Vision for Economic Growth — a roadmap to prosperity 11 Becoming a digital-first economy to do so, would be another critical change. This can A truly digital-昀椀rst economy is one in which build on the digital regulatory reporting pilot already organisations and individuals have the capacity to underway by the Financial Conduct Authority (FCA) 22 innovate and drive growth. This requires reforms to The interventions can and the Bank of England (BoE). allow secure data sharing and an enabling mindset also help to ensure that the FCA and the Prudential across government and regulators. Regulatory Authority (PRA) deliver on their secondary competitiveness and growth objective. Big move #4: be internationally competitive on data and digital. The 昀椀rst step is to create a di昀昀erentiated Anchor the UK as a leader in sustainable finance approach to data policy and regulation that combines The transition to a sustainable economy represents Big move #7: scale innovative approaches to high standards with pragmatism. Another priority the great transformation growth opportunity of the if the hub could contribute an average additional uplift of sustainable 昀椀nance. The UK has a history of pioneering 21st century. There are vast investment and 昀椀nancing approximately 0.9% compound annual growth on top of is digital veri昀椀cation. Government must scale the sustainable 昀椀nance. There is an opportunity for it to deployment of the robust standards it has been needs to achieve global net zero emissions and nature- the forecasted growth of UK goods and services exports, cultivate high-integrity voluntary carbon markets, high- related commitments. UK FPS can work with the this would result in an increase of up to £24bn in FS developing. The UK government estimates that integrity nature markets and approaches for natural 28 exports to be achieved between 2024-2030. widespread adoption of digital veri昀椀cation solutions UK Government as it delivers its own sustainability 24 capital. The 昀椀nancing need, and opportunity, is vast. goals. It can also be a “go-to” partner for 昀椀rms and could deliver about £800m per annum to the UK Big move #9: create innovative networks across the economy, amounting to a potential £4.8bn in value countries across the world seeking to transition, One estimate suggests that closing the 昀椀nance gap to 20 Finally, government should world. The UK should 昀氀ip its trade policy to focus on protect biodiversity and deliver on other impact achieve nature-related outcomes targeted in UK policy added from 2024-2030. 25 The size consider emulating the US’s Electronic Data Gathering, services, as much as goods. Trade negotiators should and sustainability-related objectives. will require a minimum of £44-97bn by 2032. of voluntary carbon markets has also begun to grow. Analysis, and Retrieval (EDGAR) system of machine- use the full “trade toolbox” including digital and, readable company 昀椀lings to make it easier for investors Big move #6: create the conditions to scale and One estimate put the total market size at nearly US$2bn where appropriate, mutual recognition agreements of to assess information about public companies at the end of 2021. This marked an almost fourfold professional quali昀椀cations or regulatory frameworks. accelerate 昀椀nancing for a just transition towards when making investment decisions, building on a low-carbon economy. Financial and professional increase from 2020. Continued growth at this pace It should create mechanisms for partnership across 21 would see the the market expand exponentially by the recommendations from Rachel Kentʼs review. government, regulators, and industry to discuss trade services already play an important role in supporting 26 the transition and will continue to do so. However, the the end of the decade. priorities, better incorporating industry views. One Big move #5: invest in an innovation and growth enabling conditions must be in place for the 昀椀nancial such mechanism could be the FPS Partnership Council mindset across government, regulatory agencies, Pursue world-class promotion and interconnectivity sector to be able to provide the supporting 昀椀nance and described as part of big move #1. Finally, government and industry. Digital transformations of the next The future success of UK-based FPS depends on bringing investment. A crucial need is for the UK Government to should look to establish international forums for few years will require agile responses that cut across a compelling offer to the world. That requires world- provide clarity and commitment around sector-speci昀椀c collaboration. One such mechanism could be multi- class promotion. It also rests on a network of strong existing regulatory boundaries. Government should transition policies that deliver on its net zero strategy as jurisdictional sandboxes, building on the work of relationships within a robust international framework. provide an even stronger mandate to the Digital part of predictable and durable energy and industrial the Global Financial Innovation Network (GFIN). The Regulation Cooperation Forum (DRCF) to enable policy foundations. With the right enabling conditions, sandboxes could develop interoperable regulatory Big move #8: showcase the UK’s FPS 昀椀rms like never collective leadership on regulatory approaches towards the signs are positive that the Government can mobilise approaches in response to emerging technologies and, before through the creation of an FPS Knowledge and emerging technologies such as digital veri昀椀cation, su昀漀cient private capital at pace to achieve the £100bn potentially, authorisation in multiple jurisdictions. Support Hub. The international promotion of the UK’s arti昀椀cial intelligence (AI), and tokenisation. Deploying it has said it will leverage as part of its Net-Zero Strategy 23 machine-readable regulation, and tasking regulators and British Energy Security Strategy. 昀椀nancial industry relies on a network of promotion Conclusion agencies at home and abroad. With targeted support, Strengthening the UK’s world-class 昀椀nancial centre these organisations could have far stronger impact. to meet today’s challenges is a goal worth 昀椀ghting An FPS Knowledge and Support Hub could support for, but it requires long-term commitment and international messaging and promotion by highlighting determination. It is time for the FPS sector to come compelling narratives, messaging and collateral of together in partnership with regulators and government existing promotion e昀昀orts; supporting the coordination to implement a roadmap that targets growth across and advocacy e昀昀orts of others (via their own direct the UK, turns up UK international competitiveness, and advocacy); and providing further industry research. This takes that o昀昀ering to the world. would help to increase FPS foreign direct investment (FDI) into the UK and exports abroad, in turn supporting The prize for getting this right is immense. We believe the broader economy’s growth. An illustrative estimate these big moves will enable the sector to create jobs and demonstrates the potential bene昀椀ts. For example, if the growth across the country and help customers prosper, hub could achieve an uptick of FPS FDI worth up to 6% of in the UK and around the world. These interventions 2022 levels, then up to £0.7bn additional FPS FDI could be could deliver an additional £225bn in investment for 27 29 As another example, captured between 2024 and 2030. the UK economy. The Garden at 120 Fenchurch, London