Fintech
What Each Party’s Manifesto for Financial Technology Outlines
The countdown to the UK general election is almost over, with the polls taking place on Thursday 4th July. With that in mind we decided to take another look at how each of the main parties’ manifestos have addressed some of the key issues in fintech.
Innovation
The Conservatives and Lib Dems have pledged to increase public spending on R&D. The Tories have said they aim to increase it to £22bn a year, up from £20bn this year. This is accompanied by maintaining their current programme of R&D tax relief.
The Lib Dems’ goal is to invest at least 3% of GDP in R&D by 2030, rising to 3.5% by 2034.
The Lib Dems also said they wanted to boost growth companies, especially outside London and the south-east, by using innovative methods to “attract” private sector investment.
In their manifesto the Labour Party does not explicitly mention a tax break programme for research and development, but states that they will “eliminate short funding cycles for major research and development institutions in favour of ten-year budgets that enable meaningful partnerships with industry”.
Labour also said it would work with universities and industry to ensure startups have access to the funding they need to grow.
Regulation
The Labour Party wants to create a new Regulatory Innovation Office to help develop new technologies. They argue this could help regulators update regulations, speed up approval timelines and coordinate issues that cross existing borders.
The Conservatives said they supported the implementation of the Mansion House reforms and would “maintain the highest standards of consumer protection and prudential regulation to ensure that the banking crisis that occurred under the last Labour government is never repeated”.
Financial crimes
The Conservatives will continue to work with the National Fraud Squad and will also ban SIM farms, which are used to send fraudulent text messages and cold calls about financial products.
Labour plans to introduce a new, expanded anti-fraud strategy to tackle threats such as online, public sector and serious fraud. They have also said they will work with tech companies to stop platforms being used by criminals.
The FT reported have drawn up plans to make tech companies responsible for reimbursing victims of online fraud.
The Lib Dems have been more detailed in their plans, proposing to create a new Internet Crime Agency, which will among other things tackle personal fraud.
The Lib Dems have also outlined plans to tackle the rise in fraud and scams: by exposing and reporting banks with the worst track records in preventing fraud and reimbursing victims; by forcing banks to repay victims of automated push payment scams unless there is clear evidence of their guilt; and by launching a high-profile awareness campaign to help people spot, avoid and report fraud and scams.
Artificial intelligence
Conservatives have boasted in the past that they have led the development of artificial intelligence, for example through the
AI Security SummitThey stated in their manifesto that artificial intelligence will “accelerate human progress in the 21st century, just as the steam engine and electricity did in the 19th century” and pledged to continue investing in large-scale computing clusters and supporting research into its safe and responsible use.
Labour has also addressed AI, saying it will ensure its industrial strategy supports AI development. It plans to remove barriers to new data centres and create a National Data Library to bring together existing research programmes, with a focus on data-driven public services.
Financial inclusion and branch banking services
The Conservatives said they “have legislated to require banks and building societies considering branch closures to consider the needs of all their customers and ensure they continue to have appropriate access to cash in their local community.” They also announced more than 100 banking hubs to give the public access to cash and everyday banking services.
The Labour Party has also focused on shared banking centres, committing to open 350.
The Lib Dems plan to introduce a national financial inclusion strategy. It will require both the FCA and the PRA to consider financial inclusion, such as protecting access to cash, especially in remote areas, supporting banking hubs, widening access to bank accounts, providing Sharia-compliant student finance and supporting vulnerable consumers.
PMI
Both Labour and the Lib Dems have proposed an expansion of the British Business Bank, to ensure SMEs have access to capital. Labour has specified reform of the British Business Bank to include a stronger mandate to support growth in regions and nations.
The Lib Dems have said they will work with major banks to fund the creation of a local banking sector dedicated to meeting the needs of SMEs.
Reform said it would raise the minimum taxable profit threshold for companies to £100,000 in the first 100 days.
Open banking and open finance
The Labour Party has said it will support open banking and open finance and ensure a regulatory framework that is conducive to innovation.
The Conservatives have said they will expand open finance, while supporting access to finance for SMEs.
CBDC
In particular, Reform UK has stated that it opposes CBDCs and is against cashless societies.
Other manifestos made no mention of CBDC or the digital pound, but as mentioned the Conservatives want access to cash through banking centres and the Lib Dems have assured that they will protect access to cash.