UK Fintech Week Review: Why UK is a World-Leading Fintech Hub
This week, from April 19th, 2021, Innovate Finance‘s UK Fintech Week took place, returning in 2021 as a brand new hybrid concept. Featuring five days of world-class content delivered by some of the biggest names in finance, government and tech, this event is the best opportunity to discover why the UK is and will remain the world’s preeminent financial services hub.
“The UK is a world-leading and unique ecosystem for fintech,” said Charlotte Crosswell, CEO, Innovate Finance. “It has deep reserves of entrepreneurial and tech talent, progressive regulators and policy-makers, steadfast financial institutions, investor and professional expertise, and a supportive government. All of this combined ensures it will remain the capital of fintech.”
The Chancellors “ambitious” initiatives
UK fintech week kicked off on Monday with an opening keynote from Chancellor Rishi Sunak. In this, the chancellor announced an “ambitious programme of new initiatives” to help aid the UK’s fintech and financial services sector, laying out plans to help fintechs scale up and ensure the UK remains at the cutting edge of digitalising finance.
He said: “Our vision is for a more open, greener, and more technologically advanced financial services sector. The UK is already known for being at the forefront of innovation, but we need to go further. The steps I’ve outlined today, to boost growing fintechs, push the boundaries of digital finance and make our financial markets more efficient, will propel us forward. And if we can capture the extraordinary potential of technology, we’ll cement the UK’s position as the world’s pre-eminent financial centre.”
Mr Sunak set out a variety of measures, some of which were in response to the recent Kalifa Fintech review including a new task force between HM Treasury and the Bank of England to explore a potential UK central bank digital currency, the creation of a new financial market infrastructure sandbox for firms and the creation of a new industry-led centre for finance, innovation and technology to utilise and enhance fintech expertise across the UK.
The response to the chancellor’s announcement has been largely positive, with many fintechs heralding the initiatives as a positive step forward for the UK sector.
City of London Corporation Policy Chair Catherine McGuinness said: “We warmly welcome the Chancellor’s proposals to enhance the UK’s competitive advantage in fintech. We are particularly pleased that many of the recommendations made in the Kalifa Review will now be taken forward.
“This is a vital step if we are to maintain the competitiveness of a sector which has a huge role to play in driving the post-pandemic recovery across all sectors of the economy, not only financial services.”
In terms of the digital currency, Bhairav Trivedi, CEO of Crown Agents Bank said: “In announcing the UK Government’s intentions to explore the use of Central Bank Digital Currencies, the Chancellor has made the most significant step of anyone globally to date in bringing about mainstream adoption of digital currencies.
“While no one can predict the future entirely, what’s certain is that digital currencies and DLT will transform the way our international banking and payments system operates – and Rishi Sunak’s announcement proves that this will happen much faster than many may have believed.”
However, some think that the initiatives don’t go far enough, and more needs to be done.
Dan Morgan, European Policy Lead at Plaid said: “Today’s announcements are a clear signal that the government sees both the potential of the fintech sector as a growth engine for Global Britain, and how central fintechs are to the future of finance as consumer demand evolves. The steps set out by the Chancellor are a starting point. By no means do they represent the adoption of the full range of recommendations within the Kalifa review, but they do illustrate that a significant deal of support will be given to ensure the UK stays ahead of the innovation curve.
“There is certainly more that can be done. Plaid would like to have seen further commitments on open finance and other smart data initiatives. Data is the core infrastructure of Fintech and measures to ensure consumers are in the driving seat will help UK fintech stay ahead.”
With the chancellors keynote well-received, UK Fintech Weeks extensive programme of webinars, workshops and networking opportunities kicked off, with the first 2 days of the event revolving around the topic “Beyond the crisis: The future of Global fintech.”
How Financial Services Respond to the Demands for Digital Transformation
This webinar was based all around digital transformation, and how the financial services sector responded to the new demand created by Covid-19.
