The AI Race: Will the UK lead the way?

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Artificial Intelligence (AI) blasted into the mainstream in 2023, with some declaring its advances as the next big technological revolution with generative tools such as ChatGPT by Microsoft and Bard by Google taking over the internet.

The boom in AI has seen some firms hit the jackpot. In August, US Chipmaker Nvidia’s shares hit an all-time high with its revenue more than doubling in the latest quarter, with its chips being sourced for the training of AI models.

The rise in AI has caught the attention of leaders and legislative makers across the world with nations keen to be world leaders in the space. The UK is no different. In March 2023, Chancellor Jeremy Hunt set aside £900 million for AI research and the creation of a new exascale supercomputer to build its own ‘BritGPT’.

The UK’s seriousness in becoming a leader in AI was restated when the government announced the world’s first summit on AI safety in early November. The plan is to bring government representatives, academics and industry experts to plan for the future development of AI.

But how well is the UK already doing and what can we expect ahead of this summit?

London vs. the rest of the world

The UK is already doing exceptionally well when it comes to AI innovation. Figures from Beauhurst show there are 967 AI companies based in London, rivalling other key tech hubs such as San Francisco and New York.

A recent article in The Times by Katie Prescott highlighted how London was a hotbed for AI, highlighting that:

  • AI firms contributed £3.7 billion to the UK economy last year and employed 50,000 people.
  • London is home to the top three biggest AI fundraisers.

In comparison to the rest of Europe, the UK has twice as many companies providing AI products and services as any other country.

Powerful use cases

There is huge interest in AI across the private and public sectors, with a wide range of firms and agencies utilising the technology to impact our everyday lives – from healthcare and treatments to our finances and even criminal proceedings.

As reported by The Guardian, preliminary results from a large study suggest AI screening for breast cancer, one of the most prevalent illnesses, was hugely successful. The results show that AI was as good as two radiologists working together and did not increase false positives, with workloads being halved.

AI does have the ability to change our world for good but to be effective it does require a vast amount of data on which to train and be accurate.

This need for data raises ethical and privacy questions. These are certainly issues that the UK and other countries must consider carefully as innovation continues.

The threat

In March, an open letter with signatures including Elon Musk urged the world’s leading AI labs to pause the training of new super-powerful systems for six months, saying that recent advances present “profound risks to society and humanity.”

This was in the wake of a wide range of AI-generated images circulating on the internet, known as ‘deepfakes’. This included an image of Pope Francis wearing a Balenciaga puffer jacket, which many believed was real.

There is a genuine concern that it will become more difficult to tell whether AI images and videos are real or not. This could have very serious consequences and criminals could exploit the technology to cause harm and commit crimes.

Others believe that if organisations, particularly banks use AI models with incomplete data it could perpetuate social biases when lending or providing mortgages to people from minority groups.

Future regulation and what can we expect

The speed of innovation in AI has meant that many legislators feel that regulation must catch up to this threat.

Governments believe that the private sector cannot be trusted to develop, train, or implement AI systems ethically and in line with individual rights without heavy intervention.

The EU is leading the way in legislation through the EU AI Act.  This act will:

  • Outline the responsibilities, risk assessments and transparency that developers will need to take when using data to train AI models
  • Banning AI for live facial recognition
  • Banning AI from social scoring: classifying people on behaviour, socioeconomic status, or personal characteristics

Unlike Europe, the UK has shown a deliberate reluctance to regulate AI, preferring to focus on innovation.

In August, the UK published a white paper in which Secretary of State for Science, Innovation and Technology, Michelle Donelan MP outlined her hopes that the “UK (will be) the best place in the world to build, test and use AI technology.”

The white paper highlighted the UK does not intend to propose new legislation but may, if necessary, amend and adapt existing legislation.

Shortly after, the UK announced that it would spend £100m of public funds on the development of AI chips. In reaction, our client, Mosaic Smart Data CEO Matthew Hodgson said:

“It’s great to see the government committing to the future of technology and innovation in the UK, putting its money where its mouth is and recognising the role AI technology will play in continuing to drive evolution in sectors like capital markets.

“Encouraging international cooperation in managing the development of AI technologies, will go a long way in boosting the government’s pledge to make Britain the next ‘Silicon Valley’ and is a positive move in the UK’s ongoing quest to become a science and technology superpower.”

The upcoming AI Safety Summit may give us a further indication of the UK’s approach to AI as well as how it will deal with increasing privacy and ethical concerns.

However, we should expect that the UK will collaborate more closely with the US, following the Atlantic Declaration which highlighted that both countries would work together on this issue.

It will be interesting to see how this close relationship will deal with the challenges and opportunities that the rise of AI presents.

 

Chatsworth was the first communications agency to focus on fintech. We’ve been building fintech reputations for 20 years, steering start-ups through launch, growth and onto corporate action, and protecting and enhancing established infrastructures.

Sibos 2023: What can we expect from this year’s event?

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Toronto is set to welcome the world’s financial leaders on September 18-21 as Sibos comes to town.

The epicentre for Canada’s investment in AI and the country’s startup capital, Toronto’s flourishing fintech scene and growing tech talent pool make it a top contender for a world-leading fintech hub – and the perfect place for this year’s conference.

Thousands of the industry’s top executives, decision-makers, and thought leaders will come together to discuss and debate around the Sibos 2023 theme – collaborative finance in a fragmented world.

Experts will deliver and attend panels, demos, and networking opportunities around the topics of sustainable and inclusive financial industry, risk management in times of economic and geopolitical uncertainty, and the balance between technology and trust.

 

Looking back on Sibos 2022

The first in-person conference since 2019, Sibos 2022 brought together over 10,000 experts in Amsterdam to discuss how the financial community at large could contribute to ‘progressive finance for a changing world.’

A few key topics rose quickly to the top of the community’s ‘to-do’ list:

  • Supporting interoperability to enhance central bank digital currencies (CBDCs) and tokenised assets
  • Advancing international payments for consumers and SMEs
  • Removing friction points in the international and cross-border payments process

These areas are expected to continue to be an important part of the agenda at this year’s Sibos as we assess progress made in the past 12 months and plan to build on this moving forward.

 

What to expect at Sibos 2023 

Interoperability, tokenisation, and the future of digital assets are set to take centre stage at Sibos this year.

Conference organiser Swift even recently announced findings of its experiments with interoperability to remove friction from tokenised asset settlement.

The news has been well received by the industry and will be no doubt a high point of conversation.

Myles Milston, co-founder and CEO of Globcap, said, “Swift’s focus on the interoperability between different chains and protocols rather than building their own is the right one… there is now widespread recognition that in capital markets tokenization has the potential to deliver greater interoperability and control to investors.”

And sessions will look at exactly that – unleashing the potential of digitisation and tokenisation, navigating the gap between digital assets and existing payment rails and managing digital assets at scale

Chatsworth client R3 is set to deliver a panel on the first day of Sibos: Digital currencies: CBDCs vs. Crypto, winners and losers. They’ll be joined by representatives from the Bank of Canada, CITI, Deutsche Bank, and EY to discuss the imminent and long-term future of digital currencies.

We look forward to supporting our clients at this year’s Sibos and further afield, as the financial community takes this step forward in creating a more collaborative, progressive industry.

For a full list of the programme, head to: https://www.sibos.com/conference-programme 

 

Chatsworth was the first communications agency to focus on fintech. We’ve been building fintech reputations for 20 years, steering start-ups through launch, growth and onto corporate action, and protecting and enhancing established infrastructures.

H2 2023: What to expect from the UK fintech fundraising landscape

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Funding into UK fintech has experienced a well-documented drop over the course of 2023 as cautious investors grapple with high interest rates and an uncertain economic outlook.

The latest data from Innovate Finance adds to the relatively bleak picture, revealing that cash raised by UK fintech firms slumped by 37% during the first six months of 2023 compared to H2 2022. Likewise, a survey conducted by the business advisory firm FRP found that 41% of UK fintechs encountered greater difficulties in securing funding over the past year,

While UK fintech investment is in no doubt in a rough patch, downturns can often lead firms to change their business models to become more resilient and adaptable, and may even lay the foundations for more steady, long-term growth.

Here are some of the key fundraising trends across the UK fintech landscape we’ll be keeping an eye out during the second half of the year..

 

1. Falling valuations, rising M&A

Tech valuations have endured stark declines this year after reaching eye-watering levels in 2021 and 2022.

Molten Ventures recently de-valued its holdings in Revolut by 40%, the firm’s third write-down in four months, whilst payments giant Stripe cut its valuation to $50 billion in March this year; well below its peak of $95 billion back in 2021. With venture capital firms such as Tiger Global writing down venture investments by a third and struggling to raise capital for new funds, valuations are likely to continue falling.

Many fintechs are subsequently seeking alternative means of securing funds; primarily, selling to bigger companies. As reported by the Financial Times, recent weeks have witnessed a flurry of  tech startups being purchased by big buyers. Thomson Reuters paid $650 million for legal services AI group Casetext, while Robinhood bought credit card startup X1 for $95 million.

The trend is likely to follow in the UK. It has been widely reported that the open banking specialist Snoop is considering a sale after multiple takeover offers, whilst former UK fintech gem Railsbank is also exploring the possibility of a sale due to mounting financial difficulties.

As VCs become far more selective about which firms they support, more fintechs will likely seek sales to bigger organisations.

 

2. Growing international competition

For all the concern and pessimism, the UK remains a major global fintech player. According to Innovate Finance, the UK was second to only the United States in terms of global capital investment into fintechs and attracted more fintech funding than the rest of Europe combined.

What’s more, even though the UK fintech landscape is experiencing an investment slump, capital invested in H1 2023 was higher than pre-covid levels, being 35% up on the first half of 2020. 

Speaking about the data, Janine Hurt, CEO of Innovate Finance, said: “Our latest report shows that the UK is still receiving more investment in FinTech than all of the rest of Europe combined, which is a testament to our amazing community of innovators and entrepreneurs.”

The biggest source of competition facing the UK is from Asia. For the first time, 4 of the top 10 investment markets are from Asia, with China in 3rd place attracting $1.7 billion, Singapore in 4th position with $764 million, India 5th with $729 million and South Korea in 9th position attracting $390 million. 

Looking ahead, Asia will likely pose the biggest challenge to the UK as a major hub for fintech investment.

 

3. Looking beyond London

The UK’s fintech ecosystem is intrinsically linked to London, with the capital being a key driver behind the country’s fintech success story. London has the highest concentration of financial and professional services firms, and in 2020, accounted for 94% of all UK fintech investment. 

Heading into the second half of 2023 and beyond, however, we can expect more attention to be paid to areas outside London.

Greater Manchester, for example, has a thriving fintech scene with 147 fintechs in the region – up 133% from three years ago. Belfast is also emerging as a key fintech player and was ranked in the top tech cities in the UK in a new report by the UK’s Digital Economy Council.

More recently, Leeds was chosen as the headquarters for the newly launched Centre for Finance, Innovation and Technology (CFIT), which will aim to draw on expertise to set a national strategy and drive growth across the country’s fintech sector.

There’s no doubt that London remains the core engine behind the UK’s fintech scene, but investment in other cities and regions is likely to grow throughout 2023.

 

4. Not all doom and gloom

Headlines like UK fintech funding tumbles have become somewhat of a staple fixture in 2023, but does this paint an overly pessimistic picture?

Investors are still supporting fintechs that they believe will be successful int the long run. In July, the challenger bank Tandem secured £20m shortly after reporting its first full year of profit. Investment platform TreasurySpring raised £23m in June, whilst payments provider Volt also raised £47m for its Series B. This is not to mention that the major venture capital firm Andreessen Horowitz chose London as the hub for its crypto and blockchain focus. 

The government has also recognised the need to find new ways of incentivising fintech investment. Speaking at Mansion House in July, Chancellor Jeremy Hunt unveiled plans to merge workplace pension schemes and release up to £75 billion of retirement funds for fast-growing startups, including fintechs. 

This will undoubtedly be welcomed with open arms by UK fintechs given recent fundraising challenges, and it will be interesting to see how fintechs get used to having risk-averse pension funds as investors.

 

Consolidation, contraction, or both?

Many will continue to point towards the fintech investment slump as a sign of a sector in decline. However, the flip side of a downturn is that there is likely to be a lot more focus on solving specific issues in wholesale and retail financial markets, with those fintechs that address a genuine market need best placed to weather the storm. 

The UK is home to some of the best fintechs and entrepreneurs, but open collaboration across both the public and private sectors will be key to staying ahead of the curve. 

 

Chatsworth was the first communications agency to focus on fintech. We’ve been building fintech reputations for 20 years, steering start-ups through launch, growth and onto corporate action, and protecting and enhancing established infrastructures.

 

Crypto Crossroads: Navigating Regulatory Paths in the UK, US, and EU

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Cryptocurrencies have emerged as a global financial phenomenon, reshaping traditional finance and investment landscapes. As the crypto market continues to expand, governments worldwide are facing the challenge of creating regulatory frameworks to govern this dynamic industry.

FTX, Celsius and Terraform Labs have all capitulated spectacularly, and the world’s two largest exchanges, Coinbase and Binance, are both currently facing SEC lawsuits.

With such a promising industry causing real people to lose real money, it is important that regulatory bodies strike a perfect balance if they wish to see genuine innovation in their economy. The UK, US and EU have all embarked on their regulatory journey, with some making more progress than others. What is the state of play in each of these economic zones?

 

UK: Striking the balance

In Andrew Griffith’s (Economic secretary to the Treasury) own words, the government’s firm ambition is for the UK to be “home to the most open, well-regulated, and technologically advanced capital markets in the world.” Delivering on this ambition requires the government to take proactive steps to harness the opportunities of cryptocurrencies and their underlying technology.

The UK made a good start, with the Financial Conduct Authority (FCA) taking the lead. In 2019, the FCA classified certain cryptocurrencies as “specified investments,” subjecting them to regulatory requirements. This classification ensured that crypto-related businesses comply with anti-money laundering (AML) and know-your-customer (KYC) protocols, promoting a secure and transparent ecosystem.

In July 2022, the UK Treasury unveiled its proposed crypto legislation, modifying and extending the existing rules for banking and payment systems to cover digital assets. On Thursday 29th June 2023, the Financial Services and Markets Bill (FSMB) finally received royal assent and has been passed into law. For the first time in the UK, crypto will be recognised as a regulated financial activity under this new act, reflecting the government’s plan to make the UK a crypto hub. These proposals initially focus on fiat-backed stablecoins in particular and will eventually allow properly regulated stablecoins to be used as a payments mechanism. Whilst significant, this is only a step in the path to making the UK a fully-fledged crypto hub.

New specific rules, according to Andrew Griffith, can be expected around April next year, with the UK desperate to catch up with the EU’s MiCA legislation. However, Griffith has said that the UK’s regulation will be more widespread than the EU’s, so perhaps it is worth the wait.

 

EU: Pursuit of Harmony

Recognising the need for comprehensive crypto regulation, the European Union has taken steps towards harmonisation through the Markets in Crypto-Assets Regulation (MiCA), which was passed into law in May 2023. Lawmakers say that MiCA will protect investors and preserve financial stability while allowing innovation and fostering the attractiveness of the crypto sector.

A major challenge for the EU, more so than the UK or US, was reconciling the diverse regulatory approaches within the EU. Each member state has its own stance on cryptocurrencies, which resulted in regulatory fragmentation. Coordinating and consolidating these varied approaches into one piece of legislation was a challenge, but a crucial one to create a unified and supportive environment for the crypto industry within the EU.

So far, the EU is the most advanced in its regulatory journey, being the only one of the three to have actual legislation. With the UK not far behind, the onus falls on the US, the most advanced economy in the world with the most stringent and robust regulatory system, to get its act together and catch up.

