Tag Archives: FX

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

LFP063 – Special Episode! A Deep-Dive into AI, Machine Learning, Big Data & FS w/Dr Tristan Fletcher Research Director Thought Machine

ThoughtMachine_Podcast_FINAL

I am delighted to be joined today by Dr Tristan Fletcher Research Director at Thought Machine to talk about Artificial Intelligence and Machine Learning in Financial Services. His Linkedin strapline is “I apply state of the art prediction methods from the Machine Learning (Artificial Intelligence) academic community to real world problems”

Tristan FletcherThis is a mega hot topic right now and also one all too often hyped beyond all belief and frankly credibility.

For some time I have been on the lookout for someone with real depth of knowledge in this area. When attending and also moderating a recent InSync event at the Tate Modern  I was impressed by Tristan’s deep understanding and also groundedness – the basic angle (or to be more precise my takeaways on his views ) being “all this stuff has been known to academics for a long time” and “many aspects of it are exaggerated and in many ways it has become more of a marketing tool”.

So the point of this show is to put it all back in proportion.

What is AI? I mean what is it really when one isn’t reading it in some journalistically overblown tech piece. What is machine learning? Are neural networks like the brain? How big is big data and does it contain all the answers? All these and more we will cover and I hope and am sure that you will go away far better briefed than before.

Tristan spans academia , FS and entrepreurialism. Academically he has studied at, or had fellowships with, Cambridge, Imperial, UCL and Sussex. FS-wise he has worked at senior levels in prestigious organisations in asset management and trading. Entrepreneurially and have worked with / founded start-ups in these domains.

Oh yes and apart from all this he has also applied machine learning to medicine (Imperial College London), supply chain management (Unilever) and even fine wine pricing.
So it’s another show where my teams of researchers have found me a guestwho is a collousus bestriding his world. And as always its another great show for my analyst who will have to hear me moaining more about my own punyness in the face of greatness.

Plenty discussed including: Continue reading

LFP058 – Exchange Traded Funds (ETFs): Tutorial, Bitcoin, Blockchain & Fintech with Laurent Kssis CEC Capital

CEC Capital

Today I have the pleasure to be joined today by Laurent Kssis MD of CEC Capital who has worked in the ETF industry for 14years. We’ve spent a few episodes recently in the heady heights of the super-big picture so let’s get back to the coalface and dive in depth into an important area of FS.

ETFs – Exchange Traded Funds – have been many times on the London Fintech Podcast, always in passing, so I thought it was more than overdue to attack them head on.

Like Banquo’s ghost in Macbeth ETFs are the thing that haunt the whole Investment Management Fintech scene … if, in essence, you can gain exposure to equity markets in a balanced way via a vehicle with minimal fees what exactly is there for Investment Management Fintech to disrupt?

Laurent KssisLaurent certainly has feet in both #oldFS and #newFS camps being the non-exec chairman of the Blockchain investment company Coinsilium. So he is the ideal expert to talk to us about this sector today.

Conceptually ETFs started life as traded funds – if you like index-tracker investment trusts – although why they weren’t just called investment trusts is a question for Laurent. According to wikipedia since 1993 in the US where they were first created an unbelievable $3trn have been invested in them. They have also moved a long way from their origin as index-trackers with (quoting wiki) “By the end of 2015 ETFs offered 1,800 different products covering almost every conceivable market sector, niche and trading strategy”.

So that’s ETFs per se. But like everywhere in FS the wave of innovation that is Fintech is lapping on many shores. If ETFs have inhibited the growth of one area of Fintech what is Fintech doing to them? Listeners will certainly get their money’s worth today as we range from a tutorial on the basics of ETFs through Bitcoin ETFs to blockchain – a huge waterfront.

