The Kalifa Review: A year on, how far have we come?

A lot can happen in a year, and 2021 was no exception.

Back in 2020, the Chancellor asked Ron Kalifa OBE to conduct an independent review to identify priority areas to support the UK’s fintech sector. Kalifa’s review contained four main recommendations that, if achieved, aimed to ‘support the growth and widespread adoption of UK fintech, and maintain the UK’s global fintech reputation.’.

  • Amendments to UK listing rules to make the UK a more attractive location for Initial Public Offerings.
  • Improvements to tech visas to attract global talent and boost the fintech workforce.
  • The creation of a regulatory Fintech ‘scalebox’ to provide additional support to growth stage fintechs.
  • And, a Centre for Finance, Innovation, and Technology (CFID), to strengthen national coordination across the fintech ecosystem to boost growth.

Now, one year on from those recommendations, let’s see how far we’ve come, and what work still needs to be done.

A surge in investment 

In 2021, investment in UK fintechs reached record highs of $37.3 bn, up sevenfold from the year before. Specifically for IPOs, the latest figures from Bank of England show Tech IPOs in the UK raised £6.6 billion, doubling 2020’s figures.

A total of 37 tech and consumer internet companies went public last year, including fintech, Wise, delivery company Deliveroo and online marketplace, Auction Technology Group. London also proved its international competitiveness by attracting companies from Europe (TrustPilot), Canada (AlphawaveIP) and the US (Devolver Digital).

So, clearly, the aim of turning the UK into an attractive place both to launch a company, and to work for one, seems to have been a resounding success.

The FCA has also managed to set up a scalebox to support fintechs as they grow and, with the City of London, has supported the development of Net Zero fintech solutions through its digital sandbox. Fintech has also been recognised in new trade agreements with Australia and Singapore.

Industry viewpoint

Despite all the successes, as always, there’s still much to be done. An open letter from Innovate Finance members states that ‘rather than resting on our laurels, it is imperative that we continue to build on this momentum and work together to establish an environment in the UK that is even more supportive of and conducive to innovation in financial services.’

Laurent Descout, Founder and CEO at Neo, said:

“A year ago, the question was – can London stay ahead in fintech despite Brexit? The Kalifa review sought to maintain the UK’s fintech edge but it looked possible Brexit could have a reverse effect. Thankfully, a year later, the UK has cemented its place as a fintech hub and is working to navigate the Brexit challenges.  

“Nowhere is this more evident than in payments. Businesses paying low bank fees for Euro transfers into London found costs soar almost overnight as banks switched to charging international cross-border tariffs. Fintechs stepped in, offering multicurrency accounts, virtual wallets and, most importantly, a viable alternative to the traditional bank-driven model.” 

Christoph Gugelmann, Co-Founder and CEO of Tradeteq, said:

“A year on from the Kalifa review and we’re seeing fintech’s potential to reshape global trade – whether that’s parcelling trade finance instruments into investible assets, managing supply chains or automating workflows. These approaches have arisen through banks, fintechs, investors and other players working together – and it is this formula of continual dialogue that will continue to revolutionise this industry.”

Eric Huttman, CEO of MilltechFX, said:

“Fintech is no longer a subsidiary of financial services, but rather an omnipresent and essential component of the way we trade and do business. 

 “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.”

Martin Wilson, CEO of Digital Identity Net, said: 

“Fintech is strategically important for the UK, but while the 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.”


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