Labour’s plans for the UK fintech sector

In January 2024 Labour released a report, “Financing Growth: Labour’s Plan for Financial Services”, which recognised that “financial services are one of Britain’s greatest success stories”  and “one of our country’s greatest assets”, being a significant export for the country. Overall, the report was very high-level and did not make any significant proposals which would see a change of direction from the trajectory the fintech sector is already on. The report focused on consistency of regulation so that the fintech sector could look ahead and plan effectively without significant disruption.  

On 13 June 2024, Sir Keir Starmer launched Labour’s manifesto which did not provide any significant detail beyond what was set out in the January report . In the manifesto Labour pledges to ensure a “pro-business environment, with a competition and regulatory framework, that supports innovation, investment and high-quality jobs”. It also promises to create the conditions to support innovation and growth in the financial services sector, through “supporting new technology, including open banking and open finance and ensuring a pro-innovation regulatory framework”. Whilst this all sounds positive, the manifesto does not contain any real detail around how this will be carried out.

The manifesto does provide that in order to help drive innovation, Labour promises to create a new Regulatory Innovation Office, which will bring together existing functions across government and “help regulators update regulation, speed up approval timelines, and co-ordinate issues that span existing boundaries.” This is likely to be positive for the fintech sector which has seen rapid growth and innovation over the last decade.

The manifesto appears to share the current government’s ambitions for AI as a growth driver while also being wary of the technology’s potential implications. In its manifesto, Labour promises to, “ensure the safe development and use of AI models by introducing binding regulation on the handful of companies developing the most powerful AI models” while also promising to support the development of the AI sector by removing planning barriers to new datacentres. More details around these promises are likely to be of high interest to the fintech sector as the use of AI continues to grow.  

With only high-level promises provided so far, should Labour win the election we will have to wait until after 4 July 2024 to hear more details of the next government’s plans for the fintech sector.