How is the financial services sector growing with FinTech?

By Ilona Alcock

Over 130 Manchester professionals gathered at the Hilton Manchester Deansgate for pro-manchester’s annual lunch with the Lord Mayor of London. This popular event aims to highlight Manchester’s successes and to strengthen working relationships between the cities.

This year’s Lord Mayor of London is Alderman Charles Bowman, senior partner at PwC, who has a keen interest in FinTech. This visit gave the perfect opportunity to showcase our thriving FinTech scene, to discuss the impact of the sector on the wider regional economy and to encourage further engagement between London and Manchester.

John Ashcroft, chief executive of pro-manchester, opened the event and thanked sponsors Clarke Wilmott and Robert Walters.

After lunch, Alistair Cree, chair of pro-manchester and partner at Eversheds Sutherland, welcomed the Right Honourable the Lord Mayor of London, Alderman Charles Bowman, to the stage and presented him with a piece of Manchester art.

The Lord Mayor expressed his gratitude and explained his particular interest in promoting the UK as a centre for financial services. The financial services sector accounts for 11.5% of GDP and generates £72.1bn tax income (approximately 60% of the NHS budget). Whilst it has its roots in London, over two-thirds of employees are positioned outside of London, including 34,000 in Manchester.

The City of London Corporation has clear aims to grow existing links and collaboration with other centres of excellence, such as Manchester, increase investments into UK and support export links across UK to rest of the world. The Lord Mayor noted Manchester’s relationship with India and invited attendees to join his upcoming delegation to Mumbai in October.

There are now 16,000 FinTech related companies, with over 50,000 FinTech related jobs in and around London. The key elements required to ensure its success include a healthy and proactive regulatory body, strong private investment and access to emerging talent. The Lord Mayor noted that the UK has recently confirmed the UK’s fifth FinTech bridge with Australia.

The Lord Mayor then introduced our panellists: Susan Hall, Partner – Intellectual Property, Clarke Willmott; Lloyd Hutchinson, Head of Sales, Ebury; Sonia Awan, Head of Digital Innovation, Together; Lewis James, Co-Founder & Chief Operating Officer, AlgoLib; and Matthew Elliot, Co-Founder and CDO, Nivo.

The panel initially discussed the opportunities/challenges for FinTech companies in Manchester compared to elsewhere in the UK and globally. James commented on the lower operating costs and large incumbents present, with Awan focusing on the access to graduate talent from the city’s universities.  For Elliot, the proximity to the big banks was essential to understanding the problems Nivo aims to solve. Similarly, Hutchinson identified a concentration of their customer base in the North West, and particularly in Greater Manchester.

The Lord Mayor had the opportunity to meet with Greater Manchester Mayor Andy Burnham earlier in the day, and asked the panellists what role they felt local government should play. Hall and Awan both highlighted the need for strong infrastructure, including high speed broadband.

Retaining talent in the city is key, and local government can help to ensure opportunities and visible to emerging talent. Elliot noted that we have the basics right but need to ensure they are accessible to everyone, with more focus on availability of funding in the early stages. James praised the aggressive strategy for inward investment and the work of agencies such as MIDAS to connect businesses and draw new companies in to the UK.

Moving on the challenges for FinTech start-ups, Hall commented that the barrier to all technical innovation and revolution – from shopping online to adopting FinTech – is fear. Robust, sensitive management and regulation is key, backed by sanctions for rogue operators.

Elliot agreed and noted regulation still has a reputation for stifling innovation, though it is starting to encourage competition. Awan is helping Together Money to be able to work with more vulnerable customers, for example those without three years accounts. They are hoping to be in the next cohort to work with the FSA sandbox to develop new solutions.

The Lord Mayor asked what else London can be doing to support Manchester. James again praised the success of international delegations and encouraged more companies to take advantage of these visits. Hutchinson commented that Ebury’s whole business revolves around cross border transactions and opening regulation up is key. Increased collaboration with incumbents would enable them to put the customer at the centre of the transaction.

Hall argues it is about continuing the rhetoric that financial services and FinTech are not London-centric and that other centres of excellence, such as Manchester, may be a better for certain companies. The Lord Mayor enthusiastically agreed, stating he refers to the industry as a “national jewel” on his travels.

Taking questions from the floor, the panel noted the need for early VC investment, new ways to protect FinTech innovations and an environment to help close the experienced skills gap.

Finally, the panel offered their predictions for the next 12 months. As expected, the focus is on collaboration with incumbents, putting the customer first and developing better big data analysis tools. Hall also predicted a crypto currency issue which may have repercussions for the whole FinTech market.

Ashcroft closed the event, thanking the Lord Mayor, all the panellists and our sponsors, Clarke Wilmott and Robert Walters.