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By Katie Bishop
ow many things can you think of that the UK is really great at? If pressed to answer, you might mention the perfect pint or wax lyrical about the outsize impact of our music and fashion industries.
You probably would not think about your banking app or the ability to tap your debit card to pay for your morning coffee. Yet over the past decade the UK has become the fintech capital of the world, forging the perfect environment for innovative and exciting new businesses to redefine how we spend, save and invest.
Chancellor Rishi Sunak’s recently announced plans to support fintech firms and even investigate the potential of a UK cryptocurrency won’t come as a surprise to industry insiders. After all, the UK fintech sector currently represents 10% of the global market and generates £11 billion in revenue.
Sunak hopes to capture the industry’s tremendous momentum and to lead a technological revolution. His ambitious new roadmap is the latest in a so far successful bid to establish the UK as the home of digital finance. With a historically strong financial services sector and plenty of capital, the UK’s digital revolution started with a pool of talent, experience and resources. Combine that with a strict, yet supportive, regulatory environment and plenty of tax incentives for start-ups and you have a perfect storm for fintech to thrive. Perhaps that is why we are now home to 11 so-called fintech “unicorns” – start-ups with a company value of over $1 billion (£707 million) such as industry-leading firms Monzo, Revolut and Checkout.com.
Yet the UK financial sector remains dominated by men, and women fintech founders still struggle to attract investment. In 2020, just 17% of fintech venture capital was raised by women, and data suggests that the number of women founders has only increased by around 1.3% within the past decade. The Stack spoke to the women business leaders who are bucking the trend to find out why diverse talent is crucial to building the future of the sector, and what is next for UK fintech.
‘Personalised products are a huge growth opportunity’
Urenna Okonkwo is the founder and CEO of Cashmere, a savings app that helps users to set realistic goals so that they can experience luxuries – even when on a budget. “My background is in financial services. I worked as an accountant and a private wealth manager, so experienced first-hand how male-dominated the sector is, and how much of it is aimed towards an older generation.
“I noticed that my female friends were less likely to talk about investments and stocks and shares, whereas male friends were much more willing to discuss finance and take risks. Encouraging women to participate in these conversations about money has always been at the back of my mind.
“The great thing about female founders is that we can build financial products that really speak to women. I’m a huge fan of Sallie Krawcheck, co-founder and CEO of Ellevest, a digital investing platform for women in the US. She is actively providing options for her female clients factoring in women’s pay gaps, career breaks, and longer lifespans,” she says.
“I think that personalised products are the future of fintech; we’re going to see more financial products that understand us as individuals. We all have different goals and life circumstances, so it doesn’t make sense for us to see the same thing when we log into our banking app.
“Another of the biggest growth opportunities is cybersecurity. As more financial companies handle sensitive data, we will have to keep up with continuously evolving security threats.
“Beyond the UK, African countries, such as Nigeria, Kenya and South Africa, are doing some exciting things in fintech, particularly around building financial infrastructure products. Successes from companies such as Paystack, Branch and Flutterwave, show that there is a lot of untapped opportunity within these markets.”
‘We’re about to see a lot of exciting new businesses challenging the larger players in the industry.’
‘We’re seeing innovations in open banking and faster same-day payments’
Francesca Hodgson is the co-founder and Managing Director of GoodBox, a social impact start-up that allows charities to collect cashless donations.
“The best ideas evolve from observing a problem and thinking about how you can create a solution. That’s how GoodBox came about. My co-founders and I could see that non-profits relied on cash donations, but that we were moving towards a contactless world. We were passionate about finding a way to help charities use the latest technology to fundraise.
“Companies founded by women garner less investment and yet they tend to monetise more strongly than male-run businesses. That means that there’s a desire among organisations to reach out to women and to give them the support and confidence that they need to attract investors.
“I’ve been part of several accelerator programmes aimed at female founders including Google for Startups, which helped me to build a comprehensive understanding of running a business.
“COVID has changed the working dynamic and removed a lot of the complex requirements of starting a business, such as finding and paying for office space. This will allow fintech companies to start on a shoestring, and we’re about to see a lot of exciting new businesses challenging the larger players in the industry. I’d recommend Beauhurst as a great source of information to track fast-growing start-ups.
“Companies such as gohenry and the Dozens app by Project Imagine are making interesting access inroads with consumers by providing innovative, ethical finance solutions to help users better manage and understand money. We’re also seeing a lot of innovations in open banking and faster same-day payments. I’m keeping a keen eye on open banking and of course there’s a lot of noise around cryptocurrencies, though I tend to find that they’re a bit Marmite."
‘There’s still a lot of unconscious bias in the sector’
Hannah Dawson is the founder and CEO of Futrli, a smart prediction software that uses artificial intelligence to help business owners understand their future finances.
“My route into fintech was far from normal. I bought a pub when I was 23, but almost lost it within the first six months. I didn’t calculate VAT properly, and was hit by a huge tax bill. I had a one-year-old at the time and we lived above the pub, so our home and my livelihood were at risk. I never wanted to experience that fear again, and became a complete spreadsheet nerd – I was probably the geekiest pub landlord you ever met. That’s how the idea behind Futrli was born.
“Fintech is moving at a pace and innovating in ways that we couldn’t have previously imagined, but I think that the shadow cast by old-school banking brands will pervade for some time to come. For small and medium-sized enterprises this remains a key challenge, as it can be hard to attract awareness. In spite of that, we’re seeing some exciting companies and disruptors in the field – with companies such as Moov and Unit as my ones to watch.
“There’s still a lot of unconscious bias in the financial sector as people are so used to dealing with men, particularly when it comes to investment. But women bring diversity to the industry. As long as you’re bringing different ideas to the table, you’ll get a better result; women bring a whole different perspective. It really is that simple.”
The UK is a major player in the global fintech market – unlocking women’s talent is key to staying at the forefront of the industry.
By Katie Bishop