A year on from the publishing of the Kalifa fintech report, the sector has rapidly grown in importance as we have navigated the pandemic.
The evolution of the sector has underlined the pivotal nature of the implementation of the report’s recommendations, with Eric Huttman, CEO of MilltechFX, stating that ‘Fintech is no longer a subsidiary of financial services, but rather an omnipresent and essential component of the way we trade and do business’.
He added: “Financial technology has received record levels of funding. Over the past 12 months, the UK has further consolidated its position as the global fintech hub with over USD 37 billion investment.
“The one-year anniversary of the Kalifa Review, however, is a timely reminder and wake-up call for firms still beholden to outdated legacy processes.
“We must focus our efforts on using fintech to help develop the real economy. That starts with the treasurers and asset managers who can face huge operational inefficiencies with their FX setups which directly affect their bottom line.
“Now is the time to leverage digital solutions to implement widespread and strategic change. If all parts of the financial services industry are to ‘build back better’ for their customers, the use of these technologies to establish a more efficient, transparent and cost-effective way of doing things will be vital.”
Furthermore, Martin Wilson, CEO of Digital Identity Net, also outlined his belief that the anniversary of the review should be a key prompt to the UK to act in order to retain its status as a fintech leader.
Wilson emphasised: “The first birthday of the Kalifa Review is a timely reminder that the UK must act to maintain its advantage as a global fintech hub. Investment into fintechs rose sevenfold from 2020 and Open Banking, a key part of many fintech services, also had a big year with one million users joining between September 2021 and January 2022. It now has five million regular users.
“Fintech is strategically important for the UK, but while billions are flowing into fintechs in London, we also need to see the government, businesses and banks adopt and implement these new technologies to improve the way we do business as a country.”
“The UK itself needs to digitise further. We are ahead in areas such as trading technology and payment processing but way behind on digital identity. Other countries are leading the way. Belgium, Norway and Sweden all have digital identity systems connected to their banks to protect consumers data and dramatically reduce fraud, which is a major and growing problem in the UK currently. The Bank-ID service in Sweden is accessed by its adult citizens on average twice a day and the Norwegian service has reportedly reduced payment fraud from 1% of daily value to a staggeringly low 0.00054%.
“The government and banks should consider how we can implement digital identity innovation in order to continue to deliver digital services which positively impact its citizens’ lives.”