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March 4, 2020

New small business regional digital disparity report

Improving the digital skills and connectivity of small and medium-sized businesses (SMBs) could add up to £15.3bn to the UK economy, a new report – The Digital Opportunity for Small Businesses – from Intuit QuickBooks today reveals.

Improving digital skills and ability to use digital tools could add £9.9bn, or 0.5% of total UK GDP. Improving digital infrastructure in the same way could add £5.4bn, or 0.3% of UK GDP.

According to the government’s Industrial Strategy Council, regional differences in UK productivity are at their highest level in over a century, with digital one of the key contributing factors. As a result, there is a growing awareness of the need to heal the digital divide. And with 58% of businesses failing in the first five years, embracing digital could be a significant factor for growth and resilience.

The report – developed by Oxford Economics, one of the world’s foremost independent global advisory firms – explores the potential uplift that SMBs (and local areas in the UK) could gain from having access to greater digital connectivity and leveraging existing technology and tools.

In order to quantify the productivity uplift, Oxford Economics constructed the first-of-its-kindSMB Digital Propensity Index, which scores 170 regions for these two factors (digital infrastructure and SMBs’ inclination and ability to use digital tools).

By identifying the regions that score below average for the two factors, and elevating them to the national average, the Index forecasts the potential benefit to the UK economy.

This digital opportunity is bigger than the respective GDP of large cities such as Bristol (£14.8bn), Liverpool (£13.4bn) and Sheffield (£12.6bn), demonstrating the scale of the benefits that digital adoption could bring throughout the UK.

The top 10 NUTS3 regions that would gain the largest boost if local SMBSs had access to greater connectivity and embraced digital tools.

UK SMBs not capitalising on digital opportunity

SMBs are the backbone of the UK economy, accounting for more than 90% of employment in 38 of the 173 regions. However, UK SMBs are not capitalising on the digital opportunity available. For example, while businesses with more than 250 employees derive 25.4% of their turnover from e-commerce sales, for SMBs this proportion falls to just 6.9.

Similarly, less than half (46.7%) of SMBs have a website, compared to 95.6% for larger firms. Only 5.2% of SMBs use enterprise planning software, while 8.6% use customer relationship management tools, compared to 67.2% and 62.9% of larger firms respectively.

Key factors behind SMBs not making the most of the digital opportunity include resource constraints – for many SMBs, high-cost investments with a long pay-off period are infeasible – and a lack of knowledge, skills and experience with digital technology among owners and employees. Only 6.7% of SMBs offer training to develop ICT/IT skills, compared to 67.6% of firms with 250+ employees.

Leading from the top

As entrepreneurs and top management in SMBs have a large influence across their firm’s operations, their experience and attitude towards digital technology can determine the extent of digital adoption in their organisation.

Gary Wood, co-founder and director of commercial vehicle company Plumwood, said:

“As a small business owner, I would say that embracing technology has been key to our success. Business owners should lead by example and adopt a genuine digital mindset to stay competitive in today’s modern landscape. Digital is fundamental in my business – we have digitised a lot of our processes, including dedicated in-house systems and online portals that give detailed insights to our clients. Our commitment to technology means we are one of very few transport compliance consultancies in the UK to provide this level of service, something that is instrumental in winning new clients.”

Chris Evans, vice president and UK country manager at Intuit QuickBooks said:

“Entrepreneurship is everywhere and is driving prosperity in the UK: but it’s never been harder for small businesses to succeed. We commissioned this report because our mission is to power prosperity and improve the small business survival rate, and we truly believe that for small businesses to endure, they must have digital at their core. By adopting the digital tools available today, they can be more productive and – most importantly – ensure they are best equipped to make their business a success.

“What’s truly exciting is this is only the beginning. Our report identifies that more than half of UK regions have above average digital infrastructure – meaning small businesses in these regions are already poised to experience the benefits of digitisation. What’s more, this opportunity will only increase: digital innovation, such as the rollout of 5G, is expected to rapidly increase over the coming years. This will spur on new technology, making it easier than ever for businesses to superpower their productivity and success.”

