The Board of Banking Competition Remedies Ltd (BCR) today publishes progress updates for Pool E recipients, providing a summary of performance against their public commitments to the period 28th February 2021.
Aidene Walsh, CIF Executive Director, said: “Over the last quarter, we have seen awardees advance their relationships with FinTechs, build market share and deliver a number of new functionalities and firsts in the market that will enable them to provide meaningful competition to UK SMEs. Those awardees that are struggling to deliver on their business cases have been very transparent in their public commitments and BCR is currently working with them to understand what this means in terms of their CIF funding recognising that there needs to be a keen focus on creating options for SMEs in the near term.”
A summary of performance against awardees public commitments can be found in the notes to editors, with links to the full updates provided below:
Pool E second quarter update
• Virgin Money UK PLC public commitment progress update
• ClearBank Ltd public commitment progress update
• Ebury Partners Limited public commitment progress update
• MarketFinance Limited public commitment progress update
• Funding Xchange Ltd public commitment progress update
• Codat Limited public commitment progress update
• ezbob Ltd public commitment progress update
• Fractal Labs Ltd public commitment progress update
• Previse Ltd public commitment progress update
The next progress updates for Pool E awardees will be in July 2021. Pool A, B, C and D awardees will provide their next reporting update in May 2021. As part of BCR’s role in monitoring the way that organisations are using the funds, BCR holds awardees to account on their progress against business plans which includes meeting all the recipients. For more details on how BCR monitors CIF awardees see here.
Pool F: new funding round under the CIF scheme
BCR has £5m CIF funding available (referred to as ‘Pool F’) for distribution under the CIF scheme to support A, B and C eligible bodies in providing competition in financial services to UK SMEs. BCR is required to consult with potential applicants on the size of awards, with the consultation process due to run in August 2021. The BCR website has been updated with further details and timings, which can be found here.
A summary of Pool E performance against public commitments
Pool E second quarter update
Virgin Money UK PLC public commitment progress update: Virgin Money announced 3 additional partnerships to their ecosystem bringing them to a total of 5 to date, namely: Strands, Redspire, Waracle, Codat and Life Moments. They have mobilised the delivery team and continue research and testing in order to enhance their proposition to meet SME needs.
ClearBank Ltd public commitment progress update: ClearBank have achieved a 5th of the market penetration target for Pool E (0.2%), taking their total market penetration to 5.2% c310,000 members. They also signed partnership agreements with a further three new lenders including Ultimate Finance and Uncapped, bringing the total to four, and development work has begun on the Confirmation of Payee (CoP) feature.
Ebury Partners Limited public commitment progress update: Ebury are on track to deliver the first of their commitments – Import Finance, however due to current market conditions they are experiencing challenges to a number of other deliverables.
MarketFinance Limited public commitment progress update: MarketFinance launched an MVP of the Revolving Credit solution in Q1-21. They now offer 3 customer solutions, and launched their new Unified Application Journey. They have also lent nearly £80m to more than 550 UK SMEs. Bounce Back Loans has meant average ticket size is higher than anticipated, meaning they expect to onboard fewer new customers than originally forecasted in order to meet their lending volume commitment.
Funding Xchange Ltd public commitment progress update: Funding Xchange integrated access to finance in Enterprise Nation’s platform in Jan 2021. They have also onboarded additional lenders, enabling reach of over 200,000 SMEs over the reporting period and completed design elements of the Concessions Management MVP.
Codat Limited public commitment progress update: Codat successfully launched the first iterations of their self-serve platform and lending portal (Visualise) in this period. They now enable financial products to integrate with commerce platforms such as Shopify and Stripe.
ezbob Ltd public commitment progress update: ezbob developed their underlying infrastructure including a flexible UI framework and pricing engines. The impact of Covid-19 on the economic environment has meant that launching their first POC has taken longer than expected, hampered further by the extended government backed loan schemes.
Fractal Labs Ltd (trading as tomato pay) public commitment progress update: Fractal Labs successfully launched their SMART solution in December 2020 with a view to start onboarding partners to increase usage of services such as tax filings and enabled payments. Both Fractal Labs and untied also powered the first open banking payment to HMRC.
Previse Ltd public commitment progress update: Previse announced the launch of another InstantFinance programme with a large international Healthcare provider in the last reporting period. They have also accomplished significant work on the planning and execution of the pre-launch phase of the Good Business Pays movement, and delivered their first corporate ERP plug-in.
