TSB is integrating technology into its banking app that will allow people to open accounts via a selfie.
The bank devised the plan with the over 55s in mind, because they won’t have to visit a branch.
TSB did some research recently that found that 57% of over 55s never use mobile banking, even though they have smartphone. This compares to 82% of 18-34-year olds who say they use mobile banking.
But 73% of them said they would benefit from being able to do their banking remotely, citing ‘speed’ and convenience and ‘24/7 access as top reasons.
Pol Navarro, digital director at TSB said the introduction is about reducing hassle for customers.
“We know that life can take over and that quick lunch time visit to a branch might not happen. With this new experience, we are making banking better and enabling customers to fully complete their application in a way that fully suits their busy lifestyles: just with a simple selfie.”
ID verification technology from Jumio in the app to enable selfie account opening.
It is by no means the first bank to offer this type of service. About three years ago HSBC launched a mobile app that enabled business customers to open accounts using a selfie as ID. There are many more examples.
It is another example of how biometric authentication is becoming increasingly common place with its ease of use. People always have their face with them and don’t need to remember anything.
Big traditional banks have embraced fintech, some more than others, with Royal Bank of Scotland/NatWest one of the more active.
Through its innovation cells RBS Group incubate startups in a Wework office in central London.
At the back end of 2016 as part of this project, the banking group started looking at what it could do to add a bit of fintech to its SME lending business.
This eventually led to the creation of Esme Loans, which offers business loans to SMEs in minutes through a completely automated process.
I interviewed Esme CEO Richard Kerton a while back about the company’s history and plans. Here is the interview, better late than never.
It is an interesting company because it demonstrates how banks can support startups through their development with expertise and funding.
A separate entity to RBS Group, the company cuts the time it takes to apply for a loan to 10 minutes for SMEs, offering SMEs loans of up to £150,000. Application is made easy through the use of the latest technology, including artificial intelligence and application programming interfaces (APIs) so it can connect with external data.
About 1000 loans, worth over £50m, had been made by Esme when I did the interview a couple of months ago.
Kerton was brought from another part of the bank to turn the organisation’s idea of a digital lending business into a reality. “We could see looking at our own business and that of fintechs that customers wanted to be served in a different way,” he said.
The first thing to do once establishing what customers wanted was to get the technology.
Esme decided to use the existing technology from a fintech company called Ezbob, which had been lending for a few years but had decided it wanted to focus on technology as its business. “We partnered up with Ezbob and we could see they had the core of a really good proposition. You could take an SME through an application process and give them a quick decision.”
The application process takes 10 minutes and an instant yes, no or maybe decision can be given. This is possible while the customer is filling in the application systems are going about their work in the background.
“As the customer is filling out their application we are pulling data in from different external sources through APIs and then with that data we are doing the onboarding process with know your customer (KYC) etc, and at the same time pushing the data into a risk engine which uses AI to crunch the data to make a decision.”
Only when the decision is a “maybe” will humans become involved, said Kerton.
The offering is a bit different to what the traditional bank offers. It provides up to £150,000 unsecured business loans in an automated environment said Kerton. Other differences include not having access to a relationship banker.
Esme has 36 staff in London. These work on marketing, underwriting and operations
For Kerton, who has 30 years’ experience as a banker at RBS/NatWest, the opportunity to get involved with the development of a fintech within RBS was irresistible. “I jumped at the chance as it was a great opportunity,” he said. “I always had an entrepreneurial side to me and I have amassed experience from all across the business. Being able to bring all that together and design product from scratch, that customers want, was just a brilliant opportunity.”
Kerton sees fintechs like Esme as complimentary to the banks. “I think traditional banks will have their core propositions and upgrade the technology to better service customers, but there is an opportunity to develop new business revenue streams in the fintech sector.”
He said doing fintech inside a big bank has its advantages. “It’s easy because you have a huge amount of resources and expertise behind you.” But he added that there are challenges. “It is harder because you have to comply with the banks policies and procedures which aren’t always naturally aligned to a startup culture,” he said.
One good example where Esme might not want to work too closely with the bank is in technology. The legacy systems of traditional banks, while reliable and stable, are not something agile fintechs want to use. None of Esme’s technology touches RBS technology which, according to Kerton, allows Esme to be agile.
