By Peter Smith, Global Head of Industry Policy Liaison, TISA.
Ahead of the FinTech Europe 2017 Summit, Peter shares with us his insight into how to keep up with the pace, evolution and change of the technological landscape.
Peter, can you please tell the Risk Insights readers a little bit about yourself, your experiences and what your current professional focus is?
Peter is currently Global Head of Industry Policy Liaison at TISA, the premier industry funded body working with the financial services industry, UK political parties, European Parliament, Treasury, HMRC, DWP, TPR, and the FCA, to enhance & improve the range, features, benefits, promotion and quality of savings & investment schemes to all UK citizens.
TISA is a thought leader in the development of policies and industry initiatives that support the financial outcomes for UK consumers, UK Plc and thereby the interests of its membership. TISA is also increasingly the instigator or developer of new industry services.
Peter’s role at TISA covers the entire financial services industry, incorporating cross sector policy work with both ministers & regulators within the UK and EU, and cross industry. He has technical expertise across a range of financial services & FinTech subjects, whilst maintaining a solid dialogue with government, the regulators and wider industry. Peter is a member of the TISA Executive Team and leads on Financial Services Industry Liaison. His work covers policy matters across financial services distribution, platforms, technology innovation, and retirement as well as a number of project groups including Digital Identity, New Technology Innovation (FinTech, Reg Tech, Insur Tech & Pens Tech), FAMR, MiFID, PRiiPs, PSD2, GDPR, Brexit and other working groups. He has a strong presence in public affairs and public policy work. He is a regular contributor to industry publications and provides commentary on various industry issues.
He recently sat on the steering committee for the Industry Sandbox consultation, which explored different models for a new industry-led accelerator aiming to speed up the process by which new financial services products are brought to market. The project was launched earlier this year in conjunction with Innovate Finance, at the request of the FCA. He also represents UK Financial Services on the All Party Political Group for FinTech.
He also sits on the APPG for FinTech, working with MP’s from all parties on the UK Government’s Digital Agenda, as well as being TISA’s ambassador on the industry Pensions Dashboard Project, UK Payments Strategy Forum and FCA Consultative team.
In the FinTech ecosystem, TISA are working with government and industry to build open standards and the structure to provide the required expertise in the regulation and law that FinTech businesses must operate within, including all aspects of securing authorisation with regulators through to the development of services and products that are compliant with regulation and law.This includes the required regulatory and legal expertise to successfully meet the requirements of trading in EU and Global markets.
At the FinTech Europe Summit, you will be speaking on your insight regarding –Keeping up with the pace, evolution and change of an ever-evolving technological landscape. Why do you believe this is a key talking point in the industry over the last 2 years and continues to be?
It’s a fundamental development for UK financial services & is very much part of the governments financial inclusion and UK digital agenda to encourage & develop technology & financial services. There will be many opportunities for both incumbents and newly emerging fin tech companies 7 their applications and solutions
What area of FinTech do you find most interesting and why?
The evolution of new applications & solutions for UK consumers to access & achieve financial empowerment. The real challenge currently is how we can coordinate MiFID, GDPR & the opening up of the API ecosystem. How do we build open standards and the structure to provide the required expertise in the regulation and law that FinTech businesses can operate within to satisfy consumers.
What are the essential considerations that need to be made when building something still relevant by time ready to launch?
That it benefits consumers or the industry and fits within the complex structure of both UK & Worldwide regulation.
Can you explain some of the challenges that come with keeping up with investment of challenger banks?
Essentially the major players have economies of scale and are much more able to cope with regulatory requirements than banks with smaller balance sheets. It means that these smaller players could be restricted to a narrow part of the market that is underserved by the major banks, which could result in smaller banks having riskier lending portfolios than their much larger rivals.
The challenger banks argue that the amount of capital they are required to hold by the regulator is so high that it is difficult to generate returns especially at a time when interest rates are so low. Banks also have to deal with customer inertia. Even though it has been made easier to switch bank accounts, many customers do not do so. There generally has to be a reason for a customer to do so, and larger banks are more able to offer new customer incentives to switch. For example, offering appealing incentives to potential new customers such as a market-leading interest rate on savings deposits would be a risky proposition.
Challenger banks are now seeking more proportionate approach to the treatment of smaller banks and building societies once the UK leaves the European Union. Possibly the Bank of England could relax capital rules.
What, in your opinion does the future hold for innovation professionals, and how can they keep up with the increasing change?
The future is exciting & will continue to evolve. The main consideration is ensuring that whatever is being developed is relevant to the consumer & provides some tangible benefit, be it, cost, access, service, flexibility etc.
Developers need to ensure they understand the driver of regulation and how to work with it. GDPR for example offers many opportunities to create greater interaction and regular communication with the users of the product or application