 

US: Patchwork of Perspectives

The United States presents a complex regulatory landscape for cryptocurrencies due to the involvement of multiple regulatory agencies. The Securities and Exchange Commission (SEC) regulates the offer and sale of all securities, whilst the Commodities & Futures Trading Commission (CFTC) oversees the derivatives market. The disputes between the two agencies over which should regulate the crypto market in the US have been very public, with Gary Gensler, Chair of the SEC, being at the centre of all this publicity.

Due to this, progress on crypto regulation in the US has been slow. The lack of a unified federal regulatory framework in the US has led to a patchwork of state-level regulations. Proposed legislation, put forward by the US House Financial Services Committee and the House Agriculture Committee is expected to be put forward into the House this year. This Bill is a bipartisan effort to address both securities and commodities regimes and issues that are hard to fix on either side.

A number of bills made progress on Capitol Hill last year, however, due to disagreements between Republican and Democrat lawmakers, they never came to fruition. Senators on both sides of the aisle hope that this new bill will be able to drum up bipartisan support and be ratified before the 2024 election. If the US wishes to be at the forefront of the new digital economy, new regulation should be passed soon, to ensure it does not fall further behind the UK and EU.

 

As things stand

Crypto regulation has become a critical aspect of the global financial landscape, shaping the future of digital assets. Looking at the UK, EU and US, it is clear that each has taken a different path towards crypto regulation. Due to different political and regulatory complexities in each country, legislation has taken a bit longer than the industry wanted. However, all three are firmly on their way to regulating crypto which will protect consumers, and foster innovation within this industry.

 

Chatsworth was the first communications agency to focus on fintech. We’ve been building fintech reputations for 20 years, steering start-ups through launch, growth and onto corporate action, and protecting and enhancing established infrastructures.

Boosting UK capital markets: why the City needs to modernise at lightning speed

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The UK’s Initial Public Offering (IPO) market has been grabbing headlines across the globe. Recent developments, such as SoftBank’s decision to list chip maker Arm in the US, have caused real concern about London’s future as a tech hub.

 

Last year we saw a significant slowdown in global IPOs, but London outpaced declines in New York and Europe. As the UK capital struggles to attract new listings, the government is working with market participants to make London a more attractive location for IPOs.

Here at Chatsworth, we’ve been leading the call for UK capital markets to modernise and modernise fast. For too long now the City has been complacent. We need to look at the reasons why tech firms are leaving London and push the UK’s digitisation strategy to the forefront of the government’s agenda.

 

What caused the slowdown?

Technology companies have been a central component of London’s IPO activity in recent years. In 2021, Darktrace, Deliveroo, and Wise helped UK tech IPOs raise £6.6bn out of a total of £16.9bn.

However, London has seen a 40% decline in IPOs since 2008 and has struggled to match the growth of rival markets in Europe. For example, Amsterdam overtook London as a share trading venue soon after Brexit in 2021.

Funds raised by companies listing in London plunged by more than 90% in 2022, with the market cooling due to slowing economic growth, rising interest rates, and wariness around the performance of British firms. Fears over the economy and a drop in startup funding have also led to more companies choosing to list in New York instead of London.

British chip designer, Arm, was considered a jewel in the crown of UK tech and was lobbied by successive prime ministers to choose London for its IPO. Arm recently decided to list in New York, leading to worries that London will miss out on more blockbuster tech listings.

Arm chose to list in New York because of the greater scale and more robust liquidity of US capital markets, with Arm’s Chief Executive, Rene Haas, claiming that a US listing is the best path forward for the company and its stakeholders.

Yoko Spirig, CEO of Swiss fintech Ledgy, recently wrote a letter to the Financial Times arguing that the UK can’t afford to rest on its laurels as other tech hubs like Berlin and Paris increase their talent pool and investment capacity.

 

Efforts to boost UK capital markets

As demonstrated in UK Finance and EY’s recent report on UK Capital Markets, the overall health and prosperity of the UK should not be underestimated, but UK capital markets are at an inflection point.

Both the government and the London Stock Exchange have made efforts to incentivise London IPOs in recent years.

Late last year, the government published its Edinburgh Reforms agenda comprising over 30 proposed changes to existing rules in a bid to enhance the competitiveness of UK capital markets.

Measures such as the Accelerated Settlement Taskforce form a key component of the Edinburgh reforms and are central to the UK government’s efforts to accelerate securities settlement cycles, with the settlement cycle for equities already poised to move to T+1 in the United States.

Accelerating securities settlement cycles and updating market architecture will contribute to the UK’s digital transformation, but all city stakeholders need to be aligned to secure the UK’s reputation as a financial innovator – as outlined by Michael Carty, CEO of Euroclear UK and International, in his article for the World Economic Forum.

Julia Hoggett, CEO of London Stock Exchange Plc, said there needs to be a “constructive discussion” about executive pay in Britain as part of broader efforts to boost the attractiveness of UK capital markets.

More recently, the Capital Markets Industry Taskforce (CMIT) commissioned a report to lay out what needs to be done to keep London a globally competitive financial centre. The report will assess law and regulation, market practice and cultural change.

There is now an opportunity to deliver structural changes to enhance the competitiveness of UK capital markets, which will require all market participants to collaborate with the government and create the right conditions for economic growth.

 

The digitisation agenda

Digitisation is a key component of efforts to boost London’s position as a global financial centre. Efforts such as the 2021 UK Listings Review and the 2022 UK Secondary Capital Raising Review show that digitisation will be a driving force when it comes to attracting future IPOs.

The government created a Digitisation Taskforce to enhance shareholder democracy through the digitisation of share certificates, which will help boost London’s position as a global financial centre and empower individual investors to participate in secondary capital raisings.

Chatsworth welcomes the UK government’s efforts to harness new technologies to boost the competitiveness of UK capital markets. If the City wants to attract firms back to the London stock exchange, we must embrace digitisation whilst maintaining a steady and orderly market.

 

Boosting the competitiveness of UK capital markets 

There is still much data that suggests London is a relatively safe bet for IPOs. Companies that floated on the London Stock Exchange in 2022 declined on average by just 1.6% as of end-December, compared with a 23.5% average fall for newly-listed companies on the New York Stock Exchange and a 24.2% fall in Frankfurt.

However, recent events should not be dismissed as a by-product of the current slowdown in global IPOs. We need to act now, and act fast, to put the wheels in motion on the promises made by industry groups such as the Digitisation Taskforce and the Capital Markets Industry Taskforce.

Recent reforms demonstrate renewed efforts to incentivise tech firms to list on the London Stock Exchange, but we need to embrace digitisation if we want to fully restore the UK’s reputation as the world’s most competitive global financial centre.

 

Chatsworth was the first communications agency to focus on fintech. We’ve been building fintech reputations for 20 years, steering start-ups through launch, growth and onto corporate action, and protecting and enhancing established infrastructures.

 

 

 

 

 

 

Fintech Week London – is London still a leading fintech hub?

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By Michael Deeny, Director at Chatsworth

Day one of Fintech Week London got off to an ominous start when my black cab driver’s card machine froze, and I had to pay with cash. “Technology is great when it works,” he quipped.

Little did he know, I was stepping into a fintech conference with hundreds of people, many of whom are focused on technology that will transform the future of money!

At Tottenham Hotspur’s technologically advanced new stadium, a fitting venue, Raf De Kimpe, CEO of Fintech Week London, opened the day by saying that Beyoncé was a hard act to follow but that he’d do his best.

While the conference didn’t have quite the same draw as a Beyoncé gig, there was a small, engaged audience of the great and good of fintech brought together by a common belief that the industry is the future of finance and much much more.

Given the name of the event, it’s no surprise that a lot of discussions focused on London’s position as a fintech hub. There was a lot of positivity in the room that the city has momentum in its favour, but there was also a sense of realism that nothing is guaranteed.

Charlotte Crosswell OBE, Chair of the newly formed Centre for Finance, Innovation and Technology (CFIT) gave an energetic and positive keynote on London’s position as a global fintech hub.

Crosswell commended the inspiration on offer at industry events like this and London Tech Week before diving into how CFIT is working hard to push the industry forward. It aims to bring together the best minds from across the UK to unblock barriers to growth and help the sector to scale.

CFIT already has some exciting projects in place to connect opportunities and drive real change. Crosswell said it’s vital the UK acts now and commits to long-term agenda to unleash a new wave of innovation across every region in the UK.

Staying with the CFIT theme, Andrew Griffith MP, Economic Secretary to the Treasury, opened day two with similar enthusiasm and optimism, talking about the UK government’s mission to make the UK the envy of the world when it comes to fintech innovation.

He highlighted some of the important successes in the UK such as the 3,000 fintechs that are based here, Open Banking’s 7mn users and 1bn API calls per month, the UK government’s commitment to spending £20bn per year in R&D tax credits and the launch of CFIT. He concluded that he was excited to work with UK fintechs in the room to strengthen London and the UK’s position as a leading fintech hub.

Rajesh Agrawal, Deputy Mayor of London for Business, also spoke about this theme and shared what he thinks are London’s three key strengths:

Talent – London is home to 40 universities, more than any other city in the world

Regulation – Protects consumers, and encourages innovation through initiatives like sandboxes

Financial Services – 1600 fintechs, 42 unicorns, the largest concentration of foreign banks

Amongst all the positivity in the room about the UK’s prospects, there was a sense of realism that its position as a leading light in fintech wasn’t guaranteed.

A panel which featured Layla White, founder and CEO of TechPassport, Saira Khan, Head of Innovation and Partnerships at first direct, Prakash Pattni, Managing Director, Financial Services Digital Transformation at IBM Cloud, Matt Smith, Co-founder and CEO of SteelEye and Sean Kiernan, Chief Technical Officer at Greengage agreed that the removal of Tech Nation’s funding was disappointing.

They saw it as an important vehicle for collaboration between founders, successful entrepreneurs and government and called for more collaboration and discussion between large incumbents and fintechs to move the industry forward.

Overall, the message from founders, scale ups, incumbents, policymakers and regulators was pretty similar – there has been some incredible work done to date, but we need to keep working together to ensure London remains ahead of its rivals.

 

Chatsworth was the first communications agency to focus on fintech. We’ve been building fintech reputations for 20 years, steering start-ups through launch, growth and onto corporate action, and protecting and enhancing established infrastructures.

 

 

Regional investment high on the agenda at Digital DNA Belfast

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Chatsworth’s Belfast team attended Digital DNA Belfast last week in the iconic St George’s Market. We met up with key influencers in the local tech ecosystem to explore the future of tech in the city and beyond.

Pictured: Chatsworth’s Cait Córdova, Mollie McLernon and Eamon Daly at Digital DNA Belfast

Sessions included speakers from firms such as Datactics, Dell, IBM, Raise Ventures and STATSports and covered everything from artificial intelligence (AI) and deep fakes to spreading investment beyond London and harnessing academic research.

Here are some of our highlights:

 

Northern Ireland’s position as a tech hub

While there wasn’t a specific session dedicated to building Northern Ireland’s profile as a tech hub on the agenda, it was a key topic of conversation on the day. The region’s tech expertise and knowledge are widely known and it boasts one of the fastest-growing tech sectors in the UK.

An insightful panel discussion took place on the frontier stage that typified the growth of Northern Ireland’s firms and their subsequent reputations. Representatives from some of its most rapidly accelerating organisations such as STATSports and TeamFeePay discussed the topic of “Igniting Innovation – From Disruption to Dominance”. 

Much of the conversation among attendees on the day was focused on improving NI’s position as a tech hub. The biggest barriers were political instability and spreading investment beyond London, while the biggest selling point was NI’s entrepreneurship, expertise and talent which combine to make it a great place to start up a tech firm.

Global technology leaders, such as Fujitsu, SAP, Microsoft, and Nvidia, have established business operations in Northern Ireland because of the wealth of knowledge, skills, support and talent available.

Northern Ireland has also developed its own vibrant and innovative tech sector with locally owned firms such as Kainos and FD Technologies that are exporting internationally.

According to a report by the Digital Economy Council, the tech sector now accounts for more than one in seven jobs in the region. The data also shows that 15 per cent of new jobs are in tech, with a 12.4 per cent month-on-month increase.

NI is now viewed as a hub brimming with potential and boasts a high level of employable talent, as showcased in Deloitte’s most recent Technology Fast 50 List, featuring nine companies from across Northern Ireland.

A vibrant tech community and an ecosystem built on collaboration have thrust Northern Ireland’s tech scene into the limelight. Belfast was awarded a FinTech Strategy specialism award in 2021 and ranked second for FinTech Strategy among mid-sized European Cities of the Future 2022/23.

 

Combatting deep fakes

We attended a session entitled, Don’t Believe Your Eyes: Can the law do anything to combat deep fakes, delivered by DWF Director James Griffiths.

The session was incredibly interesting – and fairly terrifying. Aside from the outrageous personal and social ramifications deep fakes have wrought (duping audio through ‘voice skins’ etc), AI-generated videos have sent the financial sector, in particular, spinning.

Just last month, a manipulated video popped up online showing an alleged explosion near the U.S. Department of Defence. Though Pentagon officials quickly confirmed these reports of an explosion were false, the video made its way through social media and investment sites like wildfire causing stocks to drop. The S&P 500 briefly dipped 0.3%, and prices for U.S. Treasury such as gold briefly began to climb suggesting investors were looking for security. 

Though the US-UK announced an initiative in 2020 with the aim of tackling AI risk, one wonders if their joint action will be fast-acting or robust enough. 

Is financial security reliable enough, and comprehensive enough that deepfakes can be caught before they do any real damage? Is it a matter of time before this technology evolves and improves to the point where we have a hard time distinguishing the real from the fake at all? Hundreds of AI experts and public figures recently published a statement on AI’s risk warning against exactly this and likening the potential scale of such risks to ‘pandemics and nuclear war.’

To say that security across the financial sector is already at a point of contention would be an understatement. Adding a fight against the malicious and purposeful manipulation of the marketplace through deep fakes to the mix will certainly make for an interesting landscape in the coming years.

 

AI – separating reality from the hype

For years, AI technology has been widely used by fintech and tech firms to automate repetitive processes, such as data entry and background analysis and improve decision-making by simplifying analytics. Recent developments such as ChatGPT present an opportunity to take this progress further.

It was therefore no surprise that multiple sessions were dedicated to AI and the technology came up in nearly every session.

One of the most important panels of the day was ‘What are the risks of using AI in your business: Hype vs Reality?’. While the panel recognised AI’s potential, it warned businesses not to go all in without investigating thoroughly and highlighted risks related to errors and liability, ethics, data privacy and security.

In a separate session, Harry Hope, Chief Technology Officer at Insider, shared how the publication plans to harness a technology which was tipped to completely disrupt the media industry. Insider journalists are allowed to explore tools such as Chat GPT which can help with research and brainstorming but, crucially, they won’t use it to write for them. Nicholas Carlson, Global Editor in Chief at Insider, recently wrote a memo to Insider staff about this sharing the same sentiment.

The feeling at the event was that while AI will undoubtedly be an important tool for businesses in all sorts of industries, we mustn’t get caught up in the hype and utilise it sensibly.

The event drew in 2,000 attendees and was a great showcase of all the collaboration and innovation in Northern Ireland’s tech industry.

 

Chatsworth was the first communications agency to focus on fintech. We’ve been building fintech reputations for 20 years, steering start-ups through launch, growth and onto corporate action, and protecting and enhancing established infrastructures.

 

Spring Statement: the fintech industry reacts

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In his first Spring Statement since becoming Chancellor of the Exchequer, Jeremy Hunt laid out his plans to ensure the UK is “the best place in Europe for companies to locate, invest and grow”.

