The AltFi Festival of Finance 2020 - Notes

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The AltFi Festival of Finance 2020 – Notes
Kristi Rohtsalu
In Tallinn, 22 November 2020
The second week of November 2020 was the week of The AltFi Festival of Finance, a 4-day virtual festival
of all things fintech and alternative finance. 100+ speakers and 100s of attendees explored the UK’s fintech
and alternative finance sector (The AltFi UK Summit) and the European market (The AltFi Europe Summit).
The event was capped off with showcasing leadership in financial innovation (The AltFi Leadership
Summit).
While the sessions are all recorded and can be found from the AltFi website1
, I elaborated the valuable
content by categorising it into the key themes at present time:
• COVID-19
• Leadership challenges
• Open Banking
• SME lending & opportunity
• Funding side of marketplace lending
• Fintech ecosystem: fintech hubs in Europe
• Future prospects
Indeed, certain topics – most notably COVID, Open Banking and SME lending – came up over and over
again. Instead of generalizing, I simply organised the points that different people representing different
perspectives made; there is value in views coming from different angles.
Having said that, I still have a few observations to make:
• COVID-19 has sped up the underlying trend towards digitalisation. Digital infrastructure providers are
extremely well positioned right now. People simply need to get things done online.
• Open Banking is definitely a hot topic and a solution for many challenges in our financial lives.
• Financial inclusion as a theme is increasingly gaining traction.
• In UK, government and government agencies are very much directing the progress in the financial
services industry. In the EU, government responses to COVID-19 differ which makes it more
challenging for fintechs to operate in multiple countries.
• Actors in the industry are cautiously optimistic about the future. Clearly, risk awareness has improved.
Overall, I found the event insightful – a great update on what is going on in the fintech industry in UK and
in Europe. My organized notes are below. Apologies if I misunderstood someone’s point or put it into the
wrong context in my attempt to have it on paper in a compact manner.
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https://www.altfi.com/events/altfi-london-summit-2020 [Accessed: 21 Nov. 2020]

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Contents
1 COVID-19...............................................................................................................................................3
1.1 COVID impacts as seen by lending platforms and challenger banks ............................................3
1.2 COVID impacts as seen by institutional investors.........................................................................6
1.3 COVID impacts as seen by ecosystem providers and B2B infrastructure providers.....................7
2 Leadership challenges...........................................................................................................................8
2.1 Lessons from leaders ....................................................................................................................8
2.2 Managing mental health for remote teams ...............................................................................11
2.3 Recruitment ................................................................................................................................12
2.4 Pitching your unicorn..................................................................................................................13
3 Open Banking......................................................................................................................................14
3.1 Open Banking Lending Revolution..............................................................................................16
3.2 Open Banking Payments.............................................................................................................17
4 SME lending & opportunity.................................................................................................................18
5 Funding side of marketplace lending..................................................................................................20
6 The ecosystem: fintech hubs in Europe..............................................................................................23
7 Future prospects.................................................................................................................................25
7.1 Coming out of COVID-19.............................................................................................................26
7.2 APIs powering Europe’s next fintech boom................................................................................28
7.3 Open Finance ..............................................................................................................................29
7.4 Key areas of innovation ..............................................................................................................30
7.5 Quantum computing...................................................................................................................30
8 Misc. topics .........................................................................................................................................31
8.1 Business models and profitability...............................................................................................31
8.2 Financial inclusion.......................................................................................................................32
8.3 ‘Banking On It’.............................................................................................................................33
8.4 Metro Bank’s acquisition of RateSetter in 2020.........................................................................34
8.5 Fintech pitch-off: newcomers.....................................................................................................36

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1 COVID-19
Different stories. Special memories. Some have suffered from income and liquidity, and some from
reputation. Some have been more successful than the others.
COVID boomed government backed lending all around the globe. COVID has forced many people into the
21st
century. COVID has brought the trend of digitalisation forward by 3-5 years.
Moving to remote and working from home. Overwhelming amount of applications to deal with: loan
applications, applications for payment holidays, job applications… Operational challenges.
“It is not the strongest of the species that survives, nor the most intelligent; it is the one most adaptable
to change.”
– Chares Darwin
Are we proving Darwin right? Five points by John Davies, Executive Chairman @ Just Cash Flow:
1. COVID will be with us at least for the next 12 months. Plan for it – have plans for different scenarios,
regardless the medicine.
2. Brexit will impact how we are doing business with Europe / with UK. It may not affect you directly,
but it affects your customers.
3. Financing: Don’t hope for the government channelling funds through you.
4. Support recovery. Saving you is down to you, no matter what the government says.
5. Look for your assets, that is for your customers, your staff, your partners. Deliver better experience.
People need hope. Give it to them. Break through the glass ceilings.
1.1 COVID impacts as seen by lending platforms and challenger banks
The fintech sector was almost like waiting for its first test. Till date, it seems that the industry has handled
the situation well.
Rod Lockhart, CEO @ LendInvest:
• COVID-19 has had a profound impact to our lives, to the economy and to the lenders. No one was
expecting that.
• Overall, lenders responded very well. Capital has been ‘bumped’ fast through from the government,
offering payment holidays to the customers etc.
• A number of platforms struggled at the beginning – moving remote wasn’t that smooth. The agility of
the fintechs has definitely helped.
• There are lenders that have gone to the hibernation mode. It was our conscious decision to continue
lending in the first lockdown. We did it with caution to reduce the overall risk level. Only time will tell
which strategy proves right: go to hibernation or continue lending.

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• In 2008 crisis many lenders did not survive. Now the ability of businesses to adapt has put them to a
stronger place.
• Looking forward, there are still challenges ahead.
Amany Attia, CEO @ ThinCats:
• The difference with the 2008 is this: then it was almost two years before anything happened. Now
people had to adapt quickly, very-very quickly.
• It’s the time to make sure that we are assessing credits cautiously: make sure that the customer has
sufficient cash to withstand the next shock wave. At the same time, there are also opportunities…
Patrik de Nonnville, Chief Operating Officer @ October:
• At the beginning we were very concerned about the demand. In fact, number of loans has increased
in 2020; amounts are smaller. Instant decision loans with government guarantees form a bulk of
originations by us.
• We are supporting the borrowers. When the crisis hit, we proposed to investors to give a 3 months
payment holiday for the borrowers.
• Some platforms have adopted very quickly to the new market opportunities. The opportunities that
we see in Italy are very-very different than those in Spain. Certain countries have included alternative
lenders into the guarantee schemes, the others have not. Participation in government schemes is a
great opportunity.
• We see the crisis as the opportunity to accelerate what we have been working for: automation of the
loans of about 500k euros.
• We all need to adapt very quickly at the moment. As an industry, we have to go through the crisis fully
credible, sticking to our commitments. So far, so good.
• Before the crisis it was relatively easy to expand to the other countries: technology and funding should
work across the countries. Now it’s more of a question: can we leverage our technology and funding
in 2022?
Daniel Drummer, CEO and Managing Director @ auxmoney:
• COVID is a disruption. Drop in GDP etc. Everybody had to look where they stood.
• In Europe, you have seen very different reactions from the local governments. Some peers have been
very adaptable, the others have struggled.
• We see challenges ahead, but so far, I’m optimistic – it turned out to be our positive scenario. I’m very
cautious with making any predictions, though. We hope for the best but work for the worst. So far,
we don’t see any material negative impacts of the crisis. Portfolio is still stable.
• It is very important to offer customers what they expect. We see certain mindset shift. COVID has
shifted a lot of things: people are starting to look for loans first online, previously they first went to
bank branch.
• Our loan growth this year will be somewhat lower than last year, intentionally so. Next year we will
look at the situation. Underserved market is becoming larger as banks withdraw in certain extent.

