A Fintech strategy to build a cluster of global repute

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Fintech Wales is already on a journey to build a Fintech ecosystem of global standing – with an initial £250,000 award from CCR funding a preliminary assessment of the region’s potential to become an established fintech player on the world stage. The commitment is there, collaborations are in place and an ecosystem is beginning to emerge: with Fintech Wales shaping a strategy to include building talent pipelines, access to funding and establishing a Foundry – all essential pillars to support a platform that will give voice, confidence and momentum to the start-up, scaling and large enterprises that make up this fast-growing and high-value sector in South East Wales.

“Bringing increased trade and jobs – as well as greater inclusion and recovery.”

Encouragingly, the Fintech Wales thinking to date mirrors much of what was recommended in last month’s long-awaited Kalifa Review of UK Fintech Strategy. The 106-page report, commissioned by HM Treasury and authored by former Worldpay CEO Ron Kalifa OBE, put into context the opportunity of a sector that globally is worth around £110 billion and is expected to more than triple to £380 billion by the end of the decade.

The UK has around a 10% market share of that figure – but the true significance to Wales and the CCR may be even greater than those numbers, with Kalifa maintaining that “Fintech is more than a niche sector. It’s a tech-enabled revolution that can bring increased trade and jobs – as well as greater inclusion and recovery.” Those sentiments clearly chime with the CCR ambitions of levelling-up, scaling up, building back better and developing economic clusters – and the ‘next steps’ outlined by Kalifa are already being reflected in the Fintech Wales’ strategy too, including:

Skilling-Up:

Fintech Wales has placed an absolute priority on building a talent pipeline through close relationships with schools, FE and HE, as well as identifying opportunities for retraining and upskilling. The CCR cluster already offers pathways into the industry through Cardiff University’s National Software Academy and Data Science programmes and their 1-year MSc Fintech, with specialist collaborations also involving the Cardiff Fintech Research Group and the Data Innovation Accelerator.  Sina Yamani, Founder & CEO of Yoello, is a graduate of Cardiff University and is just one example of how skilling and academic collaboration can drive fintech in the Cardiff Capital Region.

Clusters, Connectivity & Collaboration:

Kalifa is committed to nurturing high growth potential clusters outside London – and accelerating the development of these clusters through further investment and a coordinated strategy. The vision is one where the term ‘fintech’ will become gradually redundant as collaboration between large financial services organisations and enabling technology companies become an integral part of doing business – and in an even wider context showing how tech can transform any organisation. The collaboration between ActiveQuote and Cardiff University – and pioneering work being done by Shipshape VC to match start-ups with investors based on semantic algorithms – shows how this spirit of partnership is already driving market developments in our region.

Greater Investment:

Though the UK is already among the top three destinations for fintech investment globally, its numbers pale in comparison to that of the US and China. Kalifa suggests unlocking capital to create a £1bn ‘Growth Fund’, enhancing sector visibility with a global family of indices and expanding R&D tax credits – and likewise, Sarah Williams-Gardener, CEO of Fintech Wales, views investment and access to funding as central to any strategy:  “The fintech industry will eagerly await HMT’s response to “The Kalifa Review” as additional support and a commitment will be required to realise the implementation of the review’s recommendations ensuring the UK maintains and grows its world standing.”

The output of the future Fintech strategy work that is currently taking place will help shape the interventions that are critical for evolving the sector and with the CCR Levelling-up Investment prospectus – published March 15 2021- clearly headlining the intention to formulate future investment proposals in this sector, the time is right to seize the opportunities that are emerging.

“The Kalifa Review shows the scale of the opportunity”

“Fintech is about change” stresses Kalifa “it’s about new firms and established ones, large companies and small, with roles for both the public and private sector. At present, these elements and their well-intentioned supporters are not pulling together in a single vision.” It’s a scenario that Sarah Williams-Gardener is keen to address in the strategy of Fintech Wales: “The Kalifa Review is a promising encapsulation of the progress and potential of fintech here in our region. It reveals that by truly collaborating across industries and geographies, fintech has all the ingredients to remain a highly promising sector for Wales and the UK – one in which we can continue to compete on a global scale and reap the benefits for local economies and beyond.”

Fintech is a revolution rather than just a sector”

It’s clear that the Cardiff Capital Region has many of the attributes noted by Kalifa to become a key part of the fintech revolution. And this has undoubtedly informed the emerging Fintech Wales strategy to date. How that evolves will be a construct of government, private investment – and the courage and collaboration of fintechs and other stakeholders here in the CCR ecosystem.

We’ll be featuring the views of some of those companies and their collaborators in the forthcoming weeks, discovering the opportunities and challenges that lie ahead for fintech in the CCR ….

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Over the past five years, Delio has grown to become one of the ‘hottest’ names on the Welsh fintech scene - establishing an international client base of more than 90 organisations, helping financial firms across the world to transform their private markets propositions, through configurable technology that enables customer organisations to make alternative investments more accessible and transparent for today’s investors.

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