Pandemic effect on fintech industry: trends, numbers, predictions. 

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The overwhelming news about the pandemic, rapid economic changes, and soon-to-be-experienced effects once again push businesses to evolve quickly. E-commerce is already feeling the pressure.

While everyone is talking about “flattening the curve”, what can be done to prepare the business for the inevitable wave of economies crushing and client patterns changing tremendously.

We in Genome decided to analyze what trends and services are the first to follow after the pandemic peak will shift — everything from contactless payments to online merchant services.

Let’s start with the basics — a bank account. Whether people look for a way to open it for personal to business needs, they can stay at home and avoid going to the physical bank. Fintech companies already practiced the online account opening for personal finances with nothing but an ID snap. However, to open a settlement account for your business, for example, was a bureaucracy race, often rigged with inappropriate questions and stereotypical approaches. Now companies like Genome can process your company documents online and get you a fully functional bank account for your business in under 24 hours. In addition to online multi-currency accounts with instant money transfers inside Genome, cross-border, secure SEPA, and SWIFT transfers that will keep the businesses running.

One of the visible and predictable trends for businesses is going to be aimed at reducing the user’s offline contact. So besides the reduction of physical cash (being the perfect tool to spread bacterias), contactless payment is the next in line. MasterCard and VISA practically doubled the contactless transaction limits across 29 European countries. Some European banks (for example, in Denmark, Poland, Hungary, etc. ) followed and already raised the purchase limit with debit cards that allow customers not to enter their PIN manually. Unfortunately, MasterCard still lost around 35% in its shares prices, according to Marketwatch. 

Small and middle businesses are rapidly developing their online distribution channels. While in the U.S., 46% of them sell their goods and services online, that’s not the case for other countries. E-commerce platforms should be ready to broaden their industry coverage and integration options. It’s probably not the best time to be stubborn and stick to the old ways.

The economic downfall that already started and will probably get in its full swing in 6 months is already affecting everything from crediting to investment. Fintech unicorns will have to adjust their prognosis and expectations on expansion and funding dynamically. Liquidity shortage is here to stay for a foreseeable future, so expect cheap merges of acquisition, especially for small companies that will struggle with payrolls due to the lack of cash. Fintech unicorns like Klarna, Tide, Monzo-Starling, Revolut all were highlighted as most likely to suffer from revenue shortage. Reasons? Consumers’ income drop, travel ban, lending crashing — to name a few. 

But let’s get back again more up close and business-oriented. The owners will have to make sure they are ready to handle their financial operation and expansion online: from opening a merchant account to payouts, batch payments, apps, and credit card tokenization. The optimal way for a fintech service provider is to upgrade quickly and cover these requests as a complex. Companies like Genome developed a merchant portal where owners can ultimately oversee the state of their online businesses with transactions, chargeback, approve ratio reports,and even 2nd retry logic, which helps to increase sales revenues. And with direct payouts available, they can skip the middlemen with revenue routing.

Businesses will most likely aim to expand to apps if not already, which means looking for a payment tokenization solution. Tokenization is a replacement process that protects the user’s sensitive payment details. Algorithmically generated number replaces the customer’s PAN (primary account number), which allows to reduce credit card fraud effectively. This method is considered not just safer but also more convenient for the end customer. If businesses have products or services that require attaching credit cards (like delivery services, taxis, municipal services), they usually face limited provider options and have to go through an extensive registration process, even go to the physical bank branch.

For many e-commerce companies, this option will be out of the table for a while, not only because of the circumstances but also because this option is outdated. In Genome, business owners can sign up for business and merchant accounts entirely online, uploading all the required documents. They can also choose from two integration types (host-to-host or hosted payment page), based on the type of integration, cards can be saved and tokenized, meaning that their clients will not have to put their credit card data into the application more than once.

While the time is still turbulent and anyone who says he knows what’s going to happen is frankly delusional, we can gather predictions and expert hypotheses. Analyze trends, examine our strengths and weaknesses, calculating ways to evolve and adapt. Priorities might shift but not the values to take care of personal and business financial needs effectively, no matter what circumstances, locally or globally, we’re in. Discover new possibilities with Genome today and stay safe.

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Hiro creates home insurance that rewards you for owning smart home devices

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Multi-award-winning London tech start-up Hero Labs has announced the launch of Hiro – an insurance challenger brand that rewards customers with insurance discounts for having invested in smart technology that protects their homes.

Policyholders can score a discount of up to 25% using smart devices they already own, and purchase more technology from a discounted in-app marketplace to further protect their home. By installing devices like cameras, video doorbells and smart leak detectors, homeowners and renters can prevent some of the most common causes of damage to their home environment, and benefit from cheaper insurance premiums at the same time.

Hiro will use machine learning to settle claims in seconds and automate simple tasks, creating a customer experience that is closer to modern on-demand services than a traditional paper-bound insurer. It’s the latest offering in a suite of home protection products from Hero Labs, who recently claimed a prestigious Red Dot: Product Design 2020 award for its smart water monitor and automatic shut off solution, Sonic that protects an entire building from water leaks.

“Not a lot of people know this, but insurance was originally about working together to stop bad things from happening,” comments Hero Labs CEO and serial entrepreneur Krystian Zajac. “The first professional fire service was a home insurance company. They would literally come to your house and help you put the fire out.”

Hiro aims to blend the concept of insurers and customers collaborating to protect the things that matter – with modern smart home technology and cutting-edge machine learning methodologies. The service is expected to launch later in 2020, with a waiting list already open at gethiro.com.

Consumers can download the Hiro app for iOS and Android to get an estimate of how much they could save based on current smart devices installed.

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The HKMA and the banking sector join forces to help Hong Kong’s economy overcome the outbreak of COVID-19

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The HKMA together with the major banks and HKMC Insurance Limited (HKMCI) met representatives from the commercial sector (including Members of the Legislative Council) today to exchange views on the effectiveness of banks’ measures to support SMEs and discuss future follow up work in this regard.

At the meeting, the HKMA reported that, since the establishment of the Banking Sector SME Lending Coordination Mechanism in October 2019, the banking industry has introduced several rounds of measures to help corporate and retail customers.  Nearly 9,000 applications from SMEs involving principal repayment holidays, loan extensions and relief loans have been approved thus far, involving over HK$57 billion.  This has helped reduce the cash-flow pressure on customers and lessen the impact of the outbreak on the local economy.

As the outbreak continues, the HKMA and the HKMCI put forward today another round of five initiatives to further support SMEs in addressing cash-flow pressure:

  1. The HKMA will introduce a series of measures aimed at increasing the banking sector’s liquidity so that banks will have ample liquidity to support local economic activities. These include obtaining US dollars through repo transactions with the U.S. Federal Reserve for lending to local banks, clarifying aspects of the HKMA’s Liquidity Facilities Framework to make it easier to use by banks, and further explaining HKMA’s supervisory expectations on liquidity regulatory requirements so as to encourage banks to deploy their liquidity buffers more flexibly to support lending and other business activities.  For details, please refer to the circular issued today.1
  2. The current level of regulatory reserves2 will be reduced by half to release a total of HK$200 billion of lending capacity, providing banks with more room on their balance sheets to cater for future financing needs.
  3. The HKMA has asked banks to consider arrangements to automatically offer extensions of loan tenor or principal repayment holidays to qualified SMEs without requiring them to make an application. Borrowers just need to indicate whether they will accept the offer or not.
  4. Preparatory work by HKMCI and banks for the special 100% Loan Guarantee under the SME Financing Guarantee Scheme announced in the Budget has entered an advanced stage. The date for banks to receive applications from qualified SMEs will be announced shortly.
  5. Banks said that they will allow SME customers in the import-export and manufacturing sectors facing cash-flow pressure due to delays in shipments to further extend the repayment period of trade financing facilities. They will also consider allowing more customers to apply to convert trade financing lines into temporary overdraft facilities so that customers can manage their cash flow more flexibly.

