As far as fintech goes, UK has proven to be the cream of the crop among nations. This success is well accounted for, considering this is a nation that houses the financial capital of the world, a world-renowned regulator focused on innovation, and a government which has made competition in financial services the center of its policy. The talent being churned out of the UK fintech sector is thus a credit to this smoothly functioning system.
As a result, the UK fintech sector now employs more than 60,000 people, and last year turned out a whopping £6.6 billion in revenue. The UK government understands the need to keep up this momentum, and is therefore poised to develop fruitful relationships between the UK’s market and the rest of the world. Today marks a huge leap on this path of further development, as the UK government established a fintech bridge with one of the key priority international markets: China.
China’s fintech sector has grown to a gargantuan sizes size over the past few years. The alternative finance market alone is worth more than £98 billion, it is also home to eight of the world’s 27 fintech unicorns, and last year it received over £2 billion worth of investment.
It is understandable then, that some of the UK’s most ambitious fintech companies want to explore opportunities and set up operations in China, while at the same time Chinese fintech giants and investors are increasingly looking to meet the demand for financial services in the UK.
This new fintech bridge hence comes as a way to streamline the dialogue between the two giant fintech sectors, facilitating the easy movement of fintech across borders. The bridge is characterised by a regulatory co-operation agreement between the UK’s financial regulator and the People’s Bank of China. This allows information on market trends and regulatory developments in each country’s fintech sector to be shared more readily.
Soon, the first UK fintech companies will enter China as a consequence, and also lead to increased Chinese investment in the UK sector as the benefits of the bridge begin to kick in. It therefore has the potential to become an extremely and mutually profitable deal for both countries in the long run.