After a long weekend of negotiations around the Silicon Valley Bank crisis which ultimately led to HSBC acquiring the stricken bank, all eyes were on the chancellor as he unveiled his ‘budget for growth’.

Amidst measures for pensions, pubs and potholes, there was plenty for the fintech industry to digest, including tax cuts, investment in hubs around the UK and an artificial intelligence (AI) sandbox.

 

New R&D tax credit scheme for SMEs

Despite repeated calls from the UK tech industry to abandon planned cuts to the research and development (R&D) tax credit scheme, the chancellor is pressing ahead.

The scheme enables founders to claim back money spent on R&D as tax relief or cash credit. The idea is to encourage experimenting and innovation to push the industry forward.

UK companies claimed £6.6 billion in R&D tax credits in 2020-21 but, in November 2022, Hunt cut the rebates available to small and medium-sized businesses in a bid to reduce fraudulent claims, while increasing credits for larger companies.

Just last week, over 250 startup founders urged Hunt to reverse proposed cuts to R&D tax rebates for SMEs.

Possibly because of this pressure, in his spring statement, the chancellor announced additional tax support for R&D-intensive startups in fields such as AI and fintech that spend more than 40% of their total expenditure on R&D.

They will be able to claim £27 for every £100 spent on R&D. Tax relief for larger companies spending on R&D will increase from 13% to 20% from April 1.

Yoko Spirig, co-founder and CEO of Ledgy, said this was “positive for the tech ecosystem,” and that, “this move, coupled with the UK government’s intervention to support tech businesses through the weekend’s Silicon Valley Bank crisis, shows the UK is still an attractive place for tech firms and will help ensure it stays out in front as a positive example for other European markets.”

 

Tech hubs near UK universities to get £1 billion

Another key part of the spring statement was £1bn in extra funding for tech hubs clustered around universities in England to boost business investment in the regions.

Hunt pledged to create 12 investment zones in eight areas “to drive business investment and level up” the country, each backed with £80m of government funding.

He said that the zones will form the cornerstone of his efforts to supercharge growth and accelerate research and development in the “most budding industries”.

Laurent Descout, co-founder and CEO of Neo, welcomed the news: “From 2021 to 2022, spin-outs from UK universities created more than 56,000 jobs and almost £6bn of investment and this investment will help ensure this success continues. As a fintech with an office in Cambridge, we have seen first-hand the innovation taking place at UK universities and welcome the chancellor’s support.”

 

AI sandbox to support UK artificial intelligence

The chancellor announced an “AI sandbox” to boost support for the UK’s artificial intelligence companies and help firms get cutting-edge products to market faster.

He also committed to introducing a new AI prize, dubbed the “Manchester Prize”, for which the government will award £1m a year for the next 10 years to “the person or team that does the most ground-breaking AI research” in the UK.

Reacting to this announcement, Matthew Hodgson, CEO of Mosaic Smart Data, commented: “An annual £1m prize for AI research will go a long way in boosting the government’s pledge to make Britain the next ‘Silicon Valley’ and is a positive move in the UK’s ongoing quest to become a science and technology superpower.

 

Looking ahead: Encouraging institutional investors to back tech

Hunt hinted at what’s to come in the autumn statement, saying he will come back with a plan to unlock investment from pension funds and other sources.

This follows a Square Mile meeting at the end of January which involved top pension firms including Phoenix, Aviva and L&G and the fintech industry body Innovate Finance and big four firm EY to discuss pooling institutional capital in a £50bn private-sector led fund that would mimic the role of a “sovereign wealth fund”, as revealed by City AM. The goal was to encourage pension funds to invest in high-growth tech firms in a bid to support the sector through a challenging fundraising environment.

Hunt also said the autumn statement would include plans to make the London Stock Exchange a more attractive place to list.

In 2022, IPOs raised a combined £1.6 billion compared to £6.6 billion in 2021. Firms such as UK chip designer Arm, owned by Japan’s Softbank and building materials group CRH recently shunned London to pursue stock market listings in the US. Other firms such as Atom Bank pushed planned IPOs back to 2024/2025.

Pierre-Antoine Dusoulier, CEO at iBanFirst, said, “We look forward to seeing how the UK will push the barriers for fintech growth and remain at the centre of financial services innovation. With its position as a global leader at risk, a combination of increased innovation, job creation and growth is essential to ensure that the UK remains in the top spot and fulfil Jeremy Hunt’s goal to become the ‘next Silicon Valley’.”

Looking ahead, Alisa DiCaprio, Chief Economist at R3, and former FinTech Committee Chair at the US Dept. of Commerce said: “We look forward to hearing more about the Treasury’s support for other fintech initiatives, like the FMI sandbox and accelerated settlement taskforce, to ensure the UK remains at the cutting edge of financial services innovation. With competition rising from Europe and elsewhere, harnessing transformative tools specific to empowering financial services, such as distributed ledger technology, is quickly becoming a central pillar of economic growth.”

 

Chatsworth was the first communications agency to focus on fintech. We’ve been building fintech reputations for 20 years, steering start-ups through launch, growth and onto corporate action, and protecting and enhancing established infrastructures.

 

It’s time for Silicon Roundabout Bank in the UK

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By Nick Murray-Leslie, Principal at Chatsworth Communications

 

Just fresh from an excellent update briefing on the Silicon Valley Bank situation, pulled together by Janine Hirt and the team at Innovate Finance and Hogan Lovells

From the UK side, HSBC is taking on Silicon Valley Bank’s UK unit and banking facilities are now restored and fully operational.

This is absolutely excellent news for this vital sector, after a commendable night of work from the UK government, Bank of England and their advisors to resolve the situation. It’s probably the best outcome we could have hoped for and delivered in very short order.

A bank run is never a pretty thing and is of course the ultimate expression of market jitters. Make no mistake, the collapse of SVB was a very serious risk of contagion and a direct threat to a whole host of fintech businesses.

The key impact of the SVB collapse is perception of the health of the fintech sector as an extension of the tech sector.

Fintechs need access to working capital while they build and move towards adoption – then they take skyward and become profitable or acquired at pace.

The events of the last few days will have a long impact on the reputation of and sentiment towards the fintech sector more broadly adding to the pressures of an already challenging funding environment.

So a communal sigh of relief. Maybe it’s time to rebrand the UK arm –  Silicon Roundabout Bank anyone?

 

Chatsworth was the first communications agency to focus on fintech. We’ve been building fintech reputations for 20 years, steering start-ups through launch, growth and onto corporate action, and protecting and enhancing established infrastructures.

#EmbraceEquity this International Women’s Day

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The theme of this year’s International Women’s Day is #EmbraceEquity which aims to encourage important conversations on why equal opportunities aren’t enough and why equal isn’t always fair.

Women and several minority groups are underrepresented in the business and tech world. For example, just 6.5% of fintech founders in Europe are women and there are currently only two African American female CEOs of Fortune 500 Companies.

In 2022, female-led businesses only received around six percent of venture capital funding. If women in the UK could match men in starting and scaling businesses, £250bn could be added to the economy.

It was also reported that half of the women applying for loans and investments have had their requests rejected – a barrier preventing women from being successful before they’ve even started.

The lack of gender diversity in the UK technology industry has not gone unnoticed. Businesswoman and peer, Martha Lane Fox, publicly recently said there has been little progression in twenty five years.

Change has been happening in this industry, albeit slowly, and women are doing their best to be heard in a mainly male dominated industry.

A record 150,000 new firms were founded by women last year and women’s share of senior and leadership roles has seen a steady global increase over the past five years. In 2022, the global parity for this category reached 42.7% – the highest gender parity score to date.

The industry body for UK Fintech, Innovative Finance is led by three women and doing a great job shining a light on women in fintech. Innovate Finance today revealed its Women in FinTech Powerlist which celebrates some of the amazing women making an impact across the FinTech and Financial Services space.

Many of our clients at Chatsworth have women in senior positions who are smashing it! Ledgy is led by co-founder and CEO, Yoko Spirig, Duality’s Chairwomen and co-Founder is Rina Shainski and R3 the leading provider of enterprise technology, has Dr. Katelyn Baker as its Principal Software Engineer and Alisa DiCaprio as its Chief Economist.

On the 111th anniversary of International Women’s Day, there is plenty to celebrate, but also lots more to achieve in the pursuit of complete gender equality in both the workforce and in senior positions for women.

 

Chatsworth was the first communications agency to focus on fintech. We’ve been building fintech reputations for 20 years, steering start-ups through launch, growth and onto corporate action, and protecting and enhancing established infrastructures. 

Looking for intelligent, informed and connected fintech PR which delivers results and value? Get in touch and let us help build your reputation and tell your story.

 

 

Two years since the Kalifa Review: Is the UK still a world-leading fintech hub?

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Back in 2020, the Chancellor asked Ron Kalifa OBE to conduct an independent review to identify priority areas to support the UK’s fintech sector.

In February 2021, Ron Kalifa published his report, and in 108 pages it laid out plans to support the growth and widespread adoption of UK fintech and maintain the UK’s global fintech reputation.

The picture for UK fintech in the year after the report was published was a pretty one, as we highlighted in our blog on the Kalifa Review’s one year anniversary.

We were riding a wave of record investment (up sevenfold from the year before), while Initial Public Offerings (IPOs) raised £6.6 billion (double the amount compared to 2020). The UK was clearly seen as an attractive place to both launch a tech company and work for one.

The talk at the time was focused on not resting on our laurels and building on this momentum to ensure adoption matched record-breaking investment. So, how have we fared in the past 12 months?

 

Is the UK still a world-leading fintech hub?

Fintech investment suffered globally in the past year. After reaching a record $238.9 billion across 7,321 deals in 2021, total global fintech investment fell to $164.1 billion across 6,006 deals in 2022.

While the UK’s fintech sector saw investment drop $22 billion to $17 billion in 2022, this was still more than the rest of EMEA combined. Fintech investment in the EMEA region dropped from $79 billion across 2,379 deals in 2021 to $44.9 billion across 1,977 deals in 2022.

Even with a big drop off in funding and macroeconomic challenges, the UK has maintained its position as a leading fintech hub.

Laurent Descout, co-founder and CEO of Neo, echoes this sentiment, “it’s clear the foundations laid to date have helped London maintain its healthy competitive advantage.”

Eric Huttman, CEO of Eric Huttman, CEO of FX-as-a-Service pioneer, MillTechFX, believes that the Kalifa Review helped, “build resilience which has been vital during this tough period.”

 

What happened with UK tech IPOs in 2022?

 Aside from boosting fintech funding, one of the key recommendations from the Kalifa Review was making the UK a more attractive location for IPOs. As alluded to above, the first year after the Kalifa Review was a roaring success for IPOs, with a total of 37 tech firms going public and raising £6.6 billion.

But, in 2022 this dropped off, with IPOs raising a combined £1.6 billion. Firms such as Atom Bank pushed planned IPOs back to 2024/2025 as firms that did list in London such as Deliveroo struggled, while others, like Made.com, went under.

Yoko Spirig believes that this is a key Kalifa Review recommendation that hasn’t been delivered and that, “the London stock exchange is not yet seen as a top-tier destination for tech listings.”

 

Is fintech still a priority for the UK government?

There has been widespread concern among the fintech community about recent government policies that appear to contradict the aim of remaining a global fintech leader and go against some of the recommendations in the Kalifa Review.

 

Withdrawal of Tech Nation funding

One of the most controversial recent developments was the withdrawal of crucial funding to the government-backed industry body, Tech Nation. More than £28 billion has been raised by alumni of the group’s accelerator programmes, which include the likes of Monzo, Deliveroo and Darktrace.

As the CEO of a Swiss company which set up an office in London partly due to the work Tech Nation did championing startups, Ledgy’s Yoko Spirig was, “disappointed to learn that Tech Nation will be shutting down, especially during a difficult time in the sector which has seen investment drop off, valuations fall and widespread layoffs.”

 

Global Talent Visa uncertainty

Tech Nation was also responsible for the Global Talent Visa which aims to bring international tech talent with fast growth firms in the UK, leaving the initiative in jeopardy. This is despite improvements to tech visas being a key Kalifa Review recommendation.

Sir Ron Kalifa himself commented, “Having Tech Nation lead the national connectivity chapter of the Kalifa FinTech Review was hugely impactful as it brought together several different constituents, from founders to academics and from investors to ecosystem regional leaders.”

The funding instead went to Barclay Eagle Labs which led many to question if it was ethical for a startup incubator division of a FTSE 100 bank to receive taxpayer funding. Barclays Eagle Labs has come out fighting though and said it is ready to support the UK tech industry and win over critics who think it’s “the bogeyman”. One to keep a close eye on in the year ahead.

 

Cutting R&D tax credits

Another big point of contention is the cutting of research and development (R&D) tax credits which were a lifeline for many startups. The scheme enables founders to claim back money spent on research and development as a tax relief or cash credit. The idea is to encourage experimenting and innovation to push the industry forward.

UK companies claimed £6.6 billion in R&D tax credits in 2020-21 but, in November, chancellor Jeremy Hunt cut the rebates available to small and medium-sized businesses in a bid to reduce fraudulent claims, while increasing credits for larger companies.

Research from the FSB found that 64 per cent of the firms to have earned the tax credits in the last three years would now rein in their innovation investment in light of the changes, equivalent to 50,000 small firms.

Meanwhile, half a dozen founders of early-stage British tech companies told the Financial Times that the cuts, alongside Brexit and a slowdown in venture capital funding, have led them to look at international opportunities more seriously. They are looking abroad to places like France which has increased its R&D tax support steadily since 2004.

 

Increasing competition from Europe

While all of this has been in happening in the UK, Europe has been pressing ahead.

The EU is setting up an the European Tech Champions Initiative to boost equity investments and prevent its most promising high-tech companies from being bought out by foreign investors once they become successful. The initial money pot will be worth €3.75 billion, but its size is expected to increase over time.

Europe is “doubling down on tech investment in a bid to cement Europe’s position as a startup friendly tech hub,” according to Yoko Spirig. Spirig continues, “other fintech hubs like Berlin and Paris are building talent and investment capacity all the time, so the UK cannot be complacent.”

Meanwhile, fintech investment is increasing in some European countries. For example, the value of fintech deals in France grew 28% to $3.7 billion last year, while deals in Sweden rose to $3.7 billion, up from $2.6 billion.

 

So, how can the UK keep its place as a global fintech hub?

 The UK fintech community has shown its resilience over the past year and there are some positive signs. For example, in the past year, the number of newly created UK tech firms grew by a fifth, with 46,474 new tech companies created in 2022, up from 38,240 in 2021.

While we’ve seen widespread layoffs, similar to what happened after the dotcom bust, we could see a startup boom. Those laid off with healthy financial packages could choose to set up their own firms and even compete with their former employers, leading to increased competition and disruption.

That said, there will be tough times ahead with investment drying up, valuations dropping and macroeconomic uncertainty all affecting the sector.

The message from founders is that the UK government needs to continue supporting the sector.

Ledgy’s Yoko Spirig, said, “It’s vital the UK government continues to support the fintech sector, encourage balanced risk-taking and drive innovation, if it wants to remain ahead of its European rivals.”

Eric Huttman, CEO of FX-as-a-Service pioneer, MillTechFX, believes, “Momentum has not slowed and it’s vital that the fintech community continues to work together to drive the industry forward and build trust to increase adoption among businesses and consumers beholden to legacy processes and providers.”

Laurent Descout at Neo commented, “It’s clear the foundations laid to date have helped London maintain its healthy competitive advantage and we expect digital adoption will continue to boost growth in many areas, including the payments market.”

Needless to say, all eyes will be on the UK government’s Spring Budget announcement on Wednesday, March 15, 2023.