Since the beginning of the outbreak, the banking industry has responded positively to HKMA’s call to introduce various measures to help relieve customers’ cash-flow pressure.  The key points are:

  1. Using the Banking Sector SME Lending Coordination Mechanism, the HKMA has clarified various regulatory requirements, allowing banks to more effectively support SMEs.
  2. The banking industry has introduced measures to help SME and retail customers, including principal repayment holidays for SME loans and residential mortgages, extension of loan tenors for SME borrowers, conversion of trade financing lines into temporary overdraft facilities and special loans to customers engaging in sectors affected by the outbreak.
  3. The measures have worked as intended. As at the end of March, nearly 9,000 applications have been approved by 16 banks active in SME financing, amounting to over HK$57 billion.  As for personal customers, banks have approved 2,800 principal repayment holidays for residential mortgages and emergency loans, amounting to over HK$8 billion.
  4. Amongst the approved SME cases, around HK$32 billion relate to the granting of principal repayment holidays and over HK$20 billion to extension of loan tenors.
  5. Sectors such as transportation, import and export, retail and tourism that are hard hit by the outbreak have benefited most from these measures. Nearly 7,800 applications from SMEs engaging in these sectors have been approved with total loans exceeding HK$40 billion.

In addition, the HKMA has made adjustments to regulatory requirements in a timely way to allow banks more flexibility to provide credit and support the local economy:

  1. The HKMA has lowered the Countercyclical Capital Buffer (CCyB) ratio twice by a total of 1.5 percentage point since October last year, releasing around HK$700-800 billion of lending capacity, enabling banks to provide more credit.
  2. Despite the deteriorating economic environment, total loans granted by the banking sector increased by HK$192 billion during the five months from end-September 2019 to end-February 2020. Overall credit line granted by banks to SMEs in the fourth quarter of last year also grew by HK$6.9 billion, indicating that lowering the CCyB ratio had a positive impact on banks’ ability to support their customers.
  3. The HKMA issued a guideline to banks in March this year, deferring the implementation of the various requirements under the Basel III framework so that banks can focus on addressing the challenges brought about by the coronavirus outbreak.

The HKMA will work closely with the banking industry to actively implement the above measures through the Banking Sector SME Lending Coordination Mechanism and other channels so as to help our society to ride out these difficult times.

Hong Kong Monetary Authority

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EMQ Expands into North America with a New Canadian Gateway

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The global financial settlement network registers with Canada’s FINTRAC as a Money Service Business to provide superior cross-border solutions in the region

EMQ, a global financial settlement network, announced its latest gateway expansion in Canada to bolster its presence across North America. The company is also registered with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) as a Money Service Business (MSB). This will enable EMQ to provide consumers and businesses in Canada with a faster, transparent, and more consistent cross-border payments experience.

“Canada is among one of the leading remittance sending markets in the world. This year, digital remittances in the country make up a value of over US$1.4 billion and is expected to reach US$2 billion in 20231. To support the rapidly growing demands for cross-border settlements, customers will require a network infrastructure that can facilitate faster, secure and real-time payments,said Max Liu, co-founder and CEO of EMQ.With our new Money Service Business registration, we can now connect EMQ’s global network to Canada and provide increased access and value-added services to the financial sector.”

Powered by EMQ’s global financial settlement network, customers in Canada will be able to make and receive payments quickly and transparently from over 80 key global markets. This will further enhance digital international payment offerings across North America.

As a network infrastructure provider that connects the whole payments ecosystem, our goal is to enable everyone to send money anywhere in the world and to any end point in a fully compliant and transparent manner. Our expansion to Canada marks another major milestone in our journey to fulfill this promise,” Liu added.

The latest development comes on the heels of a recent series of expansion initiatives to bolster EMQ’s network infrastructure globally, which currently spans across Asia Pacific, Africa, Canada, Europe and the United Kingdom. EMQ is also licensed in Hong Kong, Singapore, and Indonesia and was accepted into Taiwan’s Regulatory Sandbox by the Financial Supervisory Commission in Taiwan.

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TFT Webinar Review: Can Fintechs save the UK economy by funding small businesses?

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In this 45-minute webinar, CEOs from leading fintech companies shared their perspectives on how they could help small businesses stricken by the coronavirus lockdown.

#fintechsaveuk

To help small businesses in the UK get better access to coronavirus loans, The Fintech Times brought together an expert panel for a compelling webinar on 8 April 2020.

The webinar covered the hot topic in the business world – the Coronavirus Business Interruption Loan Scheme (CBILS), which was set up by the UK government to provide financial support to smaller businesses (SMEs) across the UK that are losing revenue, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak.

Concerns around the CBILS have focused on how the banking sector, plagued with legacy technologies, appeared ill-prepared to deal with the deluge of requests triggered by the scheme, and that the wider fintech lending market had been excluded.

This online session was hosted by Mark Walker, Editorial Director at The Fintech Times, with a panel that featured:

Points raised in the webinar discussion, hosted on Zoom, included the key ways these fintech leaders believed the CBILS should be improved:

  • The scheme is modelled on a previous guarantee scheme [scheme] that was for larger lending and should be made more suitable for small levels of lending.
  • Current lenders are relying on cumbersome, non-digital processes [such as call centres where people are displaced] to try and process loans which is reducing effectiveness and leading to huge backlogs.
  • The CBILS is holding back many lenders from making positive lending decisions because of the residual risk exposure that they have.
  • Smaller businesses are seriously struggling to find access to finance and those that are in dire need of finance aren’t able to get commercial solutions.
  • 20% of businesses are expected to run out of cash in April, yet 70% of funding requests from businesses that have been turned down by banks are for less than £15,000.
  • There is too much miscommunication and misunderstanding of what is available under the CBILS.
  • Only a quarter of the accredited lenders in the scheme will have the liquidity and lending capabilities to make loans.
  • The CBILS has excluded the alternative lenders to the detriment of the economy and there should be a fast-track approval system for fintech lenders, especially those that can help at scale.

The panel also discussed how fintechs would be able to help:

  • Fintechs can collaborate and knowledge share to protect businesses and put sensible digital solutions in place that deliver speedier access to funding, using existing digital technology to cover traditionally offline processes.
  • Fintech aggregators and their partners have the experience of dealing with small businesses and can have a significant role to play in distributing funds to SMEs quickly.
  • The fintech community should be involved in future discussions with the government and banks about lending to small businesses.
  • The fintech community will be transparent and ensure businesses are treated fairly.
Watch the full recorded webinar below, please share with the #fintechsaveuk

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Funding Options has called on the Government

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Funding Options has called on the government to allow more agile lenders and B2B marketplaces to support UK independent businesses during the Covid-19 pandemic.

