Heroes and villains: The UK’s fincrime debate

Read that the annual cost of financial crime compliance for UK financial services firms is estimated at £34.2billion, and you may raise an eyebrow. Learn that this equates to three-quarters of the UK’s annual defence budget (£46billion in 2022) and you’ll be scraping your eyebrows off the ceiling.

Hats off to the researcher at LexisNexis Risk Solutions who thought to draw that comparison in the firm’s most recent financial crime compliance report. It’s an apt one, given that UK Finance has labelled rising fraud a ‘national security threat’, a statement endorsed by the National Crime Agency (NCA), which added: “There is a realistic possibility that the scale of money laundering impacting the UK annually is in the hundreds of billions of pounds.”

The UK economy is heavily dependent on its financial sector, yet the industry has developed a reputation for being less than scrupulous when presented with foreign money – even the government acknowledges that London is a laundromat for foreign money trying to dodge the tax system or elude serious crime fighters (or both. Meanwhile, the Social Market Foundation named the UK the ‘card fraud capital of Europe’ last year, with 134 card frauds per 1,000 people, compared with Germany’s 15.

A shocking 41 per cent of all crime against individuals in England and Wales is fraud – and yet the vast majority of crimes will never be prosecuted, a House of Lords committee report said last year.

In light of this reputation, the NCA rightly warns of criminal and regulatory penalties – imposed on UK firms from the

US or EU – and even the withdrawal of major financial institutions from the UK.

Seen one way, the eye-watering compliance costs shouldered by UK firms are a sign that these issues are being taken seriously. But you could also pose the question: how can they be spending so much, and achieving so little?

“It’s multifaceted,” says Eddie Vaughan, sales director at LexisNexis Risk Solutions, the data-driven solutions firm. “Figures suggest that we are actually no more effective now than we’ve ever been, although there’s no definitive measure.”

The LexisNexis Risk Solutions report found that financial services firms spend an annual average of £196million each on financial crime compliance, with retail and commercial banks leading the spending, at around £264.4million and £241.2million respectively. Costs are felt most keenly by smaller firms, whose compliance budgets represent around two per cent of their total revenue; for larger organisations, it’s 0.37 per cent. Most significantly, total annual spend on compliance is up 19 per cent on 2020 figures – and looks set to increase by a further eight per cent over the next three years.

So what are banks spending the money on? Mostly, it’s people, says Vaughan. “Staffing costs in any organisation are going to be a big driver; in the report, we identified that at around 61 per cent.”

But he adds: “The study shows that investment in technology and people are both rising. That does suggest that the underlying strategy and investment in some firms may be fundamentally wrong.”

LexisNexis Risk Solutions covers fraud prevention, identity verification, due diligence, and KYC, many of them supported by big data. Where it has seen an overall slight increase in money spent on technology and a decrease in that spent on people, there’s been ‘much more return on investment’, says Vaughan.

Jim Winters is head of economic crime at Nationwide Building Society and David Callington heads up HSBC’s fraud team and sits on the Advisory Board of Cifas, the UK’s fraud prevention community. For Winters and Callington, financial institutions have no alternative but to increase spending on both.

“Even if the cost of mitigating economic crime is rising, it’s always a strong business case,” says Winters.

Part of that cost-benefit analysis is the catastrophic consequences of loss of faith in the financial system, adds Callington. Every heartbreaking victim story erodes the trust at the very core of a bank’s business model.

“Trust is an intrinsic part of banking, and we shouldn’t lose sight of the customer at the heart of this,” he says.

From the banks’ perspective, both Winters and Callington agree that the technology is already mostly in place – it’s just that it is struggling to keep pace with the fraudsters.

“There was a time when we saw more new approaches becoming available for banks to select, but there isn’t that much that’s new anymore,” says Winters.

