Transcript

Julia: Hello, my name is Julia Streets, and welcome to the podcast series, StreetsTalksTo. In each episode, I interview leaders from some of the most influential firms, bodies, and initiatives in the financial services industry. We explore what’s at the very forefront of innovation and change. And we think about the challenges facing firms, and the industry at large, as we uncover the opportunities that exist both today, and as we look ahead.

Today, I am delighted to be joined by the Executive Director of SuperTech, Hilary Smyth-Allen. Let me tell you about SuperTech. SuperTech is the UK’s first professional services technology, or ProfTech, supercluster. It was launched in the West Midlands to accelerate technological adoption right the way across the sector. And to showcase the region’s expertise and investment potential across multiple sectors, including FinTech, LegalTech, PropTech, and InsureTech.

As I mentioned, Hilary Smyth-Allen is the Executive Director of SuperTech. She has had a wide-ranging career, spanning professional and financial services, including a ten-year tenure at the Fortune 500 company, AECOM. Today, she works as the Executive Director for SuperTech in professional and financial services. And she’s really established herself as a key influencer in the West Midlands, working for the Greater Birmingham and Solihull Local Enterprise Partnership, or LEP. She has also led industry engagement on behalf of a range of organisations, including nationally funded research projects with Oxford Brookes University, City-REDI at the University of Birmingham, the Department for Business and Trade, and also Innovate UK. So innovation and disruptive technology are clearly really core to the policy areas in which she works. SuperTech combines all these interests with a passion for championing Birmingham and the wider West Midlands. So welcome you to the show.

Hilary: Thank you.

Julia: It’s quite interesting to think about where to begin this conversation because there’s obviously a lot going on. Let’s start with the Chancellor’s Spring Budget. In March, he made a number of announcements, all focused on boosting the UK science and technology sectors, and wanting to, arguably, unleash this notion of innovation to drive growth, create jobs, and also improve lives. Should we start with your thoughts on that, and then we can flow into your work?

Hilary:  He certainly did make really big commitments around innovation, and more so than we’ve seen in recent years. Innovation has always been a part of our raison d’etre. The reason for SuperTech is partly around that market awareness, the brand of West Midlands. But, really, it’s about the innovation capacity, getting our businesses to be at the forefront of next generation services. I say that because it’s not something that you, historically, associate with business professional financial services. Sure, don’t get me wrong. If I went to one of our law firms and said, “Are you innovative?” “Yes, of course, we’re innovative. Bring us a client problem, we’re great, we can solve that, no problems.” And they absolutely could. And the same in property, and in construction, and the advisory, and the engineering.

But that’s not the same. That’s client led innovation. That’s not thinking about how you’re delivering your services, your business model, the way that it’s configured your customer experience. And that’s the journey the whole sector is starting to be on. I say starting because it still is really early doors. This is only about five, maybe 10 years in FinTech, but certainly in the core professional services, past five years. And we’ve never ever seen grants go into this space. And, yet, that now is an established phenomenon. 2018 saw the first Pioneer fund from UKRI, Innovate UK, putting money into next generation services to try and stimulate this type of thinking. And it was around AI, and it is around technology. Those are the externalities forcing this. Because if we don’t, other regions will, and regions, I mean Asia, other countries will.

Julia: It’s fascinating, isn’t it? Because on an international scale, there certainly are regions looking at the world of BPFS, business and professional financial services. One aspect of that is ProfTech. For the benefit of the audience, we don’t hear the moniker ProfTech very often. Love to get your thoughts on, within the supercluster, what do you mean by ProfTech?

Hilary:  Well, the reason we are a supercluster was when we were thinking about this journey… As I said just previously, the sector is large. It has been on the ascendance for over 30 years. It’s a globally relevant business advisory center with legal, PropTech. There aren’t many services that you can’t buy in the West Midlands. Partly driven by our access to talent, the geographical center of the UK that we are, the proximity to London, global connectivity, etc. But if you’re thinking about that, and you’re thinking about, FinTech being the forerunner, I suppose particularly, it’s the one that’s gone first. It’s the one that now is no longer seen as a sub-sector, to quote Ron Kalifa in his review of UK FinTech, “It’s matured to a point of being an intrinsic way that service is delivered.”