The government’s £330 billion coronavirus business interruption loan scheme (CBILS), which provides SMEs experiencing revenue loss and cash flow disruption with access to loans, is currently limited to around 40 ‘accredited lenders’.

According to the latest figures, just 1,000 businesses, out of six million British SMEs, have been granted loans up to £145million as a part of the CBILS.

Yet Funding Options, the UK-based business finance marketplace, says it has seen huge demands from SMEs looking to borrow since the outbreak of coronavirus and is concerned that the wider fintech lending market don’t have access don’t have access to the CBILS fund.

Funding Options’ chief marketing officer, David Keene, told The Fintech Times: “More than 10,000 businesses have requested loans in March worth more than a billion pounds. That’s a huge number of businesses looking to get some kind of lending to tide them through the current climate.”

“All of the big banks with all of their resources have only managed to lend £145million and are lending to the businesses that don’t need lending. Meanwhile, the genuine businesses that need lending are being blocked out because they’ve been hit by Coronavirus.”

“The scheme is supposed to be focused on how we help businesses impacted by Covid-19, but it is just not functioning properly right now. The market for lending is frozen and the idea of marketplaces have literally been put into the deep freeze. Small businesses are just not getting the amount of lending that they want.”

Funding Options wants the government to provide access to alternative finance providers, B2B (business-to-business] marketplaces and other fintech organisations to complement the crop of big high street banks who are agile and able to work quicker.

“The Treasury has gone The treasury has gone straight to the highstreet banks to help small businesses despite, having this amazing resource in the UK of phenomenally strong agile fintechs, marketplaces and alternative lenders,” says Keene. “UK fintechs are able to move fast but are largely cut out of the situation right now. We should be leveraging that ecosystem.”

“That would be our call out to the government, look, let’s be agile about this and let’s preserve those businesses out there so that when the lights come back on again, they’re all alive and healthy and can start to trade again. Let’s not let them go to the wall.”

“Borrowers should be able to go and have a look at what lenders are on the market and what’s available out there. Similar to how private healthcare has stepped in to help the NHS, the private sector fintechs should be allowed to help those businesses that are critically ill right now.”

In an open letter to the Treasury,Funding Options has called for it to ‘disseminate funds faster, develop better solutions faster and use Open Banking technology to enable the fast, secure and accurate processing of loans’.

[https://blog.fundingoptions.com/covid-19/letter-to-the-treasury]

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Credit Hero gets a digital boost in lending with Salt Edge solution

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Credit Hero, an online lender from Hong Kong, teamed up with Salt Edge, a leader in offering open banking solutions, to access borrowers’ bank data at digital speed and eliminate the traditional paper chase.

Hong Kong is a leading global financial hub. As recently the macroeconomic environment has changed, the lending market is experiencing a so-called digital seismic shift. Escalating uncertainties kickstart the demand for credit products which provide fast access to consumption-oriented liquidity.

Credit Hero uses artificial intelligence and data science to provide tech-savvy lending solutions. The company employs optical character and facial recognition for risk assessment and machine learning for automated underwriting. AI technologies run bank data aggregated from 9 major HK banks to reduce the lending process time from days to 6 minutes. Equipped with Salt Edge tools, Credit Hero improved the bad debt rate by enhancing credit risk analysis.

Ronald Lam, Founder & CEO at Credit Hero

The collaboration with Salt Edge granted us access to real-time financial data to automatically verify the applicant’s identity, account number, income sources, and balance. We are not only looking to achieve more operational efficiency but also to deliver a more intelligent risk management and enhance the customer experience.

Credit Hero applicants can now avoid the headache of bringing in paper bank statements – the required data is aggregated from banks and digitally transferred directly into the lending platform. Receiving all the transactions categorized, Credit Hero can instantly analyze borrowers’ financial spending habits and provide fairest rates of interest.

Vladimir Pintea, Head of Open Banking Gateway at Salt Edge

With modern world craving speed and digitalization, Credit Hero embraced current market rules and delivers better experiences. Salt Edge shares their goal to reinvent the traditional financial services by means of technology for the benefit of society.

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Sofi to Acquire Galileo Financial Technologies

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Small business revenue set to decline by nearly 60% in April 

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  • 37% of small businesses will run out of cash  in under six weeks

  • 69% of businesses in leisure and hospitality expect their revenue to totally disappear

  • Collective small business revenue set to decline by 57% by  end of April

  • Government support needs to get into SME hands as soon as possible

 Tide, the UK’s leading business banking platform, has released new research today revealing the health of the UK’s small business community just weeks into the COVID-19 crisis.

Tide surveyed over 1,000 small business leaders (with between 0 and 49 employees) to understand the financial health of their businesses. Three in four (75%) businesses say they have been negatively affected by COVID-19 so far, and this looks set to worsen throughout April.

When asked about their expectations for their business’ revenue, 80% projected that their revenue will decline in April 2020, compared to April 2019. Over one in three (36%) expect their revenue to decline by more than 90%.

The industries expected to be worst hit are leisure and hospitality, with 64% expecting to see their revenue decline by 100%, followed by retail, with 38% expecting their revenue to totally disappear. Businesses in IT and Telecoms expect to be least impacted, with just under a quarter (23%) saying they don’t  expect to see any  decline in their revenue compared to April 2019.

If these expectations come to pass, Tide has calculated* that collective small business revenue (including businesses affected positively and negatively by COVID-19) will decline by around 57% over  the course of April 2020. This  builds on a 20% decline already observed on the Tide platform in the last seven days of March.

Considering small businesses contribute around £1.5 trillion per annum (37%) to UK private sector turnover, this is a worrying statistic. This decline would lead to a 21%  reduction in UK private sector turnover in April from small businesses alone (seasonally unadjusted). And this will add to declines in mid- and large sized business turnover.

Oliver Prill, Tide  CEO said: “As a banking platform dedicated to supporting small businesses, Tide is extremely concerned about the  health of the SME community at this time. From the conversations we have had with our 150,000 SME members we knew the situation was very tough, but this data has relieved just how tough it is, and how much harder it is likely to get for small businesses to weather this storm.

 “The government’s support for small businesses is highly welcome and needed, and it has the potential to make a huge difference in helping SMEs survive. There now needs to be a focus from the government, and other organisations involved in delivering financial support, to do everything possible to get the money into small businesses’ hands as soon as possible.”

Additionally, the research reveals that 37% of small businesses have cash reserves that will last them six weeks or less without government support. And 19% only have cash reserves that will last up to three weeks.

Time is of the essence to distribute government support quickly and efficiently.

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Minutes not hours: Funding Options uses Open Banking to reduce business loan decision times

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Open Banking will allow businesses to be pre-approved for
loans, reduce application times, and reduce fraud risk


 Funding Options
, the marketplace for business finance, is now
using Open Banking to make it quicker and easier for businesses to
access finance. Businesses applying for finance will see their
application time reduced from days and hours, to just minutes as
they will no longer need to source original bank statements. Around
20 lenders have agreed to consume the Open Banking data as part of
their analysis for credit decisions. These include Just Cash Flow,
YouLend, Liberis,
iwoca
, Newable, and White Oak UK.  
To date, around
200 UK finance providers
are enrolled in the UK’s Open
Banking scheme, meaning the potential for expansion is huge. There
is an opportunity for the industry to come together and unlock
data, which can streamline access to finance and extend the choice
of providers for SMEs, allowing for fast and secure access to
funding. In the current health crisis, this will be of the utmost
importance. 
Last week, the Chancellor overhauled the Government’s

Coronavirus
Business Interruption Loan Scheme (CBILS) after
claims that many businesses were being denied the government backed
loans, and that it was taking too long to deliver the funds. Open
banking can help deliver funds more quickly to businesses whose
cash flow and revenue have been disrupted. 

