The future of fintech

This morning, I took part in a panel discussion at the Institute of Chartered Accountants of England and Wales, as part of Fintech Fortnight.

It was an interesting discussion, not least because of the location – we were talking about the future of finance in a building steeped in history. Guests on the panel ranged from Nationwide, which can trace its origins back to the 19th century, to Bud, which was founded just over a year ago.

One of the livelier debates was around the idea of a “digital divide”, particularly between younger and older generations. Although it’s often assumed that peer-to-peer lending is the preserve of the young, actually the average age of a RateSetter investor is between 40 and 50, and we have many lenders in their 60s, 70s and even 90s. More widely, there are roughly 250,000 investor accounts in the UK P2P market, and it’s certainly not limited to millennials.

I accept that some people still want to deal with a real person, particularly for larger transactions and complicated things like pensions (in fact that’s something we’ve noticed too, and have gone to great lengths to ensure that we have an award-winning customer service team available six days a week). However, there was a pretty clear consensus that most day-to-day financial tasks can be automated. Interestingly, the biggest advocates for face-to-face contact are often banks – who can find it uneconomical to keep branches open.

Around 10 per cent of the RateSetter staff are customer services, taking calls from our investors and borrowers daily – it was acknowledged that this is similar to the percentage you’d find at a bank or building society. Admittedly we offer fewer products, and the proportions may change as we grow, but it shows that we place as much emphasis on talking to our customers as traditional financial services companies do.

Although we disagreed on plenty of topics, I was surprised by some of the things we were able to agree on. There was a good question from the audience about how fintech companies could design their products around vulnerable people, particularly those who struggle to make financial decisions independently. We all responded that there was a lot of scope for this, and we’d be happy to look at how we can do more in this area.

Ultimately though, the thing I took away from the discussion is that very few of the issues that we talked about are confined to fintech. Both of the topics above, for example, apply just as easily to other sectors. It’s easy to get caught up in our own fintech bubble, but we won’t solve the big issues facing our sector in isolation.