The fintech landscape has not only transformed over the last few years, but the industry has also transformed the whole of the UK’s financial and professional services sector, of which it is now an integral part. However, with Fintech evolving so rapidly, UK cannot only rely on its past successes. This is why the Innovate Finance Global Summit hosted by the City Corporation last month came at a crucial time.
As the most globally connected financial centre in the world, the UK is in a position to benefit from fintech successes in those markets with which it has strong links. The Lord Mayor of the City of London Corporation, Michael Mainelli visited India earlier this year, which has become the world leader in instant payments due to the success of the Unified Payments Interface (UPI).
Other markets are taking full advantage of this and signing up to UPI in their payments system. People in the UK need to do the same if they are not to be left behind. They need to implement the Future of Payments Review and bring it up to ISO 20022, the global payments messaging standard, so UK fintechs can transact with counterparts in India and other markets.
At the same time , the debilitating spread of international fraud creates a duty for the fintech centre to do more to tackle this growing menace. Consumers are facing industrial level fraudsters and cybercriminals. They need to be protected by an industrial response.
The City of London Corporation and partner organisations are encouraging a greater role for tech companies, to protect individuals at source and make the best use of their innovative capabilities to harness technology for good. Industry must provide the first line of defence against fraud, through better collaboration and data-sharing at a business-to-business level.
In a challenging global environment for investment, the UK remains the largest hub for fintech investment outside the US, with four unicorns created in 2023 – two of which were AI firms: Quantexa and generative AI firm Synthesia. This demonstrates how the rise of AI will drive further and faster change in fintech.
The UK is in a strong position to benefit and currently receives around half of all of Europe’s investment into AI. It is essential that AI is developed and deployed in ways that benefit society, while minimising potential harm.
The Lord Mayor’s Ethical AI Initiative promotes the use of the ISO standard on AI management systems by firms, and other courses for AI builders and AI deployers. More than 4,000 participants from 300 organisations across 45 countries have taken part.
The UK has also brought together leaders from the global testing, inspection and certification sector to develop the Walbrook AI Accord, to harmonise the global infrastructure for AI assurance standards.
Being home to three of the world’s most intensive and high-profile science/tech research clusters – Cambridge, London and Oxford – means that the UK’s academic institutions have spawned world-leading tech and fintech firms. Mainelli said, his mayoral theme, Connect to Prosper, highlights the importance of these strengths to London’s financial district and the City of London’s role as the world’s ‘coffee house’.
As people reflect on the successes of the past ten years, they need to learn from the experiences so that in future they can be just as bold in embracing innovation, ensuring they are out in front rather than being left behind by competitors.
Regulators and the government will need to ensure that there are no barriers to competition, take part in the latest global successes and align with the highest international standards. As Mainelli points out, the UK’s fintech sector needs to work with the global fintech community to fight fraud and protect its customers in order for UK to be able to lead the next generation of fintech. (The writer is our foreign correspondent based in the UK)
Oman Observer is now on the WhatsApp channel. Click here
