The CA Summit 2020: Learn chapter
Ahead of CA Summit 2021, revisit the Learn Chapter of last year’s event which saw experts discuss key issues business professionals are facing, including the future of the City of London and trade negotiations between the US and UK.
The CA Summit, held on 8 October, brought together the brightest minds from the worlds of finance, academia and the technology industry to deliver a series of challenging, thought-provoking and truly motivational seminars to inspire ICAS Members around the globe.
Watch the Learn chapter
The future of the City
The COVID-19 pandemic and the measures that have been taken in an attempt to stop the spread of the virus have forced organisations to reshape processes and ways of working which have potentially been in place for decades.
In his opening speech for the Learn chapter of the CA Summit, Christian May, Editor in Chief of CityAM, described having to make these very decisions to ensure the survival of the publication.
Following a scare that he may have contracted the virus in mid-March, Christian remembers running the paper whilst isolating at home.
“I was trying to run what turned out to be the last days of the print product for CityAM from my house and indeed trying to see the company through it.
“CityAM decided to stop printing its newspaper for the first time in 15 years back in April, and we’ve recently taken the decision that we won’t be returning to print until the spring.”
However, Christian describes himself as an optimist and is sure that the publication will restart its printed offering once the pandemic is brought under control.
Christian recognised that the City of London is also experiencing a turbulent period of change due to the pandemic.
The City’s role as a driving force for the UK economy has been thrown into “sharp focus” he said as the move towards increased home working may lead many organisations to reconsider their leases as offices, for the most part, remain relatively empty.
As a result of measures introduced by the UK to help deal with the pandemic, the government is now billions of pounds in debt. With the Chancellor ruling out a return to austerity Christian said that indicates a move towards a rise in taxes.
“It’s the only lever the treasury will be able to pull. Quite how quickly they pull it is the matter of debate.”
What does this mean for London as a global financial hub? According to figures from the Global Financial Centres Index, London is sitting behind New York at number two on the list.
However, continuing his optimistic outlook, Christian said: “London is in a very secure position I think and I say that in full knowledge that Brexit is unresolved and Brexit is going to have an impact on the City of London’s position certainly in European markets.”
Christian ended his session on an equally upbeat note.
“Overall, and I am an optimist, I would say that London has stood as a commercial centre for a thousand years.
“It has survived plague, fires, aerial bombings, all sorts of political events and recessions and it will survive this.”
Working with America
The second session of the Learn chapter saw Vanessa Burkitt of the Cambridgeshire Chambers of Commerce discuss the UK’s trade mission with Antony Phillipson, HM’s Trade Commissioner for North America.
Giving a brief overview of the remit of the Trade Commission and its mandate of negotiating future trade relationships with the US, Antony described the work as “no more complicated than to deepen and strengthen what is already a quite extraordinary economic partnership between our two countries.”
At the time of writing this article, there have been four rounds of talks. Although the extensions of the Brexit divorce process and the restrictions caused by the pandemic have changed the timetable for negotiation, Antony said that conducting the trade talks virtually, as opposed to meeting in person, has not hindered the progress as much as one might think.
“In a way, it has helped because it has meant that there’s not such a focus on the four rounds and there has been an enormous amount of work done by the negotiating teams on both sides in between the rounds.”
Vanessa observed the trade landscape as it stands under President Donald Trump as more protectionist than that of his predecessor, with trade being a platform to stage his diplomacy, and asked what main areas of business and services were being discussed.
“People often focus on agriculture as being a sticking point,” said Anthony.
“I think agriculture is an important point…and it’s important for both sides.”
Although there will be a focus in the negotiation on the more traditional goods and services related to agriculture, Antony made it clear that one of the main objectives of any trade agreement will be to secure a prosperous future for the UK.
“We want to make this a future-facing, future-proofing agreement,” he said.
“[A] big focus on IP and copywrite, big focus on financial services, digital trade, enhancing cross-border data flows, which is really now the lifeblood, in my view, of international business.”
This will be coupled with a focus on “business mobility” which will simplify the process for businesses to move talent between the two countries.
On the topic of mutual recognition of qualifications, Antony praised the historic Mutual Recognition Agreement (MRA) between ICAS and US accountancy bodies, NASBA and AICPA, in 2018 which provided a streamlined process for their respective members to practice in the other’s jurisdiction.
One thing that Antony made clear was that these negotiations are likely to continue their move away from the more traditional round table meetings towards a more digital way of working.
Living with COVID-19 – the economic outlook
The need to adapt and accept a new way of living and working was echoed by Economist and Lecturer Professor Trevor Williams in the opening of his session.
“This is not the economic crisis of old,” he told the audience.
“This wasn’t caused by a problem in the financial sector as in 2008/9. This wasn’t caused by the build-up of excessive levels of debt in the corporate sector or in the household sector. And this wasn’t because of a rise in inflation. This was a health scare which has led the authorities to shut down the economy in order to protect lives.”
Any thoughts of meaningful economic recovery should be put on hold until there is a cure to the virus which would allow businesses and consumers to return to pre-COVID ways of operating.
As for the effects of the pandemic so far, Trevor forecasted that the economy is likely to shrink by around 5% this year.
“[The UK] has been more impacted by this on overage than the global average.”
Having gone into lockdown later than most countries and the UK’s highly developed services and hospitality sectors were some of the examples Trevor gave as to why this is the case.
The impact of this will be a rise in employment of around 2 million out of work compared with pre-COVID levels as “it has devastated those parts of the economy where people have face-to-face contacts, such as hospitality and leisure.”
Trevor also brought attention to the exasperating effects that the pandemic has had on those who may not be digitally able or do not have access to the internet.
“We need to ensure that people aren’t left behind,” he said.
“There needs to be lots of public spending on things like lifelong learning, on an infrastructure which is available to all bringing digital skills to more people or retraining so more people aren’t stuck in areas of work which are obsolete.”
The future of finance
Being future-facing and understanding the benefits that working digitally can bring is something which Founder and CEO of 11:FS, David Brear is all too aware of.
However, David believes that digital banking still has a long way to go as he believes it is “only 1% finished”.
Acknowledging that this statement can often cause some heated debate within financial circles, David said that digital banking needs to be viewed in the context of progress within other industries to really understand what he means by this.
David explained that there are three strands that can be seen when businesses move their offerings towards being truly digital: analogue, digitised and digital.
He gave the example of the journey the music industry has gone through since the analogue days of vinyl and CDs. The move towards music becoming digitised was heralded by the creation of iTunes, which David said was the dawn of “digital distribution, but fundamentally the same product that was being created before.”
The appearance on the scene of streaming services such as Spotify changed that by making music and the way we consume it truly digital where customers effectively “borrow” the music instead of owning it.
This same process of change towards a digital way of operating is currently happening to the baking industry. The analogue version of banking is the high street bank which relies on face-to-face interactions between customers and employees. Digitised banking should be familiar to many of us where the services and processes we would be used to dealing with inside a bank branch, such as filling in forms, have been moved online.
“What we argue is that we really haven’t seen digital banking yet,” said David.
It is on what David refers to as the “banking battlefield”, where the incumbent and challenger banks are duking it out with the new kids on the block in the form of start-up and big non-FS tech firms, to vie for new customers.
The bar of regulation has been lowered in recent years. Not in a way which makes banking riskier, rather that it has made it friendlier to innovative startups to enter that battlefield. The pressure these new players are putting on the industry as a whole is forcing an increased amount of innovation, making the FS sector rethink what a bank really is and what it means to operate in a digital world.