December 15, 2016

7 Fintech companies from the UK to look out for in 2017

7 Fintech companies from the UK to look out for in 2017

Last week I had the pleasure of attending Startup Bootcamp’s Fintech Demo Day in London. The place was buzzing with all manner of sticky-beaks, from VCs to corporate sponsors, techies, early adopters, and most importantly, the fintech startups themselves. The demo was designed to give each of the 10 startups a 90 second speaking slot and subsequent ten minutes of Q&A that took place simultaneously which, much to my chagrin, meant I had to play favourites! Here are the 7 I managed to attend (in no particular order).      

DISCLAIMER: as with the rest of the demo day participants, I do not have first-hand experience with any of these services so this piece is more of a high-level summary of what is to come in the following 12 months. 

Enterprise Bot

Your call is important us, please hold the line…’ my record was about 35 minutes trying to get through to a long gone mobile phone provider before I slammed down the phone in frustration (in all honesty it was a digital handset). Enter Enterprise Bot, which seeks to disrupt customer service within the financial services industry by using AI powered virtual assistants (VAs). Enterprise Bot provides financial services companies with a robust, AI-powered VA to enhance customer experience (how effectively the algorithm does this for more complex questions is pure speculation at this point). The white-labelled solution can be deployed on various platforms and answers a ‘broad range of customer queries’ which, according to founder Ravina Mutha, cuts contact centre costs by 40% and end user hold time by a staggering 90% (If that is indeed true, this is one robot I’d gladly wine and dine)!

Europeone

As its name suggests, this is a Eurocentric product that will spark little interest beyond the continent. Its target market is the 30 million strong cohort of mobile Europeans currently being poorly served by incumbent banks. Due to unnecessary friction, overseas clients suffer exorbitant costs and long delays (I faced similar frustrations trying to open a UK bank account when I moved to London from Melbourne).

Europeone claims to be the first bank to empower its customers to manage their finances from any European location in their native language. It aims to disrupt the existing money remittance providers by combining the latest in app technology, 4G mobile networks and the EEA’s passporting regulations which essentially creates a single European market for financial services with banks able to ply their trade across the region without having to be separately authorised in each country.  

Penta

Similarly, small businesses in Europe get a raw deal from the banks, with lengthy sign-ups and clunky user interfaces that you’d expect to see on a Commodore 64. The team at Penta claim to have a solution by providing a simple and convenient business bank account with access to third party APIs allowing customers to pick and choose which services they need without incurring the habitual costs and rigid packages that come with traditional small business banking.   

KyoLAB  

Flexible working arrangements and bring your own device (‘BYOD’) are undoubtedly the way forward but create considerable data protection and cybersecurity risks. KyoLAB is a RegTech startup aiming to bridge the gap between compliance and popular mobile messaging apps. FS regulations in the EU require secure retention of all electronic communications and virtual real-time retrieval for audit purposes, otherwise subjects risk multi-million dollar fines. The Financial Conduct Authority, the UK’s financial regulatory body, and the Markets in Financial Instruments Directive (MiFID II), which comes into force in January 2018, require that all e-communications are monitored, retained and retrievable to ‘deter, detect and prevent market abuse.’

KyoLAB allows clients to archive and monitor mobile messaging, such as WhatsApp, WeChat, Messenger and more by providing a transparent audit trail for the most popular current messaging apps, supporting both corporate devices and BYOD culture. Having happily used a secure company phone for the past 18 months, which doubled as a personal device, and resisted the urge to communicate sensitive client data via Whatsapp, I have my doubts about the ‘stickiness’ of this offering.

MoBILLity

Have you ever gotten home after a long day and seen a pile of utility bills on your kitchen table? Not fun! The team at MoBILLity enables consumers to unlock savings on their bills that most of us busy folk gloss over between reaching for our credit card and thinking about what to cook for dinner. According to CEO, Lukas Zoerner, an estimated £15 billion in potential savings is left on the table each year by UK consumers (this is almost the GDP of Iceland)! Unlike the service aggregation platforms that operate on a commission basis, MoBILLity uses a profit sharing approach with its customer (which differs across providers) in order to be fully impartial and neutral.

PACE Invoice

PACE Invoice enables SME businesses to issue invoices which their international clients can pay locally in their own currency. For the client, this provides a streamlined user experience which encourages timely payment and, according to the founders, is proven to reduce payment delinquencies. Moreover, PACE Invoice helps to reduce FOREX exposure whilst ensuring that users receive 100% of the amount invoiced. Furthermore, all inbound payments are automatically reconciled reducing office man hours.

Trakti

Given my background as a commercial contracts lawyer, this one definitely got me excited! Trakti is a peer-to-peer business negotiation and contract management platform. Capturing corporate knowledge and recording it in a useful, meaningful format for the benefit of posterity is the Achilles heel of any corporate behemoth. Many companies still have warehouses full of paper, sift through data manually and store long forgotten excel files in some dark corner of a network drive that only company veterans seem to recall.

Trakti, on the other hand, features a seamless platform that streamlines contract negotiations – from financial data gathering to financial settlements. It was difficult to ascertain during the short presentation how all of the relevant data is gathered and interrogated and the extent of user input that is required. However, founder, Luigi Telesca, did emphasise that the platform is blockchain enabled to import greater transparency into the P2P platform post-contract execution.

Today’s convergence of exponentially growing technologies has radically lowered the barriers to entry for fintech startups such as these which form part of a sector that numbers over 1,600 startups worldwide. The fintech sector has amassed funding of over US$45B and runs the gamut from lending, personal finance and remittances through to institutional investing, security and infrastructure.

Financial services incumbents have three choices. Do nothing, innovate internally or partner with startups. Given the legacy infrastructure and bureaucratic culture underpinning most incumbent banks and financial service providers, doing the latter would seem to be the most prudent path of action in order to not only diversify but to start embedding entrepreneurial thinking and behaviours into their motherships.

Innovate or die.

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Daniel Nikolin

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