Unleashing Fintech as a Driving Force for Economic Recovery
An independent review of the fintech commissioned by HM Treasury has highlighted the important role fintech can play in driving economic recovery by creating jobs, developing global trade and enabling financial inclusion.
FinTech Scotland along with fintech bodies across the UK contributed to the Fintech Strategic Review (FSR) recommendations which sets out a five-point plan to leverage innovation through a positive regulatory environment, developing diverse skills, facilitating investment to scale enterprises and accelerating a targeted approach to inward investment.
The detailed data-driven analysis of fintech innovation across the UK gave recognition to the momentum of the FinTech Scotland cluster, which included growing expertise in open finance, payments, regulatory innovation (RegTech) and “Fintech for Good”.
The Fintech Scotland cluster model was noted as a driving force since formation in 2018, progress over three years which has included,
- Entrepreneurial Growth, increasing number of fintech SME firms from 26 to 155 today
- Innovation Excellence ”“ collaboration to establish Global Open Finance Centre of Excellence in 2020
- Strategic Engagement ”“ 27 strategic partners from private, public, academic sectors
- Practical Collaboration ”“ developing mutual opportunities with UK colleagues in the Fintech National Network
- Global Recognition ”“ European cluster centre of excellence accreditation in 2020
Stephen Ingledew, Executive Chair of Fintech Scotland and a member of the FSR working group commented,
“Fintech has the potential to revolutionise how we live whether it’s paying for our shopping or managing our money or setting up a business”
“Crucially, it can play a pivotal role in stopping the exacerbation of economic and social inequalities. Fintech innovation is fast growing right across the UK and offers great potential for Scotland through investment, innovation and jobs.”
“We have been fully involved in the Review to share our learnings from the last three years, in which we’ve managed to build an inclusive and vibrant cluster, a model which The Review recognises can help foster innovation and collaboration in boosting recovery of the UK economy”
“ We believe the Review recommendations will support further progress in developing a growing fintech ecosystem and build on successes of home grown and international fintech firms already rooted in Scotland”
Linda Hanna, interim Chief Executive of Scottish Enterprise said:
“This independent review supports Scotland’s growing worldwide reputation as a leading fintech location. Scottish Enterprise has been proud to partner with FinTech Scotland in developing a vibrant environment that continues to attract international fintech firms from around the world, providing economic opportunities for our communities and high-quality jobs for our skilled workforce.”
James Varga, founder of Direct ID and Loral Quinn, founder of Sustainably also contributed to the FSR and welcomed the recommendations on behalf of the fintech community.
James Varga said,
“We have known for some time that Fintech has been one of the fastest growing parts of the economy driving innovation across the country and the findings of this report illustrate why the future of fintech is very bright indeed and, with the right drivers, can continue as one of the UK’s biggest success stories.”
Loral Quinn said,
“The FSR is a boost for fintech entrepreneurs across the country and the package of recommendations will enable innovative small and medium enterprises to accelerate growth nationally and globally”
Deloitte co-led the FSR National Connectivity Chapter with Tech Nation, undertaking a comprehensive data- driven analysis of the sector across the UK. Kent Mackenzie, Head of Fintech in Scotland, said
“the detail and data contained in this review will underpin and support what we’ve understood for a long time ”“ that fintech across the UK is alive and kicking, and primed for next stage of scaling’”.
The full report is available here
An update from Nicola Anderson on 2021
Happy new year and welcome 2021. With the continued lockdown and restrictions 2021 continues to throw a variety of challenges at us all, from all of us at FinTech Scotland we hope you’re all safe and well in what continues to be difficult times.
Diversity and Inclusion in Tech: It’s Time to Focus on More than the Optics
We’ve just completed some (admittedly superficial) digging into a few of the top tech companies’ adverts. They’re pretty diverse. Over the last couple of years, Apple’s feature 64% BAME actors, by rough calculations. Amazon’s have 78%. And Lenovo’s had a 50/50 split between the sexes.
By contrast, of Apple’s 11 board members, all are white and one is a woman. Last year, Amazon appointed the first person of colour to its 10-strong board. And Lenovo, well one of their board of 10 is female…
While big tech spends big money producing high-budget adverts with diverse optics, behind the scenes things are very different. A recent Girls Who Code report pointed out 50% of women leave tech by the age of 35. And the proportion of women working in tech is now smaller, at 32%, than it was in 1984, at 35%.