 

Chatsworth was the first communications agency to focus on fintech. We’ve been building fintech reputations for 20 years, steering start-ups through launch, growth and onto corporate action, and protecting and enhancing established infrastructures. 

Looking for intelligent, informed and connected fintech PR which delivers results and value? Get in touch and let us help build your reputation and tell your story.

Top crypto & blockchain events to look out for in 2023

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Last year was a tumultuous one for the crypto market, with crypto prices falling dramatically following events such as the Terra/Luna crash and the collapse of FTX.

Yet, the fascination around crypto held strong, with investors, industry leaders and enthusiasts expected to turn up in droves to this year’s crypto and blockchain events, conferences and summits. If you’re also keen to join the discussion, we’ve pulled together a list of the top events to populate your calendar with.

If you’d like to stand out at fintech events and take your PR and marketing to the next level, get in touch for a free consultation: [email protected] 

The Blockchain Event: 14 – 17 February 2023, Fort Lauderdale

The first event of the year is The Blockchain Event, a 3-day exposition where decision-makers, technologists and developments will gather to understand the value of blockchain to their businesses.

Key discussions will cover:

-How and why blockchain can solve business problems

-How to successfully define, develop, build, and implement blockchain projects

-Practical use cases

-Benefits businesses are realizing from their blockchain investments and implementations

-What the future of blockchain looks like

Blockchain Economy Summit: 27 – 28 February 2023, London

The UK is working to become one of the world’s largest hubs for crypto, making London the perfect place to unite over 3,000 key crypto players and experts to explore the potential that web3, NFTs, crypto, blockchain and the Metaverse holds.

With a second event taking place in Dubai, between 8 – 9 March, there is ample opportunity to connect with industry experts across more than 70 countries.

Consensus 2023 by CoinDesk: 26 – 29 April 2023, Austin

Consensus is the world’s longest-running event, bringing the crypto and blockchain community across the pond together for a collaboration of ideas.

This year will centre around rebuilding the crypto space following the most turbulent year yet – developers, investors, founders, policymakers and businesses will congregate to brainstorm solutions to current challenges and explore technology’s transformative potential.

Security Token Summit: 20 June 2023, New York

If you’re interested in institutional investment in digital assets, then the Security Token Summit is one to keep on your radar. The agenda covers a range of topics such as regulation, tokenisation, standards and real estate.

The one-day summit gathers thought-leaders, active investors, financial institutions and family offices for a series of thought-provoking panels and fireside talks that provide invaluable knowledge and insight.

London Blockchain Conference: 31 May – 2 June, London

Hosted at the Queen Elizabeth II Centre, 1,000+ guests will get together to hear over 140 speakers to learn how industries are being disrupted with blockchain technology. This year’s themes include:

-Web 3.0 and IPv6

-Blockchain Regulation and Government Legislation

-Smart Contracts and NFTs

-Stablecoins and CBDCs

-The power of nano-transactions

Decentralised 2023: 1 – 3 November 2023, Athens

Organised by the University of Nicosia in Cyprus, Decentralized is one of the world’s biggest blockchain and digital currencies conferences.

More than 1,500 attendees will head to Athens to hear panel discussions on the future of DeFi, how blockchain is improving trust and transparency across sectors, and the role that decentralisation plays in social, economic and political change.

 

Chatsworth was the first communications agency to focus on fintech. We’ve been building fintech reputations for 20 years, steering start-ups through launch, growth and onto corporate action, and protecting and enhancing established infrastructures.

Looking for intelligent, informed and connected fintech PR which delivers results and value?

Get in touch and let us help build your reputation and tell your story.

Open Banking Turns Six

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Open banking, an initiative launched by the Competition and Markets Authority (CMA) to bring more competition to the UK’s banking industry, celebrated its sixth anniversary in January.

To mark the occasion, the CMA announced that the six largest banking providers in the UK, Barclays, HSBC, Lloyds, Nationwide, NatWest and Santander, have now implemented all the requirements of the Open Banking Roadmap, and that the Roadmap is nearly complete.

There are now 6.5 million regular users of open banking technology, a significant increase from the reported 4.5 million regular users in 2021. Further, there were 1 billion API calls a month and 7.5 million open banking payments, as of December 2022.

In December alone, 7.5 million payments were made in the UK using open banking, up 230 per cent year-on-year. There are over 200 providers of open banking in the UK and over 600,000 small and medium size enterprises are using the technology to improve their businesses.

Sarah Cardell, Chief Executive of the CMA, said: “It is fantastic to see how many consumers have benefited from open banking since the CMA’s Order was issued in 2017 – which has transformed the way millions of people manage their money.”

 

Exploring more ambitious and creative solutions

Open banking was launched in 2017 as part of a package of improvements following the CMA’s market investigation into retail banking. It ordered the UK’s nine largest retail banking providers to open up customer data using secure data protocols.

The initiative has helped drive competition in a market which was previously dominated by major banks, reducing costs for businesses and improving financial decision-making for consumers.

But, in order to unlock its vastly untapped potential, banks, fintechs and businesses need to continue to explore ambitious and creative solutions that open banking fosters and facilitates to benefit the UK public and business community.

In City AM, Andrew Griffith, Economic Secretary to the Treasury, wrote, “My task now is not just to lock in this progress – but to build on it to ensure the benefits of open banking technology and broader innovation are felt by as many people and businesses in the UK as possible.”

OneID®, a London-based identity technology firm, is the prime example of open banking innovation. It showcases a truly innovative use of this existing ecosystem that benefits banks, businesses and UK citizens. It enables 40m UK consumers to consent to share their bank-verified identity data with a 3rd party service provider to easily onboard and authenticate themselves. This has huge potential to tackle big societal issues such as age verification, fraud and online abuse.

 

Still a way to go

With momentum rapidly growing pace, open banking is taking centre stage in the financial services industry. But it isn’t without its critics.

Back in December, a group of UK fintechs, including Monzo, Plum and Wise, signed a joint letter to the Financial Conduct Authority (FCA) calling for greater clarity on how open banking will be regulated from 2023 onwards.

The letter then describes dissatisfaction with the lack of clear direction from the Joint Regulatory Oversight Committee (JROC), a regulatory body established last March by the Competition and Markets Authority (CMA).

Further, not all banks have implemented all the requirements of the open banking Roadmap. Allied Irish Bank, Bank of Ireland and Danske are lagging behind the other six major banks. The CMA said the Open Banking Implementation Entity would consider enforcement action.

Despite these issues, the open banking story to date has largely been a positive one. To continue on the same path, it’s vital that policymakers and regulators act now and lay the foundations that will allow open banking to continue to flourish for years to come.

 

Chatsworth was the first communications agency to focus on fintech. We’ve been building fintech reputations for 20 years, steering start-ups through launch, growth and onto corporate action, and protecting and enhancing established infrastructures.

Looking for intelligent, informed and connected fintech PR which delivers results and value?

Get in touch and let us help build your reputation and tell your story.

 

 

5 fintech trends to watch in 2023

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Describing 2022 as turbulent is a bit of an understatement. Geopolitical tensions boiled over, volatility returned with a vengeance, the great tech layoff left 200,000+ jobless, inflation exploded, investment fell off a cliff – the list goes on. It can’t get any worse, can it?

Yes, this is an overly pessimistic review of 2022. While we are going through a rough patch, downturns encourage innovation, pushing sub-sectors of fintech to the fore and we do have cause for optimism in 2023.

Here are some of the key trends we’ll be keeping an eye on over the next 12 months:

 

Investors to remain picky, fintech to remain sticky

According to Dealroom, fintech investment fell 32% to $21.5bn in 2022, its lowest in five years.

A combination of geopolitical uncertainty, turbulent markets, high inflation and rising interest rates all led to subdued levels of investment. Other factors including a decline in public market valuations and the poor performance of various IPO listings dampened optimism from investors.

Venture capitalists became increasingly sceptical about the appetite for risk associated with unprofitable growth, and about customer acquisition costs and monetisation, forcing fintechs to tighten their belts.

If the easy money is no longer there for fintech, the good tech which meets genuine use cases is going to stick and there will be an almighty clear out of the junk.

Firms will need to work harder and smarter with existing cash flows and teams from the top to the bottom of the organisation.

This downturn is going to be both a shake-out and an opportunity for great fintech firms to show their real value.

 

AI moves increasingly into mainstream

ChatGPT, the artificial intelligence chatbot which can provide detailed responses and articulate answers to also any topic or question, has caused quite a stir online.

Created by OpenAI, which was co-founded by Sam Altman, Elon Musk and others, the software is still in its prototype stage but has been made available to the general public for free.

The overall response has been mixed, and the programme is so capable of answering questions like a person that it’s left many experts wondering what the implications could be. Speculation includes the death of Google’s search business, a wave of “AIgiarism” – or AI-assisted plagiarism, mass customer service layoffs and more. Its potential is huge and there’s already talk that the firm is set to raise capital at an almost $30bn valuation.

AI technology is already used widely fintech to automate repetitive processes, such as data entry and background analysis and improve decision making by simplifying analytics. ChatGPT presents an opportunity to take this progress further, improving the accuracy and efficiency in dealing with queries, enhancing customer experience and building loyalty.

 

Crypto regulation is coming

2022 was an eventful year for the crypto industry – the stablecoin meltdown in May, major hiring freezes and layoffs from the likes of Coinbase and Gemini and the collapse of FTX all impacted crypto prices, resulting in the crypto winter.

Despite the turbulence, Charley Cooper, Managing Director at R3 believes that currently, the market is too small to have any real impact to mainstream finance. He does, however, believe, “if the size and scope of the industry grows over the next few years, then a crash like the one we have seen this year could pose a real threat to widespread financial stability.”

But while it may not currently impact mainstream finance, the crypto winter has taken a toll on many retail investors. Around three-quarters of Bitcoin investors lost money in 2022 alone and many other coins suffered price drops, leading to calls for a regulatory crackdown to protect investors.

It is hard to predict where crypto will go from here. However, it is likely that regulation across the market will accelerate to establish more stringent consumer safeguards as regulators seek to prevent such an enormous fallout from happening again.

Blockchain has huge efficiency benefits and can bring greater speed and cost-savings to financial markets. There are many players within this space who are genuine innovators and wish to progress the industry through trust and transparency.

Against a backdrop of heightened scrutiny, it is vital that digital finance companies have clearly defined services and offerings – and the ability to communicate this to their target market – if they are to fulfil this potential.

 

Tech job losses could lead to innovation boom

2022 was the year of tech layoffs – over 235,000 people were laid off within the tech and fintech sector according to job loss tracker, TrueUp.

The biggest spike was in November, according to a report from Challenger, Gray and Christmas, during which there were almost 53,000 cuts. Some firms have blamed the effects of the Covid-19 pandemic while others, such as Twitter, pointed to overhiring during periods of rapid growth.

As a result, there is a lot of talent on the street, and this could manifest itself in a number of ways.

Similar to what happened after the dotcom bust, we could see a startup boom. Those laid off with healthy financial packages could choose to set up their own firms and even compete with their former employers, leading to increased competition and disruption.

We could also see increased innovation at bigger, more traditional financial institutions. People that lost their jobs may look for more security and these types of firms can offer just that. There may be an adaptive period however as many will be used to the ‘move fast and break things’ mantra which isn’t quite how the more traditional firms do things.

Lastly, it could be good news for startups who struggle to match the packages at big tech firms and so can’t attract more experienced hires. There are already reports of startups having better access to talent and many of those that are laid off could well seek to go back to the good old days of being the disruptor challenging the incumbents.

 

Crackdown on greenwashing

The term greenwashing is not new. It’s been around since the 1980’s and, according to KPMG, it means dishonest practices used by businesses to represent themselves as more sustainable either by giving a false impression or providing misleading information as to the sustainability of a product/service.

The FCA recognises that over the last few years, the financial services sector has ‘seen a dramatic increase in ESG and sustainable investments which has also led to increasing concerns about firms confusing or even misleading consumers about the nature of some of these investments.’

Regulators across the globe are now moving to tackle the issue of greenwashing, especially around the naming of funds which has been described as a “powerful marketing tool” for asset managers.

In November 2022, the European Securities and Markets Authority (ESMA) announced new rules for the naming of ESG-related funds to “address any misuse” of the Sustainable Finance Disclosure Regulation (SFDR).

A month earlier, the Financial Conduct Authority (FCA) proposed a raft of new measures including sustainable investment labels and consumer-facing disclosures to boost consumer trust.

While the crackdown is welcome, greenwashing has brought increasing scrutiny on ESG efforts, making it more important than ever that firms keep their green credentials simple, factual and authentic. Otherwise, they risk the greenwashing treatment, which can lead to negative backlash, reduced trust in their brand and, in extreme cases, regulatory action.

 

Here’s to 2023

As with any year in fintech, it’s impossible to say what will happen next. What is clear, is that technology must address defined problems and use cases, genuine market need and have a realistic path to delivery to thrive.

While some firms will suffer in the next 12 months, those with people who understand financial markets and the regulatory environment and work closely with them from the start to ensure their tech meets the highest benchmarks of resilience and operational efficiency will prosper.

 

Chatsworth was the first communications agency to focus on fintech. We’ve been building fintech reputations for 20 years, steering start-ups through launch, growth and onto corporate action, and protecting and enhancing established infrastructures.

Looking for intelligent, informed and connected fintech PR which delivers results and value?

Get in touch and let us help build your reputation and tell your story.

Q&A with Chatsworth’s account executives: Maeve and Jude

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What does a typical day look like for an account executive at Chatsworth?

Jude:

In such a fast-paced industry, it’s difficult to describe a ‘typical day’ – each day provides unique opportunities and challenges. Whilst you do have daily responsibilities, industry news can often instruct your work – meaning that what you think will be a quiet day can quickly become a very busy one. I feel that this is part of the reason that working in PR is so exciting, and Chatsworth allows you to get stuck in right from the beginning.

Maeve:

Each day is quite different! One of the great things about working in PR is that no two days are the same – it often depends on what is being reported in the news. Each day I have specific tasks to do – mainly monitoring the news for key developments in fintech or looking for new media opportunities for my clients.  However, the fintech sector is particularly fast-paced and there always seems to be new opportunities to secure coverage for clients!

Fintech is a fast-moving specialised sector, what is it like to work in the industry?

Jude:

Fintech is one of the most exciting sectors to work in as you are constantly on the cutting edge of the financial industry. Whether keeping up with crypto or following advancements in AI, you are kept informed of the most innovative and forward-thinking work. With the industry being so fast paced, it is important to keep up to date with the what’s going on, which means reading and researching the news is something you should find time for every day. The fast-moving nature of the industry can seem daunting at first, especially to those with no prior fintech experience, however Chatsworth offers a lot of support to help learn about the space – including 1-on-1 explainer sessions with managers.

Maeve:

I’m still quite new to the fintech sector but I feel as though I have learnt a lot over the past few months! From the outside, I think fintech can seem like quite a daunting industry – most people can be intimidated by the complexities of finance and technology. However, it’s a fascinating industry to work in because you’re often the first to hear about exciting technological developments in finance. More importantly, I think working in fintech provides you with an insight into how the world really works, as most people either use or interact with financial technology every day.

What has been your biggest learning curve since starting your PR career?

Jude:

I found that time management and communication are very important. Due to how fast paced the industry is, a news story can suddenly pop up that means you have to reorganise the order of your day, or even week, to make sure that all your work is completed by their deadlines. Everyone at Chatsworth make this much easier, however, as they are always willing to help you – whether it be by extending deadlines or taking on a task for you, all you need to do is ask.

