The FinTech Five – 20th August 2021
Welcome to the FinTech Five, the part of the week where we take a closer look at the best articles, news, and features from over the past week from our FinTech Wales members.
1. Successful bid for Degree Apprenticeships in Wales
First this week, The Open University (OU) in Wales has secured a bid to continue offering funded places on its Degree Apprenticeship in Applied Software Engineering.
The Degree Apprenticeship programme is available to employers across Wales in the public and private sectors. It is suitable for new and existing staff who work in digital and technology roles and who spend most of their working hours in Wales. The programme is funded by the Welsh Government through the Higher Education Funding Council for Wales (HEFCW).
Delivered flexibly around the needs of the organisation, the Degree Apprenticeship programme can be used to upskill employees or recruit new talent into a business through academic and work-based learning. The way the Degree Apprenticeship is taught allows people to study wherever they live. This has led to partnerships with employers in every part of Wales including rural areas.
Louise Casella, Director of the OU in Wales commented:
“We are really pleased to be able to continue to support the demand from employers in Wales to help develop their staff. Degree apprentices across Wales are studying flexibly with the OU to upskill and help meet the needs of their organisations. Skill shortages in software engineering still exist, that’s why investing in this area is so important to our economic recovery.”
A recent report commissioned by the OU and Be the Business noted that 77% of UK business leaders lack the skills required to successfully implement new technology into their business. Through the Degree Apprenticeship in Applied Software Engineering programme, the OU in Wales hopes to help organisations across all sectors address the growing demand for highly skilled employees in digital and technology roles.
2. FinTech Wales members Delio, Sero and Wealthify recognised in this month’s Insider Media article on the thriving Welsh fintech scene
Next, an article by Insider Media has captured the buzz around the financial technology (fintech) industry in Wales, with a growing number of companies generating sales, recruiting staff and advancing from the startup stage.
One of the most advanced is Cardiff-based Delio. Its technology enables financial businesses to manage transaction flows so that clients can invest in alternative opportunities more efficiently.
The last 18 months have accelerated the digitisation of private markets by five years, according to Delio chief executive Gareth Lewis. He says: “We have seen the impact of that. We’ve now cemented our position in the market, doubled our monthly recurring revenue, gained new clients across Switzerland, Asia and North America, and launched a new investment structuring service to support co-investment opportunities across private markets.”
Lewis has spotted an opportunity in private financial markets to improve links between financial institutions. He says: “We plan to launch new features that will connect financial firms with one another, encouraging them to share deal opportunities and raise capital beyond their traditional boundaries.”
Sarah Williams-Gardener, chief executive of FinTech Wales, commented: “We’ve quietly been building successful financial services delivered with cutting edge technology for several years. This includes inventing comparison,” she says, citing Confused.com, GoCompare and Moneysupermarket.
One of the businesses on the FinTech Wales Foundry accelerator mentioned by Williams-Gardener is energy services provider Sero. The financial connection is that Sero works with mortgage providers and building societies on green finance products. This is becoming more important, as vast sums are mortgaged against homes that need to reach net zero carbon within 30 years.
Chief executive James Williams says Sero has “huge potential” to grow in this area: “The finance sector is quickly moving towards a greener agenda and ESG [environmental, social and governance] investing. Sero will use its technology to help capture data about existing homes and formulate a plan for net zero which the finance sector can provide funding for, against an improvement in carbon.”
Perhaps Wales’s biggest financial technology success story so far has been Wealthify, the automated investment business, which was acquired by Aviva through purchases in 2018 and 2020. It is still a standalone business in the larger group, with an office at Tec Marina in Penarth. Staff numbers have risen from 40 last year to more than 60, and Wealthify doubles the assets it looks after every six to nine months.
Chief executive Andy Russell says he and his team spent a lot of time last year defining Wealthify’s purpose to feed into its strategy: “When I talked to the team, every person had a purpose for being at Wealthify. They had chosen not to work for large corporates and wanted to make a difference to the investment industry. Our purpose is that we are here to inspire anyone to build their future wealth.
There’s a coherent industry in Wales, says Williams at Sero: “Wales has some fantastic technology companies, and Cardiff in particular is attracting some of the most successful fintechs.”
Wales needs to invest in home-grown success stories that drive ambition, have the right attitude and provide the framework for others to follow, according to Lewis at Delio. He says: “By enabling these businesses to prosper, we can create future success stories that will inspire people in Wales to tap into the fintech sector and start their own ventures.”
3. Open Banking To Launch In Canada – Backbase The Partner Of Choice
Next, open banking has been given the long-awaited tick of approval in Canada, after experiencing a year of delays. However, the recommendation from the advisory committee to the Canadian government to implement the initial phase of open banking will become a reality by 2023.
