Coffee with Innovate Finance Podcast: In Conversation with NorthRow

Posted on July 15, 2022
Written by Natalie Davies

Our CEO, Adam Holden joins Innovate Finance’s Head of Member Policy & Public Affairs, Rolf Merchant in the first episode of season 3 of the Coffee with Innovate Finance podcast. In the episode, the pair discuss more about our new platform WorkStation, what the future holds for Regtech & FinTech and much more!

Podcast Transcript

Rolf Merchant, Head of Member Policy & Public Affairs, Innovate Finance: Hello everyone and welcome to Coffee with Innovate Finance: our podcast series, where we speak to leaders across the industry to talk about financial innovation and FinTech. I’m Rolf Merchant, part of the team at Innovate Finance, and today I am absolutely delighted to be joined by Adam Holden who is CEO of Northrow. Adam, thank you for joining us.

Adam Holden, CEO, NorthRow: Thank you, Rolf, nice to speak to you again.

Rolf M, Innovate Finance: It’s great to have you on the podcast again. Adam, we spoke to you last September, when you were relatively new to the job at NorthRow. Since then I think it’s fair to say a fair amount has happened in the world since then. So I wanted to actually start with that very point. What would you say have been the highlights for NorthRow, yourself and for the industry in the last 10 months since you’ve been CEO?

Adam H, NorthRow: You’re right, it’s been a roller coaster!

A lot has happened even since the last time we spoke in September. When we spoke, we were in the middle of a revolution, if you like, of the platform.

We’d taken a view that we really wanted to focus on building our solution, with a focus on helping compliance teams do their job rather than just provide them with great technology for technology’s sake.

Since we last spoke, I’m delighted to say we launched, in April, what we’ve called WorkStation, which is essentially the fruit of the work that the team has been doing a fantastic job on for the last twelve months. So we’re very, very pleased about that.

We grew again last year, which is great, we posted some really good results and we’re now just working through 2022 doing more of the same.

I think that if the recent events have taught us anything, it’s that there are, right across the financial services and even wider industry, people who need and want to incorporate technology solutions to help them do their jobs better.

Since you and I last spoke, we’ve had the terrible situation in Ukraine happen, and now there is a real strong focus on making sure that the sanctions that are being applied or adopted well, and can be easily identified.

Obviously there’s an enormous cost of living crisis, the wider environment is changing enormously around us and FinTech has got a fantastic role to play – as well as RegTech – in supporting the economy through these challenging times.

Rolf M, Innovate Finance: Yes, I wanted to pick up on that very point about challenging times because obviously it’s difficult for consumers, but it’s difficult for businesses as well.

And thinking about your clients, your customers, there’s a lot for them to juggle, isn’t there?

I mean, you’ve got to protect consumers, obviously. Deliver compliance to meet the demands of regulators and those are pretty stringent.

Obviously, there’s all the internal systems to deal with and then of course there’s commercial necessity that wraps all of that together, of actually reducing customer churn and avoiding abandonment. It’s a lot to juggle! How do you go about managing that, do you think? What would you say to your customers and clients?

Adam H, NorthRow: Yes, you’re right. I mean, there is an enormous amount for them to think about.

I think consumers are demonstrating changing behaviours. We’ve come out of the pandemic. People have adopted different lifestyles, they’re working from home, they’ve got to juggle different kinds of lives, they’re more discerning with respect to security and fraud. Their patience is probably lowered, so they’re slightly more flighty.

So our clients, and many businesses, have to make sure that they’re doing a fantastic job from a customer experience perspective. And industries like FinTech and RegTech have to face up to that challenge. They have to support their clients in doing the job that they need to do.

Deliver financial services and maintain compliance, but do it from a customer-centric perspective. And we’ve definitely noticed that those of our clients and our prospective clients that are very focused on solutions that not only do their job, but actually focus on a very good customer experience are doing OK.

Talking about the sort of ‘doing the job’ bit. We definitely are noticing that. Again, that slightly reduced patience and an urgency to just have a really good solution that delivers what it says. It does what it says on the tin, basically, and does it every time and quickly.

