APS 2017 Predictions

2016 saw an incredible rise in P2P lending, with firms like Uber and Deliveroo firmly integrating their services within everyday life.

The UK’s sharing economy, or ‘gig economy’ has exploded in recent years becoming the fastest growing in Europe, increasing by 92% between 2014 and 2015 and transactions almost doubling to £7.4bn in 2015. It is set to expand at 30% per year over the next decade, generating £18bn of revenues for platforms and facilitating roughly £140bn worth of transactions per year by 2025.[1]

The banking industry is one such industry that is being impacted by the sharing economy. Disenchanted with high street banks who can often take up to 2 weeks or longer to approve a business account, many of the freelancers, start-ups and SMEs operating in this space are looking for more convenient, speedier and, frankly, cheaper banking alternatives.

From collaboration to further emphasis on peer-to-peer lending, 2017 is set to be a game-changing year for the world of finance. But with more and more start-ups entering the UK sharing economy, such as JustPark, an app which allows people to find, book and pay for parking online, or Borrow My Doggy which matches dog owners and trusted borrowers for local walks, sitting and holiday care, there is a real opportunity for companies and investors to target these start-ups to help them grow and deliver strong returns to investors.

With this in mind, I have made my predictions on what this year will hold.

  • Financial uncertainty in the wake of Brexit will open more doors to challenger banking models. Early reports suggest that Britain’s banking giants are being threatened by challengers that have weathered the referendum storm and are investing heavily in new technology. Following our decision to leave the EU, many challengers to banks, not just banks,are capitalisingon the pressures faced by the big banking nameswho will be forced to cut back on innovation. This will allownew, nimbler challengers to make their mark on the industry[2] and break up the oligopoly that banks have had on the network and markets for decades. 2017 will bring a real opportunity to combat lethargy caused by traditional banks, by delivering strong customer engagement and building trust.[3]If you ever needed a proof point, the Bank of England’s landmark announcement in June this year to allow non-banks the ability to access the UK national settlement scheme will provide a foundation in the future to make banking and the payment landscape far more competitive and beneficial to both consumers and SMEs.
  • But some of these new entrants will fail to deliver… Innovation is key in this business, but established performers with great ideas, years of experience and rich knowledge of how the payment ecosystem works, will also be the ones that survive. Key players will need to deliver on collateral in order to compete in the market.

New regulation, especially the introduction of PSD2 will have a profound impact on the payments landscape.   Everyone is talking about Open Banking via APIs.  Ironically, APIs are an old established concept in the technology world, but Payment Services Directive 2 (PSD2)will bring APIs into the mainstream by giving bank data access to a host of third party payment service providers (TPPs) to enhance the banking experience for customers.  Those that will lead will leverage and enhance the financial data that is typically part of a transaction to provide a richer and frictionless payment experience.

  • Niche banking for millennials and beyond. Customers will no longer have one bank account. The customer will have bank and payments accounts and will choose the provider that does a particular payment activity the best. Key niche solutions will emerge in bill payment, online purchase (beyond PayPal), travel, and even a niche solution for currency exchange (like Transferwise).
  • Collaboration will be king. At APS, we’ve been collaborating with established players like the Post Office since 2015, allowing customers access to banking services at over 11,500 Post Office branches across the UK. Looking forward into 2017, these kinds of partnerships will be crucial when it comes to levelling the playing field between the banks and challengers and truly putting customers’ needs first.[4]
  • Rise of the entrepreneur. WithUK entrepreneurial performance at an all-time high,[5] it is more important than ever to provide financial support to these great ideas. There is an opportunity for banking challengers to target this area of the market with services tailored towards the startup, easy, fast and simple banking.  Successful challengerswill not be measured by how much free banking they give away, but instead by creating an enhanced customer experience that hastransparent fee structures that are great value.
  • Peer-to-peer lending. The 2016 Autumn Statement showed us the real value of the‘sharing economy’ this year, which increased by 92% in just one year.[6]The industry has been fueled by technological progress allowing companies in this space to provide flexible and convenient solutions to the way people live and work.[7] Set to expand at least 30% per year over the next decade,[8] there is a real opportunity for banking challengersto take advantage of this new rapidly expanding industry and help start-ups to grow, and ultimately deliver strong returns to investors.
  • Convenience is essential for the ‘on the go’ entrepreneur. Being able to manage payments and transfers, get instant access to your money or simply arrange overdrafts using the laptop, tablet, mobile browser or by going directly to the mobile appis essential for the busy entrepreneur. In light of this, we have expanded our mobile app functionality to provide a comprehensive suite of banking services available on our recently upgraded online site, including the ability to set up a new account via the Cashplus app.

