Exciting articles several times a month
18 August 2017
Technology applied to financial services (FinTech) has a significant impact on consumers’ daily lives, from facilitating payments for goods and services to providing the infrastructure essential to the operation of the world’s financial institutions. As the world’s leading financial center, the UK is rapidly becoming a destination of choice for companies wanting to establish a global presence in the FinTech sector, with leading international companies in FinTech choosing to have a base in the UK, whilst at the same time providing a fertile environment for start-ups and entrepreneurs.
The UK’s growing strengths in FinTech are due to the presence of a large and technologically sophisticated customer base, good availability of business capital, a supportive regulatory approach, excellent financial services infrastructure, and London’s position as a global trading hub. We have investigated the hottest FinTech start-ups in the UK right now, from young upstarts to more established names, and supplemented the list with some of our own personal favorites to look out for in 2017.
Digital challenger bank Monzo (the bank officially changed its name from Mondo in August 2016 following an undisclosed legal challenge) is building its banking software from the ground up so that customers would have a current account that lives on your smartphone. This includes transparent, real-time information about your money, geolocated transactions, peer-to-peer transactions and historic data on your spending with specific retailers.
Monzo gained its full, unrestricted banking license from UK regulators in February 2017. This means the now-official bank can hold customer money and offer products like current accounts.
Launched in 2011 by former Skype employees Kristo Käärman and Taavet Hinrikus, TransferWise is a peer-to-peer money transfer platform, which saves people and business owners paying hidden bank fees and inflated exchange rates when transferring money into different currencies. The easy to use online platform lets you convert currency using a calculator tool, which shows transparent pricing at the exchange rate. However, TransferWise has a charge, which is typically 0.5 percent for GBP transfers.
Founded by Oxford graduates Matt Robinson and Hiroki Takeuchi, GoCardless uses technology to process business-to-business payments and direct debits quicker than traditional providers. The technology brings down barriers for small businesses to process direct debits by aggregating payments, and fees are kept low at 1 percent per transaction, which is capped at £2. Customers can process payments using one of three tools: an online dashboard, account software partnerships or as an integration via an API. Customers cannot accept credit card or instant payments via the platform though, the system is limited to the UK, and Europe as the company continues to grow.
Azimo is a mobile money transfer startup in the vein of WorldRemit or TransferWise with a focus on migrants wanting to send money home at up to 90 percent less than traditional remittance services like major banks and Western Union. App users can also request, send and receive cash internationally using just a mobile phone number.
ClearBank is the UK’s first new clearing bank in more than 250 years. Launched by Nick Ogden, a founder of Worldpay, ClearBank is a little different to most FinTech companies in that it is not for consumers. Instead, ClearBank provides access to the primary UK payments and card issuing systems, like Faster Payments and SWIFT, for new entrants to the financial services industry to get started quickly and easily. The start-up will be using Microsoft cloud technology through two data centers, which it hopes will give it greater agility, transparency and the ability to charge lower fees. ClearBank services are due to be generally available by autumn, 2017.
Dopay has built a cloud-based payroll platform, which allows employers to pay people who do not have a bank account (two billion people worldwide according to the start-up) without having to deal in cash. Founded by Dutch serial entrepreneur Frans van Eersel in 2013, Dopay works out of the Level39 accelerator in London’s Canary Wharf. The highly automated platform also simplifies payroll processes for finance departments, like calculating salaries, emailing payroll slips and submitting government forms. Employees can get their salary paid into a Dopay account, which comes with a pre-paid Visa card to use at ATMs, in-store or online, as well as an app for managing their finances on their phone.
Curve allows you to combine all of your bankcards under a single app and card. Not only does this make your wallet lighter, but also you can track all of your transactions in one place, in real time. How does it work? For £35 up front you simply take a picture of your cards (regardless of the country where the account is based in) and Curve pulls them together into an Apple Pay style display. You then set a default card using the app, allowing you to use your Curve card for chip and PIN, contactless, cash withdrawals or mobile payments, all under a single PIN. The Curve card is built on MasterCard rails, meaning it can be used anywhere MasterCard is accepted and comes with all the same security, with the added assurance that your actual cards are safely left at home.
You also will not get charged, when using Curve abroad, regardless of which card you use or which currency you are dealing in. All transaction data is then pulled together in the Curve app. You will get a notification once a payment is made and you can tag and categorize payments on the platform to get a simple view of your finances. You will still be charged for ATM withdrawals, when abroad though (£2) and Curve charges one percent on top of the MasterCard wholesale foreign exchange rate.
The economic strengths of the UK, including a world-class financial center, an ever-growing technology hub, global links, attractive regulatory environment and a highly skilled workforce are all contributing factors in defining London as a highly sought-after world-class FinTech hub. All of this, together with a long history of innovation, makes the UK a hotbed of creativity and the destination of choice for any FinTech business looking to succeed globally.
Exciting articles several times a month