Topics discussed include:

– how Laurent’s career led him to being an expert on ETFs and progressing that into hot areas like Bitcoin and Blockchain

– the relevance of the “transition management” world [what happens when one fund manager takes over eg a pension fund from another]

– an ETF is a “marketable investment vehicle that allows you to buy and sell during trading hours of the Exchange a basket of stock/bonds/commodities through a single share”

– comparing and contrasting investment trusts and ETFs; management fees, transparency, NAV calculation, premia/discount ranges

– the multiplicity of ETFs eg there are around 50 different ones on the Euro Stoxx 50; different exchanges, currencies, market timezones leading for challenges for  market makers in setting prices, hedging themselves etc

– “trading channel” effectively the arbitrage channel is the range in which ETFs trade compared to their underlying components; over a decade ago this could have been as much as 10%/+5% to -5% (“quite extortionate”) but then illiquid, hard to hedge against;

– this changed rapidly when institutions started to get involved in larger size

– management fees (“TER” – total expense ratio) typically, on ETFs such as Euro Stoxx 50, have gone from ~0.65% a decade ago to ~0.12% today

– ETFs are allowed in ISAs, SIPPs, 401k

– in 401k’s over 50% of the investments are in ETFS (!)

– ETFs are UCITS compliant (which allows passporting into Europe), registered mostly in Ireland and “tax-advantageous” locations (Jersey/Guernsey/Luxembourg)

– ETFs are open-ended they can increase in size at any point (depending on demand:supply); how this is done

– ETFs are undergoing a huge explosion in diversity – you can buy almost anything via ETFs – gold silver, precious metals, industrial metals, agricultural products

the huge opportunity for Fintech in providing a more up-to-date angle to investing in these; the tendency of the first wave of Investment Management Fintech to just replicate investing in the same boring old stuff as existing I.M. firms (core equity markets and bonds for example)

– a whole interesting tale about Bitcoin ETFs and what Laurent learned on that journey – you’ll have to listen to hear that tale 😉 …

– the difference between ETFs and ETNs (Exchange Traded Notes)

– the recent Bitcoin hacking through BitFinex and how it differs from last years MT Gox; a high quality exchange, the role of regulation in re; hot wallets and cold wallets – a painful tale all round 🙁

– blockchain versus bitcoin

ETFs were new once and have been a great success – what can Fintech learn from that (you’ll have to listen ;-)) …

– ETFs have had a rough ride too – from journalists to scandals…

– an overview of Coinsilium – the world’s first listed blockchain publically listed investment company

And much much more 🙂

Share and enjoy!

 

LFP052 – The Realpolitik of Fintech Scaleup with Jon Vollemaere CEO R5FX

LFP R5FX bannerThis week I am delighted to welcome Jon Vollemaere CEO of R5FX to talk about the realpolitik of Fintech Scaleups, Asia Fintech and how relevant the “Fintech” label is and isn’t over the journey from being a Fintech Startup to Scaleup.

R5 offers a new electronic marketplace for emerging market foreign exchange (EMFX) and electronic non-deliverable forwards (eNDF) and has a prestigious single-figure millions investment from Deutsche Boerse and have offices in London and Singapore.

Jon VollemaereJon was one of the early guests on the show, entirely synchronicitously being the guest on  show number 5.

Upcoming Regulation requires Foreign Exchange (FX) trading banks to drastically change their current trading channels for the BRICS and other Emerging Market/NDF currency pairs.

Today these currencies are currently traded and fixed over a number of old, difficult to track and inefficient methods. The market is opaque and liable to imperfect price movements to the detriment of bank customers and consumers, hence regulators desire for change.

R5 is building the emerging marketplace for FX banks that not only satisfies these new legal
requirements, but also specialises in the fast growing transaction volumes in BRIC
and emerging economy currencies.

What is the journey like from startup to serious player?

What in prior and existing narratives around Fintech is BS/hype/fantasy?

What are the differences that matter at the coalface of competition for clients?

Where’s it all going?

Along with these topics we discuss: Continue reading

LFP050 – Is P2P FX All It’s Cracked Up To Be? With John Booth Founder of Midpoint

Midpoint_LogoDid you know that the world’s first P2P FX firm was formed in 1998 and is listed on the Toronto Venture Exchange and cross-listed on the Frankfurt Stock Exchange?

