Rising inflation globally is forcing asset managers to reallocate their capital into commodities and real estate, according to new research from Clearwater Analytics (CWAN).

A poll of over 100 firms representing more than $5 trillion in AUM shows that the majority of asset managers favour commodities (58%) and real estate (55%) as their preferred asset classes to combat rising inflation. Interestingly, 42% also see listed equities as part of their asset mix. The research follows the U.S. inflation report last month which showed prices rising at their fastest pace in four decades. While in the UK, prices have also risen sharply in recent months, with the rate of inflation predicted to reach around 7% by spring 2022 according to the Bank of England (BofE).

The findings also show that over two thirds (68%) of asset managers surveyed do not believe that inflation is transitory, a stark contrast to the wider macro-economic consensus over year ago. Naturally, fixed income is also a major focus with over half (58%) of asset managers saying that they plan to reduce their allocations or risk profile as the Fed responds with future rate hikes.

Steve Doire CFA, Strategic Client and Platform Advisor, who conducted the research, commented: “The prevailing view that we are in a transitionary inflation cycle has unequivocally shifted. With nearly half of asset managers predicting that CPI will settle in at 3-4% and 19% seeing that even higher, there is a clear move to developing more aggressive investment strategies focused on commodities and real estate.” 

Doire went on to say: “As inflation continues to climb, investing in real-estate could help combat the portfolio effects of inflation for asset managers.”

Cynergy Bank provided a loan amount of £2.5m to Faith in Nature, an award-winning natural beauty products brand in Radcliffe, Manchester.

The loan will enable the company to develop new manufacturing and business premises, having outgrown their existing premises. The development of the new site provides space for future sales growth and more jobs.  The larger property in the same area also means they can remain in Radcliffe and retain their existing, loyal workforce.

Faith in Nature started trading in 1974 in a cottage kitchen and initially made plant-based face creams and shampoos. They continue to sell shampoos, body washes and soap, offering an ethical and cruelty-free alternative. They advertise their products as Vegan, 100% recyclable and naturally fragranced as well as being made in the UK. They maintain a strong ethical ethos to the environment and are stocked in over 40 countries and growing.

The loan was structured with a 12-month interest only period followed by repayment profile.

John Allaway, Managing Director, Faith in Nature, commented; “We have been working with Cynergy Bank for a number of years and have found them understanding and collaborative during our challenging journey. It’s good to work with a bank with the same entrepreneurial mindset and with people who put in the extra effort to support the business at the critical pinch points. It feels like we are working in partnership with them.’’

Matt Cross, Relationship Director, added; “I am delighted to support Faith in Nature with loan funding for their new business premises. It was evident from my initial site visit that the business had outgrown their longstanding factory. The business continues to grow and it’s exciting to be involved in this environmentally focused enterprise. They aim to achieve BREEAM Outstanding on their new premises which is an impressive target. This considers energy efficiency and sustainably of the build to aim for top 1% within the country.”

Over 90% of SMEs would switch lenders for better or different services, with digital options growing in importance

Nearly half of SMEs rely on family and friends as barriers to external funding grow during pandemic

Almost a third of SMEs are struggling to hire due to funding roadblocks amid the Great Resignation

More than two-thirds (67%) of small and medium-sized enterprises (SMEs) globally have been unable to secure sufficient, or any, funding on at least one or more occasions, according to a new report from cloud banking platform Mambu.

The ‘Small business, big growth’ report surveyed over 1,000 SME owners globally, who set up their company and applied for a business loan in the last five years. It reveals that reliance on personal networks has increased 11% during the pandemic, with shrinking access to external capital for SMEs.

Despite the boom in new SMEs created in the last two years, access to funding remains a constant roadblock with 32% of these businesses experiencing difficulty securing starting capital, rising to 33% of SMEs launching soon. 

Nearly half (43%) of SMEs had to rely on friends and family for loans overall, with this figure rising to 47% among businesses launched since March 2020 and 48% of those launching soon. Of the SMEs unable to secure sufficient funding, 34% experienced cash flow issues, 33% were unable to launch new products or services and 30% were unable to hire effectively - a major impact amid the ‘Great Resignation’.