So our clients and our prospective clients are much more discerning about the technology providers that they speak to.

Actually, in many ways that’s an advantage because you get to decisions much more quickly and quite rightly so. Nobody wants to be hanging around in a tender process for too long.

But actually, those people that can provide a customer centric, very capable solution that does exactly what it needs to do and supports that business, ultimately does well.

I think that the cost challenge that you refer to, is one that is very real at the moment.

We’re all, as consumers, noticing a huge cost of living crisis and businesses are having to adapt and adopt different cost profiles. So hopefully technology can help firms be more efficient as well as providing a good customer experience.

I’m very passionate about pointing out to the wider industry how good technology can be and satisfying all of those challenges and really supporting the industries out there.

Rolf M, Innovate Finance: Yeah, absolutely. And it’s good to have you in NorthRow and your peers making that case, because it’s really important and I think what you described sounds absolutely fantastic.

And as a big industry body, we’re bound to say that financial technology has got a huge role to play to help financial institutions manage all that.

And yet, at the same time, we do hear that plenty of businesses are slow on the uptake here. They’re not adopting these kinds of solutions very speedily. Why do you think that is? What are the barriers? What are the blockers?

Adam H, NorthRow: As you say, you and I have spoken about this before and I’m very supportive of Innovate Finance’s approach to bringing us all together as an industry to try to increase this adoption, because I also, am hugely passionate about it.

I think the inertia against it has multiple factors within companies that are required to be compliant with regulations. For example, many of them, if not all of them, are already compliant in one way or another.

And so you’ve got a process that works. These firms will have good relationships with regulators and so the move to change that process, to adopt technology and bring it into the infrastructure, I think is a difficult decision to make, certainly from the people that are responsible. They have very personal responsibility to make sure that their organisations are compliant. So we’ve got to get it right. And I think that the challenges that they face are “Can the solution do the job as well as we’re doing it today?”, “Will it really provide cost benefits to me?”, “Will it break my customer interactions?” and “Will it support my sales team in bringing revenue to my organisation as quickly as they claim them to be able to do?”

And so it’s our job as an industry to really identify those inertial points and target them and help the organisation understand that this technology can provide all these benefits to you. We’re not here to sell you something that doesn’t work or sell it for its own sake. It’s there to solve a problem for you.

I think the adoption challenge can be really helped by us all working together on some of the generic benefits of using technology, but then also equally target specific use cases in particular industries or particular compliance areas such as AML or reg reporting or competition, to really drive that point forward.

The final thing I would say as well is in many conversations that I’ve had, where we are coming together as an industry, we don’t see as many current users of financial technology or regulatory technology coming and espousing the benefits from the perspective of the user. And I think that would be a really good thing to do, to break some of these inertial challenges down as well.

Rolf M, Innovate Finance: Yeah, that’s really interesting. And as you say, those are all fair challenges from potential customers. So being able to make that case cogently and fluently is really important and the more people you have singing off the same hymn sheet, the better. So I very much agree with you there, Adam.

I’d like to pan out a little bit, actually for the next question and ask you about the FinTech industry more broadly.

So obviously we’re about to enter, or I suppose, depending on who you listen to, we might already be in a period of severely depressed economic growth.

How do you see the current economic climate affecting the world of FinTech?

Adam H, NorthRow: There’s a balance of opportunities and threats. On the threat side, if I think about my own or our own experience coming out of the pandemic, there was a scramble for organisations to grow and as a result, there was a real search for increased resources around R&D teams. And I think that really drove the market into a frenzy from that perspective. So I think that those organisations, those smaller organisations in the world of FinTech and RegTech, who need to continuously innovate I think found it very hard to get hold of resources at good prices. And, of course, these organisations have to balance their books, they’ve got budgets to achieve and actually, therefore, trying to maintain that R&D momentum in the face of spiralling wages has been a challenge.

