New research from Tuum finds soaring consumer demand for finance services like loans, BNPL and insurance - if made easily available at checkout 

·         Insurance on items like holidays or mobile phones (44%), ‘buy now, pay later’ (BNPL) options (41%), and loans on high-value items (34%) top consumer wish lists for embedded finance. 

·         47% of the consumers who have considered taking out embedded finance products like insurance or BNPL ultimately opted not to due to complex processes, not being offered the option at checkout, or simply forgetting. 

·         Banks are alive to the opportunity, with 84% ranking embedded finance as an important additional revenue stream. 
Next-generation core banking platform Tuum has published new data today that reveals significantly strong levels of consumer demand for embedded finance products. The survey highlighted a high demand from consumers for services like insurance and loans at the checkout as opposed to sourcing separately, but only if the process of doing so is simple and straightforward. Banks are recognising this appetite too, with embedded finance cited by 84% as a new priority revenue stream. The study was carried by Sapio Research on 2,000 consumers and over 106 IT decision makers in financial services in the UK.  

Tuum’s research found 44% of consumers are likely to want to take out insurance on items like holidays or mobile phones at the checkout; 41% would like ‘Buy Now, Pay Later’ (BNPL) options, and 34% would be likely to take out loans for high value items. While most banks (64%) don’t currently offer these services, they do have it on their roadmap for the next year, with 31% of these banks planning to have services ready to offer as a plug-in for third-parties to deliver to consumers within the next six months.  

For banks and service providers, the size of the opportunity is huge – an Accenture report estimates embedded banking could capture 26% of global SME banking revenue by 2025. Undeniably from Tuum’s data, however, the opportunity only comes alive if consumers are offered products in a clear, friction-free way. 38% of consumers have considered taking out either insurance, BNPL, or a loan but ultimately didn’t, with 21% of these saying the process was too complicated, 18% said it was because the service wasn’t offered to them, and 8% simply forgot.  

Commenting on the research findings, Tuum Co-Founder and Chief Banking Officer, Rivo Uibo said: “As consumer demand for easy, integrated finance options rises, this data confirms a trend we’ve been seeing for some time; banks rising to the challenge and changing their business strategy to position themselves as ‘infrastructure providers’ in addition to offering traditional banking services. By powering finance through consumer-facing third parties like retailers, banks can create new revenue streams and ensure they remain relevant. The savviest in the industry know the size of the technical lift this change entails, and next-generation core banking technology is growing in popularity as a means for banks to be able to support growth of embedded banking services.”  

The research also provides insight to banks, retailers, and service providers on embedded finance products consumers are most interested in. Interestingly, consumer demand aligns with banks’ product roadmaps too. Insurance tops the list of embedded services banks are planning to offer (44%), followed by being able to select the currency in the payment process (48%) and offering BNPL payment options (44%) and loans on consumer products (25%). Of 18% of banks already offering their technology and embedded finance capabilities to third-parties, insurance (74%), loans (47%) and BNPL (42%) also topped the most popular and lucrative services.  

Consumer demand for embedded finance   

Tuum, formerly Modularbank, is a next-generation core banking platform provider. Its technology enables banks, fintechs and traditionally non-financial companies to roll out new financial products and services quickly and easily and empowers them to get involved in embedded finance.  Tuum is trusted by an ever-growing list of regulated banks and fintechs. Just last month, it announced it has been selected by fintech-focussed bank, LHV UK, to power the technology of its entire core banking operation.  

Confidence in the AI-based personalised offers platform Network B continues to build thanks to recent investment from Velocity Capital Advisors. 

Network B is one of the leading open-banking and card-linked rewards platforms, encouraging customer loyalty to retail brands through hyper-personalised cashback offers. 

Since its inception in 2020, Network B has seen impressive growth with a steep increase in sales over the past 8 months. Revenue is expected to surpass £3 million by the end of 2022. 

Network B is headed by serial digital entrepreneur Brad Blake who has founded and sold several businesses over his working life. With a rich background in customer loyalty platforms, Brad has also worked for retail loyalty brands such as Quidco and most recently, was the Director of Loyalty for intu Properties PLC. 