And we were probably not the first, definitely not the first to catch the FinTech wave. We’ve caught up and we know we have a really strong base, a hub within that. But if you’re on that journey, what else might happen? That’s where we were thinking about it. If FinTech has gone on that journey, and you could see it, you could see it five years ago that LawTech was definitely bubbling, very different market drivers, very different market problems and challenges. But, ultimately, an opportunity and a journey that we’ve got to get on. And then, for us, real estate was the largest sub-sector within a broader BPFS definition. PropTech is the other one. And when we started to scratch behind it, then we found a really sizable business base, going back to before when PropTech was even the label, and we probably just would’ve called it real estate IT.

We were trying to understand that and we wanted to do something that was right for us. We’re a very integrated region. If we’d set up FinTech West Midlands or FinTech Birmingham, we would’ve set up PropTech Birmingham. They probably wanted to get together. But, also, the nature of the beast is that technology is changing those verticals in their own right. The edges are not rigid in a way that they are in the professions. You are a solicitor, this is what you can and cannot do. That’s not the same. And so you need a more soft edges approach, otherwise, we’d be saying to some people, “No, you can come in, you can’t come in. What does that even mean?” And, actually, missing out on that opportunity. That’s why it’s ProfTech. It’s not the most natural term, but it is one that’s really resonating, and giving us that opportunity to think in a more collective and futuristic way.

Julia: That definitely got ahead of the whole discussion about open finance, and we talk about interconnectivity and we talk about interoperability, and adjacent sectors. These are expressions we hear all the time. What you’re saying is you got in there early, recognised the potential, and are now powering forward.

Hilary:  Well, I’ve never heard PropTech mentioned as much as it was this year in UK FinTech Week. That was a really interesting observation.

Julia: Yes, for sure.

Hilary:  From the opening remarks to others, so many more segments. Hopefully, we have caught the wave and learnt our lessons.

Julia: I love the fact that you got in there so early. But let’s talk about the roadmap, if we would, because I’m really curious about it. Because I suppose my opening question is, why now? If you’re already on that journey, why does the roadmap matter now?

Hilary:  It’s part of this overall evolution. We’ve gone from a position of not really thinking about FinTech, to thinking about FinTech, and understanding what we have and haven’t got in our region, to then adding in the same kind of metrics around PropTech and LawTech. We did look at the others, by the way. These are the ones, HRTech, MarTech, they come under that advisory umbrella. But they have very different dynamics and we felt we’d already gone on that this is right for us identification. However, it’s not enough to just count FinTechs. We’ve been around the table for three years, and like our good compatriots in national networks where we have a represented role and doing that regions to nation and connectivity, which is so important, the collaboration. You do need to do more than just count what you’ve got. And talk to them and say, “So what?”

What we found over that time is that there are more innovation leads, particularly in LawTech. We have a LawTech forum now, which we didn’t have before. When we started, we didn’t have visible activity. There wasn’t a lab or an incubator. We’re now on our second round, coming to an end of one with BNP Paribas Personal Finance, looking at their customer journeys and data insights. And that now is becoming business as usual. On our Connector Series, which is an easy way for businesses and SMEs to meet with corporates, we’ve expanded the corporate portfolio, which shows that demand. So you can see this incremental, it’s almost like fundraising. You try and get people to give a pound a month, don’t you? Like, “Come on, dip your toe, do this with us.” And then we try and move you up maybe to the next level, “Okay, maybe have a program.”

And then what we’ve found is that you need something, they want that leadership. I think it really comes down to a leadership gap of, yes, it’s about us and what we want, but we know we’ve got very similar problems. And we’d like to have that collaboration. To the earlier points about why we’re a supercluster, it’s increasingly clear that people want a space to pursue conversations, discussions, that move the dial forwards, which is cross sectoral. We’ve got a bit more market demand, the stakeholders are a bit more ready.

And then, the last bit is academia. Because of the work of UKRI and Innovate UK investing in that, I wouldn’t say we necessarily had loads of it happening here that’s been spread. The portfolio can only go so far. But, overall, there has been a collective awakening to a research and development agenda to enterprise and innovation in academia. Now, those partners are increasingly engaging with us saying, “Well, how do we get involved? What is it we can do?” So you need to be able to think about bringing those two together.

