FINANCE
Agility in finance: How digital is changing the face of banking
Despite Brexit, London is still a highly desirable place to live and work, and its financial services companies are leading the way in cutting edge implementation of digital and HR innovation. Marianne Curphey reports.
T
en years since the banking crisis, a new type of bank is emerging – one which is digitally advanced, agile and innovative. The changes are partly due to customer demand
– if Amazon can dispatch and deliver goods within a matter of hours, why can’t banks do the same with a replacement debit card? It’s also, in part, due to new regulations, and growing competition from retail and technology giants such as Google and Apple.
Open banking is a game-changer In the UK, Open Banking is being promoted by the UK’s
Competition and Markets Authority (CMA). This will require banking data, with the customer’s permission, to be readily accessible to third parties. Already, a host of lean fintech companies are developing software
and apps designed to provide a concierge service for all your financial information and needs. The skills needed for these specialist start- ups mean that many fintech companies are looking to recruit from Asia and Silicon Valley in the US. The UK fintech sector has 76,500 employees and last year
attracted $1.8 billion of venture capital invested across 224 deals, according to a recent survey by WPI Economics. The major retail banks know fintech companies can provide
strategic new alliances – although the culture has to fit. Sigridur Sigurdardottir, chief customer and innovation officer of Santander UK, says the bank has invested in 21 start-ups so far via its
innovations division. Moray McDonald, head of personal and business banking products at the Royal Bank of Scotland, says, “We talked to 1,000 fintechs last year. We have people in Silicon Valley who talk to them all the time.” At the same time, the second Payment Services Directive (PSD2),
a European directive designed to boost competition and the variety of products in the banking, credit cards, and payments space, is putting pressure on traditional retail banking business models.
Competition is global “Think of the world’s most valuable companies – Google,
Facebook, eBay, Amazon and Apple – none of them existed 20 years ago,” says Eileen Burbidge, OBE, fintech special envoy to the HM Treasury. “Twitter is only 10 years old. Think about how we used to
navigate using A to Z books when we wanted to find our way. The world has changed rapidly in that time. The real competition is outside the UK – big companies like Walmart, Tencent, and Apple.” Inward investment is important, and banks, which have always
been innovators, have the infrastructure on which many fintech companies base their apps. “London is the largest financial hub in the world and I hope that
will continue to be the case post-Brexit,” she says. “Now, 300 of the world’s banks have their headquarters in London, and there are more US banks which have headquarters in London than in the US.”
12 | Relocate | Summer 2018
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