Maeve:

I have always enjoyed writing, but I think a big learning curve for me has been learning to write more concisely. At university you’re often taught to write in a specific way, but when you’re working in PR you need to be able to adapt your writing style according to the client and the type of publication. As a newcomer to fintech, I’ve learnt a lot about the industry since I joined Chatsworth. Everyone is more than happy to answer any questions and I was given plenty of reading resources to learn more about the industry. I think Chatsworth is a great place to start your career, as you’re able to have hands-on responsibilities from the very start, such as writing op-eds for clients and contacting journalists.

Maintaining a flexible working culture is important at Chatsworth, how do you manage hybrid working amongst the team?

Jude:

Communication and understanding is key to a flexible working culture that works for everyone. When working from home, making sure you clearly state certain times when you are and aren’t available is very useful to other team members who may be looking for help on a task. At Chatsworth, everyone is very understanding of each other’s busy lives and schedules and they will not burden you with unnecessary pressure, which is easy to do when you are not face-to-face.

Whilst in the office, the team makes good use of this time. There are constantly conversations flying around the room, verbally or digitally. Everyone bounces ideas off each other and are keen to help one another. The office space is used effectively to aid in breaking up the day. Our open kitchen space helps people to have conversations with their colleagues and relax during lunch, whilst the meeting room is often home to training sessions, focused work, or client meetings.

Maeve:

The team at Chatsworth are great at making sure everyone has the flexibility they need at work. Most of us go into the office 2/3 days per week then work from home on the other days. When I first started at Chatsworth, I was worried I would be left to my own devices when working from home, but everyone communicates daily on teams (and in-person when we are in the office) – so no question is left unanswered!

As we approach 2023, what are you most excited about for the year ahead?

Jude:

I am excited to see what the new year has in store for each of my clients, and the opportunities and challenges it will present. I am also looking forward to seeing where the fintech space goes and how it grows – a lot can happen in a year!

As for Chatsworth, I am looking forward to seeing how it too develops and grows over the next year, and some more competitive socials with the Belfast team!

Maeve:

I’m really interested to see what new developments we’ll see in 2023. 2022 was a rocky year for fintech, with lots of highs and lows. I’m interested to see how more countries will regulate crypto, and if more central banks will adopt CBDCs. There are plenty of fintech events taking place next year as well, so I’m sure there will be plenty of new announcements!

Jude and Maeve joined Chatsworth as PR newcomers in 2022. If you’re interested in joining the team, contact [email protected] and look out for more details on our careers page.

Volatility fuelling automation drive in FX

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After a sustained period of calm, the FX market has sprung into action in 2022. Recent volatility has exposed the shortcomings of many firms’ FX setups and there is now a movement towards digitising the entire FX workflow.

In the past few months alone, the US dollar (USD) has surged to 20-year highs while the British pound (GBP), Japanese yen (JPY) and the euro (EUR) have all slumped to record lows.

Some of the biggest firms, particularly those that consolidate in the US, are feeling the pain of the surging dollar which is lowering the value of their overseas sales. In late October, Coca-Cola said that FX effects have dented its margins, earnings per share (EPS) and other metrics and said it expects comparable EPS to include a 7% to 8% currency headwind for the year.

Likewise, Goldman Sachs Group found that share prices of S&P 500 companies with large overseas exposure are down about 23% since the beginning of the year, compared with 18% for the wider index and 6% for companies with largely domestic businesses.

According to Kyriba’s October Currency Impact Report, firms in Europe and North America reported $37.27 billion in headwinds in the second quarter of 2022. North American companies reported a staggering 3,583% increase in foreign exchange (FX) headwinds compared to this time last year.

So, what are firms doing to manage this risk?

Short-term – increasing hedging

The main change firms are making in the short term is increasing hedging activity. A recent survey from FX-as-a-Service pioneer, MillTechFX, found that 89% of corporates that do not have a formal hedging strategy in place are now considering introducing one.

It also revealed that the majority of senior finance decision makers’ current hedge ratio is over 50% and the average hedge ratio is 56%, while the average tenor of hedges was five months. This indicates corporates are balancing their valid concerns around profit erosion with the need to be nimble in the face of fragile supply chains, weakening consumer demand and rising inflation.

Furthermore, in response to market volatility, 40% of respondents said they are considering increasing their hedge ratio, while a third shortened the tenor of their hedging instruments to remain flexible in the face of mounting headwinds and uncertainty.

Long-term – automation drive

Currency volatility has shone a light on FX processes which, for many firms, don’t make for pretty viewing. Corporates continue to use manual FX processes which are cumbersome and time-consuming.

Nearly two-thirds (65%) of corporates are still using manual execution processes and over a third (36%) still primarily use email for instructing financial transactions, while 29% rely on phone calls.

FX price discovery can often involve multiple phone calls, e-mails or online platforms to log in just to get comparative quotes from counterparties. Because the market is constantly moving, price discovery requires a team of people to collectively decide which of these counterparties can offer the best quote.

This entire process is a huge drain on time and resources, with MillTechFX’s research finding that corporate treasury teams spend around 1.85 days per week on FX-related matters while nearly half (47%) of those surveyed said they spend 2-3 days managing such matters. Over 50% of treasury teams have three or more people tasked with FX activities.

With FX moving up the list of priorities, CFOs and treasurers at corporates are now waking up and smelling the coffee. There has been a notable increase in organisations seeking to embrace digitisation to streamline these processes, with 89% of senior decision-makers stating that they were looking into new technology and platforms to automate their FX operations.

Many are harnessing simple, tech-enabled solutions which digitise the end-to-end FX process from initial price discovery right through to reporting at the end of the trade lifecycle.

Looking into 2023 and beyond, firms that harness automated technology-driven solutions will be best placed to protect their businesses during turbulent times.

Chatsworth has been at the centre of foreign exchange – the world’s largest and most liquid market – for over 20 years, positioning our clients as thought leaders, with skill and insight to move the compass needle their way. Find out more about our FX credentials here.

 

Chatsworth was the first communications agency to focus on fintech. We’ve been building fintech reputations for 20 years, steering start-ups through launch, growth and onto corporate action, and protecting and enhancing established infrastructures.

Looking for intelligent, informed and connected fintech PR which delivers results and value?

Get in touch and let us help build your reputation and tell your story.

 

 

 

 

Digital trade just got one step closer

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On 12 October 2022, the Electronic Trade Documents Bill was presented before parliament. It’s seen as the next step in a long road towards transitioning away from the country’s reliance on paper-based legacy systems for trade documents. So, with the bill now set to go through the House of Lords before heading to the House of Commons, what does it mean for the future of trade and digitalisation?

 

What is the Electronic Trade Documents Bill?

The past few months have been a turbulent period in UK politics. Amidst a new head of state, three prime ministers and two Conservative Party leadership contests, it’s been admittedly hard to keep up. But during these uncertain times, an incredibly important piece of legislation has been introduced to parliament – the Electronic Trade Documents Bill.

Under current legislation, such as the longstanding 1882 Bills of Exchange Act and the 1992 Carriage of Goods by Sea Act, most business-to-business documents like bills of exchange must exist on paper to be legally recognised. For centuries, paper-based documentation has been the standard and accepted way for enterprises to transact with one another.

The Electronic Trade Documents Bill changes this as it makes digital documentation recognised legally. And once passed, the bill will provide the framework for businesses to move into a digital-first trade environment.

 

Why is the bill important?

Since the onset of the Internet, digitalisation has sped up rapidly. Every day – whether it’s with work colleagues or friends – we talk to each other digitally. Email, Slack, Teams, Zoom, text, Whatsapp – you name it – paper-based ways of communicating have wilted in the face of new technology and apps.

Except in trade, where paper documents are still standard practice. The introduction of the Electronic Trade Documents Bill marks a significant moment in the shift away from paper and is set to facilitate much-needed digitalisation.

This is a big deal. The UK’s trade sector is worth a whopping £1.4 trillion, with over 28.5 billion paper trade documents printed and flown around the world daily. Paper documents can take days, or even weeks to process. This prolongs settlement times, adds red tape and administrative burdens and ultimately holds back many firms from engaging in commerce and growing their business.

Digitising these paper documents can bring enormous efficiency benefits by cutting the processing time of trade documents to as little as twenty seconds. Removing the legal obstacle to electronic versions of trade documents will significantly lower administration costs and is expected to provide a £1.14 billion boost to UK business over a ten-year period, according to Trade Finance Global. Likewise, the Digital Container Shipping Association estimates that if 50 per cent of the container shipping industry adopted electronic bills of lading, the collective global savings would be around £3.6 billion ($4 billion) per year.

Alongside these efficiency gains, digitising trade documents is also vital towards establishing a greener economy. Beyond the immediate environmental benefits that cutting paper brings to trade, digitalisation eliminates the need for couriers, in turn reducing carbon emissions.

The introduction of the Electronic Trade Documents Bill is likely to accelerate other global digital trade initiatives. Alisa DiCaprio, Chief Economist at R3, thinks that “on the global level, the UK effort contributes to the increasing volume of support for countries to align to UN Model Law on Electronic Transferable Records (MLETR) guidelines. The US has started this process with the Bankers Association for Finance and Trade (BAFT) promoting the updating of the eSign Act.”

The Electronic Trade Documents Bill will not initiate the digital transformation of trade overnight, as there are still some fundamental barriers and questions surrounding the transition towards a fully digital trade environment. For example, while the UK has taken a big unilateral step towards digitalisation, the widespread adoption of digital trading mechanisms will require other countries to follow suit in a co-ordinated global approach. Likewise, digitalisation inevitably throws up new forms of online security risks, which companies will have to make sure they have protective measures against.

But, there is no doubting that digital trade just got closer. By introducing clear legal guidelines for a digital trade environment, the bill represents a crucial step in enabling firms reap the enhanced efficiency and cost-reduction benefits that digitalisation can bring.

 

Chatsworth was the first communications agency to focus on fintech. We’ve been building fintech reputations for 20 years, steering start-ups through launch, growth and onto corporate action, and protecting and enhancing established infrastructures.

Looking for intelligent, informed and connected fintech PR which delivers results and value?

Get in touch and let us help build your reputation and tell your story.

What does Rishi Sunak’s appointment mean for fintech?

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New prime minister Rishi Sunak has been an outspoken advocate for fintech growth, but what does his recent appointment mean for the sector going forward and how has the industry reacted to his leadership?

 

“Champion of fintech”

The initial reaction from the UK’s fintech industry has been one of cautious optimism.

Rishi Sunak has previously voiced his support for the fintech sector and introduced positive measures during his time as chancellor including the Kalifa Review which aimed to strengthen the UK’s position as a leading fintech hub.

He also unveiled a raft of initiatives to support the sector during last year’s Fintech Week, including new Financial Conduct Authority’s ‘scale box’ and a Centre for Finance, Innovation and Technology to drive growth.

David Brown, CEO of Hi, believes this could be a positive appointment for the industry as Sunak was, “very supportive of fintech,” when he was chancellor. He goes on to say, “during Fintech Week last year, he talked about boosting growing fintechs, pushing the boundaries of digital finance and making financial markets more efficient – music to many fintechs’ ears.”

Janine Hirt, CEO of Innovate Finance, goes further calling Sunak a, “champion of fintech.”

 

Crypto reaction

During his time as finance minister, Rishi Sunak announced plans to make the UK a, “global hub for crypto.” Sunak was a key force behind the Financial Services and Markets Bill currently passing through parliament, which many industry participants consider to be a world leader in the push for crypto and digital asset regulation.

Under his leadership, the country’s coin producer, the Royal Mint, was tasked with creating a non-fungible token (NFT) collection, which has yet to come to fruition.

Ian Taylor, director of the industry lobby group CryptoUK, told CoinDesk, “it’s a positive for crypto and the general economy.”

Charley Cooper, Managing Director at R3, highlighted that the UK political instability could damage its ambition to become a crypto hub. He said, “It’s very hard to lure new businesses into such a volatile political environment because they’re unable to fully account for the risks.”

 

Online safety and fraud

One of the biggest pieces of legislation in Rishi Sunak’s in-tray is the Online Safety Bill which was introduced in May 2021 in an effort to protect online users from abuse and fraud with a particular focus on children and the vulnerable. The attempt to reduce online harm draws parallels with several issues facing the fintech industry, such as combatting identity theft and fraud throughout the UK.

Martin Wilson, CEO of OneID, said, “It is vital that the UK government continues to support this legislation so it can continue to lead the way in holding social media firms to account, protect people from abuse, fraud and violence, and make the internet a safer place.”

 

UK fintech community needs political stability

Amidst a turbulent time for British politics, new leadership has the potential to provide some much-needed stability. Fintech funding in the UK has suffered in recent months and industry experts suggest consistency at the top could help show investors that the UK is open for business.

Brown said: “A slowdown in investment threatens to stifle fintech innovation in the UK and what the industry needs now is strong, stable leadership which helps the UK secure its place as a world-class fintech hub.”

R3’s Cooper said, “the sooner the UK’s political landscape stabilises, the more likely these firms are to take the next step of integrating these profound innovations into their services and business models.”

Rishi Sunak’s record has given the UK fintech community hope of future prosperity. Throughout his career, he has consistently spoken of the importance of supporting fintech and scientific innovation. The best way he can do this is to provide strong and stable leadership and tap into the UK’s work-class fintech sector.

 

 

Chatsworth was the first communications agency to focus on fintech. We’ve been building fintech reputations for 20 years, steering start-ups through launch, growth and onto corporate action, and protecting and enhancing established infrastructures. Looking for intelligent, informed and connected fintech PR which delivers results and value? Get in touch and let us help build your reputation and tell your story.

 

 

Fintech superapp debate roars on

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Bill Harris, founding CEO of Nirvana Money and formerly founding CEO of PayPal and Personal Capital, recently wrote an opinion article in the Financial Times on how fintechs have made consumers’ lives unnecessarily complicated.

Harris’ argument is one of fragmentation and a lack of interoperability, stating that fintechs have built a ‘blizzard’ of products which are point products for specific purposes that don’t play well with others.

He continues that these products have created ‘confusion rather than clarity’ and people now have ‘too many accounts and apps and bits of money strewn across the digital domain.’ Given Harris’ profile as a fintech pioneer who has set up nine financial technology companies, this has stirred up some controversy.

Has fintech made finance more complicated?

Most people now have multiple accounts and cards across both challenger and traditional banks. There is a wide variety of ways people can make payments, whether it’s through PayPal, Apple Pay, Buy Now Pay Later providers, credit card, debit card and even crypto on some websites. This is inherently more complicated than having one bank account your entire life that you rely upon for all your financial needs.

Banking may have been simpler before the fintech revolution, but was it better?

As Patrick Kavanagh, co-founder of Atlantic Money, puts it, “the bad old days when monopolistic banks provided the worst consumer experience and charged fees for all sorts of unnecessary services. When you had to pay 5-10% to exchange currencies and were hit with extortionate banking fees when sending money abroad.”

Thanks to fintech, those days are long gone, as evidenced by new research from Plaid. It found that 41 per cent of Brits say that fintech enables them to understand their finances so they can better manage their money. It also revealed that 84 per cent of UK consumers use fintech to manage their money, more than half said it saves them time – 56 per cent – and 49 per cent said it makes them feel more in control.

The superapp debate

Harris also has his say on the debate around whether one financial superapp is better than multiple apps with individual services. Harris believes that ‘we need fewer, simpler products — single apps that address multiple needs and deliver a straightforward user experience’.

While it could be argued that having everything in one place might be easier, it could also be said that having everything in one place might be overwhelming. Users definitely do not want a bloated app with hundreds of features and products which takes a long time to load.

Open Banking and APIs have made it much easier to navigate between different apps and manage money between accounts, removing the hassle of manually flicking between apps and accounts to carry out simple tasks.

Finally, a superapp could stifle competition. For example, in China, WeChat made links to competitors such as Alibaba and Douyin inaccessible until Beijing stepped in.