 

By partnering with AccountScore for Open Banking and driving a
strategy of API connectivity with our lender partners, Funding
Options can minimise the amount of work applicants and lenders need
to do to approve a credit application. For applicants, they will no
longer need to send documentation to lenders. Instead, thanks to
open banking APIs, Funding Options can immediately make their
transaction history available to lenders, in a safe and secure
manner. As all the data is standardised, it’s easy to share with
multiple lenders.

 

For lenders, they will be able to make decisions based on the
standardised data much quicker than through the traditional
methods. It will also move the financial services industry towards
being able to pre-approve businesses for loans based on real time
data.

 

Simon Cureton, CEO
at Funding Options, says:
“Open banking has the
potential to transform the business lending landscape, improving
the experience for the customer while also improving security and
response times for lenders. We’ve already seen a number of
customers using the platform and successfully receiving loans which
highlight the value and benefit from shared data. In the face of
the current health crisis, when access to finance is vital for the
survival of many businesses, reducing the time it takes to go from
application to draw down is of paramount importance.
 Cureton continues: “In time, open banking will
be adopted across the board, and we will see the true potential of
how data can be used to improve all aspects of business finance.
This will require some behavioural changes, and as an industry,
it’s up to us to lead this revolution and improve the experience
for all our customers.” 

Caryl Regnault,
Senior Product Manager at Funding Options, adds
: “Open
Banking has been around for a couple of years now and yet we’re
still to experience mass adoption. Although there are several
resources out there published from credible sources and industry
bodies such as Which, Money Saving Experts, FCA and Open Banking
Org, it can be overwhelming for individuals to understand the value
of Open Banking. This opens up uncertainty which is coupled with
concerns around data security. It’s important to recognise that
streamlining processes using the data is not compromising the
security of customer data. Regnault continues:
“At Funding Options, we have made a conscious decision to ensure
our business finance specialist teams are in contact with our
customers over the phone to avoid relying solely on email, which
could be mistaken as a phishing attempt. Our teams will talk
customers through the data usage, security measures in place and
consent of data access so they can understand the value.”

John Davies Exec Chair and Founder of Fintech Lender
Just CashFlow Plc adds
“I couldn’t agree more with the
comments made by Simon and Caryl but the time saving isn’t just
about uploading hard copies (which are easy to forge) but also the
analysis that can be done on those statements using Accountscores
dashboard which cuts hours from manually checking them and is
clearly more accurate. We applaud Simon and his team for innovating
and making it easier for Borrower and Lender alike and we look
forward to further partnering with Funding Options with the
projects they have in the pipeline.”

The post
Minutes not hours: Funding Options uses Open Banking to reduce
business loan decision times
appeared first on The Fintech Times.

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PAYMENTS DONE PROPERLY: Contextuality holds the key to operational efficiency [WhitePaper]

https://thefintechtimes.com/payments-done-properly-contextuality-holds-the-key-to-operational-efficiency-whitepaper/?utm_source=rss&utm_medium=rss&utm_campaign=payments-done-properly-contextuality-holds-the-key-to-operational-efficiency-whitepaper

Banks have focused on what they offer and not what their clients are trying to do. Consequently, clients making a payment are typically presented with esoteric choices – “Do you want to use a wire payment? BACS? CHAPS?” It’s like an airline asking its passengers what fuel they want for their flight.

But what if banks didn’t work like this? What if they took the time to understand their clients’ relationships and intentions and used that information to answer these questions themselves? The relevant invoices, some historical data and an intelligent algorithm would be enough to automate the process.

Suddenly, instead of placing barriers between a treasurer and his business, banks are removing them: “Need to make a payment? Here are your fastest, cheapest and safest options, based on your context.” Now that’s service.

To read more please follow this link and download this free whitepaper [Link]

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Basler Insurance Germany Launches Free Child-Cover, Built By KASKO in Four Days

https://thefintechtimes.com/basler-insurance-germany-launches-free-child-cover-built-by-kasko-in-four-days/?utm_source=rss&utm_medium=rss&utm_campaign=basler-insurance-germany-launches-free-child-cover-built-by-kasko-in-four-days
  • German COVID-19 lockdown measures have left 13.6 million children who would be at school at home with their families 

  • Basler Insurance Germany, in its second project with London-headquartered InsurTech as a Service startup KASKO, has added cover for these children to existing home insurance customers in Germany

  • Basler Group has 2m policyholders, that with children, could benefit from the new extended cover

  • KASKO has built and launched over 60 products for more than 20 insurers in eight countries since founding in 2015. 

KASKO, the London InsurTech company changing the way Insurance incumbents and startups scale faster bringing new products and customer journeys to market in a fraction of the time previously needed, has announced its latest partner product launch for Basler Insurance Germany. The German insurance company’s latest product is a free addition for existing policyholders to cover children now at home through the day.
Basler’s Christoph Willi, a member of the executive board, approached KASKO on Thursday as it required the startup’s agile approach and proven track record to provide its customers with the needed cover in a time of huge change for people and their ways of living and working. In four working days, KASKO built the new offering which launched today for 2m current Basler customers. All current customers with children can sign up to add cover for any accidents or injuries sustained by the now study-and-play-from-home children aged 0-18 in Germany.
Nikolaus Suehr, Co-Founder and CEO of KASKO commented, “It is great to be able to help our partner go the extra mile, we believe in the extra service they are providing for so many people at difficult times, they came to us on Thursday afternoon, and we were able to deliver a smooth go-live without missing a step on Wednesday (less than a week). Modern technology aside, the key ingredient here was the willingness by Basler to make rapid decisions that usually would have taken weeks, not hours.”
With the holdups of legacy IT for insurers, designing, building, testing and deploying new insurance products, or digitising previously on-paper offerings is a process that would take around 18 months. In a climate in which everyone’s lifestyles and working environments changed in a fortnight, insurers, like all other industries and service providers, have to adapt to look after and retain their customers. Basler recognised a need for its customers and an opportunity to help those that need it, the customers that have switched overnight from going to the office to working at home and caring for children that legally cannot leave the house or go to school.
Christoph Willi, member of the executive board Basler Insurance Germany added that “With the current global pandemic altering the lives of billions around the world, we had two things to do at Basler. One was to ensure the safe and efficient transition of our colleagues and families to a new way of doing things. The second was to adapt quickly and to provide more for our customers with a potential gap in cover for their children in a time of change and difficulty we all share a role in. Government legislation and international efforts to combat this situation have meant that millions of children have stopped going to school or out to play, we were all children and many of us have children, and accidents happen. We approached KASKO last week to see what was possible, and in less than a week, we can provide the cover that people and their families across Germany need.” 
The offering from Basler will be available to current customers for free until the 15th of May 2020.

https://thefintechtimes.com/basler-insurance-germany-launches-free-child-cover-built-by-kasko-in-four-days/?utm_source=rss&utm_medium=rss&utm_campaign=basler-insurance-germany-launches-free-child-cover-built-by-kasko-in-four-days

‘The Digital Currency Revolution’

https://thefintechtimes.com/the-digital-currency-revolution/?utm_source=rss&utm_medium=rss&utm_campaign=the-digital-currency-revolution

A new report from the Centre for the Study of Financial Innovation (CSFI) by David Birch

PDF here

Like others, the CSFI is going virtual for the duration of the coronavirus lockdown; But we have a couple of reports ready to go – and the current unpleasantness shouldn’t affect their relevance.