Tech companies are some of the most competitive and forward-thinking businesses out there. And various studies have shown that companies with above-average diversity perform better than their competitors. What’s the use in being so cutting edge if tech can’t capitalise on these gains?
So rather than focus on how diversity in tech looks to the public, how can we make diversity in tech a real tangible thing that can help businesses grow and thrive?
Get Better at Attracting Diversity
There are probably a hundred companies paying a similar salary to you. It’s your Value Proposition that sets your business apart from the crowd, particularly in tech.
With many tech positions in high demand, companies compete through their added benefits: good work culture, progression or mobility opportunities, the ability to learn new skills, and work/life balance.
But for many, it’s how inclusive and diverse their workplace is. Not something that can be bluffed with a couple of pictures of BAME people on an advert and some nice words. Companies need to BE inclusive to attract inclusive and diverse candidates. As employees talk (and write things online), you need to put measures in place like:
- a clearly-laid out inclusion plan,
- a spirit of inclusivity from senior management to the most junior employee,
- Inclusivity committees/groups
Get Better at Hiring Diversely
Unconscious bias naturally creeps into the recruitment process. A Yale University study found scientists of both sexes, “trained to be objective, were more likely to hire men, and consider them more competent than women, and pay them $4,000 more per year than women.”
A recent piece we wrote on Talent Maturity discussed the importance of a well-developed team. And if that’s beyond a company’s reach, how valuable an external recruiter who can help them reach a mature level can be.
And combating unconscious bias is one of the things an outside recruiter can help with, using various measures:
Clearly Laid Out Requirements
We call this Scoping at Solutions Driven. Sitting down with the hiring manager, figuring out their requirements and what success looks like. Employees are less likely to be hired on “gut feel” (another form of unconscious bias) and the brief is followed by both sides throughout.
It provides the basis of the candidate scorecard where we set down what’s important and rank each section. Perhaps a degree is desirable but experience is more important? That’s taken into account.
Blind Shortlisting
It’s difficult to hire blindly when you’re hiring for yourself. Recruitment companies regularly present candidates blindly, allowing businesses to judge them on their skills and experience, rather than their name or where they’re from.
Companies then get the best talent presented to them to final interview, without any outside factors influencing the decision.
Psychometric Testing
One of psychometric testing’s main aims is eliminating unconscious bias. Teams can focus on a candidates’ personality, attributes, and skills, rather than looking for similarities to themselves.
It can also be used on the existing workforce to determine what skills and attributes are needed on teams and help identify the right fit for each role. By saying “we need an analytical thinker” recruiters can add this into their requirements, and hone in on the “perfect match”.
Hiring the Right Candidates
All we’ve spoken about until now is getting the right people for your company. But what about if your company is right for the employee?
As part of our Recruitment Process Intelligence (RPI) at Solutions Driven, we employ the 6F methodology.
We look at fit, freedom, family, fulfilment, fortune, and family to determine whether an employee and a company will work well together and if reasonable adjustments can be made to get the perfect candidate onboard.
It’s an important part of the hiring process, because unhappy employees don’t stick around. And in tech, where the job market is competitive, you don’t want to waste time hiring someone who’s just going to leave.
To find out more about how your business could improve on its diversity and inclusion initiatives, and how to hire right, first time, get in touch with Nicki Paterson from Solutions Driven at npaterson@solutionsdriven.com.
Photo by Tim Mossholder from Pexels
Fintech Scotland, new norms, new fintechs
2020 ”“ Establishing New Norms
We’re starting to wind down and think about finishing up for a break over the festive period at FinTech Scotland and like so many of you and other organisations out there we’ve been reflecting on what a year!
2020 has felt like a year where we’ve lost what was normal. Like so many, we’ve been working from home since March ”“ our last day in the office was the 12th of March, forever etched in my memory! Since then, we’ve been getting used to a new norm’, new ways of working and phrases like you’re on mute’ have made it into our everyday working vocabulary.