Although Esme has made thousands of loans worth millions of pounds it has only really been testing the water so far. A big test you might say. But it has set its sights on scaling the business this year after establishing that the concept and technology works. “We pushed through quite a high volume and through that you get feedback. We will now use that insight to help us scale the business,” said Kerton.
Another area where Esme is looking to improve is the proportion of loans that go through without any human involvement. So far during the early phase the company has been watching closely and human involvement has been deliberately higher than the company will eventually want. Kerton said about 10% of loans so far have been automated from start to finish, but he said this will increase.
To this end it is working with Microsoft to develop a data warehouse, introduce more AI. “This will power are understanding of what customers want and help us build things like chatbots,” said Kerton.
For example this will also help Esme bespoke customer journeys and help them offer loans at the time businesses need them, and improve the efficiency of its risk engine.
Esme is also working with Ezbob to break the platform into lots of Micro services. This would break the journey up into modular services, such as onboarding. “This will allow us to use them in different products, bespoke services and help integrate more easily with third parties,” said Kerton.
Read the previous fintech interviews
Part 23The ID Co, Part 22 Currencycloud, Part 21 Tandem, Part 20 Tink, Part 19 Goldex, Part 18 Azimo, Part 17 Yoyo, Part 16 Bud, Part 15 Previse, Part 14 Finastra, Part 13 InstaReM, Part 12 Eucaps, Part 11 AimBrain, Part 10 Meniga, Part 9 TrueLayer, Part 8 InvestCloud, Part 7 ClauseMatch, Part 6 Rebuilding Society, Part 5 Honcho, Part 4 Akoni, Part 3 Wrisk, Part 2 CreditLadder, Part 1 Taina Technology
More established UK fintech’s were the biggest recipients of investment in the first half of this year, which demonstrated that businesses are maturing.
Investment in UK fintechs in the first half of this year was $2.9bn, which is 85% of the total invested in 2018, according to figures from fintech industry body Innovate Finance. It is also 45% higher than the same six month period last year. London based companies took 90% of this.
It was challenger banks that got most investment during the six months with payments and foreign exchange fintechs close behind.
For example challenger banks including OakNorth ($440m), Monzo ($147m) and Starling Bank ($98m) got the most significant investments. In payments and foreign exchange sectors Checkout.com ($230m), WorldRemit ($175m) and GoCardless ($76m) were major recipients.
A total of that 85% of the investment was in more established fintechs, with early stage fintechs taking the remainder.
Charlotte Crosswell, CEO of Innovate Finance, said the type of investments is a reflection of the sectiors maturity. “The flow and impressive size of individual investments demonstrate an ecosystem that is showing signs of growing maturity. “
But the sector could face difficulties if the UK leaves the EU without a deal. “. Both the flow of capital and a wide talent pool are essential to maintaining the sector’s strength, and we remain committed to support efforts in these vital areas,” said Crosswell.
According to a survey from banking software supplier Crealogix, there is lack of awareness of open banking among UK current account holders.
In fact its survey carried out by Censuswide found that two thirds of them had never heard of open banking. But it also found that the same proportion are interested in the digital banking features enabled by open banking.
This is not a surprise. For example most people desire all manner of cloud services but how many of them know what the cloud is? A few years ago not many people had ever heard of it.
But the big difference between using the cloud and open banking is that people have to agree to sharing their data, so they really need to understand it before they use it.
Jo Howes, commercial director of Crealogix UK, said a lot of the focus so far has been on understanding regulations and figuring out details of new technology for secure data sharing. “While all this is essential, consumers are far less interested in education or understanding how this all works. People want to use financial apps that make their lives easier and more secure, and they will change provider to get what they want. Financial institutions which have the ability to put innovations into customers’ hands faster have a key competitive advantage. Open banking offers a greater range of possibilities for differentiation than the industry has ever had before.”
But there are clearly challenges and customer understanding and subsequent trust is vital.
I had a conversation with Hans Tesselaar, executive director at not for profit banking IT development BIAN. He told me that the take up of open banking, PSD2 in its case, is slow on the continent.
“After the scandal with Facebook and Cambridge Analytics, people have become more reluctant and especially if it involves sharing financial data,” he said.