March 4, 2020

Ant Financial & Klarna announce investment to fuel global cooperation

Klarna, a leading global payments and shopping provider, is pleased to announce that Ant Financial Services Group, owner and operator of the world’s leading payments and lifestyle platform Alipay, has taken a minority stake in Klarna, as the two companies deepen their partnership to bring more innovative and convenient financial services to consumers worldwide.

This investment in Klarna by Ant Financial, the payment affiliate of Alibaba Group, supports the further development of their strategic cooperation, bringing more of Klarna’s innovative solutions to consumers and merchants within the broader Alibaba ecosystem. It will deepen ongoing collaborations between Klarna and Alipay, which currently enables shoppers at AliExpress, the global retail online marketplace of Alibaba Group, to use Klarna’s popular ‘Pay later’ solution across multiple markets.

Sebastian Siemiątkowski, CEO at Klarna, says: “For too long consumers have had to endure non-intuitive, boring and overly complex services when shopping both online and offline. At the heart of this cooperation between Klarna and Alipay is a shared ambition of innovating truly superior shopping experiences and creating destinations of inspiration for consumers across the world. Alipay, and the wider Alibaba Group, have truly set the global pace on retail innovation and the app economy. We are delighted in this confidence shown in Klarna in defining the future of payments and shopping and are very much looking forward to working together further in the future.”

Klarna is now powering over 200,000 retailers and e-commerce platforms globally including AliExpress, H&M, ASOS, Expedia Group, IKEA, Farfetch, Adidas, Spotify, Samsung and Nike. In 2019, Klarna added over 75,000 new merchants and as a strategic growth partner and is driving millions of referrals and traffic each month from owned channels to these retailers, as consumers are actively seeking where they can shop with Klarna. Equally, Klarna now has an 85 million strong consumer base who choose to shop with Klarna as loyalty and preference grows across touchpoints – online and instore. The recently launched shopping experience in the Klarna app allows US consumers to shop with Klarna anywhere online. The number of app downloads has increased by 33x since May, and new features gain instant traction – over two million items were added to consumer wish lists in the first months. Klarna now has more than 200,000 more monthly app downloads than the nearest US competitor. During 2020, the company will continue to gain strong momentum on current markets as well as enter new markets, with an already strong start to the year with the recent successful launch of the Klarna app in Australia.

Numis acted as exclusive financial adviser to Klarna.

March 3, 2020

European fintech lending industry to hit $9.6bn value this year

Innovative lending services, such as crowd and P2P marketplace loans, are becoming increasingly popular in many European countries. With the development of financial technology, recent years have witnessed a growing number of business customers and private borrowers using these digital financial services.

According to data gathered by Finanso.se, the European fintech, or the alternative loans industry, is expected to hit a $9.6bn transaction value this year, growing by 10% year-on-year.

Crowdlending generates nearly 70% of total market transaction value

After the financial crisis, many traditional banks became very restrictive in approving loans, especially in some European countries, leaving businesses and individual consumers with no access to much-needed cash. This created space for lending platforms, which connected borrowers directly to lenders, and removed the banks from the equation.

Lending platforms use sophisticated computer algorithms to make lending decisions, provide fast loans, and lower rates to borrowers. Investors, on the other hand, are given the ability to easily invest in loans outside of their countries at attractive returns.

In 2017, the European fintech lending market hit $6.3bn value, revealed the Statista Alternative Lending Market Outlook. By the end of 2018, the market value increased by 20% and reached $7.5bn worth. The rising trend continued in the next twelve months with the entire market reaching $8.7bn value. The statistics indicate European fintech lending industry is expected to show an annual growth rate of 3.0% between 2020 and 2023, resulting in $10.5bn transaction value in the next three years.