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SME lending & banking
• A big part of the ‘game’ over the past 6-9 months has been applying for and participating in various
government schemes such as CBILS2
and BBLS (Bounce Back Loans)3
in the UK, making sure that one
qualifies for the criteria.
• Helen Bierton, Head of Banking @ Starling Bank: Many small- and medium-sized businesses (SMEs)
are desperate right now. They need extra cash for getting through the tough time and/or for investing
into the business and/or for pivoting. As for the Bounce Back Loans, we see traditional banks copying
us. It is critical to make right decisions very quickly, also to protect the tax payers’ money; it is hard
for the traditional banks to keep up. We don’t get it right all the time, but we listen to our customers.
• Oliver Prill, CEO @ Tide: Government did not make funding available through us. Bounce Back Loans
is not standard lending; it’s government product. Since the coronavirus outbreak early 2020, things
have been evolving very quickly. At the beginning, lending market completely tried up. We have seen
a number of interesting dynamics:
o The market is segmenting very quickly.
o There has been an enormous growth of new businesses – taking opportunities when they
arise.
o Such new businesses would never qualify for the government’s Bounce Back Loans.
o Incumbents were really struggling with working-from-home; in effect, small businesses are
choosing digital banking.
• Oliver Prill, CEO @ Tide: The other aspect is that the UK’s big five banks de facto stopped opening
current accounts. There was a huge substitution effect. KYC process had to be scaled.
• Amany Attia, CEO @ ThinCats: In terms of loan performance, better performers have been utilities,
sanitation, companies with significant online presence, software solution providers, some special
manufacturers. Better indicator than the sector is to look for well managed companies: funding
strategy / having the right funding mix, a diversified mix of customers, companies that have
redesigned their businesses model quickly. The company does not necessarily have to be in the ‘right’
sector; for example, we had a restaurant that managed to quickly adapt the business model for the
new situation…
• Sean Hunter, Chief Information Officer @ OakNorth: The response of the (UK’s) government agencies
has been really amazing, very timely. From our perspective, we have approved over 1.5 billion since
March. We have seen doubling in lending volumes compared to the same time last year. Some of the
traditional lenders like banks are pulling back to see what will happen to us.
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The Coronavirus Business Interruption Loan Scheme (CBILS) provides financial support to smaller businesses (SMEs)
across the UK that are losing revenue, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak.
Read more e.g.:
https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils-2/
[Accessed 16 Nov. 2020]
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The Bounce Back Loan Scheme (BBLS) is a new scheme designed to enable small businesses to access finance more
quickly during the coronavirus outbreak. Read more e.g.:
https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-schemes/bounce-
back-loans/ [Accessed 13 Nov. 2020]

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• Christoph Rieche, CEO and co-founder@ iwoca: We were fully automated before COVID; every single
process that can be automated, had been automated. Fully automated loans are in tens of thousands.
Above 50+ thousands we tend to have a manual review. During COVID there were lots of process
optimisations. It’s a huge amount of work to build this infrastructure, constantly finetune it. CRM
platform, the entire refinancing structure… The sectors have been very differently affected. You do
require a sophisticated platform. Manual overriding has been absolutely critical. Machines could not
capture it all.
Property finance
Rod Lockhart, CEO @ LendInvest:
• The key to lending has been staying agile, adapting to the changing situation – moving to remote and
adopting the lending process accordingly. For us, the challenge was valuing the underlying property.
During the first lockdown, it was an issue. Then we switched to desktop valuations.
• In terms of loan performance, one indicator that we are looking at, is payment holidays. Based on this
indicator the following can be concluded:
o Buy-to-let mortgage lending has been performing very well so far.
o Longer term residential mortgages perform slightly weaker.
o We assumed the most of risks in development lending. Projects became delayed. Because the
residential property market has been so strong, we have received much more repayments
than we expected; developers are selling very-very quickly. There is much less lending activity
on the development market, though; borrowers have been more cautious.
• Stuart Law, CEO and co-founder @ Assetz Capital: We used forbearance, extended the loan period
etc. In the end, it does suppress defaults that would have happened, but so far, we haven’t seen any
substantial increase in default. There is quite a lot of refinancing going on in our loan book. We are
not seeing any big elephants in the room that can be identified. Commercial mortgages have
challenges, which is obvious. There are some challenges ahead, but we do not see any Armageddon
coming. Supporting viable businesses has definitely done the job.
1.2 COVID impacts as seen by institutional investors
Alison Harwood, Head of London Branch @ Varengold Bank:
• There have been lots of opportunities to participate in coronavirus aid schemes that governments
have implemented to support SMEs. There has been a shift in demand as well.
• It has been difficult time for the fintech industry to raise capital.
• Certainly, loans are performing better if government is paying interest.4
This is for the new loans in
the first year… Government schemes are propping up companies that would otherwise not be viable.
In that sense, it’s kicking the can down the road.
4
Reference is made to the CBILS and BBLS.

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Pedro Pinto Coelho, Executive Chairman @ Banco BNI Europa:
• We are looking at our existing portfolio as non-performing loans are increasing:
o We have to go back to the platforms and make them review the quality of the credit,
sometimes restrict it.
o Platforms have to make sure that their requirements to borrowers fit to the public schemes.
o What will happen next, after the government programs end? We are looking more into loan
insurance.
o When the situation has stabilised, platforms should re-calibrate their models.
• Some sectors will take long time to recover. In the recovery period, we’d look to the sectors which
have not been affected so much:
o everything that has to do with digital, incl. companies that provide their products on the
digital platform, companies that help the others become digital;
o some export segments.
• We hope that government withdraws as soon as possible. Otherwise you compete with government
money.
Pankaj Soni, Executive Director, European Special Situations Group @ Goldman Sachs:
• As compared to our expectations in March, I have actually been positively surprised.
• Many platforms are not really qualifying for government schemes.
• Consumer lending part of the market is holding up a lot better than the SME part.
1.3 COVID impacts as seen by ecosystem providers and B2B5
infrastructure providers
David Beardmore, Ecosystem Development Director @ Open Banking:
• Many developments took longer in 2020. Every partner has been affected by the COVID.
• COVID did not bring any new benefits to Open Banking, but it enabled to articulate the existing
benefits:
o For example, you need a loan. Previously you had to send paper documents to the bank – but
the banker is working from home. With Open Banking adopted, you simply grant the banker
access to your electronic data.
o Personal financial management has been really-really valuable in COVID times.
Søren Skov Mogensen, Chief Growth Officer @ Banking Circle:
Digitalisation of banking has been in progress for ten years by now. The process has accelerated on a pace
that none of us could have imagined.
Keith Grose, Head of UK @ Plaid & Antoine Nougué, Head of Commercial @ Checkout.com:
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B2B – Business-to-Business

