Key lessons from Innovate Finance’s 2022 IFGS event
Last week, we attended the Innovate Finance Global Summit (IFGS 2022) in London. IFGS is the flagship event of UK Fintech Week, bringing together some of the most prominent leaders in the UK fintech sector, ranging from innovators, institutions and regulators to policymakers, startups and investors. This year’s summit was framed around 6 key themes: Fintech Growth, Investment Trends, Regulations, Sustainability, Open Banking and Crypto. In this blog, we take a closer look at some of the highlights of the event.
After a two-year pause due to the COVID-19 pandemic, we can certainly say that Innovate Finance’s 2022 Global Summit returned with a bang! With more than 300 speakers across three stages, including names like Anne Boden of Starling Bank, Sebastian Siemiatkowski of Klarna, and Rishi Khosla OBE of OakNorth, and nearly 2,000 attendees over two days, IFGS was “the place to be” for every fintech enthusiast in London. With the Cygnetise team there in force, here we share a brief recap of the insights that most caught our attention.
The future of fintech in the UK
One of the highlights of day one was the panel discussion, “Lessons learned and aspirations for the future: Fostering true disruption”, starring 5 of the UK’s top fintech voices: Joanne Dewar, CEO of GPS, Mark Mullen, CEO of Atom Bank, Louise Hill, COO of GoHenry, Mike Laven, CEO of Currency Cloud, and TS Anil, CEO of Monzo.
According to Mark Mullen, the success of the fintech sector in the UK lies in the proactive implementation of independent initiatives like Open Banking, and the talent factor:
“The UK and City of London have been very welcoming of talent, and they must continue to be so in order to compete into the future. Talent is the magic ingredient that makes the entire fintech industry prosper, thrive, and grow.”
In addition to this, TS Anil emphasised the key role of policy, infrastructure, regulation, capital raising, and sustainability for the sector’s future growth. He further added that improved infrastructure is fundamental for both driving innovation and enhancing regulatory compliance.
Regulation as a balancing act
The issue of the evolution of regulation in the sector was brought up in multiple sessions. “Over the next 10 years the sector will be defined by the balance between regulation and advances in technology,” said Anil.
As the fintech sector matures, and more consumers are becoming dependent on it, the issuance of tighter regulation and compliance measures is just a matter of time. It’s regulators’ tough job then to find the right balance between protecting consumers and driving innovation. The inability to do this will considerably obstruct the potential progress of the industry. For fintechs, this means that they should bring compliance to the top of their agendas.
Streamlining internal processes and operations with robust compliance solutions is no longer just a problem for incumbents. And the only way for fintechs to retain their competitive advantage is to focus on what they do best – embracing new technology. Emerging regulatory and governance tech solutions like Cygnetise can help fintechs remain fully compliant and resilient.
Open banking and embedded finance on the rise
The embedded finance sector is predicted to be worth $3.6tn by 2030, becoming an attractive space for both fintechs and traditional financial players. But when it comes to who will be “the winner” in the category, views are mixed.
With fintechs having the edge, flexibility, and capacity to bring the technology quickly to market, incumbents face a real threat of falling behind. However, the actual winners will most likely be big tech players like Google and Facebook.
The UK is open for crypto and DLT
One of the hottest topics at the conference was surely the FCA’s official statement about its plans to support the adoption of Distributed Ledger Technology (DLT) and Blockchain in the UK and convert the country into “the very best place in the world to start and scale crypto-companies”.
In his keynote speech, John Glen, UK Economic Secretary to the Treasury, said:
“If there is one message, I want you to leave here today with, it is that the UK is open for business - open for crypto businesses.”
In addition to highlighting the opportunity DLT and crypto technologies could bring to the UK economy, John Glen outlined the government’s formal framework that will aim to facilitate the adoption and minimise any risks associated with it:
Crypto regulation
“Since January 2020, crypto-asset firms operating in the UK have been subject to the Money Laundering Regulations, and we recently consulted on implementing the Financial Action Task Force’s Travel Rule for transfers of crypto-assets.”
Education
“The UK already has a strong track record of facilitating experimentation through the FCA’s regulatory sandbox, which has supported more than 50 firms using blockchain. The FCA will be organising the first of a series of ‘crypto-sprints’ next month, involving scores of industry experts. The sprints will inform FCA policy thinking in real time, and participants will be tasked with wrangling some of the legal, technical and regulatory challenges the industry faces, and then coming up with practical solutions which, we the government, will take forward as quickly as we can.”
A Cryptoasset Enagagement Group
“In the same spirit, we will also be establishing a high-level industry group, the Cryptoasset Engagement Group, to help guide us on the next steps in road ahead.”
As a blockchain-empowered organisation, at Cygnetise, we’re extremely delighted to see the UK government’s proactive approach to facilitating and authorising the DLT and crypto sub-sectors.
Cygnetise utilises blockchain to eliminate the burden of manually managing authorised signatories or signers, delegated authorities, trader lists and bank mandates. The Cygnetise application allows organisations to gain full control over their signer data and save over 90% of their admin costs and time, whilst mitigating the risk of fraud, financial loss and reputational damage for the organisation.