The UK’s overly complex regulatory environment has suffocated the ability of financial services firms from gaining a competitive edge, according to think tank Parliament Street.
Parliament Street’s CEO Patrick Sullivan said, “The financial services industry is the lifeblood of the British economy, and we cannot continue to allow excessive paperwork and compliance rules to suffocate its growth.”
The news comes as Prime Minister Liz Truss is set to announce sweeping reforms to the financial services industry to unleash growth and boost investment.
Truss is said to want to drive a post-Brexit overhaul of regulation to boost Britain’s financial services industry, which is the UK’s biggest export sector and biggest source of corporate tax. She has already indicated she wants to scrap EU rules that cap bankers’ bonuses.
Fintech entrepreneur Khalid Talukder, co-founder, DKK Partners, a London-based emerging FX markets specialist said: “The constraints of the 2008 global financial crisis have kept the city of London on a leash for far too long.
”Overwhelming amounts of regulation and red tape has effectively chloroformed entrepreneurs and ambitious financial services firms, whilst rival cities have been set free to expand and grow without interference.
“These proposals will turbocharge the city and empower the wider UK economy and should have happened years ago.”
However, Daniel Layne, founder, and CEO of fintech QV Systems said, “It’s important to recognise that regulation plays a crucial role in protecting consumers and businesses from poor practices such as mis-selling, data loss, and fraud.
“Whilst proposals to roll-back some of these policies to liberate the city and drive economic growth are admirable, great care needs to be taken to mitigate any negative issues that may arise from these measures.
Layne continued, “Changes to regulation should be proportionate and considered, to avoid unintended harm to the long-term future of the financial services industry.”