Rachel Reeves has promised UK fintech the world – now she must deliver
Judgement day looms for Rachel Reeves, and UK fintech will be handing her the verdict.
In a keynote speech at Innovate Finance’s 11th global summit, the Chancellor confirmed the Treasury’s inaugural Financial Services Growth and Competitiveness Strategy would be published on 15 July.
Reeves has lauded the industry’s growth and touted the achievements of fintech darlings Zilch and Allica Bank.
She pledged to make the UK “one of the best places in the world for fintechs to start-up, scale-up and to list”.
But after Revolut’s chief executive Nik Storonsky blasted listing in London as “not rational” last year, the Chancellor will need to swing big.
The eyes of the industry are set on July, when Reeves’ commitment to fintech will be on trial and fintech leaders will be judge, jury, and – if disappointed – executioners.
‘Optimism hinges on delivery’
Schachar Bialick, the chief executive of London-based firm Curve, told CityAM: “Fintech must be a priority – because it touches every aspect of modern economic life.
“From spending to saving to financial wellbeing, fintech is the infrastructure layer of the digital economy. Right now, the sentiment is hopeful, but cautious. Firms are watching closely to see whether the government will turn policy into meaningful reform.”
Bialick added: “Sentiment is clear: optimism hinges on delivery.”
Curve, a challenger to Apple Pay, was valued at $781m (£587m) in a 2024 funding round. But the fintech has since retreated from the US market, cutting more than 100 jobs and posting a loss of £36m.
The fintech’s chief said: “The most impactful move the Chancellor can make is to level the playing field – ensuring fintechs can compete fairly with Big Tech. That begins with infrastructure access.”
The Financial Conduct Authority and Payment Systems Regulator wrote to the Competitions and Market Authority in February calling for a fairer legislation on near field communication (NFC).
The European Union has mandated Apple to open access to NFC technology for third-party mobile wallet providers, including those that are not Apple Pay.
“If the government is serious about backing British fintech, it must act decisively and mirror Europe’s approach. This one move would unleash a wave of innovation in mobile payments and strengthen the UK’s position as a fintech leader,” Bialick said.
Reeves has ‘mountains to climb’
During her speech, Reeves hailed the UK as the top spot for fintech investment – second only to the US.
But, a report by KPMG revealed investment had fizzled since 2021 and hit a four-year low in 2024 at £7.9bn.
Private equity boss Rami Cassis told CityAM: “We’ll need to see bold measures from the government for it to succeed. At the moment, it’s all talk, and we need to see far greater action.”
He added: “The fact is that the UK’s fintech industry still has some mountains to climb – and they have only been built higher by the actions of this government.”
Cassis, the chief executive of Parabellum Investments, cited the government-triggered non-dom exodus which “drove out an important group of investment banking professionals who were incredibly involved in the sector”.
“Investment bankers are crucial for any UK fintech firm setting their sights on an IPO. Non-doms made up a sizeable chunk of the UK’s bankers, and the Labour Party’s policy change has left a large gap to fill.
“The impact has been severe, with the likes of Zurich, Frankfurt and Paris beginning to build up their fintech footprint at London’s expense.”
CityAM revealed last month Goldman Sachs’ most senior banker outside America, Richard Gnodde, was leaving the UK to avoid the government crack-down.
The plea to deregulate
As the government pledges to slash the red tape, regulation has been a critical objection in fintech’s case for economic growth.
Allica Bank’s chief executive Richard Davies told CityAM the firm was “hearing good things from the Chancellor” but warned “we can’t take [fintech’s] success for granted”.
The digital bank was dubbed Europe’s fastest growing start-up by Sifted and named the UK’s fastest growing private company by The Times Hundred.
The lender’s pre-tax profit, which caters towards small and medium-sized enterprises (SMEs), surged £29.9m to 86 per cent in 2024.
Davies said: “To continue momentum, we need regulation that promotes competition and growth.”
He added backing of UK SMEs was “critical” and called for a “supercharge” to the Growth Guarantee Scheme which provided approximately £500m of additional lending capacity to help smaller firms.
The growth of UK fintech has exploded in recent years as giants Monzo and Revolut became household names and a fleet of new firms entered the scene.
Alex Mollart, chief executive of Tandem Bank – a Blackpool-based fintech, told CityAM he was “hopeful for plans to continue to develop fintech clusters beyond London.”
David Newman, boss of Manchester-based Firenze, said: “The upcoming strategy is an exciting opportunity to present other tangible plans, which will drive fintech and ultimately growth for UK Plc.”
Mollart added: “As UK fintech enters its next chapter, it’s vital we create the right conditions for challengers to thrive – I’d be keen to see a fintech-first approach across the board, focused on innovation and opening up opportunities to drive more competition at scale and really take on the big players.”
Checkout.com’s chief marketing officer Rory O’Neil cosigned regulation woes, and added a “strong fintech talent pipeline” should be a key area of focus in the Treasury’s strategy.
He warned: “Failure to deliver on either risks slowing down growth for scaling fintechs, and worse, makes the UK less attractive to future start-ups and scale ups.”
The strategy will mark a critical juncture for the industry with momentum set to kick into another gear or be derailed.
Ahead of the global summit, Janine Hirt, Innovate Finance’s chief executive, told CityAM fintech boasts over 82,000 people employed and the workforce is projected to pass 100,000 in the next two years.
The Chancellor will face a long docket of pleas from firms on how to boost the industry – and while she may not meet every demand, if Reeves is found guilty on all counts, fintech’s momentum could grind to a halt.