Veber FinTech Vs Banking consumer report
- 1. FinTech vs Banking industry Consumer report Image Source - Unsplash.com (CC0)
- 2. Tim Poultney CEO Veber - Cloud & Dedicated Hosting Specialists Founded in 1999, Tim lead the formation of Veber and has been a CEO ever since. He pioneered the launch of‘Cloud as a Service’which was one of the first cloud platforms of its kind. Currency Cloud is one of Veber’s FinTech clients, working to- gether since startup phase, providing a Best of Breed hosted infrastructure solution which includes access to a virtual arena, a storage farm, tie lines and data security. Taking the leap from a concept, to form a startup company then to experiencing high accelarated growth within a short period of time creates an array of challenges, aswell as opportunities for fantastic innovation in technologies. There’s so much cool stuff hap- pening in Fintech with Block Chain technology, Bitcoin digital currency & Sharesight stock portfolio trackers, we wanted to know what’s next for the banking market. Will they keep up or will they lose the next generation of consumers to FinTech technologies? Mobile digitalisation opens the barriers for new challengers within the FinTech market. Artificial Intelligence and behavioural analytics is now discovering the new trends and what people are doing in FinTech. Trust, reputation, management, expertise is what enables growth within FinTech. Whilst adding computing power/stor- age constantly in response to the varying user demand levels is also very important. Successful FinTech companies are the ones refining how people are organising themselves around financial products. None rely on out of the box tech, instead they let their clients dictate which apps and services they use. This survey is based on discovering the user perceptions of a once stable and traditional marke but is now an ever chang- ing innovative market. Veber content overview 1. Foreword 2. About this survey 3. Survey findings 4. The Money Platform interview 5. Recommendations 6. FinTech discussions Tim Poultney CEO Veber - Cloud & Dedicated Hosting Specialists Founded in 1999, Tim lead the formation of Veber and has been a CEO ever since. He pioneered the launch of ‘Cloud as a Service’which was one of the first cloud platforms of its kind. Currency Cloud is one of Veber’s FinTech clients, working together since startup phase, providing a Best of Breed hosted infrastructure solution which includes access to a virtual arena, a storage farm, tie lines and data security. Taking the leap from a concept, to form a startup company then to experiencing high accelarated growth within a short period of time creates an array of challenges, as well as opportunities for fantastic innovation in technologies. There’s so much cool stuff happening in FinTech with Block Chain technology, Bitcoin digital currency & Sharesight stock portfolio trackers, we wanted to know what’s next for the banking market. Will they keep up or will they lose the next generation of consumers to FinTech technologies? Mobile digitalisation opens the barriers for new challengers within the FinTech market. Artificial Intelligence and behavioural analytics is now discovering the new trends and what people are doing in FinTech. Image Source - Austin Lee (CC0) 1
- 3. Tim Poultney CEO Veber - Cloud & Dedicated Hosting Specialists Trust, reputation, management, expertise is what enables growth within FinTech. Whilst adding computing power/storage constantly in response to the varying user demand levels is also very important. Successful FinTech companies are the ones refining how people are organising themselves around financial products. None rely on out of the box tech, instead they let their clients dictate which apps and services they use. We wanted to find out what users felt towards FinTech, the updates to traditional banking and what are their thoughts on the Future of Banking. We asked 200 people between the age of 18 - 65 across England using Google Surveys. This survey is based on discovering the user perceptions of a once stable and traditional market but is now an ever changing innovative market. Image Source - John Towner (CC0) 2
- 4. Q1 Could you describe the following FinTech terms if asked? 52% could not describe Fintech terms Mobile payment was the most commonly recognised term with 32% of those surveyed selecting it None of terms Mobile payment Crowd funding Bitcoin Digital wallets Payment Gateway Block Chain 52% 32.7% 26.4% 23.9% 20.8% 7.5% 3.8% Image Source - Viktor Forgacs (CC0) 3
- 5. Q2 Which of the following non-bank owned products are you likely to use in the next 12 months? Over 50% of people would not use non-bank owned products. Females were more likely (51%) than men (47%) to opt out of using a non-bank owned product. Both males and females showed a preference for online payment services with more females than men (33% vs 38% respectively) Males and females chose mobile payment as the 2nd most popular choice (25% and 18% respectively) None of the above Online payment services (e.g Paypal) Mobile payment (e.g Apple Pay) Mortgages Personal Loans Crowdfunding 52.4% 32.4% 19.3% 6.9% 5.5% 4.1% Image Source - Josh Rose (CC0) 4
