Event Review: FinTech West’s Annual Conference 2022
On Thursday 13th October, FinTech West hosted its annual conference, as part of Bristol Tech Festival. The event was hosted at TLT in Bristol.
Dan Read, Partner at TLT, opened the event and welcomed delegates. TLT is a long standing supporter of FinTech West and hosted our last full day in person conference, which was back in 2019. TLT is well known for its expertise in the tech sector, not only in the South West but nationally across the UK.
Sir Ron Kalifa
Kicking off the agenda of guest speakers, Sir Ron Kalifa delivered a pre-recorded address to the audience, briefly summarising the outputs of the Kalifa Review of UK FinTech, which was published in February 2021.
“FinTech is not a niche within financial services, nor is it a sub sector. It is a permanent technological revolution that is changing the way we do finance. It is about delivering better financial outcomes for consumers and SMEs.”
Session 1 - National FinTech Landscape
Julian Wells, Director at Whitecap Consulting and FinTech West, give an update on national FinTech developments. Julian spoke about the evolution of FinTech over the last 10 years, and the way that regional FinTech clusters have gained in prominence, including being boosted by the outputs of the Kalifa Review which highlighted 10 key regional clusters. Bristol and Bath was named as an ‘emerging’ cluster, and since this time various initiatives have evolved including the announcement of the creation of a FinTech accelerator, the development of a regional FinTech strategy, and FinTech West continuing to step up its activities on a regional and national level.
FinTech Awards South West
2023 will see the launch of the FinTech Awards South West, taking place on 6th July. Matt Hyde is already behind awards programmes in Wales and London, and is working with FinTech West and other key regional stakeholders to set up the awards. These awards are different to other awards because they are independently judged, and most of the judges will be from outside the region. The judging panel already includes Joanne Dewar of GPS, and Mark Walker of FinTech Power 50.
“When you look at the whole South West, it is a massive region and by partnering with FinTech West we can bring people together. Anyone can apply, anyone can nominate, and we’re really looking forward to celebrating with you all next July.”
Business plans for building a FinTech
Della Hudson, of Minerva Accountants but representing ICAEW, spoke about how FinTech firms can create strategic and financial plans that put them in the best position possible to secure the funding they need to succeed.
Della has built businesses herself, written three books, and supported numerous entrepreneurs and businesses. Speaking on behalf of ICAEW, Della talked about the importance of having a strategic plan, which needs to cover product, sales, marketing, people, other resources, financing, and of course plans for exit. Once you have a strategic plan in place you can move on to the financial plan, which needs to cover revenue and cost considerations.
Panel discussion – the FinTech landscape
The presentations were followed by a panel discussion where the speakers were joined by Dan Read of TLT. The discussion covered a wide range of topics including talent and skills, funding, the key trends in terms of technology adoption, and financial inclusion, as well as touching on the potential impact of CFIT, and the emergence of LegalTech.
Session 2 – Making it happen
Regional FinTech Sandbox – NayaOne
Kris Dickinson, Financial Services Director at NayaOne, announced a new sandbox and marketplace specifically for the FinTech West community.
The new platform, which will launch imminently, will provide an exclusive environment for the FinTech West community to collaborate, build products and find customers – directly responding to some of the challenges regional FinTechs face. Access to the platform will be free of charge for the FinTech West community.
South West FinTechs and financial services corporates will benefit in two main ways:
Access publicly available real and synthetic datasets via the NayaOne Data Marketplace.
Access APIs and potential partners via the new FinTech West marketplace, and NayaOne’s Enterprise Marketplace – the largest FinTech product and service marketplace in Europe.
Once registered, each firm will have a ‘tile’ on the FinTech West marketplace which includes a description of capability plus connection documentation to enable technical connections, helping members of the community collaborate with their peers. All users will also have access to NayaOne’s Data marketplace – 120+ public and synthetic datasets, including consumer and business transaction data – to help the community test and validate solutions.
“If you can identify and test technology in 6 weeks rather than 6 months, go-to-market time shortens dramatically driving benefits for your customer and your business.”
Design and UX - Behind Login
Oliver Lane created Behind Login to remove the barriers to competitor and market research for FinTech and Financial Services firms. The business started as a consultancy but the core subscription product is now gaining accelerated traction.
