Digital bank Zopa has appointed Peter Donlon and Kate Erb as CTO and COO respectively, pending regulatory approval.

Peter and Kate add significant technology and operations experience to Zopa’s leadership roster as the company matures and enters its next stage of growth to become Britain’s best bank.

At Zopa, they will support the bank’s continued growth, driving further efficiencies and automation while making sure it scales sustainably, on strong foundations, and in a resilient way.

Peter will oversee Zopa’s 220-strong engineering team, expanding its best-in-class products and technology infrastructure while ensuring its platform retains an unrivalled leadership position in the use of AI and machine learning.

Prior to Zopa, Peter scaled Moonpig PLC’s tech function from 30 to 200 engineers and led its £1.2bn London Stock Exchange listing. Previously, he served as Head of IT Development for the UK’s second-largest supermarket Sainsbury’s, overseeing its technology capabilities across 1400 shops and 190,000 employees.

Kate will lead business critical functions like operations, customer service, collections and recoveries, building on Zopa’s profitable unit economics and industry-leading NPS to drive strong customer outcomes. She will also continue to evolve Zopa as a great place to work with one of the highest employee satisfaction scores across the UK fintech industry.

A qualified chartered accountant with KPMG and over 20 years of experience in financial services, she joins Zopa from Leeds Building Society.

Peter Donlon, CTO at Zopa bank said: “One of the things that attracted me to Zopa is its ability to deliver great outcomes through cutting-edge technology, markedly improving the financial well-being and resilience of its customers. I am proud to be joining Zopa’s purpose driven team and look forward to scaling its digitally native offering, reaching even more customers as it continues to grow profitably.”

Kate Erb, COO at Zopa bank added: “I am excited to be joining Zopa’s leadership team as it prepares to serve 5 million customers in the coming years. I look forward to continuing the delivery of its brilliant customer experience through fair, intuitive, and transparent products that have established Zopa as the UK’s most customer-centric bank with one of the highest NPS scores”.

Zopa’s most exciting innovations, proprietary technology, and extensive application of AI enable users to improve their financial health, gain access to better-priced credit, and access saving products based on individual preferences towards interest and flexibility.

Last year Zopa borrowers saved on average £601 when taking a debt consolidation loan; its savers earned on average 4.5x more interest than they would have done at a high street bank.

The news comes as Zopa reaches an inflection point in its journey as a fully regulated bank, following multiple quarters of strong growth and achieving monthly profitability.

To date Zopa has attracted £3.5 billion in deposits, more than £2 billion of loans on balance sheet, and issued over 400,000 credit cards.

It has been voted the UK’s “Bank of the Year” at the 2022 Altfi Awards, and "Best Personal Loan Provider" and "Best Credit Card Provider" at the British Bank Awards. 

Tara Massoudi, Revolut General Manager of Premium Products, said: “An increasing number of our customers are interested in travel, lifestyle & investment products that offer top-of-the-line experiences. This growing consumer market is redefining luxury, making it more functional and present in day-to-day life. They want to build a steady passive income, but also enjoy life, keep up to date with the latest trends and travel the world.”

“In response to our customers’ demands, we’re launching this new bespoke membership that we envision as the ultimate travelling and lifestyle companion. Revolut has put together a one-of-a -kind offering, second to none in Europe. This unique card and membership plan was ultimately designed for those who enjoy the finer things in life.”

Scott Abrahams, Executive Vice President Channel Partnerships, Mastercard added: “This unique premium offering will connect Revolut customers to the travel and lifestyle benefits that they love. It’s the latest milestone in our partnership, creating innovative products and safe, secure ways for Revolut customers to pay.”

Digital Asset Research (DAR), a specialized provider of ‘clean’ crypto data and research, today recommends asset vetting diligence as a result of increased U.S. cryptocurrency regulatory activity and the growing number of digital assets classified as a security. As institutional market participants explore digital assets, a rigorous vetting process is essential to assess asset strength and legitimacy. By carefully evaluating an asset, institutional participants can make informed decisions and mitigate risks when interacting with this emerging asset class. 

“For institutional investors, diligence on digital assets is essential because the space is still very new, largely unregulated, and complex,” said Kristen Mierzwa, Head of Digital Assets, Index Investments Group, FTSE Russell. “DAR’s asset vetting evaluations give FTSE Russell a complete asset picture, from cryptography to codebase, to inform opinions on which assets are best for our indices.”

