The UK has experienced a momentous shift in its political landscape as the Labour Party, led by Sir Keir Starmer, secured a historic victory in the general elections this week. This win marks Labour’s return to power for the first time since 2005 when Sir Tony Blair was at the helm.
After 14 years of Conservative rule, the Tories have suffered their worst defeat in history, paving the way for a new era under the new Labour Prime Minister Starmer.
Everyone has had a lot to say in reaction to the result, and the fintech industry is no exception. We’ve collected a range of responses from key players in the sector to give you a look at how this political change is being received and what they want to see from the new government moving forward.
Impact on crypto
Reflecting on the election results, the crypto sector has called for the UK to establish itself as a leading hub for innovation and clear regulatory frameworks.
Cassie Craddock, UKI and Europe MD at Ripple
Cassie Craddock, managing director, UKI and Europe MD at Ripple, suggests “finalising the rule book for the crypto industry should be a priority for this new government”.
“The UK has already taken a leading role in developing clear rules for the crypto and blockchain industry, enabling financial services innovation whilst ensuring consumer protection. These regulations are essential to ensure that compliance-first global crypto companies like Ripple can continue to innovate with confidence in the UK.
“A consistent regulatory approach will strengthen market stability, promote inward investment and build trust for consumers and industry – placing the UK at the forefront of the global ‘race to the top’ for pro-consumer and pro-innovation crypto regulation, and bolstering the financial services sector as a dynamo for economic growth.”
Seamus Rocca, CEO of Xapo Bank (licensed in Gibraltar), shared this sentiment, commenting that “the UK needs to think about how to make itself attractive to entrepreneurship, innovation, fintech, and crypto to help create an industry and jobs”.
For Nigel Green, CEO of deVere Group, the Labour Party’s vision of embracing securities tokenisation signals a forward-thinking approach.
“By investing in blockchain technology and supporting startups, the UK can lead in developing new applications and services in the crypto space. Government-backed initiatives, such as funding for research and development, tax incentives for blockchain startups, and partnerships with academic institutions, can drive growth.
“In addition, establishing special economic zones with favourable regulations for crypto businesses could create hubs of innovation and attract global talent.”
Impact on open finance
Industry leaders are calling for the passage of the Data Protection and Digital Information (DPDI) Bill, along with broader support for regulatory measures that foster innovation.
Scott Dawson, head of sales and strategic partnerships at DECTA
Scott Dawson, head of sales and strategic partnerships from DECTA, highlights the need for the new government to learn from impactful regulations like the Payment Services Directive (PSD), which spurred innovation through open banking and 3DS services.
“Embracing, not fearing, regulation could be a game-changer. Less aversion to strong government support would be positive could unlock significant profit potential and fuel further innovation for UK businesses – helping them to prosper through better access to finance and financial services.”
Stefano Vaccino, founder of fintech Yapily, echoes this sentiment, stressing that Labour must tackle regulatory stagnation.
“To truly seize this opportunity, Labour must prioritise addressing the regulatory paralysis that is creating so much uncertainty for the sector, specifically the last government’s inability to pass the Data Protection and Digital Information (DPDI) Bill and the ongoing uncertainty surrounding Open Banking Limited.
“We urgently need to reinstate the DPDI Bill to establish a clear, authoritative body to drive open banking forward, or risk losing our competitive edge to more proactive markets.”
Meanwhile, Barry O’Donohoe, CEO and co-founder of data sharing ecosystem Raidiam, also suggests the DPDI Bill is essential for achieving secure and consented data sharing across all sectors, not just financial services:
“This government needs to resurrect the Data Protection and Digital Information (DPDI) Bill and progress it across all smart data sectors. It is an essential legislative framework that will help realise the benefits that secure and consented data sharing can bring to consumers and businesses across sectors.”
Impact on fintech growth
The UK has been at the forefront of fintech’s development for years; industry experts explore what the new Labour government must do to maintain this position.
Janine Hirt, CEO at Innovate Finance
Janine Hirt, chief executive of Innovate Finance, the industry body for UK fintech, hopes to see Labour deliver on its pre-election promises when it comes to fintech innovation.
“We look forward to working in partnership with Rachel Reeves and the new ministerial team to deliver their manifesto commitment to create the conditions to foster innovation and growth in financial services through supporting new technology, including open banking and open finance, and ensuring a pro-innovation regulatory framework.”