He said a lot of banks are pulling back a bit. “While there are a lot of opportunities for banks it is not easy to fulfill them due to the political climate and sentiment in the market. That is why it is slow.”
He said it will take off eventually but added that there is an over reliance on Millennials driving adoption. “Everybody says look at the Millennials, they try everything, but the moment they start a company and need a loan does or she want to share that? Or when they want a mortgage? When you mature you are less willing to share.”
But of course cloud adoption had similar hurdles, not least in banking. There was a lot of scepticism about using the cloud in the past, but that was quickly overcome when consumers and their suppliers realised the benefits. I don’t think we could function in the developed world without the cloud. My kids certainly couldn’t.
Matthias Kröner set up one of the first digital banks back in 2009 when he formed Fidor.
Fidor was launched in Germany before spreading elsewhere including the UK. It quickly gained momentum, through its disruptive tech driven business model, before being acquired by BCPE in July 2016.
I first wrote about Fido bank and Kröener in 2015, which you can read here.
Kröner left the company after 10 years when BCPE put Fidor up for sale by in November last year.
So what now?
Debt processing fintech Receeve is his latest venture, where he sits as an investor and advisor to the company, which solves a huge problem that all banks have.
A massive amount of money is lost to banks as a result of customers defaulting on loans. This reduces the returns for banks and in turn has to be factored in to future prices, which makes products more expensive and less competitive.
“At the end of last year Receeve approached me but as the CEO at Fidor at the time I felt I was in conflict,” Kröner told me. “But when I knew I was ready I picked up the phone and said to the guys ‘let’s move on.”
The company’s tech addresses the problem that companies face when they make loans. Some customers can’t pay them back and banks are really inefficient in trying to get money back. So much so that it is cheaper not to bother but rather sell the job of getting it back to an agency that specialises in it.
“Receeve is attacking one of the biggest problems in ecommerce and particularly for banks,” said Kröner. He should know as he has run a bank for the last decade.
He said the strength that the bank has is coming up with the funds but they are not very good at dealing with defaults efficiently.
For example if someone defaults the bank will write to them and try and get some of the money back. Then the default term will be in contact and try to agree new terms. Or if a customer is fully defaulting they will sell the debt to a collection company for a small amount.
“It is a lot of paperwork, a lot of administration and pretty old school for the majority of banks and they lose out massively,” added Kröner.
He said one of the attractive propositions of Receeve is in helps banks increase their returns without additional marketing spending or more loans, but by making what you have more efficient
Receeve puts tech in the middle of the process, said Kröner. It uses data science, machine learning as well as digital message to modernise the archaic processes to recover money used by most banks.
He said banks might have two members of staff armed with Excel spreadsheets looking at whether people are in default, and without even contacting them sell the debt in 60 days. “Once you sell off the loan you realise the losses because you never get anymore back.”
He said it is too expensive for a bank to go through the process of contacting the customer and trying to recover the money.
So Receeve changes this. The tech in the middle includes a strong data model and machine learning. “You have so many early indicators about a customer’s life that a bank could intact a customer with new terms before it becomes a problem.”
Receeve also modernizes how the bank will communicate with defaulting customers with letters replaced by regular digital messaging which puts the bank much closer to the customer
“The aim is to reduce the number of customers you sell to a collection company,” said Kröner. “It is more empathy at the end of the day,”
If a bank sells the debt a once valuable customer, who might have good reason to be in default, will be gone forever. “If you put a customer in the hands of a hostile company they are not going to ever come back to you as a customer,” added Kröner.
Facebook’s announcement of its planned cryptocurrency, Libra, has created much debate.
The plan has been welcomed in some quarters as a way of helping financial services reach the unbanked but these views have been more than counterbalanced by a high level of scepticism.
There are certainly some major challenges facing Facebook including overcoming scepticism and keeping regulators happy. Read this blog post I did earlier.
But what do fintech’s think of Facebook’s plans. I asked the question and got some interesting responses.
Charles Delingpole, CEO at anti-money laundering system provider complyadvantage agreed there will be significant challenges operating a global payment system on the scale that Facebook intends to create.
“Given the multitude of problems that Facebook has when defending against fake accounts and fake news, the creation of fake payments are an entirely different problem,” he said.” Fake payments can result in money laundering, terrorist financing and all kinds of horrific consequences.”
