SocGen: UK fintech is at a post-Brexit crossroads and must forge global links to retain its position
The UK’s position as global fintech leader is facing a pivotal moment as it confronts the dual challenges of fending off competition in a post-Brexit world and capitalising on Covid accelerated digital adoption opportunities across the globe.
The UK has had a proud history of leading the way in financial innovation, from its global reputation for regulation and rule of law, to the launch of the first-ever regulatory sandbox. The UK’s hard-earned prowess is further evidenced in the ‘Kalifa Review of UK Fintech’ highlighting that the UK represents 10 per cent of global fintech market share, worth £11bn in revenue.
In order to retain this position the UK must keep a keen eye on other emerging markets and global financial centres, as well as the ever-changing industry, corporate and customer dynamics. Other ecosystems are emerging with strength in France and Germany, as emphasised by President Macron at the French digital tech event he hosted last year.
In my mind and from my experience as a global head of digital innovation, as well as work in the UK, the US and France, there is little more important for the UK fintech industry than a fierce dedication to attracting the best international talent alongside a continued commitment to collaborating with global financial hubs in order to bolster its position on the world stage.
In order to drive business growth, the fintech sector must attract and retain skilled workers. Specialised fintech education and retraining courses, new visa schemes and work placements to ensure a pipeline of fintech talent are a good place to start. But to deliver outstanding services to customers, embedding diversity and inclusion at the heart of the sector is essential. Driving such a value-led fintech sector will nurture and attract the most successful entrepreneurs, innovative mindsets and pioneering skills.
Post-Brexit, the UK must also forge and nurture strong relationships with other financial centres and fintech hubs, as well as other players. This was one of the key takeaways from the Kalifa Review, published earlier this year on the future of fintech. The review focused on how businesses, technologies and solutions can efficiently scale locally, and roll out internationally. Post-Brexit, it is critical for the fintechs that originate from the UK – the ‘BRITs’ – to work with the ‘FRITS’ (France, Italy, Spain) and Germany to achieve this scale.
There is also huge potential for digital and innovation initiatives to fuel the London and global capital markets. The possibilities for achievement by retail and wholesale banks are infinite when interoperable platforms, connectivity, APIs and applications are deployed using light-to-deliver, secure, cloud-enabled models that are fast to roll out, easy to build upon and easy to scale.
The pandemic has further spurred on these digital initiatives at an ever faster rate and the potential is clear. At Societe Generale alone, we successfully completed a world-first experiment in the midst of COVID-19 with our digital asset startup Forge. By issuing a blockchain-based covered bond, settled in digital euros issued by the Banque de France, we successfully bridged the gap between capital markets and digital assets, and established a global edge.
Looking ahead, the fintech and banking industries need to think about the reality of existing in a hyper-connected world, responding to and further anticipating both corporate and consumer behaviour.
Global banks like Societe Generale play a vital role in fuelling and supporting sustainable innovation and entrepreneurship across a multitude of sectors, encompassing investment into fintech innovation, supporting ecosystems, and changing attitudes to collaboration and partnerships (including the big tech firms of this world). Pause to consider the huge potential that open innovation, open banking and open finance present, combine these with demand for sustainable and impactful finance, and we can truly change the world.
Fintech, capital markets and banks play a vital role in empowering individuals and companies. However we emerge from the pandemic, I believe competitive edge can also be found in the trust established during these challenging times. By collaborating and building together with our clients and the industry, the UK and global fintech industry will continue to thrive.