The Future of FinTech

By Kristen English, Non-executive Director, Innovate Finance and CEO of Style Research

On Monday, I joined a panel at the London Women’s Forum. This is an ‘invitation only’ group of senior City women who come together informally several times a year to discuss issues common to all their organisations on neutral turf (thanks to EY who hosted this time around). The subject of the day was FinTech.

Even a definition of the sector is up for debate, as many associate the sector with start up, disruptive companies when in fact there is a long heritage of FinTech innovation hidden behind the walls of financial institutions.

We debated whether growth was accelerating in the sector. Obviously, when Financial Services, Regulation and Technology are moving forward at speed, then there is bound to be a non-linear expansion. But the new entrant factors include: the ability to transport data around more efficiently (mobile networks and access to mobile devices), the fact that modern consumers are less wedded to banks for their financial needs and willing to look for other avenues of financing, and that there are generic technology providers on the scout to add financial capability to their existing products e.g. Google, Apple, Facebook. .

London remains well placed to be a leader in FinTech as it is the world’s leading financial centre  (as evidenced by the latest GFCI Rankings). It is a melting pot of regulation, government and finance in a concentrated centre where people have the chance to meet formally and informally to discuss ideas. FinTech is destined to grow but only if there is access to capital and talent. For the UK this is an area to foster as it accounts for 60,000 jobs and contributes £6.6bn to the national economy. Innovate Finance (the industry sound box and champion) plays a key role in presenting and nurturing UK’s position as the world leader.

Yet in many ways the big revolution is yet to come. Early stage disruptors nibble at the edges and bring new ideas to the table but it is the infrastructure that powers the financial institutions that needs serious upgrade. Enter Blockchain, big data and AI at industrial scale. Only when this is in place will we see real change. The recent FinTech Census (published Sept 2017) by EY,HMT and Innovate Finance) shows that 44% of the FinTech census universe are FCA or PRA regulated.

I wager that in ten year’s time it will be difficult to differentiate between Financial Services and FinTech. In fact, Financial Services will be FinTech.

Kirsten English (CEO)