For larger SMEs, with 101-250 employees, being unable to access funding has curtailed their ability to hire (40%), scale-up (36%) or pay for upgrades or improvements (36%).

Mambu’s findings come amid a rise in alternative lending, as SMEs turn to challenger banks and fintechs to overcome common barriers. The opportunity for new entrants is clear as the vast majority (92%) of SMEs say they are open to changing lenders for different or simpler digital support. 

Nearly half (49%) of SMEs cite better borrowing benefits and incentives as the top reason to change lenders. Meanwhile, 47% would switch for better financial options and 35% for improved digital services. 

Demand for more digital options appears to be directly related to the pandemic. Two thirds (66%) of both SMEs that launched after March 2020 and those set to launch in the near future said that digital services are an important lending consideration, versus just 53% of businesses that launched before this date.

Eugene Danilkis, CEO at Mambu, said: “SMEs are the lifeblood of the global economy and responsible for driving growth, job creation and the post-pandemic recovery. But they are facing big challenges. Access to external funding has become difficult during the pandemic amid record demand for financing and increased friction in the lending process. It’s no surprise SMEs are ready to jump ship for better, more accessible services. If lenders want to stand out, they must transform and modernise their financial experiences to ensure SME success; this includes faster onboarding and loan decisions, harnessing the power of the cloud and offering mobile and digital-first products.”

Financial institutions must do more to tackle challenging application processes for loans. The research found that the length it takes to apply for a loan is a major influence on SMEs when choosing a lender. 

A short application process was cited among the top three most important considerations when trying to secure external financing by more than three quarters (76%) of global SMEs, tied with long-term repayment terms (76%) and narrowly behind low-interest rates (81%).

When it comes to improving the application process, the majority of SMEs reported interest in faster loan decision processing (79%), more flexible loan conditions (78%), tailored offers and services (76%), and low or no collateral requirements (75%).

Richard Lim, CEO of Retail Economics, said: “The pandemic has ushered in enormous changes in how we work, play and shop, accelerating the democratisation of digital and with its repercussions still reverberating across society. But access to capital is an area where digitisation has matured at a much slower place. All too often, businesses looking to scale quickly and seize opportunities are choked by exhausting application processes. Stifled by slow and inefficient practices, current lending practices are no longer fit-for-purpose in today’s fast paced, digital world.”

The most common barriers to securing funding among SMEs are not enough starting capital (30%), too much paperwork and admin in the lending process (28%) and cash flow not being considered strong enough (27%).

Nearly 90% of organizations recognize the increasing importance of digital identity, new resources will support establishment of trust online

Global identity verification leader, Trulioo, today launched a set of resources to support modern security professionals as they shape safety and security practices in the digital world. Recent data found that compliance, risk and IT security professionals are critical to supporting business growth. These individuals are highlighted on the new Champions of Trust microsite, designed to support these professionals on their career paths, amplify their contributions and foster collaboration in an industry that is quickly becoming a driving force of innovation.

The recently released white paper, ‘Champions of Trust: A new generation of leadership for a digital-first world’, found that enhanced brand trust is the most significant impact organizations cited (68%) when having Champions of Trust and being more identity-led in their approach. The benefits are so critical and wide-ranging that almost all businesses (94%) believe digital identity is an opportunity for competitive differentiation and industry collaboration.  

“There’s no doubt about it, becoming more identity-led is going to be a defining feature of successful businesses in the coming years,” said Steve Munford, CEO, Trulioo. “Security and identity aren’t solely about defense, protection against bad actors and risk mitigation. It is also an opportunity to put processes in place that can be the foundation for business growth at a time when customers expect best-in-class service and onboarding.  That’s why the rise to prominence of Champions of Trust is a game-changer.” 

According to the data, 87% of organizations report digital identity is increasing in importance. The Champions of Trust website includes research and tools to support compliance, risk and IT security professionals as they work to drive change within businesses. The website features a Champion of Trust assessment tool for professionals to determine their baseline and uncover opportunities for growth, including steps they can take to navigate the practicalities of increases in risk, fraud and cybercrime while creating a safe, inclusive and sustainable digital ecosystem.

