Ron Kalifa heralds UK’s open banking successes
The UK’s open banking sector has “gone from strength to strength” but we “cannot rest on our laurels” as the industry is maturing and becoming increasingly competitive, Sir Ron Kalifa has said in a new report.
Kalifa, who authored a government-commissioned independent review into the fintech sector last year, noted that the UK pioneered open banking and heralded its achievements to date.
“Today, more than 70 per cent of digitally active adults in the UK use a fintech service – which is well above the global average,” he said. “We should be proud of that.
“The UK represents 10 per cent of the global market share, and fintech contributes more than £11bn annually to the economy. The UK has established itself on the global stage as a dominant force in fintech.
“That strong brand has created a thriving start-up ecosystem, and because of the strength of our incumbent financial services sector, fintech has found extremely fertile ground. It has also created opportunities to cross-pollinate into much broader technology solutions leveraging cross-cutting applications like big data, AI, and quantum computing.”
Kalifa’s comments were made in the Global Open Finance Index, a report released by Open Banking Excellence (OBE) that interviewed open banking experts from across the world. The report builds on the data from expert interviews conducted by the University of Oxford with secondary data from the World Bank, the IMF and Dealroom.co.
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However, Kalifa continued to say that “whilst we are starting from a strong base, we cannot rest on our laurels”.
“Now is the time to build on our success and shift our approach to reflect the needs of a maturing and increasingly competitive industry,” he said. “Brexit, Covid, global competition, and now the effects of the war in Ukraine are all creating challenges. So if we continue to act with the important buy-in from the government, as we’ve had, we can continue to take a lead and convert these threats in a much more significant way.”
Kalifa said that more needs to be done to encourage fintech talent to the UK, and called for more improvements to the apprenticeship system to make it easier for businesses to access high-quality training for their employees that meets their business needs.
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In the Kalifa Review, he proposed the creation of a new Fast Track system for fintech scaling up and said he was pleased that it has been taken forward by the Home Office.
Going forward, he said it is key that “we redouble and focus our efforts”.
“There are still many opportunities for us, and the financial services sector sees strengths and further opportunities in ensuring momentum in fintech is maintained and the recommendations of the Review are implemented at pace,” he said in the report. “Adopting innovative solutions such as software as a service (SaaS), artificial intelligence, cloud, blockchain in public and private markets, payments, regtech, cyber and technology solutions to ESG data, and analytics across the industry are all opportunities.
“Implementing a data strategy that achieves the right balance between data protection and enabling firms to use data to maintain and build their competitive offering is key. Also, safeguarding the future cross-border data flows to ensure that the UK becomes a much more competitive and stronger data hub is a vital aspect of the future.
“Continuing to ensure that we have access to data and analytical expertise will enable businesses to develop innovative products and services. There have been successes, but it is now essential that the financial and professional services sectors, the authorities, and the regulators continue to build on this momentum. The UK’s fintech star must continue to rise. I think that’s where the opportunity is.”