Britain - The bridge between innovation and success
Occasionally, the temptation can be to look across the pond and see the United States as some sort of older brother. Taller skyscrapers, wider motorways, astronomical defence budgets and bigger Big Mac burgers are just a few of the hallmarks that make it the developed world’s ‘leading light’.
Yet before we succumb to any inferiority complexes, Britons would do well to take stock, and see that the path we’ve been merrily travelling on (for many hundreds of years longer than our American counterparts) is just as worthy of acclaim.
Being Election week, the overflow of patriotism need not be topped up by ourselves too much. However, if you ever have cause to travel along the M54 in the West Midlands, treat yourself to a detour from Telford towards Ironbridge on the River Severn. When you arrive at the impressive structure at the heart of this little Shropshire settlement, your initial thought might be, ‘Couldn’t they have come up with a more original name?’
What you might not know is that it is also referred to by some as the ‘Birthplace of the Industrial Revolution.’ Completed in 1781, the cast-iron bridge was the first of its kind in the world, but the key lay in its efficient means of construction. The bridge was built by Abraham Darby, who pioneered a unique way of smelting iron with coke, which resulted in a considerably cheaper method of iron production. This remains an important symbol of the industrial age today.
So next time you look on in awe at the skyscrapers that line Manhattan, spare a second to consider that the material for such impressive structures was perfected nearly 250 years ago in a small British town 3,500 miles away.
FinTech and the UK
The Iron Bridge is just one of many feats of innovation that originated in this country, and depending on your sphere of interest, we’re sure you’d be able to come up with quite a list. Ours, of course, lies in alternative finance and Financial Technology (FinTech), and it’s another area in which Britain has taken the lead.
According to Gov.uk, the UK and Ireland is now the fastest growing region for Fintech investment in the world, with deal volumes experiencing year-on-year growth of 74% since 2008. This compares very favourably with global figures of 27%, and Silicon Valley which sits at just 13%.
The FinTech sector in the UK is widely estimated to be worth £20bn in annual revenues, while investment in UK FinTech firms is said to have eclipsed £342m in 2014 (more than double both the global average and that of the US).
The future of FinTech in Britain
The statistics above overwhelmingly justify the UK’s tag as the world leader in FinTech, and the gap between us and the rest is set to widen. The consultancy group Accenture once again ran its FinTech Innovation Lab programme here this year, while many global firms are choosing to relocate to our shores.
The following offer some reasons as to why the FinTech sector in the UK continues to flourish:
- Our large and technologically sophisticated customer base
- London’s position as a world-leading centre for financial services
- Vast availability of business capital
- Our encouraging regulatory approach, coupled with excellent financial services infrastructure
- Our position as a global trading hub
Peer-to-peer lending: The UK takes the lead
At the heart of FinTech and alternative finance lies peer-to-peer lending, a concept first developed in the UK over a decade ago. Following the slashing of interest rates as a result of the financial crisis, consumers have clamoured to the various platforms in search of superior returns to those offered by banks.
It is estimated that the amount loaned through P2P platforms more than doubled in 2014, with the total figure said to have toppled the £2 billion mark. Yet with the game-changing announcement at Budget 2014 that P2P is set to be included within the ISA framework, it is predicted this figure could swell to £45bn within a couple of years – more than likely making Britain the global leader in the industry.
Many headed to the polls on Thursday disillusioned with the selection of parties to choose from, and, in some cases, simply voting for the ‘least of all the evils’. But one front that most parties seem united on is the value in supporting FinTech and peer-to-peer lending.
In so many respects, our country leads the way, and the rosy future that lies ahead in these sectors is testament to that; along with the warm embrace we offer to innovation and our ongoing desire as a people to give the realms of possibility a nudge.
That hypothetical Transatlantic bridge from the UK to America may be some years away yet. But if it ever does come into being, don’t be too surprised if construction begins in a sleepy country village within our borders.
There is barely a week to go until the conclusion of the 2017/18 financial year, which means that, as ISA season begins to hot up, time is running out to take advantage of your ISA allowance.
At the Summer Budget in 2015, George Osborne had multiple nuggets of good news for investors in peer-to-peer lending (P2P), most notably the announcement of the new Innovative Finance ISA (IFISA).
Over the last decade, there can be little dispute that the reputation of mainstream banks – and particularly the so-called ‘Big Four’ (HSBC, Barclays, Lloyds and RBS) – is at its lowest ebb.
The peer-to-peer (P2P) lending industry is now regulated by the Financial Conduct Authority (FCA). The regulatory framework has been designed to protect customers and promote effective competition.
Loan underwriting is the process that we undertake to analyse all of the information provided by each loan applicant and their credit file to assess whether or not that applicant meets our minimum loan criteria. As part of that process all data is verified, analysed and summarised to paint a picture of each applicant.
When you earn interest from a regular bank savings account, for example, the bank automatically deducts basic rate tax (currently 20%) before paying your interest. With interest earned from peer-to-peer lending, tax is not deducted automatically so lenders will need to declare their income to HMRC.
As 2018 draws to a close, with our bellies full of Christmas turkey, it's only natural to look back on the past 12 months and reflect. No doubt, it's been a turbulent one economically and politically, and not everyone has had it all their own way.