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The time since March 2020 / the first lockdown has been an incredibly busy period because of the
increased demand for the fintech solutions. There has been a massive spike in online transactions.
Francesco Simoneschi, CEO and Co-Founder @ TrueLayer:
COVID has changed digital journeys of the consumers. We see a huge shift in consumer adoption of Open
Banking solutions.
Justin Fitzpatrick, CEO and co-founder @ DueDil:
• It has been a very difficult year for our customers. For us, it was a huge product lift.
• We have seen it from both sides, from the perspective of incumbents and from the perspective of
newcomers. Previously it was all about doing things faster. Now we are seeing a shift towards more
strategic mindset. People are seeing the value of more insights into the customer. Utility mindset is
being replaced with more strategic mindset.
• Fresh demands due to coronavirus:
o Provide people the ability to slice and dice.
o Context matters – it’s not just about a particular data point; help people to understand how
a given business and its people are connected to the other parts of economy.
• Unfortunately, fraud, especially in connection with CBILS and BBLS, is a real concern. Any time you
have things like CBLS and BBLS, you have some bad actors. Fraudsters continue to innovate as well.
• As B2B player, we have been surprised that remote working is really happening on scale.
Jaakko Vilén, Regional Vice President Sales @ nCino EMEA:
• There were success stories of financial companies handling the COVID situation very well. These are
the success factors:
o Cloud technology, and
o Customers being able to apply for loans fully digitally.
• In nCino, when launching these new loan schemes (BBLS, CBLS), we were able to launce those in less
than a week.
• Everyone has to be able to work 100% remote. This is still a challenge for many incumbent banks.
2 Leadership challenges
2.1 Lessons from leaders
Shamillah Bankiya, VC & Growth Investor @ Dawn Capital:
• Major COVID challenge: How do you sell your products, using new approaches?
• Balance between growth and profitability: It’s very dependent on the sector you are in and the
customers you are serving, cost of getting the customer vs lifetime value.

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• Approach to recruitment: We have seen our portfolio companies creating moments of success during
the short time when the world was open. We have seen them getting very good talent.
• Remote working: There is a lot of organic chemistry that is needed, creating emotional connections
etc. – especially when people are young and the company is fast growing. What will change, is how
we consider travel: we can see now how much we can get done without travelling.
• Mental health of founders: March - April was a crazy time, potentially zero revenue for a month or
several months. We worked a lot with the CEOs of the companies in our portfolio to support them;
we caught up every two weeks. It’s important for the venture capitalists to understand that CEOs are
people too.
• The most growth, going forward: For the first months, we see growth in everything that is in the cloud,
that is most affected by the remote working. In longer horizon, think of the things that will come back
post-COVID.
Patrick Studener, Head of EMEA @ Bird:
• Major COVID challenge: How do we keep our employees safe in the service centres and shops?
• Balance between growth and profitability: The balance has changed during the last two years; it has
become important to show to the investors how we make the business profitable.
• Approach to recruitment: Our solution is internal trainings: What to look for in a candidate? How to
do interviews? During the long review process, both sides get know each other.
• Remote working: By us, everyone is very keen to come back to the office. What is permanent, is the
knowledge that it is possible to work remotely. Yes, existing teams work fine, but it goes more difficult
over time as new employees are being onboarded fully remotely.
• Mental health of founders: People are worrying about themselves: how can they pay their mortgages
etc. Every country has its own COVID response strategy. Everyone is impacted. This all has meant a
lot of sleepless nights for me, a very stressful period. The best way to get through this is doing it
together, communicating with people.
• Opportunities: Crisis is working as catalyst. There are a lot of industries where things were moving
very slowly; now there is a realisation that it’s possible to do almost everything online. Examples like
Estonia… Education becomes more accessible: school materials are online.
• The most growth, going forward: Micromobility. Cities want this kind of alternative; cities will re-invite
scooters and other kinds of micromobility.
John Davies, Executive Chairman @ Just Cash Flow:
• Major COVID challenge: Looking after your assets, i.e. customers, staff, partners; making sure that
everybody collaborates, and collaborates with the investors as well.
• Balance between growth and profitability: The key to all is cash. You have to understand what your
cash burning is and how/when you start earning profit. The strategy of a smaller business that does
not intend to become unicorn, is very different from that of a unicorn.
• Approach to recruitment: The issue is going to be the mass amount of people being displaced in the
next quarters. They are desperate to pay their mortgages etc. The challenge is this: How do you

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actually integrate new people into the culture? You’d not want people that are always looking for
something better.
• Remote working: We have to accept that hybrid model is going to be the way forward. People working
remotely need people that support them in the office. The key is balance in flexible policies.
• Mental health of founders: CEO is the loneliest jobs you can get. Everybody is looking at you. There
have been a lot of hard decisions, having to let people go. That’s a lot of pressure. The most stressed
are people that got into the business accidentally because they lost their job. One of the big lessons
that we have learned is that collaborative approach is better. The biggest challenge is hesitancy and
uncertainty. Once fear creeps in, you become almost semi paralysed. We need to learn planning –
planning for every possible scenario. What if the vaccine doesn’t work? What if lockdowns are getting
worse? How are we actually surviving?
• Opportunities: People are moving. We are going to see new businesses and new business models.
Investing into green economy…
• The most growth, going forward: In 2021 it will be fintechs; banks don’t come to help SMEs.
From the interview with Martin Gilbert, Chairman @ Revolut:
• When you see how much money Chinese raise through the apps, you see that there is really a change
happening.
• Young people are repeating the old phrase: ‘This time is different’. Are we now creating a huge tech
bubble? Some valuations do look a bit high, but not significantly. A lot of it is driven by the liquidity
on the market. You have not many places to put your money. We see a massive shift in private credit
which is disrupting the credit market.
• There is liquidity until there is no liquidity. Liquidity can be turned off overnight. You have to think
about it.
• Revolut at the time of coronavirus:
o We had to adjust the business model, encourage customers to use their Revolut card for
everyday spending, not just for travel. Despite of slashing marketing budget, we have
seen organic growth.
o We have to work out how we get through 2021. Like most of fintechs, we are
concentrating on profitability. It is still going well in terms of revenues, but there is a very
strong focus on the cost side of the business; pressure is coming from both, from
shareholders and from regulators – and especially from the regulators.
o Regulators are very focused on companies like Revolut as the sector is becoming more
systematic.
• Advice to the CEOs and founders:
o Survival is #1. I don’t think 2021 will be tougher than 2020, but don’t hope too much!
Assume 2021 to be a continuation of 2020. Logistically spreading the vaccine is difficult;
recovery is more in 2022.
o Be cautious, particularly now. Look at the downside as well, think what can go wrong.
CEOs are guilty of looking only at the upside. Really understand your business.
o Put your customers first.