Life moved online with technology and digital connectivity vital for new norms that were being established at work and school, for learning, shopping, social interaction and connection with family and friends!
We’ve been able to count our blessings in so many ways and continue to be privileged, inspired and energised by the FinTech Scotland Cluster.
Fintech driving New Norms’
The purpose and commitment to enable greater financial inclusion is a strength right across the fintech community in Scotland. The financial impact of COVID-19 on businesses and people has presented even more need to drive this agenda and Scotland’s fintech SME’s are providing a range of different products and services to help, enable and empower people.
Amiqus has progressed a collaborative initiative to ensure those facing homelessness and a loss of address can maintain access to vital services. @Proxy address, a new normal perhaps, is a solution that aims to overcome issues of financial exclusion because proof of identify to access products is closely tied to a permanent address. It’s an innovative approach that’s enabling new insights on old issues and focused on purposeful outcomes.
Empowering people by making personal finance more insightful and transparent, while using technology to see all your accounts in one place, is fast becoming a new norm and driven by fintech’s such as Money Dashboard. The team there were recently successful in the NESTA Rapid Recovery Challenge to help people financially hit by COVID-19. The award recognised both Money Dashboard’s innovation to help people manage money and its ability to quickly scale to support more people and a growing need.
New ways are also driving the team at Nude, who are working to enable aspiring first time buyers to build a deposit for their first home. The innovation aims to help people build that deposit quicker and is working to support new savings norms to empower people through data, behavioural insights and investments.
The team at Sonik Pocket have been innovating to help children with money. They’ve been focused on the potential new norm that generation Alpha will have less experience with physical cash and are building a product to help teach them about the value of money in a digital way. The inspiring team come from a teaching background and want to see children included and engaged with money and finances.
Float, working with SME’s, is integrating a range of activities to give businesses new tools to manage cashflow, accounts, and other business finance needs. Driving a new norm that helps business owners forecast accurate cashflow using real time information to get a visual view of ins and outs, pinch points and supporting confident business decisions.
There are many more fintech’s working and collaborating with industry partners, regulators, consumer organisations and universities to build the next phase of New Norms where technology in financial services supports inclusive outcomes for businesses and people.
New Fintech SME’s
The FinTech Scotland community of fintech SME’s has grown throughout 2020 and it’s a pleasure to welcome a host of new enterprises who are all aspiring to build and support other new norms and ways of working. Focused on cyber security Lupovis helps identify and divert cyber hackers away from crucial operating systems to keep businesses digitally safe, an increasingly vital need as we embrace new ways of digital working. Love Your Employees is focused on employee health and financial wellbeing, enabling employers to support colleagues through changing financial, emotional and other health needs.
In addition, an established norm continues to see international fintech’s join the FinTech Scotland community. Montoux, Access FinTech, UNest, all international fintech’s, have started to establish and build business in Scotland. All attracted to Scotland because of the strength of talent and data driven innovation expertise available here, and all working in different markets. Montoux, a New Zealand business is focused on the life and health insurance industry. AccessFintech from New York is using its innovation to help financial operating and risk models evolve, and UNest, a Californian business is focused on enabling people to save for university and education costs.
New Connections
The positive outcome of the new working from home norm has been the ability to broaden our reach and speak to more innovative fintech communities across the world. This opportunity to welcome global innovations and to learn from shared experiences continues to energise us. Mickael, our French Scot has been building new alliances with fintech hubs around the world. The FinTech Scotland festival reach worldwide audiences across the 70 virtual events held in September and we’re hoping to build on this experience for next year.
FinTech Scotland visited seven different countries virtually in 2020 and virtual events have brought about a new meaning to airmiles as we visited’ India, Australia, Hong Kong, Singapore, Europe and the US without leaving home. The ability to connect and learn from these experiences is wonderful as is the opportunity to profile Scotland’s fintech community at these international events.
New Year Ahead
Team FinTech Scotland are all hopeful for a healthier 2021 for all. We’re also looking forward to welcoming more fintech entrepreneurs into the FinTech Scotland community, through continued homegrown talent and through attracting international enterprises. We know Scotland will continue to inspire us through innovation, collaboration and inclusion, that there will be opportunities to continue to establish many more positive new norms and we’re ready to welcome all of that too.