And it’s not just development resources, right? So you’ve got, on the commercial side of things as well, there’s buoyancy in the market. Staff retention, I think, is also a challenge for financial technology organisations. We’ve seen in the news organisations like Curve and Klarna, unfortunately, are looking at their resource bases and realising that they probably need to rethink things a little bit.

Resources have been a real challenge for FinTech.

That being said, FinTech organisations and financial services organisations in general, are looking to manage their resources better – that could be a very good source of opportunity for technology firms that can bring about benefits to these organisations more effectively and efficiently.

I think those organisations that can really work with their prospective clients to demonstrate the business case for greater efficiency and other benefits of using technology, I think could really help in the face of these economic challenges.

So there are threats as well as opportunities but I think no doubt, those FinTech organisations that can innovate quickly and innovate cleverly in a very focused way, really looking at the true source of pain for their prospective clients and really understanding what the issues are, could probably provide a really great service in helping people to overcome the challenges that are impacting everyone as a result of this current economic climate.

Rolf M, Innovate Finance: Yeah, I really like that Adam. And I think what you’re saying about FinTech delivering productivity boosts to businesses is really important as well because I think – and I don’t profess to be an economist or expert on these matters! – but I think most would agree that that’s going to be the sustainable and long-term route out of an economic slump, having some productivity boosts for businesses and being able to deliver more output, more quickly.

So that’s going to be a huge boost, and I certainly hope we can see FinTech bring some of that to bear.

So moving on, and this will sadly have to be our last question. I actually asked you this when we spoke back in September, and I’d be interested to see if your views have changed at all!

Adam, what do you think the future holds for FinTech and RegTech? And I’ll define the future as the next couple of years – anything further out than that might be slightly hard to predict and a bit unfair! Two to five years, shall we say? What do you think?

Adam H, NorthRow: It’s a great question! I think that, going back to what I said before, I think what’s really, really important for FinTech and RegTech is that we need to maintain and build on the momentum that we have gained and delivered in this country, in the UK.

You know, we’re in a fantastic situation with respect to the levels of innovation, the levels of start-ups, the support we’ve got from the regulator and the industry in general. I think we need to maintain that and focus really hard on innovation.

I think innovation, and delivery of products that really make a difference is the only way that these kinds of organisations can survive. If we do not innovate, then I think that within that two to five year horizon, we’ll see a lot of organisations just, through a process of natural selection, probably cease to exist.

The investment environment is no differently affected than anywhere else. Investors are looking for good and strong and solid, dependable returns so those solutions that are strong and fit will survive. I think that we need to do more to maybe spread the wings of the UK FinTech industry and satisfy more problems further afield than maybe just a traditional nearshore, UK, Europe, US and Northern Asia markets. There are billions of people that could really benefit from the UK’s FinTech knowledge.

Within two to five years, I would like to see those really strong, innovative organisations survive and also the UK be seen, even more so, as a centre – a global centre – for FinTech and RegTech innovation.

Rolf M, Innovate Finance: Lovely, Adam. I really admire that ambition. And I think it is shared by a lot of your peers, fellow CEOs, fellow founders to push UK FinTech into a genuinely global success story. And that’s a lovely message and, I think, a good place to stop!

Adam, thanks ever so much. Really interesting insights there, getting your take on what’s happening in fintech right now and what you at NorthRow are thinking of and looking to push forward. It’s been a really interesting and really insightful discussion So, thanks so much for joining – I hope you enjoyed it?

Adam H, NorthRow: I really enjoyed it. I always enjoy talking to you Rolf, so thank you very much for the time.

Rolf M, Innovate Finance: That’s a great pleasure, Adam. And thank you again. Well that is about it for this episode. Thank you everyone for tuning in. Please do keep an eye out for upcoming episodes. We do have many more conversations with FinTech players planned.

And we have all our previous episodes available to listen to on our website: the previous two seasons – we’re in season three now, actually!

So please do take a look at our back catalogue for many more insights on FinTech and financial innovation.

My thanks, once again, to our guest today: Adam Holden, CEO of NorthRow.

Thank you at home for listening – and join us next time for Coffee with Innovate Finance!