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February 10, 2020

Bank Leumi UK’s tech event outlines 2020’s key trends

Leumi UK – the London-based subsidiary of Israel’s leading international bank – and LeumiTech, Leumi Group’s technology banking practice hosted a joint tech-focused discussion, bringing together influential figures from the technology industry – including senior representatives from Google, Facebook and Amazon – to engage in an open discussion on the state of the tech landscape in 2020.

In his opening speech, Gil Karni, CEO at Leumi UK, explained the important role the tech sector has to play in the UK: “Many industries were impacted by Brexit, but the tech industry has thrived – with investment into the UK tech sector reaching a new record of £10 billion in 2019 – demonstrating that the UK is the best place to be for the tech industry, and Bank Leumi is here to support this growth by providing expertise and willingness to support and facilitate the right companies”.

The talk was held by Yifat Oron, CEO of LeumiTech – a prolific figure in the industry, with over 25 years’ experience working in tech, venture capital, banking and consulting – with discussions centred on the trends and challenges that are shaping the ever-changing tech ecosystem.

Here are the four top trends Oron predicts for 2020:

Everything is being ‘Amazoned

In terms of online retail, Amazon is a monster, and competitors are not even close to it. Is Amazon getting too big? Its unprecedented expansion into other domains – such as food and pharma – has led to collaborations between smaller competitors, but so far, nothing has come close to beating the colossal corporate.

1. The high street needs to innovate to survive

Will physical retail die or evolve? One thing is for sure – plenty of stores are closing down, signalling that everything is moving to the Internet. However, we see retail giants looking for technologies to innovate their physical stores, in order to enhance customers’ shopping experience and create a smarter environment that will lead to fewer employees working on the floor.

2.The spotlight is on Artificial Intelligence

3. Cyber is a hot topic – for instance, Israel as a nation decided that cyber should be a key market and it has become one of the leading nations in terms of exports of cyber products in the world. The next trend to look at? Artificial Intelligence (AI). As an infrastructure-type technology, AI for healthcare, for example, could use complex algorithms and software to analyse complicated data, minimising human input. Certainly, AI is where the spotlight is shining.

4. Stars are aligned for digital health.

Digital health is, in one word – huge; two words – very big, but there is always the question of what comes first. The technology, which is ready, or the market’s requirements? This is clearly an area that needs to be addressed, and tech players have spotted this and are investing a huge amount to meet the growing needs.

Ending the discussion on a high note, Yifat expressed optimism about the technology industry outlook in 2020 and beyond: “Every business around the world needs some sort of technology to survive, whether it’s banks, retail stores, real estate or consulting companies. Why? Because tech is where all the money is. Smart businesses realise that this is a sector that they need to be looking at carefully, so moving forwards into 2020, technology will continue to blossom globally and remain resilient towards any upcoming challenges”.

February 10, 2020

Simply completes first deal enabled by open banking technology

Simply, the SME funder, announced today that it has just completed its first deal enabled by open banking technology.

The customer, who was talking to Simply about a funding package, was asked to provide permission for the lender to access her banking data. She was sent a link to authorise, and within minutes, Simply was able to obtain the statements – removing the need for the individual to email or print them. This information, alongside a dashboard with categorised data and analytics, was then immediately made available to the underwriting team to aid speed of decisioning.

Andy Trimmer, head of technology, Simply said: “We are continually growing our customer-focused offering and delivering open banking is a key step on this journey. Our customers now have a hassle-free and secure way of providing banking documents to us and using it to help get a decision on the funding they want. By using this technology, we are providing superior customer service, enabling both speed and efficiency, whilst going further to ensure the safety of our customers data.”

Ylva Oertengren, COO, Simply commented: “Our aim is to help entrepreneurs realise their potential. Too often, SMEs’ credit applications are declined because their businesses don’t fit a scorecard.

We know that credit scores alone do not tell you everything you need to know about SMEs. This is why we are constantly seeking better ways to use data to improve our service. Open banking gives us the insight we need and makes the journey quicker and easier for the customer.”

