Whitworth Hall with its ornate wooden carvings, sweeping staircases and - there's no other way of putting this - its massive organ, provided a traditional setting which contrasted markedly with the subject matter of the Fintech North Conference. An intensive day of presentations and discussions panels was hosted by Manchester University and compered by Fintech North's Chairman Chris Sier, who is also HM Treasury's FinTech Envoy, holds visiting Professorships at several Universities and has launched Fintech businesses of his own.
The sector was put into international context by Charlotte Cromwell of trade body Innovate Finance who highlighted that the UK is the third largest investor in Fintech globally, admittedly a long way behind the two biggest powerhouses of China and the US, but way above the rest of the world including other European nations with $3.3 Billion invested in 2018 by VCs, which is rising by 10% year on year. She pointed out that VC investments are, however, very London centric with 84% compared to just 16% in the rest of the UK. Further regional perspective was provided by Henry Murison of the Northern Powerhouse who stressed the depth and strength of Fintech across the North within cities such as Leeds, Manchester, Newcastle and Durham which are home to many 'building block' businesses. He passionately bemoaned the poor connectivity between these cities which is the perennial failing that continually undermines the Northern Powerhouse concept. He was followed by Stephen Ingledew CEO of Fintech Scotland, an excellent speaker, who stressed the importance of collaboration between the North and Scotland to counter London's dominance. He illustrated Scotland's strong traditional and rising contemporary presence in the financial services sector. He placed a heavy emphasis on inclusion as the sector should focus on human need where people are not served best and that issues of community engagement and affordability are key.
Charlotte, Henry and Stephen were joined by Tim Newns, CEO of MIDAS [Manchester's inward investment initiative] and Julian Wells, Director of Whitecap Consulting and FinTech North for the first panel which debated the proposition 'More Than the Sum of Our Parts: Growing and Connecting the UK FinTech Economy'. They considered the 'for's and against's' of investment routes from VCs and angel investors to Government backed funds such as the Northern Powerhouse's investment fund and grants, as well as issues of regulatory and compliance specifically how the FCA can be a barrier to entry.
The first company presentation was from Nigel Dean, Marketing Director of Mypinpad, who have developed new technology to provide secure payment solutions from unsecured devices, such as smartphones and tablets by developing multi-factor authentication which replaces legacy systems. Whilst the technology is 'new', Nigel explained that they've actually been in development for 6 years and have just been through a third round of funding with a £15 Million investment as they look to come to market. He outlined their journey through PCI compliance and how regulatory was their biggest hurdle, and then how hard gaining adoption is with the example of contactless payment which only overtook chip and pin in 2018 despite being available for 11 years. He stressed that the key questions to address before starting any such the venture are: 'does it remove pain?' and 'does it add value?' Nigel was followed by Richard Carter Managing Director of Equiniti Credit Services who talked about the future of lending, how digital is changing loans and mortgages and the different view millennial's take on their own data which they're typically more willing to swap in exchange for better deals.
The second panel, hosted by Anita Kimber of EY, considered 'the future of SME banking' and was comprised of Neil Rudge, Managing Director of Shawbrook Bank, Chris Wilford Head of Financial Services Policy at the CBI, Stuart Law CEO from Assetz Capital, Ewan Hutton the Chief Technology Officer of Bank North and Peter Neufeld a Partner EY who had unfortunately lost his voice but could speak with a whispering technique which added a slightly bizarre aspect. His expertise was of specific interest as he focuses on user centred design and that Fintech often leaves people behind, he highlighted that the technology need to meet the unique needs of different business types, along with regional and demographic variations. They discussed how the banking crash and the advent of open banking has changed the industry with a plethora of new entrants many providing highly specialised lending services, and the rise of peer to peer lending.
Professor Gerard Hodgkinson of University of Manchester led the third panel which included Dr Hayley James and Ismail Erturk also from the University as well as James Higgins from AccessPay. The panel was ostensibly about 'skills, innovation and collaboration' but seemed to be more about punting the University's commercial services stressing the value of links between academia and industry. This is undoubtedly true, but the challenge lies in engagement and the perception of academia's 'ivory towers' was reinforced by Gerard's answer to a question from the floor on how does business work with the University to which the answer was 'if you Google Manchester University...' So whilst he advocated all the areas the University could and does help businesses with, and James Higgins from AccessPay elaborated on the graduates they'd recruited and that they were about to start a KTP program, it reminded me of my own experiences which include a KTP and how hard it was to find information about and to apply. This can be summarised by a comment made at the induction meeting of our KTP, following a 6 month application process, in which the cohort of businesses were congratulated on being accepted because the application process was designed to be like joining the Marines and tried to make you drop out in order to test your resolve.
The best part of the day, at least for me, was a series of ten 'pitches' from a series of Fintechs who had just five minutes to outline their businesses and journeys. This started with Mojo Mortgages who have developed an online mortgage broker business with a B2C and a B2B2C version for partners. They've developed a suit of APIs that match mortgage applicants with the best deals from a range of lenders and have just secured a £7 Million investment from the Northern Powerhouse. Muhammed Asim gave an entertaining presentation by starting with the statement 'banking is necessary, banks aren't' which was quite interesting given that hes CEO of ARRO Bank, which provides a 'bank in a box' white label banking solution for all kinds of organisations including Councils and Housing Associations as well as high street brands. Next, property investment app 'Sourced' presented a business which was less Fintech and more a bricks and mortar business using technology to enable their services more efficiently. The business combined property development with investors through a platform which allows users to manage their properties and investments, although these are through a series of franchisees. Sourced was followed by 'Bankish' who are an Estonian business providing cloud based admin software to banks with the USPs of low cost of entry and high functionality through a series of extendable modules. Then 'Nivo', which was a spin out from Barclays Bank, explained how they'd developed a platform using instant messaging to reduce the friction of the application process for financial products, so users can manage the process through their devices securely for example sending photos to verify identity and electronic signing procedures. Their journey was interesting as Barclays ultimately ditched them leading to administration but the management team bought the IP, revised the technology and raised £10 Million to relaunch the business which is focused on partnerships with banks and credit unions. 'Uinsure' is and online home insurance broker who have developed a solution which aims to deliver a 'zero friction' user experience by capturing data from trusted data sources, such as Land Registry to auto populate fields such as house types, age, number of bedrooms etc, to reduce the usual 52 questions the comparison sites pose down to just 1. Next came 'Raisin' described as a 'Pan-European liquidity market place' which provides users with a single platform to access and compare many savings products and banks to deposit funds. They've recently raised £170 Million funding for the Group. Finally Mutual Vision provide banking systems to its customers, challenger banks and building societies, who are also their owners within a totally transparent approach which operates on a crowdfunding basis from its customer base. Essentially it's an IT department for a collective of smaller banks who are happy to share technology between each other.
The final panel discussed 'The Future of Open Banking and PSD2' with Lee McNabb from RBS, Luke Stubbs from DLA Piper, Armin Eiber from BJSS, Will Burton from Ecospend, Adam Cox of the Open Banking Expo and Wendy Tapia the Banking Product Manager from Sage. This was gratefully accompanied by a glass of Prosecco as, by the end of a long day, everyone's flagging a bit. This also created a slightly jovial feel as the panelists discussed the relatively slow pace of the spread of open banking thus far, but agreed that this was increasing, driven by the development of more and more APIs to enable systems to talk to each other to share data and customer demand for convenience.
It's the customer experience that was the biggest take away of the day for me - the user has to be 'front and centre' at all times with the aim of a 'frictionless' experience enabled by open, but obviously secure and compliant, technologies. The simplest, quickest and easiest to use products are the ones that will win.