CEO Update – July 2022
I hope this finds you all well.
We have had a busy past few weeks at Innovate Finance, and it has been wonderful to see so many of you at our many recent in-person events. In case you missed it, earlier this week we also announced our Innovate Finance 2022 Summer Investment Report. It is inspiring and fantastic to see UK FinTechs continue to secure outstanding levels of investment, despite a global slowdown - we remain far and ahead the most favoured destination for FinTech investment in Europe, and second in the world behind the US. This is a true testament to the strength of our UK financial innovation ecosystem, including our incredible entrepreneurs and founders, strong and diverse talent pool, and supportive government and regulatory framework. It is now critical that we continue to work together - industry, government and regulators - to push this momentum forward.
Welcome to New Members
I am delighted to welcome the following new members to the Innovate Finance community:
Despite some UK political volatility, we have seen continued progress with significant policy wins including some in recent days:
- A pro-innovation post-Brexit regulatory system: Government proposals this week for a Financial Services and Markets Bill will introduce two important measures we have been advocating: a competitiveness objective for regulators and enabling powers for regulators to bring crypto-assets and stablecoins into their remit.
- The Data Protection and Digital Information Bill this week includes powers to establish digital ID and to extend the principles of open banking to other areas of finance and industries. We have been calling for both of these, and they featured in the Kalifa Review. Before resigning, tech minister Chris Philp discussed these and other policies with our FinTech Strategy Group in June.
- Buy Now Pay Later (BNPL) regulation: Treasury’s latest proposals reflect our calls for proportionate regulation and acted on our recommendation that all interest free credit should be covered (with no exemptions or loopholes) - a success for our Innovation in Unsecured Credit policy group. Whilst frustrated by the time it will now take to bring in the regulations (unlikely before 2024), we continue to engage stakeholders and this month we hosted a member roundtable with Labour shadow City minister, Tulip Siddiq MP.
- 1974 Consumer Credit Act: We have been calling for reform of this Act, which no longer reflects customer journeys and fails to deliver the best outcomes for consumers. In June, the government announced plans to reform the Act.
The regulatory reforms above all featured in our recent manifesto for a post-Brexit regulatory regime for innovation. We will be seeking further views on all these areas and continue to convene our members with regulators and policy makers to shape these proposals.
In terms of policy consultations, we worked with members of our Net Zero, RegTech and 36H groups to respond to the following consultations in June: FCA’s call for input on synthetic data; Government call for evidence on its Green Finance Strategy, where we made the case that FinTech is at the heart of green finance, with member case studies; and the Commons Treasury Select Committee inquiry into the Venture Capital market urging Government to announce as early as possible the continuation (and ideally extension) of EIS and VCT tax incentives.
We have been active in engaging Treasury Ministers to address the fundamental flaws in Treasury and FCA proposals for financial promotion rules for crypto-asset firms, working with MPs in the All-Party Parliamentary Groups on Financial Technology and on Crypto and Digital Assets, and with other industry bodies. With our blockchain and crypto member group we have identified solutions and we will be working with them to respond to a new Treasury Select Committee inquiry on crypto.
We have had a full programme of regulatory engagement including the FCA’s Crypto policy hackathon, the FCA’s recent open day, PSR work on Authorised Push Payment scams, input to the new Joint Regulatory Oversight Committee on Open Banking, and a bilateral meeting with senior leaders from the New York State Department of Financial Services (DFS). Recent discussions with the leadership team at the FCA and FOS have particularly focused on the cost of living, where we are working with our SME lending group and with a wider group of consumer focused members to develop data, support and identify good practice and advance policy improvements.
Over the last four and half years we have had the pleasure of working with John Glen MP as Economic Secretary, who has been a tremendous champion of FinTech. We have already had great engagement from his successor, Richard Fuller MP, who welcomed our Investment Report this week and I am looking forward to meeting him next week.
We hosted a variety of in-person and online events during June and July including numerous roundtables, workshops and webinars. Thanks especially to all our members for joining our Summer Reception on the 12th of July and thanks to Evelyn Partners for hosting us.
