Tag Archives: Regulation

LFP140 – The Fourth UK Retail Credit Bureau Is A Fintech! Freddy Kelly CEO Credit Kudos

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.

Topics discussed include: Continue reading

LFP136 – Regtech: Using Tech to Connect Data to Consequence and Action w/Evgeny Likhoded CEO Clausematch

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.

Topics discussed include: Continue reading

LFP134 – Bumper Episode! Hot Topics in AI/ML – Prediction, Explainability, Alt Data, Self-Learning & Much More w/Tristan Fletcher CEO ChAI

Tristan was last on the show some three years ago in LFP063 which has been solidly in the Top5 most downloaded episodes of all time even since. Today he joins us to update us on what is hot in AI/ML – and there’s a lot 😉 – along with predicting commodity prices.

Tristan is now CEO of ChAi who are creating insurance products for the commodity markets and at the forefront of some of the most interesting developments in AI/ML today.

In this episode we cover some of the key important developments and in particular dive into some amazing examples of how Alt Data is crucial to the developments. The focus in AI/ML is moving away from algorithms and onto data.

Topics discussed include: Continue reading

LFP130 – Equity Crowdfunding – Past, Present and Future Innovations w/Jeff Lynn Exec Chairman Seedrs

Ten years ago Jeff and his co-founder came up with the idea for Equity Crowdfunding and seven years ago Seedrs became the UK’s (world’s?) first regulated Equity Crowdfunder. In this episode we revisit the origins of the concept, what it was thought to be then and how it has evolved with the person who can surely lay claim to be the father of UK equity crowdfunding.

As often everything takes time to evolve and build out. But ten years in much has been achieved – and not only much for Seedrs but importantly for the hundreds of companies who have raised vital capital on the platform. In the world of the now much forgotten “supply-side reforms” there is arguably nothing better that can be done for SmallCos than to have such an effective conduit to raising funds.

One thing that has taken time to evolve is for the rest of the world to catch-up with the UK’s lead. However as we shall hear there are promises that Equity Crowdfunding will finally become a Thing across Europe so plenty of exciting times ahead as well as behind.

These topics and much more are discussed in the show: Continue reading

LFP115 – Tackling Financial Crime with Vishal Marria CEO Quantexa

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.

Topics discussed on the show include: Continue reading

LFP114 Insuretech and Leveraging Creativity with Steven Mendel CEO Bought By Many

Bought By Many are one of the UK’s oldest Insuretechs from when it was nigh on impossible to launch one and to do so meant one was laughed at. Now BBM have over 600,000 members in over 320 specialist insurance groups. They get a super-impressive Feefo trust rating of 4.7/5 from nigh on 6,000 reviews which is great going in any sector but particularly in the insurance sector which is not always loved by its clients.

In this episode today Steven talks to us about what has changed in the three and a half years since he was last on the show way back in LFP027, where Insuretech is and where it is going.

He also focuses on one of BBM’s key focuses – ensuring that they leverage human creativity alongside the tech in all their roles. Across the economy as a whole many MegaCos are versions of the Ford production line factory with people doing mundane jobs that will eventually be replaced by robots. This also applies within FS. However to be a successful startup, the small mammals taking on the dinosaurs one needs to be nimble, fast moving and agile – and for this one needs humans not robots.

Topics discussed on the show include:  Continue reading

LFP113 – Special Episode! Regulators – Unelected Power & Uncertain Constitutional Position w/Sir Paul Tucker former Deputy Governor Bank of England

This is the most important topic for our democracy. What is the constitutional position of regulators? Are they a 4th branch of the State or subsidiary to the existing 3 (executive, legislature, law)? Amazingly no-one knows and modern constitutional law textbooks make no mention. Is the spirit of Magna Carta which set in train the restraint of arbitrary questionable power over us dead when people we have no ability to hire and fire rule our lives in ever greater minute detail?

Their reach. Our lives these days are shaped in the UK (mut. mut. elsewhere) by the likes of OfCom, Ofgem, ONR, Ofwat, ASA, BBFC, CMA, EHRC, GBGB, ISPO, OGA, SHC, CAA, ORR, CQC, NHSI, CNHC, GCC, FCA, PSR, PRA, EA – in total 90 regulators in the UK :-O And that’s before we mention quangos (NDPB’s non-departmental public bodies) which in the UK employed 111,000 in 2009. As we heard in LFP112 the FCA is currently proposing to de-democratise P2P. How can they have these powers? Who are they to remove your freedom or mine. I mean that sincerely – its one thing if parliament removes our freedoms, thats bad enough but at least we can vote the government out. We have no such choice when it comes to the FCA or any of the other proli9ferating regulators.

Their cost. Furthermore all this bureaucracy and micromanagement of our lives does not come cheap. In UK-FS the cost of BoE/PRA/FCA has increased six-fold since 2000 The cost of  the 90 regulators is direct expenditure of £4bn and indirectly are believed to cost industry £100bn p.a. to comply (source: National Audit Office).

Does it work? Lord Turner in LFP065 agreed w/r/t FS with Niall Ferguson’s “excessively complex regulation has become the disease for which it purports to be the cure”. John Kay in LFP055 also felt, like I, that in FS this new approach was leading to more crises not fewer.

