This week we had great news from both sides of the Atlantic, lots of team ups and partnerships plus some of the sillier crypto stories we’ve seen

Taking on all of this on the Fintech Insider News show along side host Simon Taylor were Megan Caywood,  Chief Platform Officer at Starling; Edward Berks – Director of Banking, Fintech & Ecosystem at Xero, and our very own Ross Gallagher, Principal Consultant in our 11:FS Research Team.

Listen here for the episode in full, stream it below or read on for additional insights.

 

 

Starling’s new additions to their marketplace

We kicked off the show with a double whammy of Starling stories. Luckily we had Megan Caywood to tell us more. Firstly this one in CityAM announcing Starling’s 4 new partners in their marketplace: Pensionbee, Wealthsimple, Habito and Kasko. These are the first out of 25 planned partnerships and Starling is also working with charity apps such as Sustainably and Donate Your Change to allow people to “round up” their spending into donations to charity, in a similar way to savings firm Moneybox, which already integrates with the bank.
Megan tells us about the process behind these partnerships and what this means for their marketplace, Ross gives a run-down of Habito for those less familiar and Simon asks is such a marketplace set up possible for big banks?

Edward Berks tell us about Xero’s marketplace and how valuable it is for Xero, giving him an appreciation for Starling’s achievements: “it [our marketplace] makes our proposition richer so this totally makes sense for Starling.”

“[our marketplace] makes our proposition richer so this totally makes sense for Starling.” – Edward Berks

Next we move onto Starling’s Settle Up feature which Megan explains as “A really easy way to make payments between friends”. Ross said he struggled to find the use case for this at first but now he properly gets it, and its design is excellent “I struggled at first to see this as a use case… but it’s awesome and design-wise it’s really nice”. 

“A really easy way to make payments between friends” – Megan Caywood on Starling’s SettleUp.

Edward talks about the importance of adoption by young people of such features such as his teenage sons and university students, and the power of peer to peer recommendations to spread a product’s usage, he cites Circle pay as an example of this. Simon queries whether big banks can roll out similar things, Ross says yes: “I think they will inevitably be coming… but they’re playing catch up “.

Monzo teams up with Moneybox using Open Banking API

Moving on from Starling to their biggest rival, the team discuss this story from City AM – regarding Monzo’s partnership with Moneybox via open banking APIs, which allows Monzo users to invest their cash by rounding up purchases to the nearest pound. When users make a purchase, the rest of the cash up to the nearest pound is taken and invested in either of three kinds of tracker funds. They can also put cash in at other times. Megan says this is a great partnership which was a result of “so much demand from customers – customer demand is great than what banks were offering”.

Ross says this is a great feature but perhaps due to Monzo’s focus on their current accounts in recent months they have “fallen slightly behind the fintech pack in terms of partnerships… I expect to see more from them going forward”.

“Monzo have fallen slightly behind the fintech pack in terms of partnerships… I expect to see more from them going forward” – Ross Gallagher

If you’re curious to see what all these new user experiences look like, we have journeys from Starling’s Marketplace, Settle Up & Monzo and Moneybox on our competitor insights platform 11:FS Pulse right now. To see for yourself or to find out more go to 11fspulse.com

Revolut’s CEO interview causes controversy (again)

As with seemingly every Revolut CEO interview, this interview in the FT  got a lot of people talking on Fintech Insider News, our forum for discussion of the latest news and stories in the fintech world.  Nikolay Storonsky talked to the FT about the long hours and high staff turnover at Revolut, claiming there is little room for work-life balance in a fast-growing start-up. However he also claims he has never come across a burnt-out employee, and pledges to pay for a two-week holiday for any of his staff who feels overwhelmed by the demands of their job.

