The UK is reinforcing its position as a leader in financial services innovation with fresh guidelines to foster collaboration between FinTech entities and traditional institutions.
The new provisions serve a dual purpose: to catalyse the growth of FinTech companies and to sustain the UK’s pivotal role in the global financial ecosystem.
Pioneering Guidelines for Collaboration
New directives, a collaboration between BSI and the FinTech Delivery Panel, lay the groundwork for enhanced engagement. These guidelines are pioneering, crafted specifically for the UK to streamline the interaction between financial technology firms and financial institutions.
The guidelines are tailored to cut down on time, cost, and risk for all involved parties. Through clear communication of identified issues and comprehensive solutions, FinTech entities can present long-term market opportunities more succinctly. This structured approach enhances the efficiency of forging partnerships within the sector, promoting a seamless integration of innovative financial solutions.
Sector Growth and Economic Impact
British investment in FinTech remains substantial, with an impressive £12.2 billion invested in the first half of 2018. This allocation surpasses investment levels elsewhere in Europe and contributes significantly on a global scale. Financial institutions are reportedly anticipating an 82% increase in partnerships with FinTech enterprises over three years.
Such statistics underscore the vigorous appetite for collaboration. Investment inflows illustrate the sector’s vibrant expansion and the escalating demand for groundbreaking solutions within financial services.
Government and Industry Backing
These guidelines originate from a government-backed initiative, integrating contributions from top retail banks such as Royal Bank of Scotland, Barclays, and HSBC UK.
Lloyds Banking Group and Santander, alongside leading FinTech companies such as MarketInvoice, The ID Co., and iwoca, also played an instrumental role in developing this framework. This collaborative effort illustrates the commitment of both government and industry leaders to nurturing a conducive environment for FinTech growth.
This support is part of the larger HM Treasury’s Fintech Sector Strategy. By aligning the interests of both banks and FinTech firms, the guidelines establish a robust framework to navigate regulatory landscapes and commercial considerations effectively.
Facilitating International Engagement
Designed with both UK-based and international FinTech firms in mind, the Publicly Available Specification is accessible to over 1,600 FinTech companies currently operating within the UK. It serves as a resource for those aspiring to engage effectively with UK financial institutions.
Significantly, this helps international FinTechs to gain a foothold in the UK market, aligning their services with domestic standards and expectations.
This freely available resource underscores the UK’s commitment to inclusive growth and international collaboration, positioning it as an attractive hub for FinTech innovation.
Key Considerations and Practical Guidance
The guidelines emphasize critical aspects such as clearly defining the problem, presenting solutions, and elucidating market opportunities. They also outline necessary checks and controls to comply with business and regulatory needs.
By addressing these points, the guidance acts as a practical toolkit for FinTech companies aiming to align with financial institutions’ goals and expectations.
Voices from the Industry
John Glen MP, Economic Secretary to the Treasury, emphasised the need for ease in collaboration, noting, “The UK is a trailblazer in FinTech but to be the best in the world, we need to make it as easy as possible for newcomers to collaborate with the bigger players.”
Anil Stocker, CEO of MarketInvoice, remarked on the strategic benefits realised during the PAS creation, highlighting the importance of cultural alignment in successful partnerships.
The Future of FinTech Partnerships
The new guidelines mark a significant step towards fostering meaningful partnerships between FinTech firms and financial institutions. They promise to nurture an innovative landscape where novel financial solutions can thrive.
These guidelines signal a progressive leap in facilitating efficient collaboration between FinTech and financial sectors. With comprehensive measures to aid new entrants and established players alike, the UK is poised to enhance its status as a global FinTech leader.