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.
Have you ever thought of launching our own startup?
Being an entrepreneur is very lonely, which is one of the reasons we don’t take solo founders on the programme. It is really hard work and long hours, it is not sitting on bean bags in a brightly coloured office. I feel like I have been an entrepreneur most of my life – I have always worked for small companies. I launched a magazine inside Incisive Media – Inside Reference data which is ten years old this year, I launched another magazine called Screen that went bankrupt after nine months and what I am doing at Rainmaking and Startupbootcamp is building a whole marketing though leadership ecosystem development piece that is my baby. In a way I am working on my own startup, not in that traditional find someone to build an app and put it together, I don’t think that’s my skillset.
After 20 years in the industry, how much has the UK finance industry changed?
In UK attitudes are particularly progressive when it comes to innovation and tech change. I did not go to Money 20/20 in Las Vegas, but reports are that there were not many banks went. But I went to Money 20/20 Copenhagen and there was a huge mix of banks and startups and different types of people. I’ve found that especially in the UK and Europe, banks are much more willing to sit at the table, find out what is going on and get a lot of learning. In the US it’s still a bit ‘us and them’ with tech or with fintech or with startups generally. We launched a New York programme this year but we don’t have a US bank as a partner; the two banks are Santander and Deutsche Bank. The American banks’ attitude was more ‘we’re not quite sure, we might build it ourselves’.
The UK has a better attitude and a more progressive regulatory environment. It’s also about the people that work in the banks – I get that banking is wide and varied and there are so many different people that work in them, but the people I talk to really want to improve services, especially customer facing services.
You are also involved in the Femtech Leaders group, can you talk about what it does?
I have had many a time where I am the only woman in the room. I recently spoke at a conference in Zurich at four in the afternoon and I was both the first woman on stage and the only woman on stage all day. It is 2016.
So many of us know each other and have been in the situation where we look out and see a sea of men in suits. I have nothing middle aged white men, I am married to one of them. They are wonderful people on an individual basis, but it gets lonely when that is all you see – you wonder where are the different voices? And that’s just women, the greater diversity question is even deeper. Just with women, which make up 50% of the population, missing those voices means you will not develop products that reach the customer base.
Sam Maule from NTT Data Consulting got together with Innotribe to profile prominent women in the industry for a website that was going to come out at Sibos in Singapore last year – it was a response in a way to female speaker bingo: you know, ‘the two women we called were not available’, ‘we have no women in this space’. So the idea was, to say okay if you only know two women, here are 100 other women. Ghela Boskovich from Safin said we should do global meetups – so she organises meetups in cities including New York, London and Sydney where women can come and meet up. It is not exclusively a women’s event, we invite everyone we encourage men to come – we call them manbassadors. There’s often a speaker, the last one in London had the digital head at Lloyds speak, John Webster.
It means as a women you can come to a banking event that is not filled with old white men in suits. It is filled with people who look like you and talk like you. And they are a lot of fun! There’s a lot of wine and everyone talks – it is supportive and it’s encouraging. The idea was to have a meetup to tell other women: ‘you’re not alone’ and bring men to the table.
Is there a right and wrong way to approach diversity?
Saying ‘we need a woman’ is the wrong way. But making sure you don’t sit and let the status quo happen, is the right way. Make sure you are aware. In finance and tech women are out-numbed – they are the two alpha male dominated industries. The wrong way is to get angry about it. The wrong way is to just pick any women because she then gets demoralised as she is a token. The wrong thing is to mansplain.
Just have it in the back of your mind that if you look across the table and everyone is a 40 year old white guy that is a problem.
If you could change one thing about the industry what would it be?
Open APIs. Banks need to open up their APIs and let third parties build applications on them – it will change the industry. Payment Services Directive 2 is coming in a few years and banks need to be open to that and not be threatened. Banks find it hard to innovate because so much of their IT budget goes to maintaining legacy systems and complying with regulation. So why do they not outsource their innovation research and development to startups? They can do that by opening up their systems and data and APIs – I would like to see that happen much sooner.
I would also like to say – they need to make it easier to open a bank account in the UK especially if you’re not originally from the UK. the number one problem I had as managing director of the fintech programme last year was getting bank accounts for non-UK startups – it was absolutely impossible.
Why is that?
The banks claim its regulations but a lot of the startups opened up Mondo cards and Loot cards. I moved here 19 years ago and could not get a bank at all. One of the CTOs of our startups last year, a Russian company, was crying in front of me because all the developers walked away as they couldn’t pay them because we couldn’t open a bank account. That is a huge problem. This country will not attract quality startups if they cannot do something as basic as open an account.
What are you excited about right now?
I am a big fan of artificial intelligence – I really want to see more robots. I also think having an account is the cornerstone of civilisation and I want the fintech conversation to continue globally. I go to work every day so I can connect people in different areas and hubs and cities so we can improve banking. People forget how important financial services are to our society in general so we all need to work together to improve that.
It seems people often see financial exclusion as a developing world problem, but it’s a global problem
It’s huge. It’s amazing the amount of people who do not have access to basic banking services. We talked about women earlier – it is not that long ago a woman could not get a credit card unless it was co-signed by her husband. That is my mother’s generation – having control over your money is freedom and fintech enables that to happen for a diverse range of people.
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