The rise of challenger banks has been a particular hallmark of the fintech industry over the last decade. Created to disrupt the traditional banking sector, challengers are full to the brim with innovative, often digital offerings aiming to serve customers in a variety of ways. With the customer taking centre stage and newfound co-operation with incumbents, this month we explore some of the classic attributes of challenger banks and their efforts to stay one step ahead of the industry.

Having discussed and dissected a multitude of challenger bank topics during the month of April, today we’re concluding our coverage of the industry’s biggest disruptors by posing the all-important question, ‘what is the future for challenger banks?’

The fightback

According to David Royle, chief operating officer and MD of financial services consulting for SRM Europe, challenger banks must demonstrate both profitability and relevance in their services if they are to successfully compete with incumbents in the future: “The road ahead is many forked, and in some instances, yet to be built. Challenger banks must continue to develop and broaden the relevance of their service offering, so they become more relevant and trusted by more customer segments.

“They will have to compete hard against other banking segments, as well as contend with the next wave of fintechs who could redefine challenger status altogether – embedded finance, wealth management, AR, crypto and digital currencies to name but a few.

“We long anticipated there to be a natural cycle with many of the digital challengers being acquired by the banking mainstream, however inflated valuations and high street banks upping their digital game has constrained this avenue, no doubt to the disappointment of many digital bank founders.

“As such, establishing profitability becomes the defining step, and investors will back innovation and disruption for many years, but the ultimate success stories will be those who can be self-sustaining and continue to grow, which becomes even harder.

The early adopters and those attracted to a differentiated proposition will already have been tempted to open accounts, albeit most will have kept their traditional banking relationship alongside. The challenge remains how to acquire the next wave of customers and persuade them to leave their traditional banking comfort blanket.”

Doing it differently 

As explored here by Mike Kraus, principal of CMFG Ventures, challenger banks must facilitate services that will be entirely new to the consumer, and that they should find a niche within the market if they are going to survive within it: “Challengers hold an advantage by having lower operational costs and speed to market. The question is whether those advantages are enough to hold off the large incumbents with seemingly endless resources. Challengers will continue to chip away at market share but may see increasing competition from non-bank consumer brands such as Amazon, Apple and others.

“As of December 2021, there were 256 challenger banks worldwide according to data by Exton Consulting. While a challenger can launch with relatively low capital requirements, scaling is an entirely different story. In the coming years, we’ll find out which challengers have a differentiated value proposition for customers and are therefore able to grow profitability.”

Embedded for better

James Butland, VP of Financial Partnerships, EMEA at Airwallex, anticipates a future of embedded finance and more personalised offerings: “The future for challenger banks will be creating a holistic experience for customers and businesses.

“This means, embedding more financial products and services into their core business models, which in turn will empower a seamless payment experience for customers.”

Philipp Buschmann, co-founder and CEO at AAZZUR, largely agrees with this opinion; adding: “I see the future where banks will still be there, but day-to-day banking will be done by challengers selected via the personalised products they offer.

“Savings and the bulk of the money will be parked in incumbent banks that are trusted and have longevity.”

A testing time

Daniel Haisley, EVP of innovation at Apiture, considers what the future of the industry will look like from both sides of the table, stating: “Challenger banks fall into two primary categories:

• “Traditional institutions working on a digital transformation. These institutions are using the challenger brand to kick the tires on new technologies, new target demographics, and new products. We expect to see the number of entrants in this space continue to rise as the path to success becomes well-trodden.”Most financial institutions are looking for a way to either get out and/or stay out of the malaise of commoditisation. Some will be successful, and you’ll see the traditional institution adopt the then-tested strategy, technology, and customer base of the challenger.

• “Non-chartered institutions who want to change banking from the outside-in. Unencumbered by existing technical debt or expectations of an already-situated customer base, these entities will continue to work to define new communities of customers who are otherwise disenfranchised by the status quo of the banking landscape.”The challenge for these entities will be whether they can establish a sustainable business model in time, particularly as it increasingly appears we’re headed for economic headwinds where capital may become less accessible, and rates will continue to increase. The winners here will be those who develop strong bank partnerships to access deposit insurance as a means of driving down the cost of capital, and then the choice few who succeed in making the move to themselves get chartered.

  “We saw this with marketplace lenders in the most recent decade where a deluge of entrants results in a few winners, a few high-flyers being sold at deep discounts to their peak valuations, and most falling to the wayside.

“Overall, we anticipate seeing a continued proliferation of challenger institutions, particularly as open banking drives standards across the industry. Those spun from larger institutions will be seeking to funnel learnings back to the mothership, while those independent, non-chartered institutions will be striving to find the business model that ultimately delivers the margins needed for a sustainable institution.”

A turning point

Ahmed Karsli, the founder of Papara, closes our conversation with: “With technological efficiencies at their core, and unconstrained by the legacy systems traditional banks have built themselves on, the pandemic has been a defining moment for neobanks. From first-hand experience, our customers have valued the speed and ease with which we have been able to adapt to their quickly changing needs in comparison to incumbent providers, which we believe has been the key catalyst for our growth.

“However, as we emerge from the Covid-19 crisis with more digitally evolved consumer habits, there will be a turning point for the sector whereby challenger banks will in fact form the majority of the banking industry. Challenger banks will need to ensure they are truly at the cutting edge of technological innovation to ensure they remain just that.”

The payment infrastructure provider EBA CLEARING has collaborated with paytech SWIFT and The Clearing House (TCH) to launch a pilot service for immediate cross-border (IXB) payments.

Supported by banks from either side of the Atlantic, the pilot service is scheduled to begin by the end of this year with several participants joining the service in a phased approach.

Twenty-four financial institutions have had a hand in the design of the pilot service, with each participant expressing their interest in joining the pilot.

Its proof of concept was completed in October 2021 and reportedly demonstrated the ability to synchronise settlement in one instant payment system with settlement in the other and to convert real-time messages between both systems.

The pilot has been able to achieve this by utilising both sides’ fastest domestic payment options.

Since the conclusion of its pilot phase, the group has formed an IXB sounding board, which provides input on the development of the service whilst leveraging existing real-time infrastructure, technology and standards.

Based on the building blocks of ISO 20022 message standards, SWIFT Go and the instant payment systems of EBA CLEARING and TCH, the service will initially support instant payments in the US dollar and euro currency corridor.

As part of the announcement, the companies stated that the service is being developed with a view to extending to other currency channels and payment systems.

“The RT1 and RTP networks are perfectly positioned to deliver a better cross-border experience with a very short time to market,” said Russ Waterhouse, EVP for product development and strategy at TCH.

