Fintech is evolving and the UK stands to be at the forefront of that innovation, but only if we uphold the highest possible international standards, says Michael Mainelli
The fintech landscape has not only transformed over the last few years, but the industry has also transformed the whole of the UK’s financial and professional services sector, of which it is now an integral part.
However, with fintech evolving so rapidly, we cannot on rely on our past successes. This is why the Innovate Finance Global Summit being hosted by the City Corporation this week is coming at a crucial time.
As the most globally connected financial centre in the world, we are in a position to benefit from fintech successes in those markets with which we have strong links. I visited India earlier this year, which has become the world leader in instant payments due to the success of the Unified Payments Interface. Other markets are taking full advantage of this and signing up to UPI in their payment systems. We in the UK need to do the same if we are not to be left behind. We need to Implement the Future of Payments Review and bring the UK up to ISO 20022, the global payments messaging standard, so UK fintechs can transact with counterparts in India and other markets.
At the same time, the debilitating spread of international fraud creates a duty for the fintech sector to do more to tackle this growing menace. Consumers are facing industrial level fraudsters and cyber-criminals. They need to be protected by an industrial response. The City of London Corporation and partner organisations are encouraging a greater role for tech companies, to protect individuals at source and make the best use of their innovative capabilities to harness technology for good. Industry must provide the first line of defence against fraud, through better collaboration and data-sharing at a business-to-business level.
In a challenging global environment for investment, the UK remains the largest hub for fintech investment outside the US, with four Unicorns created last year – two of which were AI firms: Quantexa and generative AI firm Synthesia. This demonstrates how the rise of the AI will drive further and faster change in fintech.
The UK is in a strong position to benefit, and currently receives around half of all of Europe’s investment into AI. It is essential that AI is developed and deployed in ways that benefit society, while minimising potential harm. The Lord Mayor’s Ethical AI Initiative promotes the use of the ISO standard on AI management systems by firms, and offers courses for AI builders and AI deployers. More than 4,000 participants from 300 organisations across 45 countries have taken part so far. We have also brought together leaders from the global testing, inspection and certification sector to develop the Walbrook AI Accord, to harmonise the global infrastructure for AI assurance standards.
Being home to three of the world’s most intensive and high-profile science/tech research clusters –Cambridge, Oxford and London – means that the UK’s academic institutions have spawned world-leading tech and fintech firms. My mayoral theme, Connect to Prosper, highlights the importance of these strengths to the Square Mile and the City of London’s role as the world’s coffee house.
As we reflect on the successes of the past decade, we need to learn from our experiences so that in future we can be just as bold in embracing innovation, ensuring we are out in front rather than being left behind by our competitors.
Our government and regulators need to ensure we remove barriers to competition, participate in the latest global successes and align with the highest international standards. Our fintech sector needs to work with the global fintech community to fight fraud and protect its customers. Only then can the UK lead the next generation of fintech.
Michael Mainelli is Lord Mayor of the City of London