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.
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.
Financial crime affects us all – oldFS, newFS, citizens. How can businesses control and minimise Financial Crime?
We are joined today by Vishal Marria whose data-driven firm Quantexa has grown super-rapidly and works in this area as well as on other big data issues. Their clients include HSBC and Shell and despite being founded only two and a half years ago, already have offices in London, Brussels, Sydney, Boston, New York, Toronto and Singapore
Financial Crime is obviously an issue that affects Fintechs as well as FS – indeed I have been hearing about fraud since the earliest podcasts but naturally no-one wanted to talk about it (a) to avoid introducing worries in customers minds and (b) to avoid talking about where the castle walls are thick and where they are thin.
TransferGo‘s slogan is “Send money around the world. Fast. For just 99p” which is a super-cheap flat fee. In terms of price they deal at a variable 2+% to flat 0.45% (above £1000) on top of the mid-market rates with a known price when you deal. They also transfer in under 30 minutes and have a 96% 5* rating on Trustpilot which is the best in their sector.
However today we focus on the transaction fee. How can they charge so little? Is there some way the transaction fee can trend to zero whilst keeping a constant spread to mid-market rates?
How do Fintech FX’s actually do transactions way cheaper than banks when, after all, all money is held in bank accounts?
As we have heard many times before it is not – contrary to some spin/PR prevalent in the market – by doing “P2P FX”. So how is it done?
App Banks are following many courses with many motivations. Who better to guide us through this ever more complicated maze of motivations and destinations than Ricky Knox, Founder and CEO of Tandem Money/Bank and serial entrepreneur sans pareil.
inter alia (alia being things like Insead) Ricky founded GSM Systems in 2003 (where he remains non-exec chairman) which now has partnerships with >170 mobile operators in >70 countries.
In 2005 he founded Small World Services taking it from inception to a Top10 global money transfer businesses with nigh on $5bn annual turnover.
Not content with these laurel leaves he founded the well-known Fintech Azimo in 2012 which does remittances to 198 countries globally, has half a million customers and more than 270,000 cash pick-up locations worldwide.
In 2015 he founded Tandem Bank, which (another inter alia) bought Harrods Bank – which certainly makes it a standout in Fintech as a whole, let alone in the App-Banks sub-sector.
All of which background (and more not included!) makes him ideal to discuss whether the current crop of App Banks are going to turn into real businesses – you know those businesses that are self-supporting and whose revenues are higher than their costs 🙂
Many electrons have been agitated to produce patterns of light and dark on this topic. Which is probably more interesting aphenomenon than the average article on Open Banking. Ignore it we cannot however and uber-Fintech Guru (in the true sense, not self-penned LinkedIn encomium) Nigel Verdon, founder of Currency Cloud and now founder and CEO of Railsbank joins us to work out what is really going on and where challenges lie.
Nigel is no mere Fintecher with his own opinion. Way back in LFP024 Nigel shared his experience of 25yrs in Fintech – and hardcore fintech at that from doing the first online FX deal in 1992, through running digital markets at Dresdner Kleinworts to founding Currency Cloud. Since when he has VCed and now for some time been CEO and founder of Railsbank.
So someone with a very informed opinion. Open Banking is very much an evolving topic. So LFP060, an overview with Paul Thomalla at ACI Worldwide, is still #2 in the LFP all-time download charts. As recently as LFP087 Louise Beaumont argued that its not really about tech & reg but far more about strategy.
In this New Year Special I’ll survey the state of the art and present a report card for each of the main Fintech sectors – P2P, Bitcoin, Blockchain, Money, App-only banks, Insuretech, Digital I.M., Regtech, Payments and a deeper dive into the leading AI of 2017. We also examine the broader context for Fintech – namely US Tech Giants who had a seismic shift in 2017.
No awards as such this year but plenty of honourable mentions and a host of goodies for those of you in search of new ideas.
Nick Ogden is, inter alia, the founder of the FTSE Worldpay and a bunch of other interesting businesses. In 2014 he created ClearBank the UK’s first clearing bank for 250yrs and is setting out to show what a modern, hi-tech clearing bank can offer existing Banks, Fintechs and Corporates.
Its mission is “to create greater competition, transparency and leading edge technology to the banking market.”
Historically the function of Clearing Banks were to clear cheques when there were hundreds of banks in the Uk and traversing the country took days.
This function expanded and now Clearing Banks clear payments of all natures – in the UK FPS, CHAPS, BACS (Direct Debits et al). Clearing banks are basically the experts at “transaction banking”.
But onto the show – how do you disrupt an oligopoly – four clearers control most of the market?
What can one get if one starts with a fresh tech stack rather than piling more on top of tops?