Necessity may be the mother of invention, but it has a second child in collaboration.
When it comes to crunch moments and serious challenges, the human tendency is to put differences aside and work together to find solutions.
Take the vaccine rollout. The whole program is an enormous collaboration of academic institutions, public bodies, and private companies. The Oxford-AstraZeneca vaccine is popularly named for the collaboration that helped bring it to life.
The UK now faces a new necessity – economic and social recovery. Harnessing the same collaborative spirit we’ve seen time and again over the last 18 months will be critical. Where the scientific and healthcare communities came together to fight the pandemic, now we’ll need other communities to work closely together to support our recovery.
For instance, the UK has one of the most developed banking systems in the world, playing a critical role as an engine for our economic recovery. But there are thousands of headlines written each year about the demise of traditional banks in this country.
An oft repeated claim is that the country’s highly successful fintech industry is here to eat the banks’ lunch. But, for the most part, this notion of a deep conflict in a zero-sum game between incumbent banks and fintech challengers is wrong. The success of fintech is not predicated on the demise of banks, or vice-versa. In reality all rely on the same ecosystem thriving: the UK economy. And it’s clear that banks and fintechs are increasingly seeing the value of partnership. Recent research found four out of five bankers saying they are willing or eager to engage with fintech companies.
This is more and more becoming the norm; Barclays and Flux, Codat and Virgin Money, Lloyds and Thought Machine. Collaboration, not competition, is the watchword for everyone in our sector.
So, in order for the British economy to prosper in the years ahead, banks and fintech companies will have to collaborate closely. There is work to be done. For some small businesses, it is still far too hard to access capital, set up a bank account and sell internationally. Nine in ten SMEs are calling for lenders to offer more digital services. We need to help our small businesses more easily access financial services to fuel their growth, and our large businesses to adapt quickly to a changing economy.
The need for cooperation across organisations, helping to drive economic growth in the UK, is one of the reasons I recently joined the board of UK Finance, working with firms ranging from retail banks, established credit card companies and investment and challenger banks.
We all have the same goal: to help build an engine that collectively drives economic growth. Imagine a world where it would take less than a minute for a small business to open a bank account, accept payments, get a loan and file taxes. Think about the millions of hours it would save. Time that business owners could spend on better serving their customers.
A recent example of collaborative success is Strong Customer Authentication, with new rules being rolled out across Europe that aim to reduce fraud by making online payments more secure. While this regulation was well intended, it could have made buying goods online much harder, and estimates were that European businesses stood to lose €57bn in economic activity in the first 12 months, as payments declined and consumers abandoned purchases. When it came to the crunch, banks, payments companies, merchants and local regulators collaborated extremely closely and have so far managed to limit the impact on consumers and small businesses.
As the country slowly but surely shifts its focus from fighting the pandemic to economic recovery, it’s critical that this spirit of cooperation remains in the months and years ahead.