As part of the ongoing celebrations into UK Fintech Week, Gerard Grech, the CEO of Tech Nation, hosted a carefully cultivated panel on 20th April, 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.
Joining Gerard’s “Levelling Up” webinar is 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.
The panel discussed every element of the presence of fintech within this country, starting with how regional fintech has driven jobs and opportunities to date.
Commenting on the current state of affairs, Louise Brett stated “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.”
Carrying on from Louise’s point of witnessed growth away from the metropolis of London, the chair was passed to Sarah Williams-Gardener, who added insight into the current state in Wales. “When I look at Wales, back in the 1990s we had Admiral Insurance establish themselves here, and off of Admiral, it really generated an ecosystem that has spun out a range of insurance propositions, such as within the comparison market with Confused.com, Go Compare and Money Saving Expert. The Kalifa review has highlighted what we have in Wales, but also what we’ve kept a secret. We have a huge amount of potential and many more growing fintechs. But one of the things that the data also highlighted was that to be a successful cluster, you need the presence of anchor businesses working on close business connections with universities. The Kalifa report identified this as a missing link, which is why we’re proud to say that here in Wales, we’re launching the Fintech Wales Foundry, to organically bring these two components together; from which we will expect to see great potential for growth.”
Taking the conversation up to Scotland, James Varga, who is based in Edinburgh, said. “10% of the population in Edinburgh work in and around the financial services. Here we have that pedigree, we have operational banks who are extremely responsive to facilitating feedback on what we’re doing. Universities also have a huge role to play, as they’re pumping out a lot of talent which traditionally pre-covid went to London. So being able to keep that talent here in Edinburgh, in Scotland, is really important, as we want to harvest the embedded knowledge between fintechs and financial institutions. I think it’s great; the whole ecosystem is beginning to generate momentum that it’s never had before.”
Gerard accentuated this point, by adding “the closer they are to the critical mass of universities, the faster fintechs are able to achieve growth and scale.”
Keen to add a view from across the border in northern England, which itself has witnessed considerable growth within the financial sector within recent years, Richard Hayes, who is based in Manchester, added “I think Manchester and the north of England as a whole has hosted a large proportion of both fintech and tech innovation, and I don’t think it’s a coincidence that we also have some incredible universities in this region that have been able to contribute the talent and skills required for growth. I think what’s interesting in what we’ve seen is the evolution of more contact-heavy centres typical of the region with the assistance of technology. What will be really interesting in the coming months and years is to see how more traditional operationally-focussed businesses here in the north, and further afield, start thinking about how they can leverage technology to impact both the customer experience and the colleague experience. We want to make the jobs more enjoyable, but in terms of an impact on the economy, is to enable scale. The use of both technology and fintech will allow us to do that.”
With crystal balls at the ready, the webinar took a turn to consider the future of fintech within the UK, with the panel discussing what’s currently missing from the national ecosystem.
Amongst the points raised by the panel, Sarah’s vision for a more prosperous fintech landscape appeared to be very much already underway. “When we looking at the missing links, at the data and at what we need, we believe that bringing the Foundry into play was critical,” she stated. “What that’s aiming to do is to connect the established financial institutions and the fintech organisations. What we’re now seeing some of the new challenger brands coming to Cardiff and establishing high-growth areas of their business, and looking at AI, machine learning, and looking at bringing their fraud experts into Cardiff, and this is where working with the universities is absolutely critical, because we’ve got to ensure that the educational institutions are producing the skill and talents that the businesses actually want and need.”
Louise Brett also added “One of the recommendations is for a centre for financial innovation and technology to be established to help coordinate the strengths of national fintech, and underpinning that is a liquidity of information requirement so that we don’t have the situation we have today where 90% of the £4.1 billion of inward investment in fintech was in London. And essentially, we need that much more spread across the UK, and I think working together through schemes such as the national connectivity chapter is exactly how we can fix some of those structural barriers we see today.”