FinTech Briefing: September 2015
Current accounts / digital banks
Banking on the small screen. The number of mobile banking users globally is forecast to double to 1.8 billion in the next four years, according to a new KPMG report.
Alternative lending is a threat to banks, say analysts. The University of Edinburgh’s Credit Research Centre held its 14th Credit Scoring and Credit Control conference August 26-28. A survey of 200 credit analysts who attended the conference found that three-quarters view alternative lending as a "threat" to banks.
Cigarettes, lighter and a bank-less account. Partech Ventures has announced that it has invested 4m euros in Compte Nickel, a bank-less account that can be opened instantly in convenience stores with just an ID and a telephone number. For 20 euros a year, the user can manage the account online, shop with a MasterCard debit card, and make use of conventional bank details. Compte Nickel claims to have signed up 1,000 "tobacco dealers" and 150,000 customers.
What constitutes a good digital banking experience for millenials? Check out this post by Alex Kreger, CEO of UX Design Agency, for an interesting analysis.
Payments / digital currencies
More (and more) ways to pay. Two new payments services - Samsung Pay and PayPal.me - went live this month. Samsung launched its service in South Korea, with a US launch date scheduled for late September. As with Apple Pay, the technology is compatible with existing "tap and go" terminals that use near field communications transmissions. But unlike its rival, the technology will also work with magnetic stripe readers, which are still widely used in the USA and Asia. PayPal.me, as the name implies, is a new entrant into the personalised payments market. Consumers and businesses can request payments from individuals by sharing a permanent URL by email, text or via a messaging app.
Hitting the buy button. Payments start-up Stripe has launched Relay, a set of tools allowing merchants to conduct transactions within apps. Twitter has signed up to the service.
London is money-transfer happy. WorldRemit and TransferWise, two money-transfer start-ups based in the capital, have announced major funding rounds. WorldRemit raised $100m (estimated valuation: $500m), while TransferWise pulled in $58m (estimated valuation: $1bn).
SumUp beefs up. The London based start-up, which makes it easier for small businesses to accept card payments, has announced a 10m euro funding round featuring BBVA Ventures, Groupon and American Express. The company, which currently operates in 14 nations (mostly in Europe), will extend its reach to two further countries.
How much did that cost? Barclays has created a fashionable smart jacket (yep, a piece of clothing), that connects with a user’s bank account. The garment costs £150 and has been made in partnership with Lyle & Scott.
Greece, where techno-libertarian dreams come true. A thousand bitcoin ATMs will be appearing in the country, following a partnership between digital currency exchange BTCGreece and cryptocurrency service provider Cubits.
Big banks wake up. Nine major banks - Goldman Sachs, JPMorgan, Credit Suisse, Barclays, Commonwealth Bank of Australia, State Street, Royal Bank of Scotland, BBVA and UBS - will fund a new start-up, R3, to develop commercial blockchain applications and also to develop common standards for blockchain technology. Meanwhile, Barclays announced that it will be opening two new blockchain workspaces in Notting Hill and Old Street.
Visa joins the blockchain party. In an interview with LiveMint, Visa executive vice president of technology Rajat Taneja said that teams in India, Singapore and the US will be researching applications of the technology. Visa also participated in a $30m funding round for blockchain start-up Chain. Capital One, Citi Ventures, Fiserv, Nasdaq and Orange SA also invested.
Faster, cheaper post-trade processes. BNP Paribas is using one of its currency funds in Paris to beta test blockchain applications, reports IBTimes UK.
P2P lending / investing
Crowdcube is an eight digit player. The equity crowdfunder has now raised more than £100m since its founding in 2011. The company also announced a new partnership with Moody's Analytics, which will enable investors to access a new Probability of Default figure for bond investments listed on the site. Square Pie and Vanarama are the first companies to display the figure.
L plates off, app on. Octo has launched a telematics smartphone app that "gives motorists the ability to track, score and improve their driving and riding behaviour". The company will act as a middleman, directing drivers with low risk profiles to selected insurers, who can then use the data to create personalised motor insurance offers.
The correspondent banking profitability threat. Anders Borg, former Swedish finance minister, on FinTech solutions to the problem.
RegTech, compliance and security
Biometrics will be worth $22bn by 2020. BBVA Compass has published research estimating that the global biometrics technology market will be worth $22bn by 2020. B-Secure has a five-point breakdown of the report.
Behavioural biometrics. A primer, courtesy of TechRadar.
Get to know Trunomi. The provider of Know Your Customer data-sharing technology has raised $3m, with backing from Saturn Partners, Fenway Summer, Persistent Ventures and SenaHill Partners.
Secure jobs. Cyber security jobs now make up 14% of all new UK based IT roles, according to research from professional services consultancy Procorre.
Alternative SME finance
Working capital finance. MarketInvoice, the peer-to-peer business lender, has secured a £6m investment. The enterprise plans to develop a range of financing solutions for businesses, reports TechCityNews. That funding round was dwarfed by the $50m raised by Fundbox, which brings its total investment to $108m in 18 months.
Investment / wealth management
Small fry lending to the big fish. WiseAlpha has launched a new platform to shake up the corporate debt investment market. Members can invest as little as £100 in blue-chip corporate loans.
Snapping up robo-advisors. BlackRock has entered the fray by acquiring FutureAdvisor, a Y Combinator start-up that automatically generates client portfolios.
