So far Fintech has lionised technologies – APIs, Open Banking, AI/ML and so forth. But from a different perspective these are just glues to connect things that haven’t been connected before to make new propositions not previously possible. Although this has been touched on so far – marketplaces aren’t the best example – after all marketplaces are tens of thousands of years old.
In this episode we are joined by serial entrepreneur Sam O’Connor, CEO of Coconut to discuss convergence – the gluing together of components which were previously seen as different things.
Our smartphones glue together things we would have historically done in different places using different devices – camera, mp3 player, and emails for example, In the same way Coconut are focusing on micro-businesses into which all of us indies seem to need to fold ourselves these days and combining banking, accounting and tax in one place – items which historically would have been seen as different propositions.
Michael conducts the most in-depth analysis of Companies House data on UK Fintechs that I am aware of. That earlier this year he partnered with KPMG and Google on his Fintech Funding and Financing study says a lot. So what can we learn from a decades’s data on UK Fintechs?
Well first that only five are making a profit!
Michael recently updated his study which includes nearly one hundred Fintechs.
In this episode we focus on trends in profitability – which are not all as you might expect – although the report covers many more parameters especially around fund-raisings.
After a decade for the longest running Fintechs we should be able to start to draw conclusions. What are they?
Open-banking hype has generally focused on the consumer marketplace. However SMEs can potentially benefit more especially as they currently pay for banking services. Accounts and transactions can be consolidated improving cashflow management and payments can be made at a far lower cost and far faster as well as cool stuff like including “pay me” buttons in invoices to speed up receivables.
In this episode Matt Cockayne of Yapily takes us through the SME open banking marketplace and we cover a schematic of how it all works.
How do you connect to open banking? How does authroisation work? Is it just a set of pipes connecting accounts or is there added value taking place.
We get the whiteboard out and sketch the whole process.
The Retail Credit Bureau market has been in place for decades but disruption is coming to the market in the shape of Credit Kudos who help people make faster more accurate credit decisions. They have proved that this new source of data enables better credit decisions.
Formed in 2015 in anticipation of ‘open data” (a superior term in this context to Open Banking) they got by with screen scraping but now have a commanding lead with this new technology. Contrary to my inbox there aren’t a million firms doing new credit bureau services – only Credit Kudos.
In this episode we look at how open data and Fintech are changing the assessment of retail credit decisions.
Not many Fintechs dominate their sector let alone in one of the biggest markets in the world. PrimeRevenue was formed in 2003 and is the largest non-bank supplied of Supply Chain Finance in the world (working capital finance for global trade). They facilitate more than $200bn of payments per annum for 20,000 clients. In this show we dive into what it is that such a Fintech does. What can other Fintechs learn from one of the global best in Fintech?
Peter Cook who is head of all non-US sales talks us through how global trade actually works and the staggering sums of money that can be released from working capital using the appropriate techniques and how this can be win:win for vendor and buyer.
A super-important overview today. Data is just information is the standard line. Correct but not what matters in the real world. In the real world a regulatory announcement has consequences in organisations and requires actions – be it changing client agreements or operating procedures. What if we could use tech to go beyond the “regulation as pdf” to something far more third millennium? What if the new reg change was instead a domino which set in process a whole series of other dominoes falling inside regulated businesses?
Something radical is surely required given the absolute tsunami of regulation and the ludicrous black-hole like ability it is having in sucking increasing percentages of banks into being paper-pushers rather than wealth creators. At some point we will fall inside the event horizon and one person will be trying to make money in the bank and the rest pushing paper.
Clausematch and Evgeny came recommended to me long ago by Fintech übermensch Nigel Verdon. In this episode Evgeny leads us into the world of Regtech and gets beyond all the mad hype all too often associated with the sector. Whether we like it or not the world of Emperor Palpatine (“the bureaucrats have taken over”) is the world we live in whether #oldFS or #Fintech. Dealing with all the crap is a differentiator – indeed a sine qua non.
Change creates positive and negatives. The digital world means newer generations will grow up far more tech savvy. On the shadow side as we have touched on in passing a few times the digital world has been a created a nightmare for mental health in the young. But there are many dimensions of challenges – social media and money being but two.
When money was something physical you could put it into kids paws and to spend it they would have to hand some over and end up with less. This gave a good feel for its nature and the limitation of its amount.
How does this work in a virtual world though when literally “no money changes hands”, when “money” is something virtual? GoHenry have an answer to the money education and management piece – a payment card designed for children – digital pocket money if you like and 700,000 clients to date.
Founder Louise Hill and I discuss the challenges kids face in the digital world and hence the challenges their parents have. We don’t have all the answers to all the questions but have had to find some interim answers as parents ourselves.
App Banks are all the rage and you can go round the world on their cards. However move to another place and you soon find you need a bank account. Norris Koppel founder of Monese is on a mission to build a Global App Bank that will enable you to have local bank accounts at the touch of the button. How is he doing this? Probably easier having recently raised a $60m round 🙂 Listen and learn…
It is important to understand what has been said on the show in the past about the nature of existing “Global Banks” (q.v. Railsbank, GoCardless).
Global banks are just brands, just umbrella companies sitting over a whole bunch of national banks all of which have different procedures around account sign-up, KYC, AML etc procedures. Despite the marketing BS there are no global banks just businesses that own and co-ordinate a plethora of local banks. This will be very familiar to any of you who have changed country and need a new bank account.
Norris moved back in the day from Estonia to what is now the Disunited Kingdom and had just this problem and one day set about it solving it.
We all know that investing in the top P2P has been a good plan. But do corporate bonds offer better risk-adjusted value? Historically you had to have megabucks to buy bonds, or invest in a unit trust. However now WiseAlpha are Finteching the Corporate Bond Market and making direct investing available from as little as £100. Yields from high quality corporates can even exceed unsecured consumer debt on P2P platforms and the industry is far older and more solid.
We are joined today by CEO Rezaah Ahmad to discuss corporate bonds in the Fintech Age and WiseAlpha’s platform.
The corporate bond market is literally huge – $11.7trn and in a sense an amazing omission for Fintech so far in its mission to digitise and revolutionise the world of FS.
Nationwide is the largest Building Society in the world with 15 million customers, 1 in 4 UK households have an account, which makes over £1bn profit per annum and is entirely owned by its members (customers). If it were a company it would be in the FTSE50.
In this wide ranging conversation Tony Prestedge discusses how mutuals see IT – its an interesting combination (to oversimplify) of “much as everyone else” with a very different flavour – an organisation serving just its customers and no shareholders has a very different ethos which runs through the discussion like a stick of rock.
Tony emphasises that the digital age presents an opportunity to bring the human being back into banking which complements the usual narrative that the more computers and less humans the better.
But what does this mean in practice – especially knowing that Tony lead a huge SAP implementation so is intimately familiar with the coalface reality of huge IT systems as well as the more digital face of IT?
He also shares with us which types of Fintech Nationwide would like to deal with.