“The trans-Atlantic pilot service will provide valuable input for the development of a fully-fledged IXB service to meet customer expectations across the globe.”

“We are pleased that the IXB development benefits from the expert input of 24 banks from 10 countries,” added Erwin Kulk, head of service development and management at EBA CLEARING.

“Aside from delivering a simple and transparent service for end-users, our key aim is to keep things easy for financial institutions: the fact that there is no need to connect to a separate payment system should make the service very attractive for RT1 and RTP participants of all sizes.”

SWIFT’s chief strategy officer David Watson comments: “The interlinking of instant payment systems promises a new way of moving money across borders safely, quickly, and at low cost.

“SWIFT’s enhanced platform and transaction management capabilities create a flexible and efficient way to interlink multiple instant payment schemes while enabling banks to re-use their existing investment, and we look forward to supporting the development of the IXB pilot service.”

SWIFT has been particularly busy over the course of the last year. It has collaborated with SETL to innovate within the tokenised asset market; and partnered with MonetaGo to fight financing fraud within trade finance.

Within the realms of international payment services, the financial messaging provider recently enabled banks to verify payee account details before an international payment is sent, removing a key point of friction in cross-border transactions.

In addition to this, it went on to announce this week that it will enable financial institutions to connect to its network and applications through public cloud providers Amazon Web Services (AWS), Google Cloud and Microsoft – a move that will streamline access to its services and enable new innovation while ensuring robust resiliency and security.

And clearly SWIFT are ready to progress IXB even further, with the most recent news of its collaboration with TCH and EBA CLEARING.

The IXB initiative is supported by a variety of global banks Wells Fargo, J. P. Morgan, HSBC and Deutsche Bank, among others.

“We are eager to progress the IXB service from proof of concept to something beneficial for our clients,” said Cyrus Bhathawalla, global head of real-time payments at J.P. Morgan.

“With our global footprint and experience with instant payments and FX, we provide a consistent faster payment experience – end-to-end and across regions.”

Ulrike Guigui, EVP and head of enterprise payments for Wells Fargo, added: “Through this transformative solution, we see the possibilities of enabling faster, more frictionless cross border payments, and providing a better end-to-end customer experience. Wells Fargo will continue to be a leader in this work and we are excited to engage and grow the IXB initiative.

It is envisaged that the IXB pilot service will be followed by a full service offering in 2023.

The key features of the service will be aligned with the focus areas related to speed, access, cost and transparency, as outlined by the Committee on Payments and Market Infrastructures (CPMI) and Financial Stability Board (FSB) for enhancing cross-border payments.

By providing a model that can be replicated across other currency corridors and payment systems, the IXB initiative is expected to provide even greater opportunities for financial institutions and their customers around the globe.

Mambu, the cloud banking platform enabling modern financial experiences, announced that it has extended its partnership with Nordiska for an additional seven years to continue supporting the institution’s growing financial services offering and expansion plans.

A licensed and regulated Swedish financial institution, Nordiska began operations in 2014 by offering specialised business loans. Nordiska and Mambu partnered in 2016 to replace their custom-built legacy systems with a fully cloud-based infrastructure. Within months of full go-live, Nordiska expanded from Sweden to Finland and Germany. Nordiska also recently acquired another Mambu customer in the region, following a growth strategy underpinned by the international expansion of the cloud banking offering.

Niklas Andersson, cloud banking specialist of Nordiska, commented, “Our partnership with Mambu has opened enormous possibilities for us over the years and, in turn, for our customers, fitting our vision and strategic purpose of being one of the leading providers of cloud banking services in the Nordics and the European Union. We are in control of all data, system configurations, business logic and workflow. The Mambu ecosystem has accelerated Nordiska’s mission to provide technology, compliance and business driving liquidity to any company selling financial products, whilst remaining fully compliant with regulations.”

Pehr Petersson, COO of Nordiska, added, “We have invested significantly in our infrastructure, bringing scale and speed to our operations. To continue scaling our services across the region, investing in the latest and best technology is a top priority for Nordiska. We look forward to continuing our partnership with Mambu to further harness their platform and accelerate our growth.”

“Nordiska is a great illustration of how a versatile ecosystem can help an institution scale, and evolve in order to strengthen its customer focus,” said Peter Richmond, VP customer success at Mambu. “Technology is an enabler and a composable foundation has allowed Nordiska to diversify and differentiate in a changing market. We look forward to continuing our collaboration to expand their product offering and build the distinctive experiences that customers demand, at scale and speed.”

The changing face of the UAE’s workforce has brought just as much change to its rate of financial inclusion, alongside the opportunity for fintechs to make a lasting difference in how the region’s increasing demographic of modest-income workers experience finance and financial services. 

In this guest authored piece for The Fintech Times, Wael Fakharany identifies how the workforces of the UAE and the wider MENA region are changing; discussing the benefits of financial inclusion and digital literacy and how they can be furthered, and the role of human resources (HR) in advocating that shift. 

Fakharany is the managing director at Edenred UAE. Headquartered in Dubai, the payroll management provider specialises in its payroll solution service, which is accompanied by its ‘C3Pay’ payroll card. 

Dubai has moved to an increasingly cashless society, especially since the onset of the pandemic. From crisis to recovery and the reopening of economies, businesses have witnessed a profound change in consumer behaviour, evolving day by day.

There has been a significant shift towards accessing financial services via fintech platforms among skilled workers. Expanding this technology to everyone requires higher levels of digital financial literacy. Countries like the UAE, which have had an accelerated transition from cash to digital financial services, create significant gaps in digital financial literacy in more vulnerable populations.

McKinsey & Company revealed that the number of consumer digital payments transactions in the UAE increased at an annual rate of more than nine per cent between 2014 and 2019, compared to around five per cent in Europe.

Ninety per cent of surveyed payments practitioners predicted that at least half of the new users would continue with digital payments, and more than half of the respondents said strong non-cash payments growth will continue until 2026.

The advent of technology blooms new skill demands in the job market while also revolutionising how individuals interact. In the UAE, the total labour force was at 6.38 million in 2020, according to The World Bank, of which 80 per cent is foreign/expatriates. Globalisation, better connectivity and ease of communication have brought diversity to the labour force.

While access to the internet and the adoption of smartphones are widespread in the country, digital literacy and financial inclusion amongst modest-income workers is an area that will contribute positively to the UAE economy.

Better financial access means more people connect to the formal financial system, make productive investments and build assets mitigating shocks related to emergencies, illness or injury.

How can we drive financial inclusion?