The fintech movement is about competition and choice, not complication. As Kavanagh says, “we didn’t disrupt monopolistic banks to create monopolistic fintechs.”

Only technology which delivers genuine utility and change – both B2C and in wholesale/capital markets – will be adopted. The market and users will ultimately decide, what is important is that they have that choice.

 

Chatsworth was the first communications agency to focus on fintech. We’ve been building fintech reputations for 20 years, steering start-ups through launch, growth and onto corporate action, and protecting and enhancing established infrastructures. Looking for intelligent, informed and connected fintech PR which delivers results and value? Get in touch and let us help build your reputation and tell your story.

Which CBDC design considerations will matter in the end?

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by Richard Gendal Brown, Chief Technology Officer at R3, as published in City A.M.

As Central Bank Digital Currency Development (CBDC) begins to move from the research phase to real-life building, I’ve spent a lot of time in recent months thinking about why a retail CBDC might be needed.

For example, if a country already has a sophisticated retail payment system, why would consumers voluntarily adopt a CBDC? What unique features would it need to have to make it attractive? Censorship-resistance perhaps? Privacy? Support for direct person-to-person payments? Ability to pay merchants even when the power is out? These questions are likely to have significant impact on the technical architecture of any given system, and so this is where I’ve been focusing.

But the danger in that approach is that it can feel impossible to make any progress at all until all these ‘policy questions’ are addressed. Happily, serious thinkers in central banks – and elsewhere – around the world have correctly identified that, irrespective of some of the deep questions above, it is still possible to make intellectual progress.

But first, what is a retail CBDC? In short, a retail CBDC is intended to be an electronic analogue of physical cash. That might seem odd when you first hear about it: isn’t that what a bank account with a debit card is? Not quite: money issued by a commercial bank is qualitatively different to money issued by a central bank, and there are things you can do with cash that no electronic system presently enables. This means that if cash declines to irrelevance, there’s a hole to be filled.

So, with digital currency pilots ramping up across the board, here we discuss three key design considerations that central banks and government bodies are using to frame their thinking when moving ahead with CBDC production.

How is the CBDC distributed?

There are three potential ways in which a CBDC might be accessed by consumers:

1. Direct model – this model is designed for disintermediation where central banks issue directly to end customers. This model can disrupt the current financial system and will put additional burden on the central banks in terms of managing customer on-boarding, know-your-customer (KYC) and anti-money laundering (AML) checks, which may prove costly to the central banks. But it would be the most obviously ‘cash-like’ product.

2. Intermediated model – this model is like our current system from a market structure perspective. In this, banks would distribute CBDC to their customers and execute the functions of customer on-boarding and transaction monitoring, including AML compliance. The commercial bank would manage the records of their customers’ holdings, holding an identical amount in aggregate form at the central bank. The main drawback of this model is the risk to end customers. If the bank fails, it would likely take some time to give customers access to their money again. Their funds would be safe – the CBDC is always a claim on the central bank, but the only way to access it would be via an intermediary.

3. Hybrid model – this model enhances the intermediated model by having banks hold each customer’s CBDC balances in separate accounts at the central bank, thus making it easier to give consumers access to their money again if their bank fails.

In what form is the CBDC held?

A second question is around what form the CBDC is held in. There are two alternative models that are being explored: ‘accounts’ and ‘tokens’.

This is a topic that I sometimes feel is commonly misunderstood as a result of the technology being kept too far away from the business discussion. In principle, the question is simple: should the system rely on ‘accounts’, which have ‘balances’? Or, should we seek to emulate physical cash, where a consumer’s holdings are determined by the summation of the various physical coins – also known as ‘tokens’ – they hold in their wallet? In this scenario, we’re encouraged to imagine a digital ‘wallet’, that contains digital ‘tokens’ that can be transacted person-to-person and without the need for a central database of balances.

The problem, at least to me, is that these two approaches are often set up as being in opposition, as if one approach can solve only one set of problems, and the other being limited in some other way.

However, what I often discover is that the question really being asked, if only by implication, is: to what extent should individuals be able to pay each other without the transaction having to be approved, or recorded, centrally? In other words, the debate around ‘accounts’ versus ‘tokens’ is actually a disguised debate about privacy and how ‘cash-like’ a CBDC should be.

What should be the ‘relationship ownership’ role of commercial banks?

In part one above, we saw that, in two of the three models being contemplated, commercial banks (or, more broadly, ‘payment initiation providers’) have a central role: they identify their customers, issue them with ‘wallets’, and intermediate on their behalf with the central bank.

However, an open question is: how much power do we want these intermediaries to have? For example, should my bank be the sole party who can give me access to my funds? Or should I be able to access my funds via any bank that is able to verify my identity to the appropriate level? This seems like an arcane question, but it has fundamental implications for the roles, power, and business models, of the incumbents.

What does this all mean for the road ahead?

In the very immediate future, not much. CBDCs are not going to enter mainstream adoption tomorrow, or the week after, and we will not be suddenly paying for goods and services with digital currency in one big bang moment.

And, as I hope I’ve demonstrated, this is not only because this level of change is hard; it’s because some fundamental policy questions still must be resolved.

Money 20/20 USA: fintech’s annual Vegas pilgrimage is upon us

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Hot off the heels of last week’s Sibos conference in Amsterdam, the fintech industry’s attention swiftly shifts to the other side of the pond this week for Money 20/20 USA. Against the backdrop of a particularly challenging and eventful year in finance, what are we likely to see dominating the agenda at this year’s show?

Money 20/20 – why is it important?

While Sibos largely represents the old world infrastructure and the goliaths of payments, Money 20/20 has become the fulcrum for innovation and new fintech.

Billed as the annual event where the industry’s leading financial services innovators “come together to connect and create the future of money,” Money 20/20 USA also somewhat ironically takes place each year in Las Vegas, a town perhaps best known for helping people part with their money…

But for those that can tear themselves away from the slot machines, Money 20/20 always turns out to be one of the most important conferences on the fintech calendar. The agenda is jam-packed with top tier speakers and panelists (see: Serena Williams, Amrapali Gan, Takis Georgakopoulos and Bill Harris to name just a few), and most companies worth their salt use the conference as a platform to make major product or business announcements every year.

What are we likely to see at this year’s show?

This year has seen a sea change in the investment climate for fintech. Investors are looking at B2B fintech subsectors where revenue is a safer guarantee as consumers struggle with the soaring cost of living, and this is reflected in the Money 20/20 agenda. Expect to see topics like regtech, data infrastructure, financial rails and risk analytics get a lot of airtime across the full four days.

In particular, throughout 2022 there has been a continued move towards efficiency services and ones which offer regulatory compliance. ‘Safety’ tech seen as “mission critical” is typically more resilient in a downturn than other emerging technologies that can often be seen as a ‘nice-to-have’, particularly by some of the more conservative financial institutions. Many of the innovative start-ups at the show will no doubt have this in the back of their minds given the attendance by banks and other TradFi players who could be potential customers.

While in other years the agenda has sometimes been dominated by certain themes (blockchain was arguably THE central theme for a number of years), the challenge in a constrained funding environment is differentiation – and this is reflected in the variety on display in this year’s line-up. The fintech market is oversupplied with vendors and now, more than ever, you really have to set yourself apart from competitors’ offerings to make your mark in the industry.

An increasing number of fintechs have started to run out of runway this year – and to use a suitably apt gambling reference – when the chips are down, expect to see the ones with a clear, unique business model to win the sought after investor dollars, while others fall by the wayside. Given the coverage it receives in the global financial media, Money 20/20 is as good a platform as any to make your business case.

 

Chatsworth was the first communications agency to focus on fintech. We’ve been building fintech reputations for 20 years, steering start-ups through launch, growth and onto corporate action, and protecting and enhancing established infrastructures. Looking for intelligent, informed and connected fintech PR which delivers results and value? Get in touch and let us help build your reputation and tell your story.

Four ways fintech is driving a greener economy

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Just over a year after the UN dubbed climate change a “code red” emergency for humanity, the effects of global warming are being felt acutely across the globe.

Temperatures in the UK recently surpassed 40 Degrees Celsius for the first time in history, whilst a staggering 188 all-time heat records have been broken around the world since the start of the year. Scenes of droughts, wildfires and destroyed buildings have provided a sobering reality to climate warnings, heightening the impetus for finding more environmentally friendly ways of living and doing business.

As an industry with a significant carbon footprint, the financial sector is under increasing pressure to move the needle on the green transition. According to EY, financial services companies send on average 5.2 billion paper documents to their customers every year – the equivalent to 2.4 million trees. The retail banking sector is by far the largest contributor, sending an estimated 4.2 billion documents.

The indirect impact that financial institutions have on the environment is also considerable. According to the 2019 Fossil Fuel Finance report, 33 global banks financed fossil fuels with $1.9 trillion in the three years following the 2015 Paris Climate Agreement, with $600 billion of this going to companies aggressively expanding fossil fuel usage. Against a backdrop of rapid climate change and the rising importance of ESG criteria, how is fintech enabling the industry to become greener?

  1. Digitisation and paper reduction – the digitisation of customer services is eliminating the need for paper entirely. Online banking usage in Britain has rocketed over the past decade, increasing from 52% in 2012 to 95% in 2022. Beyond the immediate environmental benefits that cutting paper production brings, digitisation also removes the need for couriers and document transportation, in turn reducing greenhouse gas emissions.
  2. Sustainability planning – technology is also helping organisations eliminate needless energy consumption that could otherwise be avoided. Take supply chains, for example, where a significant proportion of greenhouse gas emissions come from freight transportation. Artificial Intelligence and data analytics can help reduce these impacts by enabling companies to calibrate production according to fluctuations in variables such as the weather or unexpected rises and falls in demand. This enables logistics teams to optimise transportation more efficiently and avoid unnecessary fuel usage that would increase carbon emissions.
  3. Impact measurement – as well as planning ahead, fintech applications such as distributed ledger technology (DLT) enable companies to measure their environmental impact in real time. Initiatives such as G17Eco, for example, leverages blockchain to provide organisations and stakeholders with real time data around energy usage and carbon emissions. This helps companies map and manage their sustainability efforts more closely and accurately.
  4. Climate fintech – According to Deloitte, there has been a sharp rise in the number of people adopting a more sustainable lifestyle over the past twelve months, and a growing number of fintechs aimed at facilitating climate action are playing a role in this transition. LA-based green banking start-up Aspiration, for example, pledges to plant a tree every time a customer swipes their credit card. There are also a variety of mobile applications, such as the sustainable investing app Clim8, which enable users to invest into climate-related causes such as clean energy and sustainable food.

The transition to greater sustainability is undoubtedly a gradual process, but many parts of the financial sector are making this transition in the dark, using infrastructure that was not designed with the environment in mind.

Fintech is uniquely poised to accelerate the journey to a greener economy, providing financial institutions and consumers with the knowledge and tools they need to adopt more sustainable practices. Carbon emissions won’t be eradicated in one big bang moment. However, the adoption of new technology could go a long way in ensuring that the financial services industry is able to meet the demands of today – and tomorrow’s – environmental challenges.

Chatsworth was the first communications agency to focus on fintech. We’ve been building fintech reputations for 20 years, steering start-ups through launch, growth and onto corporate action, and protecting and enhancing established infrastructures. Looking for intelligent, informed and connected fintech PR which delivers results and value? Get in touch and let us help build your reputation and tell your story

London Fintech Week opens with fresh funding review

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Backed by the London Stock Exchange, industry group Fintech Week London (FTWL) has announced a new review of the fintech funding landscape. Here we discuss what this means for the sector moving forwards and how fintech is adapting to inflationary pressures.

As leaders in the UK’s fintech industry gather in the capital for London Fintech Week, we are reminded of the city’s important role in the global fintech industry.

London is one of the top three global fintech hubs and has been a central driving force behind the UK’s emergence as a fintech leader, with roughly two-thirds of all fintech companies in the UK headquartered here. It has also helped establish a ‘halo’ of fintech activity around Greater London in cities such as Milton Keynes, Oxford, Brighton and Southampton, with a number of these areas developing specialisms in banking, payments and WealthTech.

Inflation tightens its grip

London Fintech Week arrives at a difficult moment for fintech companies. Investment into fintech hit record levels in 2021, but like most other industries, fintech is not immune to the grip of inflation. Against the backdrop of increasingly volatile markets, financial institutions have become more risk averse, meanings funds are more difficult to access.

Over the past few weeks, big names such as Klarna and SumUp amongst others have seen valuations drop amidst a sharp decline in venture capital investment into the sector. This is having a very real impact on real people, with an estimated 3,700 job cuts across the fintech industry in the second quarter of 2022 alone.

In reaction to this, FTWL has announced a new review into fintech funding which will bring together regulators, investors and finance firms to address declining investment and a plunge in valuations across the UK fintech landscape. Rafe de Kimpe, CEO of FTWL, said: “We’re going to look at what has happened to funding, how can we learn from this and how we can work together to make sure that industry gets better than before.”

Looking to the long run

There are signs of uncertainty ahead for fintech and this, aside from the war for talent, could be one of the industry’s biggest challenges to date.

The full maturation of any industry is a gradual process that comes with inevitable ups and downs – and fintech is no different.

The union between finance and technology is redefining the financial sector from top to bottom and despite the drying up of investment, fintechs continue to move forward, disrupting incumbents and driving adoption.

The Open Banking Implementation Entity (OBIE), for example, revealed in June 2022 that the number of open banking users hit a record of 6 million, just four months after reaching the 5 million milestone. Similarly, recent data from PYMNTS.com found that nine out of ten financial institutions are in the midst of, or planning to, roll out embedded finance solutions.

And although there has been an increase in the number of fintech companies laying off staff, this trend is likely to reverse in the long-term. According to Statista, the number of employees in the UK’s fintech industry is estimated to increase by 15% between now and the end of the decade.

As London Fintech Week draws to a close, it’s clear the industry is making a real difference to the lives of real people. In the face of mounting obstacles, fintechs need to remain resilient and continue to lead the way in financial innovation.

Chatsworth was the first communications agency to focus on fintech. We’ve been building fintech reputations for 20 years, steering start-ups through launch, growth and onto corporate action, and protecting and enhancing established infrastructures.

Looking for intelligent, informed and connected fintech PR which delivers results and value?

Get in touch and let us help build your reputation and tell your story.

Two years in the making: NI’s first Fintech Symposium

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After securing the opportunity to host it two years ago, on Wednesday 23rd March NI’s fintech community came together for the first ever NI Fintech Symposium in Belfast.

Hosted by Fintech NI, the symposium followed the launch of the NI FinTech Sector Strategy which revealed that fintech now contributes £392 million to the economy and has the potential to create thousands more jobs over the next few years.

This optimism was reflected in the room by the audience and speakers which included representatives from large organisations including Deloitte and A&L Goodbody, accelerators and investors such as Catalyst and Techstart Ventures and from other regional FinTech clusters including FinTech Scotland, FinTech North and SuperTech West Midlands.

One of the major talking points among the regional fintech cluster speakers was the Kalifa Review, which recently celebrated its first anniversary. Broadly, the views were that it has helped raise the profile of regional Fintech hubs globally and fintech investment is starting to spread around the UK. There is clearly work still to do, but most agreed it was a positive step in the right direction.

Andrew Jenkins, the Fintech Envoy for NI, discussed the opportunity and challenges for local fintechs. In his view, more needs to be done to connect startups with FDIs and incumbents, and funding networks need strengthened. He called for SMEs to collaborate, work with academia and engage with other fintech clusters to share knowledge and experience.

Karen Bradbury, Financial Services Sector Lead at Invest NI, spoke about why NI is an attractive place to set up a fintech. Nearly half the population is aged between 16-44 and while it has a smaller population than other regions, this can be to its advantage as it can be more agile. There is a deep talent pool too, with financial services employing 40,000 people, 7,000 of which are currently working in fintech.

