Innovate Finance KPMG Report on Transforming Fintech in the UK Calls for Regulatory ‘ScaleBox’

KPMG UK | September 2019

Innovate Finance KPMG transforming fintech in the UK Sep 2019 - Innovate Finance KPMG Report on Transforming Fintech in the UK Calls for Regulatory 'ScaleBox'The UK is viewed as a leading location for Fintech thanks to its position as both a top financial services jurisdiction and one of the highest ranked global technology hubs. It cannot rest on these laurels, as there is competition from Asia, the US and increasingly from Europe. How does the U.K. strengthen this position; expand the ecosystem; and use Fintech to remain a leading financial centre in the future?

ScaleBox:  Proportionate Regulation for SME Capital Markets

The UK has led global innovation in Financial Services regulation. The role of the regulator in facilitating development is key: with over 110 firms entering the Financial Conduct Authority’s (“FCA”) Regulatory Sandbox since its inception and our leading position in the Global Financial Innovation Network (“GFIN”).  However, competition for innovation is coming from Asia and competing with a, usually, less restrictive regulatory environment has created two streams of global Fintech businesses with the likes of AliPay’s and WeChat Pay’s innovation and growth far outstripping anything in the West.

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ASPAC’s Fintech sector CAGR is 43% compared to the global average of 22.17% (14).

Fintech ScaleBox - Innovate Finance KPMG Report on Transforming Fintech in the UK Calls for Regulatory 'ScaleBox'

Despite the success of the Sandbox, Fintech businesses still appear to struggle to scale and move from the unregulated space to full FCA regulation, with only 39% of businesses entering the Sandbox receiving further investment.

There is an opportunity to consider proportionate oversight/regulation in a scaling environment which bridges the gap between the Sandbox and full FCA regulation, akin to ‘EU SME Growth market’ concept which has brought proportionate regulation to SMEs for Capital Markets in the EU. The ‘ScaleBox’ could also be used to address asynchronous regulation from inbound Fintechs to drive innovation in existing UK Financial Services businesses.

Download 4pg PDF:  KPMG Transforming Fintech in the UK report

 


NCFA Jan 2018 resize - Innovate Finance KPMG Report on Transforming Fintech in the UK Calls for Regulatory 'ScaleBox' The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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