The UK will be the future digital finance hub, here’s why

Despite a slow start compared to the US and China, the UK is on track to establish itself as the global digital hub powering the Finance 3.0 revolution.

Thanks to an appetite for collaboration and a regulator keen to support innovators, the UK’s booming FinTech hub is rapidly making a name for itself as the heart of the Finance 3.0 revolution. Companies like Monzo, Railsbank and WealthKernel are removing barriers to launch new services in the rigid, highly regulated, world of finance. In doing so, they are paving the way for a tidal wave of innovation to transform a sector traditionally driven by profit into one driven by people and purpose.

15 years ago, a similar revolution was starting in California, one which would push an already booming tech industry to grow faster and innovate further.

One revolution shapes another

Steve Jobs’ iconic Apple garage

In the summer of 2003, I was visiting my big brother in Silicon Valley. He had recently co-founded a tech company and their headquarters were in a modest house in Hercules, California.

I distinctly remember the pungent smell of reheated coffee throughout the house as we navigated a maze of cots and makeshift workstations.

(not actual image)

But my most vivid memory of that day was of the garage: it was filled with refrigerator-sized racks of servers, and on the floor were miles of multi-coloured ethernet cables. To my untrained eye, this technology chaos was mesmerizing.

Upon leaving my brother’s workplace that day, I remember feeling disheartened by how out of reach my own personal ambition to build a tech company felt. Getting an idea off the ground seemed like an unattainable goal.

Little did I know, a revolution was already underway that would have a huge impact on making that goal possible.

At the time, pioneers like Salesforce in 1999 and then Amazon in 2002 were making major headway into a new direction for powering digital businesses. They were exploring a web-hosting approach called the Cloud Computing Infrastructure Model.

Back then, using only 10% of your available computing power was commonplace among tech companies.

Amazon was the first major business to see this as a key problem in need of solving. And in 2006, Bezos announced Amazon Web Services and made the cloud computing model accessible to all. This marked the beginning of the end for the hardware packed garages then commonplace amongst digital pioneers.

With this major barrier to entry for digital businesses removed, launching a tech company was in reach of more people. Energy and funds could now be focused on value-added activities, such as development and strategy. The trend for digital innovations could accelerate further!

A decade and half later, without knowing it, my coworkers and I would stumble upon a similar change happening in the FinTech space.

Stumbling on our own revolution

In 2015, my dream to build a tech company finally came true when my two co-founders and I set off to disrupt the legacy world of finance.

Smiles and laughter as we begin: the beauty of innocence

Our goal was simple: provide existing finance businesses with an easy and efficient way to distribute their products & services online.

The goal might sound simple, but building a digital business in a heavily regulated industry bathed in legacy infrastructure wasn’t. Emotions ran high and funds ran low as finance’s many barriers to entry pushed us to our limits. In the end, it took us over 2 years to jump through all the hoops.

But thanks to these numerous hurdles, the future of financial services became crystal clear to us: There needed to be a better way to build a FinTech.

So that’s exactly what we created. A platform of pre-integrated services where major blockers like regulation and infrastructure can be overcome in a matter of days, rather than months. Where everything needed to build a FinTech can be accessed through a modern set of APIs: the UK’s 1st Financial-services-as-a-Platform, or “FSaaP.”

At the core of our platform is a collaborative mindset, and an ambition to build better, faster and easier, by working with others.

We weren’t the only ones with this ambition.

The Finance 3.0 revolution

Having being referred to prematurely on a handful of occasions in the past 3 years, the Finance 3.0 revolution is finally afoot and will reshape one of the world’s largest sector in unimaginable ways.

All around us, similar initiatives to breakdown finance’s gruelling barriers through collaboration are springing up.

Railsbank, founded in 2016 by Nigel Verdon, empowers new entrepreneurs with its Bank-as-a-Platform, or BaaP. Its APIs enable partners to create international bank accounts and more in a matter of seconds, while companies like Envizage empower FinTechs with full scope financial planning through their API.

On the consumer front, challenger banks like Monzo are launching marketplaces, and sharing they’re soon to hit 1,000,000 Monzonauts (users) across the local FinTech ecosystem. For more collaboration examples, look no further than their recent partnership with TransferWise for seamless foreign exchange transfers or with Moneyhub for personal finance management.

In the Finance 3.0. paradigm, the competitive landscape will become a network of platforms and service providers, interconnected to one another. An explosive pool of network effects, fuelling growth and innovation for everyone involved.

But in today’s world, growth as an end itself isn’t enough. The Finance 3.0 paradigm will also be about upgrading Finance 2.0 from profit-driven to profit with purpose.

