Following on from the unveiling of the Kalifa Review in February, CrowdProperty CEO Michael Bristow considers the response and momentum around what Catherine McGuinness, Policy Chair at City of London Corporation, called “a crucial blueprint for the successful and sustainable growth of UK FinTech”. This is both UK competitive advantage and crucially relevant to you as it maps out the future of FinTech, and by definition financial services, which can help you grow your property business quicker and more profitably.
The Kalifa Review of UK FinTech sought to highlight the opportunities and challenges facing the UK, with a view to reinforcing its position as a leader in the global FinTech space. The five-point plan put forward by the Review in late February – covering the key areas of Policy and Regulation, Skills, Investment, National Connectivity and International – was welcomed by many in the industry who are well aware of the benefits and opportunities that the sector presents. As pointed out by Charlotte Crosswell (former CEO of Innovate Finance and 36H Group Chair, the FinTech platform lending group of sector leaders of which CrowdProperty is a founder member), for over a decade FinTech has filled a gap that traditional banks were unable to service, a “niche for better customer service, more online interaction and businesses that wanted better SME financing”. Indeed, the increasing popularity of non-bank lending caused JP Morgan Chase’s chief executive to note recently that “many of these new competitors have done a terrific job in easing customers’ pain points and making digital platforms extremely simple to use”, which was fascinating praise.
Previously considered part of ‘alternative finance’, Ron Kalifa OBE set out in the Review that “FinTech is the future of financial services… it’s permanent and changing the shape of finance. It’s about delivering better, cheaper and more inclusive financial services for customers, especially consumers and SMEs”. It seems we’ve come full circle - with the challenges presented by Brexit, Covid-19 and global competition all playing out, yet again “the sector has a central role to play in driving economic growth and supporting a strong, sustainable recovery,” says Catherine McGuinness.
With the strategy and delivery model delivered and digested, the focus shifts to taking action in order to grow what Kalifa calls “a maturing and increasingly competitive industry”. The Government response to the recommendations came some 7 weeks later, when Chancellor Rishi Sunak openly adopted the Kalifa Review in his UK FinTech Week keynote speech, announcing plans to “boost growing FinTechs, push the boundaries of digital finance, make our financial markets more efficient [and] capture the extraordinary potential of technology to cement the UK’s position as the world’s pre-eminent financial centre”. Organised by Innovate Finance, I was privileged to share my own views on the power and future of marketplace lending as one of the founding members of the 36H Group – a unified voice for lending platforms – with perspectives about the difference we are making to SME property developers as the UK’s leading specialist property project lending platform.
Amongst the measures announced by the Chancellor was the Financial Conduct Authority’s progression of a regulatory scale box – a package of measures to help UK FinTech firms grow, who are competitively advantaged and advanced on a global scale. FCA chief executive Nikhil Rathi confirmed the launch of a regulatory ‘nursery’ this Autumn which will nurture the potential of high-growth FinTech clusters across the UK. The Midlands is one of the more established clusters, and CrowdProperty has experienced first-hand the further competitive advantage of being based in Birmingham – having access to a strong talent pool with less demand, alongside lower fixed costs, making for a better resourced, more sustainable business model. It’s no wonder Goldman Sachs are heading here, but even they won’t be able to draw our brilliant software engineering talent away for the culture we’ve built and our shared mission of driving SME housebuilding and spend in the UK economy.
Rathi added: “We will support scaling firms’ entry and growth in other markets and further develop cross-border testing of innovative products and services” as part of Project Innovate. This supports Lord Grimstone’s declaration of the Government approach going forward being one of “visibility, collectivity and global connectivity” with a focus on inward investment and international expansion. These sentiments couldn’t be more applicable to CrowdProperty, especially having *STOP PRESS* just launched in Australia.
As a disruptive FinTech/PropTech business, we span and see the huge potential in both these sectors – EG recently reported on the billions of dollars being raised in the US through special purpose acquisition companies (SPAC) which are being “directed towards technology businesses, particularly in the real estate sphere”. If the US market is a measure of things to come, it’s interesting to see that Clelia Warburg Peters, Venture Partner at Bain Capital Ventures, is “extremely bullish on PropTech funding continuing to grow in 2021 and for the decade to come”. The use of technology to innovate the built environment and real estate markets will be key to reducing the inefficiencies in the way we build, transact around and manage the built world – the evolution of PropTech is hot on FinTech’s heels and I see this first-hand sitting on the Investment Committee of Pi Labs, Europe’s most prolific PropTech specialist venture capital fund – there are some huge potential PropTechs in the Pi Labs portfolio.
The achievements of the FinTech sector to date are impressive, with the innovation shown by entrepreneurs enabling myriad solutions to everyday life. Perhaps the more interesting development is customers adopting and demanding change – as Charlotte Crosswell notes: “data-led products and services, putting the customer at the centre of the proposition, is when you realise its full potential”.
We couldn’t agree more, which is why CrowdProperty is relentlessly customer-focused and changing the game of property project finance. Leveraging proprietary technology for efficiency and deep property expertise for effectiveness, we’ve built the best property project lender in the market with the developer at its heart as property finance by property people, providing speed, ease, transparency and certainty of finance so that SME property professionals can spend less time arranging funding and more time growing profitable businesses.
The reliability of lending and knowledgeable support we have been able to offer SME property developers throughout the past 12 months is attracting more and more developers and more and more institutional capital. These institutions only look to work with the best platforms – giving deep pockets, validating institutional grade investments, and only backing the highest quality players after months of due diligence. Whilst the diversity of our capital sources and deep expertise is partly responsible for our market leadership, our innovative and customer-centric FinTech / PropTech approach sets us clearly apart.
Find out more about funding your projects better and growing your property business faster and more profitably at www.crowdproperty.com/apply.
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