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o When hiring senior people, it’s important to hire people that have come through this
before.
o When dealing with regulators, do what they tell you. I haven’t seen any good strategy for
fighting with the regulators.
• What does Brexit mean for London and businesses like Revolut?
o London is lead until it doesn’t get complacent.
o Bigger financial institutions were better prepared for Brexit than fintechs as they were
forced by the regulators.
• Revolut has raised a lot of cash in 2019, but acquisitions are not our top priority. The focus is on
continuing growing the business and looking at the cost side while doing so. We’d certainly look at
the opportunities when they come, but nothing has come to the Board so far.
• Can neobanks outperform traditional banks moving into fintech in long run? I think that they can
compete with banks, especially as banks find SME space more difficult. Challenge for the neobanks is
getting the balance sheet right, getting the money lent back. There are areas where you want to
compete and areas where you don’t want.
• In the area of asset management:
o There is a continuing shift towards passive and towards cheaper. More efficiency.
o Great asset managers don’t react to the external pressure.
o If you are doing good job, the money is coming in (references from your existing
customers).
2.2 Managing mental health for remote teams
David Brear, Group CEO @ 11:FS:
• Remote work is almost too productive right now. We should ensure that people who love the job, are
not working too much (back problems etc.). It has to be sustainable. Everybody always has to have
breaks.
• What we are missing right now are those serendipitous moments, employee-to-employee moments.
We are using a tool called Donut, mindfulness tools, yoga tools. Making people a bit disconnected
from work makes them better at work. As employers, we have to be more flexible: when do people
want to be engaged with work?
• Methods and structures that work effectively face-to-face are not the same as those that work
remotely. Communication is fundamentally different. Tips to the leaders:
o Don’t try to hold on, keep changing!
o Make sure that you are listening the organisation and understanding what is going on.
Louis Jauvin, Head of People @ Checkout.com:
• Communicating with people in the time of loneliness is key. We use an employee engagement tool
called Peakon.

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• The situation is very different in London, in Hong Kong and in Paris. Some companies have said that
they’d allow people to stay remote forever. Your first question should be: how to get them back to
the office?
• There are inclusion hours, productivity hours, hours when people are away.
• Tips for the leaders: Culture is more than ever the leader thing. Being able to lead with compassion,
with integrity, with more empathy. Emotional intelligence is a key. Invest into the softer skill side.
Preserve psychological safety; ensure anonymised communication whenever necessary to make it
safe for those who need help the most but are the least likely to speak out.
Edward Lane, VP Sales @ nCino:
• People are very busy right now. We have to ask ourselves: how productive are we? Being productive
is not the same as being effective; it’s not about how many hours we put in.
• The tsunami of video calls is an issue which makes us busy but not necessarily effective. Ask yourself:
"'Should we have that zoom meeting?" Enable people say 'No' to the meetings.
• We are trying to speak more with our people because you don’t see what you don’t feel.
• People need to be secure on their jobs; we have tried to tackle that one issue upfront.
• We have some informal activities picking up such as someone doing a cooking show. These initiatives
come from people in the team.
• Tip for the leaders: Make no assumptions – assumptions are very dangerous. Ask open questions and
listen to the people. Listening supports them.
2.3 Recruitment
Amy Gilman, Head of People @ Freetrade:
• Biggest challenge in finding a talent in 2020: We have found it a little bit hard to pitch the idea of a
start-up. People see it as riskier compared to the established companies. How to sell the business to
people that are extra suspicious? We are a relatively young company. By nature, you are keen for
people who have done it before. That’s tough: people who have done it before often want to stay
with their present employer. Our solution is overcommunication: regular weekly content campaigns
through LinkedIn and other media channels.
• Fintech will continue increasing headcount – a resounding ‘yes’ to that! This is an industry that is
absolutely continuing to grow.
• You have to work out how to communicate your brand with passion while enormous amount of
volatility continues.
• The coronavirus has reset the expectations of current employees. They are expecting more flexibility.
It is a shift that was happening anyway.
Sophie Theen, Chief People Officer @ Oakam Ltd:
• Biggest challenge in finding a talent in 2020: We expected a lot of challenges; microfinance has never
been such a sexy fintech.

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• Has coronavirus changed hiring process fundamentally and permanently? Big ‘yes’ from me.
Vaso Parisinou, Head of People @ TrueLayer:
• Biggest challenge in finding a talent in 2020: For us, the hurdles have been mostly operational – that
people have right computers etc. We could capitalize on the facts that we are new and that we are
doing something for financial inclusion.
• We are cautiously optimistic about the future of fintech. We recognise that every funding round may
be the last one.
• Would you ever consider recruiting an actual rockstar? Broader question is this: how to bring in people
outside fintech? Yeah, rockstars have the ability to inspire, and capture people’s hearts and minds.
For sure, we are not doing enough to take on people without banking experience…
• We are going to loop through the hybrid model: doing really fun stuff together while also hiring people
remotely.
2.4 Pitching your unicorn
Tim Levene, CEO @ Augmentum:
• Is it possible to raise capital from investors you have never met? At the beginning of the COVID crisis,
we spent all time looking into our existing portfolio. Our mindset initially was not progressive, but it
has changed since. We have to be far more adaptable than we thought we would need to be. We
continue adapting. In the next 3-6 months, we’d be investing into the companies that we haven’t met.
• Pipeline of deals for 2021: I think, you are going to see a very strong next year, a lot of capital coming
in. It (COVID) has finally opened the eyes of big financial institutions. A lot of them failed pretty
significantly. Now big banks and insurers are realising the need for change. That’s where we put a lot
of energy.
• Has COVID changed what you are looking for? We are not looking for anything fundamentally
different. Priorities have shifted, given the fundamental shift in market behaviour. A lot more capital
is going to infrastructure providers, the likes of compliance, KYC, RegTech6
.
• Suggestions for the portfolio companies: Don’t go bust! We fund in A, B and C rounds. There are
different challenges. Many founders are in recession for the first time. They are optimistic. Present
time is a great test of their capabilities to navigate and adopt. One lesson is looking at the impact of
the marketing spend, which was cut substantially; many were surprised how little it affected. It really
opened the eyes: where can we be more efficient in our spending?
• Growth vs profitability: We always want to back a vision and a business that scales. At the same time,
we want to see the path to profitability down the line. Key question is this: how that business is going
to be valued at the point of exit?
6
RegTech refers to Regulatory Technology, i.e. using information technology to enhance regulatory processes.

14
• Gaining traction with VCs at the time when no physical networking takes place: I don’t think sharing
your story is a problem. In early seed phase it is more difficult, otherwise you can e-mail me. We are
reading everything.
Vinoth Jayakumar, Partner @ Draper Esprit:
• Is it possible to raise capital from investors you have never met? We are more in series B, investing
into the companies that we have met before. There is a lot more work that we have to do offline. We
haven’t done any deals this year, but we have come close.
• Pipeline of deals for 2021: There has been a significant amount of investor interest coming into
fintech. In Q3, we have been extremely busy. In 2021, there will be a big interest in B2B businesses.
• Has COVID changed what you are looking for? Key question is this: how are entrepreneurs managing
the situation? Do they know what dials are important in their business?
• Suggestions for the portfolio companies: There is a lot more international thinking going on as it’s all
happening in Zoom. Can you do it remotely? If you haven’t had a good 2020, the next funding round
will be a challenge.
• Growth vs profitability: There is context and there is nuance. We are backing entrepreneur and the
vision.
• Gaining traction with VCs at the time when no physical networking takes place: We have multiple
points of engagement. We are building a community for founders. In later funding rounds, you can
approach us via your previous investors. The most important thing is building a good product – and
we will find you.
3 Open Banking
Nearly three years after the arrival of Open Banking7
, the technology sits at a turning point with adoption
accelerating at pace.
David Beardmore, Ecosystem Development Director @ Open Banking Implementation Entity:
• My key objective is to ensure that more consumers and SMEs use the products and services relying
on Open Banking – for their benefit.
• Consumer adoption is still gloom and doom, but we are seeing the number of end users growing
month-on-month. The phrase ‘Open Banking’ only makes people afraid because of misunderstanding.
The ‘Open’ part of it is scary. We have a lot to do to educate consumers.
7
Open Banking is a banking practice that provides third-party financial service providers open access to consumer
banking, transaction, and other financial data from banks and non-bank financial institutions through the use of
application programming interfaces (APIs).
Source: Investopedia, https://www.investopedia.com/terms/o/open-banking.asp [Accessed: 15 Nov. 2020]

