• The GoCardless recurring payments feature is live in Fiskl
• Fiskl customers in 31 countries will benefit from the GoCardless integration
• Small business customers will gain more control over payments with direct debit

Fiskl, the global mobile-first financial management, and accounting solution, today announced a partnership with GoCardless, a leader in account-to-account payments, and the launch of recurring direct debit payments for Fiskl customers.

The partnership between Fiskl and GoCardless delivers to small business customers the most reliable payment method for automated invoices. GoCardless will significantly reduce failed transactions as it eliminates common pitfalls associated with card payments, such as card changes or expiry issues, by leveraging the bank transfer system. For international payments, Fiskl small business customers benefit from favourable and transparent exchange rates, supported by the GoCardless-Wise partnership.

“Timely payments, underpinned by favourable charge fees as well as exchange fees, are critical to our global customer base, whether trading locally or internationally”, said Alina Lapusneanu, Fiskl’s CEO and Co-founder. “Fiskl offers the largest variety of payment options as a platform to its customer base, and we are continually looking for solutions which add value to our customer’s businesses via speed, automation or savings. GoCardless solves several major pain points for our customers, enabling recurring or subscription payments, reducing late payments and providing savings on fees.”

“We’re excited to partner with Fiskl, offering joint customers a new way to collect payments that reduces churn, minimises bad debt, and increases cash flow -- all at a cost significantly lower than cards,” said Hiroki Takeuchi, co-founder and CEO of GoCardless.“This integration also provides merchants easy access to the latest technology, including our new open banking features which enable businesses to take one-off and recurring payments in a single platform. We look forward to growing together with Fiskl and our customers.” 

Report from Moorwand explores the impact of outsourcing to either specialist or generalist providers on fintech growth

Moorwand, a payments solution provider, today launched a report that reveals fintechs who outsource to specialist partners generate nearly £1m in additional revenue. The report ‘Specialists vs. generalists: How do fintechs fuel growth?’ explores why and how fintechs outsource to third parties, the importance of outsourcing for fintech growth, and the impact of working with specialists or generalists on fintech businesses.

To understand why and how fintechs outsource, Moorwand commissioned an independent study of 75 senior decision-makers at fintech firms across France, Germany, Ireland, Lithuania, and the United Kingdom. In particular, Moorwand wanted to understand whether fintechs outsource to specialist partners that provide a specific service, or generalist partners that provide a range of services. The study features contributions from leading technology providers and consulting firms including FN1X, GPS, Pannovate, Polymath Consulting, Ozone API, and W2.

Key findings include:

Fintechs outsource to fuel growth

Fintechs outsource to build out their capabilities quickly and efficiently as well as expand into new markets and new customer sectors. Interestingly, user experience is one area that nearly half of fintechs outsource and 84% see as ‘business critical’. The top three reasons fintechs outsource are:

• Improve the user experience
• Accelerate time to market
• Plug gaps in existing capabilities

Outsourcing consumes nearly one fifth of fintech budgets

With almost one fifth (18%) of total fintech budgets dedicated to outsourcing, selecting a partner is a significant business decision. Furthermore, nearly all outsourced services are considered ‘business critical’ – meaning they are essential to the operations of the business.

Established fintechs outsource more – especially compliance requirements

For nearly all services analysed, established fintechs (five years or over) outsource more than their younger (under four years) counterparts. For example, when it comes to loyalty and reward programmes, 35% of younger fintechs outsource, versus nearly double (67%) for established firms.

100% of respondents agreed that compliance is one of the primary benefits of outsourcing. And when it comes to compliance-related services - from Open Banking to Accounts and Issuing - fintechs who are more established, are also more likely to outsource.

Specialists are perceived as better partners and deliver additional revenue

Fintechs who only use specialists are more likely to rate their relationship as ‘very good’ (86% for specialists vs. 55% for generalists). And this positive relationship also extends to customers, with fintechs that use specialists reporting an increase in customer engagement (91% for specialists vs. 76% for generalists).

When it comes to impact, fintechs that use specialists report additional revenues of almost £1m as a result of their choice of outsourcing partner. And looking to the future, the 75% of the fintechs that are planning on changing how they outsource, plan to use specialist providers.