Digital assets have emerged to become one of the most interesting asset classes with a current value in the $1 trillion range. With an ambiguous regulatory environment, institutional investors gain advantages by undergoing a rigorous asset vetting process to manage and mitigate risk. Digital assets pose unique risks due to their open-source nature, the uncertain regulatory environment, and the ever growing number of new digital assets.

In 2022 through its comprehensive vetting process, DAR identified red flags associated with Terra’s LUNA token such as its algorithmic design, a lack of transparency surrounding its governance, and potential liquidity challenges. LUNA experienced a catastrophic setback when its related UST stablecoin destabilized and lost its peg, resulting in billions of dollars in losses for many investors. 

In another example, the SEC filed a complaint against Ripple, the company behind the XRP token, in December 2020, alleging that it had conducted a $1.3 billion unregistered securities offering. While the case remains ongoing, it highlights the need to examine any token’s issuance mechanism as part of understanding if it could be considered a security by regulators. 

“The regulatory landscape is complicated and constantly evolving,” said Pat Clancy, Head of Digital Asset Strategy, PolySign. “We use DAR’s asset vetting to help satisfy internal compliance and external regulators, which in turn informs which assets we want to support for institutional custody.”  

DAR developed six key digital asset vetting factors institutional investors should assess to understand a digital asset’s risks and potential value. 

• Token Use Cases, Economics, and Supply-Demand Dynamics – Reviews a digital asset’s functionality and tokenomics to understand its use case and issuance model.
• Technology and Cryptographic Standards – Identifies underlying technology and cryptographic standards to evaluate security, scalability, and performance. 
• Codebase Assessment – Assesses code and/or smart contracts against a series of digital asset industry best practices.
• Validation and Consensus Mechanism – Evaluates the asset’s consensus mechanism (such as Proof-of-Work or Proof-of-Stake) and related tradeoffs between security, decentralization, scalability, and energy efficiency.
• Regulatory Compliance – Reviews the asset’s regulatory landscape to see if it is known to operate outside acceptable boundaries. 
• Network Health and Decentralization – Finds out if the asset has a healthy and decentralized network including validators, which is vital for long-term sustainability and growth potential.

DAR follows a transparent Asset Vetting Methodology to evaluate digital assets to determine if they meet institutional investor standards for codebase construction and maintenance, community, security, liquidity, and regulatory compliance.

“As Transcend continues to grow in EMEA, adding a talented individual with deep industry knowledge like Emily, will enhance our client’s experience and product,” said Todd Hodgin, Global head of Product at Transcend. “Emily will be instrumental in supporting our clients in EMEA and working with them to drive product enhancements from an EMEA perspective while working with our global product teams on broad-based initiatives.”

“I’m excited to join such a dynamic and skilled team,” explained Emily. “The new role will bring together the opportunity to utilize and expand upon knowledge I’ve built in previous roles, as well as the prospect of working with a rapidly expanding client base – some familiar, some new.”

Avantgarde Finance Group is partnering with Agio Digital, a digital assets and fund services platform, to offer the first-ever institutional-grade on-chain crypto products. Using the platform, it is now possible to set up fully regulated and compliant on-chain funds in a matter of weeks, reducing total expense ratios by more than 80%.

Avantgarde is a leading provider of tech-enabled investment solutions which facilitate the secure management of digital assets, and embeds purpose-built risk management infrastructure. The firm made a name for itself by providing development services to Enzyme, a non-custodial solution which, through Enzyme vaults, securely automates operational, administrative, compliance and risk management functions for digital assets on-chain.

Agio Fund Services, a subsidiary of Agio Digital, adopts a digital-first approach for fund setup, licensing, NAV calculation, and investor transaction management. The partnership between Avantgarde and Agio emphasises the significance of professional fund administration in navigating regulatory requirements, mitigating operational and legal risks, ensuring compliance, and enhancing transparency and communication with investors in the rapidly evolving DeFi landscape.

