Robin Klein, venture partner at Index and founder of the Accelerator Group, was part of a four-strong panel discussing the emergence of ‘challenger brands’ in how consumers manage money, and is firm in his belief that the sector needs to modernise.
Also in attendance was Errol Damelin, founder and CEO of short-term lending platform Wonga, a business that has been built on the back of more than £100 million worth of venture capital funding and recently announced its intention to begin lending to small businesses.
Taavet Hinrikus, co-founder of money transfer platform TransferWise, and Samir Desai, CEO and co-founder of peer-to-peer lending service Funding Circle, completed the line-up at the Modern Money event.
With all four panelists involved in the entrepreneurial side of the financial services sector, they debated the future that the likes of Wonga and Funding Circle can have alongside the traditional high street banks.
The Albion Society event was hosted by digital agency Albion London, and is a quarterly breakfast meeting bringing together commentators, markets and entrepreneurs to discuss prevalent issues. The panel discussion was hosted in Shoreditch, East London, the base for a number of start-up financial services businesses.
Wonga’s Damelin was quick to point out that the financial services sector can be ‘quite technical’ at the best of times, but is primarily about giving consumers what they want.
For businesses like Funding Circle to compete and succeed against the bigger banks and achieve a re-imagination of the market, Klein and Damelin believe that regulation needs to change and become better at recognising the kind of entrepreneurial-led businesses that have emerged in recent years.
Klein says, ‘There is no question that [regulation] needs to change, it doesn’t work. And the additional frustration is that regulation changes happen slowly.’
For Damelin, the government and regulatory powers that be need to stop ‘looking in the rearview mirror’ and move away from modelling current regulation changes on events that happened in 2006 and 2007.
Desai says that he and Funding Circle want to see new framework brought in which will legitimise the new social lending/peer-to-peer lending services that now exist to encourage more people to use the system.
The four panelists were united in their view that to stay ahead of the banks, and maintain a first-mover advantage, constant innovation is going to be needed.