Simply has been able to capitalise on the benefits of open banking through a partnership with AccountScore, an analytics business that provides insights based on open banking. AccountScore and Simply have embarked on a journey to enable Simply to take advantage of an innovative blend of open banking data and business insight information, tying all relevant data together through a single integration, all with the aim to create an outstanding customer experience.

What is open banking?
Since January 2018, open banking technology has grown from strength to strength becoming part of the UK’s everyday life. It allows companies, banks and building societies, permission to access individuals’ account details electronically and securely. Open banking has shown itself to be reliable, trusted, transparent and, most importantly, it puts the account owner back in control.

Why did open banking come about?
Because data was already being provided by the customer to businesses and the way they did this wasn’t always safe.

With technology increasingly enabling efficiencies in business, saving time in the process of getting and analysing key facts was the obvious next step in terms of automation. However, this came at an, often unseen, cost to the customer.

Many companies initially used screen scraping technologies allowing third parties to access individuals’ financial data by logging into internet banking portals on their behalf. Unlike open banking, this involved the customer actively providing them with their account details.

The government rightly recognised that the moment this happens, control moves from the customer to the third party and something needed to be done to make the customers and their data safe.

Open banking was introduced two years ago as a result of the Competition and Market Authority (CMA) requirement for the UK’s nine largest banks to ‘open up’ their customers’ financial data with the consent of customers. This was requested so that approved third parties could access this data in a secure and standardised way.

Now, nearly 40 more banks have signed up voluntarily to offer better customer experiences and to keep customers in control.

What are the benefits of open banking?
Open banking allows lenders to use the data to develop insights and a better understanding of customers, which in turn will lead to better products and services being available. It ensures that customers have digital channel to share their banking information and gives them that security that they are entitled to.

Open banking also provides a quick and simple way of getting access to complex finance. Customers can provide the data required quickly, and in a simple, guided way, meaning SMEs in particular are able to obtain the finance they deserve, when and where they need it. The information enables a more holistic view of the company’s financials, meaning finance companies don’t have to rely on a credit score which so often isn’t modelled on the true picture of an SME.

February 10, 2020

Fintech startup EasyEuro raises US$4m funding to launch a Neobank

Paris and Shenzhen based fintech startup, EasyEuro, offering digital banking services to SME trading between Europe and Asia – with initial focus on China, has announced the completion of a US$4m pre-A funding round. This round of financing is mainly to be used to accelerate company growth in product development, talent recruitment and market expansion.

China and Europe are the largest trading partners in the world. Import and export volume between China and Europe from SME businesses reached US$323bn in 2018 covering goods such as textiles, furnitures, toys，foods，wine, cosmetics etc. and online e-commerce via Amazon, Shopify, France’s Cdiscount etc. is over US$100bn in 2018. These SME businesses, mostly located in as many as dozen European countries, lack the ability to easily receive and disburse payments in currency of their choice. Chinese SME also has a difficult time of conforming to European banking practices.

EasyEuro aims to provide their SME clients with a digital mobile wallet which comes with a multi currency banking account to send and receive cross-border payments in the currency of their choice. Clients can apply for a MasterCard linked with their EasyEuro account that can be used worldwide. The digital wallet supports most major payment acquiring methods such as Visa, MasterCard, WeChatPay, Alipay and UnionPay and allowing customers to benefit not only quick and simple remittance but also favourable exchange rates that can be protected during the trading process to avoid exchange losses.

EasyEuro has built a suite of open APIs for their strategic institutional payment partners such as Geoswift and SwiftPass, enabling key functions such as collect, convert, remit and pay, all in the currency of choice, which will cover the entire business flow of international trading from China to Europe.

After completing the seed funding of CNY ¥5m in September 2018, EasyEuro has raised US$4m in Q4 2019. This round is led by Shanghai based Ally Capital, and followed by seed investors SwiftPass, Geoswift, Shanghai based fintech specialist Huashan Capital and Unity Assets.

