Fintech and the regulators: Bridges to nowhere?
Despite the fanfare around their announcement, many of the proposed benefits of the 'fintech bridges' or bilateral agreements the UK government has reached with regulators around the world have yet to be realized.
Fintech bridge agreements are described as “a bespoke agreement outlining collaboration between two governments, cooperation between regulatory bodies and connectivity between ecosystems that encourages the sharing of information, including emerging trends and regulatory issues, with counterparts and discussions around areas of best practice”.
Russ Shaw, Tech London Advocates
According to Russ Shaw, founder of Tech London Advocates, these bridges are an opportunity for UK fintechs to access growth capital and sizeable markets in other countries.
However, he acknowledges that the key to their success will be ensuring there is a focus on generating specific commercial commitments that yield tangible results. “So far, the most effective bridge for the UK has been with Singapore, which has brought a number of fintech entrepreneurs to London,” he says.
This highlights a concern among some market participants that such agreements tend to be more valuable to less developed fintech markets.
“Entrepreneurs in the likes of Singapore, Tokyo and Shanghai have a real appetite to expand globally and establish commercial relationships with global tech hubs and London is high on this list given its status as a global fintech capital,” says Shaw.