He said banks, corporates and fintechs have huge problems with this, so it is very unlikely that Facebook itself can succeed where others have failed.
Sylvia Carrasco, CEO of gold trading platform Goldex Technologies said Facebook could transform the image of cryptocurrencies. ”The volatility of cryptocurrencies is one of the main reasons why digital currencies have been pigeonholed as an attractive speculative asset – and nothing more. But the launch of Facebook’s ‘stablecoin’ could change that forever, and finally deliver crypto to the masses. We look forward to seeing whether the world’s most influential social media player will pull this off – and what it means not just for the future of payments, but also the future of long term investment and savings.”
She added that at present, given the price fluctuation of Bitcoin and other altcoins, nobody would dream of transferring their parents’ life savings into crypto. “ But who knows what the future will bring.”
Meanwhile Michael Kent, CEO at digital money transfer service Azimo is forward to seeing how Facebook’s Libra currency pans-out, “particularly in regions where there’s a high concentration of people with limited access to financial services. “
“The launch of Facebook’s cryptocurrency is a great example of a fintech innovation disrupting the traditional financial services sector and shaking up the industry. Hopefully this will inspire other big tech titans to move faster in this area and to use their technologies and vast global networks to provide better services for consumers, especially the unbanked in emerging markets.”
Alex Baitlin and CEO at digital assets security company Trustology, who was previously UBS Blockchain lead is excited about the idea that over 2 billion people will be introduced to crypto currencies and blockchain concepts.
“This is a significant turning point for financial services and will give global central banks the agency to expedite the issuance of their own digital currencies,” he said. “A number of central banks are already working on developing a stablecoin.”
If you have any thoughts on Libra please leave a comment.
Edinburgh based The ID Co set about solving one of the biggest challenges’ facing businesses that want to make buying financial, or for that matter any other product online, as convenient as dragging and dropping an app icon.
That was in 2011. Today the company has evolved into a provider of instantaneous onboarding for its business customers. It is for example possible, through its technology, to automate mortgage approval and complete it in a matter of seconds without a single form being filled in.
James Varga, CEO and founder at The ID Co was chief operating officer at personal finance management (PFM) tool provider Money Dashboard back in 2011. It was then that he realised PFM tools, which for example tell people that they can save money using different products, are limited. Once the advice was given that was it. Consumers that wanted to change financial products to benefit from the advice had to do arrange everything.
“We realised very quickly that we had the same limitations as everyone else,” said Varga. “The next stage of the process of getting that financial product is really difficult. Most of the time this involves offline processes such as going in branches and sending pieces of paper.”
Most people don’t like managing their money, they would rather make a decision and be do something else
“People want convenience. They want to be able to drag and drop financial products,” said Varga. “But we could not do this products because the financial services firm the consumer wants to deal with does not know if he or she is who they say they are and doesn’t know anything about them.”
He said this problem goes way beyond financial services. “There are a lot of things we want to do online but we can’t because of this lack of identity and trust.”
He said there are problems with traditional ways of providing ID such as name and address or photocopy of a driving license because the organisation asking for the information cannot be sure the details belong to the person applying.
Working for a PFM gave Varga and his team a potential answer. “We were connecting people to their bank, which is a great source of trust and data. The bank has already done the on-boarding and knows the person well. It can connect the physical you to the digital you through spending behavior for example.”
Varga and his team worked on developing the IT for the new concept within Money Dashboard but then realised the idea had to be developed as a separate company so he completed a buyout of the new technology being developed.
“A start up with two propositions doesn’t work. Success at a startup is all about being focused and finding that traction so we pulled the IT out and stood up on our own,” he said.
Originally the company was called Miicard (My internet identity card). “The idea was that as consumers we can take sources of trust and data, like bank data or social accounts, and put that into a digital passport for people travelling the internet,” explained Varga.
The company started with 11 people, mostly tech professionals. They built a digital passport system with the initial version completed in about 18 months
The online service offered businesses, such as banks, building societies or dating sites a link that customers could use to quickly sign up
“We had already verified the person’s identity so a bank for example doesn’t have to do the Know Your Customer (KYC) checks and the customer doesn’t have to fill out a form,” Varga said. What used to take a week or two was being done in five minutes.
Varga said the service could have almost been B2C2B because everything is done with the consumers permission. The business would be charged each time the service was used.