Opinion was split on the panel in response to this one. Everyone seemed to agree that the Revolut culutre has been spoken about enough now that if you choose to work there, you should know what you’re getting into. “If it’s what you want to do and you enjoy it, then it’s fine” says Edward, Megan half agrees: “I don’t agree with the philosophy, but i see where he’s coming from”. Ross however questions the genuine nature of Storonsky’s promised as the culture might put people off actually asking for help if it was needed: “If I’m an employee at Revolut, would I feel comfortable asking for help and saying I’m burnt out?” 

“If I’m an employee at Revolut, would I feel comfortable asking for help and saying I’m burnt out?” – Ross G

Likewise, Simon asks, does the way their culture is perceived have a negative impact on the brand? Can this affect their scaling and ultimate success? It came back to bite Uber in the end, is this culture sustainable? “They’re getting results but how they’re going about it could affect them long term”.

FCA pact with CFTC

The next story is one Simon described as “Giving me warm fuzzies” as The UK’s FCA and the US’ CFTC sign fintech pact.

The Financial Conduct Authority (FCA) and the US Commodity Futures Trading Commission (CFTC) have signed an arrangement that commits the regulators to collaborating and supporting innovative firms through each other’s financial technology (FinTech) initiatives – LabCFTC and FCA Innovate. FCA CEO is quoted as saying: “”International borders shouldn’t act as a barrier to innovation and competition in financial services”. We brought you an exclusive interview and a takeover episode from the FCA last week where they explain all about their plans for expansion of Project Innovate.

The US seems to be big fans of the initiative: “The FCA’s Project Innovate is the gold standard for thoughtful regulatory engagement with emerging technological innovation,” said CFTC Chairman Giancarlo. “I imagine fist bumps over the Atlantic”, says Simon. Ross adds that it’s the “first non-US fintech agreement by the CFTC”, and Edward concurs stating Innovate is a “great British export” (pun perhaps intended).

“I imagine fist bumps over the Atlantic” – Simon Taylor

Amazon and Bank of America team up, perhaps, maybe

From one pact that definitely is happening, this one is less clear. In this story from CNBC, Amazon *might* have teamed up with the Bank of America for its lending programme.

  • In his shareholder letter two years ago, Amazon CEO Jeff Bezos said he was looking to team up with banks that could help his company expand its lending program for small businesses that sell on Amazon’s websites.
  • Amazon indicated in its 2016 annual report, published a year ago, that it received a $500 million revolving credit facility from a “lender” in October 2016. The company said in its latest annual report that the facility was raised to $600 million “and may from time to time increase in the future subject to lender approval.”
  • Sources said the lender referenced in the filings is Bank of America – but they have declined to comment

The lack of comment makes it unclear whether this is a genuine partnership or not. If so however,  Simon is unimpressed, stating that “Alibaba have been doing this for some time”, but, Ross counters, if Amazon is working with big banks to get into the lending space, “it probably is something the traditional players should be worried about”.

“It probably is something the traditional players should be worried about” – Ross G

Gig economy start up backed by BBVA

In this next story they discuss a partnership that this time definitely is happening: Azlo, a digital banking startup targets gig economy workers is backed by BBVA.

  • Azlo, founded last year is a BBVA-backed digital banking platform targeting the American gig economy
  • There are 44 million people in the US that have a “side-gig” and, by some estimates, by 2020 43% of the country’s workforce will be freelancers.
  • Azlo argues that this massive group is being overlooked by traditional lenders and is stepping in with dedicated business banking services, available online, with no fees or minimum balances.
  • Azlo is majority owned by Spanish giant BBVA, which incubated the startup at its Silicon Valley-based New Digital Business fintech lab.

This story was incredibly popular with our panel: “I love this” said Simon, Edward agrees it’s a  “solid proposition”, especially regarding such an underserved market segment, and Ross adds “I’m not at all surprised it’s BBVA who’ve done this”.

“I’m not at all surprised it’s BBVA who’ve done this” – Ross G

Lots of good news stories in this week’s show!

