Consumer Duty and fintech innovation
Season 3, episode 4
Listen to the full episode here.
In July 2022, the FCA published its Consumer Duty. Regulated firms need to implement the new rules by the end of July 2023 for open products and July 2024 for closed books of business.
Firms will need to review their products, communications and customer journey.
It will impact most areas in those organisations such as governance, reporting, product design, pricing, distribution, servicing and staff training.
In this podcast we will review the key principles, ask ourselves what the impact on both established firms and fintechs is as well as exploring innovative technologies that can help adhere to those new rules.
Guests:
Venetia Jackson – Senior Associate at Pinsent Masons
Joseph Twigg – Founder and CEO at Aveni
Chris Ansara – Founder and CEO at docStribute
Pathways: A New Approach for Women in Entrepreneurship
Last week, the Scottish Government published Pathways: A New Approach for Women in Entrepreneurship. This landmark report was overseen by tech entrepreneur Ana Stewart and the Scottish government’s chief entrepreneurial adviser Mark Logan, and was commissioned to help identify ways to unlock untapped potential, close the gender gap and boost Scotland’s economy.
We met with John Cushing, CEO and founder of mnAi, who provided detailed data analysis for the report.
The report “seeks to change how we think about the under-participation of women in entrepreneurship, to more rapidly and effectively move our society away from its current extreme gender imbalance in this field of endeavour.”
Startups founded by women in Scotland currently receive only 2% of overall investment capital, representing, the report states, a “denial of opportunity on an industrial scale”.
Just how significant is the report, and its findings?
“It’s the most comprehensive report of female entrepreneurism ever undertaken in Scotland,” says John Cushing.
mnAi use proprietary data and technology to supply unique research, analytics and insight on all UK companies.
“The Stewart Report lays bare the fact that fundamentally things just aren’t moving on as fast as they should be,” says Cushing.
“This is in spite of some amazing achievements by female entrepreneurs in and across Scotland – much more needs to be done to support their ambitions, particularly growth stage companies and those seeking investment. The report not only lays bare the problem, but also identifies the solution. That’s the critical part of all of this, that the Pathways Report actually does exactly what it says ”“ it lays a pathway to success.”
“With 12bn+ data points, our core product is a data asset encompassing 9m+ UK companies and 37m+ people that is updated and refreshed in real-time,” Cushing says. “Our unique insight on hard-to-find data points including emissions, diversity, gender, productivity, investment, debt, grants, financials and more, helps improve decision making, increases efficiency and removes complexity. Having learned about our gender disaggregated algorithms and the work we did with the 2022 Rose Review and The Gender Index, Ana and her team extended an invite to also support her ground-breaking research.”
The report makes 31 recommendations such as tailored funding packages, attention to diversity in education, and quotas to ensure women get proper recognition and a fair share of investment.
First Minister Nicola Sturgeon described the list of recommendations as “compelling”, adding: “The review’s findings are challenging but underline the need to tackle the root-causes, as well as the immediate barriers, of this inequality ”¦ The Scottish Government will respond quickly to the review as a whole, and its recommendations.”
Despite the progress made in some areas there is work to be done.
“I’m very confident that things will change… however this is a collective issue,” says Cushing.
“From secondary education to investment capital, I think we all have a responsibility to support those in need or who need help. Being a business owner is not easy, and yet many people choose to do it day in, day out so why should my gender make a difference to my ability to grow my company? It shouldn’t. This report presents the facts and now it’s up to all of us to make a difference.”
For more information about mnAi’s data platform, and to book a free interactive demo, click here
New national hub to turbocharge FinTech growth
The government just launched the national centre for FinTech called the Centre for Finance, Innovation and Technology (CFIT), designed to propel the sector’s growth globally.
CFIT is backed by £5.5million of funding from the Treasury and the City of London Corporation and will enhance growth and innovation by promoting businesses and generating job opportunities across the sector.
The hub was unveiled at an event in Leeds yesterday and also intends to publicise the advantages of new and inventive technology that will expand consumer options, decrease costs, and improve efficiencies.
The CFIT is the first of its kind and will facilitate businesses in achieving a truly global presence, supporting approximately 2,500 organisations and tens of thousands of jobs in the UK.
Commenting on the launch, Nicola Anderson, CEO at Fintech Scotland said:
“The CFIT launch is a key milestone in achieving the UK’s fintech ambitions, embracing innovation across all cities and regions. The Centre’s coalition approach very much aligns with the execution of FinTech Scotland’s cluster strategy in advancing fintech growth.