EasyEuro is founded by a team of Chinese entrepreneurs living and working in Europe in November 2017. It’s led by Dr Ryan Li, a Phd from Aix-Marseille University whom lived in France for 8 years with entrepreneurial experience in tourism, as CEO; and Densen Xue, the ex-chief architect of Huawei mobile payment wallet which is deployed as M-Pesa in Africa, bKash, TCash, JazzCash, etc. in Asia, as it’s CTO.

EasyEuro has kick started it’s payment business in Europe in 2018 with several hundreds merchants online and offline. It is an authorised e-money institution under UK FCA, and permitted to operate in the European economic area including France, Germany, Netherlands，Italy, Spain, etc.

February 7, 2020

Eazipay raises the bar with record breaking start

Eazipay Ltd, one of the UK’s leading direct debit and automated payment processing companies, is celebrating a major milestone having just seen its direct debit processing and collection volumes break the £4bn mark.

In January 2020 alone, over £77m worth of direct debits were processed on behalf of its clients – a mix of SMEs and corporate organisations – taking the company’s total processing volumes to a staggering £4,015,245,336.88 since the figures were first collated in 2008.

The current success follows what was Eazipay’s best ever year for processing volumes and overall performance. At the end of December 2019 over £822m worth of direct debits had been processed, compared to a total of £644m for 2018 – its previous record-breaking year.

Luisa Grey, Eazipay’s director, comments, “We’re enjoying a fantastic start to the year in terms of business growth and success. Processing volumes are increasing all the time, new customers are constantly coming on board and with the launch of new payment services and systems’ integrations we’re forging partnerships with more and more businesses nationally and throughout Europe.

“If things continue as they are, we should be celebrating one or two other major milestones later in the year, which will be amazing.”

The dramatic increase in the volume of work compared to previous years is a clear indication that more and more businesses continue to recognise that collecting regular payments by direct debit is the single most efficient way of controlling and regularising their cashflow.

“If companies want to avoid late payments and the untold damage that not being paid on-time carries with it, then insisting that your customers pay you by direct debit is the simplest, most convenient and crucially, reliable, form of invoice collection”, adds Luisa.

Cambridgeshire-based Eazipay, which currently employs 31 full and part time staff, has been at the forefront of collecting and processing automated payments like direct debit for over 17 years.

In addition to its direct debit collection service, Eazipay also offers a range of other automated payment processing services including direct credit transactions, SEPA direct debits for payment collection in Euros, and a card payment service allowing its clients to collect and process customer payments via debit and credit card

February 6, 2020

Digital bank does not exist yet

The rise of innovative technologies in finance naturally sparked an interest in digital banking. No wonder it has become a catch-all thing – while the competition in disruption is quite intense, many traditional banking institutions are currently attaching themselves to the idea of a digital bank in order to look more modern. Many new electronic money licence holders are going after potential customers who prefer the quick and convenient approach through digital applications also referring to their services as digital banks. But are they really digital banks?

The term digital bank is commonly used to describe many new payment apps or banking extensions. The definition is often used very broadly to describe the technological innovations within the banking sector or any banking solution that has a digital asset such as a mobile banking app. Andrej Zujev, the founder of banking software provider Forbis Group, claims that many currently available digital services should not be categorised this way. “Digital banking is not just about modern solution implementation. The term should be ascribed to new technology built to fully digitise banking services, in other words making banking services as automated as possible. I would even say that none of the digital payment solutions that call themselves a digital bank are not really digital banks.”

As stated by Zujev, the appropriate framework of digital banking has to rely on automated systems to a large extent. “The need for human resources should be very limited. Nearly everything can and should be done automatically.” On the other hand, Zujev agrees that some vital functions should be overseen by people. “For example, people should check on all issues related to escalated legal concerns, advanced anti-money laundering or geographically specific regulatory concerns. This provides better quality assurance and security of large assets. Marketing and communications can be considered as well, but the rest should be automated.”

Forbis Group have been working on developing a true digital bank where nearly all functions are automated: “We have developed a product, which is closest to a proper digital bank now. Contomobile uses our digital bank solution and needs only 4 employees to run the operations. This white label solution is currently in high demand for financial institutions who want to go digital but do not want to reinvent the wheel.”