Ollie talked about the ‘Design Double Diamond’, which involves the phases of Discover, Define, Develop, and Deliver. The approach enables you to move from problem to solution by first identifying the right thing to do, and then focusing on the right way to do it.
Building the back end - Seccl
Mary Agbesanwa, fintech growth lead at Seccl, stated that there is an estimated £800bn of market opportunity to unlock in retail investments. Seccl, which is owned by Octopus, is aiming to be the leading infrastructure-based player to support FinTechs wanting to enter the wealth management space – so in essence the firm provides ‘Investments as a service’. Seccl's mission is to rebuild the infrastructure of investments and advice addressing the fact that only 15% of Brits currently utilise a Stock and Shares ISA and only 3% of UK adults receive financial advice.
Seccl currently custodises around £600m of UK retail assets and supporting over 120,000 retail clients to access investments serviced by its technology. Mary talked through cases studies of how Seccl works with leading UK-based FinTechs today including Chip, Circa5000 and Penfold as well as upcoming trends in wealth management such as impact investing and addressing the gender investment gap.
Build a brand, not just a business - BeKindred
BeKindred is a brand consultancy that launched 18 months ago to work with the founders of high growth businesses in the South West. Paul Kirkaldy co-founded the business with Jack Thompson and Natasha McKenzie, and in his presentation Paul talked through the importance of building a brand as a key component in the process of building a business.
Paul talked through various examples of brands including Volvo, Dove, Monzo, and Dollar Shave Club, highlighting the importance of being authentic.
“Your brand is the very fabric of your business. Brand can give you clarity when you make business decisions. Start by asking yourself why you do what you do, who you do it for, and aligning your product to what these people need.”
Panel discussion – making it happen
These presentations we followed by a panel discussion featuring all of the speakers, when they were invited to share their experiences and perspectives on the life of a founder, and the lessons they have learned on their journeys as entrepreneurs or startup founders.
Session 3 – Experiences & Challenges
Following a productive hour-long networking lunch, delegates returned to hear from a mix of FinTech founders and industry experts who shared their experiences and challenges.
Going to market – Roqqett
Glenn shared his perspectives on go to market strategies for high growth startups, based on the premise that Go To Market strategy is a whole company effort, not just for the marketing team.
He observed that founders generally start with a problem, to which they then develop a product or service that is a solution to this problem and only consider market strategy when they want to launch. A more robust Go To Market strategy where enhanced understanding of the market being addressed defines the pricing strategies and the channels to market, which in turn contribute to how the product features develop, it should not be an afterthought. This will help drive successful product adoption and the ability to secure venture financing
Glenn advocates using a ‘Jobs To Be Done’ framework, which helps map what is involved in changing ‘business as usual’ to ‘new behaviours’, acknowledging that there is a ‘struggling moment’ that exists between these two states. By allocating scores to push and pull factors, as well as habits and anxiety, you can identify a JTBD score to help you gauge the challenge you face in achieving your goal.
Glenn also talked about how to value product marketing, by aligning your sales approach with the volume and value of customers you are seeking to secure, and the importance of channel / distribution strategy.
“In any startup, it’s not just about pricing, product and market fit, it’s also about distribution strategy. Although initially I would not have agreed, today I completely believe that channel drives product, and the route to market that you choose will heavily influence the way you design and deliver your product.”
Data strategy – TLT
Ed Hayes is Data and IT Protection Partner at TLT. The firm helps FinTech companies to ensure their data is in order, which is a critical factor for FinTechs who are striving to achieve a successful exit. Ed stressed the importance of the collection and recording of data processing information, and the need for internal policies and procedures.
“So many businesses have no audit record of the data processing activities they are using in their business, and this is a huge problem when it comes to light during the due diligence process.”
Regulation and the authorisation process - Burges Salmon
Martin Cook is a technology and financial services lawyer at Burges Salmon, working with UK and international clients across a range of assignments. Martin previously worked at Wonga, Funding Circle, and World Remit, so has hands-on FinTech sector experience. He talked through the regulatory framework and key considerations for FinTech firms requiring authorisation in the UK financial services market. Martin told the audience that if the FCA Handbook was printed out, it would be a huge 14 feet high!
“All of the FinTech work we are doing is done from Bristol, which makes me very proud.”
