Why UK FinTech Needs Its Hand Bitten

I've just been enjoying the photo gallery from the recent Fintech Innovation awards. It was a great night for Bought By Many - we won the Innovation in Insurance award for our work with Ping An in China. We also had a lot of fun. The frenetic pace of startup life means you need to pause from time to time to be able to recognize your own achievements. I am glad we spent an evening as a team doing that.

Last week @TheFinTech50 and tonight Innovation Award at #TheFIAs. Huge kudos to all the @boughtbymany team pic.twitter.com/bxgp5UBXg6— Steven Mendel (@stevenmendel) April 13, 2016

But the photos also reminded me that the event left a sour taste in my mouth. Here's why.

Firstly, the room was very "Fin" and not very "Tech". Attendees were overwhelmingly white, middle-aged, male, and besuited.

The compere for the evening repeatedly referred to "The City" - as if this was the institution that everyone in the room was affiliated to. When keynote speaker Matt Hancock MP, Cabinet Office Minister & Paymaster General, announced that the UK CEOs of Santander and Barclays were present at the awards dinner, there was a sycophantic round of applause.

Presumably this was because many of the FinTech companies in the room would very much like the big retail banks to be their paying clients. FinTech remains predominantly the business of supplying product to incumbent financial services organizations, so they can do what they've always done more cheaply & efficiently. Using technology to change consumers' experience of financial services for the better is, sadly, a peripheral concern.

This is not how things should be. Society doesn't really need more innovation in trading systems or treasury management. It doesn't need entrepreneurs from rarefied backgrounds in corporate banking or FX developing software to be sold back to their former employers.

Great atmosphere at #TheFIAs, but #Fintech needs to work on #diversity pic.twitter.com/UdvYAhL6XC— Sam Gilbert (@samgilb) April 13, 2016

What it needs is more innovations that help ordinary people gain more power over their personal finances. It needs entrepreneurs who are empathetic to people's state of denial over their overdraft, their procrastination over pensions, their incomprehension of insurance - and who are motivated to help them, using technology. The contribution that FinTech companies and FinTech VCs make to society should go beyond charity collections at industry events, community team-building days, and self-congratulation about our collective contribution to the UK economy.

As Dan Ariely concluded in his excellent keynote, FinTech has power and it has a choice. It can ignore people's needs altogether. It can encourage people to do things that are detrimental for their financial wellbeing - like spending more, unconsciously, through cashless payments and electronic wallets. Or, it can help people make better financial decisions. I was delighted that Clearscore, the startup helping UK consumers make better borrowing decisions through free mobile-friendly access to their credit report, was named Fintech Innovation of the Year 2016. We just need many, many more FinTech startups with this focus on the needs of real people.

This article was written by Bought By Many. We were not paid to write it but we will receive commission if clicking on a link to one of the named insurers results in a reader taking out a policy with that insurer. We also charge for advertising space so a particular insurer may be highlighted in the article and, where insurers are listed, it can dictate where they appear in the list.