The microsite spotlights interviews and insights from the first two Champions of Trust selected by Trulioo: Melissa Strait, Chief Compliance Officer at Coinbase, and Philippe Panneton, SVP of Risk and Underwriting at Nuvei. 

“The majority of the world's population continues to confront financial insecurity and there is still a great deal of work to be done to ensure that economic systems are fairer for people to access,” said Melissa Strait, Chief Compliance Officer at Coinbase. “We’re simultaneously facing a digital ecosystem that is evolving quickly - technology is the main enabler to addressing both financial inclusion and an ever-changing risk landscape.” 

“The sooner folks in our field embrace the value of digital identity and the trust that comes with digital identity, the healthier the ecosystem will be,” Philippe Panneton, SVP of Risk and Underwriting at Nuvei. “Digital identity and trust are going to be the key to ensuring the global marketplace is safe and secure as it expands.” 

The value of fostering Champions of Trust and their impact across their organizations will be profound, with survey findings revealing the following data points:

• Over half of organizations (54%) cited that they view digital identity as a critical driver in improving the digital user experience to drive user access and growth. 

• Investment in the latest digital identity tools and technologies (51%) is cited as a key factor.

• When it comes to delivering business impact, 92% of businesses think that digital identity works best when it is considered in the design of customer journeys rather than an afterthought.

• 70% of compliance, risk and IT security professionals report that digital identity is the foundation to build a sustainable digital ecosystem. 

Munford concluded, “The message from the research is loud and clear - organizations that place digital identity at the heart of what they do, and those that cultivate Champions of Trust will be the pioneering businesses of tomorrow. But realizing this future needs support in the form of cultural appreciation, talent management and investment in the best tools.”

The Champions of Trust microsite can be found here, and click here to nominate a compliance, risk and IT security professional as a Champion of Trust. 

Unbanked Inc.'s recently launched campaign has already raised over $1,000,000 from over 1,100 investors - leaving approximately $4,000,000 available for remaining investors.

Predicated on the ethos that people should be in control of their own money, Unbanked provides infrastructure for many popular cryptocurrency-powered debit cards on the market today. Partners of Unbanked are given a seamless way for their customers to interact with cryptocurrencies, using their own branded white-label debit cards and bank accounts which can act as an easy gateway from dollars to cryptocurrencies and vice versa. The company offers a suite of highly bespoke financial products which enable both the banked, unbanked, and underbanked to create a financial experience as unique as the life they live.

Previously, in June of 2020 Unbanked ran a successful campaign on Republic that was oversubscribed, reaching the legal campaign limit of $1,070,000 from over 3,700 investors. Since that time the company has grown significantly in terms of employee headcount, global reach, and revenues. This new Reg-CF campaign will be capped at $5,000,000 - leaving approximately $4,000,000 still available for investors. The company will use the new round of funding to expand geographically and develop new crypto-friendly products while continuing to scale the marketing efforts to increase and anchor its position as an innovative fintech firm operating at the forefront of the digital economy.  

"Investors have been asking for over a year when we would do another capital raise and we knew we wanted to use Republic again," said Ian Kane, Co-founder, and Co-CEO at Unbanked. "We are democratizing financial access with our products so it only made sense to also democratize investment terms via our crowdfunding campaign. Everyone gets to participate at the same terms, whether you're a VC or a retail investor."

Learn more about investing in Unbanked.

Gridline has closed a $9 million funding round on the heels of launching its digital platform for alternative investments last month. This capital enables the company to accelerate growth by scaling investment, sales and marketing teams to double headcount over the next 12 months.