Consumer Duty and why it is important – Moneyhub
Vaughan Jenkins is Director of Business Development at Moneyhub, one of the best known names in FinTech not only in the South West, but nationally in the UK. Vaughan explained that the new Consumer Duty regulations aim to make financial services firms put the interests of customers at the heart of the way they work, rather than firms’ decision making being driven by dynamics such as commercial drivers.
Consumer Duty is relevant to all firms that deal with consumers, and covers all aspects of the consumer and product lifecycle. Moneyhub is publishing some research into Consumer Duty over the coming days and Vaughan gave us a sneak preview during his presentation. 24% of firms surveyed said that Consumer Duty will have a major impact on their business, but 28% have not yet developed plans to achieve compliance with the new regime.
“In our view the FCA missed a trick by not mentioning Open Finance and Open Banking as a means via which to comply with Consumer Duty. Whilst you might not need these tools to comply, using them is the equivalent of using a digital watch rather than a sundial.”
Pitching to get investment - James Savage, ex HSBC Ventures
James has had a long career working in funding and investment, having previously worked at HSBC Ventures in Asia.
He has extensive knowledge of the technology industry in Asia including India, Greater China, SE Asia, Korea, and Japan, and was founding Partner of HSBC's Asian Venture Capital business and was previously Chairman of the Venture Committee of the Hong Kong Venture Capital and Private Equity Association.
James estimates he has reviewed over 10,000 information memorandums, and that he has been directly involved in more than 60 transactions. James stressed how time consuming the fund raising process can be. He also explained that VCs tend to be much more quantitative and analytical than entrepreneurs, and recommended that FinTech entrepreneurs design their investor presentations with this in mind.
“My aim is to help the growth scene here in the South West to grow. My key advice to founders is not to give too much equity away, and that choosing the right investor is far more important than selecting the investor that gives you the highest valuation.”
Panel discussion: Getting investment - the real stories
Nina Searle, Partner at TLT, Nikki Hawkes, Co-Founder of Stratiphy, and Eamon Tuhami of HYWL Ventures were joined on the final panel by Glenn Smith and James Savage. The panel was chaired by Stuart Harrison of FinTech West.
The panel discussed the dynamics of funding and investment, giving the audience some great insights into the process. Investors in early stage businesses should not expect any return for at least 5 years, often more like 10-12 years.
“We’re still really busy so there’s still a lot happening, but the deals we are now finalising have probably been worked on over the last 12 months. There’s a lot of follow on investment activity by investors looking to protect their investments for the tough times ahead. There are always parts of the economy that can weather the storm, and that’s where we’re seeing investors focusing.“
Nina Searle, TLT
“My theory is that your first round is easy, because of benefits such as SEIS which effectively makes you a risk free investment decision. The next round you need to have metrics to show that you are succeeding and that your business is worthy of further investment.”
Eamon Tuhami, HYWL Ventures & Fintech Wales
“In the UK the tax structure is really beneficial for early stage investment. I think there is enough early stage money around in this part of the world, particularly due to SEIS. At series A it’s a different story and not enough money travels outside the M25. I’m pushing the big VCs to get themselves here, but it’s not easy fix.”
James Savage
“Getting regulated has not been easy and takes a long time. We’ve had to look to generate revenue from other activities while we go through the process. We’ve used crowdfunding to help fund our business growth, and as a B2C business this can be a great fit. You need to look at it as a community building tool, as it can drive engagement with your product or service.”
Nikki Hawkes, Stratiphy
“Crowdfunding can be a great route for fund raising, but don’t look at it as an easy route. If you can’t satisfy professional investors like angels or PE firms, you won’t be able to convince a crowdfunding community.”
Glenn Smith, Roqqett
“The ever increasing regulatory burden slows down investors, but we are also seeing larger financial institutions are increasingly taking stakes in FinTech companies which I think can only be a positive for the sector.”
Nina Searle, TLT
Closing comments - ICAEW
Ololade Adesanya is President of the ICAEW West of England, and a Director at Deloitte. Oloade closed the event by thanking everyone for attending and reflecting on how interesting and relevant the presentations had been to the work of the ICAEW, which is aiming to support the future growth of the FinTech sector, including improving adoption by its members.
It was great to have a full room and to experience the buzz in the room at the networking breaks. Massive thanks to TLT for hosting the event and providing support including food and drinks during the day, and to ICAEW for sponsoring the drinks reception.