Financial inclusion refers to making financial products and services accessible and affordable to all individuals and businesses, regardless of their net worth or company size. It has been identified as an enabler for seven of the 17 UN Sustainable Development Goals and is increasingly regarded as a tool to assess well-developed societies.

It includes providing tools to gain access to credit, grow a business, buy a home, save for a child’s education, or plan for health and retirement. With innovative and clear-sighted policies, fintech innovation can change the way people transact. The future of finance is brightest when it provides valuable services to the broadest swath of society and the economy. Financial inclusion has been linked to reducing poverty and increased prosperity as it aids inclusive growth, economic development and financial deepening.

The financial inclusion rate for the Middle East and North Africa (MENA) region stood at 20 per cent at the end of 2019, according to the MENA Financial Inclusion Report 2020.

A breakdown of critical categories found that 36 per cent of the region’s population has access to financial services and 24 per cent access payments facilities. Meanwhile, only nine per cent have access to credit and 12 per cent to savings. In the region, the UAE has the highest financial inclusion rate at 46 per cent, followed by Bahrain at 39 per cent and Saudi Arabia at 31 per cent.

Financial inclusion alone is not enough. There is tremendous work needed around financial education to ensure the unbanked population can access financial facilities and knows how to use them. From digital payments, international money transfers (remittances), peer-to-peer transfers and more, bringing awareness to the existence of these services is the first step.

Next, they need to be aware of the risks like hacking, phishing, fraud, etc., to safeguard themselves against cyber-attacks.

This calls for a multi-dimensional approach to financial inclusion and lays out a framework for how the UAE and its companies can link financial literacy to digital literacy. These initiatives have gained an important position in the policies of the UAE.

With the UAE Vision 2021, the country aimed to diversify its economy and revenue beyond oil and enable its long-term economic and social development. A core component of this vision is the need to create a globally competitive workforce that is future-ready and equipped with future skills.

To build on the initiatives launched by the government to reduce the knowledge gap, Edenred UAE conducts training sessions for modest-income workers to educate them on topics such as personal finance management, fraud prevention and cost savings through leveraging digital financial services.

It also offers personal assistance via a WhatsApp support channel.

How can HR impact financial inclusion?

Payroll directly impacts the employee experience every single payday. A MetLife study released in 2020 found that employees are more concerned about their finances than any other aspect of their well-being. When salary payments are accurate and on time, it keeps an employee happy.

Despite advancements in technology, payroll processing still takes up time and effort. Any delays or errors on payday cause employee dissatisfaction, which spirals and harms the workplace.

Providing 24/7 online access to employees’ finances ensures a level of financial wellness. Additionally, fine-tuning payroll practices will make it easier for employees to interact with the system and employers will land up with considerable benefits, including greater productivity and reduced costs.

Considering financial wellness as an employee engagement strategy will help bolster engagement and boost the bottom line.

An inclusive and collaborative approach to closing the digital gap through education, engagement and participation of modest-income workers is crucial for the long-term prosperity of the UAE. The beneficial impacts for the people, businesses, economy, the country and finally, the region are tremendous.

In this weeks instalment of the In Profile series, we speak to Karl MacGregor CEO and co-founder, Vyne, to learn more about how the company is transforming the payments space.

Tell us more about your career to this point?

I have worked in the payments and e-commerce industry for over two decades forming digital strategies at Worldpay, Ladbrokes and Barclaycard to name a few. I’ve had a front-row seat to its wholesale transformation over the last 25 years.

In my current role as Co-Founder and CEO of Vyne, my focus is to transform payments by bringing a modern-day solution to the table to enable faster, safer and seamless payments for merchants and consumers.

What was the inspiration behind founding Vyne?

After years of working in the payments industry, I became frustrated with the way that the payments ecosystem was lagging behind industry needs, and could clearly see that a fresh approach that worked for both retailers and consumers was needed.

Current payment solutions are simply not user-friendly. The traditional bank transfer offers a cumbersome payment process that is not fast or agile enough for the modern world. Card payments are costly and can have a high failure rate, and direct debit payments are not real-time, which causes disruption to businesses and consumers. We believe the future of payments is digital and they need to be frictionless, contactless, and fair. I started Vyne to provide seamless account-to-account payment solutions that are faster, simpler, and much more cost-effective.

Vyne’s instant account-to-account payments eliminate middlemen while improving the consumer experience. Our innovative open banking powered solution enables merchants to boost conversions, reduce costs, and drive revenue. We have created a platform that is completely channel-agnostic and provides an end-to-end digital experience to businesses – whether it’s on a phone, browser, or in-store.

What problems are you solving?

While the digital world is constantly evolving, existing payments and banking solutions remain largely unchanged and stacked against merchants and consumers.

Firstly, traditional payments take several days to settle. We offer instant settlement as standard, improving cash flow. This enables consumers and merchants to access funds immediately, offer real-time refunds and payouts, and simplifies reconciliation.

Second, businesses that accept payments are held hostage by an ever-increasing processor and card scheme fees. Not only do we allow businesses to avoid these costs by bypassing the card networks entirely, but this removes the need for multiple gateways and eliminates interchange fees, helping businesses save on costs.

A third problem is conversion. Our seamless payment experiences help merchants secure conversions by offering a frictionless UX via different channels, including online and in-store checkout, payment links, and QR codes for static or dynamic payment content.

Finally, payment security is another pressing concern for merchants. Each and every payment made through Vyne is automatically Strong Customer Authentication (SCA) compliant, dramatically reducing the risk of fraud for customers and merchants while eliminating chargebacks, all without impacting conversion. We allow customers to make payments directly from their own verified bank app, with authentication carried out quickly and seamlessly, reducing friction and improving the customer experience.

We are solving these problems for multiple verticals including retail, digital goods, travel, automotive, cryptocurrency, and remittance.

How is open banking transforming retail and e-commerce?

Since the onset of the pandemic, the retail industry has undergone rapid digital transformation. There are two retail trends that have presented an opportunity to increase adoption of open banking payments. First, electronic payments have grown in popularity as use of cash has declined while consumers’ need for instant gratification has increased, they’re calling out for instant, fiction free payments. Second, e-commerce’s share of UK retail sales has increased, highlighting the need for smooth online customer journeys. Consumers and merchants are looking for innovative ways to pay that are agile, secure, and convenient. Open Banking powered account-to-account payments enable retailers to meet these rising consumer payment demands.

Customer retention is a key priority for merchants and as such they are looking to offer better and more diverse benefits to customers. With open banking, customers can view their entire financial situation- bank accounts, credit, insurance mortgages, pensions, etc- in one place, and move freely between the best value financial products and providers.