On the investment side, Ryan McAnlis, Investment Director at Techstart Ventures, shared tips on how founders can navigate investment in fintech. He said there were no hard and fast rules when it comes to fundraising but emphasised the importance of testing any assumptions about customer base, the problem you’re trying to solve, your solution, how much money you need, and pivoting accordingly.

McAnlis was followed by Steve Orr, Chief Executive at Catalyst, who laid out why NI can be one of the top three hubs in the world for RegTech and how it could become a global Centre for Secure Intelligent Regulatory Technologies – GSIRT. With £160m, GSIRT could create up to 16,500 jobs and £931m in GVA in the next decade – definitely worth watching this space.

The closing panel on NI’s fintech opportunity featured Roisin Finnegan, Head of Ventures at Deloitte, Carol Rossborough, Co-Founder of ESTHER, Chris Jessup, Finance Partner at A&L Goodbody, Daniel Broby, Professor in Fintech at Ulster University and Bo Brustkern, Co-Founder and CEO of Fintech Nexus.

The panel covered a lot of different issues including how we grow and nurture talent, how improvements in remote working opened doors to new markets for entrepreneurs and how NI can overcome challenges to continue growing the local fintech sector.

From conversations we had at today’s event with firms such as AuditComply and Datactics, and from listening to insights from the speakers, it’s clear there is a lot of energy and support behind NI’s fintech sector. We now need to turn this energy into action in order to cement NI’s place as an attractive place to set up and run a fintech business.

Chatsworth Communications recently opened a Belfast office to tap into the city’s thriving fintech scene and deep pool of talent. Find out more here.

Chatsworth was the first communications agency to focus on fintech.

We’ve been building fintech reputations for 20 years, steering start-ups through launch, growth and onto corporate action, and protecting and enhancing established infrastructures. 

Looking for intelligent, informed and connected fintech PR which delivers results and value? 

Get in touch and let us help build your reputation and tell your story. 

The Kalifa Review: A year on, how far have we come?

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A lot can happen in a year, and 2021 was no exception.

Back in 2020, the Chancellor asked Ron Kalifa OBE to conduct an independent review to identify priority areas to support the UK’s fintech sector. Kalifa’s review contained four main recommendations that, if achieved, aimed to ‘support the growth and widespread adoption of UK fintech, and maintain the UK’s global fintech reputation.’.

  • Amendments to UK listing rules to make the UK a more attractive location for Initial Public Offerings.
  • Improvements to tech visas to attract global talent and boost the fintech workforce.
  • The creation of a regulatory Fintech ‘scalebox’ to provide additional support to growth stage fintechs.
  • And, a Centre for Finance, Innovation, and Technology (CFID), to strengthen national coordination across the fintech ecosystem to boost growth.

Now, one year on from those recommendations, let’s see how far we’ve come, and what work still needs to be done.

A surge in investment 

In 2021, investment in UK fintechs reached record highs of $37.3 bn, up sevenfold from the year before. Specifically for IPOs, the latest figures from Bank of England show Tech IPOs in the UK raised £6.6 billion, doubling 2020’s figures.

A total of 37 tech and consumer internet companies went public last year, including fintech, Wise, delivery company Deliveroo and online marketplace, Auction Technology Group. London also proved its international competitiveness by attracting companies from Europe (TrustPilot), Canada (AlphawaveIP) and the US (Devolver Digital).

So, clearly, the aim of turning the UK into an attractive place both to launch a company, and to work for one, seems to have been a resounding success.

The FCA has also managed to set up a scalebox to support fintechs as they grow and, with the City of London, has supported the development of Net Zero fintech solutions through its digital sandbox. Fintech has also been recognised in new trade agreements with Australia and Singapore.

Industry viewpoint

Despite all the successes, as always, there’s still much to be done. An open letter from Innovate Finance members states that ‘rather than resting on our laurels, it is imperative that we continue to build on this momentum and work together to establish an environment in the UK that is even more supportive of and conducive to innovation in financial services.’

Laurent Descout, Founder and CEO at Neo, said:

“A year ago, the question was – can London stay ahead in fintech despite Brexit? The Kalifa review sought to maintain the UK’s fintech edge but it looked possible Brexit could have a reverse effect. Thankfully, a year later, the UK has cemented its place as a fintech hub and is working to navigate the Brexit challenges.   

“Nowhere is this more evident than in payments. Businesses paying low bank fees for Euro transfers into London found costs soar almost overnight as banks switched to charging international cross-border tariffs. Fintechs stepped in, offering multicurrency accounts, virtual wallets and, most importantly, a viable alternative to the traditional bank-driven model.” 

Christoph Gugelmann, Co-Founder and CEO of Tradeteq, said:

“A year on from the Kalifa review and we’re seeing fintech’s potential to reshape global trade – whether that’s parcelling trade finance instruments into investible assets, managing supply chains or automating workflows. These approaches have arisen through banks, fintechs, investors and other players working together – and it is this formula of continual dialogue that will continue to revolutionise this industry.”

Eric Huttman, CEO of MilltechFX, said:

“Fintech is no longer a subsidiary of financial services, but rather an omnipresent and essential component of the way we trade and do business. 

 “We must focus our efforts on using fintech to help develop the real economy. That starts with the treasurers and asset managers who can face huge operational inefficiencies with their FX setups which directly affect their bottom line.”

Martin Wilson, CEO of Digital Identity Net, said:  

“Fintech is strategically important for the UK, but while the billions are flowing into fintechs in London, we also need to see the government, businesses and banks adopt and implement these new technologies to improve the way we do business as a country.

“The UK itself needs to digitise further. We are ahead in areas such as trading technology and payment processing but way behind on digital identity. Other countries are leading the way. Belgium, Norway and Sweden all have digital identity systems connected to their banks to protect consumers data and dramatically reduce fraud, which is a major and growing problem in the UK currently. The Bank-ID service in Sweden is accessed by its adult citizens on average twice a day and the Norwegian service has reportedly reduced payment fraud from 1% of daily value to a staggeringly low 0.00054%.

“The government and banks should consider how we can implement digital identity innovation in order to continue to deliver digital services which positively impact its citizens’ lives.”

Chatsworth was the first communications agency to focus on fintech. We’ve been building fintech reputations for 20 years, steering start-ups through launch, growth and onto corporate action, and protecting and enhancing established infrastructures. Looking for intelligent, informed and connected fintech PR which delivers results and value? Get in touch and let us help build your reputation and tell your story.

Chatsworth opens Belfast office

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We’re pleased to announce that Chatsworth Communications is set to open a new office in Belfast.

Read more

Payments industry fights back against the cyber threat

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The uncertainty and disruption caused by the COVID-19 pandemic has presented cyber criminals with a wealth of opportunities to attack.

Since March 2020, cyber crime has rocketed with 74% of banks experiencing a rise in cyber attacks and three out of four financial institutions worrying about the historic rise in criminal activity and what will happen going forward.

Payments 20 (P20), the leading voice of the global payments industry, with the support of Chatsworth Communications, has taken a proactive, educational approach by developing reports and frameworks to enable financial institutions of all sizes across the world defend themselves against this growing global threat.

It has collaborated with organisations including American Express, Elavon, Hogan Lovells, J.P. Morgan Chase, the UK National Cyber Security Centre and New York State Department of Financial Services, to create a new report entitled ‘20 Best Practice Recommendations for Improved Cyber Security Protection’. Aimed at non-cyber professionals, the report emphasizes the urgency of implementing more efficient and comprehensive cyber security frameworks.  P20 also produced a report on the ‘Best Practice Approaches for Combating Payee Scams’, calling on the industry to work together to combat payee scams.

Chatsworth worked closely with P20 to build awareness of the cyber recommendations within the reports and to promote P20’s Global Payments Conference. Our strategy was to build awareness through media coverage in relevant finance and payments trade, and engage directly with our audience via eye-catching posts on both sponsored and organic posts on LinkedIn

We secured coverage in top trades such as The Banker, Treasury Management International and The Fintech Times, while generating over 1000 engagements and a significant increase in followers on LinkedIn.

Ultimately, the Global Payments Conference was a roaring success so kudos to the excellent P20 leadership who delivered a phenomenal event.

Chatsworth was the first communications agency to focus on fintech. We’ve been building fintech reputations for 20 years, steering start-ups through launch, growth and onto corporate action, and protecting and enhancing established infrastructures. Looking for intelligent, informed and connected fintech PR which delivers results and value? Get in touch and let us help build your reputation and tell your story.

Three predictions for the year ahead in digital finance

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Richard Gendal Brown, CTO of R3, shares his predictions for the future of digital finance, as published in Forbes magazine. 

Trust takes centre-stage, DeFi meets CeFi, and CBDC proponents put up or shut up.

It’s fair to say the permissionless crypto world seemed to do all the running in the blockchain space in 2021. But that doesn’t mean those of us working to bring advanced cryptographic techniques to the world of business were resting. Indeed, and despite the ongoing challenges of the pandemic, 2021 was a year of significant progress for the digitisation of capital markets. 2022 will be another unprecedented year in financial technology – and the following three trends look set to continue reshaping the landscape for market participants, governments, regulators, and infrastructure providers over the next 12 months.

  1. The quest for trust will dominate the digital realm

We never think about it in our day to day lives but the ability to develop trust in each other in the real world is what has, uniquely, unleashed humanity’s potential. Trust is the cornerstone of human civilisation.

And as more of our personal and professional lives move into the digital realm, the sheer lack of trust in the digital realm is a trillion-dollar problem the industry must tackle in 2022.

Trust allows us to do things that would be almost impossible if we had to verify everything for ourselves. Can you imagine, for example, aviation if you couldn’t trust the airline’s safety engineers? And how often have you relied on a trusted brand when searching for a meal in an unfamiliar location? Imagine if you had to check the ingredients yourself before tucking in! Put simply: if we can trust, we don’t have to verify.

How would commercial enterprises ever have extended beyond immediate family if we had no mechanisms to develop trust in strangers? Ultimately, trust is the fundamental enabler of trade. And trade is what creates wealth. This is why I say trust is the basis of civilisation. In short, the fact humans can develop trust in each other explains the dazzling opportunities, wealth and living standards so many of us can enjoy. But consider how little trust exists in the digital realm.

In the early days of the web, you had no way of knowing if your browser really was talking to the company you thought it was. So, eCommerce and online banking struggled to take off. But the advent of the browser padlock – literally creating trust that you are connected to who you think you are – unleashed trillions of dollars of opportunity. Until recently, firms doing business with each other had no way of knowing if they had the same records. And so they wasted staggering amounts of money reconciling with each other. Blockchains are solving this problem by literally creating trust that “I know what I see is what you see.”

But there is so much further to go – and this is where the tech industry must focus its attention in 2022 and beyond. For example, when you send information to a third party, you have no technological way to know what they will do with your information. So you have to spend a fortune on ‘data scrubbing’ or audits… or, more likely, you don’t share sensitive data at all. It’s mind-blowing to imagine how many opportunities to create new value or serve customers better are squandered because we can’t trust how our information will be processed when it’s in somebody else’s hands.

One day we will look back in awe at how much we managed to achieve in the digital realm when the levels of digital trust were so low. But things are changing: trust technology is now here. The convergence of blockchains, confidential computing, and applied cryptography is happening, and firms are applying this to massively increase the levels of trust that exist within and between firms of all sizes operating in the digital realm.

The delivery of trust to all realms of our digital lives will drive the next wave of human advancement – and it begins today.

  1. The lines between DeFi and CeFi will continue to blur

Interest in decentralised finance, or ‘DeFi’, is booming in the technology world, and last year that interest peaked. The term has invited enthusiasm, skepticism and curiosity, in equal measure. But I have little doubt that the technology could be host to a number of exciting applications (assuming the grown-ups in that space can out-run the grifters). At its core, DeFi rests upon the central principle of disintermediation, and this could have many benefits – namely, democratisation of finance.

But let’s not get ahead of ourselves. The idea that DeFi is ready to replace the existing, centralised or traditional financial system, or ‘CeFi’, is wildly overstated, especially at a time when governments are increasingly favourable to regulated financial markets and institutions.

However, and at the same time, we’re already seeing incumbent financial firms and market infrastructures adopting some of the insights and breakthroughs from the decentralised world – for example DTCC’s Ion work and the Swiss Digital Exchange, SDX – so we can imagine these two trends coming together and reinforcing each other in 2022: DeFi will mature and co-exist with the financial services ecosystem we have come to know and trust as it, in turn, evolves.

  1. CBDCs will move even closer to real-world deployment

2022 will be the year that CBDCs gain clear, policy-led direction and guidance. We’ll find out if any central bank is bold enough to launch a true digital equivalent to cash. CBDCs at both the wholesale and retail level are now being explored by countries all over the world, to different extents. Riksbank has been working on its ‘e-krona’ in Sweden for some time now, for example.

One of CBDCs’ usages that have received less attention until very recently is their use in cross-border settlements. In December, Project Jura successfully settled a “real-life” transfer of securities and cash between France and Switzerland with a wholesale CBDC.

2022 will be a year of real maturation for CBDCs. They are now understood by jurisdictions and this year, policymakers will get off the fence and tell us: will we as citizens be allowed to make digital payments with the same freedom we can make them in the real world? Yes or no? We’ll get an answer in 2022 and that will unlock everything – as we will then know what we need to go and build.

Chatsworth was the first communications agency to focus on fintech. We’ve been building fintech reputations for 20 years, steering start-ups through launch, growth and onto corporate action, and protecting and enhancing established infrastructures. Looking for intelligent, informed and connected fintech PR which delivers results and value? Get in touch and let us help build your reputation and tell your story. 

Venture capital investment ignites UK-wide tech boom

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Despite the troubles of the pandemic, the UK tech sector achieved its best year on record with success reaching far beyond London alone.

In 2021, a mixture of venture capital funding, attractive salaries and the creation of unicorns and futurecorns has led to a boom in technology development across the UK.

Tech investment grew 2.3x, the largest increase in growth since 2013/14, and doesn’t look to be slowing down any time soon. This enormous increase in investment allowed for the creation of 29 unicorns this year, including the e-commerce platform Depop, car selling platform Motorway, insurance disrupter Marshmallow, and the challenger bank Starling Bank.

In a turn for traditional expectations, this boom also highlighted a marked shift away from the London centric financial industry, with 35% of unicorns based outside of London and 35% of futurecorns also based outside of the capital.

With a 50% increase in advertised tech jobs, and investment levels soaring, it’s clear companies are preparing for the future and looking to nurture talent to help them expand. Fintech sits firmly at the heart of the UK’s technology sector and such an explosion of investment and innovation is a positive indicator of companies’ potential for growth.

Read the full report here

Chatsworth was the first communications agency to focus on fintech. We’ve been building fintech reputations for 20 years, steering start-ups through launch, growth and onto corporate action, and protecting and enhancing established infrastructures.

Looking for intelligent, informed and connected fintech PR which delivers results and value?

Get in touch and let us help build your reputation and tell your story. 

Fintech putting Belfast on the world stage

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A new breed of fintech businesses has taken the local and international business scene by storm

It has been a major centre in world finance for centuries and a thriving technology hub so it’s no surprise that London is home to a number of world-class fintechs that have become household names globally.

London will always play a central role in the global fintech revolution, but in recent times we have seen investment in creating technology hubs in other cities around the UK and this is translating into the creation of thriving, engaged communities and exciting companies.

Belfast, which is increasingly being seen as a city bursting with entrepreneurship and innovation, has been one of the main beneficiaries of this trend. Over the past couple of years, a new breed of fintech businesses has taken the local and international business scene by storm, putting the city on the map.

