Innovate Finance CEO: UK must help fintech grow externally

More should be done to help fintech startups expand beyond the UK, according to Charlotte Crosswell, chief executive officer, Innovate Finance.

“You have to help those [fintech] companies to expand and find collaboration externally,” said Crosswell on a panel at the Capital Markets Innovation Summit in central London this week. “You have those collaborations and find companies that can start their business here, innovate, incubate, and grow externally then that is a great thing. I will actively find those partnerships for people all over the world, because why wouldn’t I?”

The UK has taken the second spot for fintech venture capital investment for 2019, in a report published in September by London & Partners and Innovate Finance. China dropped to fourth place behind Germany, the UK, and the US. The US has invested $9.37bn across 477 deals in 2019, whereas the UK invested $2.29bn across 142 deals.

For Susanna Chishti, chief executive officer, Fintech Circle, banks’ reputation for good fintech partnerships is becoming increasingly important.

“As a bank, you want to create an ecosystem around you which strengthens your organisation, you will have the best fintech companies wanting to work with you, having the best investors introducing co-investment opportunities to you, and that takes time and trust,” she said.

Many fintech startups don’t know who to talk to in large organisations or understand the internal governance structure, according to Chishti.

“Once you get to the buyer to understand the governance procedures to get a decision made, to understand the steering committees, to understand the time it takes to go through the various structures, and to understand the deciding of budgeting as well. Often if you are unlucky you just miss the budgeting cycle, and you might just have to wait another six months before it is available,” she said.

But several fintechs aren’t living up to their sales pitch, according to Lucien Foster, global head of digital partnerships at BNY Mellon.

“Not all fintechs are actually solutions, many of them don’t work out. For us it is really about trying to figure out which company to really start to spend a lot of time with,” he said.

“We find that often the products that were built in the first instance aren’t fit for purpose for the scale that we have at our bank, and the challenges to the different types of clients that we have. There is need for self-awareness at the fintech level in terms of truly how mature is the product, truly how ready is it for the volumes of data and transactions that will go through, and whether it can be deployed in hundreds of different locations and not just one or two.”

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