Chancellor woos fintech and needs to deliver

Observer

14-05-2025

In a keynote speech at Innovate Finance's 11th global summit, the chancellor Rachel Reeves confirmed the Treasury's inaugural Financial Services Growth and Competitiveness Strategy would be published on July 15. Reeves has lauded the industry's growth and touted the achievements of fintech. She pledged to make the Uk 'one of the best places in the world for fintech to start-up and to list.'
The eyes of the industry are set on July, when Reeves' commitment to fintech will be on trial and fintech leaders will be the judge. The chief executive of London-based firm Curve, Schachar Bialick, said '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.' She 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 fintech can compete fairly with Big Tech. That begins with infrastructure access.'
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.
During her speech, Reeves hailed the UK as the top spot for fintech investment – second only to the US. But a report from KPMG revealed investment had fizzled since 2021 and hit a four-year low in 2024 at £7.9bn.
Private equity boss Rami Cassis said: '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 –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. He added: 'The impact has been severe, with the likes of Zurich, Frankfurt and Paris beginning to build up their fintech footprint at London's expense.'
Allica Bank's chief executive Richard Davies said 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 the UK's fastest growing private company by The Times Hundred.
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. Checkout.com's chief marketing officer Rory O'Neil consigned 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 speed ahead or be derailed. (The writer is our foreign correspondent based in the UK)
Andy Jalil
The writer is our foreign correspondent based in the UK.