By Dominic Allon, Vice President and Managing Director, Intuit Europe
The rise of fintech has revolutionised the way we pay, shop and borrow. From contactless payments to social shopping and app-only banks, there has been enormous innovation to help consumers and businesses manage their finances faster, better and more efficiently than ever before.
Fintech has become one of the UK’s fastest growing sectors, adding more than £6.6 billion into the UK’s economy and attracting more than £500 million of investment. From major brands such as Apple, to traditional banks and digital start-ups, a number of finance and technology companies have been competing to dominate the sector.
More recently, however, we’ve seen a markedly different approach. Fintech companies of all sizes are realising the value in working together to improve their offer. We’ve seen banks and major tech brands partnering with nimble fintech start-ups, as well smaller companies on the cutting-edge of business ideas teaming up to bring their concepts to market. Here, we look at why collaboration is the key to fintech success:
Collaborate to innovate
No longer seeing fintech start-ups as a threat, banks and large enterprises are looking to start-ups to boost digital innovation. It’s an approach being adopted beyond the world of fintech, with PwC reporting that 28 percent of global CEOs expect to collaborate with start-ups or entrepreneurs in the coming year[i]. And, in June, Richard Branson launched Platform X – a new project for big businesses to harness the expertise of more nimble rivals to help them overcome a dearth of innovation within their own organisations. Banks which follow this model and partner with more agile fintech start-ups will be able to expand and grow at a much faster pace.
Customer problem solving
Collaboration is also about solving very specific customer problems. If we look at some of the most recent fintech partnerships we can see that companies are joining forces to improve their product, and make sure it works flawlessly with their other financial applications. For example, HSBC partnered with Tradeshift to manage procurement, accounts payable, supply chain finance and settlement all in one platform. Digital bank Tide also teamed up with Iwoca to offer users business loans of up to £100,000.
At Intuit QuickBooks, we recently announced an agreement with Lloyd’s Bank to help small businesses and accountants save time by automatically transferring financial information securely into QuickBooks. We now offer direct bank feeds with three out of the top four retail banks in the UK, which covers more than 60 percent of the UK market. Our entire ecosystem is all about working with – not against – other suppliers. Partnerships and integration are the tenets of our app store, with developers gaining access to our expansive pool of developer resources.
We are entering a new era for fintech, with collaboration coming well before competition. Drawing on one another’s strengths is the key to getting ahead in a competitive market, but the real winner here is the customer. They will ultimately benefit from best of breed solutions, so managing their finances becomes one less thing to worry about.
UK firms report strongest hiring intentions in a year – CIPD
LONDON (Reuters) – British businesses have the strongest hiring intentions in a year and fewer are planning to make redundancies as the economic outlook has brightened over the past three months, a human resources industry body said on Monday.
The Chartered Institute of Personnel and Development said 56% of businesses planned to increase staff numbers in the coming months, up from 53% in late 2020 but below the 66% planning to hire staff a year ago before the pandemic.
The proportion of firms planning redundancies dropped sharply to 20% from 30% in the last quarter.
However the CIPD said unemployment was likely to rise sharply if finance minister Rishi Sunak does not extend jobs support for businesses at his March 3 budget.
“It is far too soon to rule out further significant private sector redundancies later in the year if the government does not extend the furlough scheme to the end of June or if the economy suffers any additional unexpected shocks,” said Gerwyn Davies, a senior labour market advisor to the CIPD.
A costly furlough programme that is supporting around one in five private-sector employees during the current lockdown is due to end on April 30.
The British Chambers of Commerce warned last week that one in four of its members planned to make job cuts if the support ended while they were still feeling the impact of the pandemic.
The CIPD said hiring plans were strongest in healthcare, finance, education and IT, and weakest in the hospitality sector which is bearing the brunt of the current lockdown.
The survey, run jointly with recruiters Adecco, covered 2,000 employers between Jan. 5 and Jan. 30.
(Reporting by David Milliken; Editing by William Schomberg)
Sunak to raise business tax to pay for COVID-19 support – The Sunday Times
(Reuters) – British finance minister Rishi Sunak is set to increase a tax on business to pay for an extension to COVID-19 support schemes in the budget next month, The Sunday Times reported https://bit.ly/3ujaBcU.
Sunak, in his speech on March 3, will announce he is increasing corporation tax from 19 pence in the pound and will outline a pathway where it rises to 23 pence in the pound by the time of the next general election, the report said. The move will raise an expected 12 billion pounds ($16.8 billion) a year, the report added.
According to the report, at least 1 pence is set to be added to the bill for business from this autumn, at a cost to business of 3 billion pounds, with further rises in subsequent years.
Allies of Sunak clarified he would not increase corporation tax higher than 23%.
These measures will be helpful in paying for an extension to the furlough scheme, VAT cuts and business support loans until at least August.
Unlike the 2010 Conservative-led government, which pursued spending cuts to rebalance the economy after the global financial crisis, Sunak is expected to defer most of the toughest decisions about how to pay for that support in his budget speech.
“The corporation tax hike will be higher than expected and the extension of the support schemes will be longer than most people expect,” the newspaper quoted a source as saying.
Insiders indicated the stamp duty holiday on property purchases would also be extended in line with the other coronavirus support measures, the report said.
Britain’s economy had its biggest slump in 300 years in 2020, when it contracted by 10%, and will shrink by 4% in the first three months of 2021, the Bank of England predicts.
($1 = 0.7136 pounds)
(Reporting by Vishal Vivek in Bengaluru; Editing by Lincoln Feast.)
Foxconn chairman says expects “limited impact” from chip shortage on clients
TAIPEI (Reuters) – The chairman of Apple Inc supplier Foxconn said on Saturday he expects his company and its clients will face only “limited impact” from a chip shortage that has rattled the global automotive and semiconductor industries.
“Since most of the customers we serve are large customers, they all have proper precautionary planning,” said Liu Young-way, chairman of the manufacturing conglomerate formally known as Hon Hai Precision Industry Co Ltd
“Therefore, the impact on these large customers is there, but limited,” he told reporters.
Liu said he expected the company to do well in the first half of 2021, “especially as the pandemic is easing and demand is still being sustained.”
The global spread of COVID-19 has increased demand for laptops, gaming consoles, and other electronics. This caused chip manufacturers to reallocate capacity away from the automotive sector, which was expecting a steep downturn.
Now, car manufacturers such as Volkswagen AG, General Motors Co and Ford Motor Co have cut output as chip capacity has shrunk.
Counterpoint Research says the shortage has extended to the smartphone sector, with application processors, display driver chips, and power management chips all facing a crunch.
However, the research firm predicts Apple will face a minimal impact, due to its large size and its suppliers’ tendency to prioritise it. Apple is Foxconn’s largest customer.
Foxconn is looking at other areas for growth, including in electric vehicles (EVs), and Liu said their EV development platform MIH now had 736 partner companies participating.
He expected it would have two or three models to show by the fourth quarter, though did not expect EVs to make an obvious contribution to company earnings until 2023.
Liu also said the company was still looking for semiconductor fab purchase opportunities in Southeast Asia after not winning a bid to take over a stake in Malaysia-based 8-inch foundry house Silterra.
(Reporting by Ben Blanchard and Jeanny Kao; Writing by Josh Horwitz; Editing by William Mallard and Ana Nicolaci da Costa)
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