Investors in this fundraise include family offices; general partners leading venture capital, private equity and real estate funds; and numerous entrepreneurs and executives. Notable participants include David Dorman, board member of CVS, Dell and PayPal, and former CEO of AT&T; Mark Shoberg, former managing director of the University of Texas Investment Management Company and Stanford Management Company; tech unicorn founders David Cummings, founder of Atlanta Ventures and Pardot; Edwin Marcial, founding CTO at Intercontinental Exchange; Kyle Porter, founder and CEO of SalesLoft; Garrett Langley, founder and CEO of Flock Safety; and Sacha Labourey, co-founder of CloudBees. Additional key investors include Tim Kopp, CEO of Terminus; Aaron Stone, senior partner at Apollo Global; and Jon Hallett, board advisor or director to 30+ venture-backed companies. Participating funds include GC&H Investments, the partner fund of Cooley LLP; Ardent Venture Partners, Tech Square Ventures, and BLH Venture Partners.

Early support from these investors reinforces the demand for a platform that revolutionizes alternative asset investing for the estimated 16 million U.S. households that qualify as accredited investors and the RIAs they work with.

“We are targeting $2 billion of AUM in three years to create one of the fastest-growing wealthtech platforms to date,” said Gridline Founder and CEO Logan Henderson. “This new capital and the support of a fantastic group of investors will allow us to approach expansion at full throttle.”

Gridline will grow its investment team with this new funding, bringing in analysts from across sectors and allocation strategies to build multi-asset products that deliver both diversification and access to the world's top fund managers for individual investors and RIAs. The company is also building out its demand team to provide educational content and thought leadership that brings transparency to a private market space that is historically opaque.

Investors in this round include a diverse group of legal, regulatory, wealth management and asset allocation experts, highlighting the broad appeal of the alternative investments platform and its offerings. These entrepreneurs and operators bring valuable expertise and insightful guidance as Gridline scales.

“Gridline is changing the way the industry offers access to private market investing,” said Dorman. “As individual investors and RIAs seek out this asset class, Gridline’s innovative approach is opening the doors for non-institutional investors to gain entry to previously inaccessible assets.”

Players from across banking, retail, crypto and blockchain can gain expert insight into addressing authentication challenges with FIDO – from regulation and UX, to fraud and privacy

 The FIDO Alliance is pleased to announce its first Authenticate Virtual Summit of 2022: The FIDO Fit in Commerce: Examining the Present and Future of Authentication in Banking, Retail, Crypto and Blockchain. The summit features Signature Sponsors Daon, Keyless and Nok Nok.

Attendees will hear from industry experts on the authentication challenges facing all commerce stakeholders today, and learn about FIDO’s invaluable role in the industry. The program provides market-specific insights, and will air March 30 in the U.S. (2:00 - 5:30pm EDT) and March 31 in Europe (2:00 - 5:30pm CET).

Online payment fraud is rising globally, totalling an estimated $20bn USD in losses last year. Meanwhile, Forrester research suggests poor online checkout experiences are costing brands over $18bn a year in cart abandonment. This event invites players across banking, retail, crypto and blockchain to learn how they can meet the urgent need to deliver simpler, stronger user authentication, and why FIDO has quickly become a key cornerstone in the future of commerce.

The agenda features presentations from leading financial institutions, solution providers and industry analysts to explore:

●      Commerce authentication today and its challenges

●      The benefits and risks of different authentication methods

●      Key privacy and regulatory requirements – and how they’re evolving

●      The imperative for modern strong authentication in commerce

●      Use cases and practical insights into deploying FIDO

●      The future of authentication in commerce

Speakers include executives from RH-ISAC, eBay, Gemini, Goode Intelligence, PLUSCARD, Entersekt, LoginID, the Greensheet, IDnow and more.

Register for free and view the agenda for the event here. All sessions will also be available on-demand after the second airing.

Sponsorship Opportunities

The Authenticate 2022 Virtual Summit series is accepting applications for sponsorship, offering a number of lead generation and brand visibility opportunities for interested organizations. Visit the Authenticate sponsorship page for more information or contact authenticate@fidoalliance.org.

• The European Investment Fund (EIF) has committed to making a cornerstone investment in the Estateguru Senior Secured Credit Fund
• The new fund has a target size of up to €170 million and is aiming to invest in senior secured SME property-backed loans originated primarily in the Baltics, Finland and Germany
• The investment is made possible by the European Guarantee Fund (EGF), which is part of the European Union’s €540 billion COVID response package to support small and medium-sized companies

Estateguru, a pioneer in online financing for SMEs (small and medium-sized enterprises) in Europe, is preparing to launch a diversified credit fund for institutional investors. The European Investment Fund (EIF) has committed to being a cornerstone investor, using resources from the European Guarantee Fund that was set up to ensure that European small and medium businesses have sufficient financing available to mitigate the economic impact of the COVID-19 crisis and are able to continue their growth and development.

