News Briefing - Crowdfunding, SME And Alternative Finance

crowd of women talking at a business event

1. UK – FinTech

The Litigation Finance Journal follows up yesterday’s Evening Standard report: 

“Nicola Horlick had all eyes on her as she established her peer-to-peer lending firm, Money&Co, in 2013. Along with Denmark Square, Horlick had established herself as a dynamic, forward-thinking businesswoman. While she was on track to profit in 2020, the global pandemic altered her plans significantly. 

2. UK – FinTech 

 

Digital banking app sync. has today announced a partnership with regtech ComplyAdvantage to increase its anti-money laundering (AML) and anti-fraud security. AltFi reports: 

“The partnership will allow the open banking app to run its compliance and risk management processes more smoothly.  

As well as streamlining its security, sync. has also been able to use the fact that ComplyAdvantage is recognised by the UK’s regulators to help it obtain its own regulatory licensing needed to operate in the UK.  

Charles Delingpole, founder and CEO of ComplyAdvantage, said: “ComplyAdvantage’s vision is to take on and neutralize the risk of money laundering, terrorist financing, corruption and all other global financial crimes.”  

“We are always excited to partner with other innovative products and provide our scalable solutions to sync. as they expand.”   

The integration will help sync. to better monitor its customers’ activity on its app and protect against financial crime.” 

3. International – FinTech 

Finextra reports a “world first”: 

“In what is being hailed as a world-first, a bank-issued stablecoin has been used to carry out an e-commerce payment. 

Sygnum Bank's digital Swiss Franc (DCHF) was used to make a payment on the site of Swiss online retailer Galaxus. The transaction was enabled by Danish digital currency platform provider Coinify.

The value of Sygnum’s DCHF is pegged 1:1 to the Swiss Franc. When used for e-commerce payments, no intermediaries are involved and the transactions happen in real-time with stable values.

The partners say this reduces costs for online retailers by eliminating card systems and protecting against fraud, as well as simplifying and speeding the customer purchase experience.” 

 

4. International – FinTech 

Reuters runs a critique of “DeFi” – as previously covered in this briefing. 

“It sounds like a surefire bet. You lend money to a borrower who puts up collateral that exceeds the size of the loan, and then you earn interest of about 20%. What could possibly go wrong? 

That’s the proposition presented by “DeFi”, or decentralised finance, peer-to-peer cryptocurrency platforms that allow lenders and borrowers to transact without the traditional gatekeepers of loans: banks. 

And it has exploded during the COVID-19 crisis. 

Loans on such platforms have risen more than seven-fold since March to $3.7 billion, according to industry site DeFi Pulse, as investors hunt returns at a time when central banks across the world have slashed interest rates to prop up economies battered by the pandemic. 

Proponents say DeFi sites, which run on open-source code with algorithms that set rates in real-time based on supply and demand, represent the future of financial services, providing a cheaper, more efficient and accessible way for people and companies to access and offer credit. 

But with the promise of high rewards comes high risk. 

Lawyers and analysts say such sites are vulnerable to coding bugs and hacks, and most are untested at scale and unregulated - the latter typical of much of a global cryptocurrency sector mistrustful of the financial establishment. 

Critics warn the technology could be the next overblown bubble of the crypto world, akin to initial coin offerings (ICOs), with inexperienced investors at particular risk. In 2017, billions of dollars poured into ICOs, where companies raised capital by issuing new virtual coins. Most projects failed to gain traction, and many investors lost their money.” 

5. International – FinTech 



Crowdfundinsider reports: 

Investments in private Fintech firms based in the Asia-Pacific increased by 9.1% to $1.4 billion during Q2 2020, when compared to Q1 2020, according to a report from S&P Global Market Intelligence. 

The Q2 APAC Fintech Funding Report (released on August 25, 2020) notes that Fintech investments in India dropped by 38% to $339 million during Q2 2020. This, as the Indian government continued to “scrutinize and clamp down on foreign investments,” the report noted. 

As covered in early August 2020, approximately $1.47 billion was invested into businesses operating in the Fintech sector in India between January to June 2020, according to the MEDICI Report covering Indian financial technology markets. 

The amount invested into India’s Fintech industry during H1 2020 was 60% greater than the capital allocated to businesses in the sector during H1 2019. There were 68 financial technology-related deals that were finalized between March and June 2020, according to the Global Fintech Festival Report from July 2020. But many of these deals may have been completed before March 2020 (which is when the COVID-19 pandemic began).