FINTECH WORKING GROUP
Case studies and insights
March 2018 @thecityuk www.thecityuk.com
TheCityUK is the industry-led body representing UK-based financial and related
professional services. In the UK, across Europe and globally, we promote policies that drive
competitiveness, support job creation and ensure long-term economic growth. The industry
contributes nearly 11% of the UK’s total economic output and employs over 2.2 million
people, with two-thirds of these jobs outside London. It is the largest tax payer, the biggest
exporting industry and generates a trade surplus greater than all other net exporting
London Stock Exchange Group
London Stock Exchange Group (LSEG) is an international markets infrastructure business.
The Group provides valuable services for a wide range of customers focussing on capital
formation, intellectual property and risk and balance sheet management. LSEG operates
an open access model, offering choice and partnership to customers across all of its
businesses. These include: London Stock Exchange; Borsa Italiana; MTS (a European fixed
income market); Turquoise (a pan-European equities MTF); FTSE Russell, the global index
provider with approximately $15 trillion benchmarked to its indexes; global clearing house
LCH and technology specialist MillenniumIT. Headquartered in the United Kingdom with
significant operations in North America, Italy, France and Sri Lanka, the Group employs
around 4,500 people.
Established on the basis of Capital Markets Law no. 6362, Borsa Istanbul is a self-regulatory
entity, bringing together all the exchanges operating in the Turkish capital markets under
a single roof. Borsa Istanbul Exchange Group offers a fully integrated business model
ranging from trading, settlement, custody and registry services for equities, derivatives,
fixed income & repo, precious metals and Islamic finance products which are subject to free
trade conditions. The main objective of Borsa Istanbul is to create, establish and develop
markets, sub-markets, platforms, systems and other organized market places for the
purpose of matching or facilitating the matching of the buy and sell orders for the above
mentioned assets and to determine and announce the discovered prices.
Case studies and insights 7
ROLE OF EXCHANGES 7
THE IMPORTANCE OF ECOSYSTEM ECONOMICS 10
REGULATORY AND LEGAL ASPECTS OF FINTECh 12
DEVELOPMENTS IN ISLAMIC FINTECH 14
FOSTERING BEST PRACTICE IN ISLAMIC FINANCE 17
ATTRACTING AND TRAINING THE STUDENTS OF TODAY FOR
THE JOBS OF TOMORROW 18
REACHING THE POOR: IS FINTECH A FIX FOR FINANCIAL EXCLUSION 20
UNLOCKING THE POTENTIAL OF FINTECH 21
THE JOURNEY TO UK OPEN BANKING: AN EY PERSPECTIVE FOR
THE UK-Turkey fintech working group 22
THE NEW PAYMENTS LANDSCAPE 24
DIGITAL CASH: THE MISSING ‘BIG BEAST’ OF DIGITAL PAYMENTS? 26
INITIAL COIN OFFERINGS: A REGULATORY OVERVIEW 29
crowdfunding rules in Turkey 32
Transformation and innovation: A guide to partnerships between
financial services institutions and FinTechs 34
– Key consıderations 35
– Choosing the right collaboration model 37
UK-TURKEY FINTECH WORKING GROUP
Message from Prime Minister’s Trade Envoy to Turkey
and HM Consul-General Istanbul
As the UK Prime Minister’s Trade Envoy to Turkey, my role is to emphasise the importance
the British government attaches to close trade relations with Turkey. The innovative
financial services and FinTech sectors are integral parts of that relationship.
An effective financial services industry provides the capital and expertise to support
entrepreneurs, industrialists, and through them, whole economies. When the sector works
well, it enables real and sustainable growth, and adds to the prosperity of everyone. When it
doesn’t work well it can be a source of instability in individual countries and across the world.
With the support of the British government, this welcome report provides a roadmap
for closer collaboration between the UK and Turkey across the financial services industry,
bolstering trade and investment opportunities for both countries.
