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Charlotte Crosswell on the True Value Proposition of Fintech

One balmy afternoon in late April, TFT sent its most jaded hack, senior editor Matthew Dove, to meet with Innovate Finance CEO Charlotte Crosswell at her outfit’s summit in the Guildhall. Armed with only a battered LG phone and a cynicism bordering on the unhealthy, Dove was about to get schooled in the true value proposition of fintech by one of its most enthusiastic advocates…

crosswellConference Flaws

Before sitting down with the CEO of one of the UK’s most influential fintech advocacy groups, TFT took a brief amble around the plush conference floor where two things were immediately notable.

The first was the buzz surrounding the imminent arrival of the Chancellor of the Exchequer, who had been booked to appear on the previous day but had had to reschedule (rumour has it that Mr Hammond requested a postponement until October 31 but organisers had replied, ‘Non!’).

Such was the reverence surrounding Hammond’s appearance that TFT felt almost entirely uncomfortable making jokes about the Chancellor’s cack-handed suggestion of a “blockchain border” for Northern Ireland post-Brexit. This in turn highlighted the second notable; namely that Innovate Finance is most certainly not rebel country.

our man at InnFin was unceremoniously (but ever-so politely) bounced from the “Deloitte Lounge”, having wandered in absent-mindedly, mouth full of complimentary flapjack.

Every other booth and banner seemed to be festooned with the old school ties of a Barclays, RBS or BlackRock. Case and point was made when our man at InnFin was unceremoniously (but ever-so politely) bounced from the “Deloitte Lounge”, having wandered in absent-mindedly, mouth full of complimentary flapjack.

When at last we managed to track down our very much in-demand host, this contradiction of legacy-lead “disruption” formed the basis for our leading question. Huddled conspiratorially in a quiet corner, TFT first asked about Crosswell’s experience at NASDAQ during the financial crisis and how that experience influenced her view of the financial sector.

“I turned up at NASDAQ and found a company that would’ve called itself a startup, so I never wrote a memo again.”

Unflustered, Crosswell deflected the rather barbed enquiry with a deftness that was to characterise the rest of the exchange.

“Do you know, I’ve never been asked that question before, quite interesting…I turned up at NASDAQ and found a company that would’ve called itself a startup, so I never wrote a memo again. I wrote a two line email to get something done. They had that culture and I suppose that’s why fintech attracts me.”

As for the spikier allusion to the financial crisis, Crosswell added;

“What we really saw was the companies that were IPOing and raising capital didn’t really change. NASDAQ was very well known for its tech stocks, now it’s an exchange for everything. Tech was continuing to boom just like fintech is now. There was less focus I suppose on the financial crisis and more saying ‘how do these tech solutions come through and solve this?’

crosswellCharlotte’s Web

Having failed to lure Crosswell into a round of bank-bashing (a favoured pastime at TFT Towers), we took a slightly more direct route and asked; can fintech be used to ameliorate the worst excesses of the legacy system or is it just another tool to wielded by whoever has the deepest pockets?

Perhaps sensing an “angle” forming, Crosswell calmly asserted that, “the theme of the summit is the value of fintech to society”, she then allowed a short, thoughtful pause before declaring deliberately, “this is what I choose as the theme this year.”

These words not only exposed the mettle of our host, but also what she sees as the true value proposition of fintech;

“Fintech has this opportunity to serve the underserved. How do we solve the problems of the unbanked? 16 million people in this country have less than a hundred pounds in savings, 16 million. A lot of people rely on payday lenders as their only source of funds as they don’t think banking is for them. How do we show that fintech is changing that?”

“Fintech has this opportunity to serve the underserved…If fintech can’t do that, then it’s going to miss its purpose in life.”

Striking a pragmatic chord of reconciliation, Crosswell proceeded to answer her own question by emphasising the need for pan-sector cooperation.

“The banks have managed to do that through partnerships with the fintechs…they’re learning from the culture of fintech. That’s why you’re seeing these partnerships constantly being announced now. If fintech can’t do that, then it’s going to miss its purpose in life.”

The zeal with which Crosswell approaches the task of harmonising seemingly discordant interests was confirmed when she surmised that;

“The best part of my job is hanging out with the fintech companies who are doing that. But also hanging out with the financial institutions who are trying to show that they can also do it.”

Digital Exclusion

Zealous though Crosswell may be, a zealot she most certainly is not. Throughout her speaking engagements at the summit, the chief exec was keen to tackle the potential downsides inherent in rapid fintech innovation head-on.

When asked to follow-up her remarks on an earlier panel regarding the need to avoid “digitally excluding” the underbanked, she answered;

“Well, the government’s very concerned about just that. You may have heard in the Spring Statement about the Fintech Challenge on Affordable Credit. I’ve been talking to the Treasury a lot about that. They’re always very supportive of anything industry can do and I say this constantly to our members, we don’t have to wait for government to announce things to get them done. Industry can solve it and maybe we solve it quicker.”