The Estateguru Senior Secured Credit Fund will provide SMEs in Europe with senior financing originated via the Estateguru online lending platform. The fund's geographical focus will be mainly on Estonia, Latvia, Lithuania, Finland and Germany. The fund is a closed-ended (7+1 year) private debt fund available for qualified investors that seek exposure to this asset class. The fund’s first close is expected around the end of the second quarter of 2022.

Estateguru was launched in 2014 as a platform facilitating property-backed loans for SMEs on a large scale. To date, more than 3 300 loans have been originated by the platform for a total amount of €530 million.

“With the fund we are creating an attractive opportunity for institutional investors. It will give them access to the underserved European SME property-lending market estimated at €400 billion. Digital lending platforms like Estateguru are able to serve this market more effectively than traditional lenders and gain market share rapidly, while also offering a good return for senior secured risk to investors,” said Judith Tan, Head of Capital Markets at Estateguru.

European Investment Fund Chief Executive Alain Godard said: “With the backing of the pan-European Guarantee Fund, we are delighted to support Estateguru, a fast-growing marketplace lender that aims to provide quick and flexible financing to companies in the Baltics, Finland and Germany. The small size of target companies means that the loan amounts are small too, so SMEs have limited appeal for traditional banks and are in need of alternative sources of finance. Supporting them is key to overcoming the ongoing crisis caused by the pandemic.”

Wolters Kluwer Governance, Risk & Compliance (GRC) has announced that it has signed an agreement with The Reynolds and Reynolds Company to acquire International Document Services, Inc. (IDS), a leading U.S. provider of compliance and document generation software solutions for the mortgage and real estate industry. The deal is for approximately $70 million in cash.

IDS will become an integral part of Wolters Kluwer’s Compliance Solutions business, a provider of compliance software for U.S. banks, lenders, credit unions, insurers, and securities firms. The acquisition “builds on GRC’s existing leadership in digital loan compliance, with end-to-end capabilities spanning from document generation to eClosing, loan analytics and lien solutions”, according to an official statement.

IDS serves more than 450 clients, including U.S. mortgage lenders, banks and law firms. The company’s services include initial disclosures, electronic signatures, closing documents, and document fulfillment. The IDS flagship document preparation solution, idsDoc, is a cloud-based platform that is recognized across the industry for its superior capabilities, customer service, and integrations with many of the leading loan origination systems and eClosing platforms.

IDS, founded in 1986 and based in Draper, Utah, employs approximately 75 professionals and is expected to generate revenues of approximately $15 million in 2022. “Revenues are based on transactional pricing linked to mortgage volumes. The acquisition is expected to deliver a return on invested capital (ROIC) above Wolters Kluwer’s after tax weighted average cost of capital (8%) within 3 to 5 years from completion. The acquisition is expected to have a positive but immaterial impact on Wolters Kluwer adjusted earnings in the first full year,” Wolters Kluwer added in its statement. The company’s London-based Chief Spokesperson, Paul Lyon, confirmed that the acquisition is subject to customary closing conditions and is expected before the end of the second quarter.

“IDS is well-positioned to take advantage of continuing digital adoption trends and has a strong track record of innovation in the mortgage industry,” said Steven Meirink, Executive Vice President and General Manager, Compliance Solutions, Wolters Kluwer GRC. “This strategic and exciting acquisition will further solidify Wolters Kluwer’s market leadership in expert solutions for loan compliance and, alongside our eOriginal product suite, positions us as the leading provider of digital lending solutions.”

In late 2020 Wolters Kluwer Compliance Solutions acquired eOriginal, a leading provider of cloud-based digital lending software, for approximately €231 million in cash. “The acquisition extends GRC Compliance Solutions’ leading position in U.S. mortgage and loan document generation and analytics into the fast-growing digital loan closing and storage adjacency,” the company said at the time and the acquisition of IDS is set to extend this competitive positioning.

