The financial services sector is a huge contributor to the public purse, an internationally-recognised global leader and an employer of more than 2m people across the UK. The technology sector is a true innovator that is rapidly expanding and currently outpacing economic growth, attracting a workforce of around 1.56m people.
Both rely on international talent. Both see the EU as their biggest trade partner. Both are major players on the international stage.
The two had rarely crossed paths. They have typically run in parallel to one another with little overlap, despite Shoreditch – a hub of the UK’s major tech players - being the next door neighbour of the Square Mile. This was the case until a few years ago, around the time I became the policy chairman of the City of London Corporation in 2012. Almost as soon as I took on the role, it was apparent that fintech was going to revolutionise the way firms do business.
The financial sector’s long and illustrious history, which has seen it become so successful, has also been a sort of poisoned chalice. Financial firms are working with legacy systems that are making innovation more of a challenge; they’re unable to be as dynamic as they’d like to have been. Collaboration with tech firms means they’re exploring ways to rectify this, and already making huge progress. In 2015, 11m people logged into a banking app each day – a 50 per cent rise on the previous year. Insurance firms are also reaping the rewards on claims, with turnaround time from the moment the claim is made to the time the payment is processed now, as low as three seconds.
While it’s fair to say London is not the only tech or financial giant, it is unique in that it stands alone in having the two so close together geographically.
Take the US: it has a huge financial sector in New York, and world-famous tech sector in Silicon Valley, California. The two are major rivals of London. However, they are also on opposite sides of the country – to bring together the “fin” and the “tech” would require a five-hour flight or 42-hour drive. For Londoners, it’s a brief trip on the tube or a train journey to any one of the major tech hubs across the UK such as Bristol, Manchester or Leeds.
As the UK enters into negotiations to leave the EU, it’s even more important that these sectors work closely together to seize the opportunities Brexit presents. Over the next two days, Innovate Finance is hosting one of the leading conferences for fintech – the Global Summit.
Convening the world’s global institutions together with startups, policy makers and investors, the Summit allows the sector’s leaders to share ideas and solutions to the challenges facing financial services.
During my time as chairman, I have watched fintech go from strength to strength. It is no longer the new kid on the block, or seen as a separate entity to the rest of the financial services sector. It’s part of the entire financial ecosystem that makes the UK such a pioneer. The seamless relationship is only set to strengthen - there is no stark divide between these two formidable sectors, increasingly technology is financial services.