Driving FinTech in Manchester
Wednesday 30th September, Barclays RISE Manchester
Innovate Finance is an industry-backed body aiming to promote the UK as the world centre of “FinTech” – the merger of technology and finance. Founded by companies new and old, from digital currency businesses to IBM and Mastercard, it has grown rapidly. Together with technologies body TechUK, last Wednesday they held an event in Manchester that included sessions covering local economic development, crowdfunding, and social investment – all relevant to our FITTER project
Having generously been granted a ticket after the event was already “sold out”, I felt slightly guilty about then deciding to skip the whole morning, which looked to me to be mostly about “big FinTech”. I was therefore glad to encounter two of the afternoon’s speakers on the street outside looking for the venue: proof that I was not alone either in being choosy about which bits of the event to come to, or in having difficulty locating it. And when we twigged that the shopfront of a rather nice coffee house disguised a businessperson’s Batcave of meeting rooms and conference venue in the back, we were in – and just in time for lunch. All good!
It was interesting to compare this event with the Finance Innovation Lab “Pathfinders” event I attended last week. There, the talk was all of how to repurpose the financial system on a grand scale. The room was filled with a mix of financiers, NGO and thinktank people, and individual activists, entrepreneurs and consultants. Here, I mingled with a more commercially-focussed crowd: many finance, tech industry and public sector business development executives, alongside social economy and start up businesspeople. And from the global scale of Pathfinders, this event was more explicitly about place, and UK regional development. It had a definite Manchester focus, and attracted delegates from across the North of England (like me) and also Scotland. If Pathfinders was about thinking big and long-term, Driving FinTech in Manchester was more about doing business right here, right now.
This made the encounter between the worlds of social economy, and “mainstream” FinTech, all the more interesting for me. Speakers from both backgrounds emphasised the importance of not putting the FinTech cart before the social purpose horse, so to speak. People driven by solving a real world problem made the best use of technology and finance – as opposed to people who started with the tech, or the money, and then tried to find a purpose for it. And small businesses and social enterprise people alike spoke of how crowdfunding methods don’t just raise money, but are a way to spread awareness of and build support for what you’re doing – perhaps even more important. Paul Cropper of Solarmass noted that he had got leads in the USA and UAE via crowdfunding: “you don’t get that from a meeting with the bank manager”.
On the other hand, the multiple uses of the word “community” leapt out at me. When Simon Borkin of Co-operatives UK introduced the new Community Shares Standard Mark to the event, he was clearly speaking about local place-based communities. Others used the term to mean friends and family; their crowd backers or investors; people who followed a project or company more generally; or a community of practice (as last week at the Finance Innovation Lab event). As an academic, and sometime student of community development, it’s not my place to say any of these uses are right or wrong in themselves. Words are what people make of them. (Philosophers: discuss…) But it’s important that people understand they’re talking about different things, with different connotations, different implications for levels and types of commitment and participation, distribution of risks and benefits, etc.
Speakers were quite bullish about the current and future state of social investment, and crowdfunding. Julia Groves of the UK Crowd Funding Association quoted work by Deloitte suggesting that there were over five million people in the UK with investable savings, but who couldn’t afford professional financial advice. She felt they would prefer to invest in “real things they can understand” – from small businesses to community or environmental projects (like renewable energy) – rather than complex financial products “which just seem to be about making money for people who’ve already got lots of it”. And people would be happy to settle for a less-than-maximum – but still “fair” – financial return on their investment if they thought it was doing good. “People are socially minded – its financial advisors who aren’t” she stated. This, of course, brought forth a question from a financial advisor in the audience as to how he could help his socially-minded “high net worth” clients across Europe: Karl Richter of Engaged X noted that there was a push from the European Commission to standardise an EU regime for social investment.
Finally, Social Investment Tax Relief is attracting a lot of interest across the sector. Questions flagged up included how far it benefits social enterprises (as opposed to their investors), and future government support for it – with the costs of processing lots of small claims, and proving social impact value-for-money, seen as key challenges.
There was much more, too much to cover in one blog post. Overall, the event showed that there was plenty happening in FinTech and social investment – inside, and outside, of London.
Our FITTER project is funded by Friends Provident Foundation via grants awarded under their ‘Building Resilient Economies’ programme.
To find out more about the programme, please visit: http://www.friendsprovidentfoundation.org/programme-overview/