“For a long time, the fintech sector was characterised by the idea of disruption and competition. As the industry matures, propelled by the arrival of Open Banking, BaaS and more recently Embedded Finance, focus has shifted to collaboration to drive growth,” said Vicki Gladstone, CEO and COO at Moorwand. “The research clearly demonstrates that outsourcing is helping firms to improve the customer experience, expand into new markets and customer segments, and launch new products and services. And it also demonstrates that as a fintech becomes more established, they increasingly work with specialist partners, especially when it comes to compliance.”

“Whether the fintech is big or small, in the UK or France, focused on payments or lending, the right choice of outsourcing partner is critical to fueling growth,” concluded Gladstone.  

The report “Specialists vs. generalists: How do fintechs fuel growth?” can be downloaded here: https://www.moorwand.com/specialists-vs-generalists/

In the second quarter, Commerzbank again generated a positive operating result and achieved a solid operating profit of €570 million in the first half of the year. The Bank benefited from a robust customer business and a low risk result. This contrasted with high one-time charges in the second quarter. Despite these exceptional effects and the booking of a further €511 million restructuring expenses in the second quarter, the Common Equity Tier 1 ratio (CET 1 ratio) remained strong at 13.4% and is even more significantly above the regulatory requirement (MDA).
 
On the journey to a sustainably more profitable bank, Commerzbank reached further milestones. The business model of the digital advisory bank is beginning to gather pace with the initiated launch of the remote advisory centres and the accelerated adjustment of the branch network. Furthermore, the selection process for the future second management level was concluded on schedule, and the voluntary programme for personnel reduction announced this spring got underway successfully. In line with the requirements of the German Federal Court of Justice, the Bank has also started to actively obtain the consent of their customers relating to price adjustments.
 
The Bank made further progress on digitalisation. Customers of Commerzbank are now able to conclude securities savings plans in the banking app directly with their smartphone alongside with the purchase and sale of traditional securities. Since the second quarter, foreign currency transactions have also been possible in the Cash Management App, the mobile assistant for Corporate Clients and Small-Business Customers.
 
The high level of customer orientation of the Bank is reflected in the sustained good customer feedback. All customer groups are very satisfied with the advisory services and the banking apps provided by the Bank.
 
The Bank is proceeding at pace in relation to its sustainability targets. The planned increase in the volume for sustainable financial products to €300 billion by 2025 at the latest has made good progress. The volume already increased to €141 billion in the first six months. The Bank has further set ambitious targets for its operating segments. The Corporate Clients segment is projected to contribute €200 billion and to thereby support the transformation of its customers. The Private and Small-Business Customers segment will deliver €100 billion in the form of sustainable product offerings.
 
“We have achieved a solid operating result in the first half of the year. The implementation of the strategy is right on track. We are driving all strategic initiatives forward and we are also ready to make tough decisions if necessary,” said Manfred Knof, Chief Executive Officer of Commerzbank.
 
In the second quarter of the year, Commerzbank generated revenues of €1,862 million (Q2 2020: €2,273 million). The year-on-year increase in underlying net commission income by more than 7% to €852 million (Q2 2020: €792 million) had a positive effect. Underlying net interest income remained nearly unchanged at €1,139 million compared with the first quarter thanks not least to the increased volume of priced deposits. The high one-time effects had an impact on revenues in the second quarter. CommerzVentures, the venture-capital fund of Commerzbank, delivered a positive contribution of around €100 million. A further €42 million came from Targeted Longer-Term Refinancing Operations (TLTRO) of the European Central Bank (ECB). Negative contributions came in particular from provisions of €66 million for the judgement of the Federal Court of Justice relating to price adjustment measures in the Private Customers business as well as provisions of further €55 million for the Swiss francs loan portfolio of mBank. Additional negative impacts resulted from ending the project of outsourcing securities settlement.
 
The risk result was minus €87 million and is therefore significantly lower year-on-year (Q2 2020: minus €469 million). The loan portfolio remained stable despite the ongoing coronavirus pandemic. This is also illustrated by the continuing low ratio of the non-performing exposure (NPE ratio) at 0.8% (end of March 2021: 0.9%). The additional provision booked last year for coronavirus effects anticipated for 2021 (“top-level adjustment”) was unchanged at €495 million at the end of June compared with the previous quarter.
 