According to Zujev, who has worked on digital financial solutions for nearly 30 years, even modern banking solutions, while steadily becoming rivals for traditional players, should not be seen as fully digital banking companies. “Even big market players like Revolut or N26 employ thousands of employees, raking up expenses that wouldn’t be necessary for a completely digital bank. Real digital banking should be investing more in technology rather than physical assets,” argues Zujev.

Zujev holds that modern technologies are still underused in the fintech sector. “Currently, the most technologically advanced frameworks are not being used to their full potential in digital banking.” One of the potential reasons for that is the still-ongoing use of more common IT solutions which are less developed than disruptive technologies. “Developers are using traditional algorithms instead of applying AI (Artificial Intelligence) or Big Data. These components are the future of automation and should be involved as much as possible.”

However, the expert agrees that the full digitalisation of banking may take a while. “We are taking our first steps and many initiatives have large potential”, claims Zujev. “It is very difficult to predict how digital banks will look like in 5 or 10 years from now.” Although the future of this industry is ever evolving, some steps may ensure a more sustainable development. “A new structure and organisation of banking are necessary. There are many ideas and time will show which solutions can be the most suitable for banks and their clients.”

February 6, 2020

Paysend develops payment solution for Pakistani freelance market

Global fintech company Paysend has partnered with Pakistan’s JS Bank to support the launch a new payment solution for freelancers. The ‘Freelance Wallet’ will enable freelancers in Pakistan, estimated at 1.15 million in number and earning in excess of $1bn per year, to be paid on time and in full.

The JS Bank Freelance Wallet is an app-based solution to which payment can be sent using just a mobile number. The absence of relevant payment services in Pakistan has created much demand for a service such as this among freelancers.

With 1.4 million already using Paysend’s global money transfer service, Global Transfers, Paysend provides fast, secure and simple payment solutions. This expertise has been pivotal in the development of the Freelance Wallet.

Ronald Millar, CEO of Paysend said: “The JS Bank Freelance Wallet is powered by Paysend and brings a new level of security and speed when it comes to getting paid as a freelancer. Doing freelance work can be stressful without the right tools to ensure seamless administration. This new solution will help to empower freelancers across Pakistan by allowing them to manage their money from their smartphone.”

To open a paperless account and start receiving payments, all freelancers need to do is download the mobile app and visit a JCash branch to provide biometric authentication. Clients can then send money to the wallet using the freelancer’s mobile phone number. Money can be withdrawn via branchless banking agents, JS Bank branches or through ATM cards.

Noman Azhar, country head branchless banking & digital implementation at JS Bank said: “In line with the State Bank’s strategy, we are working aggressively on increasing the value proposition in the international remittance space. JS Bank has provided freelancers with a practical digital platform to the to ease the fund receipt process without any extra cost. This is a game changing initiative and cements our position as a market leader.”

February 6, 2020

Banks adopt unique cheque fraud prevention tool

The TALL Group of Companies, the UK’s leading provider of secure electronic and paper payments solutions is working with a growing number of high street banks that have all signed up as early adopters of UCN Plus®, in a move designed to strengthen the industry’s protection against cheque fraud within the UK payments systems.

Martin Ruda, group managing director at the TALL Group of Companies, said; “The fundamental change to the UK cheque clearing system with the introduction of cheque imaging in October 2017 has seen more attempts of fraud, as criminals pro-actively look for opportunities in the new Image Clearing System (ICS). We are delighted that major high street banks, including Lloyds Banking Group, HSBC and The Royal Bank of Scotland Group are participating in the UCN Plus® initiative and helping to ensure that counterfeit, forged and fraudulently altered cheques are robustly and automatically trapped and rejected wherever possible within clearing.”

The UCN Plus® (patented GB2569173), is an Image Survivable Feature (ISF), that has been developed by The TALL Group in partnership with DIA Europe, providers of the Kappa cheque fraud prevention platform used by many of the leading cheque clearing service providers. It enables the variable payment data – payee name, amount, date, etc – to be encrypted and hidden within a unique QR code printed on the face of all ‘special’ cheques issued by the TALL Group on behalf of the cheque bureau customers of the ‘early adopters’, together with those who wish to infill their own cheques using in-house software capable of printing cheques or through TALL’s well established ‘Checkprint Solution’ software for Corporate and SME cheque issuance.

