Experts have called for a stronger focus on the fintech sector in today’s UK Spring Budget (15th March) as citizens battle with rising living costs and the global financial services sector is left reeling following the collapse of Silicon Valley Bank.
UK Chancellor, Jeremy Hunt, announced 12 new investment zones across the country to “supercharge” hi-tech growth and “turn Britain into the world’s next Silicon Valley.”
Dima Kats, CEO at global payments company Clear Junction, told Verdict: “A thriving fintech industry is vital to ensuring the UK economy bounces back from the current economic crisis that has hit businesses across the globe.”
The government’s new plan for high-tech growth will see £80m invested over the next five years in each new regional zone, in the hope of accelerating the country’s “most budding industries.”
Hunt’s plan is said to address findings from the Kalifa Review on UK FinTech, published in February 2021, which reported that 90% of UK adults will need to re-skill by 2030.
Kats believes the UK Spring Budget should focus on fintech as a primary sector to “provide well-paid, high-skilled jobs to promising talent over the challenging years to come.”
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However, it has been reported that around half of all fintech firms have needed to pause the hiring of new staff in 2023 due to an increasingly dire economic environment.
In the first half of 2022, around 4,000 fintech employees lost their jobs across 45 companies, according to The Fintech Times.
Research commissioned by UK technology consultant, Erlang Solutions, found that over half (51%) of fintechs will have to put a pause on hiring in 2023.
The data tallies with other segments of the global tech industry, which have seen job cuts throughout 2023. Meta announced, in March 2023, that the company plans laying off a further 10,000 workers following its mass cull in November.
Despite these factors, the fintech industry continues to remain hopeful – especially after the announcement of a UK Fintech Hub last month (Feb, 2023).
“Investment in fintech from the government must continue to address these problems and prepare the UK for the future,” Kats added.
“The announcement today is an encouraging step for the UK to remain a fintech hub now and when the global economy recovers from the current economic crisis.”
GlobalData is the parent company of Verdict and its sister publications.