Total costs in the first six months amounted to €3,548 million (H1 2020: €3,403 million). While compulsory contributions at €375 million remained virtually unchanged, the Bank was able to reduce operating costs by €56 million in the first half year. As announced, an exceptional write-off for ending the outsourcing project for securities settlement amounted to €200 million.
 
Total operating profit in the second quarter amounted to €32 million (Q2 2020: €205 million). Excluding one-off effects, the underlying operating profit was at €208 million. The consolidated profit attributable to Commerzbank shareholders amounted to minus €527 million (Q2 2020: €183 million). Without the booked restructuring expenses of €511 million, Commerzbank would have achieved a virtually balanced net result.
 
The CET 1 ratio recorded at the end of June 2021 was 13.4% despite the consolidated loss (end of March 2021: 13.4%). The buffer to the regulatory requirement (MDA threshold) of currently 9.4% increased to around 400 basis points due to the AT 1 issuance in June this year.
 
“In the second quarter, we have kept our Common Equity Tier 1 ratio stable despite the high one-time write-off and restructuring expenses. This again proves that we have a very strong basis for the transformation, and it demonstrates that we are also able to deal with exceptional charges on our way to a sustainably profitable future,” said Bettina Orlopp, Chief Financial Officer of Commerzbank.
 
Development of the segments
 
The Private and Small-Business Customers segment continued its growth trajectory with loans and securities. The year-on-year volume in Germany increased by more than 20% to a total of €319 billion. The primary driver for this development was the securities volume, which increased by a further €11 billion compared with the previous quarter. Out of this, €3 billion were new net money. Thanks to the strong mortgage business, the loan volume also posted an increase of more than €1 billion to €116 billion since the last reporting period. The segment made additional progress with the introduction of deposit pricing, with which the Bank responds to the sustained negative interest environment. The volume of priced deposits rose by €3 billion to €13 billion in the second quarter. Total underlying revenues for the Private and Small-Business segment increased slightly to €1,200 million despite the sustained pressure on the deposit business and the consumer restraint on consumption as a result of the coronavirus pandemic (Q2 2020: €1,190 million). Net commission income in the segment rose by 14% on the back of the strong securities business. Despite the provision of €66 million for the judgement rendered by the Federal Court of Justice as well as provisions of €55 million for the Swiss francs loan portfolio of mBank, the segment generated an operating profit of €138 million (Q2 2020: €108 million). The segment benefited from the low risk result in the amount of minus €62 million (Q2 2020: minus €152).
 
In the Corporate Clients segment underlying revenues slightly decreased to €758 million compared to the second quarter of last year which was defined by a strong capital market business (Q2 2020: €793 million). The Mittelstand division benefited from a slight increase in loan volumes. The International Corporates and Institutionals divisions reflect normalised capital market business and the strategic focus on capital-efficient business. Overall, the segment generated an operating profit of €244 million (Q2 2020: minus €91 million). In addition to lower costs, the main driver for this result was the positive risk result of plus €13 million (Q2 2020: minus €290 million).
 
 

The photography collective introduced DivideBuy’s instant credit and installment payment plan options to make it easier for clients to pay for their photography

Leading LendTech company, DivideBuy, which recently topped Deloitte’s Technology Fast 50 UK, 2020, has announced its partnership with the independently-owned photography business, the Xperience Group.

Working with DivideBuy, Xperience Group now offers its customers the option to split up payments into monthly instalments with no interest attached. The move supports its customers in funding their photoshoots, while attracting new customers who would prefer to split up payments.

Founded in 2014, the Xperience Group is a collection of professional photographers who have united to offer their services across the UK and Ireland and joins DivideBuy’s diverse range of retail partners, offering its customers the option to split up payments into monthly instalments with no interest attached.

Founder, Mark Cleghorn, who originally established the Xperience Group as a photography teaching platform before developing it into a full range of studios, explained, “When DivideBuy first explained to us how instalment-based credit payments could grow our client base and help our customers, I had visions of customers needing to wait a day or so for their credit checks to be approved before we could sign them up, which was no good. But DivideBuy isn’t like that – it’s really quick and easy for our clients to access interest free credit. Honestly, I wouldn't want them to change anything about the process, it’s great.”

