The Fintech Opportunity – and What it Means for the West Midlands

Julia Streets, CEO and Founder, Streets Consulting

Much has changed over recent years, both in the West Midlands and UK as a whole. From major decisions about our global position as a trading nation to considerable social changes, significant events that impact all our futures, including Covid-19, continue to unfold at a rapid pace.

Behind these developments, a quiet technological transformation has been taking place, offering massive potential for our future economic growth & prosperity – and we can all be a part of it. 

Financial technology – or fintech as it is known – is the engine behind this potential. Fintech is empowering businesses, their customers and even those regulating them, and is a key contributor to the UK’s global trading and economic ambitions.

Throughout the pandemic, we have seen what a gamechanger financial technology can be. Under lockdown and unusual working conditions, we have bought, sold and conducted our businesses “as usual” – in some cases even better – with relative speed and ease. Think contactless payments and online shopping. Think supply chain management, distribution and delivery. Think international payments, investment management and trading on the world’s capital markets. 

As a nation and a region we face a huge opportunity to build on this already stable base. We can – and must – forge ahead as leaders in the fintech field, delivering superior productivity, greater innovation and better business. 

To capitalise on this advantage, we need a firm and clear plan. Without a strategy we risk losing momentum to deliver all the potential that fintech promises to communities and economies up and down the UK. 

It is good news, then, that such a strategy was launched today, with backing from the UK government. The Kalifa Review, overseen by Ron Kalifa OBE and commissioned by Chancellor Rishi Sunak, sets out a plan that focuses on how fintech can help achieve three main objectives: jobs, trade, and inclusion & recovery. 

Importantly, this plan focuses on the UK as a whole, which means regions, including the West Midlands, are going to be vital contributors. 

It is worth noting that the UK is already a world leader in fintech, with government figures showing investment into the sector in 2020 standing at $4.1bn – there is a lot to share around. 

The Kalifa Review sets out a five-point plan that will help pinpoint how to capture opportunities and mitigate risks along the way. These include assessing regulation to ensure it is fit for purpose in a new fintech-enabled future – but it goes much further too. 

Investment will be essential to achieve the massive potential fintech promises for the UK, but the report also highlights how there must also be a focus on skills development to be effective. The Kalifa Review showed that even before the pandemic and its economic shock, some 90% of the UK workforce will need to be reskilled by 2030.

I firmly believe that roles in fintech will provide real opportunities to do just that – and the West Midlands is a fertile ground. 

The five leading academic institutions in Birmingham, supported by many other learning establishments, are already building their capabilities and capacity to equip students to seize and build on the potential fintech can offer.  Just  look at the work at the Sustainable Financial Innovation Centre at the University of Birmingham.

As a region and by “growing our own” talent, we can continue to foster the already energetic start-up culture nurturing them to become sector-leading high growth firms with ambitions to become global unicorns attracting one billion dollar plus valuations. 

With a growing number of fintech firms already contributing more than £400m to the region’s economy each year, the West Midlands is an established centre for this growing and vital sector.

The region also has its own fintech partnerships, hard at work developing and nurturing these local capabilities. Just ask David Stewart, fintech co-lead of the  regional partnership “SuperTech” who is also group chief operating officer at Birmingham-founded Wesleyan:

“SuperTech is focused on implementing strategies to ensure that the fintech community creates high value jobs and makes a significant contribution to both the regional and UK economies”.

 These committed partnerships are really delivering and include the launch of Europe’s largest asset management fintech hub, “The Engine Room”, run by the industry body The Investment Association at Wesleyan’s head office in Birmingham. 

According to Stewart, if the strategies outlined in The Kalifa Review are actioned, it will help fintech firms founded in the West Midlands to compete internationally, with the region taking a leading role. 

This may seem aspirational, but having worked in the sector both in the UK and internationally for decades now, I have never been more bullish and ambitious for what this means for the region. Indeed, the company I founded advises firms from some of the smallest startups to the world’s largest financial institutions, and we work, employ, mentor and invest in the West Midlands, proud to support The Investment Association’s cohorts of entrepreneurs and to partner with the key regional initiatives.   

I am not a lone voice. On Friday, February 26, I had the honour of hosting a debate at the launch of The Kalifa Review with Ron Kalifa and Charlotte Crosswell, CEO of Innovate Finance. To my mind Croswell says it best,

“Fintech is one of the fastest growing sectors in the UK and we expect it to inspire new Fintech firms to be established, and opportunities across the country as high-growth firms mature and expand”. 

The potential for national growth and joining together the work of the regional hubs is really exciting as Croswell describes, “Ensuring support for evolving hubs and better connectivity across the UK ecosystem, will help to drive collaboration and growth as a result.”

I, and many others, firmly believe fintech is part of the West Midlands’ prosperous future – and it could be a big part of yours, too.

Julia Streets

Julia Streets

Founder and CEO,
Streets Consulting