Key insurable risks facing FinTech businesses
With the FinTech industry continuing to boom in the UK the insurance market has responded to the demand for focussed operational risk insurance solutions.
FinTech businesses have a unique combination of exposures that are not catered for by traditional insurance solutions, however the insurance market is innovating and creating bespoke solutions. The following are examples of key
operational risks facing businesses today:
Professional liability
Negligent advice, errors & omissions in the client services arena are common risks for any company providing financial services. This risk is potentially heightened for FinTechs who offer new products through new distribution models. FinTechs may also potentially assume additional liability where there is a reliance on third-party contractors.
Regulatory risk
New technology, new products and new distribution brings a wealth of opportunities, but also new regulatory exposures. FinTech companies will need to ensure they keep on top of the implementation of suitable and satisfactory risk management systems. As this market evolves, so will the regulatory environment.
Keeping pace with regulatory change and the need to consider differing regulations in multiple territories will be challenging.
Theft of funds
FinTechs may deal with a high frequency of funds movement. High volumes of payments, transactions and customer accounts can leave you vulnerable to theft. These thefts could be by an employee or external party.
Cyber events
Given the nature of your operations, FinTech companies are prime targets for cyber criminals. Network security, data breaches, ransomware or even a denial-of service attack – as well as damage and rectification costs following these incidents – should be a major concern for FinTech companies.
Technology failures
Innovative technology is essential for FinTech companies – it is how you have disrupted traditional financial services – but this heavy reliance on technology infrastructure means firms can be vulnerable. Technology failure can mean customers are unable to access services resulting in lost income or lost customers.
Directors & Officers liability
The personal assets of directors and non-executive directors can be at risk where they are held liable for legal costs and claim awards from third party claimants arising out of alleged or actual wrongful acts committed in their capacity as managers of the company. Whilst the business will normally indemnify the individual directors and officers, in some instances they may not be willing or able to indemnify (e.g. due to insolvency) and therefore having access to an insurance solution should be at the forefront your of considerations.
The insurance industry will continue to innovate and try to keep pace with the new risks that will emerge as the sector continues to grow in the UK and around the world.
For more information please contact garry.hill@pib-insurance.com or visit www.pib-insurance.com
Photo by Gladson Xavier from Pexels
Fighting inequality and increasing diversity in tech
CodeYourFuture (CYF) is a UK based non-profit organisation that trains refugees, asylum seekers and other disadvantaged people to become web developers and find work in the tech industry. At CYF Scotland, we are on the lookout for new partners and volunteers, as we approach the start of our fifth class in early 2021.
Our mission
Targeting motivated applicants who have limited access to education and are currently underrepresented in the tech sector, CodeYourFuture is not another coding school, it is a community with a mission to fight inequality. In fact, CYF strives to remove as many obstacles to learning as possible for its students: the course is free and students’ costs, such as travel, childcare and internet are covered. Moreover, our 8-month-long part-time course is designed to allow students to fit their studying around other commitments.
Our students
CYF students come from a variety of backgrounds, including:
- Refugees or Asylum seekers
- Single Parents with low income
- Those diagnosed with mental health, learning, or physical disabilities,
- Those who live in a household with a total income below the UK poverty line,
- Women, minorities, ex-offenders, or anyone else experiencing problems getting the education needed to find meaningful work- including being homeless or long-term unemployed.
Our course
At CYF, the tech curriculum starts from the basics and encompasses front-end and back-end technologies, in order to develop rounded full-stack junior web-developers. Alongside technical development, the CodeYourFuture program places an emphasis on the development of soft-skills and positive habit formation over the duration of the course. Moreover, students are matched with professional mentors who offer them career guidance and support during the course. Employment is one of CYF’s main success benchmarks. Upon graduation, we help our students with CV writing, interview skills, and match them to exciting job opportunities within our partner network and wider community.
Our impact
Despite our focus on remaining an inclusive and diverse volunteer-led community, we pride ourselves on the practical impact we have on people’s career development. So far, in Glasgow, we’ve graduated thirty-nine Full Stack Web Development Bootcamp students, 70% of whom have gone on to further related study or full-time tech employment. Our graduates have gone on to work with organisations such as BBC Scotland, STV and many other companies and startups in Scotland.