No, me neither.

John BoothMidpoint, formed in 1998, describe themselves as the world’s first authentic peer-to-peer (‘P2P’) international foreign currency and payments platform, have a US patent on its FX deal matching process and have won several awards for this including being the “Best P2P Currency Matching Platform” in 2015.

 

Zooming up to the bigger picture of P2P – y’all know about P2P – one of the mainstays of the fintech revolution.

Or so you might think.

In P2P borrowing and lending there has been a lot of displacement of the “P” by institutional capital – so less P2P than it was.

In Insurance Fintech P2P is far more spoken about than done.

In FX – well it’s always been something of an insiders’ secret that the much-vaunted P2P FX model – beloved of unicorn valuations – is more talked about than done.

In LFP023 Philippe Gelis CEO of B2B Fintech FX players Kantox spoke about how “pure P2P” in the FinTech fx markets rapidly became “best execution” and that P2P never really worked.

The most well-known B2C FX Fintech is Transferwise. In a recent article Nick England founder of VFX and a 15yr veteran of the FX markets said that Transferwise was – “smoke and mirrors” – and that their main innovation was around marketing.

It was something of a surprise to social media Fintechers that Transferwise (as far as I and others saw) chose not to reply to these claims. The Memo reached out to Transferwise to ask how much is P2P and how much is dealt outside and they declined to reply. So after all, like the banks, they do have “something to hide”.

Another advertising slogan bites the dust.

Against this bakckground, for some time I have been keeping my eye out for a firm that does P2P FX to come on the show and honestly and openly discuss the pros and cons of Fintech FX.

As Midpoint are listed they are rather more familiar than non-listed firms with the need to tell the truth about business rather than hype up some PR and spin.

Discussions in this episode include: Continue reading

LFP044 – How can Fintechs Scaleup, get more Robust yet preserve their Culture? Alex Langridge Director at Digital Recruitment Firm The Up Group

Connecting digital leadersToday I am delighted to welcome Alex Langridge Director of The Up Group on the show to talk about the very hot topic of whether Fintechs can grow up without, as it were, turning into their parents.

Less metaphorically what will mean that Alternative Finance remains alternative and doesn’t just end up like a Moorish house, inward looking into its own courtyard. Will they become like banks with levels and levels of internal committees, office politics and a lack of focus?

There are two key factors here.

Firstly the firm has to decide what its culture is. Which parts of that were just startup land? For many client or business facing AltFis suits are de rigour and t-shorts were startup. Which parts do they want to keep.

Secondly who do you recruit? It’s a good gossip topic over drinks for insiders on the London Fintech scene to discuss the obvious “don’t fits” – the imported investment bankers oozing arrogance and entitlement – sticking out like a sore thumb. Quite in contrast to real Fintechs who, having grown from nowhere know that they have been lucky to survive a perilous path that most of their compatriots have fallen off. And there but for the grace of God they could too have fallen.

It’s at this Nexus that the role of “a professional search firm” – aka head-hunters is key.

Alex Langridge LIThe Up Group was formed in 2007 with a vision to become the primary destination for digital talent. They must be doing well given the number of gigs they have worked on in Alternative Finance for some of the leading players.

It’s a pleasure to be joined by Alex who has placed some key hires into Fintechland and thus faces these challenges every day.

Plenty is discussed on the show including: Continue reading

LFP042 – Bumper Fun-Packed New Years Show On Fintech & Star Wars, Beer, Media, 2015 review & 2016!

source: focusrs.org

source: focusrs.org

This is London Fintech Podcast episode 42, the answer to life, the universe and everything. Well a bit of everything anyway. And I have the pleasure to be joined today by – er – myself.

In the now traditional (um – can doing something twice be a tradition?) first podcast of the year step away from diving into a topic with an esteemed guest and take a more top of the mountain view of the landscape.