15
• Open Banking Payments8
have not really taken off. I believe that Open Banking Payments will be the
hockey stick. An Open Banking Payment can be sent together with all relevant data.
• If you want to get mass adoption of Open Banking, you really need the government, a huge transport
network and a major retailer (either online or physical) on board.
• As for timelines, I predict, in next year (2021) we will see a substantial growth in Open Banking
adoption.
• The important part in data sharing is the consumer consent.
• Heart of the Open Banking is the trust framework which must be robust, solid and secure. If there is
a problem, there should be a dispute mechanism. There are three parties to be secured:
1) identity of the customer;
2) the bank from where the data is going to be pulled;
3) the third-party provider.
• With Open Banking, we are building a solid background that can be expanded to the other sectors.
• There is still room for development. For example, Open Banking Payment to my utility company isn’t
possible right now as the amount is different every time.
Francesco Simoneschi, CEO and Co-Founder @ TrueLayer on promoting consumer trust and accelerating
Open Banking adoption:
The data shows clearly that there is already a lot of consumer trust. The question is this: how can we
improve the customer experience? Consumers get it. The problem is if we can we get enough user
experience / streamlining.
Carlos López-Moctezuma, Global Head of New Business Models, Open Banking and Innovation @ BBVA
on monetising Open Banking from the perspective of banks:
Many banks have started to build these platforms due to the mandatory part of it, without any business
model behind. You cannot monetise regulatory APIs. What next? We are looking at partnerships. E.g.:
BBVA + Uber: we are able to monetise Open Banking by building into the Uber’s ecosystem. We are
working with other commerce platforms and third-party system where we see profitability.
Patrik de Nonnville, Chief Operating Officer @ October: Open Banking is great. At the same time, a bank
may have different APIs for each of the regions where it is in’’ü [which makes embracing Open Banking
difficult].
8
Open Banking Payments or Open Payments: Payment Information Service Providers (PISPs) access consumer and
business bank accounts directly via the banks’ APIs. This lets them move money directly between accounts, without
any other intermediary.

16
3.1 Open Banking Lending Revolution
Alternative lending has been quietly benefitting from a boom in customer data unlocked by Open Banking.
But how does this data fit into the lending process? What does it mean to incumbent data providers? And
should borrowers be concerned about sharing more data?
Rod Lockhart, CEO @ LendInvest: We have been using Open Banking for some time – and it has been very
useful, fantastic. We just wish, it had greater adoption and that more borrowers would use it. It is making
a better lending experience.
Daniel Hegarty, CEO and Founder @ Habito:
• Sadly, we are not using Open Banking as much as we’d like. For one thing, we are in the mortgage
business – and Open Banking is not enough. E.g.: We cannot see your mortgage in the Open Banking
data. Open Finance could be a boom.
• Third party fraud in submission of bank statements is a serious concern.
• Adoption of Open Banking is not only about trust, it is also about user experience. Even if Open
Banking is great in mobile, it’s a mess on desktop. Consumers have to see the benefits of Open Banking
before they actually get involved.
Rahul Duseja, Credit Director @ Cashplus:
• There is more than one interaction where Open Banking helps:
o Understanding the affordability of credit to the customer.
o Understanding the customer’s cash flow, which is the starting point for credit decisions.
o Offering more affordable payment plan for the delinquent customers.
• Unsecured lenders in UK have never requested bank statements. Open Banking gives more data to
the unsecured lenders, a 360-degree assessment on how a borrower is using his/her money, more
information about the borrower’s general behaviour and why he/she is doing certain things (e.g.:
paying off mortgage loan in full while on payment holiday). More real-time access to the data is an
uplift.
• Benefits of Open Banking outweigh the risks. It is necessary that the customers understand the
benefits. We have to clearly lay out what we are going to do with the customer’s data.
Rob Haslingden, Head of Propositions and Product Marketing @ Experian:
• Experian is bringing in Open Banking:
o Enabling Open Banking data to the lenders.
o Creating a single view of the customer & for the customer.
o Open Banking data is combined with the credit data, also for the purposes of collection and
forbearance.
o A couple of stats: 62% of lenders have tightened their credit policies and want to understand
their customers better.

17
• There are differences between the credit bureau data and the transactional data. Bureau data is
extensively about the credit behaviour. Open Banking data is the data about customer’s income and
expenditures. It’s about the interoperability of both sources of data.
• We have collected summarised bank statements from the banks previously; now there are more real-
time data.
• The problem is that borrowers are hesitant to share their data with brokers. Also, brokers and lenders
need to get some confidence about the Open Banking statements.
• Experian Boost9
: We only use this data (payments to savings accounts, Council Tax payments, and
digital entertainment payments to the likes of Netflix and Spotify) in a positive way, to boost the
customer’s credit score. We are first showing to the customer how this data could help his/her credit
score – and then we ask the customer’s consent to access his/her data.
Christoph Rieche, CEO and co-founder@ iwoca: There has been a persistent drive towards real-time and
accurate date. It’s important to understand where the Open Banking fits in.
• There have been some performance issues etc. I expect things become better over time.
• There are many customers who are not comfortable with Open Banking. They can still upload bank
statements to us.
• I expect the effect to the loans coming from the Open Banking to be positive. It’s longer transaction
history and it’s more convenient for the customers alike.
3.2 Open Banking Payments
• Our vision: Within the 10 years, Open Payments will be the gold standard for moving money online.
Open Payments are going to replace all closed forms of payments such as credit cards. The forces
driving this are following:
o Consumers are digital first.
o The proliferation of platforms / whole new operational model: every single business is
becoming online.
o Card payments are broken.
• Cards provide very poor experience for the consumer and for the merchant in 2020:
o Very poor user experience. (Imagine card payments in your smartphone which start from
typing in the card number and other details. Imagine that the card is blocked for some reason
and you need to use another card…)
o Relatively high failure rate of card transactions: 5-10%.
o Relatively high level of fraud.
o High costs / transaction fees. (Merchant has to pay a 0.3-3% fee just for the pleasure of the
customer to type in all the card details.)
9
Refer to: https://www.experian.co.uk/consumer/experian-boost.html [Accessed: 16 Nov. 2020]

