Manchester and London Fintech Firms To Work Together: Modern technology and new regulations are pushing transitions in typical financial institutions in London. If these firms could join forces with the ballooning Fintech community in Manchester, they would rise to higher notches in the near future. In this era of new regulations, the UK’s financial services have a huge task of adjusting to the changes and the competitive environment.
Some of the greatest bottlenecks London firms need to overcome to meet the growing consumer demands for payment methods and apps include the new open banking rules. The other challenges that follow are the competition for innovative talent and the unprecedented nature of Brexit. Many traditional banking systems in the UK respond slowly to consumer behavior and legislation changes, making them more prone to the previously stated hurdles.
Financial institutions need to go subtle, no wonder large-scale banking institutions have started to appreciate partnerships with technology-focused firms from Fintech. Working with Fintech is one way of closing the discrepancies with better payment options and apps. As such, there are numerous opportunities for the prolific Fintech community in Manchester whereby a growing ecosystem that incorporates software experts and cost reduction measures prove extremely helpful in the establishment of financial institutions.
Formal connections between Manchester’s Fintech firms and London are underway as discussed in the event that took place at the London’s historic heart, co-hosted by Catherine McGuinness (City of London Corporation Policy Chairperson) and Tim Newns (MIDAS CEO). It was the perfect moment for analyzing the potential challenges and opportunities in technology and legislation. The breakfast meeting which was attended by delegates from Deutsche Bank, Deloitte and several firms, managed to unite big and small Fintech firms from Manchester and London. The represented firms included
ComplyAdvantage (London): a startup firm that aims at helping financiers enhance competence
AccessPay (Manchester): corporate payments and cash automation service
Onfido: it hopes to provide easier identity verifications through instant photos
MarketInvoice (London and Manchester): P2P invoice discounting firm
It was concluded that stringent regulations are the major challenges that inhibit banks from taking risks. Compliance costs further accelerate the burden faced by major financial institutions. For these matters, Fintech companies such as AccessPay have decided to propel their success under the umbrella of major corporations. Luckily the mainstream corporations have shown a willingness to partner with Fintech companies by leaving their software designs open to third-party developers with the help of open API forums.
London hosts a number of financial firms, some of which are the world’s largest. But the potential of the Fintech industry is dependent on the cooperation between London and Manchester as noted during the meeting. As far as Fintech goes, the United Kingdom is the exceptional leader where more people have been employed in the sector than in New York or Australia, Hong Kong, and Singapore combined, said Ms. McGuinness. The main tech hubs, including Manchester, have been the driving force of this growth in the UK. These hubs are bolstering the Fintech agenda across the board. McGuinness further remarked that financial institutions are leveraging technology to improve customer service, showing how vital this is to the banking industry in closing the bridge between London and other Fintech hubs in the UK.
On behalf of the City of London Corporation, the Chairperson said that it was a pleasure to collaborate with MIDAS from Manchester and to determine areas that need to be worked on closely in future. Even though London is the biggest center for FPS- financial and professional services- 66.7% of FPS personnel works outside London and Manchester and offer flourishing FPS elsewhere. The event which was hosted by the City of London Corporation allowed delegates to pinpoint the success stories of the region as well while emulating the mutual relationships among partners from the varied scale.
Manchester has seen tremendous growth in the finance industry with 70,000 new employment opportunities from such firms as WorldPay taken over the last 10 years, not to mention that Fintech has more opportunities to give. This success comes down to the meticulously incepted ecosystem as well as history. The integration of conventional technology, finance, and media in Manchester are the elements that make up a viable ground for Fintech.
Typical financial innovations have been around for a long time in Manchester, the home to IT departments of various national banks like Barclays, Co-op bank, and Lloyds. The media and creative industry in Manchester take credit for the complementary skill. Manchester is now a home to MediaCityUK.
Manchester is the biggest e-commerce center in Europe. Business minds find inspirations and gain valuable skills which are vital for customer experience as well as financial transactional requirements. The MIDAS CEO explained that this is not only confined to financial services. He said that three big companies have shown interest in Fintech. Partnering with Fintech and other SMEs enables baking institutions to serve better their clients in more creative manners. Similarly, universities are crucial parts of the ecosystem serving as sources of talent as well as cooperation between the academic world and the Fintech industry.the other important factor is easy access to capital.
A lot of firms are already benefiting from Manchester offers. For instance, Adyen, located at Spinningfields in XYZ building, delivers flawless online transactions, in-store, and mobile services to a wide range of clients through Spotify, Facebook, L’Oreal, eBay, Netflix, and Uber. Another example is the Ebury, King Street, Manchester, which helps firms to finance and conduct monitor their international trade.