A growing reputation as a fintech hub

Until recently, I rarely saw anything about fintechs from Northern Ireland in the news outside of local papers. Much of the fintech hype has focused on huge investments, mergers and acquisitions for fintechs in London, New York and Asia and the odd one in Dublin, but seldom Belfast.

But Laura Noonan, while acting Ireland editor at the FT, bucked this trend with an article entitled ‘Belfast’s booming financial services rise above political unrest.’ It highlighted the investment that is pouring into the city – Citi plans to hire 400 people, bringing its headcount to 3,600+ and FinTru a RegTech firm based in Belfast, aims to double its headcount to 1,600. Citi and FinTrU’s plans follow recent announcements by Big Four accounting firms PwC, Deloitte and KPMG, who together will create 2,200 jobs in Belfast.

And it’s no wonder – with rents as low as a quarter of London’s west end and half of Dublin’s office space, and salary expectations much lower due to low living costs, firms can save thousands every month and still only be an hour flight from clients in London or just over 90 minutes from those in Dublin.

As a region, NI also has a deep pool of talent. Not only do we consistently outperform all other regions in the UK in academic qualifications at GCSE  and A-Level, we also have 4,000 people that graduate with business qualifications every year and boast the highest percentage of qualified IT professionals in the UK.

Through Invest NI, we also offer generous support schemes: PwC received £9.8m from the agency to support 108 of the almost 800 jobs it will create by 2026. It has also supported numerous local fintechs which are leading the way in Belfast. These include Datactics, specialists in user-friendly data quality and matching software which now has a 50+ strong team, fscom, a firm of compliance experts which currently works with over 18% of the UK payments sector and RegTick, which helps simplify compliance with regulation through an intuitive platform.

Furthermore, a potential benefit of Brexit, the arrangements set out in the Northern Ireland protocol could ultimately create “the best of both worlds” by making Belfast a unique jurisdiction with a toe in both the UK and the EU, as said by Michael Hall, managing partner at EY’s 600-strong Northern Ireland business.

There are a number of trade bodies and influencers who have been driving the sector forward.

Industry body, FintechNI, chaired by local fintech evangelist, Alex Lee, released a report which found NI to have the highest concentration of fintech employment in the UK.  There are an estimated 7,000 fintech related roles here and one in five people working across the financial and tech sectors in Northern Ireland work in fintech.

Furthermore, the Fintech Envoy for Northern Ireland, Andrew Jenkins, has regularly written in the media about fintech’s potential, imploring both the private and public sectors to grab the lucrative opportunity it presents with both hands.

Capitalise on this momentum with impactful communications

Having moved back to Belfast from London earlier this year, it feels there is real momentum growing behind the fintech scene here. It’s clear that we have a really strong story, different from that of other fintech hubs, that is starting to resonate with international media.

By creating compelling narratives and using the right channels to get them in front of the right audience, we can create huge opportunities for the city and its fintechs which can together attract customers, investment and talent into Belfast.

Chatsworth was the first communications agency to focus on fintech. We’ve been building fintech reputations for 20 years, steering start-ups through launch, growth and onto corporate action, and protecting and enhancing established infrastructures.

Looking for intelligent, informed and connected fintech PR which delivers results and value?

Get in touch and let us help build your reputation and tell your story.

 

 

Treading the fine line between green and greenwashing

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Greenwashing 2

It’s no longer enough to be solely profit-driven, firms have to be a force for environmental good or face the financial fall out.

The climate emergency has pushed environmental, social and governance (ESG) to top of mind for firms, investors and customers.

Investors want to back responsible businesses and there’s a reckoning coming for firms which fail to shape up.

A PwC report found that 83% of consumers think companies should be actively shaping ESG best practices and 86% of employees prefer to support or work for companies that care about the same issues they do.

On the institutional side, a survey of more than 1,000 investment professionals revealed that 77% of institutional investors plan to stop buying non-ESG products by 2022.

Profit and being a force for good aren’t mutually exclusive. The problem is that where there is money to be made, there are those with more sinister intentions.

Some see it as an opportunity to cash in and ‘greenwash’ – branding something as eco-friendly, green or sustainable when this is not the case.

Greenwashing has brought increasing scrutiny on ESG efforts, making it more difficult for those with strong green credentials to communicate them.

They risk being tarred with the same brush and accused of greenwashing, which can lead to negative backlash, reduced trust in their brand and, in extreme cases, regulatory action.

So how can firms tread the fine line between green and greenwashing?

How to spot greenwashing

Firstly, it’s important to be able to spot the signs of greenwashing so you can avoid common pitfalls.

  1. False claims or vague language – In 2019, the advertising regulator banned a Ryanair ad claiming it was the airline with Europe’s lowest emissions without sufficient evidence to support the claim. And a Hyundai advert, claiming a car “cleaned the air”, was also judged by the ASA to be misleading.
  2. Images of nature or ‘green’ buzzwords – The use of phrases such as “eco”, “sustainable” and “green” without substantiation is a common red flag.
  3. Hiding information – As far back as 2007, the ASA ruled against Shell for an ad implying it used waste carbon dioxide to grow plants. However, the regulator actually found the quantity used was only a small fraction of its emissions.
  4. Questionable carbon offsetting – There are attempts to balance emissions by finding other ways to remove an equivalent amount of greenhouse gases from the atmosphere. Environmental groups argue this is kicking the problem into the long grass rather than dealing with the real issue of actually cutting emissions.
  5. Company ownership – Often large firms with a big carbon footprint will buy smaller ones to target environmentally conscious customers who otherwise might not have chosen to spend with them.
  6. Eco-friendly products in a wider range – Some firms will market beneficial products but omit information on other less green products.
  7. Is the product and its packaging recyclable? – In 2018, McDonald’s announced it was going to get rid of single-use plastic straws in its restaurants and offer paper straws instead. But the following year, it was accused of greenwashing when it was revealed the straws weren’t actually recyclable.

PR’s role in fighting, not propagating greenwashing

The public relations profession, which has been part of the greenwashing problem, now has a responsibility to help drive the solution.

The Competition Markets Authority has unveiled a new Green Claims Code which requires all environmental claims to be truthful, unambiguous and transparent. It also compels organisations to include all relevant information relating to a claim. The move follows CMA research earlier this year that found 40% of green claims made online could be misleading.

This code was backed by PRCA’s Climate Misinformation Strategy Group, with its chair John Brown stating in PR Week: “It’s about time every organisation in the UK moves away from dubious intent and towards positive action and proof. By embracing transparency and ensuring claims are backed by credible verification, brands can work fearlessly to help address one of the biggest challenges facing our world.”

How to communicate green credentials without greenwashing

Increasingly, green claims are coming under intense scrutiny, making it difficult for those which are actually making a positive impact to communicate it without facing a myriad of questions and accusations of greenwashing. Before communicating your ESG credentials, there are a few questions you should ask yourself:

  • Are my claims accurate? Can I back up my green credentials with evidence or independent assurance?

Where there is increased cynicism, evidence is the way forward. Back up your claims and make sure you’re not overegging them. Being officially carbon neutral or signing up to the Principles for Responsible Investment (PRI), gives you the independent assurance that you need to prove that your efforts are genuine. Making your logo green does not as McDonald’s found out in 2009.

  • Are my green credentials strong enough to communicate? Do my actions go far enough?

Many companies have a paperless office and offer cycle to work schemes so marketing these types of initiatives as your unique way of saving the world might not be the best idea. That’s not to say they aren’t important but if communicating about them, it’s wise to avoid making big claims and stick to the facts. Similarly, if you’re boasting about these initiatives but have executives constantly flying around the globe for short stints, you’re likely to get called out.

  • Is the whole company involved in the ESG initiative or just a division?

You need to make clear in your communications whether the initiative is in one office or company wide. Exaggerating a one office initiative is a surefire way to get your efforts labelled as greenwashing.

Keeping your nose green

Actions speak louder than words and this is true when it comes to ESG. Don’t make outlandish claims, keep it simple, factual and authentic. These fundamental principles are the best ways to avoid being accused of greenwashing and having to contend with the subsequent wrath of the general public, customers and regulators.

Try to tell the truth about your green efforts and the challenges you face. The public and investors know it can be tough and it’s an ongoing process. Get it right and you’ll be rewarded and respected. And you’ll lock in loyalty, investment and, ultimately, profit.

Chatsworth was the first communications agency to focus on fintech. We’ve been building fintech reputations for 20 years, steering start-ups through launch, growth and onto corporate action, and protecting and enhancing established infrastructures. Looking for intelligent, informed and connected fintech PR which delivers results and value? Get in touch and let us help build your reputation and tell your story

The Kalifa review: R3’s recommendations for the future of fintech

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Charley Cooper R3

R3 was one of a roster of fintechs that contributed to the Kalifa review – a set of recommendations outlined for the UK’s fintech community to grow and flourish in the years ahead. R3’s Managing Director, Charley Cooper, shares the recommendations that R3 put to Ron Kalifa, which helped shape the outcome of the review.

Policy and Regulation

We believe that the UK provides an innovation-friendly regulatory environment. As an illustration of this, the FCA’s Regulatory Sandbox has provided a helpful tool in supporting early-stage businesses, both as a piece of regulatory engagement and as a marker of development when attracting external investment. We recommend the establishment of similar constructs across various industries where regulatory concerns often give pause to potential innovators who worry their work will run afoul of current legal frameworks.

When we consider the development of a market around digital assets, the UK has not been as quick as other jurisdictions to encourage the market or conduct projects utilizing new solutions such as distributed ledger technology. Therefore, whilst government stakeholders have taken a sensible stance in allowing development free from overburdensome regulation, the UK has still lagged behind several European nations, most notably Germany and Switzerland, in the application of these technologies. The commitment by the Bank of England that their renewal of the UK’s real-time gross settlement (RTGS) system will include API-enabled DLT interoperability is a welcome step. However, we believe that when the government leads from the front and deploys new technologies for its own use, the private sector will take encouragement from that and view the UK as a more friendly market in which to launch and grow businesses.

The government and the central bank also lag behind the most advanced nations with specific regard to stablecoins and central bank digital currency (CBDC). Many of the most advanced work done on this topic has been done using R3’s Corda, a technology that is being developed and supported by engineers and scientists based in London. However, despite the easy reach of the technology and expertise to the UK, greater advances are being made by the central banks of Sweden (through the Riksbank e-krona project), France (Banque de France’s wholesale domestic and cross-border work), Hong Kong and Thailand (Project Inthanon-Lionrock), Canada (Project Jasper) and several more. Given the pounds’ role as a reserve currency and the UK’s strategic interest in staying ahead of the curve, this is reason for concern and an example of the UK not making use of the talent it has at its disposal.

It is not yet clear how the UK plans to adapt post-Brexit to address the gap left in the total addressable market now that reaching the European market will require overcoming additional administrative hurdles to access. Many of our partners have raised concerns that they will be forced to leave the UK in order to take advantage of growth potential in the European market. This will prove a hinderance in incentivizing companies to choose London when selecting the best jurisdiction for their public listing.

Skills and Talent

One of the key reasons why the UK has been so competitive internationally has been London’s ability to attract global talent. A significant percentage of our London-based staff were born outside of the UK but have made London their home. To ensure this continues. an efficient, clear, and stable visa system is essential.

In the immediate term, we valued the government’s position and early communication that Brexit did not affect the status of EU citizens already in the UK, and this has undoubtedly assisted us in retaining staff and satisfying short-term recruitment needs. In the medium to long term, the UK government’s strategic positioning and promotion of itself across the world will be a factor in attracting global talent to all our London office.

The developer community, in particular, can be highly mobile, meaning that the UK cannot afford to be complacent if it wishes to retain these highly skilled individuals. Indeed, this risk applies to both maintaining UK’s attractiveness to foreign-born individuals and avoiding a brain drain of British talent to the USA or Europe. Maintaining a vibrant and innovative FinTech sector will not be possible without this workforce.1

Investment

When we consider the growth path for companies in our partner ecosystem, we believe that the UK provides good opportunities for seed funding but observe that it can get crowded out by funding opportunities available in other jurisdictions at later stages, particularly Series A & B. Attracting foreign investment can be healthy for a company because it can be seen as diversification of funding and potentially a pathway to a new market. If the UK wishes to retain companies as they grow, we believe that it will need to ensure that a vibrant domestic capital market continues to develop.

Chatsworth was the first communications agency to focus on fintech. We’ve been building fintech reputations for 20 years, steering start-ups through launch, growth and onto corporate action, and protecting and enhancing established infrastructures.

Looking for intelligent, informed and connected fintech PR which delivers results and value?

Get in touch and let us help build your reputation and tell your story.

Celebrating women in the world of fintech – By Marie Graham

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Women in fintechWhile we have all faced a new set of challenges over the past twelve months, research tells us that women have felt the challenges of the last year most acutely. In recognition of International Women’s Day, I would like to take this opportunity to pay tribute to the women in business who have broken barriers during a year, which for several reasons, has been anything but ordinary.

This year has already seen a couple of ‘firsts’ when it comes to gender parity, at least at the leadership level. Jane Fraser became CEO of Citi, the first woman to hold the position at a top 10 US lender; Thasunda Brown Duckett will become CEO of TIAA, making her the second black woman to currently hold the chief executive role at a Fortune 500 firm.

Looking to our own client base here at Chatsworth, we have also seen females assume more leadership positions. Niv Subramanian was appointed Previse’s Chief Commercial Officer in early 2021, joining the ranks of women leading the way in fintech such as Catherine Minter, R3’s Chief Revenue Officer; Adeline Ee McNary, Head of Marketing at Contour; and Mosaic Smart Data’s Data Science and Research Lead, Dr. Diane Castelino.

We are seeing more women given the platform they deserve across the media, too. Dedicated journalists are making a conscious effort to commission and publish more articles written by senior females. Pursuing a gender-balanced narrative across the press is equally as important as the change taking place at the leadership level.

There are also more women running the publications which shape and report on global events. Just this week, Joy Macknight was appointed editor of The Banker. Joy joins Roula Khalaf, editor of the Financial Times; and Financial News editor, Shruti Tripathi, as leaders of prominent publications. Key fintech publications, Finextra, The Fintech Times and Ledger Insights are also run by women.

Closer to home, I am fortunate to be a member of Chatsworth’s 60% female workforce and I am confident our thriving team is due to the strong female presence we have at the senior level. Chatsworth’s Director, Liz Fleming, has built a culture where training and development are easily accessible for all team members and Senior Account Manager Catherine Day ensures junior colleagues are valued members of the teams they work with and that no question ever goes unanswered. I have found Chatsworth to be a place where women are both heard and championed, with dynamic and inspiring colleagues, mentors, and managers.

For many, the pandemic has worsened workplace equality, as women have picked up invisible tasks at home – 64% of mothers took responsibility for home-schooling compared to 49% of fathers during the first lockdown and women with children are more likely to have stopped working (UCL, 2020). Last year the UN published a report saying that 90% of men and women hold some sort of bias against women. Clearly, the road to equality is far from over. To me, this makes International Women’s Day more important than ever.

A recent article by FT business columnist, Pilita Clark ‘Women aren’t all superstar leaders in a crisis. So what?’ really hit home. I completely agree with Clark: we must continue to pursue gender equality both in the workforce and in senior leadership until all women have “the freedom to make an utter hash of things every now and then, a right that men have cheerfully taken for granted for centuries.”

While the challenges faced by women in business across all industries still pose barriers, I am reassured by what I’ve seen over the last year. Albeit slowly, the number of women in leadership positions in the fintech sector is growing. For this, on International Women’s Day, I will celebrate.

Written by Marie Graham, Senior Account Executive at Chatsworth Communications.

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