Ep. 209. Interviews Deputy Mayor of London Rajesh Agrawal START OF AUDIO 00:00:00 [Advert start] We wanted to let you know that if you love this show, how about seeing it live? We're going to be at Money20/20 Europe in Amsterdam this June, and we're bringing Fintech Insider Live with us. We'll be bringing the podcast to the main stage, right before the drinks reception, and you can be there. Sign up for tickets now. Go to Europe.money2020.com/register and use discount code 1811FS, that's 1811FS, to get €200 off the ticket price. [Advert end] DB: Welcome to Fintech Insider Interviews. My name is David Brear from 11FS, and today, I am delighted to be here with Rajesh Agrawal, thank you very much for joining us. You're the Deputy Mayor of London for Business, that's a pretty impressive job title you've got there. RA: It is, and it comes with a lot of responsibility, and I'm very excited, especially, to be here, because it's all about fintech-, DB: Mm. RA: And my own background is fintech, so I'm absolutely excited to talk to you today. DB: So, we'll get a little bit more in to the role you're doing now, in a second, but take us through your background. You know, I've-, I've kind of seen you speak a few times, and I've-, I've had a good-, a good, sort of, YouTube stalking session, last night, to-, to see all of the-, the, sort of, background, but you've got an amazing story. RA: Yeah, I mean, it's-, I was born and brought up in India, in a small town in central India, a place called Indore, I grew up there, then I moved to Mumbai, in a small job in a foreign exchange company, and I still remember, I was-, my salary was about 5,000 rupees a month, which is about, sort of, £50 a month. And then, there was an opportunity that I got, to move to London, in 2001, and I was 24 years old, I wanted to see the world, I had never been on a plane before, never been outside India before, and I did not know anybody in the UK, but I just jumped on a plane, came here. And I remember the day I landed at Heathrow Airport, with £200 in my pocket, but I did not feel like a stranger in London, and that is the greatness of London, that you-, it makes you feel at home, regardless of where you are from. DB: Mm. RA: I then worked in a foreign exchange company, for about three years, and then I set up my own business in international payments, long before it was called fintech, and long before it was-, it was cool, but set it up, just with a laptop, and it became one of the fastest growing companies in the country, and here I am now, trying to help others, other entrepreneurs, through my role as the Deputy Mayor of London for Business. So, who would have thought, 16 years ago, when I first landed in London, that I'd end up as the Deputy Mayor of the greatest city in the world? DB: That's just an amazing background story, you know, like-, I mean, you must have very fond memories of landing in Heathrow, you know, that's an amazing, amazing story. I particularly liked one of the stories that you told, about how you funded the-, the startup, in the first place. Can you tell us a little bit more about that? RA: Yeah, that was very interesting. So, I was in this job in a foreign exchange company, and I had this bright idea that, "Why don't we actually take this whole thing online?" and, like most other entrepreneurs, I was just very excited, and I quit my job. And then I realised that I've got no money in the bank account-, DB: [Laughter]. RA: And my visa was going to run out in six months. So, I prepared a little presentation, went to a bank, to ask for a £10,000 loan to start the business, uh, and the answer was no, obviously, so they declined to give me any loan. So, two days later, I went back to the same bank, and I said, "You are right. I should not start my own business. I'll continue in my job. But I'm thinking of buying a car." So, they lent me £20,000-, DB: [Laughter]. RA: To buy the car, and, of course, I never bought the car, because I didn't even have a driving licence, at the time. But we became one of the fastest growing companies in the country, and-, and it's fantastic. So, just for the record, I've repaid all that, uh, loan back, with interest, and I do not recommend anybody using that method of finance, uh, for their business, because it's quite expensive. DB: Yeah, I imagine, yeah-, RA: And, thankfully, we've got a lot more revenues now-, DB: [Laughter]. RA: For financing the business. DB: Indeed. But it's amazing, and that-, and that speaks, I think, a lot to your entrepreneurial background. You know, you find a way to make something happen when you see that opportunity. I think that's, you know, a fantastic origin story. I guess, fast-forwarding to today, tell us a little bit more about the-, what the Deputy Mayor, sort of, role really, sort of, involves, on a day-to-day basis. What-, what is it you do, in this beautiful building? RA: So, it is all about advising the Mayor around business policy, so anything to do with business within, sort of, M25, within Greater London, essentially, is part of my job, um, and as Deputy Mayor for Business, my job is to make sure that