The retail rewards platform has access to over 20 million customers with over 3.5 million customers using their open-banking & card-linked offers through over 25 publishers and more than 4,000 retail brands. This is testament to the fintech’s phenomenal success considering its conception was just two years ago. Clients and partners include Next Jump, Perkbox, Endsleigh and Collinson Group. 

“Network B has seen phenomenal growth over the past two years and, at a time when retailers are struggling to recover to pre-pandemic levels, is well placed to drive incremental sales for retailers, while also providing value-add for consumers. We are looking forward to supporting the company through its next stage of development as it continues to enhance the experience for retailers and customers alike.” says Kirsten Gohl, Velocity Capital Advisors. 

Founder and CEO Brad Blake says that the investment from Velocity Capital marks a new stage for the company which up to now has seen organic growth thanks to in-bound clients. This investment will enable Network B to continue to advance its technology platform as well as focus on outbound marketing strategies and brand building activity. 

“Our mission is to use technology to combine all aspects of retail rewards and loyalty into one platform, maximising merchant and retailer experience and above all ensuring the best benefits and rewards go straight to the end customer. 

Our market leading, proprietary technology enables us to use open-banking & card-linking to drive hyper-personalised customer offers via AI, whilst ensuring that our retail partners are gaining truly incremental sales. 

With Velocity Capital’s investment, we intend to continue with our mission, further focussing on developing our API technology to enhance the whole loyalty landscape.” says CEO Brad Blake. 

SteelEye, the compliance technology and data analytics firm, has today announced the launch of its new Order Book Replay service – a cutting-edge market replay solution.

Designed to facilitate more precise and rigorous market abuse surveillance, SteelEye’s market replay tool enables organisations to playback a trading session and more thoroughly analyse market movements.

This allows compliance teams to play, pause, rewind, fast forward, slow down and speed up order book activity to gain a full understanding of what has taken place – visually showcasing the overall balance of the book against market price levels and spreads. The solution also highlights where trading activity might be indicative of market abuse behaviours like spoofing and layering.

Commenting on the announcement, Matt Storey, CPO at SteelEye, said: “Today, most firms have a limited retrospective view of their trading operations which restricts their ability to identify opportunities, risks, and compliance threats. As regulators crack down on market abuse, SteelEye’s market replay provides a comprehensive yet accessible visual representation of a firms’ order and trade activity against the full order book so they can more effectively monitor for irregular behaviours.”

The solution is fully incorporated and has gone live for a range of clients.

Matt Smith, SteelEye CEO, said: “There have been many recent, high-profile examples of firms being reprimanded and fined by regulators for market abuse. These events act as stark reminders of the need to identify, investigate, mitigate, and report on potential instances of market manipulation. With SteelEye’s comprehensive Order Book Replay firms can more effectively oversee their trading operations to better detect market manipulation, not to mention get data insight that can power enhanced decision making and trading performance.”

GKFX, Global Kapital Group’s (“GKG”) brokerage arm offering financial services in the EU, is pleased to announce the launch of its new online trading platform, GKFX Trader.

GKFX is on the verge of a new era, starting on a transformation journey to become a global investment platform to serve all clients’ investment needs. GKFX is now ready to announce the first step of this transformation journey, presenting its own trading platform, GKFX Trader.

The customers will be able to use GKFX Trader for all products that GKFX offers today, including FX and CFDs for indices, stocks, commodities, and cryptocurrency. GKFX hinted further developments on the platform to offer global asset classes.

While developing GKFX Trader, the customer base, along with the general industry trends were deeply analysed to make sure the platform serves the diverse base with different needs.

GKFX Trader is designed to accommodate active traders who need to have access to a fully customizable and rich trading experience, such as one-click trading, placing orders on the chart, advanced charting and technical analysis tools, advanced order types, market depth and customizable workspaces. All of this and more can be done through the Trader screen.

On the other hand, the platform also accommodates the clients who prefer a simple and quick trading experience, a customizable watchlist with their favourite instruments, and trading right there from the Trader Screen. GKFX Trader’s Quick Trade functionality enables this both on the web and on mobile.