Newns noted that Manchester, as the biggest financial service center outside of London, takes up 20% of the economy. The FPS sector is not just in London but also echoes in Manchester City where it plays a huge role in the entire UK economy.
While it’s true that there are bigger challenges in the finance industry and changes in consumer behavior, the journey towards becoming digital entities instead of mere financial institutions is getting clearer. Big institutions have a challenging call to developing the agility legacy using their scale while the challenger banks must deal with the problem of scale i.e. how to penetrate the market and attract clients. The average-size banking institutions, on the other side, are in a better place which they should leverage, with a good clientele base and agility, and sufficient capital for investing in digital innovations. Manchester Fintech is the solution to all the aforementioned challenges.
A part of the ecosystem, there is a wide spectrum of Fintech hubs in the greater Manchester City, ranging from co-working environments to commercial facilitators, giving a great base for startups, big firms, and SMEs to work together and thrive.
There is a modern digital hub in the XYZ building, Spinningfields known as the Vault. Another entrepreneurial working space operated under Barclays is the Rise Manchester which inspires and natures tech entrepreneurs and startups. Then there is the NatWest which chose Manchester eSpark location as the place to carry out Fintech programs.
Looking at the co-operative side, a proof of concept exists whereby most of the financial institutions are embrace collaboration with smaller developers with expeditious innovations. A lot of firms are leaving their technology framework open in order to assist external developers in coming up with new apps and services. Because of their history, legacy, and scale, these firms admit that they may not have all the solutions or agility to get quick answers. Tech hubs and incubator centers offer the entry points. Even bigger enterprises are recognizing and adopting agile techniques on legal procurement and compliance.
As remarked by Davies, the director of the location strategy in Deloitte, financial firms are showing interest in expanding their bases beyond London for good reasons. London is a fundamental region that provides extensive pools of talents across the world. While labor costs and regional locations might be 25% less expensive, the real estate could be half-priced. But a lot of controversies arise concerning hoe firms attain conducive medium and a good balance of locations.
Reasons Fintech firms want Manchester
AccessPay is a top-notch example of a Fintech hub based in Manchester. It has managed to improve the capacity of conventional financial institutions which it serves. The type of service AccessPay provides is beyond the potential of that offered by the corporate firms.
James Higgins, the product director insinuates that the corporate banking services are disintegrated and insufficient. The world has seen major transformations in both consumer and retail levels where banking services are carried out at the comfort of one’s PC, tablet, or smartphone. This experience is yet to reach the corporate clients. James ascertains that their guiding principle is to make it much better and faster than the fundamental providers and overcome the hurdles they encounter. At this favorable stage of legislation and high demand by clients for newer technologies which are readily available, AcessPay is in a better position. The firm has benefitted from Manchester talent base without any delusion on the way money transfer and payments must be conducted.
The director added that the reason Fintech firms succeed in Manchester is the favorable ecosystem which AccessPay drew on. Higgins continued to state that the incumbent providers now have the challenge to offer better services and recognize Fintech firms as competition. Not only do they offer accounts but also keep clients money safely, which is exactly what banks do. These firms want to help clients enjoy better banking experiences and also inspire the providers to produce modern products and services at a speedy rate, something they couldn’t manage in the past due to the transitioning legacy architecture, new regulatory measures, and higher expenses. Fintech firms are more than happy to give bank customers these impeccable services in whichever kind of partnership designs the banks need.
This model will be replicated. As a matter of fact, AccessPay is reaching out to London investment managers to see the type of services that would suit the platform. It is possible for AccessPay to serve clients through the bank portals. Moreover, the incumbent providers are also seeking permission to give their services through the AccessPay platform. Such collaboration would result in a fantastic customer experience.
The UK managing director at Ebury, Paolo Giabardo added that Ebury is positive firm that believes in making things happen successfully and promptly. An office in Manchester enables the company to deploy a pool of graduate talents from individuals who are willing to be a part of Ebury’s success and get closer to clients beyond London headquarters.
According to Phillip Nunn, the CEO of Weathchain, a Manchester Fintceh firm, the commercial activities in Manchester have expanded in the past one decade mainly due to the emergence of technological startups. The city encompasses one of the greatest student populations in EU, hence companies such as Wealthchain have so much to gain from the growing graduate talent in the North.
Credit goes to technology which allows the provision of effective financial services past the confines of London, such that Fintech community can connect with investors and clients across the board.