We take a pause during August from in-person programmes, but our calendar of events kicks off in full swing from 1 September and can be viewed here. We are particularly looking forward to our Partnerships Day on 4 October, a deep dive into innovation in the asset management industry in September, a spotlight on Metaverse later in the autumn, the continuation of our High Growth FinTech CEO Dinner Series, and the relaunch of Institutional Emerging Trends Roundtables.
We are also excited to launch our first FinTech Careers Fair later in the year with the participation of FinTechs, universities, recruiters, HR experts and policy makers to tackle the important challenge of attracting and retaining talent into our exciting sector - watch this space for additional updates and further information on how you can get engaged.
In addition, we have launched a new series of programmes aimed at providing support for our early stage startup members, which kicked off earlier this month with a PR Workshop and will continue in the autumn with a session on Digital Branding and Advertising with Google, and a separate session on how to pitch to investors.
I would also like to personally invite you to our second FinTech as a Force for Good Forum taking place on 11 October. FinTech founders, financial services institutions, policy-makers and regulators, NPOs and NGOs, professional services firms, investors and international hubs will convene in-person to discuss how FinTech and financial innovation can help solve key environmental, societal and governance challenges, and foster greater financial wellness and inclusion. It will be an opportunity for our ecosystem to come together and develop an action plan to showcase how the sector can help create and support a fairer, greener, and more sustainable world for all - now more important than ever before.
The work of our International FinTech Group, launched earlier this year in collaboration with DIT, is steadily progressing. As a direct response to the Kalifa Review, this Group intends to strengthen the UK’s position as a global leader in FinTech, through working with stakeholders across the ecosystem to cement a cohesive UK FinTech global brand, develop a database of UK FinTech success stories, and ensure FinTechs have the support they need to scale.
In addition, after nearly 5 years, we have relaunched our Innovate Finance US Programme. The programme kicked off in June with a visit to New York where our team engaged with members, partners, regulators and government. The aim of this Programme is to support and connect our members who currently have offices in the US or who are looking to scale there, and to encourage more US-based FinTechs to scale into the UK. We plan to be in the US on the East or West coasts around four times per year and would love to have you join us.
Diversity in FinTech
This quarter marked the publication of an important report developed in collaboration with our strategic partner EY: ‘Changing the face of UK FinTech: focusing on gender diversity and equality’. The report reveals signs of positive change for women in UK FinTech with over three-quarters of women (76%) believing that their FinTech organisation is inclusive and diverse. However, significant barriers still exist which need to be urgently addressed to bring equality at all levels. We are looking forward to continuing our broader diversity programme with a series of Diversity Power Hours and a special Investor/Startup speed dating session exclusively for underrepresented founders in the autumn. A huge thank you as well to our partner Hogan Lovells who hosted our standout 45 Women in FinTech PowerList reception in June. Also, in case you missed it, please find the incredibly inspiring podcast recently recorded by our Chair Louise Smith and NED Iain Anderson here.
Media and Marketing
We were pleased to collaborate with Mediaplanet for an opinion piece in The Guardian’s 2022 FinTech campaign discussing FinTech's positive impact on society. Additionally I was happy to share my thoughts on challenges and opportunities in the ecosystem with Raconteur for the Sunday Times Future of FinTech.
We also celebrated the release of Innovate Finance’s 100th podcast, which concludes our Series 2. You can listen to the playlist here. Launched in June 2020, ‘Coffee with Innovate Finance’ is our podcast series showcasing stories with industry leaders on the changing face of financial services, innovation and the future of FinTech. As we are embarking on the production of Series 3 please apply here if you would like to be featured. Last but not least, a couple of weeks ago we were excited to announce the launch of the second series of Innovation in Finance with BBC StoryWorks. To get involved please send your application to siena.Morrell@bbc.com by the 29th of July.
Finally, the Innovate Finance team and I always want to ensure we are serving and supporting our members in the best way possible. If you haven't yet, please do share your thoughts and feedback in our Innovate Finance Annual Member Survey.
As ever, thank you once again for your outstanding support. Wishing you all wonderful summer holidays!
CEO, Innovate Finance