Aberdeen on the lookout. Aberdeen Asset Management has acquired Parmenion Capital Partners, as part of its self-described strategy to "capitalise on advancements in financial technology systems and to become a leader in using technology to provide investors with portfolios appropriate to their needs, whilst also growing its Investment Solutions business".
LendingRobot partners with Lending Club. LendingRobot, which provides an automatic management service for P2P lending investments, has announced that investors can now set up a Lending Club account directly through the service.
FinTech and capital markets. An interesting piece on the intersection between the two, courtesy of Steve Grobb (Fidessa).
Clearing / trading technologies
Rival Systems expands product offer. The Chicago based provider of trading software has announced the launch of Rival Trader, a derivatives trading and risk management platform. The company expects to release Rival Enterprise, an enterprise risk management tool for brokerage and clearing firms, hedge funds, proprietary trading firms, and operators of multiple trading groups, later this year.
Barclays has your back (for a fee). The bank has launched a cloud-based contingency payment service for corporates unable to use their primary channel (for example, in the event of a network outage).
Good ol' Fortram. A 2006 blog post by John O’Sullivan, a coder, has been doing the rounds again. According to O’Sullivan (who was drawing on comments by an ex-Bloomberg colleague of his), Bloomberg terminals run on 25 million lines of Fortram code, a 1950s language created by IBM. The company has been struggling for a long time now to make the transition from Fortram to C++
Boris, the angel. Stockflare, the stock market information platform, is the first FinTech venture to receive funding from the London Mayor’s start-up investment pot (the London Co-investment Fund). Stockflare has also just raised £445,000 through Crowdcube, surpassing its £300,000 target.
Symphony platform launched to rival Bloomberg terminals. Goldman Sachs and thirteen other institutions have launched Symphony, a new cloud-based communications service for the financial services sector. The move comes in response to the Bloomberg snooping scandal. Symphony has also teamed up with Dow Jones to provide users with news content from within the service. The consortium has struck a deal with NY’s Department of Financial Services, agreeing to retain a copy of chat messages for seven years and store duplicate copies of their decryption keys with independent custodians.
Ant Financial. Alibaba affiliate Ant Financial raised $45-$50bn in the biggest ever Series A funding round. Ant Financial provides a range of financial services, including Alipay (an online payments service handling three times the volume of PayPal), investment service Yu’e Bao, online credit scoring service Sesame Credit, digital bank MYBank and an SME micro loan book valued at $65bn. The Chinese National Social Security Fund (NSSF) was among the investors. Alibaba is the Chinese e-commerce giant.
Innovate Finance's 2020 manifesto. The UK should aim to attract "$4 billion of venture investment and $4 billion of institutional investment in corporate venture funds, accelerators and innovation programmes".
UK and the European FinTech scene. Research by William Garrity Associates has found that “over 10% of global fintech investment has gone to the UK and startups based here have pulled in more than the rest of Europe combined.”
FinTech growth areas. Earlier in the summer, Oliver Wyman, Santander InnoVentures and Anthemis released a report highlighting key growth areas for tech-driven financial services.
Acceleration to nowhere? Heather Vescent, a consultant, has analyzed 186 winners across 18 FinTech competitions and hackathons. Data, lending, payments and small-business solutions were the most popular categories.
IoTUK. The government has launched a new national programme as part of its £40m investment in upgrading the UK's Internet of Things capabilities.
FinTech 101. Open University has launched a £700 FinTech 101 course in partnership with Innovate Finance
French FinTech industry association launched. The body has 36 members and is being led by Alain Clot.
Lists galore. There has been a flurry of lists and rankings released recently:
- The Sunday Times Hiscox Tech Track 100 is out - Funding Circle and RateSetter make the top 5.
- Several ‘most influential in FinTech’ lists have been released recently, based on analyses of Twitter activity:
- City AM released its top 100 powerlist.
- Onalytica provides a list of the most influential people and the most influential brands (TransferWise is the only actual enterprise that makes the top ten brand - most area media outlets).
- Marc P Bernegger maintains Twitter influencers lists for different FinTech centres.
- City AM released its top 100 powerlist.
- bankinnovation.net maintains a list of the top 20 finance apps downloaded on Android / iOS. Robinhood, a startup promising free stock trades, came in at No. 7, putting it ahead of Google Wallet, Venmo, Citibank, and US Bank.
- 30 Irish FinTech start-ups, courtesy of Silicon Republic’s FinTech Week articles.
- 13 examples of FinTech enterprises aimed at helping SMEs.
- London FinTech Week (September 14-20)
- Next Bank New York City (September 15)
- Next Bank Barcelona (September 22)
- Crowdfinance 2015 (September 28)
- Fintech Americas ‘Bridging the Banking Disruption Divide’ (October 22-23)
- Innovate 2015 (November 9-10)
- Applications for the FinTech Innovation Lab close September 17.
- Fusion, the Swiss FinTech accelerator set up by Polytech Ventures, has announced the ten start-ups who will be participating in its new programme (starting October 5).
- UBS has launched its Future of Finance Challenge, offering prizes worth more than $300,000.
- The 3D FinTech Challenge runs September 16 - November 4. The focus this year is on ‘data management technologies’ and their implications for RegTech. The challenge is run by Dassault Systemes in partnership with Deutsche Borse (and sponsored by Invest Northern Ireland).
- Ignite, the angel-led accelerator programme, is launching its inaugural London programme.
- Comerica Bank and RocketSpace have launched a wearable FinTech start-up challenge, with a $50,000 prize for the winner.