The first is a paper by David GW Birch – co-founder of Consult Hyperion (one of the UK’s leading fintech consultancies), a visiting professor at the University of Surrey and a prolific author, most recently of Before Babylon, Beyond Bitcoin (a polymathic excursion through the history of currencies). He is (and has been for a long time) a committed advocate for the abolition of cash, and for a transition to digital currencies – whether they be state-issued fiat currencies or competing private currencies. In this report, he looks at what the Bank of England is saying and what the PBoC is doing – and he concludes that we risk being left behind.

That said, he gives great credit to the former Governor of the BoE, Mark Carney, who (he feels) was well ahead of the curve – at least as far as central bankers were concerned. As he puts it:

‘When people such as Mark Carney start talking about synthetic hegemonic currencies, we must conclude that something is afoot. I think that people underestimate the impact of digital currency – and look at innovation by Facebook when they should be looking at the People’s Bank of China.’

(The innovation by Facebook is, obviously, Libra – or, as Dave calls it, ‘Facebucks’.)

This paper sets out what a digital currency is (and how it differs from cryptocurrency), explains why there is a focus on digital currency right now, and explores the implications of the launch of digital currencies – whether by Bitcoin entrepreneurs or by the Fed. It ends with a call for a co-ordinated strategic response based on innovative policies on digital money, digital identity and digital diligence.

Tomorrow morning the CSFI will publish a video debate with Dave Birch that addresses many of the topics covered in this report. Keep an eye on our Twitter, Youtube, and Instagram pages for more information.

For more information, please contact:

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Industry survey indicates 9 out of 10 growth businesses needing investment now may disappear within 12 months if Government fails to act

https://thefintechtimes.com/industry-survey-indicates-9-out-of-10-growth-businesses-needing-investment-now-may-disappear-within-12-months-if-government-fails-to-act/?utm_source=rss&utm_medium=rss&utm_campaign=industry-survey-indicates-9-out-of-10-growth-businesses-needing-investment-now-may-disappear-within-12-months-if-government-fails-to-act

A coronavirus survey undertaken by the Enterprise Investment Scheme Association EISA) of 250 growth businesses currently seeking investment, indicates that more than 9 out of 10 of them will close down within the next 12 months if their current investment plans, disrupted by the coronavirus crisis, fail to materialise.

Covering businesses currently in discussion with investors, with nearly 80% in the £50,000 to £2m bracket, 4 out of 5  reported that the current disruption has impacted their plans either ‘a lot’ or ‘a great deal’, with over 70% saying that they now expect to receive less than 40% of the investment they need to develop their businesses.

Many report that despite having term sheets signed by prospective investors, in the event funds and private investors have walked away.

The EISA is lobbying the Chancellor to increase the tax relief available to private investors for investments in qualifying Seed and Enterprise Investment Scheme businesses to 60%, (from the current 50% for SEIS and 30% for EIS) levels, and to extend the scheme, for the period of the crisis with a view to attracting a further £200m of private investments into the businesses that could well represent the future of the UK’s unicorns.

Mark Brownridge, Director General of the EISA, commented, “Our survey shows very clearly that investors have taken fright at the current coronavirus disruption, which is resulting in many of our fast growth businesses fearing for their future. Of the 250 businesses in the survey over half represent the health, fintech, other tech and software solutions sectors, and these the very businesses that the UK will need as we exit the current crisis.  The evidence we have in the survey showing that nearly two thirds believe that relaxing the EIS rules would lead to an increase in equity funding, emphasises that the Government needs to act now, and we strongly encourage them to consider the request we have put to them to provide short term additional reliefs to investors without delay.”

https://thefintechtimes.com/industry-survey-indicates-9-out-of-10-growth-businesses-needing-investment-now-may-disappear-within-12-months-if-government-fails-to-act/?utm_source=rss&utm_medium=rss&utm_campaign=industry-survey-indicates-9-out-of-10-growth-businesses-needing-investment-now-may-disappear-within-12-months-if-government-fails-to-act

COVID-19 and the rise of the Megatrends!

https://thefintechtimes.com/33838-2/?utm_source=rss&utm_medium=rss&utm_campaign=33838-2

COVID-19: WHO DECLARE PANDEMIC.

We are living through the ultimate Black Swan event of our era… The World Health Organisation (WHO) officially declared Coronavirus (Covid-19) a pandemic1on the 11thof March2. Prior to the WHO’s announcement, Italy3had gone into complete shutdown; images of Italians singing from their balconies4portrayed a jovial and strong sense of community spirit, less seen in our chaotic modern lives.

March the 14th; Spain on lockdown5, imposing a €600 – €30,0006fine for being “caught” outside seemed rather draconian and serious, especially when compared to any Government action during the previous SARS epidemic in 2002. Then next was India. The whole of India, 1.3 Billion people locked down on President Modi’s orders7. Coronavirus becomes a serious concern, not the common variety flu that washing your hands to the national anthem would get rid of, thanks Mr. Rees-Mogg8.

Currently, as we stand, a third of the Global population is on a Coronavirus lockdown9, airlines are cancelling flights, and the Global economy has begun to meltdown. Unprecedented times you’re sure to remember; historical times!

The Human Cost

Since the first detection10on the 31stDecember, the Coronavirus has rapidly spread around the world. At present we have over 1.3 million confirmed cases, the majority in the US, Europe and China, and an estimated death toll of 75,000 worldwide11.

Initial symptoms include a dry cough, fever, and shortness of breath. Conditions can rapidly escalate to pneumonia. If the virus progresses to this stage the patient only have their immune system to rely on, as antibiotics are ineffective12. Most of the infected that do find a fateful end have suffered from underlying health ailments or are of old age, however recently a 13 year old and 19 year old, with no underlying health conditions unfortunately died13.

 

The Economic Cost

All over the world, the Global economy has taken a body blow… Equities, precious metals, even crypto markets have taken a nosedive due to Covid-19. The Dow Jones took an almost 20% dip after an 11year bull run, the S&P 500 dropped more than 7%14. Bitcoin dropped from nearly $10,000 to $4,000, currently struggling to find strong ground above $6-7,000, nearly a 40% decline in as many days15. Oil prices and stocks plunged to multi-year lows16. Even the price of gold, traditionally a safe-haven for investors, has shown worrying signs of decline17.

To add to the turbulence, restrictions prohibiting foreign travel are further disrupting international business, travel alone is predicted to cost the airline industry a mammoth $29 billion18. Manufacturing and supply chain disruption is going to further have a catastrophic affects across all verticals. Analysis of high frequency metrics (e.g. road congestion, energy utilisation, pollution levels) indicate that China’s manufacturing sector, which had already been suffering since February, may only be operating at 70%-80% of it’s pre-COVID-19 production levels19.

