Speakers and delegates gathered for the Innovate Finance Global Summit (IFGS) 2023 at the impressive Guildhall in central London to reflect on the momentous changes brought about by Covid-19 lockdowns and the digital transformation it spawned. The talks addressed innovation, open banking, digital currencies, ESG, and a host of other timely topics.

Industry inertia

Despite the digital changes precipitated by Covid-19, several of the speakers expressed frustration at what they termed industry inertia, in particular the slowness of real time payments.

“If you’re a disruptor, the pace of change is never fast enough. The younger generation expect everything real time and they vote with their feet,” said Louise Hill, co-founder and COO of teen finance app GoHenry, speaking on how to optimize the future of financial services.

“The appetite for risk has to grow and scale alongside the business. We can be more agile operating as an e-money business.”

“Financial services is the Luddite of the world we live in. All of us are moving forward at speed but we can’t seem to drag forward our own industry.”

Samantha Seaton, SEO, Moneyhub

“I think of open banking as being one dimensional and open finance as two dimensional, while open data is three dimensional” said Samantha Seaton, CEO, Moneyhub.

Lamenting the sluggishness in the world of payments, she added “financial services is the Luddite of the world we live in. All of us are moving forward at speed but we can’t seem to drag forward our own industry. The UK has been ahead but is falling behind. The Smart Data bill has gotten a bit stuck.”

Regulation

The theme of regulation cropped up in many of the talks, with the FCA presence indicative of how important regulatory concerns have become for fintechs. Many seemed to view the sudden collapse of Silicon Valley Bank (SVB) in March as a clear warning.

“We all got hurt in that crisis and in Covid. I can argue that regulation is what’s really driving the change in our world,” said Seaton. “We wouldn’t have the Consumer Duty regulation coming in July if the industry hadn’t galloped forward in the last ten years at a pace where we put the customer at the forefront of everything we do.”

For its part, the FCA addressed AI and transformational change. “We have a Big Data challenge, and are continuing to optimise how we collect, store, and exploit this data…we’ve seen a 200% rise in the volume of data we process for investigations, including through encrypted channels such as WhatsApp,” said Jessica Rusu, Chief Data, Information and Intelligence Officer at the FCA, as she pledged to exploit the mass of data available from public sources and make use of innovation like synthetic data.

But there was clear confusion over how fintech leaders and regulators might work together while keeping pace with technological change.

“In 2016 we managed to get the FCA, the Payment Systems Regulator (PSR), the Bank of England, the Sterling Monetary Framework together,” said Charles McManus, CEO, Clearbank. “There’s still too much complexity- what does the PSR do? What does the FCA do?”.

More information on the summit can be found here.

Please note this is not an exact transcription of what was said at this event and has not been approved by the speakers – it is a report of the discussion by the reporter who attended the event.