The market’s largest segment is crowdlending or P2P business lending. In 2017, European P2P loans in the business sector reached $3.6bn worth. Over the last three years, the market value of the crowdlending loans increased by more than 75% and hit $6.5bn transaction value in 2020. Statistics show this amount will grow to nearly $7.2bn in the next three years.

Consumer P2P loans are forecast to edge up to $3.1bn value in 2020, twice less than business lending.

Number of European fintech loans to eeach 1.3 million by 2023

Although P2P business loans represent the leading market segment, the statistics indicate a much higher number of consumer P2P loans in Europe. In 2017, there were more than 911,000 successfully funded alternative loans in the consumer segment.

Business P2P loans reached over 63,000, or 14 times less compared to consumer loans. In the last three years, consumer and business alternative loans rose to 1 million and 75,900, respectively. The average funding per loan in the crowdlending segment is expected to reach $86,185 this year. Statista survey indicates the total number of European fintech loans will amount to over 1.3 million by 2023.

Compared by geography, the United Kingdom represents the leading European fintech lending market, and the third-largest fintech lending market globally. According to statistics, the total value of UK fintech loans is expected to peak at a value of $4.8bn this year.

Switzerland ranked as the second-largest market in Europe with $1.4bn worth transactions in 2020, growing by remarkable 27.4% year-on-year. With a $796m transaction value in 2020, Italy ranked as the third-largest fintech lending market in Europe.

However, besides Switzerland, Denmark and Spain are expected to see the highest growth rates in the following years, rising by 23.7% and 22.9% respectively year-on-year.

Read the full story here: https://finanso.se/european-fintech-lending-industry-to-hit-9-6bn-value-this-year/

March 2, 2020

Kroll expands enhanced eDiscovery services globally

Kroll, a division of Duff & Phelps, and the global leader in risk mitigation, cyber resilience, security and incident response solutions, today announces that it has expanded its eDiscovery services globally. As part of this expansion, Kroll has fully integrated existing eDiscovery services provided by Duff & Phelps to become part of its Cyber Risk practice, strengthening its end-to-end support for a variety of eDiscovery engagements.

Kroll can assist with every stage of the eDiscovery process, including identification, preservation, collection, processing, analysis and review. The firm is a Relativity Certified Partner and has also developed its own proprietary technology for eDiscovery, including the Kroll Artifact Parser and Extractor, which lets forensic teams collect and process data within minutes.

These latest developments form part of Kroll’s expansion into the APAC and EMEA regions, matching the increasing demand for end-to-end cyber protection and eDiscovery solutions that span multiple jurisdictions. New processing and storage facilities are going live in Germany, United Arab Emirates, Brazil, and Saudi Arabia, among others. To support Asia-based clients further, the firm recently acquired Singapore-based computer forensics and investigations firm RP Digital Security, bringing in associate managing director Rob Phillips.

Andrew Beckett, managing director and EMEA Leader, Cyber Risk at Kroll, comments:

“Having local resources and expertise worldwide that can expedite eDiscovery has taken on greater urgency today. Data privacy regulations, such as GDPR, continue to become more stringent, particularly when it comes to timely breach notification, while organisations have to battle more cyber threats than ever before. Kroll’s new eDiscovery facilities and capabilities allow us to be even more efficient as we work with top-tier law firms and corporations on wide-ranging, complex matters.”

March 2, 2020

UK P2P platform announces IFISA eligible investment products

UK peer-to-peer lending platform Propifi, has unveiled the launch of a new Innovative Finance ISA eligible investment opportunity, which enables retail P2P investors to benefit from targeted quarterly returns.

An easy to use P2P commercial lending platform, Propifi was established in April 2018, with a clear ambition to cater for the growth in the UK bridging finance industry, while satisfying the increasing appetite for P2P property finance. Its initial growth was supported by a successful crowdfunding raise, oversubscribed at 155%.

This is the first investment opportunity launched by Propifi through its P2P platform that is eligible for IFISA investment, enabling individuals to place a minimum investment of £1,000.

