Chris Sier Talks FinTech


Eleanor Montgomery

Dr. Chris Sier is the FinTech Envoy for the North. Appointed by the government to act as a conduit between central government and the north of England, Chris supports policy implementation and facilitates the flow of information, specifically communicating the needs and progression of the northern FinTech community to the Treasury and vice versa.

As a first step, Chris and his colleague, Manchester-based FinTech Envoy, Claire Braithwaite, are working towards building a FinTech community in the north. Chris, who is also Director of FiNexus, a Professor of Practice at Newcastle University Business School and writer, has been instrumental in the organisation and planning of the upcoming FinTech North event, which will take place on Wednesday, 26th April in Leeds city centre.

FinTech North will be a great way for members of the evolving community to come together, network with like-minded professionals within the industry and discuss pertinent topics. Attendees will also have the opportunity to hear from experts on a range of interesting subjects. You can read announcements about the speakers and sponsors here and here. Chris will open the event with an introductory speech, and will also chair the panel discussion focusing on the FinTech Landscape.

FinTech-North-Chris-SierWe asked Chris more about his role as the FinTech Envoy for the North, the impact he thinks the FinTech North event will have on the FinTech landscape, and what he believes the future holds.

Chris, thank you for talking us today. Tell us, how did you first get involved in the FinTech field?

In 2007, I was a partner in a consulting firm, sitting at a point in capital markets that existed somewhere between an investment banker, a broker, a custodian banker and an asset manager.

I started to write about how inefficient the industry was, how technology failed to serve the needs of the companies and the consumer, and how innovation was a myth. I was picked up by a UK government organisation called Innovate UK (the Technology Strategy Board, at the time), who started talking to me about my opinions of technology for the sector shortly before Lehmans collapsed. The position I had taken was that if a big counterparty fell over there would be enormous problems for not only those connected directly to that counterparty, but for everyone – the risk was, a phrase later coined by economists, ‘systemic’.

How did your collaboration with the government begin?

The Government stance at the time was that the financial services sector was highly innovative as innovation was measured in proportion to technology spend, and spend was highest in the FS sector. What I believed was that quantum of tech spending was a poor measure of innovation. In fact, from a technology perspective, the financial services industry was running very fast just to stand still.

We got into a dialogue, and then Lehmans collapsed, and the thing that I’d been predicting came to pass – the systemic nature of the risk was exposed. I was asked to run an organisation that specifically looked at innovation for the sector called the Financial Services Knowledge Transfer Network. Basically an influential, non-profit position that had to engage with a set of stakeholders that I had never before approached – government, policy makers, innovators and entrepreneurs, and academia. Now, eight years later my book of contacts is second to none!

As one of my functions was to get out and explore what was going on in the science base around the UK, I came to Leeds University, amongst others. In fact, once of the very first engagements I had was with the credit unions in the Leeds region at an event I hosted at the Leeds Club.

What was the process that led to the current project you’re working on?

The project that I’m working on in Leeds came about following recommendations in two reports, the Government Office for Science Blackett Reviews on ‘FinTech Futures’ and ‘Distributed Ledger Technologies’. These reports were written to make policy recommendations and one of the recommendations was to regionalise the innovation infrastructure for Fintech.

Are you working on some of the recommendations now?

Yes. I’m trying to demonstrate that London is not necessarily the best place to be a start-up. It is hugely expensive, resource constrained, highly competitive, and a lot of the necessary technical expertise doesn’t exist there.

When you’re a start-up you care a great deal about working capital. You want to make sure your money lasts as long as possible by making sure your costs are minimised. I spoke to the Chief Executive of a Sheffield-based FinTech company that manages data in the insurance industry, who estimates that his company’s overheads are one-fifth of what they would be in London. In addition to costs, finding resources and expertise in London can be tough. If your company is looking for big data analytics on consumer data, for example, there is really only one place in the UK to go: the Consumer Data Research Centre at the Leeds Institute for Data Analytics at Leeds University. Even more general technical resource, coders and developers, is limited in London and subject to vigorous intercompany competition.

The point here is if you want to find lots of resource, technical expertise and overheads at a price point that extends your working capital, then look outside London. This doesn’t preclude having clients in London at all – the FinTech company I mention above has all of its clients in Lloyds Markets. It also doesn’t preclude moving to London at a later date. But at an early stage when you are building and growing, being in a lower cost, scalable destination makes a lot of sense.

But what incremental support could you give to encourage regional growth? Yes, all of the familiar infrastructure of collaborative workspaces, accelerators and so on is needed, but what else would encourage growth? Well, when you consider the value chain of start-ups, from the point of conceiving the idea to the point of selling the company, the place where there is least support is right at the beginning of the journey. Who helps you get from idea to prototype? And what would this ‘help’ look like? The obvious stuff is coding resource and industry mentoring, but the more subtle stuff is technical assistance and access to the sort of high performance tech you only find at great expense or in university laboratories.

So that’s exactly what I decided I would build: a laboratory where people could come and experiment with different platforms, like machine learning, big data analytics, internet of things, distributed ledger technology, cryptography and so on.

