The Fintech Talents Festival returned for another year of fintech networking, discussions and deep dives into solving problems that much of the industry is facing.
Over 1,000 representatives from financial institutions gathered at The Fintech Talents Festival at the Brewery in London to discuss all things fintech; including over 400 speakers spread across six stages throughout the festival’s two days. Here, The Fintech Times picks out a selection of highlights from on-stage at the event.
Embedded finance perspectives
Moderated by Dharmesh Mistry, CEO of property management software AskHomey, one panel discussed ‘Embedded finance for newbies‘ on the FTT Embedded Finance Stage.
Alina Bouisseau, head of strategy and performance at Tradeshift, the supply chain payment platform, commented on using data to achieve more accurate risk decisions: “We see, for example, a seller needs a working capital solution for invoices that they’ve sent. We can see the relationship between the buyer and the seller, and if we see that the buyer has paid on time for the past two years we can be confident that is going to continue.
“That data, the banks don’t have – so the combination of our data with the bank’s data on the seller gets a better picture of who the seller is, who you are lending to, enabling for better credit decisioning.”
Carl Buffery, director of global trade and receivables finance for HSBC, explained why incumbent banks would be interested in collaborating with fintechs: “Obviously, we bring the breadth of financial products and the balance sheets. Tradeshift, and many other technology companies, be much more nimble than we can. It’s the use of data that Tradeshift can do.
“The way we assess companies is very traditional. The access to the data that a company like Tradeshift has, we’d love to model more dynamically to enable us to see customers differently and see their needs differently. Instead of resisting the change, working with firms like Tradeshift makes sense.
Nzube Ufodike, an advisor to early and growth-stage businesses, also offered his take on the significance of embedded finance: “It’s a layer of extracting more value from the solution. If you have a personal service, that you are offering to consumers, it’s making sure that you can get more yield and more return on investment capital.”
Retailers offering embedded finance products
During this panel, Joshua Fabian-Miller, director of credit at tech retailer giant Currys plc, explained what embedded finance is offering consumers from a retailer’s point of view: “Embedded finance is enabling customers to access and interact with financial products in a non-financial journey. For us, the spirit of embedded finance is taking financial products to the place where the customer is interacting, so in my space, shopping.”
Fabian-Miller also discussed why Currys decided to sell finance: “At Currys, we sell expensive technology that people often struggle to pay for in one go.
“Enabling them to spread the cost is an obvious need. If we launched a prepaid Currys card, it would have no utility, right? There are two benefits to bringing in financing options for us: increased customer engagement and increased revenue.
“So increased engagement, we give the customer a credit line that you can use at Currys to spread the cost of your purchases again and again. This extends that relationship with the customer beyond that initial transaction, and we see that our credit customers come back pretty much two times versus our non-credit customers. And for low interaction or low-frequency, high-value business that ongoing engagement is super valuable, and it helps us generate more profit for our shareholders.”
BNPL for all
Another discussion titled ‘Buy now, pay later for all‘ also took place on the embedded finance stage, as another group of experts discussed their varying approaches to the space; moderated by Briony Krikorian-Slade, head of payments, innovation and resilience at UK Finance.
Yash Morar, senior propositions manager at Samsung, explained the importance of considering the long-term future of the BNPL space: “I think one of the crucial things you should consider when building the models of buy now, pay later itself is pretending it is a regulated piece – just for longevity’s sake. When we’re talking about a couple of years down the line, I know the FCA is looking into the whole buy now, pay later proposition, what can you do as a retailer to understand this isn’t just a quick buck?
“This is an opportunity to establish a relationship with a customer. When it comes to underwriting are you making the decisions that are going to ensure a long-term potential for that customer or you’re trying to underwrite with the concept of just trying to make as much money as soon as possible?”
Evolving finance offers
Dan Scott, head of enterprise sales at BNPL service Affirm, explained how the likes of credit cards can still be misleading for customers: “If you look at credit cards, they have been around forever. People are very used to using credit cards to pay for things. Looking at the interest that credit card companies charge – if you ask most consumers, they wouldn’t necessarily know or understand how that interest is charged and what they can be paying over the long term.
“The benefit of buy now, pay later for consumers is they know either zero per cent interest or, if there is interest, they know exactly how much they’re going to be paying each month and they know when the loan will be paid off. There’s no kind of grey areas, no late fees, no hidden fees and there’s no gotchas.”
Can UK fintech keep its ‘crown’?
On the fintech talents stage, one panel discussed how the UK fintech sector could ensure that it keeps its ‘crown’ and stays ahead of emerging regions and markets.
Moderated by Yvonne de Ville from the Institute of Directors, the panel covered the importance of London as a fintech hub, other clusters in the UK, emerging regions and the talent problem.
Kicking proceeding off, Charlotte Crosswell OBE, chair of the Centre for Finance, Innovation and Technology, explained: “We probably need to export to take advantage of bigger markets because the UK is just too small. Even a UK fintech that’s doing really well may struggle to get profitability there alone. But the challenge of that is when you go to the market, you’ve got to comply with the regulation there.
“As we mature the sector, which is getting to maturity now, you will see some consolidation coming in. But ultimately, I’m very confident that we are so far ahead in some of the thinking around this, that we should be able to keep the ‘crown’.”
Regulatory and market challenges
Philippa Martinelli of The Fintech Growth Fund, detailed the challenges of offering solutions to other markets: “In Africa, India, and Southeast Asia, often you’re implementing solutions which leapfrogs the existing environment in the UK. We have a really strong foundation and that is both a blessing and a curse.
“We have to continue to move forward and to push ourselves as institutions, as investors and innovators to continue to adopt new solutions. Otherwise, that’s when we risk getting left behind. But it’s really about collaborative effort.”
Valentina Kristensen, director of growth and communications at UK bank OakNorth, explained the advantages London has as a fintech hub: “The thing that is unique to the UK is London. I know that that’s not something that’s going to be a very popular view because of the levelling up agenda – but the reality is: here is where I can find policymakers, some of the world’s best universities, which then leads to the talent and a global financial centre.
“Where can we find all of that within a few tube tops of one another? Not just in Europe; that doesn’t exist anywhere else in the world. So that is something that isn’t very easy to replicate.”