Financing for business is a real concern in the short-term future. Many FTSE100 companies are going to struggle to survive through these tough times never mind the pressure on pre-revenue start-ups with limited financing. To add to this investors have just taken a significant hit to their portfolios and are understandably unlikely to fund lengthy burnrates with low to no revenues.

 

The Medical Barriers

Doctors, nurses, clinicians, research scientists, medical engineers and healthcare specialists all over the world have been working to find an effective vaccine against the virus. AI analysts, 3D printing specialists and motor companies are racing to develop medical equipment and deploy effective testing, detection and quarantine methodologies to track COVID-19; often with limited resources and large populations. There have been a number of different approaches leading to small successes; China’s authoritarian approach involving mandatory facemasks and segregated lockdown measures have lead to numbers dropping in Wuhan, and South Korea’s approach of mass free testing and treatment facilities have lead to possibly the most effective way to manage a virus of this nature20.

Researchers analysing the crisis complained of a lack of data integration from verified sources crippling the effectiveness to respond to such an event21.

Bureaucratic red tape and an archaic, disorganised, capitalist-minded medical industry has lead to a disjointed medical system not able to react to such a dramatic Global catastrophe. How can we share videos on YouTube so easily but not our vital, life-saving medical data…

2020: Rise of the Megatrends

The news, social media, every dinner discussion, phone conversation, and even email is not complete without a reference to the impact that Corvid-19 is having on society. The question remains: when will the world return to normal, and what will normal look like?

I believe that the COVID-19 pandemic will accelerate a number of key “megatrends” of the last 15-20 years, namely: AI, Biometrics, Blockchain, Digital Identity, Data Transparency, Drones, Robotics and 3D Printing technology. Over the past decade, consumers and society have become increasingly acclimatised to digital services; moving away from physically delivered services towards digital alternatives accessible on any device able to run an app or web browser. The digital revolution has affected most sectors in the Western world and has been most acute for the retail and finance sectors. The rise and healthy adoption of ecommerce and digital banking has challenged and even replaced the traditional models of advertising and physical brick-and-mortar stores with via digital services and platforms.

The current need and implementation of Social Distancing is forcing us all to perform our daily lives in a remote digital manner. Whether that is working from home (aka #WFH) video conferencing with colleagues, or having the kids next door attending digitally delivered lessons & submitting homework via similar communication platforms usually reserved for the workplace. This seismic event has dramatically affected demand for online services to the extent that Netflix has reduced their streaming quality in Europe for 30 days22and Zoom is currently serving Fortune 500 board meetings to nursery sing-a-longs; their share price also went through the roof!23

Social Distancing has forced society to work remotely; digital verification and authentication of people, tasks, and transaction is going to vastly increase. The increased demand for digital identity authentication solutions that work across multiple end points, in a user friendly & application appropriate, complying with regulation (think GDPR…), improve [or at least maintain] current levels of fraud, and lastly, have the capacity to scale and meet sudden surges in demand, are going to play a pivotal role in our digital lives.

As we have seen, this is happening across all sectors; retail, finance, government, entertainment and education. The repercussions of this Global event is going to change the manner in which we operate, but are we going to return to ‘normal’ after Coronavirus or will these ‘emergency measures’ become a more permanent factor in our ever more digital lives?

It is going to be interesting to see the outcome of these events once we recover from the crisis. Will we continue to work from home? Will we avoid commuting in rush hour, opting for a virtual catch up meeting? Will we shop in supermarkets, or has that Ocado account become the new digital butler? Movies in the cinema, or just stream it off TikTok? Could this truly be the beginning of our digital lives24?

Personally I think there will be some immediate impacts of the pandemic, but other sector will most likely return to normal…let’s all hope for a mandatory #WFH day – if not to contain a pandemic then at least to help with pollution. (Some cities have experienced CO2 reduction of nearly 50%25, but I will save “flattening the curve” of our environmental impact on the Planet for another blog…)

I continue this series of blogs with a focus on the affects of COVID-19 on Digital Identity, Biometric Sensors, and Future Payments, and will finalise the series with the ways in which other “megatrends” like “AI, Blockchain, Drones, 3D Printing, and Robotics are combating COVID-19”.

https://thefintechtimes.com/33838-2/?utm_source=rss&utm_medium=rss&utm_campaign=33838-2

The 2020 API Industry Landscape [Map]

https://thefintechtimes.com/the-2020-api-industry-landscape-map/?utm_source=rss&utm_medium=rss&utm_campaign=the-2020-api-industry-landscape-map

The API Industry Landscape is an attempt to gather all the companies that make up the API Industry that is enabling the API economy.

This landscape is a living organism. It evolves as new companies form or existing ones deploy new solutions. By its very nature is the result of some level of subjective choices. If you think a company is missing or a sub-section should be added to it, please reach out to – [email protected] or fill out this short form!

They are calling the API economy every value exchange that is created or enabled through the exposition of an API to another, internally or internally.

Most of these companies are API tooling companies as their main role is to help others achieve their API-driven business model.

The landscape is categorized in different sections and subsections to help decision-makers understand the current ecosystem and identify the featured companies, either for benchmarking or implementation purposes.

API Lifecycle Management Tooling

This is the core section of the landscape. It includes all the products and companies identified to support API practitioners to design, document, mock, develop, test, deploy, secure, monitor, stream and promotes APIs.

Some companies in this section are present in many subsections as their product has evolved over time to include more and more API lifecycle management features.

The subsections themselves have also evolved, thanks to the spread of API description formats (Open API Specifications, RAML and API Blueprint) that are implemented in most of the companies’ API teams and are able to automate large portions of the API Lifecycle.

API Aggregation and Integration Tooling

In terms of API aggregation and integration, we have identified 2 types.

The first one is identified as API Vertical Abstractions. API vertical abstraction represents every platform that takes a specific industry or value proposition and abstract them into one API. For instance, if you gather all the APIs for cloud storage into one API abstraction or bring together all delivery APIs into one API abstraction, you would fit into this category. This first type also has different subsections that represent the different verticals addressed by the industry.

Second is what we referred to as API Horizontal Abstractions or, as the analysts call them, the Integration Platform-as-as-service (IPaas). These platforms help organizations integrate horizontally many different APIs, for different sectors and different industries. They want to be the one-stop-shop for 3rd party APIs integration.

GraphQL/Backend-as-a-service/Mobile Backends

In this section, we have gathered all the backend tools, mobile backend tools and graphQL tools to host data and deliver them to other applications via APIs.

The first section consists of the backend tools to power applications and mobile backend tools to explicitly deliver to mobile applications.

A growing section of the landscape is the GraphQL tooling, with GraphQL Backends that support and power GraphQL APIs. This part will be growing fast in the next few months while the tooling landscape for graphQL is booming.

Business Process-as-a-service and API-as-products

This section comprises companies providing APIs to execute a whole business process, an IT process or a technology service. We gathered product or business processes where the distribution via APIs is significant enough in the business model of the company that it can be identified as an API-first product or an API-as-a-product.

We then split this section into different sub-sections, each one representing a category of business processes and sectors – communication, eCommerce, payment, emailing, voice, search engines, human resources, etc.

In this section, we have gathered companies providing APIs to execute a whole business process, an IT process or a technology service. We have put in this section product or business processes where the distribution via APIs is significant in the business model of the company to be identified as an API-first product or API-as-a-product.

