this year.
There have been many prime ministers in the UK since 2010 (go on, count them) but a change in party marks a change in era. Most futurists I know claim they look forward by examining the choices and results of the past. This has caused me to think back to the start of the 21st century’s second decade when the UK, and more importantly, London, became the global hub for fintech.
Many regions around the world have sought to establish themselves as technology hubs. Places that would attract smart and innovative entrepreneurs, who might set up the next Google or Apple, and establish the place as progressive, welcoming to educated talent and, most importantly, wealthy.
However, before there were silicon chips and data that resides in the cloud, London was a financial centre. Outside of its role as the capital of the UK, London has been a trading post for centuries. It served as the administrative hub and funding source for the globe-spanning British Empire. If money makes the world go round, the hub of that cash-rich carousel was London.
Prior and current UK governments have sought to invest in innovation and digital disruption in a general sense, while taking pains not to focus solely on financial services.
The UK’s own tech superstar, Brent Hoberman, chair and co-founder of Founders Forum Group, Founders Factory and Firstminute Capital, recently wrote in the Financial Times about the threat that the UK will fall further behind other European countries in welcoming the tech ecosystem. He pointed out that “recent governments have not always had messaging about tech front and centre” and claimed a senior UK politician told him there were “no votes in tech”.
However, if you are talking about supporting and growing the technology industry in the UK and especially London, a vast majority of that sector focus will be in financial services.
Fintech’s spiritual home is the Big Smoke.
Running the government just years after the 2008 global financial crises, Cameron and George Osborne, then chancellor of the exchequer, recognised that the industry was crying out for answers that wouldn’t necessarily come from the traditional banking and financial services players. 2010 also saw the launch of Metro Bank, the first UK high street bank for 100 years.
That new bank is where I consider the birth of fintech really began in the UK. People in the government and regulatory bodies looked at the fact that it took 100 years for the country to see one new bank, and realised progress, innovation and increased competition shouldn’t be that hard to create.
Fintech was placed firmly in the middle of the Conservative-backed Innovate Finance Manifesto in 2015. A manifesto that remained in place despite the coalition government with the smaller Liberal Democrats.
2014 was when fintech got serious and cool. London was the centre of that universe. Level 39 emerged in Canary Wharf, just a year earlier, filled with young, buzzy fintech start-ups. From a direct plan from Osborne, Innovate Finance, which serves as an independent voice for the fintech community, arrived in 2014. Barclays followed suit launching their own “new home for fintech” with Rise, created by Barclays (known to most people as just Barclays Rise) in 2017.
All of these new and emerging companies, which were finding homes in east London, caused the area at the end of Old Street, on the edge of the City of London, to be re-dubbed “Silicon Roundabout”.
Most importantly, the Financial Conduct Authority launched Project Innovate, which would evolve into a permanent regulatory sandbox, in 2014. Regulatory authorities from around the world flocked to London to “learn” how the FCA was enabling the creation of a new financial services provider class.
Everything felt fresh, new and exciting. Would banks be around in 30 years? If not, would anyone care? What is this new currency people are talking about called bitcoin? (I was actually gifted a bitcoin in around 2013 by a happy attendee of one of my talks — where that is now is anyone’s guess. #FindLizziesBitcoin.)
This isn’t a political column. However, I judge almost all nods to fintech by the present or presumptive government through the lens of that era.
Earlier this year, Labour released a report, Financing Growth: Labour’s Plan for Financial Services. The report says, among other things, that a Labour government will scale regional financial centres (OK, that has been in the works for years); look at regulating “buy now, pay later” (you and every single regulatory body on the planet); embrace tokenisation (way to recognise a trend); as well as empower funding for start-ups (well, duh).
Seriously, did anything blow your mind? Most of these plans are just a recognition of work that is being done now and whose roots stem from those heady years post-2014.
The Tories aren’t promising much more. A look to boost funding and productivity for small to medium-sized businesses and a commitment to implement the Crypto-Asset Reporting Framework and amendments to the Common Reporting Standard.
Was the Cameron/Osborne-backed fintech manifesto just a product of its time? Has fintech grown into maturity and I am asking too much for an incoming government to work beyond just maintaining the status quo and making it slightly easier to raise funds?
I want to wait. We are no longer in a post-global financial crisis world, but a post-Covid world. Many countries find themselves with an ageing population, while climate issues and geopolitical tensions will impact immigration and global economies further. We need the increased competition and innovative thinking of fintech more than ever.
For now, I’ll sit up here in my ivory tower and read the various “promises” with a grain of salt. Whoever will sit in Downing Street post-July 4 (likely Labour), my only question will be: “What have you done for fintech lately?”
