Join JAAGNet and Group

SIgn up for JAAGNet & the UKI Group its FREE!!

 

Member Benefits:
_____________________

 

Again signing up for JAAGNet & Group Membership is FREE and will only take a few moments!

Here are some of the benefits of Signing Up:

  • Ability to join and comment on all the JAAGNet Domain communities.
  • Ability to Blog on all the Domain communities 
  • Visibility to more pages and content at a group community level, such as Community, Internet, Social and Team Domain Community Feeds.
  • Make this your only content hub and distribute your blogs to LinkedIn, Reddit, Facebook, Twitter, WhatsApp, Messenger, Xing, Skype, WordPress Blogs, Pinterest, Email Apps and many, many more (100+) social network and feed sites. 
  • Opportunity to collaborate (soon to be  released) with various JAAGNet Business communities and other JAAGNet Network members.
  • Connect (become friends), Follow (and be Followed) and Network with JAAGNet members with similar interests.
  • Your Content will automatically be distributed on Domain and JAAGNet Community Feeds. Which are widely distributed by the JAAGNet team.

Join Us!

JAAGNet Newsletter Signup

Gold Level Contributor
Look beyond London for the UK fintechs that will lead post-Covid recovery

Echoing Prime Minister’s Boris Johnson pledge to 'double down on levelling up' the UK economy, Citi Bank’s Tony McLaughlin believes the country can become an even more friendly environment for fintech and should be looking outside “a small perimeter around Old Street”.

Tony McLaughlin believes that the UK needs to double down on fintech to spearhead the post-Covid economic recovery, but needs to look outside London for the innovative companies that will be the catalyst of this.

“If you think about fintech as a way of working, companies have got access to global markets because their software is scalable across the world. Naturally fintech is a type of business where software is created collaboratively, where people work in new styles, where not everyone has to be in same office or location,” he tells Finextra Research.

“So, I take issue with the sector being too London focused. I think, if anything, efforts can be made to promote fintech in other locations which have got great software development capability within the UK.”

There may now be an increased desire to harness these capabilities. Large numbers of people have spent the last six months working from home, so the idea of journeying into London for four or five days a week may now seem like an unnecessary exercise.

This may dilute the importance of the capital city and see companies be more aggressive in harnessing the technology capabilities around the rest of the UK.

Beyond Brexit and Covid

Perhaps following the lead of jurisdictions like Switzerland and Singapore, policymakers in the UK should be looking at where its fintech sector has a natural advantage and how this can be augmented.

“In the AI space, for example, there’s some great expertise in the UK - DeepMind came from the UK, for example - so there are places where the country’s natural advantages could be leveraged in fintech,” McLaughlin says.

“Fintech is probably not material enough to necessarily lift the whole economy out of a recession, but it is certainly going to be a big contributor.”

While it is tempting to view the outlook for fintech primarily through a Brexit or a Covid lens, it will be important for companies to set their sights on the bigger picture of how businesses and consumers are likely to interact and transact in the years to come.

Imagining how the financial services will develop and how UK fintech should look to capitalise, McLaughlin refers to a McKinsey report of January 2018, which claimed that some $60 trillion worth of economic activity will be conducted in digital ecosystems by 2025, whether this be through B2B or direct-to-consumer platforms.

If McKinsey were asked to reevaluate this sum post-Covid, it is of course more likely that their lofty expectations would be inflated than deflated.

This will offer the opportunity to provide the financial services for such platforms, whether it be fintech companies, the banks themselves, or even big tech firms doing so.

Taking China as a model, financial services on platforms such as Alibaba and WeChat are provided by the companies themselves, which is also happening in the US with the GAFA firms.

Herding cats

However, the UK’s Open Banking ecosystem should create an environment where there will be room for manoeuvre and collaboration between the different players: banks acting like fintechs, fintechs acting like banks, banks acting like vendors and so on.

“Going forward, the opportunity for fintechs will not be providing an app that tells you how much coffee you’ve drunk, but embedding financial services into these mass-market consumer platforms,” McLaughlin says.

One such example of an area where UK fintech could respond to the needs of the financial markets is in digital identity, particularly how it pertains to the payments space.

According to David Birch of Consult Hyperion, payments equals identity plus accounting entries. While the latter is straightforward, it is identity that invariably proves the difficult bit.

The areas of the payments journey that are broken often come down to knowing beyond all doubt that the person performing a transaction is who they claim to be.

“I think another opportunity for the UK is maybe to focus on our foundational capability or infrastructure for the emerging digital economy, particularly in identity,” McLaughlin says.

“I’d like to see more fintechs take on those big foundational issues.”

Rather than simply offering white-label solutions (though there will remain a great deal of scope for these), fintechs should look to “herd the cats of the banking industry”, as McLaughlin puts it.

They should be looking to build industry-wide solutions in such areas as digital identity, as there is a great case for banks clubbing together to deliver interoperable digital identity, as already exists in Sweden.

“That’s one of the relatively unexplored avenues in the industry,” McLaughlin says.

Originally published by
Finextra | September 9, 2020

E-mail me when people leave their comments –

You need to be a member of JAAGNet to add comments!

Join JAAGNet

JAAGNet UKI Business - Feeds

JAAGNet UKI Personal - Feed

JAAGNet UKI Blog Archive

See Original | Powered by elink

JAAGNet UKI Video Playlist

Love Business EXPO 2021

  • Description:

    Love Business EXPO 2021
    https://www.lovebusinessexpo.co.uk/

    A business to business networking exhibition with a difference. It brings business and personal development opportunities together. If you are a business owner, manager or thinking of starting a business - and you need answers, inspiration or just to see what’s happening in your area - Love Business EXPO 2021 is for…

  • Created by: Kathy Jones
  • Tags: love business, loughborough, uk, networking, expo