As it’s a bumper funpack we will cover a whole range of topics all of which pertain to Fintech.

So we start today’s show with the relevance of Star Wars; move on to beer and deep dive into a topic that applies to Fintech and to the whole of our perception of the world, the media – mainstream and indie.

Next a review of key themes from 2015 UK Fintech and finally we wrap up with some thoughts about the future.

In the next episode I’ll be back to the far easier task of asking folks smarter than I the answer to life the universe and everything or at least what’s going on in their corner of the Fintech phenomenon

Share and enjoy!

Happy New Year to all 🙂

~~~

Links I reference are:

LFP032 – International Remittances in the Fintech Age with Alix Murphy WorldRemit

wr-mt-new-template-facebook-tv-campaign-david

WorldRemit is one of the world’s leaders in the key sector of remittances. Remittances, to cut to the chase, is largely the province of often poor migrant workers sending their money home. To date this has been dominated by large players such as Western Union who can charge fees of 10-20%. Thus we have the obscene sight of some of the poorest people in the world being charged the highest money transfer rates in the world.

Why is this the case?  Is this pure capitalist theft or are there some structural challenges and processes which absorb much of the margin?  What can Fintech do about it?  What is WorldRemit offering that incumbents are not?

In a Fintech/VC world where the media narrative is all too often about terms centred purely on – lets face it greed and flood-up capitalism [hello the “unicorn” word] – it is nice to be able to discuss a firm which is aiming to empower the poorest users of the financial system.

Alix MurphyGenerally on these shows I take a “vertical” slice and have a CEO of a company to talk about the issue. Nothing wrong and plenty right with that.  In this case though I am taking a more horizontal approach. Alix Murphy, Senior Mobile Analyst, has been in mobile money for many years and shares many stories about mobile transfers in the developing world as well as WorldRemit’s business.

Topics discussed include: Continue reading

LFP026 – Special Episode! “The Future of Banking” with Mike Laven CEO Currency Cloud

Currency Cloud

I am delighted to be joined on the show today by Mike Laven CEO of Currency Cloud (who have always been my “Fintech insiders” Fintech of choice). Currency Cloud has done $10bn of business which is a big number on anyone’s scale.

It’s a rare guest indeed that I would give so broad a topic to as the future of banking. The interweb is full of superficial so-called “thought leadership” on this matter. However Mike is one of the very few who actually have penetrating insight into this issue. He is often approached in preference to Bank CEOs to talk on the future of banking which tells you a lot not just about Mike but Fintech and Banking

Mike Laven

As gorillas go Mike is a silverback. Inter alia Mike was COO at Traiana, CEO at Infinity Financial Technology, Cohera and Coronet, and Chairman at FRS Global.

 

Topics discussed include: Continue reading

LFP024 – Lessons from my 25yrs in Fintech, #oldFS, #newFS and VC with Nigel Verdon Founder of Currency Cloud

Currency Cloud

I am delighted to be joined on the show today by Nigel Verdon founder and Chairman of Currency Cloud (who have always been my “Fintech insiders” Fintech of choice and have now done over $10bn of business) and also partner at OGC Capital – Anglo-Dutch VCs.

NIgel VerdonOn LinkedIn Nigel modestly describes himself as:

“Broad range of experience from tech guy to trader guy with deep industry experience in capital markets, foreign exchange, international payments and technology.”

It’s both novel and refreshing to see modesty in the modern world and (as generally) it’s massively misplaced.  Nigel has been – on anyone’s measure – a colossus in both the #oldFS and #new FS worlds and has now moved into the VC world.

He wrote an excellent piece last year entitled So What Is Fintech? which I recall for having been clearly and deeply thought-through – as rare in s-called “social” (selfcast?) media as modesty.  Only having discussed his career journey on this episode with him do I realise what it has taken to achieve that degree of insight and understanding.

In this wide-ranging and deeply insightful conversation about the long roots of Fintech we cover a broad range of topics including: Continue reading