A Q&A with Lawrence Wintermeyer, CEO, Innovate Finance
Q. Which developments have had the most significant impact on the FinTech industry over the last few years and how have these developments changed the direction of the industry?
A. The pace at which the digital landscape is moving has fuelled a massive inflow of capital into FinTech (financial services technology) to fund entrepreneurs developing applications across financial services markets such as payments, lending, investment management and capital markets.
At Innovate Finance, some of the major trends we have seen in the UK in the past few years have been:
- increasing collaboration between startups and financial institutions
- The rise of corporate venture capital and institutional investment in startups, and
- World leading regulatory innovation driven by the FCA with Project Innovate and the Regulatory Sandbox.
Q. How do you work with your members to address the barriers and opportunities they face?
A. As a member-led industry association dedicated to FinTech, we have over 250 (global) UK members from start-ups to global institutions. We promote an open, collaborative and FinTech secular community dedicated to accelerating FinTech developments.
We convene events and roundtables to promote start-ups, VCs and institutions to better understand how to work together as we find that startups and institutions often face common barriers of addressing wide-spread customer adoption of products, and managing complex regulatory requirements.
We assemble member groups across policy areas including responses to government consultations such as the financial advice market review, open banking working group, financial inclusion, and the post-Brexit FinTech agenda.
We also work with our membership to produce thought leadership, such as our recent reports with Deloitte / Swift Innotribe on the benchmarking of 21 global FinTech hubs.
Q. How do you work with regulators to keep apace of the fast moving developments in FinTech?
A. We seek to provide accurate and reliable input for UK regulators on their planning and performance in a number of ways, including engaging in government policy discussions to help shape the FinTech regulatory agenda, and supporting requests for community engagement to discuss key issues such as sandbox and regtech.
In April, we were appointed to Chair the FCA’s Industry Sandbox consultation, which is currently underway and will report in January.
Q. How does Innovate Finance bring those with money together with startups so that both can better monetise this ‘trend’ of FinTech?
A. One of our key objectives is connecting innovators and investors and we do that through a number of curated member engagements and programmes. For example, our VC toolkit connects startups looking for funding directly to VCs and our investment landscape report analyses the trends in FinTech investment to better understand where the money is flowing and to identify emerging business models and technology.
Q. Where do you see the industry in 5 years’ time? How do you foresee the innovators you work with changing the future landscape of the industry?
A. The size of the prize in global financial markets such as payments, lending, investment management and the capital markets will continue to drive innovators to focus on FinTech solutions.
With half of the global population under 30, and millennials now comprising more than baby boomers in western populations, growth in financial services is forecast to be steady whilst consumption models and the adoption of new apps and technologies is poised to change significantly.
The rise of industry participation and the consortia model where adoption of technology is driven through a number of partners adopting a new technology solution is emerging.
This is especially the case with infrastructure such as payments, settlement, and regulatory solutions, and we expect to see a greater degree of innovations in both the retail and capital markets space.
We are monitoring the API space, distributed ledger technology, digital security, and artificial intelligence as real breakthrough technologies being used by FinTech innovators.
We are also watching the interest in regulatory interoperability between countries. The FCA has already launched “FinTech bridges” with Singapore and South Korea, a scheme that will allow regulated FinTechs to accelerate their authorisation in reciprocal countries. Digital and FinTech can do much more to help promote a level regulatory playing field between countries for consumers and institutions alike.