- 6. 27% of people were uncomfortable in using non-bank owned products Males were more uncomfortable than females (2.7 ave. vs 3.0 ave.) The findings also showed that those between the ages of 55-64 were more comfortable to use non- bank owned products than those aged between 18-24 years (3.6 ave. vs 2.6 ave.) Q3 On a scale of 1-5, how comfortable do you feel using non-bank owned products? Q4 What puts you off using non-bank products? 1 2 3 4 5 27.4% 11.5% 21.6% 22.2% 17.2% Security None of the above Unfamiliar with technology Lack of humanization Lack of bricks and mortar bank 52.5% 27.9% 18.9% 11.5% 6.6% 53% were put off using non-bank owned products due to security reasons. Findings revealed females showing more concern of security than males (57% vs 50%) The results also revealed 35-44 year olds were perhaps the age group most comfortable using non-bank owned products, with a majority of 43% selecting‘none of the above’ Image Source - Jan Vašek (CC0) 5
- 7. Q5 How often do you use mobile applications to access financial services? Every day Once or twice a week Once a month Less often than once a month Never 15.4% 34.7% 3.5% 10.5% 35.8% Females showed a stronger interest in using mobile services everyday compared to males (20% vs 16%). Majority of those surveyed do not currently use mobile applications to access financial services Those who do are doing so once or twice a week (35%) Image Source - Matthew Wiebe (CC0) 6
- 8. Those aged 65+ showed the strongest discomfort of any age group (1.7 ave.), with the most comfortable being 35-44 year olds (3.3 ave.) 31% of people were uncomfortable with self-directed services versus human interaction in traditional banks Q6 On a scale of 1-5, how comfortable do you feel about the introduction of self-directed services versus human interaction in traditional banks? 1 2 3 4 5 31% 11.5% 22.5% 23.4% 11.6% Image Source - Evan Batky (CC0) 7
- 9. 61% do not believe that FinTech will replace traditional banking by 2020. Q7 Do you believe traditional banking services are at risk from the digital FinTech revolution? Q8 Do you believe FinTech will replace traditional banks by 2020? More than half of the respondents (53%) were not sure whether traditional banking services were at risk from the digital FinTech revolution Not sure Yes No 53% 31.6% 15.4% No By 50% Yes By less than 50% 60.8% 50% 9.1% 5.8% 25-34 year olds most strongly believed this statement, with a majority of 43% selecting‘yes’ Many people thought that this would be replaced by 50% however, with 35-44 year olds selecting this statement the most (30%) Image Source - Luis Llerena (CC0) 8
- 10. Veber breakfast interview with The Money Platform After observing banks and lenders earning‘ridiculous amounts of money’George Huntley and joined friends that had stumbled upon a simple idea for changing how bank lending works. They wanted to answer and fix these 5 questions: • How can we cut the interest rates for borrowers? • How can we improve the borrowing experience for Millennials’? • Can we eliminate banking fees? • Can we make an ethical and economical banking model? Within a year from the initial startup concept The Money Platform is now launched. Here’s our FinTech breakfast interview with George Huntley. Tell us about the Money Platform? We are the cash equivalent of the Credit Card. We aim to serve the underserved. For instance, people aged in their 20’s are known in the financial industry as Thin File customers. Meaning they have a limited credit history, so they are often refused loans. We’re planning to use software to better qualify this demographic, for instance using social media profiling, such as using Linkedin and FaceBook to gain an understanding of who they are and what their expected salary bracket might be. We aim to use alternative data to give an accurate decision rather than the standard process many traditional banks use, which is outdated and limited. At our core we take pride in giving the great quality service expected from a money management banking service, but with the lowest possible rates and always with a smile. Our communication with our borrowers is always personalised from one of our team members. Customers will never receive a No-Reply email from The Money Platform. Thoughts on FinTech... “Start-ups are making the best of technology innovation.” “Stability is more than innovation - FALSE. Innovation is driving better deals for the customers.” “Banks are unable to catch up to FinTech innovation due to tired legacy systems.” “Traditional banks need to be nimble, quicker on their feet.” “How big establishments are responding to the rise in FinTech will be the making or breaking of the traditional banking industry.” “Nowadays you’re actually punished by big businesses for being a loyal customer.” “If you (customers) stay in the same traditional bank for too long, you won’t get a good deal.” “I have 4 bank accounts. I change them all after a year.” “Existing businesses are cutting back on innovation. It’s luck really, as a debt laden business means start-ups can provide new solutions” “I predict that in the future VC and Crowd Sourcing will go hand in hand when raising capital for start-ups’ “Start-up and UX tip: Never fear failure. Find the right team. Don’t try to do it alone” George Huntley, COO, The Money Platform Image Source - Alondra Olivas (CC0) 9