“We are excited to be working with CFIT in leveraging the opportunities in Scotland and the whole of the UK, which will provide further momentum in delivering our ten-year FinTech Research and Innovation Roadmap enabling us all to harness the fintech opportunity across the UK.”
Howard Wimpory, KYC Transformation Director at Encompass Corporation, comments:
“It is encouraging to see the government provide this support to the FinTech industry and, widely, digital transformation, which creates opportunities for growth while also assisting economic recovery. The UK technology sector overall has huge potential, with innovation at a high, and support of this kind can help organisations to harness the solutions within it to their advantage.
“Widespread effort to help organisations truly unlock the potential of digital transformation is how strong, long-term value will be created throughout industries, and particularly financial services. These organisations must now recognise the importance of utilising the new and emerging solutions at their disposal, which not only add business value, but also help to protect the nation against the ever-evolving threat of financial crime.
“Realising these goals requires businesses to embark on or accelerate their digital transformation journeys, embracing state-of-the-art cloud powered technology to overhaul manual processes and instead trust in automation, which brings long-lasting operational benefits to power success.”
Charlotte Crosswell OBE, Chair of CFIT, said the launch
“represents a significant moment for the UK’s FinTech sector and our economy more widely. This organisation will enable us to come together as a sector to start breaking down barriers that the FinTech sector is facing while creating a clear path for our homegrown FinTech companies to achieve global scale, impact and success.”
Fintech Scholarship to boost UK industry
A new survey from Quotezone.co.uk has revealed that despite the UK being a global leader in fintech, a whopping 77% of students have never considered a job in the fintech industry.
Ahead of the opening of applications for the scholarship programme, the company has surveyed students from across the UK about their university experience and perception of the fintech sector.
The survey of 500 students carried out by Quotezone.co.uk found that 77% of UK students have never considered a career in the fintech sector, despite it contributing £11 billion to the UK economy and employing over 76,000 people at 1,600 firms throughout the UK, a number that is projected to double by 2030.* 36% of those surveyed said that this was due to a lack of education and awareness about the fintech sector and what it entails.
A further 26% of students surveyed said that they had not considered a job in fintech due to a lack of relevant experience and 25% of students surveyed said that gaining relevant experience was one of the biggest pressures they faced in higher education.
The UK could risk losing its status as a global fintech hub if it does not address the challenges around its talent shortage.
The Quotezone fintech scholarship aims to help increase awareness about the sector in the UK by asking students to explore what fintech could potentially offer them as a career and enter a short blog or vlog post on what the next generation see as the future of the industry.
The successful candidate will receive a £1,000 bursary which can be used to cover part of the cost of their studies, course materials or any other living expenses as well as the option to take part in industry-related work experience at Quotezone.co.uk.
Commenting on the scholarship, Greg Wilson, Founder and CEO of Quotezone.co.uk, said:
“The UK is a global leader in fintech, which contributes billions to our economy and has the potential to create thousands more jobs in the coming years. Despite this, there is a large talent shortage and a lack of awareness around the sector, as reflected in our survey results .
“The Fintech sector in the UK offers great prospects for graduates from all industry backgrounds, not only do we want to demonstrate the potential in this but we also want to provide the winning student with real, hands on career experience to help discover what it would be like to work in such a flourishing sector.
“We need bright young talent from across the curriculum in England, Scotland and Wales to fill these roles and create teams with diverse skillsets – creating pivotal change and driving innovation within the sector. I would strongly encourage students from right across Great Britain to explore fintech and apply for this opportunity.”
Last year’s winners were Kelsey Hunt, a second year student at St Andrews University, who wrote ”“ FinTech and Small Business: a Dynamic Duo ”“ highlighting the important role of fintech in the small business sector and Ella Henry, a MPhil student studying Biological Sciences at the University of Cambridge, who wrote a piece entitled ”“ Fintech in a finite world: The price of protecting our planet focusing on climate change and the role fintech can play in helping create a sustainable future.
The deadline to enter the Quotezone.co.uk Fintech Scholarship is 30 March 2023, full details of how to apply are available here. There will be one winner from Great Britain and one winner from Northern Ireland, run via Quotezone’s sister company, CompareNI.com.
Inbest and MaPS launch New benefits calculator
In collaboration with Scottish fintech firm Inbest, the Money and Pensions Service (MaPS) has introduced a benefits calculator.
The tool, which is free of charge, will be integrated into the MoneyHelper website of MaPS to assist individuals in determining the benefits and social tariffs for which they may be eligible.