Euan McAlphine, chairman of Propifi and a veteran of the property development industry, explained: “Propifi has been developed by a leading team of experts in property development, finance and technology, to create a unique peer-to-peer lending platform that could quickly dominate the UK market.”

“In being eligible for IFISA investment, Propifi’s targeted interest P2P investment products provides retail investors with a viable opportunity to take advantage of the capped £20,000 tax-free IFISA allowance, whilst enabling them to benefit from healthy, projected returns of up to 8% fixed returns paid quarterly”

(Tax treatment is based on individual circumstances and is subject to change)

Propifi currently offers both high-net-worth and restricted investors with competitive P2P investment opportunities, whilst continuing to accept applications for bridging loans from borrowers between £100,000 to £2.5m.

Mr McAlpine continued: “Our IFISA campaign will provide Propifi investors with the opportunity to enter into and support the bridging finance industry and enable us to continue issuing valuable P2P investment opportunities to both restricted and high-net-worth investors across the UK.”

February 27, 2020

New AI offers lifeline to startups refused bank loans

Alternative lender Just Cash Flow PLC has begun harnessing augmented intelligence (AI) to identify promising startups through their online footprint – including social – and approach them directly.

Start-ups are usually caught in the catch-22 situation of being unable to access financial support, because lenders traditionally request two or more years of accounts to indicate healthy trading. However, the odds are stacked against such businesses if they can’t access the funding they need to invest and grow.

In fact, it’s estimated that more than half of SMEs in the UK have been denied bank loans in their early days. This lack of fiscal support has driven two-thirds (60%) of small businesses to dip into their own pockets, with many using savings or even re-mortgaging their homes.

Just Cashflow’s AI will turn this situation on its head, with promising companies proactively approached with an offer of financial support.

In practice the AI assesses around 16,000 new companies that register with Companies House each week. Thousands of data points are analysed including directors’ online footprint, incorporating company websites and social media platforms such as LinkedIn. This produces a ‘Propensity Index’ that shows the businesses that have the greatest potential to be successful in the future. Highly skilled business underwriters then review this shortlist, with the most promising companies approached.

For example, a new business consultancy focusing on the energy sector wouldn’t usually be able to attract immediate financial support. But because Just Cashflow’s new system looks over associated online materials, it would find that the lead director once held an extremely senior position with a major oil company and is incredibly well connected.

This would then significantly increase the propensity for this new business to be successful in the eyes of the AI. While obvious upon explanation, 16,000 weekly registrations would prove impossible to wade through manually.

Just Cashflow executive chairman John Davies, explains: “This type of new business and thousands like them are simply invisible to traditional lenders. And if the owners go looking for financial support, they’re almost certain to get a ‘computer says no’ response.

“The innovative use of AI enables us to turn startup business lending on its head by finding these businesses that would otherwise be rejected but are viable lending partners. It would be impossible to do this without harnessing new technology even if you employed hundreds of additional staff.

“AI does the heavy-lifting to find the right targets, and our highly experienced underwriters make the ultimate lending decisions.”

The initial support that Just Cashflow is offering includes a £25,000 line of credit (that works the same as a traditional bank overdraft) alongside a range of free anti-fraud tools to assess customers or suppliers – and access to other services as required, such as foreign exchange for companies trading outside of the UK.

February 26, 2020

Amid Brexit limbo borrowers favour banks and brands

Against a backdrop of political and economic uncertainty, UK borrowers turned to established and familiar lenders in 2019, according to a new research report launched today by Equiniti Credit Services and Credit Kudos.

Entitled A Brands’ New Decade: Loyalty on loan as consumers consent to data-driven lending services, the report finds that although banks remained the lender of choice in 2019, 64% would be likely to consider a loan from a non-traditional brand, if it was well-known and had a good reputation. Loans from Google and Apple, for example, would be chosen by 26% and 21% of those surveyed, and Amazon by 34%. With political uncertainty resolved, the report’s findings now suggest a ready-made market for brands that can move quickly to deliver attractive credit products.

