Tag Archives: BizDev

LFP079 – Diving Into UK Challenger Banks with Darren Meek London FS Lead at PwC

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.

Topics discussed include:  Continue reading

LFP077 – Capital Markets Fintech with Mark Beeston founder Illuminate Financial

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.”

Topics discussed include:  Continue reading

LFP075 – Managing Fintech Rebundling with Nikolay Storonsky CEO of Revolut

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.

 

Topics discussed on the show include: Continue reading

LFP074 – Will Reinsurance as a Service Change InsureTech? Andy Rear, CEO Munich Re:Digital Partners

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.

Topics discussed on the show include:  Continue reading

LFP073 – The Second Wave of Digital Wealth Managers with Adam French co-founder Scalable Capital

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.

Topics discussed include:  Continue reading

LFP072 – Socially Beneficial Fintech & Personal Cashflow Management with Emanuel Andjelic co-founder of Squirrel

Squirrel’s self-description is:

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.

In this show topics discussed include: Continue reading

LFP069 – IFAs, Fintech & Roboadvisers with Dan Kiernan Research Director Intelligent Partnership

IP banner for London Fintech Podcast“Everyone” frets over financial advice in the Fintech Age. Regulators set out to “protect the consumer”, worthy bodies talk no end about the need to protect “people” (never themselves oddly – generally they imply (/mean) folks of lesser education/wealth) and the rest of us are just confused over the labyrinthine rules around tax, savings and investments.

Needless to say a myriad on rules and regulations and the implicit costs of this suprastructure all act together in a Kafkaesque way to produce the opposite result – known as “the advice gap”.

In Fintechland breathless media and PR firms high on sugar, caffeine and other stimulants promise us a golden era of so-called “roboadvice”.

Dan KiernanHow to make sense of all this?

I am delighted to be joined today by Dan Kiernan Research Director at Intelligent Partnership “the UK’s leading provider of research, training and events on Alternative Investments” to cut through all this and to give us insights into why advisers are not recommending eg P2P to their clients when it has outperformed bank deposits for more than a decade.

On the show today we discuss all of the above and: Continue reading

LFP067 – Rethinking Banking: Marketplaces and App-Only Banks with Tom Blomfield CEO Monzo Bank

LFP Banner MonzoReformation or refactoring of banking is the Holy Grail of the Fintech Revolution. Do that and the revolution is a big deal. Get nowhere near and its all rather marginal. So-called challenger banks have ended up rather same-y. Will “App-only” banks end up going down the same route forced my micro-regulation and micro-supervision into the same tight mould. Or will they somehow remain within the constraints of the mould but somehow break it at the same time?

Its that paradox that faces Tom Blomfield CEO and founder of Monzo Bank. (and co-founder back in the day of GoCardless who were on the show in LFP046) A long way towards full authorisation as a bank will they become merely “me-too” or will they refactor banking as we know it?

Tom BlomfieldI have been an interested spectator on the sidelines for come time wondering which way the ball will bounce. At Lendit Europe 2016 I finally succumbed and took one of Tom’s pre-paid Mastercards – not least as which they offer wholesale exchange rates abroad and I was just off on holiday. It’s actually quite cool and more useful than expected. Certainly one gets a clear idea of what its like to feel like the business is really focusing on you as a customer-centric organisation with great design and service.

But back to the big picture – will Tom change the mould or will the mould change Tom?

Topics discussed include: Continue reading

LFP064 – P2P in the US, China and UK with Peter Renton

Lendit US 2017After organising nearly 1,000 folks in the O2 for Europe’s largest P2P conference ever I managed to grab Peter long enough to have a fascinating tour of the globe and P2P sitrep in the three major hubs.

Peter Renton PhotoPeter Renton has perhaps has more of a broad and deep understanding of P2P worldwide than anyone.

When he first came on the show way back in LFP015 he shared with us the fascinating history of US P2P with its hugely up and down roller-coaster road.

Since then he has created the world’s go-to conferences on P2P in the US, China and Europe which gives him a unique insight into what’s what and where.

It’s a big world and P2P is a vast domain these days so there is plenty to discuss. Key topics are: Continue reading

LFP062 – “Hard Fail” Provision Funds Revisited with Rhydian Lewis CEO Ratesetter

Ratesetter LFPI am delighted to be joined on the show today once again by Rhydian Lewis CEO at Ratesetter to talk about the ultra-hot topic of provision funds in p2p/marketplace lending. Rhydian was on in the early days back in LFP019 in an episode talking about P2P beyond the metaphors. That’s a good theme for today on a narrower topic as all too often when one reads about provision funds its metaphorical.

Rhydian LewisIn practice as with most/all of FS one really needs to get the metaphorical whiteboard out and draw some diagrams and a bit of arithmetic to make it real.

Lets provide some context first. Ratesetter was formed 7 yrs ago and has accumulated an amazing 300,000 customers with an amazing 250,000 on the platform right now and have lent an amazing £1.5bn with no lender ever losing a penny of interest or capital along the way.

Those are phenomenal achievements that very very very few Fintechs will ever manage to better.

But like growing up there are growth pains along the way. Ratesetter has been somewhat the P2P of choice for taking pot-shots at this year for the FT Alphaville column and the impressive Kadhim Shubber who seems to do more research than most. What are euphemistically described perhaps as missteps around self-investment of provision funds, not publishing future loan losses and rebasing of how the provision fund excess is calculated came in something of a flurry and even generous if sceptical folks like I started to raise an eyebrow.

But behind all this is the need to change. Did Ratesetter – or for that matter you and I – get everything right in 2009 (or for that matter every year since) or do they and we all need to keep changing in the light of experience and further thought?

Let’s briefly mention provision funds.

So briefly a soft-fail provision fund to use my terms is like the platform having a piggy bank into which it puts a few pence on every deal. If lenders loans are impaired that piggy bank is raided to subsidise them. But when it runs out the platform says “sorry guys no more funds to subsidise your loss, over to you”.

A hard fail model in contrast (which off the top of my head Ratesetter is the only big user of) when it runs out pools all investors assets together (to share the losses out). This is a big phase change – like going from water to ice. Its always been a concern of mine – if only as 30+ yrs in FS has shown me time and time again in different markets the impossible is always happening. No amount of whiteboard ink will ever save everyone in all circumstances.

So lets dive into all of this. An annus trickyus for Rhydian and colleagues and this important point about hard provision funds.

Plenty discussed on the show including: Continue reading