This business model was in use for about five years, with operations in about ten countries. “But a few years ago we realised we were too early for the market. The idea of consumers owning their identity and data was still foreign to a lot of businesses.”
Varga said it is only recently with the introduction of GDPR that who owns the identity has become clearer
We had the verification service via the bank and a digital passport on the consumer side. We figured the consumer side was too early for the market so we focused on the bank verification
The services was then made a clear B2B identity verifying service
Varga said because the company leverages bank data it was in open banking even when PSDII was just an idea. “It has taken longer than I hoped but now open banking is a global trend.”
Today the company is focused on helping businesses on-board customers. This is not just banks but any company that needs to onboard a customer that comes along and wants something from them. “We use bank data to solve the pain that can’t be solved through credit referencing agencies and other sources.”
“The problem today is that we live in a world where to get credit you have to have had credit, which I think is fundamentally wrong,” said Varga.
He said parents for example might have to get their kids a credit card just so they can rent a place, which he said is “pretending they are responsible.”
“It is much better if they are genuinely responsible person that can prove this to businesses through data and even get more personalised products,” he added.
He said the checks take 14 seconds. “It will be absolutely possible to get a mortgage in 14 seconds using this type of technology. We have customers that do same day mortgage approval and funding without any forms being filled in.”
“For all the questions people have to answer the data is already there.”
The company now has 28 members of staff and 35 business customers. In the UK The ID Co has Clydesdale and Yorkshire Bank as a customer. CYBG’s digital bank B uses its service.
Read the previous fintech interviews
Part 22 Currencycloud, Part 21 Tandem, Part 20 Tink, Part 19 Goldex, Part 18 Azimo, Part 17 Yoyo, Part 16 Bud, Part 15 Previse, Part 14 Finastra, Part 13 InstaReM, Part 12 Eucaps, Part 11 AimBrain, Part 10 Meniga, Part 9 TrueLayer, Part 8 InvestCloud, Part 7 ClauseMatch, Part 6 Rebuilding Society, Part 5 Honcho, Part 4 Akoni, Part 3 Wrisk, Part 2 CreditLadder, Part 1 Taina Technology
So Facebook has announced plans for its cryptocurrency project, known as Libra.
According to Facebook it will “enable a simple global currency and financial infrastructure that empowers billions of people”.
But to get there will be anything but simple.
Overcoming the scepticism facing the project will be the first hurdle.
Some welcome the project as an attempt to fix the problem of almost two billion people not having access to a bank account. “It’s great to see Facebook and large tech partners talk about financial inclusion. There are still 1.7 billion unbanked, and everyone needs to be on deck if we want this number to go down to 0 by 2030,” one contact told me.
But one senior IT professional in the banking sector was more sceptical about whether Facebook was the right organisation to drive a project like this.
He said: “Bearing in mind Facebook has now been shown to act unlawfully and cannot be trusted with user data, my hope is that financial regulators around the world keep a close eye on this. If it goes ahead and many millions of people start using it, the scope and impact of any issues could be widespread. I have lost faith in the moral compass of big tech and I think more people are reaching the same conclusion.”
And even if this type of view is overcome there will be many more hurdles to overcome.
I caught up with a contact of mine who is an IT expert in the payments industry. He holds a very senior global role.
He gave me his thoughts based on early information, so at the time there’s a number of details (in particular on the technology) that remain unknown.
He asked me not to name him at this point but this is what he said:
“The positioning of Libra at the moment is primarily on cross border transfer of value. This is a market with well-established players already (crypto-based players or more traditional ones). It’s clear that Facebook counts on its huge installed base of users as an argument to prevail in this market. At the same time, the incumbents are more knowledgeable about the market in general and remittance corridors in particular and will give Facebook a challenge.”
Facebook seems to be focusing more on transactions related to Facebook usage (as opposed to money transfer operators) which again can be a great argument for their user base. They position Libra as a transaction currency, directly usable by end users. This is quite different from money transfer operators that position their product as a currency-to-currency transfer, and several use a cryptocurrency as a transport currency essentially invisible by end users. This positioning avoids the pitfalls of on-ramp and off-ramp from Libra to national currencies, which requires an infrastructure of agents that acts as on/off ramps (and which requires fees to make this a commercially viable activity). At the same time, this requires Facebook to actively build a network of acceptance points for Libra (cash-in, cash-out, merchant), something that requires huge market power which Facebook and their partners may have.