the Mayor actually hears the voice of London businesses. And I was, interestingly, appointed six days after the Brexit referendum, so the Mayor is playing a very key role, he's-, the Mayor is lobbying the government on Brexit negotiation, and making sure London business voice is heard in those negotiations. So, I speak to businesses all day long, big and small, from across different industry sectors. You know, in one day, I could be talking to a CEO of a big investment bank, but I could also be-, one day, I remember, I woke up at 4 in the morning, and went to New Covent Garden Market, talking to fruit and flower wholesalers. DB: Mm. RA: So, those are the sort of things I do. I try and speak to a lot of businesses, get their feedback. I also chair London and Partners, which is London's official promotional agency, and they are responsible for bringing foreign investment in London, they promote London, worldwide, for business, for investment, and for tourism-, DB: Mm-hm. RA: So, they are, essentially, also the tourism bureau for London, they run visitlondon.com, but they also run a fantastic programme called the Mayor's International Business Programme, which helps fast-growing London businesses to internationalise. So, essentially, some of these things, and then I've-, you know, we have got a number of initiatives from City Hall, that I look after, to support tech industry, to support startups, to support scaleups, to invest-, we've got our own fund, not many people know this-, DB: Right. RA: That invests in startups. So, all those things is part of my job. DB: That's amazing. I-, I'll-, I'll get in to it, in a little bit, in terms of how you fit all that in to a day, because that sounds like a lot. But I guess some the things that have been happening recently, so we've seen Philip Hammond announce all of the-, the programmes around fintech, particularly, I think that was over the last couple of months, wasn't it, talking about the bridges that we're going to be establishing with various other countries, and the-, the various different appointments. What's your, kind of, take on-, how do you think that'll affect the-, the, sort of, perception of London on a global stage? RA: I think that's absolutely fantastic, because I believe in building bridges and not walls-, DB: Mm-hm. RA: Uh, unlike some other people. So, I think we need to reach out, London is a global city, and we are the fintech capital of the world. Our tech industry is very growing, we are the largest tech ecosystem in Europe, as well. So, it's only right that we actually work with other cities around the world, and build bridges, and making sure we make it easier for entrepreneurs from here to work with other countries, but equally, entrepreneurs in other countries, if they want to come and expand in London, and in the UK, they are able to do that. There's a saying that, if 19th Century belonged to the Empire, if 20th Century belonged to the nation states, 21st Century belongs to the cities, and that is so powerful. Cities are so agile, they are nimble. Cities, to a certain extent, they're like a startup, they can move very quickly, and they don't have a huge amount of burden of, sort of, foreign policy, and things like that, so they can work together a lot more closely. So, we have got a city to city initiative, from-, from here, and we have signed that with a number of cities, to help entrepreneurs, on both sides, to expand. DB: That sounds great. I think, as you say, the-, you know, the city and fintech is, you know, synonymous globally now, you know, I think the-, the work that London has done to establish the regulatory frameworks, to establish the-, the-, the magnets for some of the brightest and best, you know, globally, to come here. How important do you think fintech is to London? RA: Oh, very important. I mean, fintech, if-, if you like, is the crown jewel of London's tech industry. It's very successful, and it's built on the natural strength of London, which is finance. London is a-, is the finance capital of the world, is the banking capital of the world. We've got more American banks in London than there are in New York. We've got more banks than any other city in the world, we've got more insurance companies than any other city in the world. I mean, I come from a foreign exchange background, and in foreign exchange, about $3 trillion are traded every day worldwide, half of which are from-, traded in London alone, every day, $1.5 trillion are traded in the city of London. So, fintech, essentially, is building on those core strengths, uh, and it's really the crown jewel of London's tech industry, and-, and it's-, it's got the potential to grow so much. I mean, fintech is so much talked about already, but I believe that we are only scratching the surface. There's so much more to be achieved. DB: I agree with that, completely. I guess, you know, you mentioned you were appointed, was it six days after the Brexit was announced? How do you think that could potentially affect the-, the, sort of, London ecosystem, with regards to fintech? You know, there's lots of talk about, you