Cart abandonment is another issue for retailers that’s causing stress. Our latest research shows that regular online shoppers are abandoning baskets at least once a month, citing hidden charges and frustration at inputting lengthy card details as the chief reasons for doing so.

Returns are a major concern in the UK’s retail industry. As per our research, 43 per cent of consumers have had to chase their refunds for online purchases, leaving them feeling frustrated and angry at retailers. Poor payment terms can damage customer loyalty, but open banking facilitates instant returns leading to higher customer satisfaction.

In this new, pandemic-influenced world of e-commerce, merchants and consumers want speedy, secure, and convenient customised payment experiences. Open banking solutions can deliver on this demand.

What are the benefits of open banking?

Open banking enables the delivery of innovative consumer financial products via API and provides financial institutions with improved decision-making ability by granting access to data and insights.

Open banking payments are a more modern, transparent, and seamless approach to transacting that benefit both end consumers and merchants. It allows users to move money between bank accounts instantly; reduces costs by bypassing the card networks and their transaction fees; and increases cart conversions by offering simple mobile-first experiences. Furthermore, it is also fraud resilient – with open banking there are no chargebacks, need for fraud screening, nor risk of data hacks. Open banking is instant with increased cash flow with no delays in receiving funds direct to merchants’ bank accounts.

The number of consumers using open banking is increasing rapidly, but there’s still time for businesses to get ahead of the curve.

Is open banking, and the cardless economy, set to be the next big thing in 2022?

The Open Banking Implementation Entity (OBIE) revealed that 3.9 million British consumers and 600,000 UK small businesses are currently using open banking services, with one million new users being added every six months. 2022 will see a continued rise in consumers demanding easier ways to pay for goods and services and this is where open banking will shine. In 2021, we saw a 60 per cent increase in new open banking customers (up from 2.8 million in December 2020). This clearly demonstrates how the payments landscape is changing, as more and more consumers are experimenting with trying new payment methods.

Why is it important for businesses to shore up their payment processes for consumers?

Consumers are demanding change. The post-pandemic consumer is looking for instant and secure payments with little to no friction. Account-to-account payments eliminate the need to fill out long card numbers and allow payments in as little as three clicks, reducing customer frustration with the process. It is important for merchants to jump on this growing trend in order to keep consumers happy and in turn, build loyalty and grow their revenues.

How much does regulation come into play?

Open banking was initiated by regulation, PSD2, which was the catalyst for financial institutions across Europe to adopt open APIs. The removal of the 90-day reauthorisation requirement in November 2021 was a landmark change that will support the adoption of open banking services. Now, consumers and businesses will be able to stay connected to their selected third-party providers for longer, resulting in an improved user experience. This is a positive step forward towards the future of payments and the rise of open banking.

What is the future of open banking, and where does Vyne fit into that?

Open banking is transforming the way we pay for goods and services and manage our finances. As the payments landscape undergoes a period of significant change, Vyne is setting the course for the future of payments by offering a more modern, transparent and seamless approach that benefits both merchants and consumers in a transaction. Our mission is to become the preferred way to pay and get paid and we will strive towards this by continuing to promote instant account-to-account bank payments that eliminate middle-men and improve the consumer experience. We are providing an intelligent infrastructure that puts fintech at people’s fingertips.

By 2025, around 40 million people will be able to access open banking services, and we are confident that we will make a significant contribution to this figure.

Fintechs will struggle to grow if they fail to recruit and retain the right tech talent yet competition for talent has never been fiercer.  Can prioritising financial education help solve talent issues and ensure future industry success?

The fintech industry is one of the fastest growing sectors post-pandemic, outperforming the wider market by three times, according to recruitment firm Robert Walters.

Its latest Global Fintech Talent Report reveals that the global fintech sector has seen a 182 per cent increase in tech job growth for the first quarter of 2022 – with the top eight fintech ‘mega-hubs’ accounting for more than 90 per cent of all new fintech jobs advertised around the globe. Economic resurgence and appetite for growth has piled on the recruitment demand.

With one in three new hires within fintechs around the globe going to software engineers and developers, Robert Walters warns that the fintech sector will face major hurdles this year due to an acute tech talent shortage around the globe.

Toby Fowlston, CEO of Robert Walters, says: “The forecast for organisations working in the global fintech market is a very positive one, however, their growth will be dependent on their ability to recruit and retain the right tech talent. No country quite has a dominance over technology and given the remote and mobile nature of the tech industry it seems that all major economies are competing for a slice of the fintech pie.

“While the outcome of competition means heightened innovation and consumer choice, from a talent perspective this creates a challenge and as the adoption of fintech products continues to grow at an exceptional rate the concern is whether there is enough of the right tech talent to keep up with the growth.”

In addition, Scottish recruitment firm Core-Asset Consulting also recently revealed that organisations are fighting over the same limited talent pool with startups missing out on the crucial talent they need to scale and attract new investment.

Talent war

So what can be done to ensure victory in the tug-of-war for talent? According to industry experts, educational changes and better funding are essential ingredients for ensuring the UK stays competitive in the fintech ‘race to the top’.

Speaking at a fireside chat on fintech innovation at the recent Innovate Finance Global Summit (IFGS) at London’s Guildhall, Sarah Williams-Gardener, CEO at independent membership association FinTech Wales, said: “We need the right skills and talent. We have phenomenal universities, phenomenal colleges and phenomenal capabilities but we have to ensure we have the right funding.

“I have two children and if they had not had a mother who is a fintech founder they wouldn’t know about fintech and nor would their friends; they would still be going into traditional industries. There is huge responsibility on us to talk about what this industry is about.

“In Wales, we are taking the industry to students as these are the skills and talent of the future. We’ve got coding academies and businesses going into school telling them what they are they doing and why. It’s important if we are going to stay at the beginning of the fintech race.”

Fellow panellist, Jeff Parker, CEO at business payments firm WorldFirst, echoed this view. He said: “There is a chronic talent shortage in the UK because fundamentally the education system is broken and hasn’t changed for decades; it’s old school. We really need to learn to embed coding, engineering, science and technology into the DNA of our country from an early age. Until we fix that pipeline, it’s going to be really difficult and more and more challenging for the UK.”

Sustainable funding for financial education

Research undertaken by the Money and Pensions Service has shown that attitudes towards money are formed as young as seven, proving that financial education provided at a young age is vital for future financial capability.

Earlier this week, charity The Centre for Financial Capability went to Downing Street to call for better funding for high-quality and effective financial education. It presented a letter signed by companies in the financial education and services industry, including GoHenry, Hargreaves Lansdown and Quilter, urging for a substantial proportion of unclaimed money from dormant accounts (through the Government’s Dormant Assets scheme) to be used to fund financial education for primary aged children.