It’s also great to see a general openness that Facebook brings –
– open source approach
– the market for Libra wallet providers is open (albeit Facebook with their Colibra will obviously be the gorilla in the room)
– the association is open to other partners in the future”
Facebook and the association will face some key challenges
“Cross-border market offerings are subject to very important regulatory pressure pertaining to preventing money laundering etc. While some of the players in the association are familiar with this (e.g. PayPal), it’s clear that the association will need build muscle in this domain to lobby and succeed. Banks, the most traditional players in this space, have been struggling with this and actually retiring from certain markets (de-risking.)
“As the products become available for use in many countries, Facebook and the association will face regulations regarding money transfers specific to these countries and markets. PayPal is a good example of this where the offering of PayPal can be quite different from country to country based on local regulations (for example in many countries a PayPal user can accept a payment from abroad, but can’t send money abroad). Achieving uniformity of Libra offering across markets will be a huge endeavour.
“Another aspect of global and local regulations is the KYC requirements for customer onboarding. Facebook states that the Calibra wallet will respect all local and global KYC requirements, which is again a huge endeavour. At the same time, Facebook also mentions that they will not supervise the other Libra wallet offerings, which may backfire – if certain wallet offerings don’t abide by the local regulations, the entire Libra may face a challenge from the regulator even if other wallets do abide.
“To overcome these challenges, Facebook and the association will need to be open and listening to a number of players who understand these regulations on a global and local scale.
“From the financial inclusion perspective, Facebook will need to prove the value of Libra in the following situations:
– onboarding poor and remote people without the required documents to obtain financial services
– the pegging of Libra to other fiat currencies is great. At the same time, many countries have stringent regulations about the possession of foreign currency by citizens. In such countries there’s a risk of a secondary and predatory market for Libra
– availability from simple (non-smart) phones
– availability of cash-in/cash-out points close to the target population, with low or zero fees to transform local cash into Libra
– transacting in local currency at low or zero fee
– interoperability with exisiting players such as banks and mobile money providers
– interoperability with local merchant networks
– openness to local application providers
“It will be interesting to see if the size of Facebook and partners will allow them to build today’s vision of a worldwide widely available currency or whether they will have to adapt this vision to local and global circumstances that will reduce this vision to offerings that pretty much exist today, or to a business currency usable purely on Facebook (like airline miles).”
The latest opinion piece from participants at this year’s London Tech Week is from Tim Rea, an investor into the BGF (previously known as British Growth Fund). Here he looks at how unicorns are not the only success story for London Tech Week.
Here are the opinions already published:
Don’t forget the SMEs that form the bulk of the UK tech industry
By Tim Rea
Earlier this month, the UK capital convened thousands of forward-facing entrepreneurs, business leaders and industry-shapers for London Tech Week (LTW). As the tech sector continues to generate record levels of funding and with a vast array of innovation on show – it certainly attracted the attention of the UK’s investment community.
Yet, make no mistake that whilst London played host, LTW goes far beyond the successes of the capital alone. Prime minister, Theresa May, opened the week with the remark that “British tech is thriving” – carefully chosen words to reflect a truly national story. In fact, recent BGF statistics show that 83% of the UK’s growth businesses from all sectors are outside of London.
The domestic tech industry is expanding 2.6 times faster than the rest of the economy and is now thought to be worth over £184 billion to UK output, so ‘Seizing the Digital Opportunity’ was rightfully thrust to the top of the agenda.
Taking centre stage were Britain’s tech unicorns and the scale-ups hot on their heels – these success stories scream ‘best-seller,’ yet there are also a great many small-to-medium sized businesses with an equally compelling narrative. These businesses are the engine room of the UK economy – they are securing investment, pioneering innovation and creating employment.
From startups to titans and everything in between, a key takeaway from last week was the strength of the UK tech ecosystem. A cause for optimism as the country seeks to understand its new place in the world and showcase its reputation for innovation as genuinely world-leading.
This is in part a result of the ambitious and imaginative ideas that garner the support of early stage investors. Our ecosystem is all the stronger because they are willing to take a risk on what might one day change the world. Undoubtably, some of them will.
