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In this article:
World FinTech Report 2020: FinTech collaboration is even-more essential now for banks to achieve customer-centricity
Lending businesses could be 'decimated' by COVID-19 without government support
Fintech firms race to plug gaps in UK’s coronavirus relief measures
Chancellor announces £1.25 Billion support package for innovative firms hit by coronavirus
Inside the fintech funding drop.
World FinTech Report 2020: FinTech collaboration is even-more essential now for banks to achieve customer-centricity.
Last week, Capgemini and Efma jointly published the World FinTech Report 2020 revealing that despite a widening gulf between traditional banks on the one side and BigTechs and challenger banks on the other, traditional banks have an opportunity to thrive in today’s market by embracing Open X and adopting specialized roles in the new, open ecosystem – with collaborative support from qualified FinTech partners.
With data-fueled, hyper-personalized experiences in real-time, BigTechs and challenger banks have demonstrated their ability to win customers over. In contrast, while traditional banks have invested heavily in front-end IT infrastructure to improve customer experience, efforts so far have not measured up to what has become customary across other sectors, especially with tech providers. For banks to remain appealing and competitive in this shifting landscape, the report highlights that they must transform into agile and customer-centric “Inventive Banks”.
Lending businesses could be 'decimated' by COVID-19 without government support.
Alternative lenders are facing a cash crunch after funding markets seized up due to the coronavirus pandemic. Banks and other mainstream institutions have become reluctant to extend credit to other lending businesses given the current economic uncertainty, creating cashflow problems for many businesses. The problem has been exacerbated by new rules from the UK’s Financial Conduct Authority requiring all lenders to give people and businesses repayment holidays during the current economic shutdown.
Calls are growing for the government to step in and support the UK’s alternative lending sector through the crisis. They have asked the government to set up a new ‘forbearance liquidity funding scheme’ that would allow alternative lenders to borrow cash relative to the volume of payment holidays offered. The industry is also lobbying for banks to be given state-guarantees in order to free up credit lines. Finally, they want to see government purchases of bonds to allow non-banks to keep issuing notes while securitisation markets are closed.
Fintech firms race to plug gaps in UK’s coronavirus relief measures.
Britain’s fintech industry is racing to fill gaps in the government’s Coronavirus Business Interruption Loan Scheme (CBILS) as traditional lenders that were initially accepted onto the program have been criticized for being too slow to process the loans and for putting up barriers to firms applying for them. Bank trade association U.K. Finance last week revealed that only 21% of CBILS loan applications had been approved by lenders.
U.K. fintech industry body Innovate Finance has been piling pressure on the government to include more non-bank lenders in CBILS. The organization’s CEO, Charlotte Crosswell, said she was “delighted” that in recent weeks newer digital lenders have been approved as well, but was “eager to see more non-bank lenders become accredited lenders.”
Chancellor announces £1.25 Billion support package for innovative firms hit by Coronavirus.
HM Treasury has announced a new £1.25bn coronavirus package to ensure firms in some of the most dynamic sectors of the UK economy – ranging from tech to life sciences – are protected through the crisis so they can continue to develop innovative new products and help power UK growth.
The package includes a £500 million investment fund for high-growth companies impacted by the crisis, made up of funding from government and the private sector. SMEs focusing on research and development will also benefit from £750 million of grants and loans.
Inside the fintech funding drop.
Funding for the global fintech sector is at a three-year low, with venture capitalists fearing that the coronavirus pandemic will lead to a recession. Nonetheless, fintech may be better insulated than other sectors from a capital retreat, given it’s attracted investors with deep pockets and long-term ambitions.
This article dives into the latest fintech figures in Europe to see exactly what’s happening on our doorsteps. The health of the fintech sector can also be seen as a proxy for the wider startup scene, given financial-tech has been Europe’s largest investment category since 2013.
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