The expert lensmen specialise in everything from family portraits, newborn shoots, and pets on the prowl, to B2B corporate events and fashion shots – all with the goal of creating ‘the perfect image’.

James Bradley, Business Development Director for DivideBuy, commented, “Xperience Group is doing some great work in the photography sector, so we’re pleased to be supporting its customers who seek friendly and creative photographers like this collective. Last year, we helped over 800 consumers spread the cost of their images, and that figure is only growing.”

With a focus on responsible lending, DivideBuy’s goal is to make LendTech mainstream by providing an intuitive, interest free credit solution that puts the customer’s needs first; a goal it is achieving, as the company achieved a milestone £100 million in lifetime sales last year. Its partnership with the Xperience Group is part of a wider strategy through which DivideBuy is looking to diversify its retailer base and expand its partnerships into the industries that will benefit most.

Fusion Essence Cloud will automate core processes and digitalize the end-to-end customer journey to support growth in mortgage lending and savings

Finastra today announced that UK-based specialist building society, Teachers Building Society, has selected Fusion Essence Cloud, its next-generation Software as a Service (SaaS) core banking solution, to deliver a new core and digital banking service. Fusion Essence Cloud will help Teachers Building Society (Teachers BS), the first-ever UK building society customer to invest in the solution, process significantly higher volumes of mortgages, savings applications, and money transfers; enabling the firm to continue to grow its member base through an enhanced customer experience.

Simon Beresford, CEO of Teachers Building Society, said," After a rigorous global selection process, Finastra is the standout partner for us. Finastra's commitment to responsible business and social innovation held strong appeal. Its deep expertise, innovative solutions, and proven experience with 90 of the world’s top 100 banks left us in no doubt about the benefits of the appointment. Investing in the new platform will ensure we can deliver best in class products and service to brokers and their clients, as well as teachers, providing enhanced engagement experiences to both our core audiences."

Fusion Essence Cloud, a SaaS solution on Microsoft Azure, gives Teachers BS the flexibility to bring new products to market and respond to new demands quickly, while unlocking access to data and analytics for a personalized customer experience. With native digital online and mobile banking capabilities, Fusion Essence will enable the building society members to open and manage savings accounts easily and transact digitally with a cutting-edge experience. The team at Teachers BS will also benefit from end-to-end straight through processing of higher volumes of mortgages and savings, due to pre-built integration with software specialists BEP Systems, for origination, and Fairmort, for regulatory reporting.

Anand Subbaraman, General Manager, Banking, at Finastra said, “Fusion Essence Cloud will give the Teachers BS team the flexibility to meet ongoing customer needs when it comes to home ownership. Our integrated solution streamlines core processes, such as onboarding, money transfers, mortgage origination and regulatory reporting, and will enable Teachers BS to focus on business expansion while giving its customers the best digital experience. As our first UK building society customer, we are delighted to be supporting Teachers BS’ ongoing growth and success and to be working with them to build ‘the building society of the future’.”

Teachers BS is the first UK building society to invest in Fusion Essence SaaS to serve its core audiences more effectively. The mutual was founded in the 1960s specifically to offer mortgages to teachers, a group considered ‘unattractive’ by larger lenders due to their smaller deposits and relatively low income. Today, the Society’s purpose remains the same; to support teachers who are first-time buyers, as well as those with atypical income through Teachers for Intermediaries, its specialist complex lending brand. The new platform, powered by Finastra, which aims to unlock the power of finance for everyone, will enable the Society to continue its mission and grow its business across both groups.

Kapital Investment Group B.V. (KIG BV), part of the global financial services group Global Kapital Group, has acquired Işık Menkul Değerler A.Ş., a multi-asset broker in Turkey.  

The acquisition gives KIG BV a greatly increased product range, as Işık Menkul is a multi-asset broker offering trading in stocks, futures, FX, commodities as well as CFD products.

Işık Menkul increases the Group’s global presence by adding the MENA region after Europe, Australia, Asia and the US, marking a significant step in KIG’s plans to become a leading global multi-asset group.

