To ensure that London is at the forefront of innovation in finance, tech must be at the forefront of government focus, according to Alisa DiCaprio, Chief Economist at R3.
It comes as Chancellor Jeremy Hunt made stability a cornerstone of his budget, highlighting recent events in Silicon Valley as clear evidence that frameworks are key to dealing with macroeconomic volatility.
Reacting to the Chancellor’s technology and innovation strategy, DiCaprio, the former Chair of the FinTech Committee at the US Department of Commerce, emphasised that ‘if London is to retain its status as a global hub for financial services, then technology must be at the heart of its strategy’.
She elaborated: “Westminster has made welcome progress in creating the right environment for financial services to innovate with technology – such as its consultation on the digital pound and proposals to regulate crypto assets – but it is vital that the government maintains momentum and ensures good policy delivers world leading market conditions.
“We look forward to hearing more about the Treasury’s support for other fintech initiatives, like the FMI sandbox and accelerated settlement taskforce, to ensure the UK remains at the cutting edge of financial services innovation. With competition rising from Europe and elsewhere, harnessing transformative tools specific to empowering financial services, such as distributed ledger technology, is quickly becoming a central pillar of economic growth.”
Nonetheless, the budget continued to outline the government’s aim to progress levelling up, which the fintech sector has been key in securing and benefiting from. Northern locations Carlisle and Salford both named as benefiting from the growth of the fintech sector.
DiCaprio added that a regulatory framework that isn’t restrictive will be pivotal to the evolution of tech, she stated: “The original Big Bang was about deregulation, but Big Bang 2.0 must set out smart regulation.
“The introduction of targeted regulatory measures around exciting tools like distributed ledger technology will help distinguish the UK as a leader in initiatives such as accelerated settlement and central bank digital currencies. Doing so will ensure that the City remains at the forefront of financial services innovation – helping promote the Chancellor’s agenda to not only strengthen the economy, but also position the UK as the next ‘Silicon Valley’.”