The panel was moderated by Isabelle Jenkins, head of financial services PwC UK and panellists for this webinar included; Jen Tippin, Group Chief Transformation Officer, NatWest Group; James Bardrick, Citi’s Country Officer for the UK, Cluster Head for the UK, Jersey and Israel and the Chief Executive of Citigroup Global Markets Limited; Joe Garner, CEO, Nationwide Building Society, and Matt Hammerstein, CEO Barclays Bank UK.
When the pandemic hit, the financial services sector had to react fast. From going digital in a matter of weeks to finding new ways of working, this webinar set out how these financial organisations responded to the demands of the global coronavirus situation.
The discussion was filled with how these companies have supported their customers in this transition, and the future of transformation. On this, Jen Tippin said: “I think, unlike the financial crisis, this health crisis has demonstrated that the banking sector has a very important purpose, and it’s enabled businesses like ours to really come to life in terms of how we’ve supported our customers and our communities.”
Levelling Up: Increasing the Strength of the Fintech Ecosystem across the UK
Gerard Grech, the CEO of Tech Nation, hosted a panel to discuss how exactly the UK can strengthen its fintech ecosystem. Acknowledging fintech as an enabler for the rest of the digital economy, Gerard identifies how streamlining the processes around fintech can benefit the national economy on an unprecedented scale.
Participants were James Varga, CEO of The ID Co, Louise Brett, the UK & NSE Financial Services Innovation & FinTech Lead Partner for Deloitte, Richard Hayes, Co-founder & CEO of Mojo Mortgages, and Sarah Williams-Gardener, the CEO of FinTech Wales. At first glance, the choice of panellists brings a strong sense of regional representation to the conversation; allowing the webinar to follow more geographically-holistic avenues of discussion.
Louise Brett said “There are roughly 2,500 fintechs operating across the UK, a third of these are outside London. There’s a lot of growth that’s coming outside of London, and if we could connect it, the benefits could really be exponential. Where is that growth? It’s in Cardiff, in Birmingham, in Edinburgh, and in Belfast. What we established is that there are 10 high-growth clusters of fintech. The data from the last 20 years suggests that we’ve seen these clusters grow by 16%; when compared to SME growth of 1.3%, and they’re clustering around areas of specialism. That’s where it’s really exciting because this isn’t just fintech duplicating itself all across our country, there are clusters of real specialisms that are driving that growth, and the 50,000 new jobs we can expect to see in the next 3 years.”
Going Green: The Pivotal Role of Finance
On the penultimate day of UK Fintech Week, a webinar titled “Going Green: The Pivotal Role of Finance” took place. In the past decade, many fintechs have taken a stronger stance on the green initiative, increasing their ESG regulations to make their companies more sustainable and in turn, more attractive to investors. The webinar explored a subsection of ESG concerns, namely, green finance and what role regulators will play in encouraging environmentally sustainable business practices, whilst also discussing what was next for the industry with COP26 quickly approaching.
Moderated by Tom Graham, Managing Director in Accenture’s Banking practice and Programme Director for Accenture’s FinTech Innovation Lab, the panel consisted of Charlotte Wood, Head of Innovation at Schroders, Duncan Grierson, CEO & Founder of Clim8, Francesca Hopwood Road, Head of RegTech and Advanced Analytics at the FCA Innovation division, Sopnendu Mohanty, Chief FinTech Officer at the Monetary Authority of Singapore, and Dr. Vian Sharif, Head of Sustainability at FNZ.
Duncan Grierson kicked off the conversation by saying, “Green finance is making a difference, putting money into companies that are either taking sustainable action on emissions or on the use of resources on the planet. It is about putting money into clean energy, cleantech, electric mobility, sustainable food and a range of other sub-themes. It is not using ESG as a screening filter to screen out just fossil fuels – green finance is something much, much deeper.”
Vian Sharif added: “The thing I’m most worried about is that we’re not going fast enough. We’re here in 2021 and we’re still questioning what we need to be surfacing and what information we need. I think we’ve got to accelerate if we’re going to make a difference. We’ve got eight years to achieve the sustainable development goals – we’re running out of time.”
