For this week’s CFO Software roundup, we’re doing a special edition for FinTech Week 2018. Financial movers and shakers from around the world have descended on London for a week of inspiration, innovation and collaboration.
Here are the five big stories generated by the FinTech hubbub in London this week.
The London Stock Exchange and City UK are announcing their first ever FinTech Financing report today (21st March 2018). Drawing on results from an independent survey, conducted by YouGov, the report looks at the experiences of over 400 FinTechs from the UK, USA, Israel, Hong Kong, Germany, Austria, Singapore and Turkey.
The research found that FinTechs are cross-border in their growth aspirations, with 72% planning expansion into new countries.
John Glen, Economic Secretary to the Treasury and City Minister, said:
“Our fintech sector contributes £6.6 billion to the UK economy each year, and employs over 60,000 people across 1,600 companies. As this report shows, we’re a global leader in fintech not by accident, but by design – our outstanding expertise, robust regulation and fair taxation gives us an edge above the rest, and we’re committed to ensuring that it stays this way.”
Chancellor Philip Hammond is set to announce the UK’s FinTech Strategy on Thursday this week, to outline plans for maintaining the UK’s pre-eminence in the field. The plan includes a strong focus on blockchain technology and crypto-currencies, as well as a plan for a ‘FinTech bridge’ between Australia and the UK.
The Financial Conduct Authority announced plans for international cooperation on a FinTech testing ground, or sandbox, at the Innovate Finance conference this week. The UK already operates a FinTech sandbox, and the FCA is now building relationships with other markets to roll out the plans internationally.
Christopher Wollard, Executive Director of Strategy and Competition at the FCA said:
“Now is the time to bring fellow regulators around the world into the conversations… Later this week we start work with interested regulators, including colleagues across Europe, the US and Far East, on a blueprint.”
LHV, the Estonian bank that works with Transferwise and Coinbase in the UK, has announced plans for a UK branch to leverage the energy of London FinTech and ride the wave of Open Banking. Andres Kitter, head of retail banking, says that LHV has received a large number of enquiries from UK FinTechs keen to work with a seasoned banking partner.
The bank’s confidence echoes Estonia’s commitment to fostering tech innovation. The country became the first to offer an e-residency scheme to make it easy for entrepreneurs to run businesses from the Baltic nation.
Kitter said: “The main focus is payment rails and payment facilities,” Kitter said. “For the more complex demand, we provide financing facilities. Basically, the tools that you need as a fintech or money service provider — payments, financing, card acquiring.”
Oak North, the digital challenger bank that received its banking license in 2015 from the FCA and PRA, has become the first of its kind in the UK to report an annual profit. Oak North has pioneered the use of Artificial Intelligence and Machine Learning to drive its growth as a bank for entrepreneurs. The bank’s profits testify to the power of FinTech to generate real profit – and value – in 2018.