know, Luxembourg, and different places, coming to-, to try and attract talent to-, to, sort of, various different locations, but I think particularly on that, sort of, brain drain side of things, what-, what are we doing to-, to combat that? RA: Well, I'm very clear that London is a successful city partly because it's got amazing talent. I mean, that's the number one reason. And I speak to investors from around the world, they come to London because they will be able to find talent in London, regardless of the industry that they are in. So, it's very important for London to remain open, and that's why we launched the campaign London Is Open, straight after the referendum, because I think that message is very important to the world. And the Mayor has also published a white paper on immigration, making it very clear that London has benefited significantly from talent from all around the world. In the tech industry, particularly, almost 55% of London's workforce in the tech industry are overseas born. DB: Yes. RA: So, it's hugely international. So, on our immigration white paper, we made it very clear that there is still a case, if the government wants, to have qualified freedom of movement for people-, DB: Mm-hm. RA: Because I know of many entrepreneurs, from Europe, who came to London and started their business here-, DB: Yes. RA: Equally, a lot of London-based fintech firms have expanded in to Europe, as well. So, we benefit a lot from being part of that, and we need to remain open. So, whilst Brexit poses its own challenges, I've got no doubt in my head that London will continue to be the fintech capital of the world. DB: Mm. Well, it-, it definitely doesn't appear, at this stage, to have dramatically affected-, you know, we're-, we're not seeing swathes of investment leaving, we're not seeing swathes of companies moving abroad, and I think the-, the opportunities that presented themselves, you know, pre-Brexit, with regards to the, you know, the financial ecosystem, and all of the-, the talent that's here, and-, and really the-, you know, the problems within some of those big organisations that need fixing, then, you know, all of those things are still as relevant as ever, aren't they? So, it feels like, exactly as you say, it feels like there's a long-term objective within London for fintech. But, I guess-, RA: And this is not just in rhetoric. It's actually also in numbers. DB: Mm-hm. RA: In 2017, we had nearly £3 billion going in VC investment in the UK. Almost half of it-, DB: Mm-hm. RA: Actually just went in fintech, of which 90% was within London. DB: Yes. RA: I mean, if you look at the Fintech 50 list, 31 out of 50 companies are London-based. DB: Yes. RA: So, it's-, you know, and-, so, the-, so, the investment has-, is still growing, still happening, I mean, you look at the big tech firms, like Google and Facebook, they've continued their investment here, VCs have continued their investment in London, so I've got no doubt in my head that London will continue to thrive. DB: I completely agree. I guess the-, on the other, sort of, end of the spectrum, I mean, in terms of talent, we're seeing, increasingly, sort of, more and more younger people coming in to fintech. You know, as you say, you know, fintech is such a, sort of, sexy subject right now, that really everybody wants to-, to, sort of, be involved in, given the large scale of opportunities, and actually the-, you know, the relative impact that can be made very quickly. Do you think we're doing enough to really, sort of, educate people about, you know, being an entrepreneur, yourself, the realities of being an entrepreneur, and the-, you know, the-, the, sort of, fantasy of being Steve Jobs, or Elon Musk, or-, you know, the realities on a day-to-day basis are very different, aren't they? Do you think we do enough to prepare young people to, you know, really get in to, you know, entrepreneurship right now? RA: I think there are two things, right? One is the skills, the, sort of, technical skills, where-, you know, the digital talent, as it were, and we are doing a lot, we are investing significantly to-, to make sure that the young people have got talent, the right kind of skills, not just for the jobs of today, but for the jobs of tomorrow. DB: Mm. RA: But, apart from that, there's the entrepreneurial culture, which is very important, and London is a very entrepreneurial city. And, with regards to entrepreneurship, I'm often asked, "Do you think entrepreneurship can be taught, or not?" and I say, "I don't know if it can be taught or not, but it can be caught-," DB: Mm. RA: "Like an infection." DB: Yes. RA: So, if you create an environment which is entrepreneurial, you know, there are people who want to go on that journey, but if they come across more entrepreneurs, if there are role models-, DB: Mm. RA: Then certainly that helps the entire ecosystem. And-, and that's why we need to-, we need to create that. So, when the, sort of, Old Street, and the Shoreditch, uh, area started developing, I remember one of the very popular things was, at the Old Street Roundabout, was the Old Street, sort of, "drinkabout", the