The platform provides a consistent, unified and fast user experience between any device, but it’s a ‘native’ app that works with the device’s built-in features. In other words, the app not only looks the way the customer expects, it behaves that way too.

This year is certain to be a volatile one for the financial markets following the uncertainty of Brexit, however there is plenty of opportunity ahead. Firms that adhere to regulations, collaborate and place bullet proof contingency plans in place, in light of Brexit, will remain competitive in the Fintech game.


About APS Financial

Advanced Payment Solutions Ltd (APS), trading under the name “APS financial”, is a data-driven digital banking services pioneer, which aims to transform the UK’s banking sector and be the first choice digital challenger to banks for SME and consumer customers.

Recently nominated as a finalist for Best Business Account for 2017 by Business Moneyfacts Awards, over the last 10 years, APS has developed a wide range of digital banking products. 

Through its proprietary technologies, award winning products and superior in house data analytics, APS is able to offer nearly a million customers fast, simple and intelligent banking solutions to efficiently manage their finances and business cash flow.

Authorised and regulated by the Financial Conduct Authority, APS has a full permission credit licence for consumer credit activities (FRN 671140). A subsidiary of APS, APS Financial Ltd (“AFL”) is authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 for the issuing of electronic money (FRN 900002).

AFL was the first non-bank issuer to gain MasterCard membership and is a member of both the Electronic Money and Emerging Payments Associations.




Rich Wagner, CEO, APS financial


Rich Wagner is an innovative and entrepreneurial senior executive with 30 years of successful payment experience in US and UK financial services.

An alum of the University of Southern California, Rich is an expert in launching and managing high growth financial services businesses internationally.  He has spent the last decade at the helm of APS financial, the trading name of Advanced Payment Solutions Ltd (APS), transforming the UK’s banking landscape and empowering small businesses to thrive in our economy.

APS financial was born out of very real frustration with traditional banks. When Rich set up APS, he spent half a day filling out paperwork to open a business bank account and then had to wait a further four weeks for a decision. Like any small business, he needed something simple, fast and smart, from a service provider that understood his demand for immediacy.

In the decade that’s followed since APS opened for business and offered an alternative to the traditional banks, the firm has served nearly one million UK customers, including 900,000 individuals and 70,000 UK start-ups and small businesses disenchanted with high street banks.

Although APS is not a bank, Rich and his team know banks very well – and know how they operate.

This knowledge has enabled them to launch products and services that have seen 60% year-on-year growth in demand since APS was founded. In the last full financial year, APS processed nearly £1.7 billion of funds loaded or ‘deposited’ by customers into their accounts. This is a 54% growth on the previous financial year and over seven times the volume that we were processing just five years ago.

Rich, Chair of the Emerging Payments Association, and his experienced team have created one of the most awarded digital and mobile banking solutions in the industry.

Some of the results APS has delivered under Rich’s leadership include:

  • Five years of profitability, a period in which turnover has increased by almost threefold
  • £4.1 million EBITDA profit in year ended March 2016, reflecting a CAGR of 69% over the last 4 years
  • £25.3 million in revenue in year ended March 2016, reflecting a CAGR of 29% over the last 4 years
  • 61% CAGR in revenue on SME services since 2014
  • 172% CAGR in revenue for our consumer credit card since we actively started to serve this market
  • 80% gross margin across the APS Group (excluding interest costs on credit funding)

A self-confessed foodie, wine buff and anglophile, US born Rich lives in London and is a huge fan of the Great British Bake-Off. He was recently voted CEO of the Year in the 2016 Wealth & Finance International Awards.