Asymmetric risk profile of regulators. In essence there is no cost to retraining Gulliver’s freedom down with one more thread, one more paragraph of regulation but they run a huge risk if Gulliver goes on a bender and trashes the local village. There is little downside for them in the short term in reducing the freedom of citizens to do what the hell they want. However when something goes wrong – and it always does – there is hysteria and political calls for public flogging of regulators. What would you do in those circs if you worked in a regulator?

Sir Paul Tucker not only has 34yrs experience at the BoE, as well as roles on the broader banking stage, he is now a research fellow at Harvard, and chairs the Systemic Risk Council a body set up in 2012 of wise elders such as Paul Volcker, Lord Turner, Jean-Claude Trichet, Paul O’Neill, John Reed and many more who advise current regulators. All of this in itself would be more than sufficient to have clear insights into regulation per se. However above and beyond all this Paul has spent several years working on a super-impressive tome called “Unelected Power – The Quest for Legitimacy in Central Banking and the Regulatory State” and has thus been thinking super-deeply about the topic. The book itself is well over 500pp with an astonishing 30pp bibliography and is guaranteed to become a reference work in this topic. None less than Paul Volcker says of the book “Paul Tucker has written a most timely and thoughtful analysis of the role of independent agencies in democratic societies.”

Paul is also not arguing from any position of “leave it to the mandarins” as cynics might think. Both he and the governor Mervyn King argued against the BoE being given excessively enhanced powers post-crisis. He has said Too much govt power lies in the hands of unelected regulators” and would have subtitled the book “How technocracy should retreat to preserve our system of government and in its own interests”. Another comment I warmed to was “policy makers should refrain from participating in many other and broader issues confronting their societies”.

So it’s a super-important episode for us all as citizens let alone for the development of Fintech and FS. And a super long intro to the show notes which I will wrap up with a quote from inside the cover of the book:

“Unelected Power lays out the principles needed to ensure that central bankers, technocrats, regulators, and other agents of the administrative state remain stewards of the common good and do not become overmighty citizens…Tucker explores the necessary conditions for delegated but politically insulated power to be legitimate in the eyes of constitutional democracy and the rule of law. Tucker explains how the regulatory state need not be a fourth branch of government free to steer by its own lights, and how central bankers can emulate the best of judicial self-restraint and become models of dispersed power. Like it or not, unelected power has become a hallmark of modern government. This critically important book shows how to harness it to the people’s purposes.”

Topics discussed include: Continue reading

LFP112 – FCA Proposes Undemocratisation: Taking the “P” Out of P2P with Ryan Weeks Editor AltFi News

You may not be rich, you may not be “sophisticated” but what kind of Stalinism is it that means The State can order you re what you can and cannot do with your money?!?

The entire ethos of “P2P” – the heart and most successful sector of Fintech – was connecting ordinary people, enabling lenders and borrowers to meet via the internet and both get a better deal than they would going through the megabanks.

Now if current FCA proposals go through this is all but dead – Ordinary Joe can keep borrowing (the system loves people being indebted) but the lending will only be unrestricted for Ingsoc Party members (“rich”, “sophisticated”) – Ordinary Joe will be capped at 10% of his investable assets.

It is also a constitutional outrage. The FCA’s job is to regulate platforms and ensure the bad/dodgy ones get shut down. The FCA is undemocratic and unelected – unlike our MPs we cannot vote them out of office – how dare they “regulate the people”? Regulating the people is something that ought to go through parliament not an office in Canary Wharf.

This topic undermines everything we have seen since the Magna Carta in 1215 became the first piece of legislation to limit the arbitrary power of the monarch.  Are we to return in this area to early Medieval Monarchical powers?

Ironically it was the UK’s Zopa that invented the UK globally. For a long time the UK State as a whole was highly supportive of Fintech and P2P. Now with government distracted, over a dozen years of success (&the records of the leading platforms have been far far better than bank returns for a diversified portfolio). Now only Party Members can fully avail themselves of these excellent returns. “To them that hath shall more be given”.

Ryan Weeks is the editor of AltFiNews the longest running AltFi news site, a real insider in this area. He is also the host of the successful Millennial Money Matters podcast and author of a best selling book as we shall come on to.

He joins us to discuss the Proposals in the round. Its a long document after a long consultation. Some proposals are sound, some so-so but this one is just plain wrong.

We all make mistakes and these are proposals. I call on the FCA to rethink this marketing restriction proposal. Already we have seen plenty of platforms changing from being P2Ps to avoid increasingly Draconian legislation. Already we have seen institutional money flooding into the sector. The whole purpose of the Fintech revolution was to make FS something of the people for the people. Let us keep it that way.

Topics discussed on the show include: Continue reading

LFP111 – The Role and Purpose of P2P Aggregators with Iain Niblock CEO Orca

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.

Topics discussed on the show include:  Continue reading

LFP106 – Bumper Episode! The Future of Leveraged Trading, UX, & Education w/Ivan Gowan CEO Capital.com

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