On 26 February 2021, HM Treasury (HMT) published Ron Kalifa OBE’s independent strategic review of UK financial technology (FinTech), also known as the Kalifa Review. The executive summary is available here.

Formally relaunched on 20 July 2020 following an announcement by HMT as part of its 2020 Budget and delays due to Covid-19 (see our blog post here), the purpose of the Kalifa Review is to help boost the growth and adoption of FinTech in the UK. The Kalifa Review details a strategy and delivery model for the UK to maintain its position as the go-to place to start and grow a FinTech business. It sets out a five point plan of recommendations, including the creation of a Government-backed Centre for Finance, Innovation and Technology (CFIT), mandated and supported by the UK Government, but led by the private sector to coordinate the delivery of the recommendations.

HMT is expected to publish its response in due course.

A five point plan of recommendations

1. Policy and regulation:

  • Deliver a digital finance package that creates a new regulatory framework for emerging technology in areas such as digital ID and data standards.
  • Implement a ‘Scalebox’ that supports firms focusing on scaling innovative technology – this would entail enhancing the Regulatory Sandbox and making permanent the Digital Sandbox pilot.
  • Establish a Digital Economy Taskforce (DET) to ensure a coherent roadmap for technology and digital issues, creating a ‘single customer view’ of the Government’s strategy.
  • Ensure FinTech is at the heart of the UK’s trade policy.

2. Skills:

  • Retrain and upskill adults in support of UK FinTech by ensuring access to short courses from high-quality education providers at low cost.
  • Set up a new visa stream to improve the UK’s access to overseas talent.
  • Build a pipeline of FinTech talent by supporting FinTech scale-ups to offer embedded work placements to Further Education and Higher Education students and kickstarters.

3. Investment:

  • Expand research and development (R&D) tax credits, the Enterprise Investment Scheme and Venture Capital Trusts.
  • Establish a £1 billion FinTech Growth Fund backed by institutional investors such as private pension schemes to provide support to firms in the Series B to pre-Initial Public Offering (IPO) stages.
  • Reform the UK listing regime via a reduction to the free-float threshold, allowing dual class shares and a relaxation of pre-emption rights – this should be read against the backdrop of HMT’s separate UK Listings Review (see our blog post here).
  • Create a ‘family’ of FinTech indices – once enough UK FinTechs have listed and formed a sub-sector, an index could become a bellwether for UK FinTech stocks.

4. International:

  • Deliver an international action plan for FinTech.
  • Launch an international FinTech Credential Portfolio (FCP) to provide easy access to the credentials required to drive overseas expansion, including identity verification, digital ID, regulatory compliance, and evidence of partnerships with incumbent financial institutions and backing from recognised investors.
  • Drive international collaboration through the CFIT, and launch an International FinTech Taskforce.

5. National connectivity:

  • Nurture the high growth potential of the top 10 FinTech clusters, facilitating connectivity amongst them and supporting ‘regional specialisms’, in particular regarding the intellectual property being created in UK universities.
  • Drive a national coordination strategy through the CFIT.
  • Accelerate the development and growth of FinTech clusters through further investment.

Some of the recommendations could have a significant impact on the FinTech industry. Alongside other reviews and projects currently being undertaken by HMT and UK regulators (especially in relation to payments, cryptoassets and stablecoins), the policy and regulation recommendations will give HMT a number of possible routes and options to explore when deciding how and to what extent the regulatory regime applicable to FinTechs should be reshaped. The key will be to develop a framework that caters for continued innovation.

Interestingly, the Kalifa Review highlights that some stakeholders would like to see the Competition and Markets Authority (CMA) adapt its approach to FinTech in order to better balance competition and growth, by allowing more flexibility in the assessment of FinTech consolidation.

In the area of investment, the Kalifa Review highlights the need for the UK to transition from being a global leader in FinTech start-ups to also being the best place to scale such business. Its four key recommendations in this area – including reforming the listing regime and establishing a growth fund – are therefore intended to ensure FinTechs receive appropriate support at every stage of the funding ladder, including at the IPO stage.

The recommendation to amend certain visa rules is also significant. Action is already under way on this front; in an interview with the Financial Times published on the same day as the Kalifa Review’s release, Chancellor Rishi Sunak announced that he will launch a new fast-track visa scheme for UK scale-ups, i.e. firms with annualised growth of at least 20% over three years with 10 or more employees.

The various opportunities flagged by the Kalifa Review, and the roadmap it provides, should enable the UK to build on its existing strengths as a leading FinTech hub, making the UK the place of choice to start and grow a FinTech business, boosting trade and investment, and creating new skilled digital jobs across the UK.

Next steps

HMT is expected to publish a response in due course. Mr Kalifa has also requested the UK Government to consider appointing a FinTech ‘business champion’ to support FinTech and deliver the strategy set out in the Kalifa Review.


Karen Anderson
Karen Anderson
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Terence Lau
Terence Lau
Senior Associate
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Harry Millerchip
Harry Millerchip
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Cat Dankos
Cat Dankos
Regulatory Consultant
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Trystan Cullinan
Trystan Cullinan
Professional Support Paralegal
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