The overarching theme for this year’s Innovate Finance Global Summit was finding purpose and value in society. In other words, how can FinTech be used to help solve some of the problems affecting society? Capitalism 2.0 if you will.
The two-day conference, part of FinTech week, was jam-packed with speakers, panels and workshops. So for anyone who couldn't make it, here are my key takeouts:
Purpose not disruption
With blockchain, cryptocurrencies and AI dominating previous conferences, it was refreshing to focus on the benefits of FinTech for customers. Being a fantastic innovator with a veracious appetite for growth is no longer enough. For a FinTech to succeed it now requires a clear purpose as well as well articulated value proposition to have real value for the customer.
Leave no one behind
From one panel guest we heard that 12 million people in the UK have at least one financial product that is not fit for purpose and perhaps more disturbing was the financial plight of people in ‘working poverty’ – 47% have less than £100 in savings. For people who find themselves financially excluded, we clearly need a rethink. Open Banking could help but more could and should be done.
Challenging the challengers
Relations between the FinTechs and incumbents remain strained. We really need to get past this new and nimble versus old and slow debate. As one panellist put it, TechFin (GAFA and the other big-tech firms) is where the biggest challenge resides in regards to user experience and operating systems rather than with FinTech. I hope the debate is about to move on.
Diversity and equality needs to be accelerated
Last year, female-led FinTech start-ups received only 3% of total available funding in the UK. Across FinTech companies overall, only 17% are female-led. Equal pay also remains a big issue in Financial Services. It’s a situation we need to address with more programmes, funds and opportunities to support and channel diverse talent.
Inspiring young people from across the spectrum of UK society is also critical. The Innovate Finance initiative of teaching FinTech in schools could help deliver a pipeline of talent and bring the social diversity Financial Services desperately requires.
Regulators Fuelling the UK’s success
Mark Carney, Governor of the Bank of England, recognised our nation’s voracious appetite for buying online (25% of all UK purchase transactions by next year), and part of the RTGS system update to manage these £600billion+ of payments will help support this shift in volume.
The BoE recognise that a new economy is emerging. Carney said that the new digital economy needs new finance, which requires a new BoE to create the right conditions that allow UK FinTech’s to innovate and grow.
Also the FCA’s Chris Woolard said it had now published its evaluation of regulatory sandbox testing. This allows businesses to test innovative propositions in the market with real customers. It was just one of many collaborative approaches between regulators and innovators we heard about. Working together bodes well for the future.
Work, workplace and workforce
The ‘augmented workforce’ is becoming a reality. What’s more, by next year 35% of the global workforce will be from the millennial generation. Flexible working hours, life/work balance, diverse workplaces and brand identities are all becoming fundamental to attracting the ‘always on’ generation. Businesses need to learn and adapt to this changing workforce if they want to remain competitive.
Finally, I just want to thank everyone who attended ‘How integrated platforms drive business success’ on the second day. I was given the responsibility of moderating the discussion, a job made delightfully easy by a wonderful panel. I hope everyone enjoyed hearing their brilliant insights and thought-provoking opinions.
About the author:
Ben is a Partner in Baringa’s Banking practice where he leads the Transaction Banking and Payments business as well as our efforts across Fintech, Regtech and InsureTec.
Ben has over 20 years’ experience in financial services, 10 of which were in industry (at Citigroup and then ABN Amro) prior to moving into consulting in 2008. Ben works closely with his clients across a range of challenges including new market entry, proposition design and optimising / restructuring their business models.