The new Labour government needs to focus on maintaining the UK finance industry’s global leadership and fostering growth in our finance and fintech industries, according to Dan McLoughlin, Lynx Tech’s fraud and security specialist.
“While we cannot say for certain what a new Labour government will deliver, its goals are broadly aligned with industry needs,” he said. “We know it wants to keep the UK at the forefront of global innovation and prioritise the safe development of AI. Now in power, to deliver on these aims it needs to create its proposed Regulatory Innovations Office to speed up and maintain regulatory compliance and the implementation of new, pro-innovation open banking and finance frameworks.”
Magali Van Bulck, head of government relations, Wise
Magali Van Bulck, head of government relations, Wise, the global paytech, notes that Labour’s commitment to fixing the transparency issue of hidden fees in the financial market is most important.
She says: “For too long, traditional banks and financial institutions have ripped consumers and businesses off with hidden fees – fees concealed in the exchange rate whenever they send or spend money overseas.
“Last year, British consumers and small businesses lost £4.4billion in these fees, while the lack of transparency also suppresses fair competition. It’s a market failure that Labour has committed to fixing. We look forward to working with the newly elected government to deliver on those [hidden fee removal] promises and ensure the UK can meet its commitment to UN SDGs and G20 targets – it is currently not on track to do so.
“It’s time to scrap the loopholes that rip off consumers and businesses. Everyone should know what they pay.”
Impact on access to finance
In order for the backbone of the UK’s economy, SMEs, to prosper, they must have a good and simple access to finance. One suggested way to achieve this would be by reforming the British Business Bank.
Todd Davison, MD of Purbeck Insurance Services
Todd Davison, MD of business insurance provider Purbeck Insurance Services elaborates on his views of the election results saying: “We want to see Labour prioritising small business growth and funding. Access to finance from the larger banks for SMEs can be difficult and precious time can be wasted in pursuit of these facilities. Decisions by the big banks need to be expedited for SMEs so that they have the opportunity to explore other avenues if necessary.
Davison noted the impact cashflow accessibility has on businesses will need to be addressed under the new government, suggesting reforms to the British Business Bank could make access to capital easier.
“Fundamentally, closer liaison is needed between the new Government and the lending community to help SMEs overcome the barriers to finance.
James Robson, CEO of FundOnion
For James Robson, CEO of lender FundOnion, the government must implement innovative policies to increase growth and help with rising costs. He explains: “While the result is no big surprise, a majority Labour government gives small businesses certainty and security, and for the government itself, an easier path to passing new legislation.”
In a similar vein to Davison, he adds: “We’re keen for the new government to shake up the British Business Bank by ensuring it increases its partnerships with alternative finance providers and holds regular consultations with UK SMEs and the financial services sector, to get real-time findings of the challenges facing businesses and what they really need.
“To reverse the long-term trend of the falling availability of growth finance and access to alternative finance options, businesses need to better understand the finance options available to them, whether that be in growth finance, debt consolidation and refinancing, or other business loans.”
Impact on ethical finance
Tom Eyre, co-founder and co-CEO of Loqbox
ESG and ethical finance have been at the top of many fintechs’ minds for the past few years as a focus on diversity, climate change, sustainability and inclusion have emerged as necessities, not niceties.
Financial education is essential but up to this point, has been often neglected. For Tom Eyre, co-CEO and co-founder of Loqbox, the credit broker, this is where the Labour government needs to step up. “The reality is most 16 or 18-year-olds leave school not knowing what APR means, or the difference between a loan and a credit card, and crucially they often don’t understand that both have to be repaid.
Patrick Suckling, managing director at Pollination
Patrick Suckling, managing director at Pollination, a climate and nature advisory and investment firm, likens the new Labour government to its Australian counterpart: ” Australia’s Labor government is now two years in and we have seen a remarkable shift toward transforming Australia into a renewable energy superpower, supplier of critical minerals to build the future global economy and innovative agricultural powerhouse for sustainable food and fibre systems.
“It’s not without its challenges, but Labor’s commitment and deft, dogged application is already seeing national economic rewiring for jobs and growth
“Sir Keir Starmer shows every sign he understands the opportunities of climate and nature transition in positioning the UK as an exemplar on the global stage for decisive action on net zero; evidently for our beleaguered planet and critically for the UK’s future prosperity.”
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