Whilst having a laissez faire Tory government behind the wheel may be of grave concern to some, Crosswell, typically enough, isn’t fazed;

“I’m very encouraged to hear government saying to industry that, “we’re really pleased with the initiatives your doing.“”

“we don’t have to wait for government to announce things to get them done. Industry can solve it and maybe we solve it quicker.”

One public/private sector collaboration the former Exadin director holds especially dear is the Rent Recognition Challenge.

“We did [the Challenge] last year for which I was one of the judges. The Treasury pledged £2 million to companies to find a way to keep a digital record of how you pay your rent. This, after all, is a generation of renters and if there’s no digital record of that, then how are people going to get on the mortgage ladder? If you’ve rented for twenty years, at the moment there’s no proof that who’ve paid your rent. If you pay the council rent, then the chances are that that council isn’t keeping a record of the fact that you’re a good renter.

The Rent Recognition Challenge was about creating a record but it’s also about allowing you to open a bank account because you can show that you’ve got a credit record. Then we said “let’s go and push that again to extend to affordable credit.”

Asked if fintech could play a role in lowering barriers for entry simply by facilitating better record keeping, Crosswell confirmed;

“Yes, and one of the best companies I’ve seen for that was Dragon’s Den-style in the big meeting room in the Treasury. They were a couple of lovely guys from the north of England who came in having seen first hand the problems there. Everybody had told them that councils were too difficult and that they’d never push it through. And they said, ‘we don’t care, we’re gonna push it through’ and they went to the council and they started digitising those records. That’s what fintech can do, that’s the power of it. Then it goes all the way through to things like blockchain and making banks more efficient.”


Seizing on the subject of blockchain tech, TFT moved the conversation to the omnipresence of tokenisation and its claim to “democratise investment.” Specifically, whether this reminds Crosswell of the “democratisation of credit” which proved so toxic in the lead-up to the subprime mortgage crash?   

When I was talking to the Bank of England about this, it became clear that it’s really hard for regulators to decide where to go on this. There’s blockchain, there’s Bitcoin, there’s crypto and so on. When you look at blockchain in isolation, it’s a distributed ledger and that’s all it is…It’s a really tough one for regulators though.

No-one wants to be the one which over-regulates but at the same time no-one wants to under-regulate either. You see adverts on the Tube for unregulated products which are consumer-based saying, ‘Come and buy Bitcoin!’ and we don’t want to see another financial crisis coming out of that.”

The Gender Dilemma

With our allotted time now perilously close to elapsing, focus was abruptly shifted to the unavoidable issue of gender in fintech. Few are better placed than Crosswell to speak unedited on the subject given the fact that her organisation is 75% female and thus an extreme rarity. 

TFT: On a panel this morning, you mentioned that women are still seriously under-represented in fintech.

CC: That’s right 17% female founders and 29% across the sector.

TFT: It almost seems as though fintech is a more unappealing environment for women than the legacy organisations.

CC: I know, shocking!

TFT: How can you change that?

CC: From our side, we run fintech programmes where we get female founders in to see VCs on female-only investment days. The VCs are very keen to invest in women but they can’t get them. They say they can’t get them but they’re out there, it’s just that women are less likely to ask by nature.

Now, if you look back at banking, where did fintech come from? It generally came from people from senior crosswellpositions who’ve done very well in their career so had the capital to take a risk and try a start-up. And guess what? That was a male dominated world!

What we’re trying to work is; is that going to be a trend that continues?

We want to make sure that it doesn’t continue and we’ve got a survey going out for which we’ll have data in the next two months. I’ve said don’t give me the founders, give me the next level down…because if that’s 40-45% women, then it will solve itself. It will still need a little push but it will solve itself.

We also need to get more women into investing. We currently have 48% of investors with no women on their investment teams. We have to inspire more women to sit there, we have to go into schools and say “you know what? Technology and finance can be for women!”

Women aren’t risk averse but they are risk aware and it’s important for us to tell them that it’s fine to be risk aware but come and solve the problems that are out there.

The key here is that women respond to value and purpose when they’ve got a role where they think they can make a difference. Seventy percent of our team are female, why? Because, as an industry body we can make a tremendous difference in what we do if we get it right.

We seem to be getting there, we’ll keep an eye on those numbers though, as it’s not going to change overnight. But I certainly think we can change things.

TFT: Your theory that women are more value-centric certainly bodes well for humanity!

CC: But all millennials are too! The point is, let’s get more people starting fintech companies and changing financial services for the better.

All images courtesy of Innovate Finance.


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