“Most large firms use similar technology, including some payment profiling, some behavioural profiling, some biometric profiling, some device insight, and whatever other contextual information you can bring in. You supplement that with good people,

“David’s right” agrees Winters. “This is where we’ve been taking a ‘low-fi’ approach, if you will. All firms invest v ery, very heavily in all sorts of layers of technology, but we’re finding that, in this push for digitisation and everything instant and real-time, some of the controls we used to use aren’t sufficient to ‘break the spell’ in APP. That’s a corny phrase but very accurate when it comes to scams driven by social engineering.

“What we’re finding is that the bad guys, like any other kind of business model, are reinvesting their profits heavily in good quality people. So at Nationwide, we do two things. First, we make sure we invest in humans, as well as systems, so that we can have meaningful interactions with customers and break that spell, because we find that automated approaches are not effective.

“Second, we provide what we call our Scam Checker Service, which is something we publicise heavily, because we want our customers to call us before they carry out a transaction, and we’ll tell them whether it’s genuine or not.” with very capable data scientists. There’s a place for machine learning too, but not as a standalone tool.”

Losses to APP fraud skyrocketed in the UK in 2021, overtaking losses from card fraud for the first time, although the latest figures from UK Finance show a 17 per cent decrease in APP fraud losses in 2022, down to £485.2million.

NEVER-ENDING STORY

While criminals can up sticks and migrate to new methodologies on a whim, banks have to keep the old holes plugged while racing to address new ones.

”Over the last few years, especially in the fraud space, banks have invested in technology, in terms of unauthorised access,” says Callington. “Now the bad guys have gone back to social engineering, which is why we are focussing on human intervention again.”

Callington’s talking about authorised push payment (APP) fraud, a methodology that tricks victims into making a bank transfer to the account of a fraudster in the belief that they are a legitimate payee.

This is a methodology that exploded onto the scene during the pandemic, so it’s encouraging that banks’ mitigation techniques, like those described by Winters, appear to be working.

“What’s absolutely clear is that with certain areas of fraud, particularly APP, the threat is increasing,” agrees Vaughan. “It’s becoming ever more complex, and because of the victim impact, it’s always going to attract higher interest, including from regulators and government. I agree there isn’t one silver bullet to solve this problem; it’s actually a multi-layered approach that combines both technology and individuals. So, how can we develop technology that enables organisations to identify when there is a true risk?

“We’ve been doing a lot of work around the integration of behavioural biometrics into our device authentication capabilities. So, for example, where we have a customer who might be part of an APP scam, how can we identify if that customer is under pressure?

“Is the way in which they’re interacting with their devices not the norm, and would that suggest an element of risk? At each and every point of that customer interaction, there are different treatment strategies that need to be instigated.

“That might be technology, but also it may be that human touch. Being able to speak to an operator at a bank to ask questions is fundamentally important, too.”

Fighting The Good Fight

LexisNexis Risk Solutions has built out a digital intelligence network through which 96 billion transactions are processed annually, and nine billion active devices are identified.

“That richness of insight, through the consortium model, and that ability for all regulated entities that use some of our products to see that insight of both good and bad information and intelligence to establish trust is key,” says Vaughan.

While no one in the industry is putting their heads in the sand, the LexisNexis Risk Solutions report, which surveyed 300 financial services professionals, found that only one in six believe the UK financial sector’s collective efforts in fighting financial crime is ineffective, and the vast majority under the fraudster’s spell, and that’s been driven by some interactions elsewhere within the ecosystem,” explains Callington.

“We need to look across the ecosystem, at the telcos, the social media companies, the online marketplaces, where this fraud is originating. So, it’s not a traditional bank or fintech challenge; it’s an end-to-end challenge, across the ecosystem. The challenge is breaking the spell.”

This touches upon a broader debate in government: how to legislate to protect UK citizens from online harms without alienating Big Tech and stifling the UK’s innovation scene. As the Online Harms Bill approaches its debut in parliament, banks are continuing to push for online scams to be included in the legislation.