Avantgarde and Agio have worked hand in hand over the last year to bridge the gap between institutions and blockchain-based asset management technology by wrapping DeFi vaults running on Enzyme into a fully compliant fund structure. Importantly, these regulated investment funds preserve many of the original values of blockchain: elimination of counterparty risk, the right to self-custody, the provision of much-needed transparency to the institutional market, and 24/7 provable and verifiable reporting.

This launch comes as recent research from Avantgarde highlights that, in comparison to 12 months ago, 78% of institutional investors are more likely to use decentralised finance technology and 62% stated that on-chain asset management is now more attractive. While interest is building, investors are looking for guidance with almost three-quarters (71%) of CFOs polled saying investment allocations will be influenced by ‘finding a qualified and experienced DeFi asset manager’.

Mona El Isa, Founder and CEO of Avantgarde Finance Group states: 

“Through this partnership with Agio, we can launch on-chain funds in a compliant and transparent manner while reducing operational costs and barriers to entry for our customers by more than 80%. Asset management suffers from extremely high barriers to entry today and this partnership changes that, whilst it also opens the door to institutions more familiar with traditional hedge-fund structures to access decentralised finance compliantly, and in a way they are already used to.”

“Agio is the first fund service provider in history to leverage the automation that blockchain can offer to streamline and automate administrative services for digital asset funds with Enzyme. Institutional investors are looking for support and guidance, and together with Agio we are bridging the gap between traditional finance and blockchain-based finance to enable the next trillion dollars of AUM into decentralised finance.”

Brian Jones, CEO of Agio Fund Services, comments: 

"Agio’s strategic partnership with Avantgarde has truly unlocked new possibilities. By pooling our expertise in structuring regulated investment vehicles with their depth of knowledge in asset management, we've crafted a platform that truly embraces this new asset class.

“Agio recognizes that many existing digital asset products have been hindered by outdated and expensive models, resulting in a lack of transparency with significant custodial and counterparty risks, which were particularly prevalent since 2022. However, Agio sees an opportunity to address these challenges by harnessing the power of blockchain technology. We are excited to pioneer this initiative with Avantgarde, marking a new era for digital asset investment.”

• 16.06.2023 -- 10:17 am

With less than two months to go before the new Consumer Duty deadline, two-thirds (65%) of UK lenders admit they are yet to fully review the regulation requirements, according to new research from AI-powered transaction analytics firm, Fuse.

The FCA’s new Consumer Duty will come into force at the end of July 2023. It requires firms to not only act to deliver good customer outcomes, but to understand and evidence whether those outcomes are being met, as well as ensure fair outcomes for vulnerable customers. It’s widely accepted as a positive move in improving consumer protections, with more than three-quarters (77%) of lenders believing that the new rules are the first step in a long journey to improving borrower outcomes.

However, there is concern around how prepared the industry is for the incoming rules, with more than half (55%) of lenders admitting to not being ready, and 61% needing to turn to external expertise.

The heightened focus on improving consumer outcomes comes at a vital time given the growing consumer reliance on credit - nearly three-fifths (58%) of UK adults have used a credit product in the last year, and more worryingly, a fifth of consumers (21%) are relying on credit and loans to pay for everyday expenses. 

However, 72% of lenders believe that the regulatory change has come at a financially challenging time for their business and, despite the increasing need for credit, more than a fifth (22%) of lenders say the cost of living crisis has already reduced the number of loans provided. 

Sho Sugihara, CEO and Co-Founder of Fuse, comments: “Lenders are under huge pressure to bring in the much-needed changes the Consumer Duty demands but, less than two months out, it appears the vast majority are unprepared. 

“Lenders need more support ahead of the Consumer Duty deadline. With the cost of living crisis contributing to growing consumer reliance on credit, they are performing a critically important role in supporting millions struggling with rising costs.

“In the long-term, the Consumer Duty needs to kickstart a transformation across finance to ensure it becomes more personalised and outcomes-driven for borrowers. In order to build a more effective and fairer financial system, lenders should supplement traditional affordability criteria with a more holistic view on whether a product will provide a consumer with good outcomes.”

Fuse recently launched a new product, Health Signals, to help risk and compliance teams to measure vulnerability, predict arrears risk, and monitor the impact of financial products on their customers. 

Health Signals automates vulnerability monitoring by analysing customer transaction data (via Open Banking or existing transaction data) and provides institutions with the insights needed to proactively monitor, report, and predict vulnerability. This approach empowers firms to ensure better treatment of vulnerable customers and provide rapid support to those at risk of falling into arrears.