- 11. FinTech inspiration Credit Kudos is an amazing innovative model for credit scoring the‘Thin File’customers. Nutmeg.com is a superb‘money farm’for giving people, typically like me, in my mid 20’s with a small but decent savings, a transparent way to invest money, without any hidden fees and traditional banking jargon to cut through. RateSetter is known for having used the concept of a“Provision Fund”into peer to peer lending. It’s a borrower-blind P2P investment model that prides itself on the fact not even one of its customers has yet lost so much as a penny investing with it. Funding Circle has a superb human approach that allows investors to profile small to medium business to help them startup, making people become the bank. MangoPay is also one to watch using fantastic technology to make payments easier. Start-up Tips The Money Platform gained angel investment during the first few months at early conceptual stage. I think it’s important to have the right team to secure interest from FinTech investors within the early stages. Each of us in our team has worked within the broader finance for a number years so we had a wealth of knowledge to pitch our idea with just an investor deck, without a minimum viable product. Our first investment fund helped to build our MVP. We tested our Alpha model with friends, the Beta testing group was a sample of profiled friends that were a close fit to the demographic we would like to target. We’re still tweaking our current model to suit our users’needs. I see this continuing throughout our growth. Our Challenge Converting the user registration to actual loans is our biggest challenge. We have almost 1000 registrations in our first month so we are refining many things at this stage to simplify the on boarding process and determining a loan. We value keeping the customer service friendly and a sense of optimisation throughout the process. Currently our focus is on innovation through technology to enhance the credit decision making process. With such a high amount of registrations we don’t want to miss out on good business opportunities. Dream hire If I could add one person to add one person to our team it would probably be another person in our risk team. Our business is all about minimising risk, so that our lenders can have confidence in what we offer - a strong risk team is the making or breaking our business. Image Source - Freestocks.org (CC0) 10
- 12. FINTECH RECOMMENDATIONS 01 Compliance Despite FinTech innovation there are still compliance levels that need to be met 02 Security The highest concern and is an ever changing landscape and it is no longer just external threats 03 Performance Reliable performance is essential to both start-ups and mature platforms 04 Public Cloud Public cloud is an essential part of the mix it cannot deliver all the requirements for FinTech 05 IaaS IaaS allows solutions to behosted or co-located that cannot be delivered from the cloud 06 Hybrid Services 06 Collaboration Customised solutions offer the best of public cloud and private, secure datacentre environments Best of breed cloud services 11
- 13. Watch discussions from our 2016 Veber Disruptive Technology Event Best of breed cloud services Are you interested in attending our next disruptive technology event? • Tell us about your business • How can we help you at Veber Hosting? • Looking to expand your infastructure? • Interested in Veber Breakfast Interviews? Email: [email protected] Call us on: 020 3468 7001 Image Source - Alondra Olivas (CC0) 12
- 14. FinTech is one of the largest industries to be disrupted and its growing at a much faster rate than any other industry London has been ranked number one city in Europe for supporting both startups and scale- ups in the European Digital City Index London has become the FinTech capital of the world – With more people employed in the sector than any other city worldwide, standing at 44,000 (1,000 more than New York) Our experience in FinTech and Cloud solutions has allowed us to help our customers over the years. To find out how we’ve used out expertise within the FinTech industry, read our latest Case Study. The Rise of Startups Over the next ten years the number of digital technology companies in London is expected to rise to 45,000 and create more than £12 billion of economic activity. Oxford Economics Bitcoin & Blockchain bounce back CB Insights recent research showed that investment into bitcoin and blockchain bounced The opportunity The largest blockchain and bitcoin investments in 2015 involved strategic and corporate investors, such as Google, Cisco, Goldman Sachs, Visa, BBVA and AXA. CB Insights research techcityuk.com Image Source - Jan Vašek (CC0) 13