We are on course to graduate a further ten students in November, and are almost ready to interview applicants for our largest class yet of thirty students in our next Bootcamp starting in early 2021.
Join us!
To achieve our aims, we have worked with a number of corporate partners over the past few years. In Scotland, we have a special opportunity for partners to sponsor the development of students in our next Bootcamp. We ensure our partnerships are fruitful for everyone involved, with fantastic opportunities to energise your company’s working atmosphere and social impact through things like tailored volunteering opportunities, collaborative workshops and exclusive hiring avenues.
If you are interested in the chance to make an impact in your community and taking concrete action towards increasing diversity in the tech industry, we would love to speak with you.
For more information on how you or your organisation can get involved with CYF from a tech education, career mentoring, soft skills development or sponsorship perspective, contact scotland@codeyourfuture.io.
You can also find further information about CodeYourFuture on our website: https://codeyourfuture.io/.
Tech women: essential to economic growth
Scotland has a thriving technology sector but there’s still a huge amount of untapped potential that could further elevate its success and bolster our economy. Women, who remain significantly underrepresented within the sector, have a major part to play in making this happen.
The Scottish Technology Ecosystem Review by Mark Logan, published earlier this year, set out how Scotland’s technology sector can contribute to the post-pandemic recovery. The review identified three key areas which were essential in supporting and nurturing Scottish tech businesses, from the early start-up phase through to full scale maturity. These include education and talent, from school to all levels of further learning, infrastructure, and funding.
Logan’s initial point on education is where we need to start in addressing the current lack of women within the sector.
According to the UK organisation Women in Tech, females account for under 17% of technology roles at present with only one in ten women in IT leadership positions. With little progress being made on these figures over the last decade, it’s clear that we need to make a concentrated effort to encourage more girls to pursue STEM subjects which can provide a solid foundation for pursuing a career in technology. We must also support initiatives to keep women interested and active in technology as well as other STEM-related industries beyond their school years.
Here in Scotland there are a number of other bodies already seeking to do this including the Royal Society of Edinburgh (RSE), an internationally renowned science-focused organisation currently run by a female CEO which has significantly increased its number of female Fellows over recent years. The Scottish Government also set up a taskforce earlier this year to tackle gender stereotyping in schools which aims to drive bold and far-reaching’ actions including ensuring greater gender equality in key professions.
Organisations like ours are also seeking to affect positive change. Through our annual AccelerateHER Awards programme for female company founders, we have now introduced four STEM-focused categories, including FinTech, Data Science and Cyber Security, which is specifically aimed at female technology business founders.
Women leading these types of companies not only demonstrate the potential to thrive in these sectors, they also play an important role as inspirational mentors to younger girls who with a talent for technology.
Encouraging more established businesswomen to become investors is also important in presenting technology as a more attractive sector for female entrepreneurs. We’ve seen this phenomena in the US where females now account for more than 25% of its business angel investment community. This has created a ripple effect where a corresponding percentage of angel-backed companies are those led by a woman.
As the Logan Review has reported, technology in now essential to our economic future as it’s a sector that is most likely to create jobs and develop new, world class companies. Women in Tech has also estimated the UK economy would benefit from an extra £2.6 billion each year if we increased the number of women working in technology to fill the prevalent IT skills shortage.
As we have witnessed through our AccelerateHER Awards programme, female tech business founders are breaking through. Previous award winners including Rachel Jones of SnapDragon Monitoring, Elaine Galston of Tubular Sciences and Sheila Hogan of Biscuit Tin Planning are great examples of successful, Scottish-based technology business founders who are growing their companies and contributing to Scotland’s overall economic growth.
I would invite any female tech business founders, even those whose businesses are in the very early stages of growth, to put themselves forward and apply for next year’s awards ”“ the deadline for entries closes this Friday (11 December).
Meanwhile, educators, governments and business must continue to ensure they keep the focus on attracting more females into the tech sector. This will not only deliver greater equality in a field where there are still far too few women, it will also help pave the way for a strong economic recovery which will be essential as we emerge from the global pandemic.