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Ebanx appoints João Del Valle CEO
João Del Valle, co-founder of Ebanx, is the new CEO of the company. After more than three years as COO, preceded by almost seven as CTO, he takes over the executive leadership of the fintech, which has been led by co-founder Alphonse Voigt for the past nine years, since its founding in Curitiba, Brazil.
With the change, Voigt will now be the head of the Board of Directors, as Executive Chairman, and Wagner Ruiz, also a co-founder, becomes Chief Risk Officer, leaving the CFO position to the newly hired Alexandre Dinkelmann, former executive in the Brazilian BTG Pactual and TOTVS.
As Chief Operations Officer (COO), Del Valle led important projects for the fintech’s expansion, such as the ensemble of the global commercial team, the launch of 50 new integrations and payment methods within the company’s B2B solutions portfolio only in 2020, and the Push LatAm, an initiative that is taking EBANX operations to new Latin American countries, including in Central America and the Caribbean. “EBANX has a unique story and it will be a privilege to lead this next chapter. Our vision of being the best payment provider in Latin America is growing stronger, and always fueling the urge to innovate. The path we want for EBANX is very clear for the three of us, co-founders: focus on the mission of providing access in Latin America, through technology, speed, consistency and quality of execution,” said Del Valle.
Voigt has been EBANX’s CEO since the creation of the company which, during his tenure, exceeded the market value of USD 1 billion, becoming the first unicorn in the southern region of Brazil. Now, as Executive Chairman, he will lead the company’s strategic expansion. “The big dream got even bigger and from now on I take on this new position, helping to envision the next decade of EBANX. And João, our new CEO, is an example of dedication, focus and result orientation. He has a unique capacity to keep the company growing exponentially while projecting our future,” said Voigt.
Alexandre Dinkelmann, who takes on the position of Chief Financial Officer, will continue the work of Wagner Ruiz, who will now be focused on the company’s risk management, strategic partnerships and regulatory operation, essential pillars in the growth of EBANX. “Alexandre’s arrival brings us even more robustness, capacity and talent to maintain the pace of growth and adapt our financial sector to the new moment that EBANX will experience,” said Ruiz. Dickelmann brings in his experience as CFO at TOTVS and Even Incorporadora, as well as a stint at BTG Pactual and his role as a co-founder of the Onyo platform.
The new EBANX leadership has the mission of consolidating the company as the payments leader in Latin America, and to continue to expand the operations that have already given access to more than 70 million Latin American consumers to some of the largest global brands, such as Uber, Spotify, AliExpress and SHEIN. “These changes arrive in line with our goals for the next decade. Our success depends on the success of customers in the region and this is our focus. We remain even stronger and more structured to establish the leadership of Latin America in the global market and the leadership of EBANX in the world of payments and technology,” concluded Del Valle.
Tipalti expands ERP integrations
Tipalti, the leading global payables automation platform, has announced that it can now integrate with any Enterprise Resource Planning (ERP) system.
Notable ERP integrations include Microsoft Dynamics 365 Business Central, Microsoft Dynamics NAV, Microsoft Dynamics GP, QuickBooks Desktop, Xero, Sage 50, Sage 100, Sage X3, Sage 300, SAP Business One, SAP Business ByDesign and Acumatica, opening up scalable, global and modern AP automation capabilities to a much larger number of high-velocity businesses.
Tipalti offers a highly configurable integration that automatically syncs invoices and invoice payment data between a company’s ERP system and the Tipalti platform, with minimal IT effort. Tipalti’s world-class integration capabilities, advanced technology, and intuitive interface smartly and efficiently manage the lifecycle of vendor bills and payments.
“Integrating Tipalti’s AP solution with ERP systems let’s organizations achieve better automation by validating invoices against supplier information, ensuring that general ledger coding, including department, class and location syncs with the ERP system for faster payment reconciliation and financial close,” said Kevin Permenter, Research Manager, Enterprise Applications at IDC.
“This new ERP integration capability from Tipalti exposes their modern AP automation capabilities to a much larger segment of fast-growing mid-market businesses.”
“An ERP system is one of a company’s most valuable business investments and payables departments need to have an integrated philosophy that encompasses the entire end-to-end process,” said Roby Baruch, Chief Product Officer at Tipalti. “We’re excited to be open for integration with any ERP system, making scalable, modern payables capabilities accessible to every company.”
Tipalti previously had offered ERP integrations with Oracle NetSuite, QuickBooks Online, and Sage Intacct.
Former LSE chief Rolet preps fintech Spac – Bloomberg
Former London Stock Exchange CEO Xavier Rolet is planning to get in on the fintech Spac frenzy by launching his own $300 million blank cheque company, according to Bloomberg.