Silicon Drinkabout. Uh. It's about creating that environment, but also providing support to-, to startups, by the way of funding, by the way of opportunities to network, by the way of providing them mentoring, and all those sort of things, and those are some of the initiatives that we are doing, from the Mayor's Office, to-, to provide to young people, and to young entrepreneurs. DB: Yeah. Yes, as you say, it really does feel like there is a-, such a vibrant community here, it doesn't feel-, exactly like you said, it doesn't feel like somebody is trying to win at the cost of other people losing, which is fantastic. You know, I've-, I've experienced it first hand, actually, people offering lots of support for different, you know, CEO to CEOs, advising-, you know, one startup challenger bank to another startup challenger bank, or, you know, one payments company to an FX company. So, you know, that, kind of, London growing together, sort of, positivity, it feels, um, very unique, I'd say, so. I guess one of the other topics that is, you know, really important today, and, actually, we're seeing a lot of press about, is gender diversity. You know, there's lots of statistics coming out about inequality of pay, in terms of the-, uh, the different levels that people can achieve, but do you think we're doing enough to-, to really address some of those concerns? RA: We need to do more. I mean, I-, you know, this is the year 2018, exactly 100 years since some of the women in this country got-, first got voting rights. DB: Mm. RA: It's hard to believe that 100 years ago, women didn't even have voting rights in this country. DB: Yes. RA: We've come some way since, but we've got a very, very long way to go, and we have to lead by example. I'm a proud feminist. Sadiq Khan, the Mayor of London, he's a proud feminist, as well. So, the first thing we did, when we got in the office, the Mayor ordered gender pay gap audit across the GLA organisation, Greater London Authority organisation. And the Mayor, directly and indirectly, employs about 80,000 people, which is about 1.4% of London's workforce-, DB: Mm-hm. RA: Through the Metropolitan Police, and TfL, and Greater London Authority, London Fire Brigade, and so on. So, you have to lead by example. So, first of all, we ordered gender pay gap audit, published it, you need to bring transparency, you need to bring issues to light. DB: Yes. RA: We have also recently published the ethnic pay gap audit, as well, and I hope other organisations will follow suit. Of all the Deputy Mayors, more than half are women. We've got a fantastic business advisory board, full of entrepreneurs, about 16 people on the board. 10 are women. So, we've got amazing, talented women in London, we just need to make sure that they get the right support-, DB: Mm. RA: And so on, and we have to lead by example. Interestingly, we are sitting here today, because if you look at the Parliament Square just outside Parliament, there are statues of some fantastic, great men. Mandela, and Gandhi, and Churchill, and so on. But all men. DB: Mm. RA: All fantastic, great, but all men. These are about ten statues in there, but all men. So, if you are a little girl, growing up in London, there are not as many great women statues. DB: Mm. RA: So, we need more role models. DB: Yes. RA: So, in fact, later on, sort of, next week, we'll be unveiling the first ever woman statue on Parliament Square-, DB: Wow. RA: Of Millicent Fawcett. It's fantastic. I mean, these are some symbolic changes, but we need changes at all levels, symbolic, at policy level, and at cultural level, and we need to promote diversity at all levels, and lead by example. So, for the first time in the history of Metropolitan Police, we've got a female Police Commissioner. DB: Mm-hm. RA: First time in the history of London Fire Brigade, we've got a female Fire Chief. These are great examples, but we need to do more in-, in tech. I mean, you know, in tech, I think we need more-, more diversity, and for that reason, we are funding Ada College-, DB: Mm. RA: Which is the college for digital skills, which will particularly focus on young people from underprivileged backgrounds, and women, to make sure they've got the right kind of digital skills. DB: That's fantastic. It's-, like you say, it requires radical change, doesn't it? You know, this is not just a-, an audit and some numbers, this is changing things, and making things happen, and I completely agree with you, I think it's-, it's not just in the boardroom, or, you know, in offices, but changing people's aspirations. So, you know, statues, as you talk about, really, you know, from, you know, my daughter seeing somebody who she can aspire to be, you know, that's where it needs to begin, doesn't it? So, it's-, it's fantastic to see that level of change. I guess, speaking of change, you know, given all of these movements, given all of the things that are happening, in London, and globally, how do you see the fintech scene changing over the next, sort of, couple of years, with-, with everything that's going on? RA: I think there's a huge potential in