Meanwhile, in May, UK-based business banking platform Tide called on the government to tax social media firms and financial services. We do a heck of a lot, and we’re collectively investing hundreds of millions of pounds every year into prevention, but we can’t do it on our own.”

It’s clear that legislation will be required to establish a broader community of fraud fighters. But an anonymous respondent quoted in the LexisNexis Risk Solutions report makes an important point: “I think we have too many bits of legislation and it’s like putting another room on your house… it gets to the stage where you need to knock down the house and start again.”

As the regulation debate rolls on, a tension is developing between consumer protection on the one hand, and innovation on the other. For banks, that believe their organisation is helping to tackle the fraud epidemic. But it’s a lonely fight. While fraud makes up roughly half of all UK crime, specialist economic crime fighters represent only around one per cent of police resources.

When UK Finance conducted an analysis of more than 59,000 APP cases earlier this year, it found that three-quarters of online fraud cases originated on social media. Yet banks have been handed the lion’s share of the responsibility to mitigate financial crime, and take much of the accountability when things go wrong.

“By the time the customer comes to the bank to make the payment, they’re already

City to the Isle of Dogs, even if the proposed levy is yet to generate any support from lawmakers.

“There needs to be more collaboration,” agrees Winter. “The new frontier will be in bringing the insights together from across these different industries, that all have a part to play. If financial services is the focal point for all the controls, you’re effectively making financial services the gatekeeper for all economic crime prevention globally, which isn’t right.

“That’s probably why you see scam losses growing, because you can’t leave it to tension is drawing a new line between instant, seamless experiences and authenticated safe services.

In Whitehall, the Online Harms Bill is likely to tread on toes across the private sector. WhatsApp owner Meta has already threatened to pull out of the UK if the bill goes through in its current form. Expect similarly hard-nosed responses should Big Tech be drawn into sharing the costs of fraud prevention.

But, unless the siloed approach to financial crime compliance changes, the LexisNexis Risk Solutions report concludes: “A tipping point will soon be reached by the industry, whereby every extra pound spent on compliance will have no additional impact on effectiveness.

“No one – not industry, not government, not society – can afford for that to become a reality.” or

Is Secure Customer Authentication just a sticking plaster for a patient that’s bleeding out? Linda Weston, MD and Head of Core Products for Barclaycard Payments, Andrew Shikiar, Executive Director of the FIDO Alliance, and Quintin Stephen, Global Business Lead, Authentication at Giesecke+Devrient discuss vital signs and possible interventions

More than a year after Strong Customer Authentication (SCA) became a legal requirement for digital payments in the UK and Europe, the wrangle over how to reach the holy grail of perfect balance between security and usability rumbles on.

Against a background of global payment card fraud that is expected to rise to a staggering $49billion by 2030, the need for extra security around card payments closer to home was highlighted by research based on European Central Bank data, published in 2022.

Analysis by the Social Market Foundation found that the UK had the highest bank card fraud rate in Europe, with 134 card frauds per 1,000 people in

2019. The cost of card fraud per 1,000 people in the UK was put at more than £8,800. By contrast, France saw 115 card frauds per 1,000 people, Spain 37, Italy 19, and Germany only 15.

The vast majority of fraudulent transactions (84 per cent) in the UK involved the card details being used without the physical card being present, pointing to the rising incidence of malware and phishing scams to steal the information.

Secure Customer Authentication is a requirement under the European Union’s Payment Services Directive (PSD2), adopted by the UK ahead of Brexit, and it relies on using something you know, something you have, something you are, to validate a user’s identity. Banks are now compelled to use two of those values to verify online payments in what is known as two-factor authentication. The industry standard for authenticating card payments is known as 3D Secure.

The principles of such a multi-factored authentication (MFA) system are starting to be taken up globally. But, despite SCA coming into force in the UK in March 2022, research by Adyen among 500 senior retail decision makers a year on found that more than one in 10 (13 per cent) had still not adopted it, leaving businesses vulnerable to FCA penalties for non-compliance as well as risking losing business as a growing number of issuing banks are declining non-compliant transactions. So why the resistance?