The information held in the encrypted QR Code provides validation of the details on the face of the cheque and can greatly help with fraud prevention when the cheque image is scanned and verified within the new Image Clearing System.

In a move designed to support the fight against fraud in the UK cheque clearing system, TALL also announced recently that it was making its unique UCN Plus® fraud prevention tool available across the accredited cheque printing sector, at no charge.

Martin Ruda added, “As a Group, we strive to assist our customers and provide solutions that can improve their operations. We are actively engaged in a programme of product innovation and new customer services to build on the requirements for Image Survivable Features and will be announcing further developments as we move through 2020.”

 

February 5, 2020

Metro Bank becomes Bacs participant to enable direct debit for SMEs

Metro Bank has become a direct participant of Bacs, the Pay.UK-operated payment system, helping enabledirect debit origination for business customers through a new partnership with Bottomline Technologies.

Bottomline is a leading provider technologies which help businesses pay and get paid. Through this partnership, Metro Bank has deployed new technology to take greater control of its payments capabilities and bring a best-in-class solution to market.

This is a milestone move for the bank as it continues to shake up the SME market and gets set to launch the new direct debit service for SMEs in the coming months.

Metro Bank business customers will be able to create, automatically collect and manage payments via direct debit – a service that is sometimes not accessible to many smaller SMEs. ​​​Trusted by consumers up and down the country, direct debit is the safest and most cost effective method of getting paid or for regular or occasional payment commitments.

76% of regular payments are made by direct debit and more than 15% of small and 30% of medium-sized businesses accept direct debit as a payment method. Many of these are the types of businesses that are the mainstay of the modern economy such as gyms and online suppliers.

In 2019, Metro Bank also announced partnerships with Personetics, RMS Group Services, Funding Options, Conance, and DueDil and as part of the Bank’s commitment to collaborating with UK SMEs and fintechs by embedding them into the products and services it provides.

Paul Riseborough, chief commercial officer at Metro Bank, says: “We’re seeing real transformation in the payments industry and this needs to benefit smaller SMEs too. By becoming a direct participant of Bacs and partnering with Bottomline Technologies, we will offer a best-in-class solution for our SME customers to collect payments via direct debit. By removing the complexity of regular payments we can save customers vital time, that can better be spent running and growing their businesses.”

Matthew Hunt, COO of Pay.UK, says: “Enabling a vibrant UK economy is central to everything we do at Pay.UK, and increasing participation and involvement in payments, while maintaining robustness and resilience, is a key driver in achieving this. As such, we are pleased to welcome another familiar name on the high street as the latest direct Bacs participant, and look forward to working with the team at Metro Bank.”

Nigel Savory, managing director, Europe at Bottomline Technologies, says: “We are excited to be working in partnership with Metro Bank to enable wider access to payment systems and bridirect debit capabilities to SMEs through our technology platform. SMEs have traditionally found it challenging to get access to direct debit with all the benefits it brings – but Metro Bank business customers will soon have access in a simple and secure way.”

February 5, 2020

Fintech lending industry to hit $390.5bn value by 2023

Although traditional banks still hold the largest market share for consumer and business loans, there has been a considerable demand for fintech lending in recent years.

Global fintech lending, or the alternative loans industry will hit a $312.6bn transaction value this year, growing by 17% year-on-year, according to data gathered by LearnBonds.com. The rising trend, highlighted by peer-to-peer firms Lending club in the US or Funding Circle in the UK, is set to continue, with the entire market reaching $390.5bn value by 2023.

Fintech Lending in Emerging Markets

Consumer and business loans in the fintech space are mostly offered through lending platforms, connecting borrowers to lenders, without the need for a high street bank. Sophisticated computer algorithms make lending decisions in minutes instead of days, and the lean company structure of fintechs means they can offer lower rates to borrowers as well as higher rates to lenders.

These platforms have grown in popularity in developed countries. However, emerging markets with low access to formal financial services are also expected to experience rising demand for business and consumer peer-to-peer loans.