fintech. I mean, we-, we are building on our core strengths, but it's still early days. I mean, if you look at the, sort of, regulatory tech-, DB: Mm. RA: You look at the insurance tech, it's-, we've still got a long way to go. So, the payment tech, which is the industry I come from, was one of the early ones which, sort of, disrupted in the, sort of, FX world, and in the payments world, but there is a lot more to go. So, I think the fintech industry will continue to grow, with-, with a huge amount of potential. I also think that there is a big opportunity for a lot of London and UK firms to expand internationally, and lead the way, because our regulators are very progressive. DB: Mm. RA: That has certainly contributed towards growing the industry, but not all countries are exactly in the same boat, so I think London and UK tech firms can lead the way around this, so, I'm definitely very excited what it has to offer. But also let me talk about-, when I say "fintech", it's not just a big commercial opportunity, but I think it's all something that will contribute significantly to the society, by providing a good service. Whether it's the numeracy, whether it's the financial inclusion, it can play a very key role. And-, and we can internationalise, and we can target some of the countries where it's an even greater challenge-, DB: Mm. RA: But financial inclusion is-, is a big thing. Financial literacy is a big thing, as well. So, I think, on some of those things, fintech is very good. In fact, one of our initiatives is called Tech Invest, where we are bringing startups and angel investors together, so we do five events a year, we'll do it for the next four years, and every event is themed at a different topic. So, we did one for AI, one for virtual reality, augmented reality, one for smart cities. So, there will be one coming up soon for-, which will be themed on fintech for good. DB: Brilliant. RA: We are also about to launch a civic innovation challenge, which would be an annual thing, but we'll be launching the first one, and again, one of the prizes would be for fintech for good, which is very important, because fintech can truly make that difference. I mean, it-, in payments, for example, if you consider remittances, $550 billion every year gets transferred from developed countries to developing countries-, DB: Mm. RA: Which is three times more than the global foreign aid budget. DB: Mm. RA: If we are able to reduce the cost of those transfers, billions of more dollars will reach every year to some of the poorest parts of the world. So, that is an example where fintech can truly help the society. DB: Yeah, without doubt. Fintech for good. I like-, like the idea of that. Closing out with a few questions about-, about you. So, you know, there's obviously a big team here, and-, and you've got lots of experience managing teams in the past, with your companies that you've-, you've run, but how do you go about motivating your team? What's the-, what's the way that you go about that? RA: Well, we all come from very diverse backgrounds here, different nationalities, from different parts of the world, and so on. But one thing that binds us here, especially in City Hall, and here at London and Partners, is our love for London. We absolutely all are very passionate about London, and that motivates us. That is the, sort of, binding glue between-, between us. And that motivates us, too. We want to help entrepreneurs, we want to help London, we are all very proud Londoners, and-, and that is the number one thing. DB: Very nice. What-, I guess, over the course of your career, you must have had lots of people give you advice, but what's the one piece of advice that really, sort of, stands out, that somebody's given you, as-, either from way back when you landed in Heathrow, or-, or to-, to what you're doing today? RA: The one thing I've always done in my life is never be shy of trying. Sometimes, there are people who'll say, "Don't-, don't do this, don't do that, you won't be-," when I-, I remember when I was-, when I was first time coming-, coming to London, I had a lot of people, a lot of my friends say, "Oh, nobody from your family has ever been abroad!" I said, "So what? I'll be the first one." Then I started my business, and I know all my, sort of-, a lot of people around me said, "Oh, nobody from your family has ever done business before. How are you going to do it?" I said, "So what? I'll be the first one." Then I joined politics, and everybody said, "Nobody from your family has ever been in politics!" I said, "So what? I'll be the first one." So, never be afraid of being the first. DB: Mm. RA: And-, and-, just-, just go for it. If you've got 100% conviction, that is the most important thing, because if you are not convinced, yourself, how are you going to convince your customers, your investors, your partners? So, conviction is very important. DB: Fantastic. Well, thank you very much for spending the time today, I know you're a busy man, but thanks for coming in and talking on Fintech Insider. RA: You're very welcome. Thank you. END OF AUDIO 00:25:02 END OF TRANSCRIPT