Pivotl hosted their The Future of Fintech event last night which showcased a number of UK unicorns and up and coming startups to an audience of fintech entrepreneurs, investors and senior executives. Keynote speakers on the night included senior executives from TransferWise and Funding Circle and we also heard from some startups that Rise London, formerly known as Barclays Accelerator have been mentoring.
Editorial director of Pivotl, Tom O’Meara introduced the event and explained that digital disruption is a hot topic at the moment, which is evidenced by the growth rates of investment. Sarah Gill, Pivotl senior reporter explored how last year was a record breaking year for fintech investment, but this is something that was seen in 2014 and 2013 and is very likely to happen in 2016 also.
Alongside this, Gill highlighted how 2016 could be the year that the rollout of fintech will fall into place as industries like money lending continue to excel. The main reason for this is a desire for change as consumers move reluctantly away from banks.
“European fintech is much bigger than one city,” Gill said in relation to the hype surrounding London as fintech centre of the world. Although London is a great city, she gives the example of Hamburg based fintech startup Kreditech which has grown at an astonishing rate and talks more widely about Europe as a fintech space.
Despite the increased investment in all areas, there has been a slight decrease in funding of cryptocurrency startups, but financial institutions realise that “the potential for blockchain is something real,” Gill said. She predicts that banks will start taking meaningful steps as challenger banks are coming.
Lukas May, head of international growth at TransferWise, spoke about how their company exists because of problems the founders had when sending money abroad using banking services. With a fast growth rate, May said that they have seen a lot of success but there is a long way to go.
“People define fintech in different ways, but I don’t like any of the definitions. Being a mission player in the financial services, fintech should be when you find a problem and try to solve it,” May said. He also explained how speed of execution is critical and this mission is a race as startups are always up against all players.
TransferWise operate using the classic Silicon Valley mindset, which is to find a problem and solve it, but May reveals that it can get messy, especially as the business grows. May presented the idea that we cannot predict who will be doing money transfer in the future, but his company is beginning to reach scale and reach maturity.
“We’ve crossed the rubicon and there is no going back as it will not be acceptable in the future for a financial institution to create a product and ram it down throats,” so fintech adoption lies in consumer preference.
David De Koning, head of communications at Funding Circle, shares a similar view and asked the audience whether they would create a bank if the entire financial system was blown up and if this form of institution would be the best mode of lending.
De Koning states that Funding Circle can do what a bank does and can do it pretty well, but explained that the future of fintech lies in remaining humble because no one in London’s fintech scene has reached where they want to be.
The Future of Fintech sponsor Avant Credit’s managing director Raj Singh said that fintech should create huge opportunity in an unaddressed demand, like his company does. “We still think there is a place for banks, but will need to figure out quite quickly what assets they still have.”
Singh continues to say that 2016 will be an interesting year for fintech with new trends emerging, but as the global economy is struggling, this is will a challenge for everyone. That is where accelerator programs like Rise London can play a huge part in a fintech startup’s future, as Isabel Cooke, assistant vice president of open innovation explained.
Rise London is an open innovation platform that finds innovative disruptors in the space. Alongside this, the accelerator runs a three month program where startups, such as Cutover, Everledger and Splittable were mentored.