But the gap is still quite large and I think that’s something which you can’t easily bring across. It’s very obvious to say, “Business and academia need to work together more.” How many times do we hear that? “If only they worked together more.” And you can get there quite quickly in a skills agenda, talent, we know what we want. We want more people to can communicate. We want a more diverse population. These particular skills, more AI, and more tech. But the gap between research thinking and that pursuit of the frontier with meeting industry demands is not an easy one. They don’t speak the same language. So that really has been the point of the roadmap. Why here, why now? It’s a convening methodology in its own right as well as being a product. We’ve worked with all of our industry partners and with our academic institutions to find out, “Well, what are the capabilities? What do you really care about?” And what those is. We found some really interesting things, things we didn’t expect.

Julia: What I really hear when you say this, so we think about the roadmap in terms of, I’m picking up very strongly on vision, pursuit of a frontier leadership. But it’s also important about the alignment of work that’s already happening. And then bringing those sectors together to create, also, what feels to me almost like latent opportunity. When you begin to create your own energy and you create your own momentum as well. But this hasn’t been just created on your desk. I know you’ve been out in consultation. Talk to us a bit about the consultation exercise?

Hilary:  I think when you try and do these kind of projects, particularly as a cluster organisation, you’re nothing without your constituent members. You decide you want to do this, you go, “Hello, please would you talk to us?” And then hope and wait. And it’s almost like a validation of your own existence as to whether people respond. Really so happy because we weren’t asking for them to engage once, it was an iterative process. So we really did need sustained effort over a period of time. We went through a filtering process of putting a very long list of thematic areas down on there, and asking people to prioritise, and then playing it back. 

We’ve been on that socialisation and constant consultation journey for about 4/5 months, over 30 large corporates, the SMEs, participation in workshops, in person, online, you name it, we’ve done it, Mentimeters and surveys. It’s no small feat to be captured together in, hopefully, what is a largely accessible report with some pithy themes, with robust, communicable actionable. But underneath that, we know there’s a really robust evidence base of what we heard.

Julia: It’s no mean feat to bring those constituents together, as you say, time and time again, and to be testing and engaging as well. Give us a sense, Hilary, if you would, of what we can expect? What is the time period in question with the roadmap? And, also, give us a sense, perhaps, of what impact do you anticipate we’ll make?

Hilary:  I want to start with the impact, actually, because if there isn’t impact, then we can just file this, can’t we? And put it somewhere never to be seen again. It makes good kindling for your fire. We know, within the business professional financial services sector, that is the context. I keep coming back to that because that is the context. The sector is about 28 billion currently, which is of 100 billion economy. It’s equivalent to a small European country. The size of the West Midlands is not to be underestimated. And the name almost doesn’t give you a sense of that, just how big an economic geography it is. Roughly a third of that then is in this broader advisory and financial services sector. And that is forecast to get close to double between 2050.

Within that, we are then looking at the ProfTech bits, the new entrants, the disruptors, so the specific technology businesses that feed into that and come under it and give an expanding definition. Because that’s the nature of the beast that we’re working with. We predict, therefore, through this work, that innovation activity load, if we follow the road map and pursue the opportunities, we’re looking at about 4-4.5k regional extra jobs, coming on to over 300 GVA competition, 1.5 billion regional economy in the next 10 years contribution. So good numbers in their own right. But I think, on top of that, the earlier numbers, and the statistics about the overall growth, depend on this agenda as well. So, yes, those direct jobs, the direct uplift in GVA and economic contribution. But without that, the risk of the wider sector is definitely at play, as I mentioned before.

Julia: It’s fascinating, isn’t it? Because I think a lot of people do underestimate, actually, the size and the importance of the region, its contribution already. And you’ve given us those benchmark numbers on that. But, also, a real flavour for the ambition, the momentum, the latent potential that could be generated.

Hilary:  I think, as we’ve been on this journey as SuperTech, from formation, the last five years to the three years where we’ve been in operation, we were in response to the fact that the sector wasn’t very visible, that people think the West Midlands only builds cars. And we’re really quite good at real estate generally. But there’s property, a little bit of a manufacturing. But what’s so interesting is that, by doing this work, we’ve actually really been able to lean in and really understand what our business base is strong at. We’re really strong in specialist lending, but we’re really strong in specialist lending around motor finance. Well, go figure. So if you’re going to talk about motor finance and some of the opportunities, and there’s lots going on in that, particularly around the regulatory environment, it’s hot topics in many different areas, but why wouldn’t you then think about that and the West Midlands being a strong place to lead to do that?