Jackie Waring, CEO at Investing Women
More details on the 2021 AccelerateHER awards can be found here
HR for Fast Growing Fintechs: Investing in a People Strategy for Success
The rise of the FinTech sector in Scotland continues at an impressive rate despite the challenges of this year, with a number of innovative new start-ups contributing to this exciting growth.
Setting up any new business is challenging but especially so in technology where getting access to and retaining the best talent is crucial to success. HR strategies and framework must address this reality in order to build a strong team and culture for sustained growth and competitive advantage. Setting up the company’s values and mission early on lays the foundations for a strong and successful workplace culture ”“ ultimately the driving force of HR.
Supporting Scottish FinTech
As HR specialists with a niche focus in the technology sector, we have supported Scottish Fintech Exizent since early 2020.
An innovative, Glasgow-based technology firm, Exizent have a strong purpose – to improve the bereavement experience for everyone involved.
The Founders had launched the company, both having previous experience of building successful businesses. They had plans to scale rapidly and knew the value of early investment in strong HR practice. Having secured funding to support their ambitious growth plans, they needed to build a strong team and culture and implement HR framework and infrastructure.
Establishing HR & people strategy
Having engaged us to support their growth journey, we conducted a full review of Exizent’s existing HR setup and processes, held scoping 1:1’s with the Founders and conducted a needs analysis, planning and prioritisation session aligned to their business and growth plans. This allowed us to gain a real understanding of the company’s ambitions, culture, people plans and future HR support needs.
We then identified the key short and medium term strategic and operational HR requirements which would enable the business to achieve its aims linked to rapid expansions and rollout, as well as being able to support the company values and culture.
Key requirements included contracts and documentation, onboarding processes, compliance, a HR management system, an employee handbook and the ongoing development of strong organisational culture.
The outcome was a tailored and prioritised HR plan with indicative timeline to support the business to scale rapidly over a 24-month period.
Our approach was designed to provide an effective and fit for purpose HR strategy, putting in place solid foundations to allow Exizent to grow and scale sustainably from a people management perspective.
A regular bank’ of HR support time was agreed, allowing Exizent a full hands-on HR service and access to expert HR support when needed to help them develop, implement and maintain their people strategy. This would also ensure that ongoing guidance and manager support was available to their team from a very early stage in their organisational development.
Exizent now have in place robust, fit for purpose, effective and compliant HR and people management systems and documentation, optimising their organisational effectiveness by aligning strategy, people, resources and processes. Team development sessions led by Purpose HR support effective business relationships, collaborative working practices across the organisation, and a strong and positive culture.
Exizent continues to grow rapidly, confident in the knowledge that they have a trusted and flexible HR partner embedded in their business.
“We engaged Purpose HR for their recognised expertise with growing technology-led businesses. They are a trusted extension of our management team and we value their depth of knowledge and professionalism. Purpose HR are very well aligned with our business, share our values and are a great cultural fit. Their flexible support is responsive, cost-effective and saves us valuable time. I would highly recommend Purpose HR for their cutting-edge, hands-on and people-centric approach – perfect for scaling businesses.”
Aleks Tomczyk, Founder & COO
The importance of investing in HR
It can be easy to overlook HR in a startup business and it is an area of expertise which many technical startups lack.Many entrepreneurs get their businesses off to a flying start, charging forward at speed, but struggle with people management further down the line. As a business grows, leaders often find there just isn’t time to deal with day-to-day people management and recruitment, and the focus on people can easily get lost. This is a costly mistake and can affect employee engagement, culture and long-term success.
Investing early in strong HR practice at the beginning, as Exizent have done, is critical for sustained growth. For startups, outsourcing this to a HR partner who understands the market, the company’s values, culture and strategic aims, and who adds value to the business is an investment in the future success of the organisation.
Lisa Thomson is the Managing Director of Purpose HR and is experienced in establishing HR functions and people management and development frameworks within growing businesses and is a trusted advisor at board level.
Purpose HR are a trusted HR partner to some of the most exciting, investor backed, high growth businesses in the Technology, Engineering and Life Science sectors in Scotland and offer hands-on flexible support to enable scale and growth through attraction, retention and development of key talent.
If you’d like to find out more about cost-effective and tailored HR support for fast growing, technology-led startups and scaleups, contact Lisa Thomson at lisa@purposehr.co.uk
Is artificial intelligence the key to better access to funding for business and consumers alike?
