FinTech is the foundation of our future
7th April 2020
Written by Chris Hancock, Founder and CEO of Crowd2Fund
In these unprecedented times, we must all pull together and do our bit to support the global effort against the Covid-19 pandemic.
The health of the country comes first. However, the resulting economic shock will be felt for years to come.
The good news? If the situation is managed correctly, much of the economic crisis can be averted and the trajectory of the national and global economy can be re-calibrated.
This is the first economic crisis the FinTech sector has been required to weather. It is a test for all new platforms to enact their disaster recovery and contingency planning — for the first time. Fortunately, the sector is now almost a decade old, and well established with well-defined regulations designed to deal with this type of scenario.
For a decade I have listened to the rebuff of the old guard, proclaiming that the FinTech industry is unproven because it lacks evidence of the survival of an economic shock or the ending of the credit cycle. Well – this is it. It is a crucial moment for the sector, with the chance to deliver a final blow to the naysayers and drag the UK financial service sector into the 21st century.
The non perfect start of the CBILS scheme and the British Business bank saw clients, some of the most innovative, fast-growing and successful businesses in the world, being rejected for finance. Like Rami from Cyclotricity, who designed, manufactured and exported the UKs only e-bike and was refused access to emergency credit. This is simply bewildering.
As an owner of a FinTech platform that leverages cutting edge technology and the brightest brains in Britain to deliver debt-based investment capital to small and medium-sized entrepreneurs, I am obviously biased. However, evidence that backs up my argument abounds.
The key facts are:
Over the past 10 years, the best talent has left the banking sector to either start their own FinTech companies or join one—the banks do not necessarily have the best people to weather this storm.
FinTech platforms use state of the art technology, offering an innovative and improved experience for their consumers. This technology allows platforms to operate much leaner models than a bank, and these cost savings can be passed on to consumers.
By nature, the banks are old clunky beasts that are unable to adapt quickly enough to a rapidly changing climate. This lack of flexibility, coupled with a highly dynamic market landscape and an economic crisis, leaves banksunable to effectively deliver what the government needs.
The UK FinTech sector is the envy of the world. Why would we choose not to use the 10 years spent building strong, carefully laid foundations as a springboard for the UK financial service sector — for the next 100?
I have great confidence in those in charge, and the government departments such as the Treasury who are managing this; I am optimistically waiting to see how the situation will unfold.
This crisis will create dramatic social and economic shifts that we all need to adapt to. It has also brought about a shift in the way workforces operate and communicate in a global environment. Furthermore, many businesses have been pushed to adapt their business model and rethink the way they serve their customers.
What the world is experiencing is absolutely horrific. However, there is light at the end of the tunnel. We must prepare now to ensure a swift economic recovery as we emerge — and the thriving, dynamic and well-proven UK FinTech sector will give us an essential footing to achieve that.
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