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Connecting globally, acting locally
This year’s Innovate Finance Global Summit saw the launch of Deloitte’s interim Global FinTech Hub Review, compiled in collaboration with the Global FinTech Hubs Federation.
Deloitte UK’s Head of FinTech, Louise Brett, announced that the number of hubs showcased in this year’s report has grown from 21 to 44 within the six months to April 2017, accounting for $17.3bn of the $17.4bn invested in FinTech globally last year.
According to Louise, the development of FinTech has opened up room for disintermediation and disruption of traditional financial institutions. She described FinTech as a truly global phenomenon in an increasingly connected global world, and believes that FinTech innovation will ramp up in future. As she put it, “the pace of change now is the slowest it will ever be”.
Eileen Burbidge, HM Treasury FinTech envoy, described London as the FinTech capital of the world, aided in no small part by what she describes as “really progressive regulators and policymakers”. This pro-innovation regulatory environment, as exemplified by the opening of the Financial Conduct Authority’s regulatory ‘sandbox’ in May, is now being embraced globally. A number of other countries, particularly in Asia, have now launched similar ‘sandbox’ initiatives. Louise advocates an EU-wide ‘sandbox’ which “could shift the dial for FinTechs across Europe”.
Similarly, regulators across the globe are following the UK by signing FinTech co-operation agreements, the first of which was between the UK and Australia in March of 2016. Switzerland in particular has embraced the idea, signing eight such agreements, while the UK follows closely behind with seven.
The issue of talent is again key to the global development of FinTech, in particular the available access to talent and global movement. As Louise put it, “some hubs don’t have enough talent; others, it’s one of their prize assets”.
FinTech hubs across the globe are aiming to ensure they have access to a wide talent pool, both locally and globally. Sopnendu Mohanty of the Monetary Authority of Singapore discussed how Singapore has launched an initiative providing FinTech internships for university students. As he put it, “the only thing we have is talent. It’s our biggest asset. We can’t afford not to train our talent”.
Collaboration across FinTech hubs will be essential in ensuring the industry reaches its full potential, as different hubs have different strengths and weaknesses. Louise asked a panel of representatives from various hubs what they were leading in. The answers ranged from skills and talent to untapped opportunities, venture capital, and even regulation in the form of facilitating experimentation.
You can download the interim update of Deloitte’s Connecting Global FinTech report for the Global FinTech Hub Federation by visiting deloitte.co.uk/fintechhubs. The next full version of the report will be launched at Sibos in October 2017.