Fintech is an adolescent suddenly realising it can’t use the excuse of being young for any inadequacies. Like with everyone when they reach adulthood the rules change.
Remember when fintech was on the fringes of the IT and banking industries? Today it is an industry of its own which combines the two.
The government is focused on it as an industry of the future while the industry itself is coming to terms with becoming mainstream.
Fintech like other industries now has grown up things to do. For example it has to consider diversity like other mainstream sectors because eyes are on it. So too does the industry have to deal with regulation as the organisations policing the sector shine torches onto its methods.
The Innovate Finance Global Summit is testament to this.
I attended the first day and thought I would summaries some of the interesting things I heard. I couldn’t be everywhere, gone are the days when fintech events were one room, this one took over London’s Guild Hall.
But here is a selection of talking points.
I must point out that although Brexit was mentioned OCCASIONALLY by speakers I saw, it was ALWAYS the elephant in the room. As fintech author Chris Skinner pointed out,“ we are not sure if it’s an Indian or African one.”
Kicking off with an opening speech from Innovate Finance CEO Charlotte Crosswell it was proclaimed that fintech is coming of age.
She said that the financial services industry has a new face and one that consumers can trust. “The industry has been recovering from the 2008 crash for far too long and I do feel like we have turned a corner.”
She said some of today’s banks look very different. A group of these took the stage moments later. These were crowdfunding platform Seedrs, challenger banks Starling and OakNorth, and payments firm Worldpay.
Collaboration seems the order of the day for these companies.
Anne Boden, CEO at Starling Bank, said as a challenger bank the company is all about regulation, technology and access to payment s systems. ”We are providing a platform for other people in this marketplace.”
For example she described how Starlings membership of payment schemes like BACS, SEPA and Faster Payments means it can provide infrastructure to the industry. “This allows fintechs, other banks and even governments connect to payment infrastructure in a low cost way with high availability.”
She went on to say the big battle in banking involves the cost base rather than innovation. All traditional banks can innovate. They have huge budgets so there is nothing stopping them creating the same fintech services as challengers. They are already doing it. But rather than having hundreds of staff they have tens of thousands. As a result the new players have a huge advantage in terms of cost base.
Fintechs on stage also talked about how regulation has spurred innovation and how new finance suppliers have focused on certain vertical markets.
Later on I attended a presentation from Liam Maxwell, national technology adviser to government. His key message was if government services, which like financial services are heavily regulated and used in high volumes, can be modernized then traditional finance firms can do the same.
This takes me on to a speech by MP Nicky Morgan, who chairs the House of Commons Treasury Select Committee. Earlier in the day another Conservative MP, John Glen, who is economic secretary to the treasury, talked up the UK’s strengths as a fintech hub. He said the governmment is putting its weight behind the industry. But he didn’t mention Brexit. Unsurprising given the lack of positives.
So I was expecting Morgan, an opponent to the hard Brexit, to fill the gaps. She did eventually mention Brexit and the challenges it creates, but I got the feeling she was holding back.
What she did emphasise is the need for the sector to become more diverse. In particular that there are not enough women in leading fintech positions.
I also attended an interesting debate about cybersecurity in financial services.
Some of the talking points were: financial services firms should share intelligence on cyber security, blockchain is immutable but not necessarily secure, and whoever has the first quantum computer will control the world.
“The entire internet is based on something that is not quantum safe,” said one panelist. “I think quantum will do us all.”
I heard from Chris Woolard, director of strategy and competition at the FCA who talked about the importance of collaboration between the financial services industries in different countries and called for a global sandbox for fintech development.
To finish my day I was interested in hearing about the role of artificial intelligence from the experts.
A panel including representatives from the Alan Turing Institute and Google gave their thoughts on AI.
It seems from an IT career point of view many professionals working in enterprise IT are looking to move into artificial intelligence roles. “Many people are doing degrees in big data and machine learning,” said one panelist
“We should be very careful not to produce those junior-level analyst jobs that are going to be automated away,” said another. “We care working on artificial intelligence for data analytics. Please focus on those people that understand the business and are conversed in the technology to bring the groups together and we will all be better off.”
See all grown up? Not a mention of a smartphone app.