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IFGS 2022: Taking the pulse of UK fintech

IFGS 2022: Taking the pulse of UK fintech

Following welcome addresses from Catherine McGuinness, chair, Policy and Resources Committee, City of London Corporation, and Janine Hirt, CEO, Innovate Finance, the Innovate Finance Global Summit took off with a panel stacked with leading fintech voices.

Launching the session ‘Lessons learned and aspirations for the future: Fostering true disruption’, Christopher Woolard CBE, partner at EY, first asks panellists to reflect on the success UK fintech has experienced, and what makes it such a unique environment for the industry.

Mark Mullen, CEO of Atom bank, argues that the fact that the UK is holds a fundamentally strong position economically and regulatorily, puts it in good stead. “The UK sits between the old world and the new - between the US and Europe,” literally and figuratively. Additionally, having experience a set of independent initiatives, such as Open Banking, the UK has been able to prosper tremendously.

But above all else, Mullen argues that the key reason for the UK’s success comes down to talent. “The UK and City of London have been very welcoming of talent, and it must continue to do so in order to compete into the future. Talent is the magic ingredient that makes the entire fintech industry proper, thrive and grow.”

TS Anil, CEO of Monzo concurs. He explains that ultimately UK success comes down to how people and fintech leverage the position they find themselves in, and it is this “combination that makes it an exciting place for fintech.”

Listing the integral components that currently impact and are likely to continue shaping the future of fintech in the UK, TS Anil notes that firstly, it is essential that the UK must not be complacent, as “we’re still playing catch up with places like Silicon Valley.”

Anil continues that policy, infrastructure, regulation, capital raising, and sustainability are the remaining factors which will impact the space.

With regard to policy, Anil argues that it’s time to be more ambitious, and “smart data should be seeing more support to set the tone for the next decade.”

He notes that improved infrastructure is essential for both the ability to promote innovation, alongside the need to combat financial crime, regulation needs to be proportionate and fit for purpose - in a way that is not anchored to traditional banking, and rules around capital raising must be improved. Finally, Anil states that the industry must come together “to take a hard look at our carbon footprint. 99% of our carbon footprint is in our supply chain, and this must be improved.”

Incumbents around the world are beginning to approach fintech partners and are keen to work with them, states Woolard. Moving the conversation on to partnerships, Woolard asks panellists how they view the dynamic of partnerships across financial technology.

Joanne Dewar, CEO of Global Processing Services, is most excited about being invited to the table to have a conversation about being true partners, which means that products and solutions can be crafted which will continue to be delivered into the future. “Happily, this conversation has now shifted toward the incumbents.”

Mike Laven, CEO of Currencycloud, argues that “we’ve all got the message that you can’t do it alone. The fintech-regtech revolution touches on a range of different sectors, and all players in these sectors have to work together.”

Working together has never been more apparent than in the push toward ‘Fintech for good’, and Louise Hill, co-founder and COO of GoHenry, notes that fintech’s response to the pandemic was evidently very strong.

“Everyday fintech was and is working to enable access to different groups of people, demystifying the traditional biases of unpaid financial services, strange language, and more.”
Anil continues that Monzo’s gambling block is a clear example of fintech for good, allowing customers to put a block on their account to put a hold on any payments to gambling sites. “A quarter of a million have turned that capability on, with very few choosing to turn it off. This is a real example where technology has allowed us to build and scale something which helps people.”

Dewar observes that the “inclusion to exclusion spectrum” is not a continuum. Pockets or disparate groups of individuals continue to find themselves excluded, and fintech has been able to pull together technically advanced solutions which effectively target those disadvantaged groups.

According to Mullen, fintech adds competition to an industry that is infamous for a lack of it.
“The fundamental business of fintech is frankly to offer competition and improved financial services. While this has moved slightly, it has not yet moved materially.”

This plays into comments Laven made in conversation with Finextra, prior to IFGS.

“I think that the structural advantages of the UK in terms of the depth of the talent, and the depth of the understanding of both capital and consumer financial markets will keep pushing the UK forward. I'm a positive, bullish person, and while there's always headwinds, when you have the depth of talent and the depth of companies that go across multiple sectors, you're going to push through.”

He stated that the UK has been a financial centre particularly in foreign exchange and cross border, for over 100 years, and will remain so because the depth of talent in firms is incredible. But scale-up capital is needed.

“We need global access to pools of talent for specialised talent. As fintech itself keeps booming on a global basis, competition for that talent becomes global,” stated Laven.

Concluding the panel session on the subject of incoming influences likely to shape the sector, Anil notes that the interplay, or dance between new technologies such as web 3.0, defi, and crypto, and the regulation they require will continue to define this era.

“Regulators have been standing alongside, observing, deciding how they want to regulate the space. Those who will win, will be those who get this balance right.”

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