The same on the real estate and non-bank lenders as well, especially this lending alternative lenders. Real estate being the largest sub-sector. We’re known for really good property. The RICS is headquartered outside of London in the region. And so it makes sense we found, guess what we found? PropFins, and we found FinProps where we do it, and you come from both ways. And this Venn diagram comes together and it starts to make more sense. And then you can start to think about, well, actually, what do those things need? And what do we need to unlock them?

Julia: Certainly, through all the work we’ve done, we would know that there’s a huge conversation about the potential of real estate as an asset class, and what it needs in order to either drive greater transparency and control, and there are so many dynamics at play. It is a fascinating sub-sector. I think that’s another podcast for another day. However, what I do want to do, you’ve given us an insight into uncovering some of those themes and topics. Talk to us about the big themes coming out of your roadmap?

Hilary:  Through the consultation, we had so many initiatives coming forwards. We were able to group them and saw really strong four themes, ultimately. And they’re the buckets of actionable activities which are around productivity, open data, sustainability, and the last one being inclusion and wellness.

Julia: I’ve got to go through each of those in turn because, particularly a couple of those, pique my interest in terms of the moniker that you’re taking from that. Let’s start with productivity, undeniable. We’re talking about economic productivity and contribution. Let’s delve a little deeper.

Hilary:  Productivity, it is efficiency in another language, I suppose. The need for automation that the future of next generation services, meeting customer expectations for frictionless, really customer experience, customer-centric. But behind the scenes, we know there’s some legacy technology. There’s regulatory burden around KYC, consumer duty, etc. Productivity, in a nutshell, is leveraging technology to help business operations. That’s every sector, in different ways, had opportunities and needs in that space.

Julia: That’s a huge undeniable truth. I always describe these things as the undeniable truth, which is potential, but also it’s undeniable. Perfect. And so then, open data, I imagine that flows very beautifully into this question of automation and efficiency.

Hilary:  Yes, open data is such a big topic at governmental level. This is a classic case of, “What is it that we can bring to the table?” Not necessarily everything is for us to lead on, but there are specific opportunities. It’s interesting that conveyancing, alongside open finance, we’re in this government smart data roadmap, well, we have a really strong business base because it’s very consumer facing. So the open data bit is about understanding what businesses can do for themselves with existing sources, and maybe combined with a bit of academic intelligence and capabilities using AI, ML, etc, those type of things, doing for themselves. But, also, where the opportunity is for cross sector data sharing. A really rich topic, and one that feeds directly into the future of innovation in the country.

Julia: And, of course, you can see, with the supercluster, how that could flow and is incredibly important to unlock this latent potential but, also, to drive the insights.

Hilary:  It gives us more of a driver for why we should do it. It could be done, but if you’re only focused on one, then it feels like it’s the side business. Whereas, it becomes core for us.

Julia: I love it. And then, the third one you talked about was sustainability. Now, I’m quite curious on this because some people often put sustainability and environmental concerns alongside each other. Is that the way you see it?

Hilary:  Definitely broader than that. Sustainability, in the fullest sense, closer to an ESG type definition. We can have a debate about which is the bigger label to use, the bigger moniker. But we do really mean around environmental, plus the social, plus the governance. And thinking about that with AI, net zero. There’s just so many big agendas. And these are on all of our business’ minds. Some of them having services directly speaking to that, and thinking about how they can scale. Others, trying to adopt, or think about what their role is. If you’re a retail financer, doing white goods, for example, well, then, you’re starting to see, “What’s our role in the circular economy aspect of what we are financing?” And that’s a really big sticky problem to name but one. Not to mention just the regulatory burden that’s coming around, and expectations of ESG reporting, and net zero beyond that.

Julia: And you say it’s much, much bigger than the environmental. As you say, it’s the ESG. And your next one, which is inclusion and wellness. Quite often, the inclusion comes into the S of the ESG. You’ve carved this out into inclusion and added wellness. Tell us a bit more about that?

Hilary:  We’ve carved it out, not because we think it’s necessarily wholly separate and distinct, but that it had a groundswell of activity that was justified in its own right to have its own pursuit within this. I think the subtle difference is, when you think about ESG and the S and the reporting bit of that, it’s everything from your employee strategy and engagement with communities. And so it goes much further than beyond the tech. When we’re thinking about the inclusion bit, and wellness as well, they are closely related concepts. Inclusion, at its core, is focused on ensuring that all consumers and businesses who require business professional financial services and ProfTech product services, but they make sure that they have a viable way of accessing them. So access to services is probably a way of explaining what we mean by inclusion within this.