This letter followed The Financial Education Summit, sponsored by John Penrose MP and supported by the Centre for Financial Capability, which called for increased attention to the importance of implementing financial education in primary schools, to meet the larger goal of increasing financial resilience throughout adulthood.

Stewart Perry, a member of The Centre for Financial Capability and head of responsible business at Quilter, said: “I very much recognise the importance of ensuring sustainable funding for financial education and believe the Dormant Assets Scheme is a common sense way for industry to work with Government to ensure every child in the UK has access to the necessary financial skills to equip them for later life.”

Recent education initiatives

In March, FinTech Wales, Cardiff Council’s Cardiff Commitment and Invest in Cardiff officially launched The DebateMate Schools Programme; a 12-week programme designed to develop pupils’ oratory skills and awareness of the fintech sector in a series of debating contests culminating in a grand final later this year.

While at the end of last year, Deloitte hooked up with Innovate Finance to launch an app and educational programme for pupils in Scotland. The app gives students access to information that will help them to better manage their own personal finances whilst developing their understanding of financial inclusion, banking, mobile payments, and cryptocurrency.

Newcastle based fintech company, ION has announced they have joined Stripe’s Partner Ecosystem (SPE) becoming a strategic partner with Stripe, a global technology company that builds payments infrastructure for the internet.

As a ringing endorsement of the partnership, Stripe has appointed ION as a strategic partner for billing implementation in the UK to provide fully integrated payment and billing infrastructure to mid-market businesses. ION and Stripe work together to accelerate cash collection for mid-market organisations, by implementing the financial infrastructure required to automate billing and payments, integrating CRM and accounting software, whilst delivering powerful data analytics.

Stripe offers over 135+ currencies and dozens of payment methods, combined with automated billing, revenue recognition and global tax calculations covering 35+ countries, giving businesses everything they need to meet the demands of payments, subscriptions, and billing in the modern world.

ION’s team of finance technology specialists collaborate with customers to design and build powerful subscription, billing and payment solutions, which accelerate revenue, reduced collection time and maximise profitability.

“We are delighted to be selected as Stripe’s strategic billing partner in the UK. Their industry-leading billing and payment solution further enhances ION’s unique proposition as the leading independent financial transformation specialist for business finance leaders in the UK” says ION Managing Director, Rob Mathieson.

“The launch of the Stripe Partner Ecosystem coincides with more businesses looking beyond their organisation to navigate the internet economy, and Stripe making it easier to find the right partner for their needs,” said Dorothy Copeland, vice president of global partnerships and alliances at Stripe.

“By partnering with ION and introducing a comprehensive set of partner resources, companies around the world will be able to accelerate their move to online commerce more easily.”

Digital payments have helped businesses get paid safely and efficiently through the COVID-19 lockdowns and associated restrictions, but new challenges are arising as economies reopen. With supply chain disruptions, the ‘great resignation’, rising inputs such as fuel, and the expense of reopening top of mind for businesses, now is an opportune time to build on the processes optimised throughout the pandemic, especially across B2B trade.

Transforming payment processes with digital technology not only helps businesses get paid faster but implementing integrated cloud-based solutions delivers many efficiency-based benefits for businesses. In light of this, Spenda, a provider of B2B payment and lending solutions, leveraged research to create a paper that delivers a holistic overview of insights into the global state of B2B payments and how businesses can take advantage of trends and innovations to accelerate growth.

Spenda’s CEO, Adrian Floate said: “Businesses pay late for many reasons, most commonly because cash flow is hampered as a result of ageing receivables. While regulatory changes and Government incentives are a valid step and may reduce payment times, they don’t resolve the root cause of late payments.

“Implementing the right technology can address late and non-payment risk at its root while transforming how businesses manage their finances from credit management to accessing working capital.”

The research found that over half of Australia’s B2B payments are processed late, and it’s a major resource drain. More than 53 per cent of B2B receivables in Australia are paid late. Not only do late payments cause cash flow problems, but chasing up these payments takes valuable time too.

In terms of global digital B2B payments trends, e-invoicing and virtual cards lead the way. Adoption rates of digital B2B payments technologies vary around the world. Currently, developing regions in Africa and South-East Asia are leading the way with growth driven by the uptake of innovations such as virtual cards and it’s projected that the global virtual card transaction value will reach $6.8trillion by 2026.

Mandates and Policies are a also a catalyst for digital adoption. In Australia for example, the 2022/23 Federal Budget cash flow promise and Payment Times Reporting Scheme are a valid step and may reduce payment times. Similarly, Governments around the world are planning to accelerate e-invoicing adoption for businesses in the coming years. And while this is a valid step and may reduce payment times, it doesn’t resolve the root cause of late payments and inefficiencies across the supply chain — outdated processes and payment infrastructure.

Floate added: “COVID-19 accelerated the use of smart technology in the supply chain, providing a starting point for companies to expand efficient systems to other business areas. Businesses that implement integrated technology solutions can better maximise their ROI while transforming systems and processes across the organisation. And it’s those companies that are proactive now that will gain a competitive edge, while experiencing lower costs and stronger financial management.”

Heang Chan, co-founder and CEO of low-code solutions provider Prelim, knows firsthand how manual and cumbersome customer-facing processes can be. It’s one reason he left banking seven years ago to work in fintechs. “I spent a considerable amount of time as a banker and realized that there were a lot of, I would say, places […]

London-based documents automation fintech Uhura Solutions has raised $1.8 million in a seed funding round, the company announced Wednesday. Uhura Solutions offers a low-code solution for document and contract analysis, automating data analysis and classification, extraction, review and processing, according to a release. The fintech works with $1.7 trillion Barclays, $573 billion NatWest and Austria-based […]

This week on Finovate Global we’re taking a look at some recent fintech developments in Canada.

On the fundraising front, embedded wealth management platform OneVest announced a $3.9 million (CAD $5 million) seed funding round this week. The investment was led by Luge Capital and takes the Canadian fintech’s total funding to $5.5 million (CAD $7.1 million).

The funding will help OneVest, which was founded in 2021 and is headquartered in Calgary, Alberta, to grow its team, expand sales, and support product development. The company offers digital wealth management services that can be embedded into consumer-facing products via APIs. The technology integrates well with multiple fintechs and financial institutions, empowering them to combine wealth management and investment functionality into their own financial solutions.

“People are increasingly demanding a more seamless and simple experience where financial products are integrated into their everyday lives,” OneVest co-founder and CEO Amar Ahluwalia said. “Our mission is to make investing more accessible to everyone, and available anytime, anywhere and through any channel.”