Due to the ongoing discussion surrounding open banking, Backbase Canada offered thought leadership to explain how it could drive a more inclusive financial marketplace for all Canadians at the Digital Marketing Financial Services conference (DMFS).
Randy Johal, Customer Strategy Officer at Backbase Canada, observes that the vast majority – around 90% – of online banking experiences still offer the same types of accounts and haven’t updated their tools in years. Which is why customers are now demanding better.
That’s where Backbase comes in: integrating applications to provide faster payments, and with better visibility of balances, which allows the customer control of their finances.
The first phase of open banking is limited to low risk, read-only activities such as allowing third-party service providers to receive consumer financial data, but not edit the data on the bank’s servers. However, this allows a unique opportunity for financial institutions to develop their own customer experience, often called ‘mashups’
During the DMFS conference, Randy asked the audience to think about what their mashups could be and presented ideas. Most of the mashups had an ability to inform and educate the customer at a critical life stage or event, while also offering a financial and social impact on the community they live in.
Moving forward, Backbase encourages all banks to accelerate their digital transformation agenda to focus on the customer experience. Backbase’s one platform vision – connecting third parties and orchestrating value – is key to enabling clients to create a truly engaging digital experience. In turn, it will drive financial institutions market differentiation in an increasingly competitive landscape.
4. Principality has posted good interim results as it continued to invest in its technology, people and communities
Next, Principality has posted good interim results as it continued to invest in its technology, people and communities.
The building society has helped more than 1,500 first-time-buyers get a home during the first six months, helped many members cope with the financial uncertainty created by the COVID-19 pandemic, and supported communities by keeping its branches open throughout the winter lockdown period.
Julie-Ann Haines, CEO at Principality Building Society, said:
“As a mutual, member-owned building society, our aim has never been to maximise profit but to focus on the long-term future of the Society. We have made a decision to be much more purpose driven so we can not only achieve our objective to help people get and stay in their homes for longer but also have a positive impact on improving the prosperity and resilience of customers, colleagues, clients and communities.”
“The economic environment looks to be more optimistic than the previous 18 months, although the impact of the coronavirus pandemic will shape both the wider environment and our Society for years to come. Principality remains a safe home for savings, our capital and liquidity levels remain strong, well in excess of regulatory requirements and will be able to withstand any challenging economic and market conditions.”
Net retail mortgage lending was £24.7m in the first six months of this year (June 2020: £118.7m). Although retail lending is relatively flat, mortgage applications remain strong in a housing market being supported by stamp duty reliefs. We expect net retail mortgage lending to remain relatively flat throughout 2021 as we embed our new mortgage platform and manage application volumes in the short term.
Balancing the needs of savers whilst remaining competitive in the mortgage market is a constant focus and the savings rates offered to members were directly impacted by the interest earned on mortgages. Principality still delivered an average rate to savers of 0.77% compared to the market average of 0.32% over the same period, maintaining its position as one of the best on the high street.
Read the full article on Principality’s website here, where you can find access to the full interim results report.
5. CashCalc wins Professional Paraplanner award 2021
Last but not least this week, Professional Paraplanner recently announced their award winners amongst which CashCalc were winners of the ‘Best small product or service provider’ award.
Instead of being decided by a select panel, the Professional Paraplanner Awards seek to recognise the best in paraplanning talent as well as the platforms and providers that paraplanners rate most highly for the quality of the service and/or products they deliver.
Following CashCalc’s award win, Rob Kingsbury (Editor at Professional Paraplanner) caught up with Chartered Financial Planner and founder of CashCalc, Ray Adams.
There is an irony to CashCalc winning the Best Small Product or Service Provider Award this year – given that in May 2021 the firm was acquired by FE fundinfo. The win reflects the origins of the CashCalc system, which was developed by Ray Adams to serve his chartered financial advice firm –Niche IFA, based in Newport, Wales – and then spun out as a standalone company and offered to other advice firms. It has gone from strength to strength over the intervening years – according to a report from NextWealth, it has around 45% of the UK cashflow tool market.
Ray says: “At heart I am a financial adviser who is looking to fix some of the pain points being experienced by my own firm. From that I have been able to develop a technology company which looks to find solutions both for my issues and those of other advice firms.”
CashCalc was launched to the market in 2014 and has been innovating and developing ever since. Hence, CashCalc is not just about cashflow modelling, another benefit is its ability to simplify and speed up the onboarding process for advice firms.
Click here to read the full announcement on Cashcalc’s website, where you can find access to Ray Adams’ full interview
Until Next Week
And that’s it for the FinTech Five this week. Thank you for reading, and don’t forget to join us next week for more of the best content from across our FinTech Wales membership.