18
o Liquidity gap.
• Some steps have already been taken to smoothen the process of card payments. This goes at the
expense of the merchant – and also consumer. Still, there is a friction. We cannot continue building
on top of legacy.
• Solution is Open Payments; Open Payments are 10x cheaper, instant, frictionless, safe and secure:
o Biometric authentication
o Instant settlement
o Digitally native
o Safer for consumer
o >80% savings on card fees
• Open Payments are in very early stage, but the momentum is picking up really-really fast.
4 SME lending & opportunity
Small business banking, a sector long under-served by the high street banks, is today one of the most
innovative and exciting areas of finance. Whether through government schemes like CBILS and the BBLS
or through the increasing use of data, business lending is being transformed.
Søren Skov Mogensen, Chief Growth Officer @ Banking Circle:
• The case:
o There are 22 million SMEs in the EU. They provide 2/3 of the EU employment and more than
half of the business turnover. It’s a major segment.
o Banks say that SMEs are too expensive to serve. They fall between the cracks, while neither
retail nor corporate offering is suitable to them. There is no one-size-fits-all solution for SMEs.
o 40% of the SME customers use settlement accounts in other countries. 1/3 of them use
fintech solutions.
• SME wish list:
o Lower loan arrangement fees
o Reduced interest rates (SMEs claim that as compared to corporates, credit prices are too high
for them.)
o More flexible repayment terms
o Shorter response times to loan applications
• How to better serve SMEs?
o Service: personalised service & human touch
o Pricing: more flexible, more transparent
o Credit lines and risk management: better risk scores, API-based credit lines and risk
management
o Building trust
o Professional advice: creative ways to set up profitable service (e.g.: paid advice)

19
• There are two models evolving:
o Challenger banks with the SME propositions
o Traditional banks stepping up through specialisation and partnerships
• Fintechs that are already working with this:
o Banking Circle delivers better financial infrastructure to the banks that serve SMEs. Solutions
are tailored to the bank needs.
o TransferWise
o Starling
o Tide
o … [The list goes on.]
John Davies, Executive Chairman @ Just Cash Flow:
Our experience is that in SME lending it is the human touch that makes things working.
Helen Bierton, Head of Banking @ Starling Bank:
There are many services that the SMEs need beyond banking (legal, marketing etc.). We are investing into
marketplace proposition, integrating services for the SMEs. Partnerships have always been part of our
business model.
Oliver Prill, CEO @ Tide:
• There is no single right model to serve SME customers. We never believed that it’s going to be ‘the-
winner-takes-it-all’ market. We should encourage different models / having a choice; we should target
a very-very diverse market.
• We have third-party branding of products – we are not focusing on manufacturing the products. If
there is anybody who wants to distribute their product, we are happy to talk. We take the community
aspect very seriously. Members first approach.
Sean Hunter, Chief Information Officer @ OakNorth:
• Top innovations in the last 12 months that all have helped us as a bank and as a fintech solution
provider for SMEs:
o Vulnerability score to assess the vulnerability of borrowers.
o Instant credit analysis.
o Sector insights.
o Portfolio diagnostics: we run stress scenarios across the portfolio on a very granular level.
• Further developments in lending automation:
o Speed in decision-making, whether fully automated or providing the decision maker as much
information as possible.
o Also, document generation and other poring parts of the commercial lending.
• About debt collection: We haven’t had any credit losses – thus, we haven’t had to do any debt
collections. Instead, we have early warning signals. We provide borrowers good options to prevent

20
the losses. Be early. Monitoring based on the data is becoming more and more important. We
sometimes use alternative sources of data.
Lisa Jacobs, Europe Managing Director @ Funding Circle:
• We are working to make the process easier, seamless, faster; we want to support as many businesses
as possible. Borrower demand has changed, it has come up. Mass digitalisation is very true in lending.
• How the government is encouraging competition in small business lending is having a huge impact
across the market.
• Open Banking is important, a huge step in the right decision; it allows more in-depth into the data. All
needs testing, however.
Jonathan Annis, Area VP Sales @ nCino:
• Banking industry is being digitally transformed. Scalability and speed to accelerate the process is
absolutely the key.
• Banks traditionally cannot analyse huge amounts of loan applications very fast. We enable that
capacity to them.
• From the data point of view, there is a choice here: affordability scores, commercial credit
information, credit bureau information… Looking into the past performance is not – particularly in
this environment – representative for future performance. Credit models need updating.
5 Funding side of marketplace lending
The future of funding for marketplace lending has never been more in flux, with retail appearing to give
way to institutional funding while banks look to 'own the originator' by combining their cheap deposits
with lending platforms.
Audience was polled about the future of funding marketplace lenders. As shown in the figure below,
institutional investors won overwhelmingly, followed by retail investors and the banks.

21
Figure 1 – Poll results: what is the future of funding marketplace lenders?
The perspective of ‘big money’
Alison Harwood, Head of London Branch @ Varengold Bank:
• We are investing across Europe and across products: SME lending, consumer financing, asset-backed
financing. The only thing that we don’t like is payday lending.
• We have not changed our terms for the existing clients. When it comes to new originations, we have
adjusted our lending criteria accordingly to the present situation. There is more focus on government
backed and insurance backed portfolios.
Pedro Pinto Coelho, Executive Chairman @ Banco BNI Europa:
• We invest across different product segments, across Europe, UK and US as well.
• I don’t think there is a mispricing by industry sector; it’s more binary: in some sectors you just don’t
lend. We are not ruling out any particular sectors.
• What about neobanks – Starling in particular – partnering with alternative lenders, Metrobank buying
RateSetter etc.? Are digital banks coming to the space of alternative lenders? Interest of digital banks
is increasing, yet they are coming late to the party, particularly Starling; they are realising that they
cannot live out of commissions – they need a loan book unless they have a huge scale. Metrobank
Institutional
65%
Retail
19%
Banks
16%
What is the future of funding marketplace lenders?

22
thinks that RateSetter is better off when having permanent access to capital; Metrobank gets new
customers.10
Pankaj Soni, Executive Director, European Special Situations Group @ Goldman Sachs:
• We are agnostic. We avoid non-prime lending and such.
• Europe catching UK in terms of loan origination growth on alternative lending platforms means that
Brexit is real.
The perspective of marketplace lenders
Diversification is increasingly the name of the game.
Natasha Wear, P2P CEO @ Zopa11
:
• Zopa has been pursuing banking license for a number of years before. We are able to provide wider
range of products to our customers. In funding terms, we can diversify more to build resilience. Retail
money is stickier as compared to institutional funding; you cannot underestimate that. As a bank, it is
easy to raise deposits if you slightly increase interest rates.
• ‘Alternative lenders + digital banks’ is an inevitable trend – actually very positive for us. We are looking
for the stability of funding. In longer term, this is a cheaper capital as compared to the hedge funds.
• Returns this year have actually come better than last year. This is because of the payment plans and
restrictions that we put in place, from preventing defaults happening.
• The level of regulatory scrutiny to P2P firms has really picked up. In some areas it has been necessary.
We support raising the quality in the sector.
Stuart Law, CEO and co-founder @ Assetz Capital:
• Retail is a diversified source of funding. We have done £1 bn of funding purely from retail sources,
ended up in 50-50 balance between retail and institutional money. We expect retail to come back
strongly over the cycle as interest rates are coming down further. We are probably going to open a
couple of additional channels for retail. When talking about banks, they are looking to deploy a billion
quickly and profitably. The key is having suitable range of funding sources available.
• ‘Alternative lenders + digital banks’… Banks are struggling to originate themselves. We can see direct
involvement from banks. We can also see multiple funding partners working together, e.g. in
securitisation deals. Credit funds have been pretty consistent; they are getting leverage from banks.
• Key to funding is very-very good understanding of capital markets combined with long and credible
origination history. The scale is critical; banks are out there with big lending balances.
• More regulation would be wrong move. The opportunity sits in properly applying the current
regulation.
10
Compare this view to the funding cost for the alternative lenders: funding from digital banks is generally cheaper
than funding from hedge funds and similar institutional investors.
11
In 2020, Zopa started a new chapter by officially launching Zopa Bank alongside the P2P business. Source:
https://www.zopa.com/about [Accessed: 17 Nov. 2020]