Işık Menkul is a well-established company, with a 35-year track-record of providing brokerage services. Part of its reputation has been linked to making financial markets more accessible for investors and traders in its region. The company was the first broker in Turkey to offer commission-free stock trading in 2021 – a decision that has been viewed as revolutionary.

It is licenced and regulated by the Capital Markets Board of Turkey (CMB) and offers leveraged trading on stocks and foreign exchange derivatives. The acquisition gives KIG BV the right to operate in Turkey, expanding the Group’s global reach.

KIG BV Chair of the Board Engin Çubukçu said: “The acquisition of Işık Menkul marks one of the most important steps so far towards our goal of becoming a multi-asset investment platform. As a top-tier financial institution with a significant share in Turkish capital markets, Işık Menkul serves more than 26,000 clients in Turkey, providing a gateway into the Istanbul Stock Exchange (BIST) while offering futures, FX, commodities and CFDs for trading.

Our strategy involves constant innovation to make financial services more accessible to investors. Işık Menkul has proved that it can make great improvements in the industry and has secured a place as one of the region’s most reputable financial institutions. It attracted our attention with its dedicated efforts for increasing accessibility to financial markets.

What excites us the most is how Işık Menkul’s business strategy matches ours. Evolving into a multi-asset investment platform focusing on improving its clients’ trading experience, Işık Menkul positions itself as an all-round financial institution, going beyond offering trading products and platforms. It is always more fruitful to work with companies that you share a common purpose with.”

Çubukçu also pointed out the strategic importance of the acquisition: “Turkey is one of the most important markets in the MENA region, as it is highly developed and very competitive. Entering the Turkish market with a financial institution with such strong credentials will give us a significant advantage over   our competitors. Işık Menkul is a company that prioritises transparency, a key point in the establishment of a loyal client base. It is also a pioneer being the first zero commission stockbroker in Turkey which has helped it establish a strong brand recognition, crowning its already highly reputable brand image.”

This year has been a breakthrough year for KIG BV with global acquisitions and licences. It has acquired FairMarkets in Australia, stepped into the US with GK Trade New York, established a broker in Africa licenced by FSC Mauritius and acquired a CMB regulated multi-asset broker in Turkey, all in the first seven months of 2021.

Kapital Investment Group B.V. (KIG BV) is a Dutch private company with limited liability, incorporated on August 23, 2019. Owned by GKG Holding BV in Netherlands, KIG BV operates across the globe in different business segments with highly qualified professionals throughout its subsidiaries. With the vision and goal of becoming “a global multi-asset investment platform and technologies holding company”, the Group is expanding into different regions by acquisitions and organic growth.

Few banks are disclosing the number of AI users that engage with their chatbots. Why? Bank of America reported about 20 million or about 30% of their customers arere using ERICA – their chatbot. ERICA has been in use for about 4 years, So, Foresight Research wondered about consumer resistance to AI and chatbots and surveyed 400 consumers of banking products and services to find out the resistance to AI in Georgia.

To start with, about 85% of all consumers are comfortable with asking banking questions or gathering advice on investments, loans or retirement planning in-person. But when asked about call center text message engagement that number drops to about 2 of 3 customers. For chatbots or AI a low 51% of consumers are comfortable using this technology for routine questions. For gathering information or for asking for advice on loans, retirement planning or investments only 44% would be comfortable using AI. While chatbots are still in their infancy, it seems that consumer adoption will take a lot of time. Not surprisingly, younger consumers are more comfortable with this technology and when it comes to Gen X or Baby Boomers a tall task can be expected. Foresight found one surprise – high income consumers are more likely to become comfortable perhaps because they have more need – especially for advanced applications. Of course, advanced chatbots are not yet available, but expanding technology is just one issue – another is consumer adoption.

In addition to younger and high- income consumers, there are a few small rays of light. One area is satisfaction with their primary financial institution. Consumers who are extremely or very satisfied with their bank’s performance in problem solving, offering financial advice, and digital banking are more likely to express comfort with routine AI and advanced AI applications. So, the overall customer experience seems to be a prerequisite to automated banking adoption.
  