Once more, the UK is paving the way toward this change.

With initiatives such OpenBank or the FCA’s Regulatory Sandbox and Advice Unit, the UK encourages its local entrepreneurs to go down a path of fairness and virtue.

Furthermore, its early adoption of cutting-edge regulations like PSD2, MiFID II (to which its own Retail Distribution Reform in 2012 was a precursor) and GDPR guide its ecosystem towards true data portability and fee transparency.

All of the above are catalysts towards making the UK a pioneer in building a true people-centric financial system: Finance 3.0.

Winner-takes-all is dead — long live the collaborators

What this all means is that the unlike the winner-takes-all model experienced thus far in tech, through goliaths like Google for search, Amazon for e-commerce or Uber for transport, the Finance 3.0 paradigm will be a patchwork of collaborative platforms.

And with twice as much regulation around data transposability as other sectors, it will also be one of the first sectors disrupted by technology where users have true control of their data, perhaps instoring much needed competition in today’s oligopolist world of data-hoarding tech giants. Better yet, maybe even a world where Zebras can cohabitate peacefully with Unicorns?

The UK has been a dominating force throughout finance’s tumultuous history. Finance 3.0 is its opportunity to continue this dominance and turn a demonised sector driven by profit into one of profit with purpose.

Bonus reading: building an app in Finance 3.0

To illustrate what building a Fintech in this new paradigm looks like, let’s explore the story of Company A. The beginning of this story is based on a true company I co-founded earlier this year:, currently in its Beta stage.

Day 1 — Idea stage

Company A has conducted market research and is looking to build an new kind of investment app. The goal is to provide them with a “smart portfolio” that operates like self-driving car. It should start nice by minimising risk. As profits are generated, the car (portfolio) would pick up speed (risk) helping users reach their final destination (financial goal). Conversely, if overall conditions deteriorated (ie. a market crisis), the car would reduce its speed to proceed more cautiously. In addition, Company A will only charge users whose accounts are profitable. It calls this the fair-fee initiative.

With this idea in mind and a small amount of seed funding, Company A reaches out to WealthKernel to use their APIs for building this app.

They need access to the following:

  • regulatory permissions
  • infrastructure to manage investments
  • basic user account management.

Day 30–1st live user / Beta launch

Company A’s priority is to start collecting user feedback so it can tailor its proposition. To move quickly it uses pre-built white-labelled interfaces and uses the pre-integrated infrastructure suppliers in the platforms third-party marketplace.

It has started to apply for its own regulatory permissions (a 9 month process), but in the meantime has been granted temporary permissions through the platform’s regulatory umbrella service.

It’s only been 30 days and Company A onboards its first live user. A new industry record!

Day 90 — Iterate and Launch

Company A quickly realises it’s on the right track. User feedback is overwhelmingly supportive of their fair-fee initiatives and its smart-portfolios are a hit. But users are struggling to see how this portfolio fits into their broader financial picture. They need financial planning.

Armed with this new vital feedback, Company A transitions off the platform’s white-labelled interfaces over to its own user interfaces using APIs. It collaborates with Envizage for financial planning, RailsBank for generating user bank accounts and Pave for providing credit, all through the same third-party service marketplace.

In a matter of months, it incorporates a wide set of complex features into its application, all through the same suite of APIs. .

Day 360 — Expand distribution

Company A has now been granted its own FCA permissions and seamlessly moves off the platform’s regulatory umbrella. But it encounters a major problem, the cost of acquiring users to invest their savings is prohibitively expensive.

Thankfully, Company A is able to expand its distribution through Monzo’s app-marketplace. It’s acquisition costs are reduced to a flat per-user amount paid in exchange for this win-win collaboration.

Day 720 — Coping with a major disruption

Company A has been growing steadily and can now be found in most challenger bank app marketplaces. But a disruptive trend is on the rise and its future is at risk once more.

Blockchain clearing manages transactions near instantaneously, at a fraction of the cost. New investment apps are springing up to capitalise on this trend.

Thankfully, Company A is able to adapt through a simple reconfiguration of its infrastructure API. Through the platform, Company A now partners with Ripple, a blockchain custodian, and his able to adapt seamlessly.

This example is actually a live ongoing case. Company A’s real name is and is currently at the Beta stage.

Yannick Brunner

FinTech enthousiast & co-founder @WealthKernel

PS: I would love to hear what other people interested in this space think of the ideas put forward in this article. If you are one of them, please don’t hold back on feedback or comments.