Fintech Takes x C&R Software Presents: Fintech’s Next Test Across the U.S. and U.K.

Alex Johnson (0:00)

This episode is brought to you by C&R Software. More than just debt collection, C&R sets the global standard for AI native humanized credit management. They simplify the complex with end-to-end credit risk lifecycle support, powered by automated workflows, AI native intelligence, and real-time data-driven decisioning. Learn more at crsoftware.com.

Hello, and welcome back to our podcast series, Collections Conversations, sponsored by our friends at C&R Software. Today's episode is about Fintech and it's about the UK, which is a combination of topics that we haven't really gotten into in this series so far. But I'm very happy that we're now diving into it. How do Fintech companies which thrive on reducing friction and making things as easy as possible for customers, react when customers have problems that aren't easy to solve? How does the focus of UK regulators on consumer duty and better serving vulnerable customers mix with Fintech companies move fast and break things ethos and VC mandated growth ambitions? How does AI help smaller companies, including Fintech companies not named Revolut, compete with their larger peers? And is the story of the next era of Fintech in the UK and in the US a story of scale or a story of customer centricity? All of these are questions that my guest for today's episode, Luke Broadhurst, CEO of Credit Strategy, discussed with me in today's episode. As you'll hear, Luke has been covering the UK banking and Fintech scene, particularly from a credit perspective for more than two decades. So he had a lot to share. And as always, it was a real pleasure to sit down with an expert in one market and compare its dynamics to what's happening in the US. You're in for a treat with this episode. So without further ado, here's my conversation with Luke Broadhurst on Collections Conversations.

This is Fintech Takes, the podcast keeping you in the loop on all the latest Fintech trends, news and ideas. I'm Alex Johnson, creator of the Fintech Takes newsletter, your host and self-confessed Fintech nerd.

Okay, well, Luke, thanks so much for joining me.

Luke Broadhurst (2:28)

Yeah, great to be here, Alex. It's very exciting. Looking forward to it.

Alex Johnson (2:33)

Well, we were joking before we started recording that it's fun to record these things across the pond. So I'm looking forward to diving a little bit more into the UK market and hearing what Fintech companies are up to.

I wanted to start with a little bit of just a reset and the level set on the market overall. So when I think about Fintech and the progress that it's made in the market, and again, this is my US-centric view. So curious to hear how yours maybe differs a little bit. It feels like the last decade or so was spent promising the unbundling of the traditional bank. And I'm curious what you think the next decade is going to look like in Fintech. Because to me, we spent a lot of time on removing friction, on creating a better interface, on making onboarding faster. But it still feels like there's a great deal of work left to do when it comes to kind of managing the overall full end-to-end customer relationship. And ultimately, delivering outcomes for customers, which is, I think, what everyone in the business is trying to do. But I don't know that Fintech has quite gotten that far yet. So what's your perspective on that?

Luke Broadhurst (3:52)

Yeah, I mean, from our perspective, so we run a network called Credit Strategy in the UK. So this is a network of thousands of individuals, but hundreds of different financial services organizations of which Fintech are sizable. And actually a growing important group, I would say. We've probably seen a lot in the similar things in the UK that you've seen in the US. So the market's been disrupting. It's been immature to some degree because the onboarding and the front end of financial services is always easier than the more complex nature of running a longer term business.

And you're probably now seeing a splintering into those that are clearly going to win and those that are now questioning whether they're going to be around for the next 10 years. So somebody like Revolut is clearly going to be a winner. And they spent a long time getting their regulatory approval in the UK. They've got that now and they're talking about valuations of 200 billion plus.

But there'll be a lot of other Fintechs looking at them saying, can we get anywhere near what they've done so far?

Alex Johnson (5:12)

Yeah. I mean, the have-have-not split feels very present in a way that maybe was not true five, 10 years ago. Like you go back in time, everyone was kind of trying to figure out like, what does it look like to be a challenger bank? What is the model? What is the potential future of this? And now, you do see pretty big splits between the revolutes of the world that have clearly scaled and taken off and are now becoming banks versus some of the companies that maybe are wondering, you know, can they can still be around?