UK based digital only bank, Atom Bank, raised more than $205mn from investors including BBVA; the new capital will help the bank further investment in technoloy and business capabilities; BBVA Chief executive Carlos Torres Vila tells the FT, “we are fully aligned with the vision of banking that Atom is pursuing, and the disruption it is already bringing to the UK financial services sector.” Source.
The bank is currently recruiting engineers to help launch the online lending platform Marcus in the UK according to Business Insider who found the job listings; last September Goldman Sachs said the Marcus brand would launch in mid 2018; Goldman Sachs’ Marcus has taken off in the US and have been aggressive in expanding their consumer finance offerings. Source
In a recent speech on the future of money Bank of England Governor Mark Carney said a ban on crypto would stifle the useful innovation with blockchain; Mr Carney tells the FT about payment systems needing to change, “These must now evolve to meet the demands of fully reliable, real-time, distributed transactions.”; he also talked about the community driven approach to the tech and the many use cases for it that increases efficiency and transparency around systems that are in need of an upgrade. Source.
Surveys by finance site Smart Money People and RFI Group both point to an important time for UK based digital banks; Starling Bank and Monzo were the top two banks in customer satisfaction according to Smart Money People; RFI Group found UK customers willing to use a digital only bank dropped from 78 percent to 54 percent in the past year; while the digital only banks please customers more they are beginning to run up against incumbent competition for a similar experience; digital only banks need to begin thinking about building long term businesses as the old guard catches up. Source.
The company reported an increase in profits and sales last year which were helped by growth in the Nordics and Germany; Klarna processed €18bn in transactions last year which was an increase of 42%; the company partnered with Asos, Topshop and JD Sports in the UK to drive further growth; in the US they have partnered with Microsoft. Source
Funding Circle led originations for the month with 125 million Euros; total originations for the month were 454 million Euro across the platforms tracked; Mintos and Twino both reached significant milestones originating 500 million and 250 million Euros respectively. Source
UK based startups and big banks have been pushing their online investment advisors through ads as they try to gain new clients; after seeing some of the startups have early success big banks started to get into the market this past year; the upcoming ISA deadline on April 5th has companies pushing their marketing spend in recent months with hopes it will pay off in new customers and cash. Source.
City A.M. recently visited Funding Circle’s offices and highlights the stark differences from other financial institutions; the company has a relaxed office with various games typical at many startups; as the company has grown they have made sure to maintain a healthy culture which empowers employees to make decisions and be creative; Funding Circle’s co-founder James Meekings discusses workplace culture, the problems they are solving for small businesses and some of the early challenges the company when they lacked data for underwriting. Source
Tearsheet digs into how Revolut generates cash; the startup announced it broke even in December with 1.5 million customers and monthly transaction volume of $1.5 billion; this represents a 700% increase in 12 months; Dan Westgarth, head of Revolut USA stated, “Our revenue model globally is payments-centric. We receive renumeration every time our card is used; that’s what keeps our business afloat, and we’re wrapping around on top of that third-party services, and we have a business and corporate product.” Source
In the transaction on the blockchain platform, Credit Suisse and ING swapped securities totaling €25 million using the HQLAx Corda collateral lending application; doing transactions in this way increases regulatory transparency, reduces systemic and operational risk and helps companies manage capital efficiently. Source