Source:

Mehdi Medjaoui is the founder of the worldwide apidays conferences series he started in 2012 in Paris. Mehdi is highly involved in the API community and API Industry, as author, lecturer, consultant and investor in the API tooling space. His industry research involves publishing and maintaining the API Industry Landscape and the yearly State of Banking APIs. In 2018, he publishes as co-author “Continuous API management” (O’Reilly) and begins as lecturer and invited professor at HEC MBA and EMLyon Executive MBA. In 2019, Mehdi become H2020 European Commission expert to lead the APIS4Dgov study on public sector and government APIs. As entrepreneur, Mehdi co-founded in 2014 OAuth.io, an API middleware for OAuth intégration used by 40,000+ developers that has been acquired in 2017. Mehdi’s new venture GDPR.dev develops a Personal data API framework and protocol to democratize data regulations usage for mass users and compliance for applications developers, making GDPR programmable.

https://thefintechtimes.com/the-2020-api-industry-landscape-map/?utm_source=rss&utm_medium=rss&utm_campaign=the-2020-api-industry-landscape-map

Cheque mate: Starling Bank launches mobile cheque deposits to make banking from home easier

https://thefintechtimes.com/cheque-mate-starling-bank-launches-mobile-cheque-deposits-to-make-banking-from-home-easier/?utm_source=rss&utm_medium=rss&utm_campaign=cheque-mate-starling-bank-launches-mobile-cheque-deposits-to-make-banking-from-home-easier
  • First digital-only bank to offer mobile cheque depositing

  • Available for all customers from next week

  • Helps small businesses and individuals do their banking better from home

Starling Bank is launching mobile cheque deposits. The Starling mobile app which works across iOS and Android uses device cameras to capture an image of the cheque and ‘reads’ the details to pay the money into an account. It’s simple, convenient and secure.

Cheque imaging will be available to all Starling customers from today with UK personal, joint, sole trader or limited company business accounts. The service works for all cheques of up to £500. Customers will still have the option to use a free postal service to process any cheque or cheques over £500 by popping their cheques in the post for free.

Anne Boden, CEO and founder of Starling Bank said: “There is no better time to launch mobile cheque imaging than now as it enables customers to do even more from their smartphone, at home – and with thousands of cheques deposited with us every month we know that this will help our customers.”

Please note customers need to have the latest version of the Starling Bank app in order to use cheque imaging.

https://thefintechtimes.com/cheque-mate-starling-bank-launches-mobile-cheque-deposits-to-make-banking-from-home-easier/?utm_source=rss&utm_medium=rss&utm_campaign=cheque-mate-starling-bank-launches-mobile-cheque-deposits-to-make-banking-from-home-easier

Debt collections in times of uncertainty

https://thefintechtimes.com/debt-collections-in-times-of-uncertainty/?utm_source=rss&utm_medium=rss&utm_campaign=debt-collections-in-times-of-uncertainty

It’s widely agreed and accepted now that social distancing is the only way through which we can prevent the spread of Corona virus. Let’s also accept that social distancing is here to stay for more than a few weeks, until we are given the all clear.

Corona or COVID-19 has already disrupted lives — be it at the individual level or the way that corporates function. Traditional NBFCs are no exception. Let us take debt collection as an example.

Debt collections, as most of us are already aware, typically happens either through a call centre or a field agent – or a combination of both. In the current environment, both physical collection through field agents or large call centers present a significant risk to contagion.

At the same time, in both calling and field collections, the ‘old school’ way of collecting debt is highly labour intensive and inefficient.

A Collections Field Agent has a maximum capacity of around 10- 12 cases (based upon the assumption that the assigned cases are all in the same area and in fairly close proximity of each other). If rural cases are included in the day’s tasks then the number of cases they can tackle significantly reduces. Poor weather conditions also reduce the rate of physical collections. In addition, it often takes three visits before the outstanding payment is actually made.

The potential risk of contracting or on passing a virus such as Corona would be further amplified in such a scenario. Worse, the alarming rate at which the virus would spread — if the agent continued to work, considering the volume of people s/he would come across during across the day is a disturbing thought.

The benefit from using a tech based collection platform is that it is very easy to continue to work when you are trying to maintain social distancing.

As long as you have a laptop and decent internet speed, digital collections can continue without the need for any physical face-to-face discussion since all the work is carried out from using the platform. Productivity remains the same.

In effect, technology can help build a distributed call center so that anyone anywhere can login, get cases assigned, begin calling, benefit from our data science and machine learning algorithms and begin collecting. Managers and team leaders can also be remote and monitor overall and individual collection caller performance. The use of technology can also automatically assigns cases to the best fit agent – e.g. based on language, empathy or previous ability to collect for certain lenders and scenarios.

Therefore companies like ours are still able to continue call center scale collections on a distributed and remote basis but with significantly improved real time allocation, task management and reporting. Call agents can still allocate tasks to cash pick up of field agents but these are managed by the machine and no longer require the call agent to know the field agent or his or her location.

Interestingly, we have seen a spike in digital collections with no human contact borrowers responding to messages and paying online. As all shopping malls, movie theatres, bars and nightclubs in certain locations are shut down, disposable income should theoretically be much higher than normal.

India is still predominantly a cash economy and culturally it is not a natural thing to encourage social distancing.  However In such times, behaviour must change in order to adapt to the circumstances.  Therefore it is important that we play our part by reminding borrowers to do so in order to reduce chances of infection.  Opting for online payment is perhaps the best way to stay safe rather than asking for someone to collect cash from their home.

-Authored by Jonathan Bill, Co-founder & CEO, CreditMate

https://thefintechtimes.com/debt-collections-in-times-of-uncertainty/?utm_source=rss&utm_medium=rss&utm_campaign=debt-collections-in-times-of-uncertainty

Leading open banking fintech Yapily raises $13m in Series A funding to drive the global open finance revolution 

https://thefintechtimes.com/leading-open-banking-fintech-yapily-raises-13m-in-series-a-funding-to-drive-the-global-open-finance-revolution/?utm_source=rss&utm_medium=rss&utm_campaign=leading-open-banking-fintech-yapily-raises-13m-in-series-a-funding-to-drive-the-global-open-finance-revolution

The UK is at the epicentre of the world’s open banking movement, and Yapily is leading the adoption of open finance and open banking, empowering people around the world to receive faster, affordable and personalised financial products

  • Yapily’s industry leading technology is used by Fortune 500 companies and fast growth start-ups, providing a strong, secure and powerful connectivity layer that enrichs customer experiences and creates financial opportunity
  • The investment comes during a period of fast growth and increased market share for the fintech – with 500% monthly recurring revenue growth in the past six months

Leading enterprise connectivity platform Yapily has today announced that it has raised $13m in a Series A funding round. The fintech will use the investment to drive open banking adoption by organisations across Europe; providing a strong, secure and powerful connectivity layer that enriches customer experiences and creates financial opportunity.

The investment was led by Lakestar, an early investor in Skype, Spotify, Airbnb and Facebook as well as one of Europe’s biggest fintechs – Revolut. Existing investors HV Holtzbrinck Ventures and LocalGlobe also participated in the round.

Angel investors also include Taavet Hinrikus (TransferWise chairman and co-founder), Ott Kaukver (Twilio’s CTO), Roberto Nicastro (UniCredit’s former deputy CEO) and Frank Strauss (Former CEO of Deutsche Postbank). 