“Consumers still consider a low interest rate to be the key factor when choosing a loan product,” says Sarah Jackson, managing director, Sales at Equiniti Digital, which incorporates Equiniti Credit Services.

Interestingly, however, brand reputation was cited by one in four as the most important factor overall, overtaking low weekly or monthly repayments for the first time. That doesn’t mean people are loyal to any one brand, however. Only 14% said they would return to a lender they’d used in the past.”

One area where lenders should focus, says Jackson, is on meeting the growing expectations for digital, consumer-centric services: “As technology continues to drive convergence across sectors, borrowers are rightly expecting a digital-grade service experience from their loan provider. While banks continue to play catch-up, there is a big opportunity for the tech-enabled brands that are known for delivering exceptional user experiences to make a play in consumer credit. Established lenders need to work hard to make up ground here. Delivering a first-rate UX will be key in ensuring they protect their lender-of-choice status.”

The report also suggests that consumer perception of open banking is moving beyond concept stage, presenting lenders with a number of exciting opportunities to expand hypothetical use-cases into real revenue-driving products and services.

“Our research highlights that consumers are becoming increasingly aware of the benefits offered by open banking,” comments Freddy Kelly, CEO, Credit Kudos, an FCA-authorised Credit Reference Agency and Account Information Service Provider (AISP). “Demand for personalisation and instant, consumer-centric digital services was evident in the report, with consumers becoming increasingly receptive to how their data could be translated into more personalised services, presenting a real opportunity for lenders.

By leveraging this data, lenders can gain a better understanding of their customers, offer new transaction data-based products which can flex and adapt to fit changing individual circumstances and, as a result, create a more central-role for themselves in the lives of their customers.”

The full report also explores the impact of the ‘Brexit limbo’ on the credit market, the apparent decline of traditional price comparison sites and consumer attitudes to new technologies, like AI. Importantly, it identifies where opportunities for credit providers lie and offers support on how they can create new, personalised services which deliver for consumers of all ages.

L-R: Richard Carter (managing director, EQCS), Sarah Jackson (managing director, EQCS), Freddy Kelly (co-founder and CEO, Credit Kudos)

February 20, 2020

Bison Bank counts on ndgit PSD2 ready software

Bison Bank in Lisbon has chosen PSD2 ready software from ndgit, the first provider of dedicated API platforms for banks and insurance companies, to empower its Open Banking platform. ndgit will also provide local technical expertise to accelerate integration of its industry proven, standardised PSD2 solution, helping Bison Bank to fulfil the central functions required by the Regulatory Technical Standards while evolving next generation services.

Bison Bank represents ndgit’s second customer win in Portugal. Focusing on wealth management and investment banking, the innovative Portuguese bank is a rapidly expanding international player. Enabling the fulfilment of the new regulatory PSD2 functions for third-party service providers, ndgit’s secure APIs will allow Bison Bank to extend its digital offerings, including online and mobile, to its clients around the world. At the same time, ndgit will support Bison Bank with local implementation, helping to configure, integrate and commission the software on-premise at the bank’s data centre within a two-month timeframe.

Oliver Dlugosch, CEO of ndgit, says: “The cooperation with Bison Bank strengthens our market presence in Portugal, confirms our position as Europe’s leading PSD2 software and underlines our fast, international growth.”

Bison Bank chose ndgit for numerous reasons. “With ndgit, we not only get PSD2 software but also an API platform with which we can flexibly implement bank-internal micro services and Open Banking strategies”, explains Nuno Oliveira, Bison Bank’s IT architecture and development manager. “In addition, its PSD2 ready software is highly secure and offers over a hundred different configurations that fall within the regulatory requirements of PSD2 and the options of the Berlin Group Standard. Last but not least, ndgit can draw on its experience of twenty-five PSD2 implementations to help us achieve a quick and efficient integration and ensure we are up and running with PSD2 APIs for third party providers in just 40 days.”