Foresight Research (a Michigan marketing research company) and a leader in cost effective syndicated market research has been working with Fortune 500 companies for over 20 years. Visit our website, shoot us an email or give us a call to find out more about this report and other available reports.

Leading anti-money laundering specialist SmartSearch has achieved its best ever first half year results in 2021, following a surge in demand for its online ID check and due diligence platform.

The multi-award-winning RegTech specialist, based in Ilkley, West Yorkshire recorded 27% in business growth and an increase in users from 45,000 to 53,000. In addition, the firm has seen 21% expansion in its team in the first half of the year, increasing from 135 in January to 164 in June.

After the best year in SmartSearch’s history last year, 2021 has started on a record-breaking pace. The record results in 2021 are as a result of SmartSearch’s industry-leading anti-money laundering product becoming even more essential for regulated businesses.

Across industries, there have been increasing fraud and money-laundering attempts since the outbreak of the pandemic in March 2020. The global crisis opened a window for attempted fraud as lockdown caused face-to-face interactions to become scarce, and criminals used this opportunity to digitally alter documents.

These attempts to deceive are not just restricted to the UK and SmartSearch began offering its market-leading services internationally last year. The AML specialist opened an office in the USA in July last year, and in May 2021 expanded into the Netherlands.

John Dobson, CEO at SmartSearch, which now operates in the UK, US and the EU, said the results were a reward for the hard work of the SmartSearch team.

He said: “We have been continually innovating in the past year to stay ahead of the competition. The market is getting more crowded, but none of the other entrants to the sector offer the breadth, or efficiency of our product.

“The pandemic certainly has attracted the attention of those looking to attempt fraud, and our product has never been more critical to prevent it. Even with lockdown restrictions easing, some businesses are still operating remotely when on-boarding clients, and our system provides a quick and easy method to accurately identify customers.

“Despite the rapid recruitment achieved already, we are still looking to expand our team due to the growth we’ve achieved in the first-six months of the year. We are recruiting for a range of roles, including developers, sales staff and customer service professionals.

“We recently celebrated our tenth-year in operation, and the business continues to go from strength-to-strength. Each year has brought its own challenges, perhaps none as tough as last year, but we are proud to be on course for another record-breaking year in 2021.”

SmartSearch’s industry leading technology can screen new and existing clients without the need to meet in person. With just a few details, name, date of birth and address, the electronic verification technology can identify legitimate clients in just two-seconds.

To find out how SmartSearch’s unique AML platform can enable your business to comply with the latest money-laundering regulations and meet all your Know Your Customer needs, visit www.smartsearch.com 

TrueLayer, Europe’s leading open banking platform, has announced that Clement Boulais has joined the firm as General Manager for France. A highly experienced commercial manager and fintech expert, Paris-based Clement will define and manage commercial strategy in France, alongside TrueLayer’s Chief Revenue Officer Max Emilson. 

The announcement comes as TrueLayer consolidates its position as the leading open banking platform across Europe, routing more than half of all traffic in the UK, Ireland and Spain. TrueLayer offers 90%+ coverage of French banks delivered through PSD2-compliant APIs and has been active in France through its collaboration with innovators such as Revolut.

“Open banking can solve many of the customer pain points in ecommerce, B2B, wealth and fintech. The growth of instant, bank to bank payments and the next phase of their evolution becoming embedded across multiple industries makes this an incredibly exciting time to join a market leader in TrueLayer.” Clement commented. “We can use our experience and expertise to deliver meaningful financial products to customers and support innovative services that will benefit French consumers and businesses.”

Clement has been an advocate for fintech and open banking for many years, having been the Head of Startup Engagement at La French Tech, the French Economy Ministry’s organisation for promoting startups in the country. He also acted as a mentor at Techstars in Paris where he advised firms on fundraising and proposition development. He joins TrueLayer from GoJob, an online recruitment platform specialising in temporary work, where he was VP of Sales. 

Max Emilson, CRO at TrueLayer, commented: “TrueLayer is accelerating its European expansion, working with clients to replace costly, poorly converting card payments with instant, secure bank-to-bank payments that deliver a better customer experience. Clement will be playing a critical role for us in France, building on our work with clients such as Revolut. His experience, particularly within the French fintech and startup ecosystem, will be vital as we continue to grow in the country.”