Tag Archives: Investment

LFP091 – Securitisation in the Fintech Age with Oliver Schimek CEO CrossLend

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Much Fintech (online wealth managers qv) is just “putting lipstick on a pig” – digitising existing processes at oldskool prices. No-one can say this about CrossLend who securitise loans ~200,000 times cheaper than oldskool prices and securitise down to one single loan as small as €1,500 :-!

Furthermore oldskool securitisation has all too often been a metaphor for investment bankers taking a huge chunk of value out of a package of assets and slicing and dicing the residual into complex tranches that even bamboozle the ratings agencies. With catastrophic effects – 2008 & CDO-squareds qv.

CrossLend has grown to a team of around 45 people, based in Berlin and Luxembourg and work across Europe – Germany, Netherlands, Spain, UK, Norway, Finland.

Topics discussed on the show Include: Continue reading →

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

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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

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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 →

LFP068 – The London Fintech Podcast’s 2016 Highlights and 2017 Awards

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Dilbert by Scott Adams - Fintech 2016 turns into Fintech 2017Happy New Year boys and girls 🙂 May 2017 be a great one for you and yours! This is the New Year Special where I look back at my 9 highlights from 2016, dish out 10 immensely prestigious awards  and take a peak at 2017.

So without futher ado lets kick off the awards… Continue reading →

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

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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 →

LFP059 – How Smart Pension got 75,000 Fintech Clients in under 2yrs with Will Wynne Co-Founder

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Smart Pension London Fintech PodcastI have the pleasure to be joined today by Will Wynne MD and co-founder of Smart Pension who have had the fastest 0-60 of any Fintech that has been on the show to date and it’s a record that’s hard to beat.

Will Wynne Smart PensionHow did they do it? Listen up and all will be revealed – though if all of us can read recipe books, few of us can become master chefs like Will who previously sold millions of flowers (from knowing nothing about that business) and in his spare time raised £100m for charity.

I say “wow” more in this episode than in any other – I think you can see why…

In 2014 I hung out a lot in the Fintech startup scene. So many moths! Such a big flame! One of the insider “trick questions” in Fintech is “name a success from all the Fintech incubator/accelerator programs in London”. Actually to be honest someone did come up with one name very recently – though sadly I’ve forgotten it so will lose the game next time that question comes round.

All of which is to say that the ex-ante chances of an individual Fintech getting anywhere are roughly less than zero. And as for ideas … sigh – so many people tell me they have an idea – yes everyone has lots – there is a bigger gulf from idea to business perhaps than there is from startup to business of scale. And then a big gap from “business of scale” (which the best Fintechs have reached) to – er – what might we call it. Scrapes his memory for long-since economics lessons … of yes its coming back … yes the stage that Fintech ain’t got to yet … its … yes “a profitable business” J

So how do you win the lottery? How do you beat odds of less than zero percent of getting anywhere?

Are you interested in how to do this? Would your Fintech be better off for acquiring 75,000 clients?

Listen up and the formula for instant fame and success will be yours. Terms and conditions apply.

Topics discussed on the show include: Continue reading →

LFP057 – Five Reasons Corporate Governance is Essential for Fintech with Geoff Miller CEO Afaafa

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AFAAFA

Geoff Miller

I have the pleasure to be joined today by Geoff Miller, CEO of Afaafa and former CEO of GLI Finance which he built from having no presence in AltFi to having over two dozen share stakes and loan agreements.

If existing FS has gone far to far in the direction of endless PC box-ticking – the porridge is too hot, then for sure in Fintech the porridge is too cold. Fintech is a long way behind grown-up FS is on corporate governance – the average Fintech board being comprised of founders & VCs/angels – little independence there.

How can Fintech get the porridge “just right”?

What are the advantages for a Fintech of a well-composed board?

A quick count on LinkedIn shows that Geoff may have been on getting on for two dozen boards.  So who better to talk about the importance of corporate governance then Geoff. As Professor John Kay said in LFP055 corporate governance may sound like a dull box-ticking exercise but it is a vital function of FS. Just look at what has happened to senior executive pay in the UK when the FS industry (now the largest holder as most of our investments are indirect) hasn’t much to vote much at board meetings. If the cat is off busy making whoopee its hardly surprising if the mice steal most of the cheese.

If you are anywhere near the Fintech scene in London (or in some other countries) you will have heard of Geoff. Geoff has always been a rare soul in terms of brutal honesty. At AltFi Europe 2015, the general tone of which was “ra-ra aren’t we wonderful” Geoff spoke of “woeful underwriting standards and hopelessly naïve CEOs”.

Geoff is an ideal guest on the London Fintech Podcast as he doesn’t just have “views and opinions” which are so prevalent amongst the so-called “thought-leader” classes   Rather he has been at many coal faces with many miners. And as with coal mining its often painful work. In LFP037 John Regan gave an excellent account of managing ones way out of business model crisis at Platform Black. GLI Finance had its own internal shuffle before Xmas bringing in new management. More recently Funding Knight went into administration and there was plenty of work for the board there.

Topics discussed on the show include: Continue reading →

LFP056 – “Everything You Wanted to Know About Fintech Venture Capital But Were Too Afraid To Ask” with Rob Moffat Partner at Balderton Capital

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Balderton BannerI am  delighted to welcome Rob Moffat, Partner at Balderton Capital to dive into the topic of Venture Capital and Fintech.  As I aim to present London Fintech in the round I have been – for a long time – keeping my eye open for a friendly VC to have on the show. This has taken two years would you believe!