The first company to take advantage of the new offering is Neo Financial, which leveraged OneVest’s platform to launch its new actively managed wealth platform, Neo Invest.

Square announced this week that it is bringing its financing solution to business borrowers in Canada. Square Loans leverages transaction data to create and bring customized offers to eligible sellers, giving them a straightforward, paperwork-free application process. Funds are available the next business day and businesses are charged a single, upfront loan fee that is paid back automatically as a set percentage of daily card sales with Square. This arrangement enables borrowers to make larger repayments when sales are strong and smaller repayments when sales are weaker.

“From our earliest days, Square has focused on building easy-to-use tools and services to empower entrepreneurs to succeed on their own terms,” Head of Square Alyssa Henry said. Since Square Loans launched in the U.S. and Australia, the company has provided more than $9 billion in financing to more than 460,000 businesses with an average loan size of $6,750.

For all the interest – an even enthusiasm in some quarters – over CBDCs, not everyone is on board. This week we learned that Pierre Poilievre, leadership candidate for Canada’s Conservative Party is not only unimpressed by the opportunities provided by CBDCs, he also wants to enact a ban on the technology.

But don’t mistake Poilievre for a Luddite. The man considers himself a blockchain backer and has, in fact, pledged to make Canada “the blockchain capital of the world.”

“A Poilievre government would welcome this new, decentralized, bottom-up economy and allow people to take control of their money from bankers and politicians,” the Conservative Party politician said in March. He added that an embrace of blockchain would “expand choice” and “lower the costs of financial products” as well as providing a wealth of tech-oriented jobs and opportunities for entrepreneurs in Canada.

As such, Poilievre’s CBDC skepticism seems to be more related to his attitude toward central banks than his opinion on blockchain technology. He has promised that, in addition to a CBDC ban, he would support an audit of the central bank’s balance sheet – a common commitment from conservative politicians in the post-Global Financial Crisis era. This would include a review of the central bank’s bond buying program during the pandemic. Poilievre has blamed the central bank economic response to COVID for the country’s currently high inflation rate.

Both a Canadian CBDC and a Poilievre mandate are some ways away, if that. The Canadian central bank has been working on a CBDC for year, with the project still in development stage. Poilievre, while the front runner to become the leader of the opposition Conservative Party, would nevertheless have to wait until 2025 at the earliest to challenge Canadian Prime Minister Justin Trudeau.

Here is our look at fintech innovation around the world.

Central and Eastern Europe

Middle East and Northern Africa

Central and Southern Asia

Latin America and the Caribbean

Asia-Pacific

Sub-Saharan Africa

Photo by Brett Sayles

Capital One’s focus on digital tools and dealer relationships contributed to increased auto originations in the first quarter as the lender looks to keep pace with industry competition. Auto originations increased 20% sequentially and 33% year over year to $11.7 billion, driving overall growth in the bank’s consumer banking business, according to the earnings supplement. […]

The European open banking platform TrueLayer has become the first to deliver variable recurring payments (VRP) for both non-sweeping and sweeping use cases through a single application programming interface (API). 

VRPs allow a third party to initiate recurring payments from a person’s bank account on a continuous, usually monthly basis. Third parties could pertain to subscription service providers or bill payments for example.

TrueLayer’s API will enable businesses to connect to selected UK banks to take VRP from their customers. The VRP API also allows businesses to ‘sweep’ payments, transferring money between two accounts belonging to the same customer, whilst also enabling VRP transparency, speed and control for more people in the UK as a replacement for direct debit and card-on-file payments.

The problems with direct debit and card-on-file

Using open APIs, VRP allows companies to collect recurring payments of variable amounts from their customers. In a way, they’re similar to direct debit and card-on-file payments, but without the issues that affect these methods. 

Unlike the speed associated with the capabilities of open banking, it can take up to five days to settle a direct debit transaction, whilst the wait can be as long as 10 days with card payments.

This delay prevents businesses from handling their cash flow effectively, whilst also hindering users from accessing the services they want to use.

Both direct debit and card-on-file payments lack key security features. Setting up card-on-file payments requires customers to share sensitive credentials, leaving them vulnerable to security breaches and fraud.

Direct debit doesn’t involve credential sharing, but it lacks strong customer authentication (SCA) measures. Cards in particular present several other issues for merchants. They can draw steep interchange and processing fees, both of which are expensive for businesses.

Then there are chargebacks, which present additional penalties and could expose companies to friendly fraud.

The VRP solution

VRP provides a solution to many of the aforementioned problems with direct debit and card-on-file. Instead of a single payment credential as would be expected from a card, consumers can set up unlimited recurring payments by establishing various VRP mandates to specific merchants and payment amounts.

VRP lets users know exactly where their money is going, alongside the power to revoke specific allowances or subscriptions more easily. TrueLayer’s VRP also incorporated the latest SCA measures, implemented nationwide in March, allowing for a better customer experience compared to cards.

Businesses can also benefit from real-time settlement, o9wer transaction fees and the near-elimination of card fraud. 

Use cases

TrueLayer’s VRP can be leveraged to facilitate both sweeping and non-sweeping use cases. Sweeping use cases include tasks like funding savings accounts; moving money from one account you own to another account that you also own.

The platform is also set to offer non-sweeping applications, including both fixed and variable subscriptions, enabling merchants to take payments for things like your phone bill, rent, energy bill and streaming subscriptions.

A partnership between Mastercard, the payments organisation and Microsoft, the tech corporation, has been announced as the companies look to launch an enhanced identity solution designed to improve the online shopping experience and tackle digital fraud.

Delivering a frictionless shopping experience is critical as retailers look to shift window shopping and price comparison visits to confirmed sales. And, while consumers enjoy the convenience of shopping online, fraudsters also seek to develop new methods to use these same channels for ill-gotten gains. One of the growing types of digital fraud is first-party fraud, where a legitimate purchase is made online but later disputed. First-party fraud is estimated to be a $50billion global issue.

Mastercard has addressed these needs by enhancing its Digital Transaction Insights solution with next-generation authentication and real-time decisioning intelligence capabilities. The solution pairs Mastercard’s network insights with the merchant’s own data to confirm the consumer is who they claim to be, providing financial institutions with the additional intelligence needed to optimise their authorisation decisions and approve more genuine transactions. Digital Transaction Insights is used across a wide range of online checkout instances, from click-to-pay functionality and wearables to digital wallets and in-app purchases.

Ajay Bhalla, president, cyber and intelligence at Mastercard, said, “Shopping online should be simple, quick and secure. But that isn’t always the case. We’re committed to developing advanced identity and fraud technology to help enhance the real-time intelligence we provide to financial institutions around the globe. This builds on our longstanding commitment of working across the industry to provide advanced technologies that enable trust, and help build a safe and thriving digital ecosystem for all.”