Well, almost a third (32 per cent) of those questioned by Adyen also reported that conversion rates have fallen since SCA came into effect.

It all comes back to that aforementioned holy grail: how to provide a solution that is secure but seamless: make it too difficult and customers will abandon transactions, make it too soft and you risk losing customer confidence in completing transactions.

For its part, Barclaycard Payments, a top payments processor in the UK, has developed a fraud screening process called Barclaycard Transact, which uses AI and machine learning to assess transaction risk levels in real-time. Transactions that are deemed low risk use an exemption under PSD2 which allows customers not to take extra verification steps.

“The biggest challenge facing the payments industry right now is how to balance fraud risk and the customer experience, within the construct of regulation,” confirms Linda Weston, MD of Barclaycard Payments.

“With analysts predicting that payment card fraud is expected to rise from $28billion globally in 2020 to $49billion in 2030, merchants need to act now to protect their future profits and their customer loyalty.

“Retailers must safeguard themselves from cyber fraud with advanced protections, and really utilise technology that does exist in the payments industry, such as Barclaycard Transact. We control and help to manage that process, minimising the risk of fraud and declines for merchants. Businesses need to provide that smooth, secure, painless payment experience for customers, and this is especially important online.

“Payments providers can really help businesses to thrive, by creating smart, cost-effective payment solutions, that keep customer experience strong and simple. There are some great innovations, and I think, as technology has evolved, machine learning, artificial intelligence, all of those items are combining in order to provide a much stronger capability to detect fraud up front, rather than relying on processes, post the event happening.”

THE MAGIC TOUCH?

The FIDO Alliance is an open industry association with a mission to help reduce what it sees as a global over-reliance on passwords – a key vulnerability to fraud – and develop simpler, stronger authentication. With PayPal among its co-founders in 2012, its ranks now include more than 300 members, including big techs Microsoft, Amazon, Google, Apple and Facebook.

gesture, two-factor authentication, which is possible through biometric sign-ins based on FIDO [Fast Identity Online – a set of technology-agnostic security specifications for strong authentication].”

The rapid advance in the use of biometrics such as fingerprints on smartphones has already had a huge impact on the payments industry. Indeed, recent research by Barclaycard Payments shows that digital wallets now represent 30 per cent of all transactions in the UK, outstripping contactless in-store payments (24 per cent), conventional card payments online (21 per cent) and cash (17 per cent).

That’s particularly significant for retailers, as data shows customers forgetting their passwords is a prime cause of cart abandonment and that even those who accept the invitation to reset their passwords spend less.

Shikiar believes there is already a quantum shift at play.

“Ultimately, I think the conversation is shifting from bottom line, which is your fraud prevention, to top line, which is revenue creation,” he says.

One of the Alliance’s large e-commerce members has found that about 15 per cent of its customers cannot remember their passwords when they sign in.

“And we know there is around a 50 per cent shopping cart abandonment rate for people who don’t know their passwords. That’s a huge opportunity loss,” says Shikiar. “Furthermore, those that actually take the time to do a password reset spend less money. So, with a better authentication method, if we can move the needle on that from, say, 85 per cent signing in to even 86 per cent, that’s a huge top-line benefit.”

FIDO Alliance’s executive director Andrew Shikiar believes biometrics – a technology championed in its standards – offer a superior, safe and seamless customer experience.

“I think we’ve seen some challenges, frankly, with methodologies for two-factor authentication which takes the user out of the transaction flow, perhaps seeking a PIN, or an email, or message, or juggling between devices. That is suboptimal,” he says. “To best aid commerce, we need to find solutions where you have a single

That said, research commissioned by FIDO Alliance, found around 30 per cent of people are reluctant to give up password authentication because they mistrust biometric technology.

A lot of that comes down to education – or lack of it – by the banks, says Shikiar.