Viewed from Mars you might think this is curious given how the whole mainstream tech media is so focused on fund-raisings, so-called valuations (and fantasy animals with one horn), and the whole machismo around money.

Viewed not from Mars the VC sector globally is perhaps rather problematic. If this is a surprise to you then I recommend as an entry point Diane Mulcahy’s 2014 Harvard Business Review article Venture Capitalists get well paid to lose money. As a former VC she knows where to direct the fire – high fees, illiquidity and underperformance. As I recall in the greatest tech boom ever, in the US the aggregate stats are something like that the average VC hasn’t even returned to the investors the funds they raised, let alone got a carry cheque (the performance related fee).

Furthermore as we heard way back in LFP008 with Richard Goold the UK/European venture capital market was very thin indeed in most of the 20th Century (post-WW2 the UK basically had the (originally government) 3i as the only player for a long time) and returns were poor.

Set against this virtually every Fintech that scales needs VC money – without which there would be no boom at all.

Equally like in all industries there are always some good players with a reputation for adding value. It was such a lead that led me to Balderton Capital who are one of the real players in the London Fintech scene.

Rob MoffatRob also writes a lot on the industry – I recommend his blog – and is on the board of seven of Balderton’s investments, the best-known of which in UK Fintech are perhaps GoCardless and Nutmeg. Balderton invests around £20m per annum into Fintech.

Above and beyond this Rob is – finally – someone who is happy to talk on air about the reality of VC and Fintech. As he joined the firm in 2009 (from Google) he has experienced the Fintech world from roots through shoots and now into a rather varied garden.

There is more than plenty discussed on the show, key topics include: Continue reading →

LFP055 – How Fintech Could Become Far Greater by Re-Forming FS with Professor John Kay

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John KayI am delighted to be joined this week by Professor John Kay – one of the UK’s leading economists and outstanding authority on Financial Services to discuss the truly vast potential that still exists for Fintech to disrupt FS. Fintech as we know it now has so far only put its toe into that ocean of possibility.

Maybe Fintech as we know it now is as good as it gets. Or maybe it could be far far more. If the latter it really needs to get stuck into the areas we discuss on the show and in a far more radical way really support society at large and both re-form and reform FS.

John’s CV includes having written for the Financial Times for over 20yrs, being a successful author of at least 9 books, a fellow of St John’s college Oxford for some 46yrs, a visiting Professor at the LSE, being awarded the CBE, has been a director of well over a dozen FS companies, a successful businessman (Google tells me he has an investment in London Fintech Nutmeg), a member of the British Academy, the Royal Society of Edinburgh, establishing the IFS as one of Britain’s leading think tanks,  and in 2012 producing a review for the UK Government on equity markets and long term decision making. Post-Brexit he has been appointed to advise the Scottish Government on European Union issues.

So he knows a thing or two about FS. Not only this but as his website strapline is “accessible and relevant economics” he has the rare ability to take all that knowledge and experience and make it readily assimilable to the layman. Never more so than in his latest book “Other People’s Money: Masters of the Universe or Servants of the People?” (which currently gets 4.4*/5 from 32 reviews on amazon.co.uk).

If you want a taste of the book and an education (I learnt a lot and I know a little about FS myself) I recommend checking out John talking about the book at Google or at the LSE. And then buy the book 🙂

Anyway all this deep background serves for a very deep and vitally important issue.

Fintech would not be where it is today without the FS crisis of 2008. Leading authorities – John, the ex-governor of the Bank of England and the ex head of the FSA – have all written books saying that the fundamental dynamics behind that crisis have not been eliminated and that we will see a similar crisis again. I agree entirely.

In his Google Talk John mentioned that his book was in part educative but also in part so that when the next FS crisis breaks authorities will not be able to say (as they did last time) they had no forewarning and no policy prescriptions to reach for.

This made we wonder whether we couldn’t repurpose and leverage John’s work – inverting it as it were – turning problems into opportunities and showing what Fintech could do to both reform and re-form FS. Continue reading →

LFP048 – A Deep-Dive Into Corporate Venturing & Insurance with Ben Luckett MD Aviva Ventures

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LFP Aviva bannerWhat is corporate venturing perchance you ask? One definition is an “internal VC arm of a corporate” – although this hides some major differences with VC per se.

Ben LuckettIn London Fintech Podcast episode 48 I am delighted to welcome Ben Luckett MD of Aviva Ventures to dive into corporate venturing.

For the company doing it corporate venturing is a classic route to get exposed to innovation in a marketplace that’s moving faster than a large corporate can easily replicate itself. As an example The Economist wrote in this context about Intel’s venturing which has over 20yrs invested in more than 1,300 companies in 56 countries. Set against that the HBR points out that the median lifetime of a corporate venturing project is one year – so not all of them fly in the sky.

For the startup/scaleup corporate venturing it is a source of growth capital but it can, at best, feel not like a type of venture capital funds (which can come with plenty of winces as I see daily talking to Fintechs) but as a steadier, less profit-orientated perhaps, source of funds.

On the show we discuss all this and more: Continue reading →