News Briefing - Crowdfunding, SME And Alternative Finance

escalator ascending into light

1. UK – FinTech 

 

It’s been six months since Monzo launched its long-awaited business accounts and in that time, the digital bank has reached 50,000 customers, according to AltFi.  

“55 per cent of the businesses on its books are sole traders, while the remaining 45 per cent are limited companies.  

Users of Monzo’s business accounts range from videographers, Etsy sellers, bakers, digital consultants and it even has a few tech start-ups using its services, with businesses ranging from just a few months old up to SMEs over 15 years old.   

Seemingly at odds with the rest of Monzo’s demographic, 70 per cent of the SMEs using its business accounts are located outside Greater London, with 58 per cent hailing from outside of Southeast England.” 

 

2. UK – AltFi 

 

FT Adviser reports: 

 

“The Financial Services Compensation Scheme has paid out £355,000 on claims against defunct self-invested personal pension provider Pointon York but £15m against IFAs who recommended the company's product to clients. 

FTAdviser understands in total the lifeboat scheme has received 106 claims against the provider, with 10 being successful, six unsuccessful and 90 still in progress. 

The scheme started accepting claims against Pointon York in July 2019, after the company went into liquidation in November 2018. 

Pointon York was declared in default in June meaning the FSCS was satisfied the firm was unable to pay any claims for compensation and that at least one claim it had received was eligible.” 

 

 

3. US – FinTech 

Finextra runs a teaser on a survey of inward investment into the sector. 

 

“The paradigm of challengers and incumbents should be revisited in the light of widespread collaboration between the two, according to Tony McLaughlin of Citi and Mike Massaro, CEO of Flywire. 

Massaro and McLaughlin have spoken of the new era of partnerships between fintechs and incumbents that is taking shape, defying the commonly-held assumption that the latter are resistant to innovation.

McLaughlin uses the analogy comparing fintech disruptors as “barbarians at the gate” who were then invited inside the city for a cup of coffee.

“There is so much collaboration now. The success of fintech has made banking better. We’ve had to become better to meet the expectations of forward-thinking clients,” he says.

“One example of that is the ability to deliver services through APIs, because banks traditionally had file-based connections and graphical user interfaces. This is something we’ve had to invest in to support our fintech clients,” McLaughlin adds.

Among them is Flywire, a Boston-based vertical payments company, which offers vertical specific payment services to organisations across education, healthcare and travel among others.

“I think it is wrong to assume that banks aren’t innovating because they are,” Massaro says.

“Challenger banks and other fintechs just showed them how to innovate a little differently. Incumbent banks were able to invest heavily on infrastructure, for example, an area which is pretty much unavailable to anybody but banks.”

Massaro refers to the work Flywire has done with Citi, something which would not have been possible had the bank not been so bullish on their investment in FX APIs, cash management integration points and much else besides.” 

 

 

4. International – Fintech 

Cryptocurrency and blockchain technology adoption continues to rise, with banks, institutional investors, and everyday consumers now using these platforms to engage in everyday transactions or to implement various business use cases. Crowdfundinsider reports: 

“According to Chainalysis, the “patterns of cryptocurrency usage” vary widely across the globe. The blockchain security firm claims that its recent report is one of the first attempts to quantify key differences in how DLT and crypto-assets are used by businesses throughout the world. The report was compiled using blockchain analysis and insights from expert interviews, which looked into important regional differences in crypto adoption and related use cases. 

As mentioned in Chainalysis’ report, the Central and Southern Asia and Oceania’s cryptocurrency market has been growing steadily. Approximately 12% of all value sent and received using cryptocurrencies came fromt his region, the report revealed. 

In total, $40 billion worth of digital assets were received by entities based in Central and Southern Asia and Oceania, according to the report. It added that another $41 billion in crypto-assets were transferred out of the region to various places throughout the world. This region accounted for a relatively small or 1.7% of the illicit share of crypto valued received and just 0.8% of illicit share of value sent.” 


5. International – FinTech 

AltFi reports: 

“New Australian fintech on the block Cape is gearing up to launch a “recession-fighting” credit card for SMEs in early 2021.  

The card will be powered by open banking and will allow businesses to manage their cash flow through live file management, access buy-now-pay-later finance and make revenue-based repayments.  

Based in Sydney, the fintech is hoping to launch the new account in February 2021 to tap into the 2.1m-strong Australian SME market.  

Ryan Edwards-Pritchard, CEO and co-founder of Cape, said: “We know already from our work in the fintech and digital sectors that businesses are facing hurdles when it comes to accessing credit having been locked out of business lending, equity investments or simply are nervous about external finance in the current climate.”