Long reads

After Brexit, Britain seizes the moment for unification across banking, trading and investing

Marco Mottadelli

Marco Mottadelli

Head of Global Brokerage , Fineco Bank

Expansion is the name of the game for today’s financial companies. The CEO of PayPal, Dan Schulman, announcing record earnings early this quarter, said that he expects the company to evolve from a digital wallet “into a superapp that transcends across payments and financial services.” The term ‘super app’ comes from China, where AliPay and WeChat have evolved from a simple instant message platform to an integrated ecosystem where consumers can do almost every part of daily lives.

The question in the British market and specifically banking industry is – are those forces headed here? And what impact will they have on consumers' behaviour? We strongly believe that Britain will move in the direction of unified financial platforms, but it will be the responsibility of financial entrants both existing and upstart to understand and overcome traditional forces that have stood in the way of this adjustment. And with the UK now having unprecedented freedom to set market conditions and regulations after its exit from the European Union, we see nothing standing in the way of this transformation.

Britons have traditionally taken a piecemeal approach to finance. That meant using a high street bank, building society or credit union for current and checking accounts, while turning to a specialty advisor to access funds or ETFs. With the rise of cheap and convenient shares trading, the majority of the market migrated to online brokers and later apps. It left British customers with a scattered, ‘pick and mix’ approach to their financial lives. The disunion was so noticeable that it left a gap in the market for the emergence of budgeting and monitoring services such as Emma that provide a unified view of people’s financial future.

But rather than using a tool that sits on top of several different services, we see the UK is finally moving in the direction of working with a single company to provide all of these services. The benefits of this approach are manifold, but in general fall into three main categories.

Convenience. In a single application, it’s now possible to have a holistic view of a financial picture. There are no delays, no problems with integration with APIs that can happen with third party indemnification. It also eliminates the need to manually sync new accounts or features as one’s financial choices evolve.

Deeper insight. With access to a 360 degree view of the financial picture, it’s easier to make observations about spending and return patterns. This makes it possible to shift from simplistic financial measurements to help consumers move towards tangible saving goals or life cycle changes. Advancements in artificial intelligence and machine learning can be deployed to give a deeper perspective on how consumers can change their behaviour in response to new goals.

More control. It’s far easier to set limits on risk appetite with a combined banking and investing product. Achieving specific portfolio-wide goals are possible as well, such as setting aside a certain percentage of assets to invest in companies with sustainability pledges, or to ensure no money is going to problematic industries. These can be set up and then executed across all assets, not spread across disjointed companies which may have different categorization criteria.

While the technology has improved, this approach has been available on the continent for decades. Fineco was founded in Italy with this integrated system, and it’s guided our behaviour for the past 20 years – and that model has been an important part of our success. The UK can now take advantage of the strong market and products developed for the consumer market individually, all in a single location through our application. This can serve as the foundation for additional innovations and creations, perhaps moving the market closer to the ‘super app’ currently in place in Asia and now predicted for the United States. Unification is a strong first step.

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