Although the UK ranks third in the world for numbers of new business start-ups, it sits at a less impressive 13th place in the number of successful business scale ups[1]. Access to finance is widely argued to be a contributing factor with traditional banks having become more risk averse in recent years, and focussed heavily on security rather than a borrower’s ability to pay. Consumers, too, know first-hand how frustrating this can be, especially those held back by the seemingly inflexible approach taken by credit ratings agencies.
Change, however, is coming
Financial disintermediation, or more direct links between providers of capital and borrowers, has been a major feature of the financial landscape for the past two decades. Digital advances have seen this trend accelerate and the proliferation of non-bank lenders continues to increase. In fact, according to recapitalnews.com, 18 of Europe’s 40 largest real estate lenders are non longer banks.
And whilst some might argue that it really doesn’t matter where borrowers gain access to the funding they need to grow, there are increasing signs that both sides of the lending equation are benefitting significantly from new, highly advanced, technology solutions being deployed in the sector.
Elsewhere, comparison websites, taxi or ride-hailing apps and online supermarkets have all helped to show us the convenience of going digital. We feel more in control of our choices, and have the information we need at our fingertips. We have become used to instant gratification, and processes that are simple to use (even if they are massively complex to run). So too, we are starting to see this in the world of FinTech – where finance and technology collide to produce new and innovative activities in the sector.
Houston we Have is one such company that has developed an innovative solution that produces the strangely non-binary, or win-win, situation where a lender risk and operating costs are reduced and borrower convenience and access to funding is actually enhanced.
Based on the company’s proprietary prescriptive intelligence software platform, Houston we Have developed a credit risk assessment model for a Sydney-based SME lending platform that combines leading automation, the best of human expertise (without bias) and more than 70 information variables to produce an online application tool that’s easy to use, and fast to run.
Prior to the implementation of Houston we Have’s solution, the credit risk decision support system in place at the business was manual, resource intensive, reliant on third party providers and exposed to flawed systems. Typically a fast decision would take several hours. Today, the business can produce a decision within seconds.
Risk has also been reduced with a far better understanding of a borrower’s ability to pay and the removal of human bias in the decision making. Delinquent loans have been an astonishing zero since the system was introduced. And as for changes in legislation, lending frameworks or appetite for risk; these can be easily factored into system updates, as can revised versions for the regulatory environments in different countries and jurisdictions.
All this points to a more efficient industry that benefits lenders and borrowers alike.
Houston we Have is a boutique technology business that combines data science, software and artificial intelligence to deliver the kind of information that allows their clients to make better decisions and thrive. Their proprietary software was initially developed for military intelligence agencies, an environment where it is still very much in use. Gartner has identified the company as a Cool Vendor describing the value proposition as “unlike that of any vendor we have seen.”
[1] www.smallbusiness.co.uk, June, 2018
Photo by Markus Spiske from Pexels
Creating a Culture of Support in the Financial Services Industry
Pinsent Masons recently published a report Creating a Culture of Support in the Financial Services Industry’, produced in collaboration with a number of key stakeholders in the financial services industry, including financial institutions, fintechs and third sector organisations, to explore this important topic in more detail.
As part of the report, Pinsent Masons commissioned a consumer survey to obtain insight into the role individuals see their bank playing in helping to support them if they are affected by a mental health condition. Their findings show that consumers are very much in favour of banks taking a proactive approach in helping consumers to manage their money, for example by implementing spending controls or notifying the consumer if an abnormal spending pattern is identified.
One of the key areas of focus for the FCA is ensuring that consumers with mental health issues are treated fairly and the report looks at the FCA’s approach, the legal issues associated with banks and other financial services institutions being proactively involved in supporting consumers, what the industry is doing to support consumers with mental health issues and how the COVID-19 pandemic has increased the need for additional support to be offered to consumers.
Creating a Culture of Support in the Financial Services Industry’ highlights the positive steps already taken by the financial services industry to ensure that consumers with metal health issues have access to the support they need and shows that that there is a huge opportunity for collaboration between industry players to offer even better solutions for consumers in the future.
A copy of the report is available here.