“People see a thumbprint to sign in and mistakenly think ’no way am I going to give my thumbprint to my bank’, even though they’re not – the thumbprint is staying on the device. So, while I think biometrics will evolve, consumers at large will need to be educated, and become more comfortable with them.

‘

“The cautionary side of this is that it’s very important that service providers and industry protect the integrity of biometrics. This is why we think it’s so important to do everything on device, where the risk of a biometric breach is eliminated, which will help instil further confidence.”

Weston also sees the case for the increased use of sophisticated biometrics.

“The growth in smartphones use has brought biometric authentication to the masses and made it a really normal experience for consumers, which is always super helpful,” she says. “And there are many forms of biometrics – behavioural biometrics is another key area that can be used to support authentication methods.

“Part of the challenge, though, can be that it can take time to build some of those biometric profiles. That means that you have to couple biometric authentication with other forms of authentication in order to remain within the framework of the regulation, and also to protect yourself, and your consumer from potential fraud.”

Quintin Stephen, of security technologies provider G+D, says banks have been slower at adopting biometric technology because there was ‘a concern that you says partnerships are vital in the future development of payments authentication.

“The whole reason for authentication is because of risk, fraud, and compliance,” he adds. “One bank or one financial institution is not competing against another when it comes to fraud and risk. So, it needs an ecosystem approach because the weakest link is what will get attacked. Partnerships are critical in managing the end-to-end lifecycle of a transaction, as well as how users interact with the system.”

Shikiar strongly agrees: “There is no competitive advantage to isolating yourself. So we’re really looking at security and authentication by community, building best practices, building open standards and common flows, to allow for more secure user authentication.”

In that case, are the guns of the world’s payment regulators being pointed in the we at the Alliance have been introducing lately is a passkey, which is an alternative to passwords as a primary factor. It provides MFA-type capabilities in a single gesture, possession-based authentication, and is supported by Apple, Google, Microsoft, etc.

“Regulators need to adjust their view on authentication based on these new capabilities. Once the focus is taken away from bolstering passwords, we can actually start solving the problem. And so I’d like to see regulation start to embrace more modern means of authentication that exist today, beyond just layering added would lose your customer along the way, by changing the way you were authenticating’.

He says, though, that ‘if you add a convenient way of authenticating to the convenience of being able to shop on your mobile device, that only leads to a massive increase in transactions’.

“So merchants obviously find that very attractive,” he says.

As global business lead, authentication at G+D, which works with more than 130 central banks and more than 2,400 commercial banks, as well as all the major payment schemes worldwide, Stephen

Thumbs up: FIDO Alliance members back single-gesture, possession-based authentication right direction? Shikiar believes that, while regulation has undoubtedly improved security, there remains a big and fundamental challenge to be overcome.

“If you look at PSD2, and all the regulations around authentication, a lot of them are fixated on solving a problem that’s fundamentally tied to the primary factor of authentication that we’ve had for 60 years,” he points out. “Passwords are the problem. Passwords lead to data breaches. Passwords can be hacked. I could guess your password. I could steal your password. I could even steal your SMS one-time password. Any sort of knowledge-based credential can, and will be stolen.

“Two-factor, three-factor, multi-factor authentication – these approaches are certainly stronger than passwords alone but, ultimately, they’re band-aid solutions to address the flawed primary factor. What factors on top of a flawed first factor, on top of the password.”

Weston takes a more cautious view, saying: “At this stage, we’re a year into the regulatory requirements for PSD2 around authentication. I think we need to give a little bit more time, to really see how that embeds, before we can form a strong frame of view as to what that future evolution could or should look like.”

Stephen raises another issue: that global regulators are not in agreement over how identity verification should be tackled.

“I think this is the biggest challenge,” he says. “PSD2 covers the EU, but there are many markets out there that have varying degrees of regulation, or no regulation. This is a big challenge, especially for banks that operate across multiple countries. The multitude of regulations out there are not really in lockstep – I’m not saying they have to all follow PSD2, but PSD2 is definitely the flagship when it comes to regulation.

