The Covid-19 crisis has demonstrated the importance of fintech, Innovate Finance’s chief operating officer has said.
Speaking at the Fintech North virtual Leeds conference, Janine Hirt said that the pandemic has highlighted the role technology plays in all areas of our lives, particularly financial services.
Banks and other large financial institutions struggled to move their customers online “in such a short period of time with little or no warning,” said the fintech trade body executive.
In comparison, “fintechs by their very nature are able to adapt or adjust to obstacles,” she added, noting that they had stepped into a multitude of areas including small- and medium-sized enterprise lending and the simplifications of mortgage chains.
“Fintechs will play an integral role as we build back better in this post-Covid recovery,” she said.
Looking ahead, Hirt said that the UK needs to make efforts to maintain its position as a leading fintech hub.
“We know that the UK has historically stood at the forefront, thanks to our proactive regulators, the Financial Conduct Authority (FCA) and the Prudential Regulation Authority,” she said.
“But we can’t rest on our laurels as other countries around the world are taking initiatives as well.”
As an example, she noted that there are about 35 or 45 replications of the FCA’s regulatory sandbox scheme in other countries.
“We need our regulators to stay ahead of the curve,” she added.
Hirt also underlined the need for additional regulatory and supervisory support for fintech firms that are scaling up.
“We do have quite a strong growth capital gap here in the UK,” she said, and called for the “unlocking of institutional and corporate funding”.
Hirt also suggested changing the listing rules in the UK, to make it easier for fintech firms to float on the London Stock Exchange, such as allowing dual class shares and reducing the minimum requirements.
Dual-class structures tend to be popular with high-growth innovative companies, as they enable founders and other early-stage shareholders to maintain voting control of the publicly listed company by holding shares with enhanced voting rights, compared to the shares held by public shareholders.
These structures are not possible for a premium listing in London but are available on other major stock exchanges across the world.