Entitledto.co.uk claims that there may be billions of pounds in unclaimed benefits across the United Kingdom. By entering their basic information, users will be able to conduct a quick search and receive results in less than a minute.
The calculator will then request that they complete a more detailed search to verify their eligibility for any potential claims. MaPS emphasizes the importance of identifying other sources of income and any available assistance to help individuals manage their money and pensions, given the rising cost of living.
This initiative was launched after MaPS launched a new campaign in the previous month to increase awareness of the free help and advice available.
Michael Royce, Senior Policy and Propositions Manager at the Money and Pensions Service, said:
“The most common reasons why so much goes unclaimed in benefits is that people are unaware of what they’re entitled to or assume that they aren’t eligible.
“We look forward to working closely with Inbest and hope that making their benefits calculator available through our MoneyHelper website helps millions of households who are currently missing out to maximise their income.”
Manu Peleteiro, founder and CEO at Inbest, said:
“We are thrilled to partner with MaPS and power their MoneyHelper benefits calculator. Working with MaPS colleagues is a fantastic learning experience, and their input is crucial to continuously improve our calculator and shape our product roadmap.
“We are looking forward to working with MaPS and contributing to the delivery of the UK’s Strategy for Financial Wellbeing by helping people access the benefits, grants and social tariffs they are eligible for.”
€9m Investment by Ingka into Scottish fintech DirectID
DirectID, one of the leading fintech in Scotland, that specialises in credit risk assessment, risk analytics and predictive modelling, has announced that it has received a minority investment of €9m from Ingka Investments, the investment division of Ingka Group.
DirectID’s main objective is to promote financial inclusion worldwide through its global credit risk score, by providing advanced data to optimise credit and risk decisions in an increasing number of countries. The company provides risk managers with a real-time dataset that can drive efficiency, improve decisions and lifetime value across the credit lifecycle. DirectID’s insights enable decision makers to assess risk better, regardless of age, location, and past credit performance.
James Varga, CEOand Founder of DirectID, said:
“We’re proud to join Ingka Investments’ portfolio of market-leading firms. We are excited to be shaping a new global standard in credit scoring that enhances people’s lives by enabling access to products they need in an affordable way. Our coverage, advanced insights and predictive models provide a unique opportunity to achieve this by creating the world’s first real-time, inclusive, credit score based on open finance data.”
The funding received will help expedite the launch of DirectID’s most advanced predictive models for credit and risk, built from open banking data. Additionally, the company plans to expand its credit risk offering into new markets and accelerate the development of models for each stage of the credit lifecycle, from originations through portfolio management to collections.
Peter van der Poel, Managing Director of Ingka Investments, said:
“We are pleased to have made this investment in DirectID and are confident of their continued growth in the open banking market. They have developed an innovative solution with the potential to complement and disrupt the traditional credit and risk market and help drive financial inclusion for more people. Open Banking-enabled credit and risk insights is an area we believe can add value to Ingka’s financial services proposition in the future.”
This investment is just the latest in a series of investments made by Ingka Investments, which aims to strengthen Ingka Group’s core retail business by investing in innovative companies in areas such as digitalisation, customer fulfilment, fintech and sustainability. These investments support the ongoing transformation of Ingka Group to become more affordable, accessible, and sustainable.
Fintech and payroll, disrupting how people get paid
Season 3, episode 3
Listen to the full episode here.
When thinking about payroll generally most people would assume that it is something that works well. You work, you get paid. However, payroll is being disrupted like never before.
According to software company Intuit, one in four workers say they have had paycheque errors. And cloud company Kronos found almost half of workers who have had two or more paycheque errors will look for a new job.
Society is changing fast (even more so after COVID). In this podcast we’ll explore how those changes are impacting the way people work, get paid, pay taxes and how new fintech solutions are developing to make this possible.
Guests:
Ian Hogg – Chairman of The Work Tech Group that owns fastPAYE
Hayley Strachan – Director – Global Employer Services at Deloitte
Richard Tooth – Tax & Legal consultant at Deloitte LLP
Eira Hammond – Executive Director Global Payroll at Hi55 Ventures
New government initiative to promote women in STEM
The UK Government is launching a new initiative to encourage women to consider careers in science, technology, engineering and mathematics (STEM).
Currently, only 29% of the STEM workforce is made up women. This new initiative will benefit from £150,000 of Government funding and will be used by Women Returners and STEM Returners to target women who have taken career breaks and promote core skills in an attempt to plug the STEM skills gap.
