The Innovate Finance Global Summit this year has been and gone. With speakers including the chancellor of the Exchequer Philip Hammond and some of the leading lights in fintech attending, the event, in its fifth year was packed out.
There were well over 2000 registered visitors at this year’s event in the GuildHall in London, which had four stages running for two days. This was part of a busy Fintech Week in the UK. Yes UK, not just London.
The GuildHall London is in the heart of the City of London and fintech does sometimes feel like a London thing.
I have lived in London 20 years and it is a bit of a bubble. For fintech this is certainly the case, and something that could become a problem for the industry unless it spreads beyond the Big Smoke.
This is not just to help entrepreneurs outside the UK capital but also to provide appropriate fintech services to the people that live outside London. There are about 50 million of them after all.
I caught up with the Innovate Finance’s CEO Charlotte Crosswell after the dust had settled on fintech Week to get her thoughts on where fintech is today. She was keen to emphasise how the London based fintech trade body is trying to reach further afield.
Innovate Finance attempts to represent the entire finance sector and not just the new players normally associated with fintech. For every four fintech members it has a large financial institution member.
But what is needed to further broaden the reach of UK fintech is for entrepreneurs to look beyond London she told me.
This is something Innovate Finance wants to happen and is part of its strategy to improve financial inclusion or in other words create fintech services for people that would not normally use and benefit from them. Crosswell said this is part of its inclusion drive.
“I am encouraging more people to get out of London and look at the problems in more remote areas where financial inclusion is a big issue,” she told me. “We should not forget that a lot of people are not at the same level of technology adoption as we are in London and we don’t want the gap to get bigger.”
As Anne Boden, CEO at challenge bank Starling said at the event that the fintech industry has to stop looking at things through its own London based eyes. “We spend an awful lot of time talking to each other here in London, but we need to get outside”, she said.
“Can we stop having fintech companies solve London fintech problems. Let’s stop seeing the world through our eyes. People live very different lives to us in this room,” she told the audience at the Innovate Finance Summit.
Moves are afoot. Innovate Finance has signed an agreement with Fintech North and Fintech Scotland. This will not only help spread the fintech solutions coming from those regions but “enable us to see financial services in a different way,” said Crosswell.
This might include developing services for remote populations that are currently totally reliant on cash from a business to consumer perspective or giving regional businesses access to capital in the business to business sector.
Dan Rajkumar, who founded peer to peer fintech Rebuilding Society and is one of the founders of Fintech North, said the partnership with Innovate finance and Fintech Scotland, known as the UK Fintech Network, disseminate the message and getting people around the country engaged with the industry. “This is whether they work in the industry or if they are a consumer that wants to know more,” said Rajkumar.
“While London it is a global hub you have to get a broad base of consumers and adoption and there is a large population across the cities in the North,” he added.
He said the economic benefits of getting the message out to people and finding regional partners are significant.
And fintechs can tap into the many of the same advantages as London in other regions, said Rajkumar. “Outside London you have a much longer runway if you are a fintech. The same resources are in places outside London but they are just not as amplified.
He said there is a cost saving for fintechs that look beyond London. “It’s easy to think that online processes and no branches cuts costs, but if you have all your staff in London on high wages which are subsidised by a high valuation that is not sustainable as a business model. What you want if you want a low cost business model is do it in a low cost part of the economy.”
Perhaps Innovate finance could change this and encourage fintechs to set up outside London. The problem is 94% of investment goes into the London Fintech sector because it’s easy for London based investors to visit them, said Rajkumar.