Prime Minister’s Trade Envoy to Turkey
The British government through Prosperity programming are proud to be supporting
this UK-Turkey FinTech Working Group initiative in collaboration with TheCityUK, the
London Stock Exchange Group and Borsa Istanbul.
The UK Financial Services sector is already well represented in Turkey and we have
strong representation from Turkish companies in the UK. With a solid platform to build
upon I hope that through this report we will discover more ways the UK and Turkey
can work together.
HM Consul-General Istanbul
Turkey with its fast-growing economy, unique geographical location, young and dynamic
human capital and investor friendly environment continues to be one of the key emerging
markets in the world. We are pleased to see more than 3,000 British companies operating
in Turkey. In fact, the UK ranks fourth in terms of foreign direct investment (FDI) stock in
Turkey and this demonstrates trust in the Turkish economy.
London is the world’s top financial centre and Istanbul is emerging as another one. There
is growing cooperation between Borsa Istanbul, London Stock Exchange Group and
TheCityUK for transforming Istanbul into an international financial centre. It is great to see
that our cooperation is now extending to the area of FinTech, which has witnessed rapid
technological developments, innovation and entrepreneurship at the heart of Turkey’s
strong financial services sector.
I believe that this report would further enhance the collaboration between Turkey and the
UK, as two great economic partners, in this relatively new and exciting field.
Ambassador, Turkish Embassy in London
Message from the Ambassador,
Turkish Embassy in London
UK-TURKEY FINTECH WORKING GROUP
1 Deloitte, ‘Türkiye FinTech Ekosistemi’,(April 2017), available at: https://www2.deloitte.com/tr/en/pages/finance/articles/fintech-ecosystem-in-turkey.html
Across the world, FinTech is transforming financial services. It is revolutionising the way products and services
are delivered, opening up access to competition from new entrants, and allowing customers greater and
more flexible access to their financial services providers.
The UK has positioned itself at the forefront of the FinTech revolution, outpacing the global market in terms
of FinTech investment growth. As a leading global FinTech hub, the UK-based sector employs over 60,000
people across the country and in 2015 was valued at around £6.6bn. Its success is underpinned by the
heritage of the UK’s world-leading financial services ecosystem, helping to make Britain one of the best places
in the world to start, grow and scale a FinTech company. Turkey, on the other hand, has a relatively young but
rapidly growing FinTech ecosystem. According to recent data, the FinTech market in Turkey, with more than
200 companies, is growing at an annual average of 14%.1
FinTech offers significant scale efficiencies in financial services, but it does need to also comply with a robust
regulatory framework that preserves resilience, safety, and transparency. In that regard, Turkey faces similar
challenges to the UK, particularly against the backdrop of its aim to make Istanbul an international financial
centre. However, while it has a highly-skilled FinTech sector, it is currently under-developed and not fully
diversified. We believe that by operating at government to government and also sector to sector level,
with strong engagement between the two, the UK and Turkey may understand the fast evolving market
landscape, and through shared insight, promote and support growth of new business – domestic and
This is why, as part of our UK-Turkey FinTech Working Group initiative, TheCityUK, London Stock Exchange
Group, and Borsa Istanbul have compiled this paper to consider key aspects and opportunities for the sector
and serve as a guide to helping develop mutually beneficial areas of knowledge and interest.
We hope this paper will help to deepen areas of cooperation between Turkey and the UK. It is composed of
case studies and insights into FinTech, each written by a member of TheCityUK’s UK-Turkey FinTech Working
Group. We encourage readers to treat the paper as a starting point for further engagement, rather than an
exhaustive guide for future collaboration. We are confident that the range of issues discussed throughout the
paper will generate strategic and commercial outcomes for both countries.
This paper has been made possible by the financial support of the British Consulate in Istanbul and with
input from UK-based and Turkish FinTech organisational and commercial stakeholders participating in the UK-
Turkey FinTech Working Group. We would like to thank everyone who has contributed.
Chief Operating Officer,
Dr. Robert Barnes, Chartered FCSI
Global Head of Primary Markets and