It must also be recognised, however, that whilst skipping to find out the end of the story is tempting, we need to take it page by page. Much of last week’s buzz centred on questions around IPO’s, exit strategies and the next colossal round of fund raises but what the tech sector really needs now is an approach to longevity.
The combination of entrepreneurs and backers in it for the long-haul will be critical for realising the potential of the sector – enabling Britain to sustainably scale the hotbed of early stage tech firms that are found in every corner of the country.
The right funding mechanism is a key part of the story – investors will need to support businesses through all stages of the growth journey and for that the market will need patient capital.
The UK tech sector may feel like it is moving at the speed of light, but patience is vital – because whilst tomorrow’s tech stole the spotlight in London last week, we must avoid getting lost in the fiction; distracted by sci-fi or tales of future unicorns.
London Tech Week 2019 demonstrated much of what the UK tech ecosystem has to offer: we have ground-breaking ideas at our fingertips, but we also have an existing community of high-potential SME’s that are already harnessing the technology of today and driving business growth.
Investing in the future doesn’t mean we shouldn’t invest in the present – and many of the brilliant businesses that need support are those shaping our reality right now.
With London Tech Week held recently various tech sector executives have kindly offered to provide their opinions of this year’s London Tech week.
Here are the opinions already published:
JUNE 2019: The coming of age moment for London Tech Week
By Gavin Poole
During the last six years, London Tech Week has been growing in momentum. From relatively humble beginnings with Boris Johnson and Michael Bloomberg crammed into a packed room at Central Working for the inaugural launch event, through to nearly 60,000 attendees in 2019. This year saw London Tech Week cement itself as one of the most prominent festivals to emerge in London, gaining the attention and commitment from international businesses and governments around the globe. This year, the week came of age.
During the week there was a rollercoaster of events taking place with some of the most prominent tech companies rushing to take part. The week saw CEOs and founders from the likes of PayPal, Strava, TransferWise and Slack as speakers and for the first time ever – the week was opened by the Prime Minister. On Monday, Theresa May took to the stage at the Opening Ceremony at Here East and used the platform to make a further commitment to tech, announcing £153m investment in tech and 2500 AI course places and 1000 scholarships across the country.
Never before has the government been so involved with London Tech Week, and the backing of the Prime Minister felt like a breakthrough moment for the festival as a whole.
British tech is adding more than £130bn to our economy every year and has become the fastest growing industry in the country. This level of growth is not driven just by investments into businesses themselves, but also into the enabling companies such as the £100m plus invested by Delancey into Here East and Plexal on the Olympic Park. This sense of growth and ambition was truly captured throughout last week with prominent events such as CogX: the world’s first and largest AI summit. Government interest didn’t stray as Secretary of State for DCMS, Jeremy Wright and secretary of state for health and social care Matt Hancock spoke at the event.
Launching a consultation on a national data strategy, Wright announced new guidance on AI technology for public sector leaders. This highlights how London Tech Week is holding events which are facilitating change on an enormous scale.
The rest of the weeks’ events saw continued government interest as Bloomberg’s Tech Event saw the Chancellor of the Exchequer discussing the centrality of tech and business in the light of Brexit. He warned that while he doesn’t believe tech companies “will fly to Europe”, managing the country’s future data regulatory regime to be compatible with European regimes will be a challenge. Whilst there is no doubt that this is true, it’s hugely encouraging to see the government actively taking a stand and backing the tech sector.
This level of consistent government interest throughout London Tech Week proves the significance of the 300+ events taking place and for that, the partners behind LTW (London and Partners, London Tech Advocates and Informa Tech should be extremely satisfied.
The UK’s position as a global home for tech innovation is only set to grow and improve, something that the PM emphasised when she said she wanted “to make sure Britain stays the best place in Europe to launch and grow a start- up.” The talent at London Tech Week demonstrates why no other country on the continent generates more billion-dollar tech businesses than the UK.
As we take time to reflect on a week that saw ministers and governmental figures standing shoulder to shoulder with the most high profile tech entrepreneurs in London , the momentum and global significance of London tech was more apparent than ever before and there is no doubt that 2019 has been the year when the festival finally came of age and matched the success of the tech community it celebrates.