Having delivered the 2020 UK budget, the Chancellor of the Exchequer Rishi Sunak1 commissioned / appointed a seasoned banking / FinTech executive Ron Kalifa OBE to conduct an independent review on the state of UK FinTech industry. The objective of the review was not merely an assessment of the current state of UK FinTech, but also developing a set of recommendations to support its growth, adoption, as well as global position and competitiveness.

On that last point, measuring UK’s (or any other country’s) position in FinTech has always been a combination of science and art. While certain financial metrics are fairly unambiguous and comparable (e.g. number or total value of IPOs, or total value of M&A transactions), the ranking of a given country in FinTech is more nuanced. Should a total value of all FinTech funding / deals be used on absolute basis? Or perhaps adjusted per capita? What about legal and regulatory environment – should it be captured in the score as well?

The abovementioned considerations are usually pondered by researchers in specialist publications or market data companies, while most people in financial services simply work out some sort of internal weighted average of the above, and usually get the Top 3 (the US, the UK, and Singapore) fairly consensually.

Lastly, FinTech industry is unlikely to flourish without world-class educational institutions and a certain entrepreneurial culture. UK universities are among the very best in the world across all disciplines in all global university rankings. The entrepreneurial culture, as an intangible, is challenging to quantify, but most people will agree that London is full of driven, risk-taking, entrepreneurial people from all over the world.

Ron Kalifa 2021 UK Fintech Review

One way or another, UK’s FinTech powerhouse status is indisputable, and the Chancellor’s plan to build on that makes perfect sense. Brexit is the elephant in the room, because by leaving the single market, the UK created a barrier for the free movement of talent where there was none before. Brexit also arguably sent a less-than-positive message to the traditionally globalised / internationalised FinTech industry at large. On the other hand, there is some chance that Brexit could enable UK’s FinTech’s a more global (as opposed to EU-focused) expansion, although this claim can and will only be verified over time.

To his credit, Ron Kalifa approached his review from the “to do list” perspective of actions and recommendations rather than analysis per se. As a result, his document is highly actionable as well as reasonably compact.

The Kalifa Review is broken into five main sections:

  1. Policy and Regulation – which focuses on creating a new regulatory framework for emerging technologies and ensuring that FinTech becomes an integral part of UK trade policy (interestingly, this part includes a section on regulatory implications of AI as regards the PRA and FCA rules; this is the highest profile official UK publication to address these considerations that I’m aware of. Prior to the Kalifa Review AI regulation in financial services has been discussed at length from the GDPR perspective in ICO’s publications, but those do not directly feed into government policies).
  2. Skills and Talent – interestingly, the focus here is *not* on competing for Oxbridge / Russell Group graduates nor expansion of finance and technology Bachelor’s and Master’s course portfolio at UK universities. Instead the focus is on retraining and upskilling of existing adult workforce, mostly in the form of low-cost short courses. This aligns with broader civilisational / existential challenges such as the disappearance of “job for life” and the need for lifelong education in the increasingly complex and interconnected world. Separately, Kalifa proposes a new category of UK visa for FinTech talent to ensure UK’s continued access to high-quality international talent, which represents approx. 42% of FinTech workforce.
  3. Investment – in addition to standard investment incentives such as tax credits, the Kalifa Review recommends improvement of the UK IPO environment as well as creation of a (new?) global family of FinTech indices to give the sector greater visibility (this is an interesting recommendation for anyone who has ever worked for a market data vendor; indices are normally created in response to market demand and there are FinTech indices within existing, established market index families. Creating a new family of indices is something different altogether).
  4. International Attractiveness and Competitiveness.
  5. National Connectivity – this point is particularly interesting, as it seems solely focused on countering London-centric thinking and recognising and strengthening other FinTech hubs across the UK.

The Kalifa Review makes a crucial sixth recommendation: to create a new organisational link which the Review proposes to call the Centre for Finance, Innovation, and Technology (CFIT). The Review is slightly vague on how it envisions the CFIT structurally and organisationally (it does mention that it would be a public / private partnership but does not go into further details). CFIT is one recommendation of the Kalifa Review which seems more of a vision than a fully fleshed-out idea, but Ron Kalifa himself spoke about prominently in his live appearances and gave the impression of CFIT being the organisational structure upon which the delivery of his recommendations would largely hinge.

Upon release, the Kalifa Review was met with a great deal of interest from the financial services industry, as well as legal profession, policymakers, business leaders and academics. Ron Kalifa made multiple appearances in different online presentations on the topic, and most brand-name law firms carefully analysed and summarised his report. That, however, was the visible and easier part. The real question is to what extent the recommendations made in the Kalifa Review will be reflected in government policies for years to come.

You can read the report in its entirety here.


(1) Rishi Sunak took over the job of the Chancellor of the Exchequer from his predecessor, Sajid Javid, less than a month prior to the publication of Budget 2020. Consequently, it can be debated whether the FinTech report was Rishi Sunak’s original idea, or one he inherited.