Microsoft will be the first partner to share its insights and integrate with the new Digital Transaction Insights solution across several lines of business. Building on a long history of cross-collaboration, Microsoft’s Dynamics 365 Fraud Protection’s proprietary risk assessment, which leverages adaptive AI to assist in real-time fraud detection by identifying risky behaviours across purchase, account and in-store activities, has been integrated with Mastercard’s Digital Transaction Insights to better enable real-time intelligence sharing in an easily consumable and actionable format. This will enable issuers to enhance their decision-making processes for authorisations, chargebacks and refunds. Moreover, organisations can improve transaction acceptance rates with insights that help them balance profitability and revenue opportunities against fraud loss and checkout friction.

Charles Lamanna, corporate vice president of business applications and platforms at Microsoft, said, “We are excited to partner with Mastercard to leverage our cloud-native, cutting-edge fraud assessment tools to empower issuers and merchants to prevent more fraud and approve more genuine users. This partnership lays the foundation for the future of global fraud prevention where data silos are no longer a barrier to security.”

Digital Transaction Insights is enabled by EMV 3-D Secure and Mastercard Identity Check, a global authentication solution built on the enhanced industry standard. Both elements support GDPR requirements and other related regulations. In 2021 alone, Mastercard Identity Check delivered a 14 per cent uplift in transaction approval rates across billions of transactions.

To collaborate and develop the nascent securitised digital token space on the Tezos blockchain, an agreement has been announced between Yoshi Markets Limited, a Multilateral Trading Facility (MTF) and custodian for virtual assets, regulated by the Abu Dhabi Global Market (ADGM) Financial Services Regulatory Authority (FSRA) and Tezos Gulf.

As per the agreement, Yoshi Markets and Tezos Gulf will develop and offer a solution to tokenise assets using the Distributed Ledger Technology (DLT) for trading, custody and settlement of digital security tokens.

The underlying assets will take the form of “Digital Security Tokens” using Tezos’ proprietary protocol, and open-source blockchain protocol which is supported by a global community of validators, researchers and builders.

Yoshi Markets would then offer these Digital Security Tokens for trading on its (MTF) and also store these tokens in its custody. Yoshi Markets recently received the Financial Services Permission from the ADGM FSRA to operate as an MTF and Custodian for virtual assets. As Yoshi Markets gears up to launch vanilla crypto assets such as BTC, Ether and others, it is also developing a pipeline of innovative product offerings such as Digital Security Tokens, subject to receiving the necessary regulatory approvals for Digital Securities.

Customers could benefit immensely from the ease of investing in these security tokens. Tezos with its advanced blockchain infrastructure and Yoshi with its trading and custody infrastructure will offer a seamless environment for these security tokens to customers and investors.

Mustafa Kheriba, executive chairman, Yoshi Markets said “The objective of Yoshi Markets is to democratise financial market products through the use of blockchain. We are delighted to collaborate with Tezos, a market leader in transforming everyday assets to digital tokens using Tezos Protocol. As a fully regulated platform offering trading and custody services, Yoshi Markets endeavours to offer innovative and ready to use products using the blockchain technology on receiving regulatory approval.”

“Projects like these are exciting as this is the future of investing,” pointed out Waleed Rassuli, head of Tezos Gulf. “The Middle East, especially the UAE, is leading the way when it comes to encouraging virtual assets and investment technologies like ours will only enable more people to expand their portfolios and access new investment opportunities. After evaluating several options, we decided to collaborate with Yoshi considering the extensive exchange expertise of the management team and infrastructure that they have set-up.”

Arshad Khan, founder and CEO added, “Digital Security Tokens will revolutionise how financial products are traded – the trust and transparency it offers will only make it more attractive. We believe more assets will be traded and settled in a tokenised form in the next two to three years as financial institutions adopt the blockchain and its resulting benefits of security and transparency. Yoshi Markets wants to be a leader in innovation and so we want to be ready with these products when the market desires them.”

This week our experts brought you the following insights based on their experience as investors, entrepreneurs & executives.

Monday Ilias Hatzis our Greece-based crypto entrepreneur (Founder & CEO at  Kryptonio a “keyless” non-custodial bitcoin and cryptocurrency wallet, that lets users manage bitcoin and crypto, without private keys or passwords and Weekly Columnist at Daily Fintech) @iliashatzis wrote Like it or not, Crypto is changing everything

At the end of March, Vitalik Buterin in an interview with Time Magazine specifically voiced his concerns about the market’s large amount of Ponzi-scheme Defi and NFT protocols and how they’ve hijacked the Ethereum platform and have driven fees sky high.

People’s interest in crypto has skyrocketed among investors and in popular culture, thanks to everyone from like Elon Musk to that kid from your high school on Facebook.

The market is only in its infancy, which is why every new bitcoin high can be easily followed by big price drops. While exact predictions are impossible, this Easter Sunday, I will be looking at some interesting facts and figures for the year’s first three months to understand where we might be headed

Editor note: The Defi and NFT markets are still in their scam phase, but a lot of disruptive innovation goes through this phase.

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Tuesday Bernard Lunn, CEO of Daily Fintech and author of The Blockchain Economy wrote: Silvergate is becoming a real crypto bank and that should worry legacy banks.

We first wrote about Silvergate Bank when they announced their pre IPO round by the Witter Family Office (not by the usual VC Funds). The Witter name should ring a bell with finance folks as the money came from Mr. Dean Witter and the firm that bears his name (part of Morgan Stanley since 1997).

Editor note: Silvergate maybe acquired by big tech or a legacy bank; their valuation is still low enough to make this feasible.

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Wednesday Alan Scott Managing Director EMEA at 24 Exchange @Alan_SmartMoney wrote his weekly roundup of Stablecoin news.

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Thursday

Rintu Patnaik, an Insurtech expert based in India, wrote: Segment-of-One Personalization Part 1: The End Goal

The merits of well-executed personalization are legion. Financial institutions (FI) can potentially generate up to $300 million in revenue, for every $100 billion in assets under management by interacting with customers in hyper-personalized ways.  The reality is that many providers have struggled to deliver the tailormade experiences those customers expect. In banking, for instance, nearly 90% of firms fall short. So much so that two-thirds of their clientele feel that most retailers deliver a much better personalized experience.

Editor note: Customers want to think they have a one to one relationship, without thinking about how their insurance company delivers this profitably at scale.

Christian Dreyer @x3er, the Swiss based CFA who focusses on how XBRL changes our world wrote his weekly roundup of XBRL news.

