5 min read

Fintech Insider News: Peter the Leopard

Dhanum Nursigadoo

It’s been a wild week for fintech news as conference season kicks off with Philip Hammond’s speech at the IFTC including robots taking over regulations and bridges to other continents.

Picking apart the week on the Fintech Insider News show alongside hosts Ross Gallagher and Simon Taylor are Helene Panzarino, Managing Director at Rainmaking Colab, Monty Munford, journalist and found of agency Mob76, and Ryan Garner.

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

Hammond’s Bridge to a Robot World

We headed up the show with the story of the week, Philip Hammond’s strategy for fintechs. In a keynote speech to the industry at HM Treasury’s second International FinTech Conference. Establishing closer links to the Australian government via a fintech bridge is a key point of the Chancellor’s strategy. The UK and Australia’s central banks, regulators, and treasury departments will work together on policy and help with trade missions. Fintech bridges will help both nations figure out how to help companies establish themselves in both countries.
Maybe instead of regulation with numbers we need regulation by numbers. - Ross Gallagher
A cryptoassets taskforce was also announced, formed by the Bank of England, FCA and the Treasury. Its goal is to examine the subject in a disciplined way. Monty notes that the USA are ahead of the curve on this one, with a Senate testimony on cryptocurrencies filled with mature debate on both sides. Robo-regulation was another high point. It’s set to help fintech firms in the financial services industry comply with regulations by building software that would automatically ensure they follow the rules. They might help more than just fintechs with the slew of regulations that have come down on the industry since 2008.

Challenger’s are the new Disruption

Speaking to issues around financial exclusion, Pockit Loqbox has launched a scheme to help the UK’s unbanked improve their credit score. The scheme is tackling a well known problem. A recent Experian report released data that 4 million people in the UK have a thin file credit report. Ryan notes that without the ability to increase their credit score those people have only been able to access credit products with extortionate rates. It all plays in to the reality that the poorest are most hard hit by traditional banking products. Simon points out that financial products don’t need to be nice for the sake of it, from a brand perspective it encourages loyalty and increases net promoter score. Being nice is good for long term business and alternatives like Pockit and fintechs could start eating into business. OakNorth has become the first UK fintech to report annual profits. It’s the first Digital UK challenger bank to report an annual profit, with a pre-tax gain of £10.6m. After its second full year of operations the challenger bank has a net interest income of £24.9m in 2017. Up from £7.2m the previous year. OakNorth tripled its loan book over the period, to £851.5m and customer deposits more than doubled to £491m. Big banks have long considered fintechs to be at the fringe of the industry, Google and Facebook are a more concerning problem. But with fintechs attaining profitable margins and solving problems that may be a mistake. SME’s are a wholly underserved sector and fintechs are now creating SME services. But the worry is, SME owners are busy people, they won’t necessarily have the time to compare and contrast all the different services they’re now being offered. Why now? Probably because the low hanging fruit of consumer banking was picked in 2013 and with open banking coming into force, SME focused products coincide well with more personal banking.

Connect 6? Or is that 2?

Customers rarely buy what companies think they sell - Peter Drucker
Yolt boasts an integrated API connection to six major banks: RBS, Natwest, Ulster, Lloyds, Halifax, and Bank of Scotland. But four of the six are essentially the same bank. Yolt’s delivering a meaningful PFM app, which is a super broad concept and the PFM services industry is set for a great deal of change this year. Open banking is going to see an increase of these sorts of services and what people actually want help with is likely going to be revealed across the second half of this year. Consumer expectations tend to shift upwards rapidly and do customers even want these services? Peter Drucker famously said ‘Customers rarely buy what companies think they sell.’ so it’s unlikely that PFM services will remain in their current form for long. By the end of the year the products will look very different as they adapt to customer engagement and adjust to their analytics.

I’m real! I’m a real live bank!

Monzo has reached 500k customers, and these are real banking customers not just people with a card. Will it convert to a bank? It’s looking more likely every day. Monzo has removed the ability to sign up without a current account and, in the first user-hostile move they’ve made, asked its existing customers to convert to a current account. On the other side, from Monzo’s statistics on diversity and inclusion they’ve published all the relevant data they should and explained how they’re going to push inclusion further. Their numbers aren’t too far off industry standard but instead of hiding the issue with PR they’ve been transparent about the entire issue.

Michael Sheen: Fintech Vigilante takes on High Interest Loans

Michael Sheen (not to be confused with Martin or Charlie) has decided to scale back his acting career to campaign against high-interest credit providers like Wonga and Brighthouse. Other less predatory credit options are available in most cases but they’re simply unknown. Sheen’s goal is to find fairer alternative sources of credit, on Tuesday he’s launching the End High Cost Credit Alliance. It’s a campaign group of politicians, charities, and tech companies brought together to promote affordable methods of borrowing money. (Listen to the podcast for Monty’s great story on Charlie Sheen’s tiger blood phase)

Whatsapp challenges Tez to take India’s Payment space

Tapping their 200 million person customer base, Whatsapp is piloting a payment service to let them transfer money to each other. Whatsapp Pay is designed to work with India’s Unified Payments Interface, a digital payments system to facilitate real-time transactions, developed by National Payments Corp. of India. The country’s multi-bank umbrella body. >Google’s Tez has a significant early lead in the market space, 52% market share, along with a slick product that may make it hard for Whatsapp to keep up. Including, found on 11FS Pulse, ultrasonic p2p transfers, using sound to alert other devices you want to make a transfer.

Collection Plates go Tech and Charitable Giving for the iGeneration

Church of England is set to accept contactless payments for donations. iZettle co-founder Johan Bendz described the partnership as ‘A match made in heaven.’ Unfortunately, this means you no longer have an excuse to not donate to the collection plate. Rooster Money, an app designed to teach children fiscal responsibility teams up with JustGiving to help children donate money to charity. Children choose a charity to donate their money to and off it goes, once it’s approved by a parent. Despite the clunky-sounding nature of the approach, the concept wins approval from everyone. Listen back to the episode in full here. To ensure you never miss an episode, subscribe to Fintech Insider now! Come talk to us @11FSTeam or @FintechInsiders on Twitter or hello@11fs.com if you want to send us an email.

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