Will 2017 be the year FinTech breaks down the walls of the City of London?
With the Norman invasion in 1066 the existing Saxon power structures were swept away to be replaced by a new nobility, new clergy and a new monarchy. However, in the very heart of the nation the financiers of London struck their own deal of near self-governance. A deal which exists to this day as the City of London Corporation.
The Corporation's states that its mission is to support and promote the City as ‘the world’s leading international financial and business centre’. For nearly 950 years this organisation has served the interests of one of, if not the, global financial centre. Protecting the rights and privileges of the Square Mile and those who live and work within it.
The City of London Corporation is unique in nearly the entire world for its length and structure. Its legislative body is elected predominantly not by residents (as in most other democratic structures) but by electors chosen by city companies and appointees of qualifying bodies. These voters vastly outweigh the residents who can vote. The Corporation’s ceremonial leadership is elected by a body of senior members of the livery companies, ranging from the 622-year-old Worshipful Company of Mercers to the one-year-old Worshipful Company of Art Scholars.
As financial institutions have developed, so has the City of London corporation. With the addition of new livery companies and changing demands as firms grow, change and are replaced.
However, in recent years financial services are facing more rapid change than at nearly any other time in history. The growth of FinTech is already disrupting the practices of the City of London. The question is now will this impact the ancient governance of the Square Mile?
The differences between traditional financial services firms and FinTech are hard to overstate. A 2016 study by Think Different Group found that while only 10% of people in a sample drawn from financial services experts considered banks to be customer-centric, this figure was 80% for FinTech firms. The same panel believed, by 58%, that FinTech will be the biggest winners in 2016. Taken together, these suggest not just the continued rapid growth in FinTech firms and the number of people they employ but also significantly different wants and demands from traditional financial services.
In 2017 the Court of Common Council, the key legislative and decision making body of the City of London Corporation, is up for election. To date this body’s membership has been predominately drawn from the ranks of the large financial institutions, City law firms and other major companies based in the Square Mile.
Any firm based in the City for longer than a year is able to appoint voters for this election. With an estimated 44,000 people already employed in FinTech within London, a number likely to increase before the 2017 election, the influence of this growing industry on the Common Council elections is one to watch. Over the next year the growth of FinTech could herald not just a changed market place but a new set of political leaders, with new priorities, for the City of London.