FinTech for Breakfast

Held on Tuesday, December 13, 2016.

With support from Dentons.


  • Izabella Kaminska (FT Alphaville)

  • Andrew Graham (IBM)

  • Karan Shanmugarajah (WealthKernel)



The Lisbon Web Summit

This year’s Web Summit coincided with the American election – hopefully Izabella will give us a debrief on the conference itself, as coverage for the event got Trumped. Still, The Atlantic had a rather acid take on proceedings – fun in its own right, and blessed with a BTL comment calling the Web Summit a “Cambrian Explosion for weird business ideas”.

Potential discussion points:

  • What (aside from Trump) happened at this year’s Web Summit?

Going cashless

Struggling with your Christmas shopping? For those too time-poor to put a cheque in the post, PayPal announced some seasonal e-cards to brighten the gift of electronic money.  Rumblings about the quality of business PayPal is putting onto its credit book remain confined to the blogosphere.

The wider world of cashless payments had a down and up month: 20,000 Tesco customers found themselves (briefly) with less cash; the UK’s Payments Strategy Forum released a final strategy document very much in line with its draft strategy; Newcastle University believed they’d found a “distributed guess” vulnerability in VISA; Mastercard decided to deploy machine learning to reduce its false positives; Prime Minister Narendra Modi made India perhaps a little too cashless; and SETL became the first company to emerge from the FCA’s Regulatory Sandbox, and promptly struck a deal with Deloitte.

Frustrated after a trip to Scandinavia, Citi released a note under the self-explanatory title “FinTech: Dude, Where’s My Innovation?” – for all the technical innovation underway, adoption rates of new payment technologies are still low in developed economies. In contrast, EY and DBS Bank reported on the rise of FinTech in China, where mobile payments and wallets have seriously taken off. Alipay underlined its international ambitions, adding 930,000 merchants to its European network via partnership deals.

Potential discussion points:

  • Do any of the payments innovators in developed economies look like they’re generating real momentum?
  • Should payment systems in developed countries be fearful of China’s unicorns? Or is PayPal’s development since eBay a sign that evolving outside your native ecosystem is a significant challenge?

What’s the plural of metamorphosis?

The line between “disruptors” and “incumbents” got even blurrier with more mergers, partnerships, and business model adaptations. Atom Bank entered the UK mortgage market using a platform from Australian firm IRESS. Zopa announced it was considering obtaining a banking license, prompting the FT to run a nice Animal Farm analogy. Munich Re partnered with start-up Wrisk to add mobile distribution for its products. IFA group LEBC announced it had reached £500m of AuM on its robo advice platform, and Killik is launching its own offering next year.

In the US, the OCC issued a white paper exploring the pathways for US FinTechs to become banks. Wells Fargo and Citizens Bank became the latest entrants in the US robo advice market, using B2B2C platform SigFig.

Quite why anyone would want to morph into a bank is another question – PwC released a report reminding us that in recent years UK banks’ revenues have grown slower than GDP. That said, being a standalone disruptor isn’t easy either – Nutmeg added £30m to its war chest, amid reports that acquiring enough AuM to fund organic growth is easier said than done.

Potential discussion points:

  • Are the majority of FinTech companies really challenging FS incumbents? Or is the bulk of their challenge aimed at financial software houses and tech consultants?
  • After the experimentation phase, will we really see radically new business models emerge? Or will new services look a lot like old financial services, just with much of the cost ripped out?


The bigger implications of Big Data are still being worked through. Andrew Bailey gave a speech to the ABI about the social implications of a world dictated by algorithms – and Izabella also had a good hard think. It’s a theme we’ll be looking at it in January with a round-table on the ethics of big data and digitisation.

That EY / DBS report on China also had some interesting stats on insurance distribution in China – proving that ecosystems can cross-sell other financial products (admittedly with help from a giant like Ping An).

Potential discussion points:

  • Given the potential for “misuses” of Big Data in insurance, should there be wider public debate of the issues?

Market Infrastructure

Another month, more blockchain experiments. Deutsche Bourse & Deutsche Bundesbank announced a post-trade DLT settlement prototype. The ECB and Bank of Japan are doing some more research into DLT and other potential next generation technologies for market infrastructure.

In the private sector, Goldman Sachs left the R3 consortium, followed by Santander. Still, quiet progress goes on behind the scenes: CLS overhauled the architecture underlying its FX settlements; and The Royal Mint teamed up with CME Group to launch a digital gold trading platform… on blockchain.

Potential discussion points:

  • Is real innovation in post-trade and market infrastructure going to come from blockchain alone? Or will we see more of a patchwork of innovation driven by cloud computing, open APIs, interoperability and so forth?


This year’s Autumn Statement hid a lot of positives for FinTech under an anticlimactic headline. The Chancellor announced a further £500,000 per annum to support FinTech (no, we didn’t miss any zeros there) – but in fairness to HMT, the announcement was alongside a £23billion commitment to productivity investment, significant amounts of which will go towards fibre connectivity, 5G broadband, science and research, and some £400m for private investment in innovative companies. Elsewhere, the FCA expanded its bridges programme with a cooperation agreement with the Hong Kong Monetary Authority.

Britain did will in Nesta’s 2016 European Digital City Index – although the underlying data is all pre-Brexit, so who knows what next year will bring. Whether one takes the KPMG / CB Insights numbers or the Innovate Finance / Pitchbook numbers, Brexit has definitely affected UK FinTech funding.

Potential discussion points:

  • Is there sufficient central support for the FinTech sector in the wake of Brexit?

What else should we be talking about this month? Email your suggestions to Angus Young.

Another month, another gallop through the world of FinTech. As ever, holding the reins will be Izabella Kaminska, of FT Alphaville, safely recovered from the WiFi outage at this year’s Lisbon Web Summit.  Joining her will be Andrew Graham, Distinguished Engineer and IT Architect in IBM’s Financial Services business, and Karan Shanmugarajah, CEO of B2B robo advice start-up WealthKernel.

So what’s been happening in FinTech? Well, amongst other things we hope to cover:

  • the biggest stories from this year’s Web Summit;
  • Innovate Finance’s report on UK FinTech funding post “Brexit”;
  • Nutmeg’s latest funding round and developments in robo advice;
  • Nesta’s European Digital City Index (and the UK’s strength in depth); and
  • Tesco, public relations, and cyber-crime.

If you (or a colleague) would like to join us, and share your own priorities and perspectives, please let us know by emailing or calling the office on 020 7621 1056. Thanks to our friends at Dentons, there will be plenty of tea, coffee and sticky buns to keep us going.