An Open Letter by Innovate Finance CEO Charlotte Crosswell
I have been amazed at the response of the financial services innovation community to the COVID-19 crisis. It is at times like these that we really see the value of its out-of-the-box thinking, agility and bravery to try something new.
Innovate Finance has been recognising and celebrating the incredible work of the ecosystem in the wake of Coronavirus. You can see some of these great examples of innovation on our dedicated web page.
It should be no great surprise that FinTech has been so quick to find solutions to the economic difficulties. After all, the sector was born in the wake of the last global economic crisis in 2008 and the long, deep recession that followed.
Since then, we have seen a huge number of changes in financial services. The UK is now recognised as a global leader in FinTech, but that has not happened overnight, and it is vital that we do not lose a decade’s worth of innovation.
Thanks to FinTech providers, there is so much more choice for consumers in how they conduct their day-to-day banking, manage their savings, borrow at affordable rates and for those wanting to improve their financial wellbeing.
The range of new FinTech lenders created in the last decade has started to expand the SME lending market, undoubtedly for the good of British business. These providers are centre stage right now. We have been working hard over the past three weeks to ensure that the non-bank lender sector, which provides over half a million small firms with financing, is able to play its part in the government’s solutions to distribute funding as quickly as possible. They have a vital role to play and in many cases, have been the first point of contact for SMEs needing financing.
I have been particularly impressed at how many of our FinTech companies have responded to the crisis and accelerated product solutions that will help those most affected by the crisis. They are leveraging open banking and verification of income or ID, or advancing much needed salaries to those in need who can’t wait until payday, or who need to refinance their loan to make ends meet.
FinTechs will continue to play a critical role as we emerge from this crisis, as consumers and businesses alike will be searching for financing and affordable credit that their own bank may not be able or willing to offer.
Although FinTech adoption has begun, it is not yet widespread. The Covid-19 crisis is a pivotal moment. We risk undoing so much of the sector’s brilliant work of the last decade if the vibrant ecosystem of startups, scaleups and high growth are lost in the economic downturn. We must protect this innovation, so it is ready and able to respond to our economic recovery.
The last few weeks have reminded us just how critical the digital economy is to our lives and work. The crucial importance of using new technology to support and improve business has become crystal clear. There is little doubt that we will see the speed of digital transformation across the economy accelerate in the months that follow. I fully expect the revolution of FinTech to extend from banking innovation and take root across sectors such as insurance, wealth management and asset management.
Every person and business across the UK and the world, has recognised the need for a digital awareness and presence. There is no going back. FinTech must be at the cornerstone of this renewed digital drive.
It is now time to make this happen. To do so, we must collaborate. FinTech companies, banks, Big Tech, financial institutions, investors, government, regulators and other stakeholders must all come together to speed up FinTech adoption. We have to work together to keep financial innovation moving forward.
Over the last ten years, countless entrepreneurs have worked tirelessly to make financial services more efficient, more transparent, more open, and more inclusive.
Let’s leverage the time, energy and capital that’s already been invested in them.
Let’s unleash the power of FinTech. Let’s #PutFinTechToWork