The morning addressed several areas of current pertinence to fintechs, which, already fighting the monumental challenge of scaling internationally are facing the added instability and funding pipeline uncertainly thanks to Covid-19.

Isabel Woodford, fintech journalist, Sifted, took the helm and spoke first with London Lord Mayor, William Russell, who delivered an optimistic outlook for the future of fintech in London despite any problems the pandemic may present.

“I’m an optimist. I genuinely believe that we have huge advantages within the London fintech ecosystem. As a regulatory environment we have the rule of law. I’m a big culture person and we have a wonderful city to live in, we have a timezone and a language that is favourable. It’s all there and Brexit isn’t going to change any of that either.”

Questioned further about the looming Brexit departure, Russell added that even those who had initially raised concerns about its impact are now backtracking, as they understand that London is indeed where the action happens.

Russell, revealing that while he is a Revolut man himself, Covid-19 has really driven the need for incumbents to bring their digital strategy forward as the ability to visit bank branches is not currently viable. This is only likely to strengthen the position of London fintech and build on its already established momentum.

“There has been a huge change and it is hugely positive for the sector, we need to take this momentum forward and continue investing. What the Chancellor has been doing around the Future Fund has been very positive and I’ve received very positive feedback. We need to learn lessons from this particular crisis and see how we can take that forward.”

Necessity is indeed the mother of invention

Launching into the following area of focus, Helen Child, co-founder and CEO, Open Banking Excellence set out describing the current state of the UK fintech market at present.

Despite the obvious challenges, Child observed: “I’ve also seen the very, very best of fintech, that ‘day-one’ mentality that says give us a problem and we can solve it. We saw this with the ‘heroes’ of Open Banking, the Chief Execs and Founders that galvanized their team very quickly at the beginning of the pandemic to resolve a problem and just provide a new source of amazing responses.”

Such responses are heartening, but according to investment figures as described by co-panellist Martyn Holman, partner, Augmentum Fintech, perhaps we shouldn’t be so surprised at the success and resilience the sector is continuing to demonstrate.

“Looking first on the investment side,” Holman said, “there’s been a relatively low interruption over this time period…The early evidence has been reinforced by later data that’s since been published which basically says that VC investment in European fintech is flat pretty much year on year - down in Q1 and up in Q2.”

Caroline Plumb OBE, CEO and co-founder, Fluidly, furthered the issue on financing, explaining: “As Martyn described, activity is broadly flat and a lot of those pipelines, those deals, take at least 3 or maybe even 6 months on average to finalise. What we’ll be interested in is what actually happens with deals during the third quarter.”

Speculating that perhaps deals in the third quarter won’t be as high given the mentality shift in VC approach, reinvestment and now the government’s involvement in providing loans, Plumb observed that this “has created a lot of interesting dynamics in that market and where the value is captured has really moved around.”

Is investment during Covid-19 a pipe dream?

VC is confident in the long-term viability of fintech, argued Anton Ruddenklau, head of digital banking & innovation, financial services, KPMG: “that must be because we’ve got crusty old financial services sitting to one side that needs renovation quickly. This is a good area, but we need to focus on things that are different.

“If fintech companies are looking at this trade mission, saying ‘I’m coming to the UK with an invoice finance product’, don’t bother to come. We’ve got enough of those already, we need to look at points of difference and we need to mature the market.”

Ruddenklau highlighted capital markets, wealth, property and health as the large, underrepresented product areas within the fintech space which need attention. These areas of adjacency are where the UK is well placed to expand and there remains significant opportunity for firms coming from abroad.

Further flags raised by the panel as the most significant areas of concern for fintech companies looking to scale in the UK centred on the availability of talent, selling a product which does indeed have a unique selling point in the matured fintech market of the UK rather than the younger markets in which they originated, and naturally, how the expense of London can make the move a bit of a do-or-die mission.

There is however the option to expand in the UK outside of London. While London traditionally held the reputation as the ‘place to be’ for fintech, currently 40% of UK fintech operates outside of the capital with Bristol, Leeds, Edinburgh and Manchester are just a few cities considered to be flourishing tech hubs. Given the dramatic shifts in traditional office culture brought about by Covid-19 and the rising number of firms (particularly in tech) encouraging working-from-home set ups, this percentage of fintech based outside of London is only like to increase.

Capitalising on ethics to ride the Covid-19 trust boom

Rounding out the session, Andrew Wilde, senior director, financial services, Edelman, presented findings of the firm’s renowned Trust Barometer. Typically announced annually at Davos, Edelman chose to provide a Covid-19 focused update to the findings to understand how the pandemic influenced markets and consumers from January to May.

Interestingly, Wilde explained that trust toward financial services is currently on an uphill trajectory, between January and May there has been a steep 9-point rally in the UK.

“Historically,” Wilde elaborated, “in times of crisis people tend to rally around their institutions, people gravitate toward the institutions that they believe are going to protect them at a time when they very much need to be protected.”

While this is promising for financial services - which, Wilde noted, include fintech - it is typical for a crash in trust to occur in the year following a trust spike. This may be because their expectations were set too high and it is immensely difficult to deliver against what consumers expect of a given firm or institution.

As a word of warning, Wilde added that the actions of a single company or a single individual can have a disproportionate effect on a sector as a whole. Alluding to a current European company in the fintech space, Wilde commented that “when these major scandals happen, people have to pedal harder to avoid being tarred with the same brush.”

“I’ll leave you with a thought, when we looked at the individual traits that people said would lead them to trust a company more, these fall into two categories: one of competence and another being the firm’s ethical stance.”

The ethical drivers, Wilde explained, include whether firms advocated for the rights and values shared by their customers, are three times more prominent and important than the element of trust.

“Customers are looking for people to advocate for them to espouse their values, to champion the things that matter to them. In our view, if you can do that at the moment you’ll maintain the current trust boom and you’ll be able to capitalise on it.”


Newfound’s Market Missions programme focuses on assisting fintechs establish and expand across new markets through the provision of pragmatic plans and resources. Given Covid-19 pressures, providing a purely virtual Mission programme means internationally minded fintechs can build on momentum for expansion without the opportunity cost and expense of travel.