Future of Finance: Three experts reveal how to stay ahead of the game in FinTech

We speak to three of the women leading the charge in the UK FinTech space about where they think this exciting industry is taking us.

---

London is a global leader in FinTech, but how can it maintain its edge?

London has achieved something that other FinTech hubs would love to replicate. It’s not just the geographical proximity of bank and tech, the super accelerators, wealth of talent and investment. FinTech London has also successfully engaged the Regulator and Government. Financial institutions are no longer passively tech-spotting but are actively working, even collaborating, with innovators. There is a tangible sense of belief across all the relevant parties. Our answer would be to ask a further question: Is the financial ‘revolution’ a reality to those who live and work outside the sector? Do people experience London as a smart FinTech city through their own everyday transactions? 

If you were running UK FinTech PLC what would your priorities be for 2016?

We have two:

Focus on UK FinTechs with the capacity to become global businesses and help them to enter new markets and scale. 

Do more to take the FinTech story beyond the FinTech ecosphere, and beyond the capital, to businesses and consumers to make sure that they too benefit from innovation. FinTech is for everyone.

Is FinTech making more of a difference to businesses or their customers?

Hopefully, to both. FinTechs who take their services direct to customers, such as P2P and payments, are changing financial services for ever. But even if FinTechs are not directly democratising financial services, their innovations are helping to make those delivered by traditional providers safer, more accessible and more cost-effective. It may yet be early days in the digital banking epoch, but in our experience banks are only too aware that their customers, who also have access to independent FinTech services, will ultimately determine their future.

Where will innovation come from in the emerging payments market?

All eyes are on the Blockchain, the public ledger of transactions

Which has the potential to reduce transaction and processing cost. One global FS Institution has already launched its own Blockchain innovation lab to explore how technologies can make banks more efficient – for example, through instantaneous settlement rather than the days it takes at present. In a location sense, payment innovators within dynamic economies such as India have the potential to create innovation that will transform financial services on a vast scale and on a socially inclusive one.

How can the sector attract more talented young women?

The key word here is ‘more’. Women found and lead successful businesses with relentless regularity … and yet, women-founded ‘tech businesses’ can still find it challenging to raise VC investment. Peter Thiel, who co-founded PayPal, put it perfectly when he said this: “If we want to have more women in tech, it is not enough to get more women engineers and executives—we need more women founders, because it is the founders of companies that set the cultural tone.” 

London is a global leader in FinTech, but how can it maintain its edge?

London is the FinTech global capital. Right now, I think other cities need to emulate how London and the UK view FinTech entrepreneurship in order not to fall too far behind. No other city has every facet of financial services – buy-side, sell-side, retail, corporate etc… and tech talent and investment opportunities in one city. London does. In addition, the UK government and the regulators (FCA and PSR) have made huge efforts to make London and the UK and easier place to do business, get investment and set up financial services tech firms.

If you were running UK FinTech PLC what would your priorities be for 2016?

Open bank APIs

Is FinTech making more of a difference to businesses or their customers?

It depends. How do you define FinTech? Anything that influences how banks operate, their market knowledge, how they interact with their customer – will ultimately benefit both the business and their customers. Expanding secure, regulated financial services to communities (both in the first world and the developing world) is being enabled massively by innovations in FinTech.  

Where will innovation come from in the emerging payments market?

The PSD 2 is about to open up a new world of opportunities into this space. I believe its impact may be a bit underestimated. Payments are a tricky beast. The road to ‘better payments’ is littered with the corpses of people much smarter than me.  The key is to get consumers to change their behaviour without conscience thought, like TFL did with contactless. They key to that is the merchants (which effectively the role TFL acted as) and merchants are not going to change their behaviour until they see the customer behaviour change. Chicken and egg.

How can the sector attract more talented young women?

Hire more. Give more money and investments to female-led startups. Get more women speaking at events and conferences. Make a woman your spokesperson. Don’t apologise for it. This is beyond feminism. This isn’t a political agenda. The financial services industry needs, desperately needs, new ways of thinking. The easiest way to do that is to create diversity in experience, thoughts, opinions, research and visibility. 

I don’t have time for this shit anymore – Going round and round in circles about ‘how to *attract* women’. Fucking hire women. Promote women. Fuck 30% quotas or 50% speaking slots. If you have an event that has 20%/30%80% whatever women speaking – don’t pat yourself on the back at being so ‘feminist’ and dedicated to ‘diversity’. Just accept that as normal. No one bats an eyelid at boards or conferences or management teams that are 99% male. That is what should be considered ‘not normal’.

This industry loves ‘disruption’. There is nothing more disruptive than a female voice in this industry. 

London is a global leader in fintech but how can it maintain its edge?

We need to improve the dynamic between the regulator and regulated – adopt a spirit of greater collaboration and transparency. Ask Heads of Compliance if they would like coffee with the FCA, they would say “Not without Legal!” We need to change this tension if we are to best provide for and protect consumers. Today, it is much easier for startups to approach the regulator with new business models and digitally-led finance products. Things will be even easier with the regulator working on the recently announced sandboxed regulatory environments for development. If major financial services firms are to thrive, they need to learn to externalise, co-create and open up their innovation processes.

If you were running UK fintech PLC what would be your priorities for 2016 be?

I hope that 2016 will be when the world begins to embrace the incredible potential of transacting through Distributed Ledger Technology (DLT). I don’t think that we will see an immediate launch of major services using this nascent tech, but the prize is big enough to have thousands of people working on using DLT. Looking to the near future, I would analyse and adjust the margins companies currently enjoy. As cloud computing, DLT, and P2P exchange technologies develop, the volume of income banks receive through system inefficiencies will diminish or disappear. The banking services value proposition – and the associated margins firms’ capture – needs to offer greater value for the consumer.

Is FinTech making more of a difference to businesses or their customers?

FinTech is affecting all parts of the economy from suppliers of enterprise software to consumers of savings tools, from SMEs to consumers who have never before participated in banking services or good financial planning. Customers have more choice in service providers, banks are adopting more efficient IT architecture to save money in the process and delivering better service to consumers. Fintech innovation is servicing us all.

Soon, consumers will be better informed in financial decision-making as big data tools become available to us all. Personal financial management dashboards, with accessibility to the insights of large data pools will democratise the business of finance and benefits of financial literacy for us all.

Where will innovation come from in the emerging payments market?

A potential future for the payments market could be the widespread adoption of blockchain technology to create more secure, fast, cost-effective and authenticated methods of transaction. This could create an almost frictionless system, where the inefficiencies of traditional processes are completely removed. We could all soon have the power to authorise a smart contract, robot, or block in a blockchain to, when certain conditions are met, make payments automatically. The real challenge will be the custodianship and exchange of data, and who has the right to enshrine your identity in these robots or blocks.

How can the sector attract more talented young women?

Improving the number of female FinTech founders and the quantity and quality of investment that they receive. Despite providing investors better growth figures and running on average more resource-efficient firms, female entrepreneurs are also struggling against social biases and a legacy of the old boys club. It’s time to showcase the success stories.

ENTIQ is committed to helping more female founders source the financing they need to become the next generation of FinTech heroines with project @Fin4Fem. The scheme aims to showcase and support the UK’s top 10 female tech firm founders who are investment-ready. Look for our launch event early 2016, and get in touch to get involved and help us rebalance this sector.