Moreover, taking into account that customer needs are not always the same throughout the day; GKFX customers have the option to dig deep through the Trader, and then use the Quick Trade later in the day to ensure they do not miss an important market opportunity!

By developing its own platform, GKFX is making a commitment to its customers to continue innovating and customizing based on their needs, to keep transforming to meet market demands, and to bring a competitive edge for its customers in serving their trading and investment needs.

Real estate investment platform closes first tranche of Series A funding and launches second tranche to help fund its major global expansion plans 

Shojin Property Partners, an FCA-regulated online real estate investment platform, has raised its first tranche of £3m via a global pool of investors at a company valuation of £49m. Having proven substantial growth in the past 12 months, Shojin  has just launched the next tranche of funding to raise a further £2m at a £55m valuation. 

This raise sits alongside a £5m underwriting facility provided by a London-based family office with a provision to increase it to £10m, which effectively guarantees funding for mid-market real estate investment opportunities before they go live to investors. 

Having focused exclusively on the UK property market until recently closing its first non-UK real estate investment in Malaysia, the raise will be used to grow Shojin’s operations team with new hires in deal origination, marketing, technology and risk management as it ramps up global expansion plans. The additional £2m corporate raise will primarily be invested into the company’s data-driven marketing campaigns as Shojin sets its sights on new investment opportunities across the globe.

Shojin operates in the online real estate investment market forecast to grow from $15bn in 2021 to $800bn by 2027. The company was created to make investing into mid-market property developments simple and affordable through co-investment while providing developers with a consistent and trusted source of junior finance. Typically, such institutional-grade property deals are only accessible to the top 1% of the world’s population, who control 45% of global wealth. Shojin enables intelligent investors from over 40 countries to access this market from as little as £5,000. To date, Shojin has raised over £38m across 30  projects. 

Jatin Ondhia, CEO, Shojin Property Partners, said: “As a business, we’re at a very exciting inflection point. Having made our first investment outside of the UK and with substantial resources in place, we’re ready to begin our scaleup journey. One of the challenges ‘concept’ startups face in the UK is that investors still undervalue high-potential businesses, insisting on profitability which in turn can stunt growth potential. Thankfully, Shojin is already a profitable business which is why we have made the decision to hire for growth while allocating £1.7m of the corporate raise to direct response digital marketing as we continue our growth.”

Cabital, a leading digital assets institution, announced that it has added the Swiss franc (CHF) to its growing list of payment methods.

Through its partnership with BCB Group (BCB), the leading global provider of business accounts and trading services for the digital asset economy, Cabital can now enable its users to exchange CHF for crypto assets and vice versa at some of the most competitive rates in the market. 

With a simple bank transfer, Cabital customers can easily convert CHF, GBP and EUR into their digital assets. Both local (via Swiss Interbank Clearing) and SWIFT transfers are supported with Cabital.

With a bank transfer, people using CHF will enjoy some of the lowest crypto prices in the industry. This is because Cabital does not have any hidden fees and offers our customers one of the lowest spreads in the market. 

Cabital Connect, Cabital’s secure fiat on-ramp and off-ramp gateway, also allows its partners’ users to use CHF to buy and sell crypto - including Bybit, a fast growing cryptocurrency exchange. 

Raymond Hsu, Co-Founder & CEO of Cabital said:

“Cabital aims to be the Paypal for Web 3.0, starting in Europe, by shaping the future of fiat and digital payments. In 2021, we made significant progress towards our ambition with the announcement that Cabital integrated with Plaid to make it easy for our users to seamlessly fund their Cabital accounts with fiat currency from over 11,000 financial institutions. In November, we announced that we have partnered with BCB, enabling us to incorporate GBP and EUR to our growing list of payment options.

“Our dedicated teams have also made excellent progress already in 2022, further strengthening Cabital’s position across Europe with the announcement of accepting CHF as a payment method. I am confident that our new capabilities reinforce our competitive strengths across the region. We will remain focused on the delivery of our purpose of taking the crazy out of crypto and execute our strategic priorities to generate long-term sustainable value for all our stakeholders and customers.”