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Friday Howard Tolman, a well-known banker, technologist and entrepreneur in London, wrote his weekly roundup of Alt Lending news.

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This Week in Fintech is now outside our paywall. You can read anonymously on our site or subscribe by email (all we need is one of your email addresses). Both delivery options are free.

Tink, a European open banking platform, has announced the expansion of its open banking payments services to five new markets across Europe. Its Payment Initiation Services (PIS) product is now live in the Netherlands, Norway, Estonia, Finland and Latvia. Tink operates in 18 markets in total across Europe, connecting to over 250 million bank customers.

Open banking payments, often called Pay by Bank, is a transfer of money from one bank account to another. The payment is initiated by Tink through an Application Programming Interface (API), but the user journey is completely embedded within the payment service provider (PSP) or merchant’s own environment. The payment is authorised using the bank’s own system, making it a secure, frictionless and low-cost payment method.

Tink’s payments expansion to new markets reflects the rise in consumer demand for seamless digital experiences.

Tom Pope, head of payments and platforms at Tink, commented: “We’re seeing a surge in consumers using open banking payments across Europe, because of the dramatically better user experience it offers. Tink’s payments technology makes it simple for consumers at checkout, allowing them to quickly and seamlessly make payments via the institution they trust the most – their bank.

“Open banking payments are secure, frictionless, and put businesses in control of the user experience. With our solution, merchants are discovering how their payments experience can be a source of competitive advantage.

“Our aim is to be the backbone of payments services providers across Europe, and the expansion of Tink’s payment services into these five new markets is a significant step towards achieving this goal.”

The majority of financial institutions currently operating in the UK believe that cryptocurrencies will see the light of mainstream adoption within the decade.

In terms of certainty, UK institutions held this opinion with the most confidence – shared by 90 per cent of respondents – whilst a still promising 81 per cent of French respondents and 82 per cent of German respondents agreed.

These were the primary findings of Bitstamp‘s Crypto Pulse survey, the intriguing contents of which were divulged this week. As the world’s longest-running crypto exchange, these results were naturally of high importance and interest to Bitstamp.

The data from more than 250 institutions in the UK comes from a Bitstamp survey of over 28,450 respondents — including 5,450 senior institutional investment strategy decision-makers and 23,000 retail investors — from 23 countries across North America, Latin America, Europe, Africa, the Middle East and Asia-Pacific.

The rise of crypto investments

When considering the data more holistically, the survey also found that around 70 per cent of institutional respondents in the UK currently place trust in crypto products, with 67 per cent of the country’s banks, fintech companies and trading platforms actively recommending investing in crypto to their clients.

On a global level, 80 per cent believe that crypto will overtake traditional investment types such as stocks, shares, and ISAs. A 70 per cent majority of institutions are already very likely to recommend crypto as an asset class, while 71 per cent of institutional respondents have ‘high trust’ in crypto as an investment.

The appetite for everyday crypto

The polling of more than 1,000 UK consumers also found that more than 40 per cent would purchase their groceries and everyday items, as well as shopping online, using cryptocurrencies.

Furthermore, just under half of UK consumers believe cryptocurrencies will overtake traditional currency in the next decade.

However, there is still a clear need for education about crypto investment in the UK, with 45 per cent of non-investors in the UK saying their top reason for not investing is that they ‘do not know enough’ about it, and only 18 per cent of respondents saying they were very knowledgeable about cryptocurrency.

“The adoption of crypto and other digital assets is advancing at an unprecedented rate,” explains Julian Sawyer, CEO of Bitstamp.

“In the last few years, cryptocurrencies have moved from the outskirts of the financial ecosystem to find themselves front and centre of mainstream investing, with many of the largest trading venues in the world now catering to both retail and institutional crypto needs.

“We’ve seen interest propel in the years since the pandemic, and crypto is now part of the wider conversation in global macro-economic matters. Our survey shows something we have advocated over a long time: talking about the survival of digital assets is firmly over — the question is now about evolution.”

Is there no compassion left.

Quite a sad little story really. With the best of intentions fintech fledgling Revolut, itself founded by a Russian and a Ukranian was offering introduction fees of up to £ 250 for introducing Ukranian citizens, fleeing Putin’s madness, to their services. In typical entrepreneurial fashion Revolut saw a requirement in the market for these refugees, many of whom through no fault of their own, do not have the required documentation, such as proof of residency,  to open a bank account However it seems that a somewhat unscrupulous group of people saw an opportunity to make money  by misusing the referral mechanism to their own ends. Additionally Revolut also provided a link to Ukranian Banks to allow their clients to access money and to boot waived the transfer fee. It all sounds like a good idea and very public spirited but they have been forced to withdraw the service thanks to the greed of a few. How pathetic that this should happen.

Lender’s hit by Russian withdrawal from civilised world.

It seems that some Russian leasing companies emboldened by new laws created by Mad Vlad have quickly taken advantage of the laws passed by his government to re-register foreign owned airliners in their own names. Some 360 aircraft have been added to the Russian aircraft register since the start of March of which 171 are now in the names of Russian leasing companies. Some two thirds of the aircraft in question are in fact owned by leasing companies based in either Ireland or Bermuda. Insurance claims will surely follow much quicker than any payments will but it will be an interesting exercise to see how many of the offending assets will actually be discovered? Russia of course will have far less planes to worry about as flying more or less anywhere outside of Russia is not going to be easy. As for me following my consultancy to banks behind the old iron curtain countries after the fall of the Berlin wall I never want to travel in a clapped out old Tupolev ever again. Servicing and maintenance will also be on passengers minds?

HSBC intensifying shift to Asia

I cannot help but think that HSBC are being a little too bullish on their increasing focus on China and the far East as the fount of all profits. The problem with China is of course that everything is done for the benefit of the Chinese Communist Party(CCP), which means its leader, and he has shown himself recently to be the ultimate autocrat. Western economies actually have to look after their populations or their Politicians become toast. No such mundane considerations will bother the CCP. People being free becoming better off, healthier, living well and aspiring are the feedstock for a profitable banking sector. Does any of this matter to Xi? I don’t think so. HSBC may become a hostage to fortune. Most international banks are taking a close look at where their asset portfolios are post Ukraine. HSBC may be looking n the wrong direction.

Howard Tolman is a well-known banker, technologist and entrepreneur in London,We have a self imposed constraint of 3 news stories per week because we serve busy senior  Fintech leaders who just want succinct and important information. For context on Alt Lending please read the Interview with Howard Tolman about the future of Alt Lending and read articles tagged Alt Lending in our archives.