Ron Kalifa, a non-executive director of the Court of Directors at the Bank of England and the vice-chairman of WorldPay, has produced a long-awaited report on FinTech.
In a move that must be music to fintech’s ears, Kalifa has proposed developing and adopting common data standards, meaning that incumbent banks’ slow legacy systems just simply won’t be enough to get by anymore.
Kalifa has also suggested prioritising Smart Data, with a specific focus on open banking and opening up more channels of communication between open banking-friendly fintechs and bigger financial institutions.
Open Finance even gets a shout-out in the report, with Kalifa telling the government that the adoption of open banking with the intention of reaching open finance is of paramount importance.
As a result of their growing popularity, Kalifa has also suggested tighter regulation for cryptocurrencies and he has also solidified the commitment to meeting ESG goals.
The report implies the creation of a fintech task force and the improvement of the “technical understanding of fintechs’ business models and markets” will help fintech flourish in the UK.
Following the success of the FCA’ regulatory sandbox, Kalifa has also proposed a ‘scalebox’ that will help fintech firms to grow and expand their operations without the fear of getting on the wrong side of the regulator.
Historical Performance And IFISA Process Guide
That figure is the result of over £20 million of loans facilitated on the site, as we bring individuals looking for a good return on capital together with carefully vetted small companies seeking funds for growth. Bear in mind that lenders’ capital is at risk. Read warnings on site before committing capital.
All loans on site are eligible to be held in a Money&Co. Innovative Finance Individual Savings Account (IFISA), up to the annual ISA limit of £20,000. Such loans offer lenders tax-free income. Our offering is an Innovative Finance ISA (IFISA) that can hold the peer-to-peer (P2P) business loans that Money&Co. facilitates. For the purposes of this article, the terms ISA and IFISA are interchangeable.
So here’s our guide to the process:
The ISA allowance for 2019/20 is unchanged from last tax year at £20,000, allowing a married couple to put £40,000 into a tax-free environment. Over three years, an investment of this scale in two Money&Co. Innovative Finance ISAs would generate £8,400 of income completely free of tax. We’re assuming a 7 per cent return, net of charges and free of tax here.
Once you have made your initial commitment, you might then consider diversifying – buying a spread of loans. To do this, you can go into the “loans for sale” market. All loans bought in this market also qualify for IFISA tax benefits.
Risk: Security, Access, Yield
Do consider not just the return, but the security and the ease of access to your investment. We write regularly about these three key factors. Here’s one of several earlier articles on security, access and yield.