News Briefing - Crowdfunding, SME And Alternative Finance

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1.UK – FinTech 

Altfi reports: 


“Banks have an opportunity to earn $518bn more per year in revenues by 2025 by copying the business models of digital-only challengers, according to a new report from Accenture.  

The models of nearly 100 leading traditional banks and over 200 digital-only players in 11 countries across North America, Europe, Asia-Pacific, and Latin America were analysed by Accenture which found that pressure of revenues is building in the banking system. 

What started as somewhat small revenues being earned by digital-only banking players is now building into a steady and quickly growing wall of cash from the new wave of competitors. 

The report notes that with a total rethinking of large banks business models and embracing strategies similar to digital-only banking and financial services new entrants, traditional banks could boost revenues by nearly 4 per cent. 

“On the surface, the banking industry appears healthy, with big banks posting robust revenues and profits,” said Michael Abbott, a senior managing director at Accenture and leader of its banking practice.  

A closer look, however,  suggests that the combined effect of more than a decade of low-interest rates, fee compression from increased competition, and undifferentiated product offerings is slowly eroding banks’ share of gross domestic product, Abbott says. 

“In many markets, banking and payments revenues are flowing from incumbents to new entrants. To re-ignite growth, traditional banks need to reimagine how they create and deliver compelling products that focus on customers’ intentions. That will require rethinking their vertically integrated business models.” 

Purely moving to the digital sphere is no longer a differentiator though, says Dilnisin Bayel, a managing director in Accenture’s Strategy & Consulting group in the U.K.” 

 

2. International – FinTech 

 

Finextra reports: 


“As regulators hone their focus on Decentralised Finance (DeFi), new data from Elliptic reveals that just over $12 billion in losses have been suffered over the past year by DeFi users and investors. 

DeFI defines a flourishing alternative financial system that replaces traditional intermediaries with software running on blockchains.

According to the Elliptic report, the prevalence of DeFi theft and crime is largely due to the untested and immature nature of the technology available. Mistakes in the design and development of decentralized apps are the most common cause, giving rise to bugs which hackers can exploit, accounting for $10.8 billion of all losses. Another $1 billion in losses are the result of exit scams (where a Decentralised App creator intentionally leaves a ‘backdoor’ in the code that allows them to steal users’ funds) and the theft of 'admin keys'.” 

 

3. UK – SMEs / FinTech 

 

The Fintech Times reports: 


UK SMEs need more Government support to help them be greener – with 50% saying that reducing their CO2 emissions isn’t a priority for the coming year, a new survey has revealed. 

In the wake of world leaders reaching a new agreement to reduce coal power at the COP26 climate summit, small firms have said they are doing everything possible to be more environmentally friendly, but cannot afford to put it at the top of their to-do list. 

The survey was carried out by small business lender Capify – and found SMEs have already stretched themselves to introduce measures to cut their carbon footprint. 

They include recycling more, reducing waste, creating a paperless workplace and cutting down on unnecessary travel. 

In terms of what would encourage businesses to become more focused on reducing their emissions, the majority (60%) said both better financial incentives from the Government and lower costs for greener solutions were needed. 

Around 35% of those responding to Capify’s Environment and Business Survey said they wanted “more understanding about what we can do”, while 33% said it was important to see more of the country’s largest firms leading the way. 

Almost half (49%) said making their SME more environmentally friendly was not a priority for the next 12 months. 

And despite 60% wanting more financial incentives from the Government and lower costs for greener solutions, just 10% said they would prioritise greener initiatives if they had 20% more cash in the bank.” 

4. International – FinTech 

Crowdfundinsider reports: 

“The Switzerland Stock Exchange (SIX) recently revealed that the SIX Digital Exchange will be issuing its very first senior unsecured digital CHF bond. 

SIX’s management confirmed that the bond had been issued for a total volume of CHF 150 million and with its maturity set for 2026 through its holding firm, the SIX Group. 

SIX also mentioned that this marks the first digital issuance in a completely regulated environment. The update explained that the bond includes two exchangeable parts. The digital part of the bond will get listed and traded via SDX Trading Ltd and it will be centrally held by SIX Digital Exchange. 

And the traditional part of the bond should get listed and traded via the SIX Swiss Exchange and centrally held by SIX SIS. This should help with ensuring the link between the digital and traditional environments. 

The digital part of the bond reportedly accounts for CHF 100 million of the total issue volume. Meanwhile, another CHF 50 million has reportedly been allocated to the traditional part of the bond.” 

5. International – FinTech 

 

Altfi reports: 

 

“Lydia has struck a deal to offer crypto and stock trading to its 5.5 million users through a white label deal with Bitpanda. 

Lydia will use Bitpanda’s API-driven infrastructure to give their customers 24/7 access to investing with trades executed through the former’s platform. 

The French banking challenger, which counts a third of 18-35 year olds in France as users, was launched in 2013 by Antoine Porte and Cyril Chiche. It doesn’t hold a banking license but is increasingly positioning itself in the increasingly popular ‘super app’ category.  

“With Lydia trading, our ambition is to widen access to investment assets, to make it accessible to everyone whether they are simply curious, beginner investors or experts. Our users get to choose what their money finances, contrary to the traditional bank system. We are the first on the French market to provide such an extensive range of digital assets”, adds Cyril Chiche, CEO and Co-founder of Lydia. 

Austrian fintech unicorn Bitpanda, which launched in 2014 as a crypto trading app but now also offer fractional shares and ETFs, has been moving into the B2B2C space in the past year.”