There is no end to Fintechs reach – this week to the most fundamental industry in the world – Farming – easily forgotten but without which we would all die soon. 90% of the world’s commodities cannot be hedged exposing producers to huge risks. Stable are merging AgriTech with Fintech to enable producers to hedge/insure their risks.
Richard is both a Neolith and a Techolith – being Farmer and Fintech CEO and thus bridges these two worlds.
In our modern overly-financialised world they are something that most denizens of the City have much to do with. However back in the day the City was pretty much London and before shares existed the Royal Exchange which was opened in 1571 was a market for real stuff. Only later – well before the LSE – did it expand into shares.
So the origins of the City are totally in trading real things long before it traded abstract things.
Thus this week we go full circle – connecting not just one of the oldest industries in the world with the newest but also bridging over five centuries of The City’s history.
Creativity springs eternal. Here is yet another new topic, one that no one could have imagined even a couple of decades ago. Litigation crowdfunding gives litigants a new source of funding and investors a totally new investable asset with non-correlated returns. Cormac Leech CEO and co-founder of Axiafunder walks us through this complex landscape.
Litigation Crowdfunding investment is definitely not for the unsophisticated. Barristers rarely assess even the best of cases as having more than ~75% chance of success such are the vagaries of the legal process. Vice versa though, for reasons we shall come onto, investment returns are super-normal and a portfolio of well-managed litigation crowdfunding loans has the possibility of very high returns indeed.
Cormac was last on the show some three years ago, appropriately talking about innovating in P2P. Well here he is having done that big-time.
How are the changing tides and winds in newFS vs oldFS lending? How are the incumbents and newbies doing? How is the balance of institutional funding of P2P and retail going? What’s the best way to succeed? When does accepting institutional funds turn into just being a front-end for oldFS?
Landbay only do buy-to-let mortgages and since their first loan four years ago have done nearly one thousand loans with a total lent of over £200m and an astonishing 0% loss rate which is a tribute to their strict credit criteria (average LTV 70%) as well as operational efficiency.
They recently won the 2018 Best Buy-To-Let lender of the Year award ahead of Barclays, Lloyds and – well – all others 😀
They were also placed #20 in Deloitte’s Fast Tech 50
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.
Using “P2P loosely there are over fifty to invest in, all with different standards and approaches. It’s a “fragmented and complex” market. Professionals do much due diligence before investing. How is an individual investor to cope? One strong contender for The Answer is “Aggregators” who do the due diligence, sign you up with said platforms and offer model portfolios
Iain Niblock co-founder and CEO joins us today to lay out the problems and challenges of investing in “P2P” which in practice covers many approaches in a diverse landscape.
Orca are also a rare example of a well-regional Fintech being based in Northern Ireland with an office in Edinburgh.
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?
On the show this week we have a bumper edition – the future of leveraged trading, online/in-app education, IT Dev, user experience design, new ESMA rules – and much more, Responsible for this fireworks show is Ivan Gowan CEO of multi-award winning capital.com. who have125 staff and over £30m of capital.
In the previous episode LFP105 we covered the digital approach to execution-only stockbroking.
In this episode we cover the more rarefied world of leveraged trading which democratises as it were the magical powers of hedge funds to trade efficiently and leverage positions. You can see this as a crossover of capital markets Fintech and trading for sophisticated investors. One for the cognoscenti but a market which has seen huge growth in the past two decades. Fintech is truly revolutionising everything.
Both last weeks episode and this cover the waterfront of the disintermediation of investment management. It’s also important not to see them as opposing – most moneyed folks will have a core portfolio that is solid and stable and those that do leveraged trading do it with a portion of their funds. As we come into in the show the demographic of such folks is pretty wide going far beyond the ex-traders that I had always imagined.
So without further ado lets sketch some of the detailed topics in this episode. Topics discussed on the show include: Continue reading →
The ultimate disintermediation in FS is for folks to directly buy shares/binds directly and cut out the whole investment management industry as we know it.
Even better if it’s cost free to deal. This amazing proposition is becoming real as Freetrade’s core offering gets rolled out to its first users and we are joined today by founder and CEO Adam Dodds to dive into this whole world.
Freetrade is a member of the London Stock Exchange but at the same time a real Fintech, designed from the ground up for the digital age of Fintech.
Once upon a time P2P was a simple thing. Now it’s more accurate to see it as online lending and borrowing. Models vary, regulation varies, the most successful platform was started by a bank, direct lenders have wholesale flows in funding retail or corporate outflows, others have just retail funds and others mixed.
Quite a complex state of affairs and in this episode Christian Faes joins us for a wide-ranging conversation about where this all came from, where it is and where it is going.
Lendinvest itself is no longer a P2P in the current definition but an online investment platform which is itself only one of their many channels.
Since Anil and MarketInvoicewere last on the LFP, and no doubt as a direct result, they have gone from having done ~£1/2bn to ~£2bn and remain the Invoice Financing market leaders as well as having expanded their product range.
Anil joins us today to discuss all things cashflow re the vital financing of UK SMEs which account for 60% of employment in the UK and over 50% of GDP.