Leeds, with its big data analytics centre, its cluster of banks, its universities, its tech companies, its location and its connectivity, is the obvious choice where all parts of the puzzle come together.

How would you describe the relationship between the Financial Services sector and innovation?

I started to wonder how it was that this sector was so clumsy and so unwieldy. It never really changed or innovated, not at its core. Sure, consumers are being offered new products and services, but the heart of the industry, its models and platforms, have not really gone anywhere. Since 2008-2009, I’ve been working almost exclusively on the existential question of how do you drive innovation into a sector that actually resists innovation? After all, a fully integrated multi-service multi-market bank, for example, is hardly going to want to cut out a large portion of its revenue just to make the industry more efficient. And even if it did, the massive change required is scary and risky.

Many innovations require consensus across the whole industry, and one thing that Financial Services firms don’t do well is consensus. Individual firms do things to improve their own business model; differentiation is, after all, a source of competitive advantage, but as a rule they won’t do things to improve the security of entire industry.

How did the role of FinTech Envoy for the North come about?

I’ve worked with Treasury for quite a long time, and I asked them how they could help me in my mission to both innovate the sector and also share the success with the rest of the UK. That’s how they came up with the idea of the regional Envoys. There are now four of us – two in the north of England and two in Scotland. The role for me was created around the idea of having the gravitas to be able to convene in the north of England, and to be able to coordinate activities relating to FinTech within the UK and outward facing towards the rest of the world.

What does your role entail?

Well, there are reactive and proactive components. Reactive in that I go to conferences, write articles and represent the north of England and its capabilities. But also proactive in that I want to structure those capabilities into something that doesn’t exist yet but will be really useful when it evolves. FiNexus Labs, basically.

In fact, I’m essentially aiming to put myself out of a job! It’s a vocational role, and the aim for me is to get to the point where I’m no longer necessary as the North has sufficient draw to no longer need dedicated attention.

What support is required to ensure the future of FinTech?

A minister recently asked me what we need to do to guarantee the UK’s continued pre-eminence in FinTech. The only way I’ve seen for collaborative FinTech to take place is when the consumer gets involved and demands change, or when the regulator cites something as risky and demands change. The industry will only self-organise if they’re required to do so. And once those challenges and required changes are outed then they need to be worked on in a supported way and at scale.

Scale and support then. If you want innovation to lead to the creation of lots of start-ups then the best way is to have to have a very wide funnel at the outset, and actively manage the process to maximise the chance of individual success. It’s like any research project: you should have lots of well-thought-out experiments in to increase the chances of success out.

We need to think about how we manage the process from the very beginning, and get more people to come in at the top of the funnel. And that’s what we’re doing in Leeds. We need to take people from idea to prototype in a very efficient way, we need to drag them into the funnel and give them the tools and techniques they need to build something to the point of prototype. At the prototype level, there is quite a lot of support already in the form of various accelerators and incubators, but pre-prototype? Ideation, proof of market, proof of concept? There isn’t much there.

You are chairing and speaking at this year’s FinTech North. What involvement have you had in the planning and coordination of the event?

My role with FinTech North this year has been to bring together the agenda and leverage my international context. International connections and a broad network are essential. Innovation can happen anywhere and anyone can be an entrepreneur. Without that connectivity, you will miss opportunities. I bring that content and that network.

The point of this conference is to build awareness of the FinTech options in the north, to continue to build the brand of Leeds, to build the international network and deliver content in a rich and appealing way.

What do you hope to achieve through FinTech North?

I want people leave with a greater understanding of the key issues and technologies facing the industry, and of how these technologies might solve a problem for them.

I also want people to realise there’s vitality in the north of England, and that the north of England is a good place to find FinTech. I want them to realise that there is a unique set of skills, resources, companies and problems that can be solved for a global audience, in the north of England.

I want people to realise that Leeds is great at retail banking, that Newcastle is great if you’re looking at sustainability and solutions for an ageing probability; that there’s a great cluster of possibility for life and pensions in Liverpool. There are more good universities and at greater concentration in the north than there are anywhere else. And they’re churning out graduates with relevant degrees who can provide lots of resource for companies based in the north.

Speaking of community, how would you characterise the FinTech sector in terms of diversity, with regards to gender and international collaboration, for example?

Sadly, FinTech is still pretty male-dominated – something we need to correct. Obviously, education from an early stage is very important, and there are a few organisations that specifically teach girls that science is accessible. But role models are also important. We are fortunate today in that we will hear from just such a role model – Karoli Hindricks from Estonia is speaking later. Karoli is CEO of the fastest-growing company in Estonia (being humble she will deny this of course), a company that specialises in helping with tech resource. She is a fantastic role model.

If you encourage a community that is inclusive, you end up with diversity. We need to create that sort of a community rather than promote the traditional ‘old boys’ club atmosphere. In the longer term, developing and making ubiquitous flexible working practices, for example, is also important. And with diversity comes success.

Finally, without giving too much away, can you give us an idea of what we can expect from your introductory speech at FinTech North?

I’m going to lay down the challenge for why FinTech is so important. To put it bluntly, it’s because we have the opportunity to save an entire generation of people from poverty.

Visit the FinTech North website to read about a recent video interview Chris did for Shortlisted Productions.