Tech policy newsletter: FinTech Week recap, UK policy lookahead & COVID-19 developments

WHAT THE TECH? Cicero/AMO / April 2021 Hello!

Welcome to the first What the TECH? of 2021. What the TECH? is Cicero/AMO’s quarterly newsletter focused on all things tech and FinTech.

Having recently joined the Cicero/AMO team, as Head of FinTech, I am thrilled to be your new editor for this newsletter - and very much look forward to bringing you all the latest news shaping technology and public policy in the UK. So, onto this edition. With Brexit delivered, and the so-far successful vaccine rollout making the prospect of a post-COVID world seem possible, the Government is grappling with its domestic policy programme.

In the past month alone, this has included a Spring Budget, a wholesale review of the UK’s foreign policy, and multiple policy consultations and announcements.

In this update, we look at how tech has been put at the forefront of the economy, the military, and the COVID-19 response. We also delve into the world of FinTech, which is now seen as key feature of the UK’s future competitive advantage, and into the controversial impact of social media on retail investors.

As ever, we hope you enjoy our thoughts and insights. If you wish to discuss anything you’ve read here further or want to see how Cicero/AMO’s tech team might be able to support your business, please get in touch.

By Sameer Gulati Head of FinTech sameer.gulati@cicero-group.com

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Contents Click the title links to navigate to each article

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Tech at the forefront of Government policy: Tech in Government: A recap and look ahead at what’s to come

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By Juliet Bevis, Technology Specialist

Tech in COVID-19: Vaccines and passports

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By the Cicero/AMO tech team

Lobbying Government: The Greensill saga

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By Sameer Gulati, Head of FinTech

FinTech as the future of financial services: UK FinTech Week 2021: Five key takeaways

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By Sameer Gulati, Head of FinTech

FinTech as a key source of UK competitive advantage

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By the Cicero/AMO tech team

What is StockTok and why might it be a problem?

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By James Donald, Head of Digital

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Tech in Government: A recap and look ahead

By Juliet Bevis, Technology Specialist 2021 has seen the Government look to reassert control of the domestic agenda and paint a picture of a post-COVID future, with numerous set piece fiscal and policy announcements. From the Spring Budget to the Integrated Review of Security, Defence, Development and Foreign Policy, it is clear that the Government views tech as a priority area. We also look forward to the Queen’s Speech on 11 May, where we expect the Government to set out further clarity on what its legislative agenda has in store for the tech world.

The Budget Delivering the Spring Budget 2021 to Parliament, the Chancellor outlined a three-part plan to protect jobs and livelihoods, begin fixing public finances and build the future economy. Setting out the Government’s agenda in the face of significant economic scarring and social disruption as well as the ongoing health emergency, it was no surprise that the Budget was still very much focused on the pandemic, as evidenced by the extension of several COVID-19 support schemes.

Nevertheless, the Budget did showcase the importance of tech in delivering the Government’s ‘Build Back Better’ agenda, especially as tech has been identified as a key source of the UK’s competitive advantage in the future. The funding allocated to enhance digital skills is intended to increase productivity and these skills will play a key role in the economic recovery. In addition, visa reforms will allow the UK to attract and retain global talent, ensuring organisations can maintain their access to the global market and recruit world class talent who will help drive innovation and accelerate growth.

This is coupled with a Help to Grow scheme to increase SME productivity, reforms to visas to allow for increased high-skilled immigration, and the introduction of a £375m ‘Future Fund: Breakthrough’ to drive investment in the most innovative, R&D-intensive businesses.

The Integrated Review The Government published its Integrated Review of Security, Defence, Development and Foreign Policy, which had been billed as the biggest review of the UK’s defence and security since the end of the Cold War. Outlining the Government’s aim to become a “Science and Technology Superpower” by 2030, the Review recognises these aspects as an integral element of national security and highlights the shift away from “traditional” capabilities of warfare. Defence capabilities which were once defined by the number of tanks, ships and troops, that defence ministers could have rattled off at the drop of a hat, will now be measured by the Government’s science and technology capabilities.

Cyber and Aritificial Intelligence (AI) are thus a clear priority. The Government has committed to improving the supply of AI talent and boosting high level skills, including through the Turing AI fellowship - an initiative created to support researchers to lead innovative and creative 3

AI work with transformative impact. In addition, the Government has committed to increasing investment in AI research and innovation; supporting the effective and ethical adoption of AI and data technologies; and identifying international opportunities to collaborate on AI R&D, ethics and regulations. The Government is also reviewing its AI needs for the next decade and has committed to publishing a new AI strategy. With regards to cyber, the Government has stated that it will adopt a comprehensive cyber strategy and deepen the relationship between government, academia and industry; take the lead in the technologies vital to cyber power, such as microprocessors, secure systems design, quantum technologies and new forms of data transmission; and build seamless systems to detect and act with industry on cyber threat information.

Ten Tech Priorities Unleashing the transformational power of AI also forms a key tenet of the Government’s broader tech priorities, as set out by Department for Digital, Culture, Media and Sport (DCMS) Secretary Oliver Dowden MP in March 2021, alongside: rolling out world-class digital infrastructure; unlocking the power of data; building a tech-savvy nation; keeping the UK safe and secure online; fuelling a new era of start-ups and scale-ups; championing free and fair digital trade; leading the global conversation on tech; levelling up digital prosperity across the UK; and using digital innovation to reach Net Zero.

Local Elections On Thursday 6 May, now otherwise known as ‘Super Thursday’, voters across England, Scotland and Wales will head to the polls to cast their ballots in local and devolved elections. While local elections are traditionally associated with policing, transport, and housing policies, the publication of the new London Tech Manifesto by trade organisations and think tanks hoped to focus the attention of London mayoral candidates on the tech industry.

Authored by London Tech Advocates, techUK, London First, Here East, Plexal and Centre for London, the manifesto includes 12 policy recommendations for the next Mayor of London. The recommendations include the introduction of a Digital Skills Strategy to ensure that all Londoners have access to digital skills and to ensure investment for home-grown talent. This recommendation is further reinforced by a 2021 report from the Learning & Work Institute which found that over one in three employers said their workforce does not have the advanced digital skills required and that since 2015 the number of GCSE entries in computing or information and communication technology has declined by 40%.

Other recommendations call for the Mayor to champion tech companies to drive London’s long-term economic recovery and establish initiatives that attract entrepreneurs and investors to all boroughs within London. Furthermore, it is suggested the Mayor also target investors from around the world to invest in London’s tech companies and digital infrastructure. London remains a leading investment destination within Europe, with tech companies based in the city receiving £7.6bn of venture capital investment in 2020 according to Tech Nation, compared to £2.8bn and £2.15bn received by firms in Paris and Berlin, respectively. Despite this, the city has some catching up to do globally if it wants to compete with the likes of Beijing and San Francisco.

The London Tech manifesto points out that any future Mayor should also stimulate cross-city collaboration across the UK and work to strengthen the relationship between London and other UK tech hubs to encourage investment, knowledge exchange and job opportunities. This would represent an important element in supporting the Government’s levelling up agenda. Importantly, it is also suggested the Mayor should campaign for an immigration system which presents London as globally competitive and a destination for international talent. The Mayor and City Hall must also work with the Government to establish an immigration system that meets the needs of tech companies. While the announcement at UK FinTech Week by the Chancellor Rishi Sunak MP of a ‘scaleup’ visa to help the UK access the global talent it needs was welcome, further action is still required to help plug the existing talent gaps in the tech industry.

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The Queen’s Speech May also brings with it the State Opening of Parliament, with the Queen’s Speech on Tuesday 11 May setting out the Government’s agenda for the next parliamentary session. In terms of what to expect, the Government has already confirmed that it will introduce legislation to improve the building safety regulatory regime, repeal the Fixed-term Parliaments Act and reform the asylum system. In addition, the Police, Crime, Sentencing and Courts Bill, the Environment Bill and the Armed Forces Bill will be carried over from this parliamentary year.

Apart from releasing an official statement on the matter at the end of March, the Government has been unusually tight lipped on the contents of the speech, although reporting of some legislation, for example a new Bill to counter hostile states, has made its way to the pages of national newspapers. As a result, relatively little is currently known about the Government’s specific legislative agenda for the next year. For those of us who are tracking tech policy, it looks as though it will be a case of wait and see.

One piece of legislation that many will be looking out for is the Online Harms Bill. Following increased concern about harmful activity and content online, the Government published an Online Harms White Paper in April 2019 which argued that existing regulatory and voluntary initiatives had “not gone far or fast enough” to keep users safe. The White Paper set out legislative and non-legislative measures to make companies more responsible for their users’ safety online, and the accompanying consultation closed in July 2019. Fast forward to December 2020 when the Government published its response to the consultation, confirming that Ofcom would be appointed as the regulator for online harms and that a duty of care would be introduced.

Despite saying that legislation will be ready this year, there is still no official timeline in sight. It is also worth noting that in June 2020, Minister of State for Digital and Culture, Caroline Dinenage MP, said that as a result of COVID-19 the Government “would not commit to bringing a draft Bill to Parliament before the end of 2021”. If the Queen’s Speech does not provide clarity on this policy matter, it will raise serious questions for the Government including, if not now, when?

By Juliet Bevis Technology Specialist juliet.bevis@cicero-group.com

Next article: Tech in COVID-19: Vaccines and passports

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Tech in COVID-19: Vaccines and passports By the Cicero/AMO tech team The Government’s relationship with tech in COVID-19 has been… fraught, particularly in the early stages of the pandemic. What with the unbalanced schooling algorithm and multiple attempts at a functioning Test and Trace app, and a barely functioning Trace system more broadly. And there was also a moment where we all had to write down our phone numbers in books outside of restaurants and pubs, which led to a series of quite terrible privacy infringements.

But What the TECH is delighted to report that there has been somewhat of an about-turn in its delivery. The UK is known to be world leading in scientific research, and though its health regulators are known for being stringent, they are also globally respected. And they have so far delivered, developing and approving vaccines in record time, whilst taking the early and controversial decision to delay the second dose, which was later recommended by the World Health Organization (WHO).

Delivery and dissemination have similarly been a renowned success.

Over 33 million first doses have been administered, alongside over 13 million second doses. While the pace has slowed from a previous daily average of just under 500,000 doses per day, the initial rollout can only be lauded.

So, what has driven this shift in the Government’s fortunes? There are a multitude of reasons for the difference between Test and Trace and the vaccine rollout. One aspect which may speak to the respective failures and successes is the centralised nature of the Government. Another engaging ‘working theory’ – put forward by Robert Colvile, Director of the Centre for Policy Studies – is that the successes were largely down to the Government’s upkeep and utilisation of various databases.

The other significant technological development to (potentially) soon grace our daily lives are COVID-status certifications (otherwise known as vaccine passports). They present another fraught topic, and one that cuts across various technological, legal, and ethical issues. The concept is simple: prove if you have had a vaccine or are COVID-free, and be allowed entry into specific settings or to travel. There is nearglobal acceptance of the latter – international travel – based on the existing precedent of ‘proof of vaccines’ that are already required.

But the domestic use is more controversial, particularly within settings such as pubs, shops and public transport. This debate has moved quickly. Ministers were keen to dispel the idea just months ago, but have recently changed their tone, suggesting they will play a role in the next stage of the recovery, particularly when it comes to the running of large events. Trials thus began this month, albeit in a relatively rudimentary form, with an integration with the existing NHS app expected.

This shift in approach is likely due to the significant public support for some form of certification if it enables a swifter return to ‘normality’ than would be possible without such technologies. Polling from YouGov found that 61% of the public supported the idea of certifications,

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compared to 25% opposed, and this has remained steady. Indeed, the cabal of Conservative MPs holding to the ‘civil liberties’ line may be loud, but they find themselves increasingly isolated. Labour, for that matter, has expressed concern over their widespread use but support the concept in specific circumstances, such as international travel and events.

Source: YouGov We will admit to previously being sceptical of the Government’s willingness to officially endorse and develop such a controversial and largely untested new technological solution, particularly after the difficulties covered at the beginning of this section. But it does seem minded to do so, albeit with uncertainty over the exact proposals. The really interesting question is where this goes next. Is it a time-limited initiative to manage the transition back to ‘normality’? Or does it open the door for the realisation of a long-term Government ambition – the development of a modernised and mandated national ID system of the kind Boris Johnson opposed so vehemently in the past?

Next article: Lobbying Government: The Greensill saga

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Lobbying Government: The Greensill saga

By Sameer Gulati, Head of FinTech It was during a Party conference speech in 2010 that the future Prime Minister, David Cameron, predicted that “lobbying” was Britain’s next big scandal. As the papers have almost unanimously reported these past few weeks, little did he know then that he would be the centre of a story raging at the heart of British politics today.

To mention in detail the web of interactions which have resulted in several inquiries, including independent and parliamentary investigations, is beyond the scope of this article, however it is worth briefly summarising the state of play.

In August 2018, David Cameron became a part time advisor to Greensill Capital (a FinTech firm focused on the provision of supply chain financing). Fast-forward to March 2020, with COVID-19 very much centre stage, Cameron lobbied ministers to help position Greensill as a means to support British businesses through this exceptionally difficult period. Part of his lobbying agenda was to allow Greensill to issue government-backed loans as part of the Corporate Covid Financing Facility (CCFF). Although ultimately unsuccessful, during this time David Cameron sent text messages to Chancellor Rishi Sunak, as well as making representations directly to the Bank of England and Treasury officials.

Perhaps most personally damaging to the former Prime Minister, and as revealed by The Times and Financial Times, is the access afforded to Lex Greensill (CEO of Greensill Capital) as an unpaid Advisor to David Cameron whilst in office, as well as the reportedly £60m worth of shares Mr Cameron had in the company. The web thickens with a senior civil servant moonlighting as an Advisor at Greensill Capital whilst simultaneously on the civil service payroll, private drinks with the Health Secretary Matt Hancock, and a trip by David and Lex to Saudi Arabia - to meet Crown Price Mohammed bin Salman on behalf of Greensill Capital.

Looking at the letter of the law, whilst David Cameron has issued a statement admitting that he should have contacted the Government “through only the most formal channels”, he has denied breaking any codes of conduct and rules on lobbying. And herein lies the issue.

As Iain Anderson, Executive Chairman of Cicero/AMO recently highlighted in the Times, Transparency International estimated that the new lobbying rules put in place by David Cameron’s own Government in 2014 capture about 20 per cent of the lobbying that takes place.

“That means 80 per cent of the lobbying that comes from trade bodies, think tanks, in-house lobbyists, charities and trade unions is not being disclosed on a statutory register”.

This is not an indictment on the entire lobbying industry. We know that taxpayers need to get the very best value and ideas from the

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Government of the day, and indeed that Government ministers and officials must ensure policy is practical by speaking with the outside world. This is however an issue about the transparency of that lobbying.

For a long time now, commentators have suggested fundamental reform is needed to the UK’s statutory lobbying register, such that it covers the activities of consultant lobbyists, as well as those working inhouse - regardless of whether those approaches are made from trade associations, think tanks, charities or ex-Prime Ministers.

As Iain states, now more so than ever, Britain must adopt a “register of lobbying, rather than lobbyists”, for the integrity of decision-making in public office and the trust we hold in an open and fair democracy may be the price we pay for inaction today.

By Sameer Gulati Head of FinTech sameer.gulati@cicero-group.com

Next article: UK FinTech Week 2021: Five key takeaways

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UK FinTech Week 2021: Five key takeaways

By Sameer Gulati, Head of FinTech UK FinTech Week 2021 once again precipitated a number of announcements for the UK’s burgeoning financial technology sector.

However, perhaps more so than other years - as we eagerly anticipated the Government’s response to the Kalifa Review - the week promised to mark itself as a defining point for the future of the sector.

Here are my five key takeaways from the week (though should you be in the market for a more detailed session-by-session account, see my Twitter thread here):

1. An Inflection Point for UK FinTech?

With the Kalifa Review of UK FinTech having landed, and the Government subsequently setting out its response in a written ministerial statement, it’s clear HMG sees FinTech as the future for a new chapter for UK financial services, with a focus on being more open, greener and technologically advanced.

We saw a number of announcements during the week, including: a HM Treasury/Bank of England taskforce on digital currencies, the scaleup visa, and a Financial Conduct Authority (FCA) Regulatory ‘Scalebox’ - more info on both here. Further still, my former colleagues at the UK Department for International Trade (DIT) announced two new initiatives: the FinTech Academy, and FinTech Champions – read more here.

As review chair Ron Kalifa highlighted, the scale of the opportunity is huge: the global FinTech market is set to treble to £380bn by 2030, and the UK already has 10% of global market share - with hopes that a new Government-backed Centre for Finance, Innovation and Technology (CFIT) will nurture the UK’s continued comparative advantage in FinTech.

2. Keep Calm and Carry Crypto From the mood music coming from policymakers it looks as though we may be reaching (or have reached?) a tipping point on cryptoassets in the UK. Whilst some stressed the need for regulators to bring a sceptical mind to inquiry, and to always protect consumers – they likewise cannot have a bias in regulation to the familiar.

The Bank of England (BofE) also seems bullish on the future need to regulate cryptoassets (see BofE consultation here). The rise in consumer adoption of crypto is driving regulatory pressure and change, as well as being seen (at least by the retail investor) as a means to diversifying their investment portfolios.

On Central Bank Digital Currencies (CBDCs) - a very high priority at the Bank of England – there was general consensus that we need to understand what we want from a CBDC (scalability, trust, security), and for what use cases (financial inclusion, payments etc.) before choosing a technology which fits those needs.

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3. Return of the SPAC Rishi Khosla, CEO of OakNorth said “we have seen continuous amounts of capital available, with the last six months driven by Special Purpose Acquisition Companies (SPACs), and the fear of missing out of SPACs fuelling the market rather than pure venture and private equity.”

But as others have pointed out is the (socially distanced) party about to end? As the Global IPO Innovations panel suggested, the big concern with SPACs is around the process. Investors are asked to look at a company and base their decisions on “one meeting, in one week”, raising the question if SPACs are getting to the market too quickly?

As Adam Walham, Head of Equity Capital Markets (Europe) at Fidelity put it, “it takes months, and maybe years, to get a company public-market ready.” Ultimately taking advantage of a vehicle to abstract from learning to go public might just be a PIPE-dream.

4. The Future of Finance will be Embedded “Open Banking in the UK has shown that security can be built right into the heart of the infrastructure”, as Imran Gulhamhuseinwala, Implementation Trustee at Open Banking, remarked. Moreover, the combination of technology architecture and regulations have promulgated an exciting ecosystem of regulated actors. As a result, the UK now has 300 regulated third party providers (and a pipeline of 400 more) – this is more than the rest of Europe combined.

So where does this leave us? As Freddy Kelly, CEO of Credit Kudos put it, “this intersection of regulation and market change is a massive drive towards embedded finance, and transacting at the point of checkout … as the FCA looks further at what other (smart) data needs to be shared, Open Finance will be the bow that ties all these things together.”

5. Britain’s Got Talent (or has it?)

We are getting to a stage within the UK tech ecosystem where, as the scale of our collective ambition increases, and as more entrepreneurs build large scalable businesses, we are likely to see the re-circulation of talent generate further positive spin-off effects for the UK economy.

However, we must continually add to this pipeline (both domestic and international) to ensure we plug any talent gaps in the UK. As June Angelides MBE, Principal at Samos Investments noted, “female-founded FinTechs account for only 17% of the UK’s total venture capital investment in FinTech” and black founders have been found to systematically lack access to networks, or institutional investors.

Given that we are in a global race for talent, it was no surprise to hear from the Economic Secretary to the Treasury, John Glen MP, that the UK Government is committed to doing more, whether that is: looking closely at FinTech Apprenticeships, powering mentorship opportunities, and flexible incentives or continuing to invest in the development of skills.

I think it’s safe to say that this year’s UK FinTech Week has shown a path forward for the industry, but in doing also recognises the myriad steps which need to be taken to ensure the UK remains at the forefront of financial services innovation.

By Sameer Gulati Head of FinTech sameer.gulati@cicero-group.com

Next article: FinTech as a key source of UK competitive advantage 11

FinTech as a key source of UK competitive advantage By the Cicero/AMO tech team There is significant uncertainty regarding the UK’s approach to financial services post-Brexit. Early on in negotiations it became abundantly clear that the sector was not a priority, and the subsequent lack of provisions in the Trade and Cooperation Agreement and accompanying documents came as no surprise. Of course, the recent completion of a Memorandum of Understanding is welcome – talking is better than not talking – but falls far short of any type of comprehensive mutual market access, which was once seen as a minimum for the sector.

Beyond the Government and Central Bank’s clear prioritisation of regulatory autonomy over market access, the Government has made clear that FinTech has the potential to be a core source of competitive advantage post-Brexit. This ticks the box of a potential area for divergence in an effort to drive competitive advantage, as the EU is doing likewise across other aspects of financial services.

This dynamic was clear in the publication of two foundational reviews published recently: the Strategic Review of UK FinTech, undertaken by Ron Kalifa, and Lord Hill’s Listings Review. And as set out above, UK FinTech Week has revealed further information on the Government’s next steps.

• The Kalifa Review: Whilst the Government is keen to bolster the FinTech sector, much still needs to come out in the wash following the publication of the Kalifa Review. That being said, the Chancellor confirmed his intent to reform the visa system to attract the best global FinTech talent; welcomed the FCA’s development of a regulatory scale-box; and backed the formation of an industry-led Centre for Finance, Innovation and Technology.

• The Lord Hill Review: In parallel to the Kalifa Review, the publication of Lord Hill’s Review of the UK listings regime has equally spurred the Government into action with the Chancellor confirming the intent to remove the double volume cap and share trading obligation. While he said the UK would maintain the “highest possible regulatory standards” in doing so, the overarching objective here is clear: competitive advantage. A subsequent written ministerial statement confirmed the Government would also publish its first annual ‘State of the City’ report to Parliament in 2022, and conduct further reviews of the UK prospectus regime and capital raising processes.

Growth vs. consumer protection Amid all this discussion of bolstering competitive advantage and driving economic activity, there is an obvious counterpoint – what

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of the simultaneous drive to improve consumer and investor protections? Indeed, to take the issue of SPACs, for which the Government is increasingly enthusiastic, are not exactly known for their clarity and propensity for strong and sustainable investor returns. And this tightrope is one that the Government must tread carefully. See below James Donald’s piece on the increasing role of social media in driving investment activity, and there is an ongoing political debate on whether financial promotions should have a place in the Government’s pending online harms legislation.

Next article: What is StockTok and why might it be a problem?

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What is StockTok and why might it be a problem?

By James Donald, Head of Digital When you think of TikTok it may be lip syncing videos and dances that spring to mind, or #CatsOfTikTok (currently 40.9 billion views). But there’s much more to a platform which hosts an increasingly diverse range of interests, including a growing number of amateur investors who have discovered investing through apps such as Robinhood.

