INTERVIEW IBS Journal December 2017 19


Brexit, fintech and the tech giant threat


At Sibos 2017 in Toronto, IBS Journal caught up with Paul Thwaite, head of transaction services at NatWest, to chat fintech collaboration and the effects of Brexit


Senior Reporter Alex Hamilton


I


BS Journal: Banks appear to be changing their tactics on the collaboration side these days: from multiple small partnerships to fewer, deeper relationships, do you agree?


Paul Thwaite: If we’re talking about partnership and collaboration with other banks then I would agree with you. This is driven by– simplicity vs. complexity and the regulatory backdrop.


If we talk about banks and fintechs or solutions providers I don’t think it’s as clear cut. If you looked at the majority of banks – certainly for NatWest – the number of partners we’re dealing with in the fintech space has increased considerably over the course of the last two or three years.


We look to partner with fintechs who are specialists in specific products and solutions. We aim to choose the best-in-class partner for the area in question.


IBS: Partnerships with fintechs help to reduce costs and complexity to banks, but do you think this new collaborative mindset is in part a reaction to the rise of the big tech companies in the space?


Paul Thwaite: It’s multidimensional. Ultimately, the way we think about it is that it’s driven by our end customers. We’re driven to build solutions, products and initiatives that have client and customer appeal. I wouldn’t say that I would ever interpret the world as a “us vs. them” scenario. That wasn’t the mantra or approach that we ever adopted.


As the market has developed and as the client’s needs have become clearer, it’s helped the fintechs in some ways get clearer about what the opportunities are and to play into those areas they’ll require the banks in certain spaces.


As the banks have seen the developing pace of those customer


needs and expectations, they have reacted. NatWest has had a scanning and scouting operation for six or seven years across Silicon Valley, Tel-Aviv, London and Amsterdam. Those teams have brought us the latest innovations and have helped us drive change. I don’t think it has actually moved from competition to collaboration. What’s behind it is the underlying layer of customer demands and needs. We have actually found it really invigorating to work with fintechs. They often bring different ways of working and different ways of addressing solutions.


IBS: It’s been a year now since the Brexit referendum. How has that decisive “leave” vote impacted NatWest and its clients?


Paul Thwaite: It’s been around 15 months since the vote. It was a referendum that was put to the nation and the majority decision was to press ahead and leave the European Union. We’re very respectful of that. What we want to do is continue to respect our customers whatever outcome is negotiated over the next 12 months or so. In the short term, there hasn’t been any impact on our core services, core products or core client base.


We haven’t changed as a consequence of Brexit – or the potential of Brexit. What clients share with us is around how the vote impacts them. Obviously, it has an effect on economic confidence. We’re doing what you would expect us to do as one of the largest banks in the UK: working with the regulator to make sure that whatever eventuality plays out, we’re able to support our existing client base within the regulations that transpire.


I would say there is a lot more to come over the next 12 months in regards to having a deeper understanding of what Brexit actually means. For example, what does passporting look like (or not look like). We’re lucky to have a number of banking licences in Europe anyway. We’re preparing – at the request of the regulator – for a Hard Brexit and Soft Brexit respectively. We’ll be ready whatever transpires from the negotiations.


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