“I agree, though, let’s not put another band-aid on the problem when it comes to authentication. Let’s go back to the fundamentals of what this regulation must drive.”

If Ohio isn’t on your destination list, it should be, says the state’s fintech flagwaver Ron Rock. And fellow Buckeye Jim Marous tends to agree!

Among its many claims to fame, Ohio is the birthplace of rock’n’roll – music that didn’t just take the world by storm, but changed the attitudes of an entire generation, breaking down social barriers and promoting collaboration.

Back then, the so-called Buckeye state was one of America’s industrial furnaces, largely built around the car industry; today it’s a financial powerhouse, ranked the fourth largest financial services economy in the US.

Legacy institutions like US Bank and JP Morgan loom large. But then there are the fintechs, the rock’n’rollers of their day, agitating for change and livening up the status quo. They sit alongside tech giants contributing to the digital economy, like chip-maker Intel, which recently committed a mammoth $20billion to build a manufacturing mega-site locally.

Setting the rhythm for this dynamic ecosystem and helping the members find their partners, is the fintech and financial services unit of the state’s private economic development body, JobsOhio. It was, uniquely in the US, spun out of state ownership with a commercial revenue stream strapped to it – it manages the state’s lucrative alcohol distribution franchise. Heading up the unit is Ron Rock, a highly-driven executive who spends most of his waking hours extolling the virtues of Ohio as a base for startups and scaleups around the world. Who better to interview him, we thought, than fellow globetrotting Ohioan, fintech influencer and publisher of The Financial Brand, Jim Marous.

JIM MAROUS: What is JobsOhio – and how come it’s in the liquor business?

RON ROCK: JobsOhio is Ohio’s private non-profit economic development organisation. We privatised about 10 years ago to become extremely resilient to economic challenges like recessions. Typically, when states are going through a recession, and their tax revenues are down, the first thing to go is economic development. So, we decided we needed to come up with a different model... and now we own and run the state’s liquor business, and the profits all go to economic development.

I’m responsible for one of nine sectors that JobsOhio is focussed on. My colleagues and I are all looking for international companies, foreign direct investment. When it comes to fintech and insurtech specifically, there are a lot of organisations innovating well beyond where we are in the States, and I’d love to bring some of those companies to Ohio. So, when I go to events – be it in London, Amsterdam, or France – I’m highlighting the ecosystem that we have here.

In 2019, we created the JobsOhio Growth Capital Fund, which gives us an equity stake in a portfolio of earlier stage companies. There are tonnes out there that I want to put in that portfolio!

JM: I was born in Ohio and I live here now, but it tends to be seen as a ‘flyover state’, right? Is that a challenge for you?

RR: It’s true that people tend to focus on New York and California. The earlier stage companies especially think, ‘I have to be close to the money’, or, ‘I have to be close to this large city’. But I think Ohio’s finally shedding that reputation of the Rust Belt, or the flyover state.

We’re making a name for ourselves, with our three Cs: Cleveland, Columbus, and Cincinnati. We have a healthcare cluster in Cleveland, a lot of startups, banks and insurance companies in Columbus, and banks and insurance companies in Cincinnati, too. There are innovation centres in all of those cities.

Then there’s the talent: 40,000 tech graduates a year from each university – Ohio State University, University of Cincinnati, and Cleveland State.

There are lots of community colleges, too, and we’re changing how education is attained, by working with educators on developing micro degrees and other training programmes, which can be very specific to tech-driven jobs.

Going back to location, remember it can be more of a challenge to turn a profit in those high-cost cities I mentioned; the cost of talent is going to be higher because the cost of living is higher. I’m talking a third of the cost in Ohio, and about a quarter of the cost in rental expense. So, when you take those expenses out of the equation, or at least reduce them, you can get an earlier-stage company to profitability a lot quicker in Ohio than you can on the coast. And we definitely have a friendly business climate – we don’t have any state corporate income tax for a start.