But wellness, the reason for adding that in, is because it’s related, but it goes deeper. It’s more thinking about not just access to the market, but it resembles something akin to them being and feeling supported. And you can see that in the direction of travel with the regulators, isn’t there, around consumer duty. Not just, “Are you providing relevant information?” But, “Are you making sure you’re dealing with vulnerabilities?” And that vulnerability, not just at the point of sale and transaction, but through the life of that. And if you think about that in the context of the built environment and PropTech, the built environment is so important to wellness, isn’t it? But if you haven’t even got access to rented accommodation, for example, then credit applications, certain people being discarded for that, and then having to repeat that. Or your journey, your first home into your next one. There’s just so much opportunity that we felt it merited, frankly, its own thematic around that. But it’s obviously directly fed by open data, and the sustainability bit and, also, an element of productivity to realise that vision.

Julia: And it’s really fascinating, isn’t it? Because when you think about the conversation about digital inclusion and financial inclusion, there, you’re talking about legal inclusion. And this is about having services that are available to everyone.

Hilary:  And it’s consumers, obviously, but it’s also SMEs. So there’s a B2B here again, as well as the B2C, and the B2B2C. That’s the opportunity.

Julia: If we’re going to drive entrepreneurship in the UK and create start-ups and scale ups, as many people know, we’ve brought out this piece of research, particularly looking at the dynamics of growth. This all comes into play, all completely comes into play, from the individual the way through to the corporate. Really fascinating. So time is never our friend on podcasts.

It’s amazing how time canters. If you think about it, in a really short period of time, you’ve talked to us about what you’ve taken into consideration, and even what you’ve decided to put aside in some of the peripheral. You talked there about MarTech and other potential segments. Because you have this really clear sense of the vision, the pathway, the alignment. And then, also, as I described, the latent potential to be had there. You’ve given us a sense of the size of the market today and the potential tomorrow. And then, also, broken down the roadmap into these four key themes and given us some insight into what they all mean. As you think about the road ahead, clearly delivering this is a top priority, some final thoughts for the audience?

Hilary:  Well, am I allowed a rest after doing the work?

Julia: No!

Hilary:  It is a roadmap at the moment. We’ve got our thematics. You’re absolutely right. It’s given us the confidence to pursue and to lead. And, actually, as much about the things we’ve included, it is about the things we can, with a bit more confidence, say, “Great, happy to help.” But it’s at the edges for us and we know that. We have got to turn it into an implementation plan. There are some things already bubbling. We’ve got some nice activities in the pipeline which already directly align. So it’s not a complete U-turn, or even a right-hand turn, whichever it is, it’s business as usual. But, now, we can go after that. We’ve just got to get the resources in place and partners. And I’m excited to share it with them, to be honest, to see what happens. 

That’s the nice thing, you get the convening power. And you really feel like you’re supported, that the business community wants this. So it’s the start of a journey. There’s so much more to do, as ever. But we’re really, really optimistic about what we can achieve.

Julia: Having been through the consultation, you’re now in that convening phase. And listening to you talk about how you brought the industry together, not once, but multiple times to get behind it, I think it’s exciting to see what comes next. So Hilary Smyth-Allen, thank you very much for being with us.

Hilary:  Thank you so much for having me.

Julia: Not at all. And if anybody wants to find out more, the best way to do that is to go to the website SuperTech WM, SuperTech West Midlands, so supertechwm.com. And, of course, you can follow Hilary Smyth-Allen and SuperTech WM on LinkedIn. So there’ll be plenty more updates to follow, for sure.

As always, thank you to everybody for listening to StreetsTalksTo. This has been StreetsTalksTo SuperTech. Thank you for listening. And until next time, goodbye.

This episode of StreetsTalksTo was produced by Podshop on behalf of Streets Consulting Ltd. At Streets Consulting, we’re a strategic business development, marketing, and communications consultancy, focused on helping financial services and technology clients around the UK and around the world. Every client is focused on growth and/or transformation. And as FinTech PR specialists, we are there to help them every step of the way. And we do this through strategic campaigns, compelling content, and impactful coaching. We never forget the human in the mix. So you can find this episode on streetsconsulting.com, and using the hashtag StreetsTalksTo. And we can also be found on LinkedIn, YouTube, and X at Streets Consult. Thanks for listening.