23
Patrik de Nonnville, Chief Operating Officer @ October:
• We are proud that the % funded by the crowd has been significant and stable. They are strongest
commitment. For retail investors, we have to commit to the transparency. For example, when we
wanted to offer payment holiday to our customers due to corona crisis, investors had to vote for this.
• Lending our own money on the platform is super powerful in long term. ‘Skin in the game’ is crucial
for seeing platforms as matured ones.
Daniel Drummer, CEO and Managing Director @ auxmoney:
• Connecting retail to retail is part of our brand. At the same time, we need institutional funding for our
expansion plans. Both are important to us.
• We will also invest our own money in the parts of our loans – the skin in the game.
6 The ecosystem: fintech hubs in Europe
Three fintech hubs in Continental Europe were explored: Berlin, Amsterdam and Tallinn. The table below
provides a summary. The views are those of the entrepreneurs and people working in the companies in
each of the respective locations:
• Berlin: Jessica Holzbach, Chief Customer Officer @ Penta; Georg Hauer, General Manager@ N26;
Dr. Florian Resatsch, Chief Build Officer @ finleap;
• Amsterdam: Olivier Guillaumond, Global Head of ING Innovation Labs & Fintech @ ING; Nick
Bortot, CEO and founder @ BUX; Ali Niknam, CEO and founder @ bunq;
• Tallinn: Pärtel Tomberg, CEO @ Bondora; Lars Trunin, Product Manager @ TransferWise.

24
Table 1 – Exploring fintech hubs in Continental Europe
Berlin Amsterdam Tallinn
What makes the city
great for fintech?
- Start-up friendly environment,
incl. help on regulatory side
- Lots of VCs
- Big pool of technical talent
- Germany’s best networking
opportunities for young start-
ups (The nature of fintech in
Frankfurt is different. / The focus
in Frankfurt is on serving
incumbent banks.)
The city kind of lives and breathes
fintech:
- A long history around trading
- A lot of tech savvy people
- Excellent location geographically
- The city is attracting success, the
leading (fin)tech companies
- Banking expertise from multiple
large banks; innovation labs by the
leading banks (notably: ING)
- There are a few key areas where
Amsterdam is particularly
successful when it comes to
producing unicorns: trading and
payments; in these areas,
Amsterdam has a lot of special
knowledge
- Start-up mentality: At the
beginning of 90s, Estonia as a
country was re-started as a start-up
- A history of solving problems in a
creative way as a result of the tragic
past
- Amazing pool of people in a small
community – previous successful
start-ups on the scene / founders
and ex-employees sharing their
experiences & investing into new
start-ups
- It’s very easy to set up companies:
one can start accessing European
market with very lean set-up
- Bringing in international talent
from anywhere in the world is easy
Special topics of
interest
The WireCard scandal12:
- Tied to a specific company /
not to be linked to the entire
industry (This is different from
the 2007-2009 investment
banking crisis.)
Amsterdam as one of the greenest
cities:
- Younger people are looking for
investing into sustainable
companies that make sense.
‘Green and sustainable’ is in the
genes of the people in Amsterdam.
E-residency: by becoming an e-
resident, one is able to use the
infrastructure that e-Estonia has
Rapid changes within the last ten
years:
- Tallinn has become a vastly better
living environment & much more
multinational
- 10 years ago, there was only Skype;
now there are a number of unicorns
- In 2009, raising money to an
Estonian entity was virtually
impossible; now a number of start-
ups are doing so. VCs are coming to
the country and knocking the doors.
Major roadblocks
(except COVID and
company-specific
scandals)
- Missing sandbox environment
to launch MVPs13
- The market for digital talents is
extremely competitive; getting
the visa for an international
talent still takes 10 weeks
- Renting office space is rather
expensive
- Raising series A in Amsterdam is
fine, but it gets more complicated
in subsequent rounds
- Talent pool is limited: one cannot
hire hundreds of engineers
- Attracting international talent to
Tallinn is challenging: people often
don’t know about Tallinn
- Some worrisome developments in
legislation (not yet ratified / still
possible to prevent), e.g.: talents
may come but their families can not
Finally, audience was asked to vote: “Post-Covid, which city will become Europe’s next fintech capital?”
Options included: London, Amsterdam, Paris, Berlin, Tallinn. The votes were distributed as follows:
12
See e.g.: “’‘The Enron of Germany’: Wirecard scandal casts a shadow on corporate governance”,
https://www.cnbc.com/2020/06/29/enron-of-germany-wirecard-scandal-casts-a-shadow-on-governance.html
[Accessed: 14 Nov. 2020]
13
A minimum viable product (MVP) is a version of a product with just enough features to be usable by early
customers who can then provide feedback for future product development. The concept can be used to validate a
market need for a product and for incremental developments of an existing product.

25
Figure 2 – Voting results for the post-COVID fintech capital
7 Future prospects
Atypical environment is expected to continue. Innovating the financial services industry will continue.
Nick Ogden, Founder @ RTGS Global:
• Most positive developments? 8 months ago, it would have been an easier question to answer. The
race of digital progress has accelerated so much… There is an expectation to delivery, good customer
service, transparency. The technology may arrive way before 2030.
• In 2014, not many people did know about cloud computing. Now many financial institutions are trying
to embrace cloud computing as fast as they can. The question is: what are the next steps after this?
• Big players in the financial services industry in 2030? There is a big change going on in the industry.
Challenger banks are having the efficiencies; they haven’t got the legacy; they should all be cloud-
compute, highly agile, able to absorb new applications. The incumbent banks are working like hell to
catch up; they have the balance sheet advantage – and it’s very hard for the challengers to get to that
level. You have to be brave these days & do the unconventional things. Are the Big Boys going to be
brave enough for unconventional?
London
44%
Amsterdam
29%
Berlin
15%
Tallinn
9%
Paris
3%
Post-Covid, which city will become Europe's next fintech capital?

