News Briefing - Crowdfunding, SME And Alternative Finance

horse

1.  UK - Alt - Fi

Altfi reports: 

 

Revolut has today published its 2020 financial results and it’s safe to say it’s had a bumper year. 

The digital banking service saw annual revenues jump 57 per cent from £166m in 2019 to £261m in 2020. 

Revolut puts this boost down to an “enhanced appetite for digital financial management” under lockdown, with the fintech widening its trading and investment portfolio continuously over the last 18 months. 

As well as seeing revenues surge, the fintech’s customer numbers also increased from 10m at the end of 2019 to 14.5m by the end of 2020, a 45 per cent leap. 

Revolut also now counts half a million SMEs as business customers, making it one of the biggest business banking fintechs on the market. 

With higher customer numbers comes higher customer deposits. By the end of 2020, customer balances had increased by 96 per cent to £4.6bn compared to £2.4bn in December 2019.” 

 

2. UK – FinTech 


Finextra reports: 


“The introduction of a central bank digital currency does not necessarily require a tradeoff between privacy and tackling financial crime, according to the Bank of England's fintech chief. 

Privacy has been one of the most hotly contested areas of the CBDC debate, featuring heavily in the feedback received by the BofE to its discussion paper on a potential Britcoin.

In a speech last week at the Future of FinTech conference, BofE director of fintech Tom Mutton said that while most respondents agreed that privacy is paramount, what that means in practice generated a wide range of views.

With a handful of exceptions, respondents were generally of the view that anonymity was not desirable, nor particularly realistic in digital payments, given their electronic nature, as well as the importance of reducing financial crime.

Some raised concern about the central bank being able to access information on their payments through a CBDC system.

Mutton believes that preserving privacy and reducing financially crime can both be accommodated within a CBDC system for three reasons: the bank has no commercial incentive to gather user data; choices can be made within a system to protect data; and technologies, such as zero knowledge proofs and digital identity frameworks, could enhance transparency while still increasing security and privacy.

Elsewhere in his speech, Mutton again stressed the BofE's position is that CBDC is of "great interest" but that no decision on whether one is needed has been taken and that if a Britcoin was introduced it would not replace cash.

Listing the potential benefits, he cited supporting a resilient payments landscape, avoiding the risks of new forms of private money creation, supporting competition, efficiency and innovation, improving the availability and usability of central bank money, addressing the consequences of a decline in cash, and helping with better cross-border payments.” 

3. UK – FinTech 

Crowdfundinsider reports: 


“London-based digital lender White Oak has facilitated loans worth £400 million to SMEs impacted by the pandemic under the Coronavirus Business Interruption Loan Scheme (CBILS). 

Talking about the adverse impact of the pandemic on small businesses across the UK, Andy Davies, Managing Director of White Oak Leases & Loans, said in a statement: 

“… With the UK’s economy beginning to recover, we are confident that this record lending will help SMEs around the country to drive the economic recovery. We are also looking forward to increasing support for SMEs as they continue to finance business growth through asset finance and other lending products.” 

The lender witnessed a record demand across all products that helped its 2021 loan book reach £500 million for the first time. For White Oak, March 31 was the highest day of lending on record, with £9 million disbursed in a month that saw record monthly figures at £70 million worth of loans provided to 724 SMEs. 

White Oak was accredited under CBILS in May last year. Since then, the lender has provided financial solutions to over 2,200 businesses across various sectors, with loans paid out ranging from £75,000 to £750,000. However, the construction and manufacturing sectors received the maximum at £109.2 million. Solicitors also received over £56.5 million, with more than £38.3m going to retailers and wholesalers. 

In March this year, the alternative lender had surpassed £270 million in CBILS lending while receiving an increased allocation by the British Business Bank.” 

 

4. International – FinTech 

 

The Fintech Times reports: 

 

More than half of millennials are happy to switch to, or have already switched, to a digital-only bank; reveals the latest data from the independent financial advisory deVere Group. 

The results from the poll, which quizzed 550+ clients born between 1980 and 1996, highlighted how 59% of those surveyed already exclusively use digital banking services, or are planning to make the switch to do so within the next year. 

The respondents are clients who currently reside in North America, the UK, Asia, Africa, the Middle East, East Asia, Australasia, and Latin America. 

Of the poll’s findings, Nigel Green, deVere Group CEO and founder, comments, “This is more bad news for traditional banks, which seem to have been in a perpetual game of ‘catch-up’ in recent years amid evolving customer expectations, regulatory requirements and tech advances. The poll’s findings are a big deal for old-school banks. Why? Two reasons: first, millennials because they’re the fastest-growing cohort of clients; and second, because they are becoming the beneficiaries of the Greatest Transfer of Wealth in history.” 

According to some estimates, $68 trillion in wealth is to be passed down from the baby boomers – the wealthiest generation ever – to their children and other heirs (millennials) over the next few decades. 

“Millennials have grown up on technology. They are ‘digital natives,’” continues Nigel. “They’ve been influenced by the enormous surge in tech as they came into adulthood – which came around the same time of the global financial crash that hit in 2008. Against this backdrop, they seemingly became comfortable using fintech to help them access, manage and use their money rather than using a traditional bank.” 

5. International - FinTech 

Finextra reports: 


“ION Group is to install a new IT system for Italian digital challenger bank illimity and take a 9.99% stake in the lender. 

Outlining a new four-year strategic plan, the bank says it aims to quadruple its net profit from an estimated €60-€70 million in 2021 to over €240 million in 2025 and to grow its customer base from 1.4 million to three million over the same timeframe.

Illimity reported a net profit of €31.1 million in it last set of full-year results for 2020.

The bank say a new IT platform licenced from ION Group will generate revenues of €90 million by 2025 through the provision of improved data anlytics, credit scoring and market intelligence. As part of the agreement, ION will also take up to a 9.99% stake in illimity through a capital increase for 5.75 million ordinary shares and warrants for a further 2.4 million shares.”