“Wolters Kluwer has a long and distinguished history of excellence and innovation, and we are truly excited to join this leading business,” commented Mark Mackey, General Manager of IDS. “This is the perfect combination that will bring the next level of capabilities to our clients and the lending market.”

Wolters Kluwer Compliance Solutions reported a record year for industry awards in 2021, with more than 70 independently judged accolades celebrating excellence and innovation. These awards included plenty for the eOriginal product suite. Corporate Vision magazine, for example, named Wolters Kluwer eOriginal as “Best End-to-End Digital Lending Platform” in its 2021 Technology Innovator Awards for innovative use of technology. And Wealth & Finance International magazine named eOriginal “2021 End-to-End Digital Lending Platform of the Year” as part of its highly competitive FinTech Awards series.

Acquisition International also honored Wolters Kluwer Compliance Solutions with its 2021 “Financial Technology Acquisition of the Year” accolade, part of the magazine’s 8th Annual Business Excellence Awards, for its December 2020 acquisition of eOriginal.

Wolters Kluwer’s Compliance Solutions business line is globally run by Meirink who joined Wolters Kluwer in December 2015 leading a global team of more than 1,500 professionals across 15 global offices. He is responsible for the overall strategy and full operating P&L for the company’s Compliance Solutions business, serving the banking, insurance, and securities markets. Prior to joining Wolters Kluwer he was Senior Vice President and General Manager for Assurant Mortgage Solutions and has held several senior level positions within Equifax.

Cutting-edge affordability technology will enable personalised decisions that accurately reflect a customer’s financial circumstances

Early tests show a 10% increase in acceptance rates without any compromise to affordability assessments or credit performance

 Digital lending platform Oakbrook will soon be able to offer an additional service to enable more people access to fairer and affordable credit, as they pilot Experian’s Work Report™ tool, a feature of Experian’s Affordability Passport, to enhance their loan application process.

Using the Work Report feature, customer’s applying for a loan with Oakbrook will be able to give consent to share their employment information in a single digital exchange.

Experian’s Work Report™, provides direct confirmation of a customer’s gross and net income, as well as employment status and tenure, in a matter of seconds. The service is the first digital verification service that allows a customer to consent to digitally share their payroll information.

Work Report™ is produced in partnership with global Fintech platform Salary Finance and recently onboarded payroll software providers, Sage and Zellis. It will give the opportunity for 1 in 3 (over 10 million) employees to share their employment details.

Combining real time access to granular transaction and employment information provides a more rounded picture of credit and affordability risk. Adding Work Report, to their already existing set of tools, further enables Oakbrook to accurately confirm a customer’s affordability, helping make a faster and simplified lending decision based on their financial position.

Testing of the service by Oakbrook Finance prior to launch has shown a potential 10% increase in acceptance rates, on some consumer segments applying for credit, without any compromise to affordability assessments or credit performance.

The verification service can be used throughout the credit application process to reduce credit risk and minimise fraud. It also adds to the tools Oakbrook already uses to meet affordability regulations and treat customers fairly.

Paul Speirs, Managing Director of Digital Consumer Information at Experian, said: “This partnership comes at an incredibly important time, as many will be feeling the strain of fluidity in the UK employment market and pressure on household incomes from a rise in the cost of living. The ability to accurately verify a customer’s employment information provides a much better understanding of a customer’s affordability and provides them with affordable products that suit their financial circumstances.

“This is good news for new customers, some who may have been previously declined, and existing customers including those who experienced a financial shock. We’re delighted to be working alongside Oakbrook on this exciting pilot.”

James Blakey, Chief Analytics Officer at Oakbrook said: “We’re delighted to be working with Experian and Salary Finance on this pilot for Work Report, and to be the first UK lender to trial it. By using Work Report, we’re adding to our already extensive set of tools which help us assess the affordability of loans for our applicants. Our purpose is to simplify and personalise borrowing and we’re really looking forward to seeing the role that Work Report will play in helping us achieve this.”