News Briefing - Crowdfunding, SME And Alternative Finance

train platform crowd

1.UK – FinTech

 

Finextra reports: 


“Revolut, Starling and Wise are among a host of UK fintechs to join a new 'Tech Zero' taskforce to tackle climate change. 

Led by green energy supplier Bulb, the taskforce has set itself the aim of accelerating the UK government's plan to reach net zero emissions by 2050.

Fintechs GoCardless, Moneysupermarket Group and Onfido have joined as founding members of the taskforce, which is backed by Tech Nation and the UK's Net Zero business champion, Andrew Griffith MP.

The group says it plans to set "ambitious, but achievable" emission targets and to help the UK become the top destination for green investment while also helping consumers make greener choices.

While the taskforce has only 15 founder members, it has set itself a target of bringing at least 1000 British tech firms onboard ahead of the COP26 UN Climate Conference later this year.” 

 

 

2. UK - FinTech 

  

AltFi reports: 


“Several important updates to the Banking Competition Remedies (BCR) process were announced on Friday, with the most important being the launch of a new £5m Pool F. 

Pool F is formed from the cash returned by Onfido after the identity verification fintech decided its public commitments no longer aligned with its strategic aims. 

The new Pool will be open to new and existing applicants. However, the BCR first has to consult with potential applicants to determine whether the £5m should be broken into smaller grant sizes. This consultation won’t take place until August at the earliest. 

BCR also announced that five existing awardees had submitted new businesses cases over the last quarter to change the public commitments on which their funding was awarded. 

Codat, Form3, Investec, Metro Bank and Starling Bank all requested changes to their earlier promises, which the BCR granted.” 

 

3. International – FinTech 


Crowdfundinsider reports: 


“This past week the European Securities and Markets Authority (ESMA) issued a consultation paper addressing standards for the previously approved pan-European crowdfunding regulation. As covered in the past, the European Union has passed legislation to enable online securities offerings across its member nations. After many years of debate and discussion, the enactment of the law that legalizes cross-border securities offerings for crowdfunding platforms has been broadly welcomed by industry participants. Under the new rules, issuers may raise up to €5 million across the European Union. It is anticipated that these new rules will be a huge boost to online capital formation for the European Union. The European Crowdfunding Service Providers for Business and Amending Regulation (ECSPR) was approved in October 2020 and is anticipated to go into effect towards the end of 2021. 

Supervision of these securities offerings will be carried out by national competition authorities with the ESMA coordinating cooperation between EU member states. Of course, questions remain and the ESMA has been tasked with establishing a viable regulatory environment for investment crowdfunding rules to be effective. 

The consultation provides a draft version of some of the Technical Standards that ESMA will submit to the European Commission according to the ECSPR. The ECSPR requires ESMA to develop 8 draft regulatory technical standards (RTSs), including 2 in cooperation with the European Banking Authority (EBA), and 4 draft implementing technical standards (ITSs). The majority of these standards will be submitted by ESMA to the European Commission by 10 November 2021. The remaining 4 technical standards mandates (2 RTSs and 2 ITSs) must be delivered to the Commission by 10 May 2022. In addition to these 12 mandates to ESMA, the new regulation gives a mandate to EBA to develop 2 additional RTS (both in cooperation with ESMA). Crowdfunding Service Providers (CSPs) are preparing feedback to be submitted to ESMA now. 

The consultation is divided up as follows: 

  • Complaints handling 
  • Conflicts of interest 
  • Business continuity plan 
  • Application for authorisation 
  • Information to client on default rate of projects 
  • Entry knowledge test and simulation of the ability to bear losses 
  • Key investment information sheet 
  • Reporting by crowdfunding service providers (CSPs) to CAs and CAs to ESMA 
  • Notification to ESMA of national provisions concerning marketing requirements 

 

 

4. International – FinTech 

 

Klarna’s rumoured billion-dollar funding round has been confirmed by the ‘buy-now-pay-later’ (BNPL) lender, making the fintech the second-highest valued in the world, reports AltFi. 

“CEO and co-founder Sebastian Siemiatkowski said the $1bn round had been 4x oversubscribed, with Klarna reaching a valuation of $31bn. 

The funding comes just six months after its last $650m funding round, when the fintech was valued at just $10.65bn. 

​“At Klarna, we solve problems—that is the heart of what we do for both consumers and retailers. Consumers want transparent products to help them bank, shop and pay that reflect the way they live their lives, not just outdated traditional models,” said Siemiatkowski, announcing the raise. 

Siemiatkowski also announced that 1 per cent of the funds raised ($10m) would be put towards sustainability initiatives, which Klarna is planning to reveal on 22 April on World Earth Day. 

He added: “it is also time for us, with our culture of change, disruption and innovation, to focus on tackling bigger, more complex issues. I believe our industry has a responsibility to help in some way solve global sustainability issues and I hope others will join Klarna in our ambition.” 

Klarna offered a hint of its product roadmap a few weeks back with the launch of bank accounts in Germany. 

The lender also teamed up with Swedish cryptocurrency broker Safello to let the startup use its open banking rails for payments. 

A Worldpay report last week indicated that annual BNPL spending, currently at £9.6bn in the UK, could reach £26.4bn by 2024 or 10 per cent of the eCommerce market.” 

 

5. International – FinTech 


Finextra reports: 


“BBVA says it has had "encouraging" results testing an out-of-the-box AI language model to summarise Spanish customer conversations about banking. 

BBVA has been experimenting with an open API for GPT-3 (Generative Pre-trained Transformer 3), a language model from vendor OpenAI.

The lender says it wanted to see if the technology could be useful in generating summaries of conversation with customers that can then be used by bank staff, saving them time and improving the user experience.

BBVA used the model on ten unedited Spanish conversations about banking extracted from publicly available online forums.

Without any previous fine-tuning, transfer-learning or retraining on the domain’s data, in most cases GPT-3 Davinci managed to generate summaries, identifying the core issue or question, the product or service involved, the recommendation or answer given and its state of completion.”