Opening remarks Chris Hayward, chairman of the policy committee for the City of London Corporation made opening remarks on how fintech joins together the UK’s existing strengths with its thriving tech expertise. Hayward described the significance of developing partnerships and making international collaborations to boost growth.

Hayward expressed the significance of the collaboration with the City Corporation, noting the importance of regulatory compliance for fintech success.

“Together we will support a new revenue platform to host strategic dialogues between federal financial institutions and payments bodies. Regtech is a fast growing area that has the potential to help firms to increase efficiency, reduce friction, and help manage compliance processes. I look forward to making progress in key areas such as financial crime and ESG.”

Following Hayward, CEO of Innovate Finance, Janine Hirt, touched on the growth of the UK fintech industry despite national economic struggles in recent years. She highlighted challenges to the industry such as the cost of living crisis and post-pandemic recovery, along with areas that required more attention such as gender and ethnic diversity within the industry.

How can financial organisations flourish under the threat of a crisis? The opening panels at the conference were set under the theme ‘The Road to 2030’, the first of which was ‘The Fintech CEO Series - Disruption Then, Now, and Tomorrow’, which saw CEOs from two leading UK fintechs, Lisa Jacobs of Funding Circle and Jaidev Janardana of Zopa, discuss industry disruption and the current landscape. The panel was moderated by host Katie Derham.

On the impacts to the fintech sector Jacobs observed that financial inclusion is one of the main impact points in the sector: “If you look at what technology has done ultimately, is enabled us to serve a much cheaper cost people communities who weren’t being served beforehand, and that’s opened up a huge amount of infusion. At Funding Circle, we provide loans to small businesses, typically £70,000. Prior to finding listing, they were underserved groups, both from a service point of view and from an access point of view, and we have opened up that community see the same thing happening again and again.”

Janardana noted that savings is incredibly important for the current customer base in the UK and being able to provide interest for savers is a focus for Zopa: “In today’s time, the most relevant thing that we have done is actually effectively let people have all of their money. We are talking about a cost of living crisis and across the board. Fintechs have helped reduce the cost of using financial services.”

He went on to say that Zopa will deliver over £600 million in interest back to UK savers, which is significant for UK consumers struggling with the current economic crisis.

The establishment of Funding Circle was a response to a financial crisis, Jacobs noted, adding that they saw opportunity within the crisis and the ability to enact change in response to issues which were not being addressed. “There are events that happen that create momentum, sometimes that’s crisis and sometimes that’s innovation. Thinking about the development of the iPhone and the internet and how much they unleashed a huge wave of innovation. As we go through the cost of living crisis, there will be really exciting innovations coming out.”

“Crises force people to look at their assumptions and assess their thinking,” said Janardana.

“For example, the Covid-19 crisis meant that increasing digital adoption went even further, particularly in the winter separation. It also meant that consumers started thinking about how to save money, given the cost of the prices and look for better options. That then drives competition and better innovation. Also during a crisis, the incumbents tend to be defensive. They have things to protect, and that might mean that a large part of the societies then will not get the offers that they were looking for, so there is an opportunity for people like us to step in.”

Jacobs stated that she does believe the industry is responding to the needs demanded by users during the current economic crisis, and that there is a real focus on adapting to situation and consistently evolving in the industry which is essential. Yet, she described the current phase of fintech sector as in its early teen years in terms of coming to its own, indicating that there is still a lot of growth and change to come for the future.

The shift towards consumer duty for the FCA is a significant step in the right direction, Janardana noted, adding that the consumer-focus standpoint that regulators are taking will be beneficial to the UK financial ecosystem. Janardana also spoke on Zopa’s ability to create solutions and high quality customer service during the pandemic as a sign of progress amidst crisis.

He advised that new players consider what customers need and whether they are solving a problem: “Think about whatever you are offering and if you are really solving a customer need. If the customer actually took your product, would they end up being better off than not taking it? The second question you need to honestly answer is: will the customer be ready? Is the problem you are solving big enough that you will pay enough so that you can meet your costs?”

How have fintechs paved a path to success? In the second panel of ‘The Fintech CEO Series’, titled ‘The Future of Financial Services: Not Just Different, but Better’, brings together another set of industry leaders to discuss financial inclusion and the path to success in financial services. Sitting on the panel was Louise Hill, co-founder and COO of GoHenry, Charles McManus, CEO of Clearbank, Samantha Seaton, CEO of MoneyHub, Paul Taylor, CEO and founder of Thought Machine, moderated by Michael Hayman MBE DL, chair and co-founder of Seven Hills.

Each of the panelists expressed a hunger for growth and to become major, monolithic, international corporations. The pace of change is not fast enough and everything needs to be consistently disrupted and innovated was the general consensus.

“One in five 10-12 year olds in the UK have GoHenry,” says Hill, on the success of the app designed to teach under-18 year olds how to manage their money. She continues that they are excited about their success, but are still looking on how to grow and develop further, there is always more to pursue.

Seaton stated that “Open banking is one-dimensional, open finance is two-dimensional, and open data is three-dimensional. Just one dimension is not enough.”

McManus noted on the inertia-first aspect of current technology and the need to move even faster to scale to ”real-time everything”.

Taylor stated that there are many people in banks with a disruptor mindset. He emphasised that there are many people working within banks to bring them up to speed to the newfound complexity of the payments network and maintain their status in a sea of new players. What is required from banks is a massive amount of work and collaborations with payments regulators to ensure the company can innovate at an affordable speed.

Seaton explained that she does believe that there is a “good crisis” that drives change, as it negates all the negative consequences of the crisis that everyone involved has to handle. She emphasised that regulation is where change is being driven.

When the topic of the collapse of Silicon Valley Bank arose, McManus labelled it as a disruptor that did not work out: “We have seen various non-successful examples where large groups cannot change what they have got. They want cultural change, the fintech attitude, the speed. They set up a hub by a subsidiary, start the new digital bank and then migrate mothership to that. It’s not worked. It hasn’t worked because the sort of antibodies kick in. To the extent of the second line, in particular, risk management has saved numerous banks in relation to product price in and so there may be the innovation at the front end, but there’s the risk appetite behind all of that within banks.”

On risk appetite, Hill explained: “The risk appetite has to grow and scale alongside the business. I think it’s also the people that we have within the business, how they assess the risk of regulation, for example, you have to operate within regulation, and we make sure we do that.” As an example, she cited that GoHenry has not pursued a full banking license as it allowed them to remain more agile.

When asked about his perspective on being a change for society through his company, Taylor remarked: “I think we’ve got a place to play. Specifically, we’re going to radically reduce the overall cost of banking, radically reduce the carbon footprint of banks. In doing that, it frees up budget, time, and resources for doing other things like financial inclusion. We are an enabler for other people to work towards financial inclusion.”