February 20, 2020

VAS Panel launches next generation Dashboard

Leading valuation market specialists, VAS Group has launched its next generation VAS Panel service Dashboard, a dedicated cloud-based interactive portal for lenders, specialist distributors and brokers to improve their valuations management processes.

With a focus on increasing workflow, usability and transparency, Dashboard allows user to automatically request a valuation quote, instruct their chosen surveyor and follow the process from start-to-finish with access to all notes, both external and internal.

Once logged in the user can search and manage all ongoing valuations from one easy-to-use screen, with clear sub sections to show at which stage the valuation is at in the VAS process.,

The interactive system also allows immediate communication between the user and VAS staff.

VAS Panel’s comprehensive valuation panel management service already ensures the most relevant third-party valuers are instructed to provide loan security valuations based on location, deal type and value.

An internal, ongoing quality assurance programme checks the accurateness of reports before being returned to the client, a unique market offering which helps to reduce property specific lending risks and ensure the valuation panel is managed in order to meet the highest quality standards.

Stephen Todd, joint co-founder of VAS Group, said: “The introduction of the Dashboard is part of our on-going commitment to make the customer journey as efficient as possible. It serves as a simple ‘one-stop-shop’, which simultaneously enables us to capture all of our clients’ requirements to ensure our valuers provide the most accurate quotes and service delivery.”

“We have worked hard to create an efficient product that is designed to provide full transparency and visibility of the valuation process,” added Gina May, joint co-founder at VAS Group. “It allows lenders’ underwriters, case managers and BDMs to have full visibility of the valuation process so they can manage their clients’ expectations, whilst being able to interact with us, easily gain quotes and make instructions.”

As well as VAS Panel, VAS Group includes VAS Audit, which provides live and retrospective auditing for lenders to reduce property specific lending risks and control their loan book, and VAS Software, a cloud-based valuation panel management framework which allows lenders to better manage their own panels.

February 19, 2020

Kyriba launches payments network for global CFOs

Kyriba, the global leader in cloud treasury and finance solutions, has launched the Kyriba Payments Network to address the growing CFO mandate to combat payments fraud, centralise payments, and unlock organisational efficiency.

The new payments network provides corporations with real-time fraud detection and access to machine learning-driven payments anomalies detection, the ability to dramatically accelerate corporate ERP cloud migration projects, streamline global bank connectivity and format transformation projects.

“Kyriba simplified bank connectivity and centralised payments processes during a significant treasury and finance transformation project,” said Janice Minter, senior treasury analyst at Amway. “With hundreds of banks, and nearly a million payments per month, Kyriba streamlined our treasury operations, helped us reduce risk by 10x and eliminated more than half of our payments banks, making the team more efficient and effective to support the enterprise.”

For more information about “Amway’s Journey to Transforming and Centralising Global Payments,” download the case study here.

“CIOs are challenged with finding ways to accelerate ERP projects and reduce payments transformation costs against a larger backdrop of increasing payments fraud and keeping up with market innovations, such as real-time payments,” said Jean-Luc Robert, chairman and CEO at Kyriba. “CFOs, in partnership with the C-Suite and their Boards, are demanding payments efficiencies.”

New research shows 88% of CFOs reported that their organisations were the victims of sophisticated payments fraud schemes.

“Corporate CIOs and CFOs are scrambling to build greater resilience to payments fraud as they migrate their ERP platforms to the cloud,” said Simon Shorthose, managing director Northern Europe at Kyriba.

Our clients choose Kyriba to reduce the risk of payments fraud, just as they rely on Kyriba to manage liquidity and currency risk.”

The Kyriba Payments Network is a core pillar of Kyriba’s cloud-based Active Liquidity Network that delivers cash, liquidity, payments, working capital, and risk management to enterprise CFOs.

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