The Kalifa Review – Five Years On

At Budget 2020, the then Chancellor of the Exchequer  announced an independent review, led by Sir Ron Kalifa and supported by the City of London Corporation and Innovate Finance as the secretariat, to identify priority areas to support the UK’s fintech sector. 

Almost five years have passed since the report and this milestone provides an excellent opportunity to take stock of progress, identify areas for more action and, in the context of a changing world – explore what the next few years ahead may hold.

How has FinTech developed over the past five years?

UK FinTech has continued to be a thriving success story since the Kalifa Review, cementing itself as a global leader,, growing in size and consistently attracting more investment than anywhere else outside the US. However, this is not without challenge from other jurisdictions around the world, such as the UAE and India – the former of these actually surpassing the UK in investment in the first half of 2025. . 

FinTech has established itself as one of the most exciting sectors of the UK economy, and one of the most important drivers of growth across the country.  60% of all SME lending across the UK today is being done by FinTech.8 out of every 10 adults in the UK are using at least one FinTech tool on a regular basis. More than a quarter of UK FinTechs are directly addressing the issue of financial inequality, and more than 97% of all UK FinTech is having a medium to very high positive impact on the United Nations Sustainable Development Goals.  In 2024, FinTech was the subsector of Financial Services that had the highest job creation in the UK.  The impact of FinTech is clear.

FinTech firms now make up the largest segment of the UK’s unicorn companies.  If the UK is to have technology companies on the size and scale of those in the US – they are most likely to come from FinTech.

Where have we seen progress following the review?

Since Sir Ron Kalifa’s review, we have seen genuine progress made by both government and regulators to support firms and the sector as a whole.

The government's commitment to rebalancing regulation for growth, cutting red tape, and driving initiatives to open up private capital are key successes. Additionally, the FCA's five-year strategy also shows a forward-thinking, tech-positive approach with a section dedicated to a ‘Smart Data Revolution’, which is very encouraging. 

Examples of significant progress include:

• The Government’s Modern Industrial Strategy included financial services as one of the eight sectors to deliver growth. The sectoral plan for the Industrial Strategy – HM Treasury’s Financial Services Growth and Competitiveness Strategy, further highlighted FinTech as one of the five high-growth sub sectors to deliver this and included a range of measures to support this.
• The work of the government has led a drive for growth, challenging regulators to do more to reduce unnecessary red tape and initiatives to deliver investment – including the creation of the Private Intermittent Securities and Capital Exchange System (PISCES).
• The FCA has developed its innovation services, with sandboxes, sprints and fora to bolster innovation in the sector, including topics such as Open Finance and AI. Its live-testing approach, for example in relation to AI, is an  exciting evolution of the sandbox.  In their 2025-2030 strategy the regulator also set out its direction as an increasingly “tech positive” regulator. 
• The passing of the Data (Use and Access) Act put both Smart Data schemes such as Open Finance and the trust framework for Digital ID on a statutory footing.
• The government and the FCA have committed to a principles-based, outcomes focused approach to AI regulation – welcomed by the sector.
• We've achieved policy wins like faster regulatory approvals, streamlined authorisations, and a new PRA and FCA Scale-Up Unit for growing firms. A “Scale-up Box” was another key recommendation in the Kalifa review.
• The Mansion House Accord was a significant step in helping to boost investment, with 17 of the largest workplace pension providers in the UK expressing their intent to invest at least 10% of their defined contribution (DC) default funds in private markets by 2030, with 5% of the total allocated to the UK.
• The British Business Bank has been a success and last year reached the milestone of £2.5bn of lending under its Growth Guarantee Scheme.
• Another key recommendation in the Kalifa Review, the establishment of CFIT, has also been achieved. Since it was created, CFIT has delivered coalitions focusing on Open Finance for SME lending, financial inclusion and, corporate digital verification – highlighting challenges, use casesusecases and building working prototypes to solve for these issues.
• On tax, there have been some faint glimmers of light amongst some challenging Government decisions, most notably the announcement from the Chancellor in the last budget of a Call for Evidence on the tax environment for entrepreneurs – responding to concerns we have raised in Government engagement and in the media.

Where does the UK stand?

On balance, the Kalifa Review stimulated considerable Government, regulator and industry action across its core themes. However, in certain  areas progress has been slow and the UK has fallen behind other countries. Whilst work is in train and in some cases final regulatory proposals are imminent, we have yet to realise the ambition set out in Kalifa on areas like:

• Open banking and open finance, where we await a roadmap and proposals from the FCA and the long term statutory basis for embedding open banking. Despite being first to deliver Open Banking, we’ve arguably fallen behind countries like Brazil and India in delivering pay by bank in e-commerce and retail environments.The Innovation Team at the FCA has held sprints on Open Finance to establish valuable use cases such as mortgages and SME Finance, but the regulatory work to underpin this and deliver scalable solutions to the market has not yet begun.
• Tokenisation and digitisation of capital and wholesale markets, where the UK-US Transatlantic Task Force for Markets of the Future is an opportunity to accelerate progress.
• Digital ID: where we have seen fantastic scale up firms developing solutions and a number of initiatives, including by CFIT and City of London, but continued confusion on Government strategy
• Stablecoin and digital assets: we are close to finalisation of an FCA regulatory rulebook for crypto assets and stablecoin, but Bank of England proposals on stablecoin remain unsuitable for growth of a GBP stablecoin.

New technology and priorities have also emerged over the last five years, including agentic AI as a tool for payments and financial services innovation, and the importance of developing next generation payment infrastructure has risen up the agenda.

Five years on from the publication of the Kalifa Review, It is clear that we now need even more pace and ambition from Government and regulators in the next five years - matching the pace and ambition we know is intrinsic to FinTech. 

What next?

5 years on from the Kalifa Review, here are our 5 priorities for maintaining the UK as the most vibrant FinTech centre in the world: