Conrad was on the show back in LFP020 since when he has built Funding Options (strapline “your free marketplace for business finance”) into one of the most successful London Fintechs. They were chosen as one of three UK government mandated SME Referral Portals, are the largest of those by an order of magnitude, increased revenue fourfold last year, are on target to triple again this year as well as being on target to be the UK’s largest introducer of working capital finance.
Funding Options essential task/service is lining up all the many SME borrowers out there with relevant sources of Finance. A task made all the harder by the plethora of lenders and the many types of lending finance available.
Steve Husk has decades in IT and FS and in this tour d’horizon we dive into his experience of delivering IT solutions from design through to sales, why the Cloud as a technology enables a totally different service proposition and what it means to scale in Fintech.
Collateral management has been assuming an ever increasing importance in banking driven in large part by massive (and somewhat inconsistent across continents) regulatory changes as well as innovative approaches to IT being able to far more simply deliver firm-wide solutions rather than the formerly un-joined-up “per silo” basis. Its also been elevated from a back-office issue to a middle-office issue of importance to risk management, compliance.
When I first met CloudMargin back in 2014 (folks don’t believe me enough sometimes when I say the queue to be on this show is long…) there were three founders and about half a dozen staff. Now only one of the founders remains and the firm is 50 strong and manages collateral worth an amazing $2.5trn on behalf of its buy-side and sell-side clients using its SAAS/Cloud solution.
Trade Finance is one of those less media-highlighted but vital areas of the economy – it really is the oil in the engine of international trade. It’s one of those “how hard can it be” areas where it turns out quite a lot of wrinkles make it more of a speciality field than it might be. One can presume that this is due to it being an ancient business, after all finance was needed for the silk road and all other routes and merchant banking had its origins in international trade.
TradeRiver were founded in 2011 and have provided over £100m of working capital finance to businesses in the UK. They provide UK businesses with a unsecured line of revolving trade finance to fund purchases of goods or services within 24 hours, both worldwide and in the UK. Facilities can vary from £100k up to £5million. They recently opened an office in Baltimore to serve the US market.
Being a digital player their aim is to be quick, simple and paperless (more rare than you might imagine in Trade Finance).
I am delighted to be joined today by Guy Willans, Trade River’s COO whose varied career – from Sandhurst, working around the world, an AIM listed dot-com, importing, sales and twelve years at HSBC et al certainly provide a rich enough background to discuss Trade Finance in the round and in context.
Data is to our age as steam was to the industrial revolution, just rather more intimate as, in extremis, your data reveals you and your life. It needs to be kept secure and it needs to be kept private – few of us would be happy with a world where all our records were available.
But what is privacy? Philosophically, politically, practically and – with the huge EU legislation GDPR on the horizon, regulatory (breaches of which can cost a firm 2-4% of the global revenue of the ultimate parent company). How can “tech” play a part in this? Can it make squaring all these circles feasible? Can one design data privacy into systems rather than just “ice the cake”?
On this show Jason du Preez CEO of Data Privacy firm Privitar whose focus is “Privacy Engineering” across multiple verticals (FS, Pharma, Telecoms et al) joins us to pull together all the threads that make up the tapestry.
If you are anything like me then occasionally you can get impassioned by data privacy and the rest of the time not worry about it.
What is a more nuanced position other than this digital (ha!) choice? What is privacy? Is it absolute, is it relative? How do all these topics relate to the practical day to day roles of firms and how does this relate to the must-do regulation?
Twenty or so new banking licences have been granted since 2010. The UK Retail Banking Sector is incredibly diverse but this is often disguised by the single label of “Challenger Banks” which hides far more than it reveals. UK Retail Banking is a very diverse sector with players with very different focuses and motivations.
In compiling their report “Who Are You Calling A Challenger Bank?”, PwC has interviewed dozens of CEOs and senior executives and, worked with YouGov to establish consumers’ views and preferences. In doing so they have produced a grounded, well-researched analysis (it’s free – check it out) that sheds light on how competition is improving customer choice and driving innovation in UK retail banking.
Darren Meek has 26 years at PwC and joins us today in conversation about the must-know, main important themes of the vibrant scene that exists today.
Today we aim at the beating heart of FS – its IT systems. I am delighted to be joined by Mark Beeston founder of Illuminate Financial who has over two decades of hardcore FS experience trading derivatives, COO- and CEO-ing, to discuss Capital Markets Fintech.
A lot of Fintech is B2C, some is B2B but there is a whole chunk trading under the Fintech rubric which aims not to disrupt the provision of FS but rather enhance the incumbents. Disrupting existing IT vendors to FS not FS.
Illuminate Financial are Capital Markets VCs extraordinaire. Their claim is “we cross the chasm between enterprise Fintech and the Financial Institutions it should serve”. I can do no better than quote further re where this gulf comes from:
Regulation is increasing, the industry is deleveraging, and compliance is becoming ever stricter.
Financial institutions have been slow to adopt new technologies, while vendor management and procurement processes are focused on contracting multi-million dollar enterprise solutions from billion dollar corporations.
In doing so, they often overlook the innovative lower cost and highly scalable solutions offered by newer and more entrepreneurial suppliers.
Organisations know that the answers may lie in Fintech. Yet the ever-growing hype around the subject has made it more and more difficult to distil the signal from the noise.”
One of the founding ethos of Fintech was “unbundling” – the slicing of FS into single-issue firms. This is now looking old-hat. Revolut acquired 500,000 customers in less than two years by offering interbank rates on FX transfers and so was one of the most successful of Fintech 1.0.
Now they are leading the way with Fintech 2.0 offering a whole range of products. Managing this transition with respect to both “the brand” and “the app” is not trivial and I am delighted to be joined today by co-founder and CEO Nikolay Storonsky.
Unlike Monzo who have gone down the banking route but Revolut have remained with the simpler/cheaper/faster but narrower e-money issuer licence.
Can InsureTech change the landscape of insurance as a whole or will it just enhance parts of the value chain? Conventional wisdom says the latter but the appearance of a model called “Reinsurance as a Service” [HT to Daily Fintech] could have far wider repercussions.
Traditionally insurance (in all its very diverse/speciated forms) is in three layers. Brokers. Insurers and Reinsurers. Traditionally you would deal with a broker. They would get the policy from a an insurer (eg Aviva who we had on the show in LFP048). Insurers in turn would re-insure themselves with aptly named – er – Reinsurers.
We’ll talk about how Reinsurance as a Service might change that “stack”.
Andy is the CEO of Digital Partners, Munich Re’s entity for interfacing between it and the Insuretech world. MunichRe is one of the worlds largest reinsurers. To give you an idea of what that means it has around 43k employees, €50bn of revenues and €276bn of assets.
Incumbents across FS are trying all sorts of approaches to the Fintech phenomenon. Judging by results to date Munich Re have found one of the best avenues. In a relatively short time they have established partnerships with a number of InsureTechs, none of them “tangential”, including Bought by Many (stars of LFP027), Blink Innovation, Next Insurance, Simplesurance, Slice, So-sure, Trov, Wrisk.
Investment management – despite its known deficiencies – has been least disrupted perhaps so far by “Fintech”. The first wave of I.M. Fintechs (pre- & up to 2015) promised “democratisation” but have made relatively little headway. The awfully named “roboadvisers” are neither robo nor advisers but are ludicrously hyped.
There’s also the rather challenging question of what is there to be disrupted if ETFs (see LFP058) can be bought for roughly zero commission and have minimal fees.
Against this background I was delighted to come across Adam French – he and two other ex-Goldman Sachs colleagues launched Scalable Capital in both the UK and Germany a little over a year ago, and, as befits their background, really know of what they speak. They also have the advantage of befitting from V1.0 of the great “digitalisation of wealth management” experiment and can better design V2.0. They claim to be Europe’s fastest growing “online wealth manager” with around 4,000 clients, £150m of assets under management, and have a tie-up with ultra-blue-chip Siemens to power their employee benefits platform in Germany.
a smart new way of budgeting and saving that helps you resist that temptation to spend. We work in partnership with employers, local authorities, housing associations and credit unions to bring better money management to the widest possible audience.
Squirrel’s 7,000 clients range from those on benefits to those earning more than £100k – as Emanuel puts it “there are spenders and savers” and this tendency he believes is already formed when a child is still in single digits – and hence in place later regardless of adult income levels.
In this episode though, for the main course we focus on “socially beneficial Fintech” – or in less euphemistic terms what Fintech as a whole can do for those with little money. All too often the vast majority of Fintech – for all the PC buzzword terms like “financial inclusion” ends up just being a tool for the top 1%/10%.
Recent benefit changes in the UK have led to significant problems for folks who are unemployed or underemployed and these are only going to get worse if current plans are rolled out further. In this episode Emanuel, co-founder and Chairman of Squirrel takes us on a deep dive into the economic circumstances and changes. He also talks very honestly about his own personal and significant struggles with debt.