Wealthsimple’s latest fundraising round

From a Spanish backed startup to a Canadian one that’s gaining momentum, is the news in Business Insider regarding robo advisor Wealthsimple’s £37 million fund raise.

  • Michael Katchen, CEO and co-founder of Wealthsimple, said in a statement: “Wealthsimple had an incredible 2017. We expanded to our first international markets, and tripled the number of clients who invest with us.”
  • Toby Triebel, Wealthsimple’s European CEO, said: “In the UK we’re looking forward to adding more products to our line-up in the coming year and making it even easier for people to invest in their values through offerings like our SRI (Socially Responsible Investing) portfolio.”
  • The Canadian startup launched in the UK and US in 2017
  • Their business model heavily targets millennials – 80% of their clients are under 45 and 40% are first time investors
  • The fund raise will help them grow and expand their products and serviced worldwide.

To hear more about Wealthsimple, Jason interviewed Toby Triebel in Ep 163 of Fintech Insider.

Conservatives using blockchain for activism

Next up we reached the silly story part of the show now, starting with this story from Conservative Home explaining how Conservatives can use the blockchain for activism.

This is a bizarre thought piece about a theoretical token called ConservativeCoin (or ConCoin), written by Mike Rouse, a “West Midlands-based independent digital consultant with a focus on pushing innovation in political activism.” The piece centres around how he could create and mine a token using Ethereum in order to incentivise volunteers who help with Conservative party campaigning. The key premise is outlined below:

“I created a special type of token within an existing blockchain system called Ethereum and named it ConservativeCoin…Let’s say someone turns up to a campaigning session…they could be credited with 0.0500 of my ConservativeCoin from the central pot. If they stuff some envelopes, we give them 0.0100 perhaps. If they go to the trouble of travelling to a target area, we’ll give them 0.1000, maybe. If the area is a red hot target, we can add a premium, and make it 0.5000 – or even a whole 1 ConservativeCoin if we like.”

It is unclear if this is a serious piece or not. If it is, our panel are quite dismissive of it – “it sounds like someone has too much time on their hands”  says Megan.  “This sounds like every ICO” says Simon.

“It sounds like someone has too much time on their hands” – Megan Caywood

Steven Seagal’s crypto endorsement

Continuing with the crypto theme, and setting up new tokens, CoinDesk broke the news this week that Steven Seagal Endorses Questionable ‘Bitcoiin’ ICO.

From the press release: “Hollywood actor Steven Seagal has become a believer of Bitcoiin2Gen, the Hollywood action star will be representing the leading cryptocurrency organization, Bitcoiin2Gen, as brand ambassador.” Bitcoiin has attracted some criticism for sharing elements of pyramid schemes, or investment structures by which early investors make money largely by bringing in new buyers. In addition is it also risky for Seagal to publicly back a cryptocurrency after the SEC issued a warning about celebrity crypto endorsements.

Much like ConservativeCoin, our team are not impressed: “this has to stop” says Ross. “The blockchain space is both sublime and ridiculous and it’s often hard to see the sublime for the ridiculous”, despairs Simon.

“The blockchain space is both sublime and ridiculous and it’s often hard to see the sublime for the ridiculous” – Simon Taylor.

And finally…

In a show packed full of good news, we chose one more to end on, this one in the Express regarding the Big Issue magazine seller who takes contactless and saw a huge boost to sales as a result. Big Issue seller Robin Fabian bought a contactless card reader to increase his sales after passers by repeatedly didn’t the have £2.50 in change to buy a magazine. He said the card reader paid for itself on the first day, and since then he estimates he’s sold 200 extra copies. “Welcome to the future” says Ross. “That’s brilliant – cash just annoys me” agrees Simon.

The team discuss how this is a great idea and more charity collectors should take contactless to get around the increasing issue of a lack of cash among the public. The British Legion issued poppy sellers with contactless card readers for the first time last November for the poppy appeal, more charities should look to doing this.  “This feels like an opportunity for Square” concludes Megan. Watch this space.

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