Oliver von Landsberg-Sadie, Founder and CEO of BCB Group, said:

We’re delighted to be working with Cabital, and helping them with payments infrastructure to allow them to add CHF to their offering. We look forward to continuing to help Cabital add more payment methods across Europe and beyond as we further build BCB’s global banking footprint.

• Half of people don’t know that they’re at risk of falling into debt if they miss buy now, pay later (BNPL) payments.
• Huge misconceptions around borrowing are putting people at risk – one in seven adults wrongly believe that it’s impossible to get into debt from using BNPL, and this rises to one in four among 18–34-year-olds.
• Since January 2021, BNPL has become the second most popular form of new borrowing in the UK.

81% of UK adults are unaware that buy now, pay later (BNPL) schemes are unregulated, placing them at major risk of falling into debt, according to new research from subscription loan provider Creditspring.

Around half (47%) of UK adults don’t know that a person could be referred to a debt collector if they miss a BNPL payment - 43% also don’t know that BNPL providers can add a late payment fee in this instance.

A third of people (32%) are unaware that BNPL is a form of borrowing and, as such, this comes with risks. Even more concerningly, one in seven (14%) UK adults believe it is impossible to get into debt from using BNPL, and this rises to 26% among 18–34-year-olds. Since January 2021, more people have taken out BNPL than a mortgage, car finance or loan from a mainstream lender. Given what an enormously popular form of credit it is, especially among young people – one in five (18%) 18–34-year-olds have used BNPL since January 2021 - these major borrowing misconceptions mean millions of UK borrowers are at risk of hurting their credit reports and potentially falling into a debt spiral. 

The UK’s cost of living crisis is gathering pace as inflation sits at 6.2%, the highest rate in 30 years, and is forecast by many to hit 8% in the next few months. The Resolution Foundation has estimated that this will see the real value of incomes decline by 4%, making each household £1,000 poorer - the biggest annual decline since 1975. April will also see the introduction of the proposed 1.25% rise in National Insurance increase pressure on household budgets.

According to the FCA, there were £2.7bn worth of BNPL transactions in 2020, with research suggesting the market more than doubled to £5.7bn last year. The cost of living crisis and reliance on credit suggests that reliance on BNPL will only increase during 2022.

Last year, the government announced a consultation ahead of regulation of the BNPL industry. Regulation is yet to be implemented but lenders also need to improve the UK’s financial literacy to protect borrowers.

Neil Kadagathur, co-founder and CEO of Creditspring, comments: “Ever since payday loans have been driven out of the mainstream, BNPL has been viewed as the new wild west of the borrowing industry.

“Regulation is welcome but the misconceptions amongst borrowers, that BNPL is risk-free or isn’t a form of borrowing that can lead to debt, are a much bigger issue. Regulation won’t go far enough - lenders need to ensure they develop awareness amongst borrowers of the risks that BNPL poses.

“Borrowers must be protected – currently, they are in real danger of falling into another credit trap as they continue to rely on BNPL as a crutch to struggle through until payday. Worst-case scenario is that borrowers can end up receiving a knock on the door from a debt collector, but currently the vast majority are completely unaware this is even a possibility.”

The research also reveals other misconceptions around borrowing that are potentially putting people at risk. For example, fewer than half (48%) of people know that their partner’s credit score also impacts theirs and can reduce their credit options. One in five (16%) of people check their credit score less often than yearly, and a third (35%) have never checked their credit score.

Neil Kadagathur adds: “Financial education is vital and more support is required to reach those who need affordable credit. Currently, there are up to 15m people in the UK who struggle to access mainstream credit options – these are the individuals who are most at risk from predatory high-cost lenders, especially in the current climate.”

Creditspring’s fixed cost and low-risk credit solution offers customers access to two advances per year, with clear repayments, capped costs, and no hidden charges or confusing APRs.

Creditspring’s 100,000 members benefit from the platform’s affordable, easy-to-use loans and education tools, including its Stability Hub service which offers members a financial health audit and personalised tips to improve their financial situation, as well as its ‘Step’ credit builder product that helps members gradually improve their credit score without running the risk of incurring further debt.