Fintech at a Crossroads: Industry Leaders Urge Government to Support UK Innovation

The UK's fintech sector, once the envy of the global innovation landscape, is facing a critical moment. According to Janine Hirt, chief executive of Innovate Finance, the industry risks losing its global lead unless the government steps up with stronger policy and fiscal support.

Speaking ahead of the Autumn Budget, Hirt warned that while Britain remains home to "the very best fintech ecosystem in the world", momentum is slipping — and rivals from the US, Europe, and Asia are quickly catching up.

"We Need Government to Get Behind Us"

At Innovate Finance's Fintech as a Force for Good summit, Hirt championed the sector's achievements, from expanding financial inclusion to powering small business lending. She described fintech as both an engine of UK economic growth and a force for "inclusion and democracy".

"Fintech is a huge driver of growth," Hirt said, "but in order for the full power of our sector to be unlocked and help benefit this community and our entire economy, we need government and regulators to get behind us."

Her message was direct: without stronger state backing — particularly through the Treasury and the Financial Conduct Authority (FCA) — the UK's fintech leadership could erode.

A Global Race for Fintech Dominance

Britain has long held a strong reputation as Europe's fintech hub, anchored by London's deep capital markets and regulatory sophistication. Yet international competition is intensifying.

In the US, venture capital for fintech has rebounded sharply since mid-2024, while the EU is ramping up cross-border regulatory sandboxes and digital payments infrastructure. Singapore and Dubai, meanwhile, are attracting start-ups through tax incentives and lighter-touch compliance regimes.

"We have to grasp the opportunity that lies before us," Hirt warned. "Other countries see that opportunity too — and they are moving forward."

Recent figures suggest the UK's fintech investment dropped sharply between 2022 and 2024, according to Innovate Finance data, reflecting broader venture capital tightening and cautious investor sentiment.

Policy Levers: Tax, SEIS and IPO Incentives

Hirt's appeal comes as Chancellor Rachel Reeves prepares her first full Autumn Budget. Among her recommendations:

Strengthening investment tax schemes like SEIS (Seed Enterprise Investment Scheme) to boost early-stage start-up funding.
Introducing tax incentives for fintechs going public in the UK to stem the outflow of listings to New York.
Ensuring that the Mansion House Compact — designed to direct pension capital into British growth companies — delivers measurable results.

"The world is changing," Hirt said. "Let's all work together to make sure that it's the change we want to see."

The UK Investor Lens

For investors, the debate isn't just about fintech's future — it's about maintaining the UK's edge in innovation-led growth. With consumer adoption high and open banking regulations still world-leading, the fundamentals remain strong.

Yet many founders argue that structural issues — from slow regulatory approvals to lack of growth-stage capital — are constraining scale. Without policy alignment, more start-ups may choose to relocate or list abroad.

Investor Takeaways

Opportunities

UK fintech remains strong in payments, open banking, and regtech.
Expansion of SEIS/EIS could reignite early-stage funding.
Pension reforms may channel long-term capital into fintech growth.

Risks

Slowing domestic investment compared to US and Asia.
Policy uncertainty during the government's fiscal review.
Competitive pressure on UK listings and talent retention.

The Bottom Line

Fintech has been a pillar of the UK's innovation economy for more than a decade — from Monzo and Revolut to fast-growing regtech and AI-driven finance start-ups. But the ecosystem that once led the world is no longer guaranteed to stay ahead.