Joanna Kori, Head of People for fintech firm Encompass Corporation, commented:
“I am glad to see the Government promoting and providing tangible support to women looking to get into, or return to, STEM careers through investment and skills training. STEM careers are hugely rewarding, yet, as recent figures show, too few women are involved in the sector, and that needs to change. Women are poised to play a crucial role in resolving the skills gap, and it is vital that organisations provide the opportunities and training to empower women and encourage them to pursue a career in STEM. At Encompass, we work hard in this area, providing the balance of both autonomy and support to allow our talented female employees to thrive and be at the centre of the company’s growth.”
Nicola Pickering, VP of Customer Success & Delivery at Encompass Corporation, said:
“The opportunities and avenues available in STEM are vast and, with initiatives like this, will only increase. It is encouraging to see how far we have come in schools, in terms of expanding opportunities, and instilling in girls to have no limits in what they pursue. There is so much possibility to achieve in the tech industry and, with the evolution of flexible working, inclusion for women is greater than ever before, meaning they can fulfil exciting career ambitions while maintaining the positive work-life balance that many look for.”
Photo by Andrea Piacquadio: https://www.pexels.com/photo/happy-ethnic-woman-sitting-at-table-with-laptop-3769021/
Carbon Markets: How can fintech avoid green washing?
Season 3, episode 2
Listen to the full episode here.
The FinTech Scotland Research and Innovation Roadmap highlighted the growing focus on climate considerations for the financial services sector.
Whilst this is in part driven by consumers, demanding better transparency for the products they invest in, this is the launch of new regulations that is accelerating the move to a more sustainable financial sector.
Financial services providers are facing growing challenges around ESG reporting due to the difficulties around the availability of trustworthy data. This has led to mounting concerns around greenwashing.
In a bid to clamp down on greenwashing, the Financial Conduct Authority (FCA) is proposing a package of new measures including investment product sustainability labels and restrictions on how terms like ‘ESG’, ‘green’ or ‘sustainable’ can be used.
In this podcast we discuss how to best avoid greenwashing moving forward.
Guests:
Colin Carmichael – Sustainability Director at PwC
Jules Salmond – Founder at Ciendos
Matthew Brander – Senior Lecturer in Carbon Accounting at The University of Edinburgh Business School
Boost for Scottish fintech cluster as Morgan Stanley enters collaboration with FinTech Scotland
FinTech Scotland, the cluster management body, has announced a new strategic partnership with Morgan Stanley, further strengthening the growth of the financial technology innovation and excellence across Scotland and accelerating the fast-growing sector’s global connectivity.
Morgan Stanley joins FinTech Scotland’s existing strategic partners including financial services firms, academia, technology solution providers and public sector organisations, to further enhance the development of Scotland’s fintech cluster through the support of strategic initiatives and the harnessing cross-regional collaboration.
For Morgan Stanley, a significant technology participant in Scotland, partnering with FinTech Scotland opens up new engagement opportunities with cutting-edge technology providers, a key part of Morgan Stanley’s fintech innovation strategy.
The collaboration will also support the firm’s Multicultural Innovation Lab and accelerator programme, that promotes financial inclusion and provides access to capital and expertise for early-stage technology and technology-enabled start-ups led by entrepreneurs from diverse backgrounds.
This partnership demonstrates Morgan Stanley’s continued commitment to Glasgow and broadens its support of the Scottish technology ecosystem. The firm has a workforce in excess of 2,000 in Glasgow and recently announced further investment in local talent, providing career opportunities to over 200 young people as part of its largest graduate recruitment programme to date.
The investment bank will get involved in the collaborations that continue to progress the FinTech Research and Innovation Roadmap, driving innovation in Financial Regulation, Climate, Open Finance and Payment & Transactions.
Commenting on this new partnership, Khalid Rafiq, Glasgow Head of Technology at Morgan Stanley said:
“We are thrilled to deepen our ties with the Scottish fintech community and to help foster the growing start-up ecosystem. Playing an active role within the Fintech Scotland cluster not only ensures we are fully supporting our local community, it gives us the chance to share our expertise and deepens our commitment to foster technology talent and diversity so as to drive innovation and business value in the buoyant Scottish marketplace.”
Nicola Anderson, Chief Executive at FinTech Scotland said:
“We’re looking forward to working with Morgan Stanley, building even more global connectivity as we continue to build, grow, and advance the FinTech Scotland Cluster. Plans for the year ahead will see more fintech innovation in capital markets and further support to enable greater diversity in fintech innovation. Morgan Stanley’s strategic engagement will enable further fintech innovation and opportunities in Glasgow which continues to see fintech growth, building Scotland’s national reputation for fintech innovation.”