Fintech lead

Formidable Fintech

16 January 2015

An insight into how London can become the Fintech capital of the world

The UK government’s ambition is clear: to make the UK synonymous with Fintech in the same way that Silicon Valley is synonymous with digital technology. In August, Chancellor George Osborne declared, “I believe we can make London the Fintech capital of the world.” Indeed, the government may not be too far from achieving this. The UK and Ireland is already the fastest-growing region for Fintech investment, with its value estimated at a staggering US$265 million in 2013.

Fintech simply means any technology which is used to deliver financial services. Over the past two years, there has been a proliferation of enthusiastic Fintech companies, armed with a wealth of funding and bright ideas. “Fintech is currently thriving in the UK and Equiniti is at the forefront of this wave,” says Lucy Dimes, Chief Operating Officer, Equiniti.

“What we have seen recently is the segregation of Fintech into two main subgroups,” explains Shaul David, Fintech Specialist, Financial Services Organisation, UK Trade & Investment. “Traditional Fintech is companies 
which have provided services to financial services organisations for a long time; and then there is emerging Fintech, the new kids on the block, many of which are disruptive and reshaping how financial services operate. The government is aiming to open up competition within the sector, and allow new providers outside of the usual incumbents to compete within the market.”

Financial services organisations are also recognising the potential value Fintech brings. Lucy says Equiniti is providing smart and innovative Fintech solutions for its clients: “Our heritage in payments, pensions and share registration is a great basis for us to build on. Fintech is an exciting area of growth for us as cutting-edge technology is key to the services we offer now and in the future.” 

London Bridge Thumb 627X300

The UK has a unique combination of factors, which has helped the growth of Fintech both in London and across the UK. The country has a wealth of business capital, an interconnected financial services infrastructure and supportive regulatory bodies. London also has the enviable position of being one of the world’s largest centres for financial institutions, with an abundance of foreign banks and financial services companies making the capital their home. 

“The government and regulatory bodies are based in the same place, which helps dialogue and conversation between the three parties,” Shaul says. “This is very powerful for a Fintech business. Although it’s operating in a very heavily regulated environment, it has the opportunity to discuss innovation, both with its clients as well as with the regulator. We see the UK not only as a destination but as an ideal base for reaching overseas markets.” 

There is a big appetite from consumers in the UK for new, innovative models which will improve their experience: the UK spends more on e-commerce in comparison to Germany, France and the USA; and the UK has been one of the fastest adopters of peer-to-peer lending. Lucy believes Fintech will provide more choice for the consumer as it continues to develop, with a particular emphasis on relationship management and product development.

Fintech will also impact the sector in many ways we can’t even predict yet. We are nowhere near capitalising on the opportunities we currently have.

“Efficient platforms, software and payment systems help our clients get on with what matters – growing their business,” Lucy says. “We have focused on a number of key acquisitions to offer our clients more solutions to provide the best possible experience for them and their employees or customers. With our intelligent acquisitions, such as Pancredit (intelligent loan administration, lending software and origination services) and Invigia (specialist in technology, financial and administrative services), we are strengthening our technology platforms and expertise for the benefit of our clients.

“Equiniti is in the process of establishing a new Fintech hub in Cardiff which will feature an interactive presentation suite providing hands-on experience of our new mobile technologies and an academy for training, mentoring and development.”

Fintech will also impact the sector in many ways we can’t even predict yet.  “We are nowhere near capitalising on the opportunities we currently have,” says Shaul, “but I think the next wave will be in streamlining processes within the sector, particularly in the capital market and investment management space, which will enable businesses to run more cost-effectively.”

Lucy agrees: “Improved technology will limit legacy systems and the technology issues that come with this. Businesses will be able to save time with costly administration tasks. As we move forward, technology such as artificial intelligence, big data and robotics will change financial services unrecognisably. It is a very exciting time. We will continue to develop our Fintech solutions with our clients and their changing needs in mind.”

THE BIG FOUR OF FINTECH

There are four main subsectors of Fintech, in which the UK is particularly strong: payments, software, platforms and data analytics. Equiniti is a Fintech provider offering leading solutions for clients, which encompass each of these subsectors and more.

1 PAYMENTS

Payments is a huge area of potential: the online sector is expected to grow substantially, alongside a change of operating models. Equiniti International Payments has access to one of the world’s largest payment networks, and payments can be made in 130 countries and 90 currencies. The online payment system is quick, easy and secure, and allows companies to manage privacy and set up secure authorisation processes. Equiniti also uses MyPeopleAX, the only payroll product in the world certified for Microsoft Dynamics AX. The system is HMRC PAYE recognised and has an intuitive interface, which gives our clients flexibility.

2 SOFTWARE

Fintech companies are offering innovative software solutions for risk management, banking, asset management, insurance, accounting and more. Equiniti’s Pension division uses Compendia Self-Service, a responsive self-service website with an enhanced interactive feature set that keeps company pension members engaged, informed and empowered. The features enable members to update their personal details, track investment performance and switch investment funds. A benefits modeller also helps members make important decisions about their retirement planning, by looking at the impact of different retirement ages and adjusting contributions.

3 PLATFORMS

Several unique platforms, including in peer-to-peer lending, trading and personal wealth management, as well as aggregators, have shown the viability of Fintech. Equiniti manages the payrolls, HR, share schemes and preretirement pensions for around 1,600 businesses. The Xanite platform is behind Equiniti’s core wealth management and investment solutions. Xanite offers a configurable, fully integrated, browser-based, comprehensive front-to-back solution that can either be deployed as a single application or integrated as components into your existing platform. Web-enabled front-office tools give your customers direct access to the Xanite platform.

4 ANALYTICS

Data research and analytics will help improve the customer experience and the monitoring of business activities. The comprehensive software solution for regulated complaints and feedback management, Charter Continuum, works across departments and even across entire enterprises, plugging seamlessly into their existing management information systems. A host of well-known blue-chip businesses rely upon it every day to gain and act upon the insight it gives them into their customers. Renowned for its flexibility, reliability, powerful root cause analysis and Management Information reporting capabilities, Charter Continuum delivers real business benefits with a measurable return on investment.