Another thing to note is that we have 50 different regulatory bodies in the United States, which I think turns a lot of people away. But in Ohio, the attitude of the Department of Insurance, for example, is ‘let’s have a conversation about what you want to do’. We've also just launched a financial regulatory sandbox, so it’s all about making it easier to do business.

JM: We know that, in tech jobs in particular, there’s been a huge trend towards remote working. Has that affected Ohio’s pulling power?

RR: Remote working is a double-edged sword for us. People aren’t buying a building, or building a building anymore; they’re being very hybrid, very virtual.

Typically, as I said, people want to operate in Silicon Valley, for instance, to be close to the investors. Then they realise they can get tech talent in pockets that they haven’t been dipping into before. So, we have people here working for Google in California, for example. But that works the other way, too.

There are 240,000 other individuals in the state who are working in financial services, so it’s not just about pulling talent. If you have a presence here, you’re also part of a community where innovation breeds innovation – you’re incubating ideas, and you have a lot of people doing the same thing, and wanting those types of new, innovative solutions.

JM: There was a lot of noise around Intel arriving in Ohio. Does its presence here work to your advantage?

RR: I feel there’s going to be a halo effect to Intel’s arrival because it’s going to create a couple of thousand jobs directly, but, indirectly, tens of thousands of jobs are going to be created and that means tens of thousands of people who need financial services. Even if a company isn’t a financial services company, it has to pay people, and it needs to get paid. Technology is needed for that and I could potentially meet a fintech company, or an insurtech company, that might help with that and other cross-sector opportunities.

There’s also been another effect. Prior to the Intel deal, when I was at an event, telling people about Ohio, they’d wonder where it was – sometimes you’d actually have to circle it on a map. After the Intel deal, they don’t wonder as much.

I think Ohio just has all the pieces of the formula that are necessary to attract businesses. And it’s my job to shout about it. People laugh… they say I’m everywhere! But I try to find platforms to get in front of as many companies as I can because my goals are to create new jobs, create new payroll, and secure capital investment by talking to the companies in Ohio, and also to the companies outside of Ohio who can be introduced to our community.

There are a lot of organisations that they can partner with here and we are known for being a test market. I think that’s a great selling point for a company that’s looking to scale into the States.

JPMorgan Chase has a large presence here, U.S. Bank too, as well as Nationwide – so lots of huge companies with large assets. You have legacy systems in insurance companies and in banking, and they are all looking to innovate. Western & Southern, for instance, a 135-year-old company, is partnering with Fabri, a new insurtech. That’s the epitome of the type of partnership we’re looking for because larger organisations might not be able to organically create innovative solutions.

JM: You’re building an external ecosystem for financial services in Ohio, but individual companies, like Progressive, are also creating their own. How does it all fit together?

RR: Yes, there’s Progressive with Level20. We also have Grange, which has an innovation department, whom we’ve done work with, and they have another partner in Rev1. Nationwide has Nationwide Ventures. Fifth Third has an innovation team that I’m working with constantly. In terms of how it fits with what we do, it just makes it more of a team effort in being able to comb the landscape, and make sure that, if there’s anything out there that any one of us isn’t seeing, we don’t miss it. We’re talking all the time.

So, when you’re thinking about getting into the ecosystem here, it could be for market share, or for a different customer base, or helping another organisation springboard to the next level. Whichever it is, there’s lots of opportunity.

JM: You’ve given plenty of sound business reasons for coming to Ohio. What’s the personal appeal?

RR: I work in the metropolitan area. But I basically live 15 minutes away – I have green grass, a nice house. I wouldn’t be able to afford that in another city.

And then there’s the people. In the Midwest, they’re very willing to help out. They’re going to answer the phone to you, they’re going to answer your emails, they’re going to be helpful to you.

I think that’s key, especially when you’re looking for partnerships. If you’re an insurtech or a fintech coming into the States, and you’re wanting people to answer your call, we’re definitely going to do that and be very genuine about it.