The participants were Dominic Maffei, financial markets and UK lead of SC Ventures, the open innovation arm of financial services firm Standard Chartered, and Erica Young, director of venture capital and advisory firm Anthemis Group.
Young and Maffei agreed there was not yet significant disruption of existing financial institutions, and the focus was on collaboration with fintech developers, which had come to Maffei while attempting to disintermediate banks, whereas now they are coming to him offering their data.
Young said disruption was hard, in part due to the size of banks’ balance sheets and existing regulations, but that she was excited about embedded finance, where financial instruments moved from a vertical to a horizontal structure, and she compared it to computing.
Mawson asked Maffei why Standard Chartered had set up a venture studio now, given that it seemed relatively comfortable. He said there was still competition. He pointed to the 2008 crash, saying that people forget that banks had been innovative, something that stagnated with the structures that were placed on them after the recession.
Comparing big institutions to elephants – large traditional actors – and fintech developers to mice – smaller but nimble – Mawson asked about the pain points and impacts Maffei’s and Young’s groups faced.
Maffei said that at Standard Chartered, fintech has quickened culture change, though he placed that responsibility at the feet of media, rather than internal excitement about fintech startups. Young said the elephant was actually rather well optimised for its desired outcome – stability and longevity.
Mawson pointed out that new people were entering the fintech and insurtech spaces, and asked whether there were any new areas of opportunity for actors like Young and Maffei.
Young was interested in longevity. As the general population lived longer, existing financial instruments were breaking down. Traditional assumptions surrounding life insurance and retirement no longer applied, particularly as the baby-boomer generation was transferring assets to younger people.
Maffei’s area of interest was in the client journey, but he was personally most excited by new securitisation technology and the potential market for it in China. He spoke about the need to build off-ramps and on-ramps for digital assets, and creating the ecosystem around them.
A question from the floor challenged fintech’s place as the recipient of a quarter of all UK venture investment. Young said this may be down to the current definition of fintech, which may be too broad, whereas Maffei admitted he did not know, saying valuations were very “frothy” right now, making it hard to tell.
