Fintech provides “risks and opportunities” for the UK, but the government is “completely committed” to bringing the sector to fruition, Economic Secretary to the Treasury and City Minister John Glen has said.

Speaking at the Investment Association’s inaugural annual policy conference, Glen said the UK is a world leader in the area of fintech, and it will drive efficiencies, but presents opportunities and risks.

“Fintech challenges entrenched models as empowers customers to take control of their finances and breaks down the barriers to finance…government and regulators are completely committed to bringing the UK’s nascent fintech sector to fruition. We are capitalising on this world leading position by building fintech bridges with other countries, most recently Australia, but there are more in the pipeline.”

He said companies around the world are looking to copy the UK’s approach, but while “imitation is the sincerest form of flattery” the interest is a reminder of the importance of the UK remaining internationally competitive.

On the subject of Brexit, he said negotiations with the European Union have not followed a linear path, but reassured delegates the government is aware of the need to provide detail as soon as it can. The Treasury’s white paper will be published shortly, and will set out detailed proposals for the future economic partnership and future security partnership, Glen stated.

“In financial services particularly, I don’t need to tell you how important it is that we secure a deal that protects the interests of your industry. We are working very hard to deliver this,” he said. On the subject of markets, he said the UK’s market is already “deeply connected” with those in the EU, and our rule books are identical.

“I believe it is neither in the UK or the EU’s interest to exclude financial services from a future trade deal. No one should be under any illusion about the significant cost that would be borne by businesses and consumers if this highly efficient eco-system were to fragment,” he added.

Describing himself as the investment industry’s advocate and ally in government, Glen promised to do his best to keep financial services on the mantle as a leading light of the UK’s economy. Glen noted that the UK asset management industry is intrinsic to the UK’s success as a global financial hub.

“It is the largest in Europe with £8.1trn worth of assets under management, generating 1 per cent of the UK’s GDP. Your industry is living proof that markets never disappoint, they always innovate and they always impress,” he said.

In addition, Glen said that companies are rightly expected to be responsible and accountable far beyond “window dressing” or “de minimis corporate social responsibility initiatives”. He said the concept of corporate social responsibility has come “quite some way” since the early days in the 1980s, noting there is increasing pressure on businesses to engage with the issues driving the day.

“Asset managers like all businesses have a responsibility to ensure their own businesses are being run in accordance with society’s values, but they also have responsibilities as asset owners. There is increasing demand from investors who want to know where their money is invested, by who and to what end. That means holding businesses to account for their ESG outcomes,” he said.

He noted that historically there has been a presumption that ethically directed investments would result in lower returns, but now evidence suggests considering the factors can boost returns.

Glen added that he is “determined to make the case for responsible capitalism” and will continue to explore the issues of ethical investing and returns.

“I believe that capital and companies are drawn to the UK like a moth to a flame for the simple reason that the UK is a champion of the free market, a crucible of creation and unlimited potential. It is the UK’s tried and true ability to recognise and capitalise on potential,” he added.

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