Cuvva have some hundred employees, 400,000 UK clients and 5% of the short-term UK car insurance market which is a phenomenal achievement for any Fintech in any sector. In this episode founder Freddy Macnamara joins us to discuss how price comparison websites have changed the insurance industry, the regulatory review of pricing in re and how to go beyond such websites to, schematically, re-invent the model of a broker who is looking after you for the 21stC insurance markets.
At a higher level this is another delayering play. In the LFP157 we discussed how direct bank to bank payments for merchants would massively delayer the conventional credit card payment chain which has lots of mouths to feed. In the case of insuretech it is simplest to quote from Cuvva’s about page:
“But we soon realised insurance isn’t just lacking. It’s completely broken. It’s built on layers of middlemen and outdated systems.”
Online payments are expensive – directly for merchants and indirectly for consumers as the price is obviously higher due to the merchants having a ~3% cost of payments. But in a world where I as a consumer could pay you as a merchant directly from my phone if you simply gave me your sort code and account number (and you would get the funds immediately rather than with a considerable delay), in a world of Open Banking and APIs can this simple model not be automated and provide the same functionality online to all customers?
It turns out it can and Banked are leading the way of so-called direct-payments. These have many benefits not having been designed in the days when a plastic piece of card with some simple numbers on them was what amounted to account security.
If this is the schematic than as always one needs to understand that traditional credit card payments do but just provide payment but a whole host of features around them. What if eg the credit card used to buy something from your store was stolen? What if you the consumer receive the goods having paid but the goods are substandard.
As always with payments the high-level schematic is simple yet the devil lies in the detail.
One thing serial entrepreneurs learn if the value of a Good Board in helping drive business success and avoiding car crashes along the way. The ne plus ultra is having a great Chairman. Brian Basham has founded many businesses and chaired many businesses. In 1976 he founded the Broad Street Group with £100 he had borrowed and ten years later listed it on the LSE for £36 million. Furthermore the Broad Street Group was heavily involved in the M&A decade and Brian advised many FTSE Boards, gaining yet more insight into what makes Boards tick and the role of the Chairman
Brian was Chairman of one of the LFP’s former brand partners Archover for many years and continues to Chair Boards having not far short of 50 years of experience of Boards
Thus I can think of no-one better to explain to us all the most important aspects of the Chairman’s role having experienced the whole NewCo to listing/trade sale several times over as well as having many case studies in mind – several of which he shares from the country’s top companies.
The trend in recent decades has been to ever-more flexible working contracts – be it gig economy, independent consultants or the freelancing/project-based work that sits in between. Gig-ers have a company app to engage and pay and indies a company around them. Freelancing et al have always been challenging to administer for both the buyer or seller of labour. However Fintech is changing all this and Underpinned is leading the charge.
Naturally in a world where governments continue to destroy businesses when the CDC data shows that the fatality rate of covid19 is nothing out of the ordinary it is highly likely that you or someone you know may have to take up smaller chunks of work than they ever would in the past.
Equally it’s likely that your Company or one you know will have to engage folks on ever-shorter projects.
The key to facilitating a more flexible labour-market is to smooth the whole process.
One reason that as the Fintech revolution proceeds Fintechs can do more ambitious things is that there an increasing number of back-end service providers that they can plug into. In this episode Joanne Dewar, CEO of back-end payments services provider GPS – who work with 40 issuing banks globally, and operate programmes with 90+ APIs for over 100 clients (including Revolut, Starling Bank and Bo) in 60 countries in 150 currencies – joins us to share her experience of what drives success in this sector for both the B2C front-end companies and the B2B back-end providers. GPS is furthermore a rare example of a profitable Fintech – which are always good to talk to.
Back-end providers have been with us for a long time – Currency Cloud, who executed most of Transferwise’s FX transactions for quite some time were back on the show years ago.
Time moves on though and by now we have plenty of data where partnering/outsourcing worked well and plenty where it did not.
What are the key factors of success? How is it done well and why is it done badly?
In LFP152 we took a strategic look at the post-Covid landscape. In this show Julian Cork, COO of Landbay, guides us through the tactical responses by one of the UK’s most solid Fintechs – £1/2bn buy-to-let mortgages written to date and zero losses.
However as to risk “the past is not necessarily a guide to the future” and in a market that has frozen it is very challenging to operate.
We cover many aspects starting with a background to the UK BTL market and the strategic shifts that were already in play right through to the importance of maintaining not just business dialogue between staff but that important social glue social dialogue too.
It is a cliche to say “the world changed forever” but macroeconomically and microeconomically it has – not because of the C19 virus but because of governmental responses to it. As the landscape for Fintech and indeed all firms has changed for – well decades at this rate in this show I do a one-off 30,000 feet overview of its impact on four key dimensions – societal, governmental, economic and liberty.
These will be the backdrop for the new world which Fintech must cope with – or for many right now try and survive in and only later get back to thriving in. Also we have all read too much at a detailed level so something setting the big picture scene for the next few years will keep future episodes from always coming back to the big picture.
The narrative of the show connects dots that we all know to give a 30,000 feet view. Three more recherche sources are:
As we have repeatedly heard profitability is a major challenge in Fintech. In this episode Tim Nicolle CEO of Trade Finance Fintech Primadollar describes his journey to working out the necessary building blocks to profitability. As someone who has had his own businesses for some 30yrs he has had more experience than most with these challenges.
Despite only being founded in 2015 Primadollar already has an astonishing 12 offices around the world so is well placed to also talk to the globalising of Fintech in this Brexiting year (albeit temporarily (?!) on hold due to a well-know virus of course).
Staff numbers are around 50, one-third in the UK and around two-thirds abroad.
The largest financial transaction of your life is also your last – dying! Get it wrong and Boris gets more money for vanity bridges and your relatives are left with a mess on their hands and potentially plenty of squabbles. Get it right and it is smooth for them and you minimise being taxed twice on the same income.
The whole death-related industry – wills, probate (executing wills) and cremations is super-undigitised (98% is still offline). It is into this gap that Dan Garrett co-founder and CEO of Farewill has stepped.
Farewill get 4.9* from >3,000 reviews on Trustpilot so must be doing wills well.
This is a super-important topic – if any of you out there don’t have a will you should get one and now it has been made digitally convenient there is no excuse. You can do it on your phone.
Today the LFP has Dan Kiernan as guest host and instead I am in the guest seat to discuss my long in the making recently released book on the Unlisted Board The Realpolitik Of The Unlisted Company Board – Making Your Board An Engine Of Growth. This is a behind the scenes account based on interviews with some 80 SmallCo Boarders – mostly founders but including Chairmen, NEDs, VCs, Angels and other SmallCo Boarding surround.
Done well the Board can turbocharge the SmallCo’s success – done badly it can end up in company failure or the sacking of the founder who created the company in the first place.
Company Boards are a mysterious and remote thing for most people – only a tiny percentage of any company serves on the topmost, legal Board. If you are in MegaCo they will generally be so remote as to be irrelevant to your day job. Even in a SmallCo you may know little of what they do other than matters such as signing off on fund raisings, certain large expenditures et al. You will have read about the obsession of recent decades Corporate Governance and think that Boards are just paper pushing.
However no matter how inexperienced and naive all founders sooner or later find out that it is the Board that governs the Company not the founder. For some time the founder might have voting control on the Board but as bigger and bigger raises come and go the founders control slips away which creates a whole new dynamic.
In this show we discuss the background leading to the book, the motivation and some key takeaways as well as the thing that serial entrepreneurs know about the Board that the first time founder does not. Topics discussed on the show include: Continue reading →