The UK’s fintech scene is thriving now, but that doesn’t mean we can afford to rest on our laurels, writes Kelly Devine
Britain has long been a hotbed for tech and payments innovation.
Six decades on from the introduction of the first credit card, a new report from EY highlights the scale of card payments in the UK, and how those payments benefit the British economy.
Card payments allow consumers to spend safely and more easily, as well as giving them better visibility over their personal finances. Small businesses can take payments with less friction, whilst contactless payments allow more spontaneous small-scale transactions, all of which contribute to economic growth.
With card penetration in the UK representing 57 per cent of all transactions, the report suggests that card payments facilitated an estimated 6.5 per cent of GDP in 2022, or up to £161bn of UK GDP – the equivalent of around 2.1m jobs.
In other terms, the GDP facilitated by card payments in the UK in 2022 was equivalent in scale to the number of people employed in the financial, insurance and real estate sectors combined.
Card payments are one of the many examples of the UK’s financial services strength. It’s a combination of forward-looking businesses and entrepreneurs, advanced technology and supportive regulation which has got us to where we are today – a world leader across fintech and payments innovation.
The UK’s fintech crown is something I, and countless others, are immensely proud of. But we must work to keep it.
The opportunities for growth are staggering. Already, for example, we are starting to see the power of open banking – which allows financial data to be shared securely between banks and third parties – to simplify and speed up payment processes.
Fintechs are making strides in addressing the needs of un-and-underbanked individuals through the creation of tailored products and services that foster inclusion and empower people to better understand and manage their finances, whatever their background.
From powering our nation’s treasured small businesses, to addressing financial exclusion and boosting the UK economy, backing continued innovation in this area will bring positive outcomes for all areas
of society.
That’s why it is so important for our political parties to put digital financial technologies and innovation at the top of their agendas.
This means creating a fertile environment for innovation by helping to close the funding gap for fintechs particularly for those focused on financial inclusion, enabling them to start and scale more successfully, championing collaboration between private and public sector and introducing supportive regulation that acts as a catalyst for positive change.
In the UK, the average fintech grew by over 20 per cent last year and our recent report on fintech innovation highlights that partners from across industry, trade bodies and fintechs themselves need that growth to remain both sustainable and inclusive.
To that end, we call on policymakers to channel investments towards innovation by introducing more attractive incentives for investors, rolling out policies which specifically support eco-tech startups.
These policies should also encourage an ecosystem which can support the growth of fintech innovation in the North of England and help channel unbanked customers towards fintechs which promote financial inclusion.
The UK is in an advantageous position. The fintech crown is ours. Let’s keep it that way and work together to use the power of technology and payments innovation to get Britain growing.