News Briefing - Crowdfunding, SME And Alternative Finance

crowd at an airport

1. UK – Alt-Fi

 

The Evening Standard reports: 

“Fund manager Nicola Horlick’s lending platform Money&Co lost £400,000 in the last financial year as potential investors ducked taking out its ISAs amid the Covid crisis. 

Horlick, once dubbed the “City Superwoman”, set up Money&Co and its holding company Denmark Square in 2013 as a peer-to-peer lender but has since changed the business model so it only lends on secured assets, primarily in music publishing and litigation finance. 

She said: “We would have made a profit but hardly anybody bought ISAs in the key March-April time. Literally, it was something like 5% of the business on 2019 levels.” 

 

2. UK – FinTech 

 

AltFi asks if premium banking is the way forward for FinTechs. 

“The fintech world was abuzz with activity over the past two weeks as the three largest digital banks, Monzo, Starling and Revolut all released their annual reports for the last financial year.  

What ensued was a flurry of comparisons between the ‘big three’ and their differing strategies to make enough money to not only survive but thrive  

All three challengers mentioned above have subscription packages (Starling currently only offers Business account subscriptions) so, it begs the question: Can premium banking push fintechs to profitability?  

Monzo was the first to release its annual report, in which it admitted that its 2020 results cast “material uncertainty” on its future following steep losses and only a small increase in revenues not helped by several delays in pushing out its paid-for Monzo Plus project.  

Starling followed a week later, with its results showing “no material change” from coronavirus, soaring revenues (up 370 per cent), boosted by strong growth in SME customers, and fairly sizeable losses but not on the same level as its hot-coral-coloured rival.” 

3. UK – AltFi 

Money Marketing runs a piece opining across advice service levels and an opportunity to re-embrace the FSCS – all courtesy of Covid-19. 

“One thing that stands out is the wide variation in the quality of service from advisers. Boring Money’s Advice Report for 2020 shows satisfaction levels remain extremely high, although its detailed interviews suggest highly disparate levels of service. 

Some 26 per cent of advised customers reported having had no contact with their adviser since lockdown started. At the same time, customer appetite for and acceptance of video calls has increased, and now 63 per cent of advised clients say they would be happy to engage with their adviser this way. 

The focus on trust among retail investors is echoed by a new paper from the CFA Institute, which found only 59 per cent of retail investors who had a financial adviser considered them their most trusted source of advice. This is a reduction from 65 per cent in 2018. This “trust gap can be viewed over time in relation to the effectiveness of the investment advisory industry”, the report said. 

Improving trust is best achieved by working with clients to provide better information, financial education and transparency. A mixture of technological innovation and the human touch that is provided by you is key. Trust and value go hand in hand and value creation without trust is unsustainable.” 

4. UK – FinTech 

Finextra reports: 

“The British Business Bank has announced that it has approved Conister for accreditation to the Bounce Back Loan Scheme (BBLS), and Bank of Ireland (UK) for accreditation under the Coronavirus Large Business Interruption Loan Scheme (CLBILS). 

Conister will join the other 26 BBLS lenders who have been accredited since the scheme opened.

The new CLBILS lenders will be able to provide finance to midsized and larger UK businesses with a group turnover of more than £45m (the upper limit for the existing smaller-business focused CBILS) that are suffering disruption to their cashflow due to lost or deferred revenues during the Covid-19 outbreak.

Following their approval, the lenders will put in place the operations required to start lending under the schemes and will confirm the dates from which they will be ready to start receiving applications from businesses across the UK.

Government published statistics show over 1.2 million businesses have to date[1] benefitted from loans and guarantees worth £52.7 billion through schemes delivered by the British Business Bank. This includes 1,174,854 Bounce Back Loans worth over £35.5 billion, 60,409 facilities worth almost £13.7 billion through the Coronavirus Business Interruption Loan Scheme and 516 facilities worth £3.5 billion through the Coronavirus Large Business Interruption Loan Scheme.

The Bank continues to review applications from a wide range of lender types - from PRA-regulated banks, to platform lenders, debt funds, invoice finance lenders, asset finance lenders and responsible finance lenders.” 

 

5. International – FinTech 

 

Personal finance app and open banking provider Moneyhub has added a smattering of new Irish banks to its platform, extending the fintech’s reach in Ireland. AltFi reports: 

“Allied Irish Bank (AIB), Bank of Ireland, First Trust, and Ulster Bank are among the new additions, allowing Moneyhub’s enterprise clients to offer customers access to their financial data from these banks. 

“Building on our established Open Finance reputation in the UK, we are proud to be further strengthening our Irish proposition, helping business transform and grow at a time when they’re under real pressure,” said Moneyhub CEO Sam Seaton. 

Moneyhub’s clients include the likes of Nationwide, Lumio, KPGM and AON, with the startup boasting that the addition of these new banking API connections will help its European customers to reach Irish consumers.”