Do you know what it means to double your stimmy? If so, you’re probably already familiar with the world of StockTok, also known as FinTok. For those of you that are not, let me explain. StockTok videos are about investing, or more specifically getting rich. Videos range from investment advice to explaining stock market terms, to simply bragging about how much money you have made.

Scrolling through StockTok and FinTok videos there are some obvious recurring themes. “Stocks that will double in 2021”. “How to double your stimmy” (US government stimulus payment). “If you invested $X in this stock one year ago you’d now have $X” (Tesla is a common recurrence here). Promises of massive financial gains from minimal effort. This is not a place for diversified portfolios or warnings that past returns are no guarantee of future performance.

TikTok Investors on Twitter documents some of the more spurious advice. In one video that was widely circulated in January, “Chad and Jenny” detail how they “fund their lifestyle”. Chad explains that he trades stocks on Robinhood, and that investing may sound intimidating but it’s actually really simple. He sees a stock going up so he buys it, then he watches it until it stops going up and he sells it. Genius! In the previous month this strategy had seen him turn $400 into over $14,000. Why isn’t everyone doing this?

In this case, the backlash was swift and the video soon deleted. The problem is Robinhood’s and FinTok’s growth have coincided with a period of strong market performance since 2019. Markets suffered badly at the beginning of the pandemic, but soon bounced back. The S&P 500 hit all time highs in late 2020 and early 2021, this rebound meant there was money to be made. When markets are going up everyone is an investment genius.

This has come at a time when people have been forced to spend more time at home than ever and are looking for ways to pass the time. They see videos promising massive returns, and evidence that people have made thousands of dollars. But what happens when markets head in the other direction?

That’s the risk.

TikTok investors speak in convincing language, using terms that make it sound like they know what they are talking about. Sure, turning 14

$4,000 into $1 million in eight weeks simply by doubling your money every week is obviously ridiculous, but others are more convincing to those new to this.

If an individual started investing in April last year they’ve only seen markets going up and have evidence of the money they have made. There’s always an audience for people telling you how to make quick and easy money. A young person with no investment experience might well trust them. What’s risky about investing in Tesla? Elon Musk is the richest man in the world after all.

We saw it with the Reddit driven increase in GameStop’s share price. People saw the price going up, they heard of the incredible returns and the money people had made in a short space of time. They wanted a piece of it. Stick it to the hedge funds and make money from it. Win win. But they invested too late. They jumped in at the top, and they lost money. There is a danger that people could be drawn in only to lose money they can’t afford to lose.

What can be done about it? In the UK, investment firms and platforms have to warn in their marketing that investments can go down as well as up and past returns are no guarantee of future performance. It is next to impossible to regulate what people are saying in their videos which are being viewed all over the world, which means it is only TikTok itself which can act here. The pandemic brought about a change in approach from Twitter and Facebook, who became less hesitant to post warnings of misinformation and introduced COVID-19 information hubs. Perhaps TikTok could include its own warning about the nature of investments on any video posted with #StockTok or #FinTok, or even create a financial information hub with some real, sensible investment advice. TikTok’s users are predominantly in the 18-24 age bracket and if this could be extended to other topics too it could be an opportunity for TikTok to show it is a force for good after months of damaging stories about its Chinese ownership.

Until then, unfortunately there are going to be people losing money.

By James Donald Head of Digital james.donald@cicero-group.com

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GET IN TOUCH...

To discuss any of the issues raised in this newsletter or to find out how Cicero/AMO can help support your organisation, please contact a member of the team below: Sameer Gulati Head of FinTech +44 (0)20 7297 5950 sameer.gulati@cicero-group.com James Donald Head of Digital +44 (0)20 3427 3055 james.donald@cicero-group.com Juliet Bevis Technology Specialist +44 (0)20 7343 1601 juliet.bevis@cicero-group.com

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