Around 1.7bn people from all over the world still don`t have access to the bank account, according to the World Bank, with many living in developing countries such as India, Mexico, and Bangladesh. The lack of traditional banking products in these countries also brings enormous problems for businesses. India, for example, has nearly 50 million small and medium-sized companies that have no access to formal credit, according to a World Bank survey.

The growing number of fintech firms in emerging countries is expected to drive market competition, by forcing traditional banks to adapt their services and meet the needs of tech-savvy consumers.

Volume of fintech loans to hit 87 million by 2023

In 2017, the global fintech lending was worth $181.2bn, revealed the Statista Alternative Lending Market Outlook. This had jumped in market value by more than 30% to $267.1bn in 2019. The overall market is forecast to grow at a steady 7.7% over the next three years.

The volume of business and consumer peer-to-peer loans increased by 30% since 2017 and is expected to hit 72.8 million in 2020, growing by 11.2 % year-on-year. In the next three years, it is forecast to peak at 87 million globally.

Business peer-to-peer lending is the most significant part of the market, with a 70% market share expected to be worth $219.1bn in 2020. The number of loans to small and medium-sized companies is forecast to jump to $290.1bn by 2023.

Consumer peer-to-peer lending lags behind business loans, with $93.5bn a transaction value expected this year. By 2023, consumer peer-to-peer loans are set to edge up to $100.4bn worth, almost three times less than business lending.

China and the US make up 95% of the fintech lending market

Regionally, China is the largest alternative lending market globally with a 90% market share and a $265.7bn transaction value expected in 2020. The country has been hugely affected by increased government regulation in recent years, which led to an enormous drop in the number of landing platforms and loans. However, the Statista survey shows the Chinese market will top $341.2bn over the next three years.

With $33.5bn market value in 2020, the US is the second-largest alternative lending market in the world, home to large players such as Lending Club, Prosper and SoFi. Together, China and the US hold 95% of the overall market. However, the consumer lending model in China is different from the US model.

Chinese companies typically operate an online-to-offline model. This means investors are found online, but borrowers are served offline through partnerships with the non-bank financial institutions or their agents. In the US and across Europe, alternative lending is almost entirely based on an online model.

Far behind the two leading markets, the UK ranked as the third-largest alternative lending market, expected to peak at a value of $4.8bn this year. However, Switzerland, Denmark, and Spain are expected to see the highest growth rates over the coming years, rising by 27.4%, 23.7%, and 22.9% respectively year-on-year. Canada is forecast to show the lowest negative growth with a compound annual growth rate of -5.1% by 2023.

Read the full story here: https://learnbonds.com/news/fintech-lending-industry-to-hit-390.5bn-value-by-2023/

February 3, 2020

Brits flock to Clearhaus as Brexit takes effect

In the wake of Brexit, the Danish payment institution Clearhaus has secured a license which gives the Danish acquirer access to the attractive UK market.

The license, issued by the UKFCA, allows Clearhaus to continue to provide its payment solutions to webshops in the UK market. The same way as Clearhaus does in the rest of Europe.

“We have been preparing for this moment. The UK market is incredibly important to us and we can see that the Brits appreciate our technology-driven payment platform,” says Claus Methmann Christensen, CEO of Clearhaus.

The results of Clearhaus’s Brexit license are already clearly visible. In January 2020, a record number of UK companies applied to become Clearhaus customers. The company has observed an increase of more than 70% compared to the previous year.

“Our competitors in the UK market may be a little bit too slow for many regular UK online businesses who just want to sell their goods online quickly and smoothly. UK customers want the best solution – even if it is on the mainland. Maybe that’s why we see a huge influx of British customers to our platform,” says Claus Methmann Christensen.

Brexit was predicted to ensue red numbers on the bottom line for Danish companies. But at the beginning of Brexit it seems companies like Clearhaus thrive.

“It is an interesting development that a growing number of UK customers are choosing Clearhaus in the wake of Brexit. And it tells us that foreign and Danish solutions are still needed in the UK market,” says Claus Methmann Christensen.

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