Economic secretary Harriett Baldwin has said Fintech “helps normal people in their daily lives” by giving them extra choices.
Speaking at the Association of British Insurer’s event on Fintech and insurance yesterday (22 February), she said in the 21st century Fintech was essential in making financial services work for the consumer.
Ms Baldwin said the effect of Fintech was not just local or regional, but national.
She said: “Across the UK the Fintech market generated over £6.5bn in revenue last year. Our Fintechs attract significant investment, with around £550m in capital invested in 2015.
“It is clear that we have a strong pool of talent and the right government and regulatory regimes to help Fintechs survive.”
She added she had been particularly encouraged by seeing start-ups from across the world choosing the UK as their home and developing their businesses here.
As a result of the perceived impact on peoples’ everyday lives, Ms Baldwin said the government wanted to see Fintech growth in the UK.
She mentioned the Financial Conduct Authority’s launch of Project Innovate and the Innovation Hub.
Additionally, she noted the FCA’s regulatory sandbox would be open to applications for testing from firms this coming spring.
“Though ‘regulatory sandbox’ is certainly a contender for the jargon of the year award, what a regulatory sandbox does is provide a safe space for innovative firms to test out new ideas at an early stage, with real consumers, but with oversight from the regulator.
Additionally, Ms Baldwin said a sandbox also ensures the regulator is close to innovations in financial services and understands both the risks and benefits they may pose.
She said: “I know that the ABI has been supportive of this and has been working closely with the FCA to ensure that companies developing insurance products can benefit - I hope that this will continue going forward.
She also said the government had been particularly pleased to see some insurers creating dedicated spaces to test new ideas and collaborate with technology start-ups.
“The Aviva Digital Garage is an excellent example – and I know there are many more companies that are also investing in similar initiatives, such as Axa who announced that they would be funding a new €100 m (£78.2m) InsurTech incubator, dedicated to designing and launching novel disruptive products and services for insurance clients.”