The US-listed special purpose acquisition company that would target investments in fintech and quantum computing firms could be unveiled within days, say Bloomberg, citing sources.
In recent months, Spac deals have become the go-to method for fintech players in America looking to go public, with MoneyLion, eToro, Payoneer and SoFi among those to have gone down the route. In the first three months of 2021 alone, 143 Spacs raised c$43bn in the US, according to data from Refinitiv.
In February, Rolet – who left the LSE in 2017 – signalled his support for the still-controversial strategy, calling on his former employer to get in on the boom in a paper urging the UK to revisit its Spac rules.
“The UK needs to promptly consider the Spac revolution,” wrote Rolet. “Whilst there are significant differences between our markets and those in the US, the appetite for permanent listed capital on the part of ambitious UK and European entrepreneurs and innovators is no less than that of their American counterparts: ask the management teams at Spotify or Markit.
“Spacs represent a financial instrument that should not be overlooked and where agility could realise considerable benefits to credible British and European entrepreneurs and dealmakers.”
The former LSE chief is also already on the board of another blank-check company, Golden Falcon Acquisition Corp, led by ex-Barclays banker Makram Azar, which raised $345 million in December, says Bloomberg.
BNPL Fintech Clearpay Research Reveals UK Millennials, Gen Z More Financial Savvy than Older Consumers
Research from Buy Now Pay Later (BNPL) service provider, Clearpay, reveals that Gen Z and Millennials may have been hit the hardest by the COVID-19 crisis, however, they’re the most financially savvy generation in the United Kingdom. Around 68% of Gen Z and 61% of Millennials are now budgeting and saving in a more responsible manner when compared to the older generations (the research study found).
The Accenture report noted that in addition to filling up their piggybanks, younger consumers are generally more careful with debt. Although as many Millennials carry credit cards as Gen X did at around the same age, their outstanding balances are a significant 10% lower, on average. These findings have been released after research from The Bank of England which shows that consumer credit growth declined by nearly 10% annually – the largest drop since records were kept back in 1994.
When it comes to investing in their plans for the foreseeable future, younger consumers tend to be the leaders in using the latest remote banking and investment apps, with almost 3x as many young investors (59%) using online or all-digital apps to invest their funds, when compared to older people (19%). Millennials and Gen Z are more than 80% likely to engage with contactless payment options, more than 30% likely to perform transactions with mobile payment apps and more than 50% likely to use BNPL services.
Damian Kassabgi, EVP for Public Policy at Clearpay, stated:
“There are often misperceptions that young people are bad at saving and investing their money. However our research has shown that they are actually more cautious than many of their older counterparts and more committed to responsible spending. The pandemic has prompted a surge in customers looking to spread out the costs of products without being subjected to extortionate interest rates and payment terms. Young people have seen the value of flexible payments and therefore it’s not surprising they are leading the charge in the payments revolution and becoming more spending savvy as a result.”
As the United Kingdom tries to recover from COVID-related, nationwide lockdowns, it appears that Gen Z have been impacted the most due to the pandemic, with around 11% becoming unemployed during these difficult times vs. only 4% of Millennials, Gen X and Baby Boomers losing their jobs.
Since last year, when the Coronavirus began to spread globally, Gen Z have been furloughed at twice the rate of older workers – as social distancing requirements and lockdown measures proved more likely to impact employment across the hospitality and retail trade sectors.
Wealth has also declined by 10% over the past 10 years for younger consumers, meanwhile, for age groups above 55, wealth has actually increased by around 30%. The drop has been attributed to property ownership declining by about 23% and student debt increasing 4x during the last decade.
These findings suggest that owning a home is now a lot more difficult for younger UK residents, as housing expenses have surged 6x as fast as people’s earnings. During the past 2 decades, the prices of homes in the country have increased around 3x while median income has actually increased by 30%. That’s why 44% fewer Millennials now own a home when compared to Baby Boomers at the same age. Gen Z are around 50% more likely to rent a home compared to the Gen X age group.
Damian Kassabgi remarked:
“During the pandemic, we have seen an 134% increase in customers opting to use our service, with 95% of customers choosing to pay via their debit instead of credit options. Over the last 12 months we have seen a definite shift towards more flexible payment options that help customers to budget and save towards their future.”
Unlike other BNPL firms, Clearpay claims it supports responsible spending habits and its inbuilt protections are designed to ensure consumers don’t get into the revolving debt trap. Clearpay confirms that it doesn’t charge any interest, with late fees being capped and they automatically “pause an account if a single payment is late.”
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