The Health Signals platform is highly-scalable, easily integrated with an organisation’s current systems. The algorithms have been trained on over 400 million proprietary data points collected specifically for retail lending, including transactions, lending decisions, and credit reports. 

• 16.06.2023 -- 06:10 am

Develop, test and utilise credit risk frameworks and models incorporating Basel IV, IFRS9, IRB, climate risk and stress testing standards

Credit risk modelling and management is an ongoing priority for the banking industry. Banks need to understand their exposures to different counterparties to ensure they forecast and model the probability of default of each customer to whom they lend. Moreover, the long-term impact of COVID-19 on credit risk is not yet clear. Now as banks have moved back to BAU they face other pressures such as regulations and macroeconomic pressures, notably inflation and interest rate rises. This has a knock-on impact on things such as non-performing loans (NPLs), the proportion of which may rise over the coming months.

The marcus evans 10th Annual Credit Risk Management, Modelling and Validation conference taking place in Amsterdam, Netherlands on 18-20 September, 2023, will enable delegates to adapt their credit risk management, modelling, and validation strategies to meet the current set of macroeconomic, regulatory, and operational challenges. The meeting will include practical guidance on Basel IV, IFRS9 and IRB/AIRB, developing best practices in modelling and validation, utilising AI and Machine Learning effectively, integrating climate risk and credit risk, anticipating new regulatory requirements, and adapting models to macroeconomic conditions. Attending these hands-on sessions delivered by industry leaders will allow you to optimise your credit risk frameworks.

Topics Covered:

• Confront the uncertainties of IFRS9 model implementation

• Determine the effects of volatile macroeconomic factors to reduce uncertainty in credit risk modelling

• Ensure climate data quality to mitigate the exposure to financial losses within credit risk modelling

• AI governance in the new era for credit risk: organizational aspects of responsible AI in credit risk scoring

• Identify the best techniques to validate backdated information and avoid inaccurate results

• Integrate IRB model in credit risk portfolios to accurately estimate credit risks

Best Practices and Case Studies from:

• Dr Konstantin Vasilev, Group Head of Risk Modelling, Revolut

• Nina Faljic, Head of IRB Data and Strategy, Risk Models, Nordea

• Zsolt Jaczko, Head of Retail IRB Modelling, Nationwide Building Society

• Sotirios Migkos, Head of Model Risk, Pictet

• Páll Guðmundsson, Director of Credit Risk,  Landsbankinn

• Caterina Dalmara, Head of Model Development and Monitoring, Lloyd's Banking Group

For more information and registration discounts please contact: Ms Ria Kiayia, Digital Media and PR Marketing Executive at riak@marcusevanscy.com or visit: https://bit.ly/42GM41g

Praxent, a fintech product agency with more than two decades of experience, has been recognized as a 2023 Best Place to Work in Financial Technology by Arizent and Best Companies Group. The company ranked 8^th out of 50 companies, up from 36^th last year.

Praxent was acknowledged for its passion for innovation, focus on core values and client intimacy-led approach, helping deliver over 400 digital innovation projects for clients. Built on a culture of trust and accountability, the company intentionally invests into its employees, unlocking potential through training, professional development, consistent recognition and remote team engagement. This unique workplace environment has resulted in a 4.8/5 star GlassDoor rating with a 99% CEO approval rating. 

“At Praxent, we’ve worked hard to build an engaged, energized and creative team; that’s why a culture built upon and maintained by core values and trust is so important to us,” said Tim Hamilton, CEO of Praxent. “It is rewarding to see this dedication pay off with strong employee satisfaction. We’re proud to be named a top 10 Best Place to Work in Financial Technology, joining other leaders who are also working hard to improve and drive innovation in the industry.”

Praxent is creating meaningful change, accelerating innovation within financial services. The firm recently launched a wealth accelerator kit, allowing wealth management companies to expedite time to market by 16 weeks and save over $150k of custom development. Praxent plans to extend this concept to other areas of financial services to enable wider innovation; additional accelerator kits are currently in development.

For more information on Arizent’s Best Places to Work in Financial Technology program, including full eligibility criteria, visit www.BestPlacestoWorkFinTech.com.