The new funding comes during a highly successful period for the London-based fintech, in the last six months its monthly recurring revenue has grown by over 500%; quadrupled its headcount in London to 45; and expanded into Italy, Ireland and France, as it works towards total market coverage in Europe, with new territories added regularly.

With the UK at the centre of open banking innovation and development, today’s investment announcement shows significant market confidence in Yapily. With more than 6,000 banks affected by the PSD2 deadline, most European countries are set to release quality APIs publically in 2020. Open banking technology is also being adapted to other aspects of financial services as part of open finance. The new funding will be used by Yapily to consolidate its position in Europe as the backbone of open banking, and the infrastructure that partners need in order to take advantage of open finance.

Yapily offers a proprietary open API that enables companies to access the financial information needed to meet rising customer expectations in banking, lending, payments, accounting and money management. It boasts Fortune 500 companies and fast growth fintechs as clients, including Intuit QuickBooks, where Yapily’s API is used by the accounting software provider to help thousands of its SME customers access insights and financial information from bank accounts in UK, France & Ireland. Other customers and partners of Yapily include IBM and GoCardless.

Yapily also collaborates with technical design authorities and regulators, such as Open Banking Implementation Entity in the UK and Berlin Group.

Stefano Vaccino, Founder and CEO of Yapily, said: “We believe open banking is a force for good. Using our API and infrastructure, we’re not only providing our partners with strong and powerful connectivity to boost their user experiences. But we’re also giving their customers, whether they be consumers or businesses, greater control of their finances, through the creation of products and services which can fuel greater financial management and accessibility. Something that’s more essential than ever during this period of uncertainty. 

The UK is at the epicentre of the world’s open finance movement, with the industry setting the rules as the world begins to embrace their own open banking positions. We’re pleased to be at the centre of this growth – we’re backed by experienced investors, and we’re the only technical provider trusted and chosen by regulators and technical committees. With this funding we intend to drive open banking adoption and its benefits, ensuring benefits are far reaching within the likes of payments, accounting, lending and beyond.

Stephen Nundy, Partner at Lakestar, said: “With pressure placed on the world’s economy due to the Covid-19 outbreak, we believe investors have an important role to play in continuing to support innovation to fuel business growth. Now has never been a more important time to drive financial wellbeing and goodwill, and Yapily’s infrastructure is best placed to enable and encourage this across the financial ecosystem.”

“With Yapily, we’re investing in market leading technology that is ahead of the competition, both in terms of seamlessness to the end user, and in security and control. Their “Open API first” approach, with no screen scraping or reverse engineering of functionality, ensures all parties are getting the performance, scale, and security expected of such a critical piece of API infrastructure.”

“Stefano and his growing team have deep technical and regulatory expertise, they’re very ambitious, and we look forward to accelerating Yapily’s business growth.”

Ola Malomo, Head of Bank Partnerships at Intuit QuickBooks, said: “By plugging Yapily’s API directly into our platform, we’re able to offer our SME customers a smooth and simple way to access their financial information, unlocking real-time insights into their cashflow. We look forward to working with Yapily as the company continues to thrive.”

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UK consumers put strong technology as main appeal for banks

https://thefintechtimes.com/uk-consumers-put-strong-technology-as-main-appeal-for-banks/?utm_source=rss&utm_medium=rss&utm_campaign=uk-consumers-put-strong-technology-as-main-appeal-for-banks
UK consumers are placing strong technology as their
biggest priority for banking, but digital banks need to be clear
with their value offering to capitalise on this, according to Vilve
Vene, CEO and co-founder of core banking platform
Modularbank

In new research on the UK’s financial space, the FinTech
platform found that more than 90% of UK consumers claim a strong
technology offering is important to them when choosing who to bank
with. The survey, which comprised of responses from 2,000 UK
consumers, stated the technology was more important than interest
rates, with only 88% of respondents citing it as an important
factor.
The reason for this desire for robust technology comes from
the fact technology is being deeply ingrained in our daily lives.
“As consumers we are receptive to these advances which continue
to enhance our working and personal lives,” said
Vene
. “Let’s take the example of the growth of
neobanks. These 100 percent-digital banks have grown in popularity
because banking is an everyday essential for people and they
recognise the value of having a strong banking technology offering
which caters for their needs.”

The coronavirus has increased the demand of online banking
services, as people are being told to stay indoors, keeping them
from visiting their branches.  With the UK’s Chancellor of the
Exchequer,  Rishi Sunak, giving people a three-month holiday on
their mortgages people have been spending hours on the phone trying
to contact their bank, simply because many traditional financial
institutions have no other means of communicating with
customers, Vene stated.

However, there is banking technology available which would
enable consumers to apply for changes with a single click and for
banks to handle them internally just as easily, she stated.

With the current situation, digital banks are in a great place
to acquire more customers. People are clearly looking for strong
technology-based solutions and lengthy phone calls trying to
contact their bank in this time could see them look towards a neo
bank. However, Vene believes they need to really consider what
their actual value offering means in terms of service as many
offerings in the market at the moment are very similar.

“What is crucial for these banks now is to differentiate
themselves by introducing more complex, new services that are easy
to use and which add real value to customers. Only by doing this
can these neobanks become a true banking partner for their
customers (currently they may have significant numbers of
customers, but these customers only use a fraction of the available
services in their everyday banking).”

If challenger banks do not act fast, they will miss the
opportunity. Customers are typically loyal and if incumbents do act
quickly and implement strong technology, Vene believes they would
likely retain their customers.

In Modularbank’s
report
it also found that consumers are no longer worried about
the brand of a bank or creating personal in-branch relationships
with staff. Only 68% of people cared about the brand and 47% of
people want to have a personal relationship in-branch.

On a scale of 1-10 (with one being unimportant and 10 being
extremely) 80% of consumers voted six or above when asked how
important technology and a digital offering is in banking.
Furthermore, 53% claimed they would be happy if they never had to
visit their bank’s branch again.

People are becoming more opening to non-branded banks. Brands
are not important, instead financial institution need to gain the
trust of the consumer that their savings and operations are safe
and secure.

“The need for physical branches becomes totally obsolete since
the banking services they provide can be done more conveniently and
efficiently online. This does not mean that there will not be a
client manager in banks anymore, this just means that the
operations that actually do not need human contact will take place
without it,” Vene added.

“I personally have run several companies and handled all my
personal banking over the past ten years without visiting my bank
branch even once, however, I still feel that I have a personal
relationship with them and my worries are all handled with
dedication.”

Estonia-based Modularbank offers financial institutions with
technology which can integrate with existing systems and offer
seamless digital banking experiences. Vene said, “Technology
really is the key to attracting and retaining a customer’s
business in the banking world.”

While Vene does not believe banking will be fully digital within
five years, she does see everything shifting that way. Furthermore,
banking will become more embedded into our daily lives to the point
where it could become “invisible” in the extent that people
will not consider certain processes as banking services. She said,
“This is in fact already a reality, in the form of ‘buy now,
pay later’ products already offered by many retailers. To the
consumer, these are retail services, yet they are still financed by
banks. In the future, more and more retailers will be offering
services to help finance purchases – and these will be set up and
run entirely via technology.”

The post
UK consumers put strong technology as main appeal for banks

appeared first on The
Fintech Times
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