UK fintech execs talk diversity

The UK has a relatively low unbanked population compared to other countries, with approximately 1 million unbanked individuals, according to the Financial Conduct Authority (FCA). Over the past few years, various measures implemented by the banking sector have successfully reduced the number of unbanked adults from 1.71 million in 2014. However, concerns persist regarding the impact of limited diversity, increased regulation, and restricted access to funding on disadvantaged groups.

At an event organized by think tank Parliament Street and hosted by Dean Russell MP, a panel of fintech experts gathered at the UK parliament to discuss the role of businesses in recruiting and fostering a more diverse fintech workforce. They also examined the potential threat posed by artificial intelligence (AI) to job creation. The attendees deliberated on the future of the fintech industry in light of funding shortfalls. Recent reports indicate a decline in venture capital financing globally, including in the US, due to investors’ cautious approach amid market uncertainties such as rising interest rates, inflation, and recession fears.

During the diversity debate, industry experts emphasised the importance of educating young people about fintech and financial literacy. They stressed the need for compliance awareness, as both businesses and individuals should be mindful of their actions in an evolving regulatory landscape. The panel also underscored the significance of diversity in finance and technology, highlighting that diverse organisations tend to perform better. They emphasised the need for concrete actions to address diversity challenges and promote inclusivity within the industry.

In terms of financial inclusion initiatives, the FCA has focused on promoting access to cash, recognising that a certain percentage of the population still heavily relies on it. Additionally, efforts have been made to promote basic accounts, resulting in over 7.2 million basic bank accounts being opened as of June 2021. The UK government has expressed support for credit unions in improving the financial well-being of local communities, proposing legislation to expand the range of products and services they can offer. Furthermore, £100 million of funding from dormant assets has been allocated towards financial inclusion, allowing organizations like Fair4All Finance to explore ways to scale the affordable credit sector and provide loans to vulnerable consumers.

The FCA has also introduced the Consumer Duty regulations, which will come into effect on July 31, 2022. These regulations aim to enhance consumer protection in banking and prioritize the needs of vulnerable customers at risk of financial exclusion. The discussions at the parliamentary event shed light on the challenges and opportunities facing the UK fintech industry, highlighting the importance of diversity, education, and sustainable funding to drive its growth and foster inclusivity.

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