We are delighted to be partnering with Magna Carta Communications on a report mapping the UK digital skills gap. The report, as Simon notes below, is an important step, not just in quantifying the shortages and shining light onto key areas of scarcity but also in terms of informing future policy and corporate strategy. The process of digitisation across the economy is fundamentally changing the way consumers, business and all institutions (including education and government) operate. We need a fundamental shift in the way we think about and construct education and prepare for the evolving nature of work. The report will be launched and, no doubt, debated heartily at the FinTECHTalents Festival.
The technologies underpinning these broad changes are themselves continually evolving and it is exciting to think about how the financial services industry will continue to change. London has been an leading hotbed of fintech innovation but the same technologies that allow small start-ups to outpace many large incumbents in terms of leveraging tech for new products and processes, creates the opportunity for other hubs to develop. The multi polar fintech ecosystem that Simon describes below is interesting, as is the vision of a post-Brexit, more integrated Europe.
There is clearly lots on the agenda to discuss at FinTECHTalents 2018 and we look forward to working in partnership with Simon and the rest of the Magna Carta team.
1. You have been working across the fintech sector for some time. What are some of the most exciting developments that you have seen?
SH: What’s exciting about this present moment in finance is the pace of change created by the move to digital. Something that’s only going to accelerate as automation and AI becomes an accepted part of our everyday lives. It’s truly transforming an industry that’s pretty much unchanged since the industrial revolution.
Much more fundamentally though digital will make it finally possible to make financial inclusion a viable, achievable goal and make the benefits of financial services available to the many not the few.
2. What are your top trend predictions for the coming year?
SH: Based on the outcome of our recent research on fintech, I’d say that we’ll start to see some of the first benefits of Open APIs and the Open Banking movement. The banks that have the foresight to grab the opportunity there will put themselves in the strongest position for the future.
AI and automation are clearly rising up the agenda fast but the successes will only come where the company – whether a bank or a fintech – has designed the technology to meet or solve a specific customer challenge. ‘Me too’ automation is as likely to backfire as the move to VR (voice recognition systems) in the 1990s.
I’d (really) like to say blockchain will finally prove its worth as a I’m a strong believer in decentralised systems but it’s still too early and the market has cooled a bit in the last year.
3. Brexit is obviously looming on the horizon. What do you think some of the potential impact will be on the UK fintech sector?
SH: Perversely I do feel that Brexit is likely to lead to more integration with the rest of Europe not less – in the sense of binding ties with the rest of the region that UK fintechs, and banks, will need to create by opening up new operations or outposts in other EU countries to avoid being caught out by the potential for different regulation on both sides of the Channel.
By March of next year, we should (hopefully!) have a clearer picture of what Brexit really means for the UK but my guess is that although London will remain a strong fintech centre, it will be the entry point for a more polar fintech scene in Europe. And perhaps that’s a good thing for the European economy as a whole.
4. Who do you think are some of the realistic challengers to the UK’s position as a leading fintech hub?
SH: I don’t think it’s as simple as one challenger now that will steal everything from London – it feels like we’re moving gradually to a more polar fintech world.
In terms of where these new poles are – in Europe, Germany has been very successful at creating some very strong fintech businesses and will continue to do so, clearly France has strong ambitions but it’s too early to say if Paris can build on some early successes.
I also think you have to look at the Nordic region. There are some challenges there – the regulators between the countries don’t really coordinate regulatory policy in the way that the EU does and leave it to the banks to drive cooperative innovation – but as a region that ‘gets’ what design means and what it can do, and that is virtually cashless already, if the countries of the region could join forces on digital and fintech they’d be a force to be reckoned with.
Thinking about comparisons to London as a city state then I think you’d also have to look at Singapore which has the twin advantages of being a key Asian centre but that is also separate from China – giving fintech innovators a more open business environment to work with.
5. FinTECHTalents is excited about working in partnership with Magna Carta on the upcoming report focussing on the UK digital skills gap across the financial services sector. From what you’ve learned so far, is the industry and government fully aware and ready to meet the challenge?
SH: Yes, us too – the research is a fascinating eye-opener into what’s happening across government and industry as fintech becomes an important force in finance. There’s definitely awareness in government of the value of fintech, in spite of the Brexit debacle. I think the real challenge for policymakers though – and not just in the UK – is that talent shortages in fintech are really part of a much larger problem of an education and commercial system which is designed for an industrial, and not a digital, economy.
So while there’s an awareness that there’s a “digital skills shortage” it’s not as simple as building new training programmes to tick the digital box. It’s going to need a more holistic view of how this new kind of economy works, and its impact – so that education, government and work (or industry) can understand how to adapt.
A key reason – and focus – for carrying out the research was to help policymakers and business start to come up with some of the answers to this defining challenge.
6. Come October 30 and 31st, will we find you in the craft beer sessions or dancing?
SH: Mmm – I might try a bit of multi-tasking if I feel brave and dance with a craft beer (if that’s allowed).