FinTalk: "Having control over your money is freedom and fintech enables that"

By Sarah Gill | 23 June 2016

In the latest episode of the FinTalk podcast we sit down with Liz Lumley, currently director of global ecosystem development at Startupbootcamp Fintech and Insurtech in London. Starting off her career in finance as a journalist back in mid-1990s New York, she came to London 19 years ago and has watched the industry transforming significantly since days when banks wouldn’t even disclose whether they had PCs in the building or not. 

Tune in to hear our conversation about the evolution of the finance industry, the opportunities for technology to help democratise access to financial services and transform banking, tackling diversity issues and what’s next for fintech. The episode is available for listening on Soundcloud right now, with a launch on iTunes coming very soon. We’ve also transcribed the interview below for those of you that prefer that format. Enjoy!

 

How did you get into finance and why did you stay?

I graduated university in 1994, answered every single ad in the New York Times that said ‘reporter’ and the one that hired me was a publication called Inside Market Data. I knew absolutely nothing about what a stock was or what tech was. It was a big learning curve.

You came to London in 1997, what was the finance industry like at that time?

I spent most of my journalism career writing about tech in the capital markets. In the past seven years I expanded into payments, retail banking and transaction banking. It was post big bang in London and decimalisation so it was a bit more open. There were basic thing – as a journalist I found people in the UK easier to talk to than in the US where they were more behind PR.

In terms of technology, banks get a lot of criticism for not innovating fast enough or being fast enough with tech. When I first started they were trying to build their own proprietary operating systems and they wouldn’t tell me if they had PCs in the building because it was competitive information. So they’ve really come on leaps and bounds in the last few years. The client-serve revolution really was a revolution. They are changing as fast as they can: a lot are super tankers and it takes a long time to change.

So you’ve just had the first teams coming through the SBC Insurtech accelerator?

Ten teams just finished the programme and had their demo day, which was very exciting. I hate to say it because I have been a champion of fintech for a while, but insurtech feels like fintech did a few years ago. Everyone is so excited by insurance. Fintech people are getting a bit weary…’please don’t talk about blockchain anymore!’.

Insurance is still as an industry a little further behind than banks, it’s still very paper-based and they admit that. They do not interact with customers enough to get enough data and feedback to understand how to develop their products. Some of the partners in the programme are Admiral, Ergo, LV and a lot of other big names- they are eager to find out how to accelerate their own businesses.

Is this excitement down to the sheer size of the existing insurance market?

It’s the excitement of a green field site. Insurance is seen as ripe for disruption because there’s so much to improve everywhere. That’s what people are excited about.

With the Fintech programme, is there a particular segment you focus on?

We have not in the past particularly focused on a segment. In first year we saw a lot of payments startups – a lot of people still associate fintech with payments and retail banking. The next year it was a lot of alternative lenders. But last year five of nine comps were focused on the asset management space, which we saw as a trend. If you went to Finovate this year, about 30% of the companies were in wealth, wealth investment or robo advisors – so we are seeing that as a trend. What is coming next I think is capital markets.

We saw 4-6% of applications from the capital markets space, but they are not seeing a lot of investment. Payments are still getting the bulk of investments from angels and VCs.

Is that because payments are more familiar?

Payments are more mature in the fintech space. We saw a bit of a downturn in the quality of payments startups actually. MasterCard is one of our partners and they said they would like to see more so we are actively looking for payments startups this year.

It’s an area where there were a lot of big names like Apple Pay and other big organisations came in to tackle payments. Also payments are more complicated than some people realise. If you are not from the industry and think, ‘I want it to be easier to pay my restaurant bill’, but don’t understand how that processing layer works that’s going to be a very complicated situation. So I think that weeds out a lot of low quality payments startups.

Is there something you’d personally like to see entrepreneurs solving?

Capital markets. There should be a more dynamic way a head of the desk can monitor the trading floor, weed out rogue traders or mistakes and deal with risk in an easier way. Risk and reg-tech are two areas I feel very passionately about – if someone comes up with a solution to make it easier to comply with regulation or deal in a more coherent way with risk I think that is a good road to go down. I’m waiting for fintech to hit the capital markets and the trading floor soon.

Full transcript on PaymentEye

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