26
• How are things going to play out in this unusual recession?
o The economic output: people’s income and ability to spend have reduced. Retaining nation’s
cash flow is going to be really though.
o A lot of money that has been lent to the SMEs, has been government money. The key question
is this: is it going to be repaid? Quite often, SMEs come to us too late.
o Vaccine has been found, but we cannot jump straight back to where we left off. We are all
getting used to increased productivity, improved efficiency. Many-many businesses are going
to find it very-very hard going back; it would mean going back to the inefficiencies.
o It’s going to take 3-6 months next year to get back on track; we are going to live with the same
level of challenge and uncertainty for the next 9 months.
• Biggest bank in the world in 2030: HBC, Monzo or Amazon? Still HSBC, because of the balance sheet
advantage.
• Technology topics in the AltFi conference in 2030? AI, robotics….
• Is bitcoin still a thing in 2030? Rather central bank crypto currencies…
• What Fintech company are you most jealous? Probably something in the identity space, automation
of KYC stuff.
Antoine Nougué, Head of Commercial @ Checkout.com:
o It’s all about convenience. What is happening, is a shift in habits.
o We saw subscription economy accelerating already before the pandemic. It’s more
convenient.
o Embedded finance14
provides better consumer experience.
Keith Grose, Head of UK @ Plaid:
o Subscription economy is going to flourish for a while, until it hits a ceiling. It’s more
convenient. Currently we are at the early wave of this.
o Budgeting tools are increasingly including subscription services into the calculation;
subscription fees are no longer hidden.
o We see embedded finance happening.
7.1 Coming out of COVID-19
There will be some adjustment back in the balance of on-line vs off-line, but the setpoint towards online is
going to be higher.
14
Embedded finance is best understood as integrating a financial service or technology with a traditionally non-
financial service, product, or technology. See e.g.:
https://www.finextra.com/blogposting/19418/embedded-finance-what-it-is-and-what-it-means-for-the-fintech-
industry [Accessed: 15 Nov. 2020]

27
The audience was asked if it is bullish or bearish about the fintech prospects post-COVID. The answer was
a resounding ‘Yes’, that is ‘bullish’:
Figure 3 – Poll about the fintech prospects post-COVID
As seen by the B2B infrastructure providers:
• Jonathan Annis, Area VP Sales @ nCino: After the health care crisis, we are going to have the economic
crisis.
• Jaakko Vilén, Regional Vice President Sales @ nCino EMEA:
o Some ECB’s worst-case scenarios see NPLs (non-performing loans) reaching 1.4 trillion in
Europe.15
More than 1/3 of the companies that are temporarily closed may never open again.
o We have been part of the problem by lending out more money than even before – helping to
do so. But we also handle those problems. It all starts with the data: having access to data and
having the ability to crunch the data in real time. Not just look in the rear mirror, but look into
the credit portfolio from different angle. Running scenarios: what if this area crushes
completely?
o Financial institutions need to keep on lending to those companies that are running healthy
businesses. Data can be used to find these businesses.
15
See e.g.: https://www.ft.com/content/cc3a9a51-4d9a-4c73-9ff0-9f623ecf4065 [Accessed: 19 Nov. 2020]
Bullish
93%
Bearish
7%
Are you bullish or bearish for fintech post-Covid?

28
• Nick Ogden, Founder @ RTGS Global:
o Many people are reconsidering their lives as well as careers. For example, why should one go
back to the four-hours commuting?
Fintech industry, as seen by the fintech lenders:
• COVID crisis is important test for the industry: is the sector broadly passing the crisis?
• Natasha Wear, P2P CEO @ Zopa: The crisis is testing our resilience. I think it’s really important to
demonstrate. Positive returns over the crisis period is the key statement.
• Stuart Law, CEO and co-founder @ Assetz Capital:
o I’m not sure how much the government will do next year in terms of government schemes.
Going forward, we are going to see substantial opportunity in the alternative finance. We
don’t see government guarantees coming into the property development lending; I think, the
industry needs us.
o It is easy to show positive returns in ‘good times’ with rapidly growing loan book. Charts of
absolute returns through the cycle are going to be attractive for the people.
• Amany Attia, CEO @ ThinCats: Coming out of the crisis, the industry will be more robust. I see a
positive long-lasting impact, going forward.
• Patrik de Nonnville, Chief Operating Officer @ October: Before COVID-19 people were going to a
bank's branch for a loan, yet now they are looking online first.
Fintech industry, as seen by the fintech investors:
• Pankaj Soni, Executive Director, European Special Situations Group @ Goldman Sachs: We think that
markets will be re-calibrated. Some fintechs have recalibrated their models already. We don’t want
to stop at the wrong point, not to be overly conservative. At the same time, we all know that a wave
of defaults from CBILS and BBLS is going to come in Q2 2021 and onwards.
7.2 APIs powering Europe’s next fintech boom
Keith Grose, Head of UK @ Plaid:
• We are starting to realise the value of B2B infrastructure.
• In last 8-9 months, we have seen acceleration of the trend towards Open APIs. Whole generation has
had to start using fintech for the first time.
• Areas of innovation in 2021-2022: The use of Open Banking in lending has had a lot of value. The next
step is handling payments. I think, payments will grow.
Benedikt Voller, VP Business Clients & Partnerships @ Raisin:
• We have started getting closer to customer, using Open APIs for consumer data.
• Quality and reliability of Open APIs is being built; more people are dedicated to it.
• There has been a boom of the trading apps this year.

29
• We see a continuing boom for the white label providers. Not everybody can build everything by
themselves. This is true for the APIs: complexity of the connecting tools is high.
Carlos López-Moctezuma, Global Head of New Business Models, Open Banking and Innovation @ BBVA:
• In BBVA, we already have a lot of consumer APIs. We haven’t launched them yet; they are being tested
with our partners.
• Areas of innovation in 2021-2022: Lending APIs will play a very important role in the future
development of Open Banking. We are moving from the mandatory world of Open Banking APIs to
the construction phase.
7.3 Open Finance
Open Finance is the new buzzword, a new/broader term following Open Banking.16
The UK's financial
regulator, the Financial Conduct Authority (FCA), has issued a ‘Call for Input’ in respect of its vision to
extend Open Banking to financial services more generally (under the label of Open Finance). Can Open
Finance succeed?
Clare Reilly, Head of Corporate Development @ PensionBee:
• Open Finance is rather underpromoted than overhyped. Nine out of ten people on the street don’t
know what that is.
• You really need to see and show what the consumer use cases are, take consumer first approach.
Incumbents should not be allowed to decide what the data standards are.
• For many consumers, we don’t have any data in digital form… For building consumer trust, we first
have to get the data in the consumers’ hand.
Nicole Sandler, Head of Digital Policy @ Barklays:
• I think, Open Finance is being promoted to the level where it should be. The data that is being shared
already, has not been made enough use.
• What I am struggling in terms of regulation, is sectoral approach when we already have a more general
approach in place.
• I don’t believe we would share enough data without being mandated to do so. The framework needs
to be effective and adaptable.
16
Unlike Open Banking, which is concerned with bank accounts and payment services only, the impact of Open
Finance would be much wider, affecting mortgage providers, consumer credit firms, investment and pension funds,
as well as general insurers and intermediaries. See e.g.: https://globalcompliancenews.com/uk-extending-open-
banking-to-open-finance/ [Accessed: 16 Nov. 2020]

30
• This kind of innovation is non-linear. It takes time to take off, but then it starts accelerating at
increasing pace. Knowledge is being compounded. From the angle of consumers, Open Finance is very
similar to Open Banking. In Europe and in UK, we still have to open up a lot more data that is available.
• Data standards: We think of the standard as technological standard. Where it fails, is the regulatory
framework, regulatory standards. Use cases on regulatory level are often not very well thought
through. Who should do that? We have to keep the discussion open. The role of the regulator is to
co-ordinate all these efforts – and then leave it to the market to solve real-life problems.
7.4 Key areas of innovation
• Christoph Rieche, CEO and co-founder@ iwoca: Offering multiple payment options, Open Banking
powered. It’s a space to watch for the next few years.
• Francesco Simoneschi, CEO and Co-Founder @ TrueLayer: In 2021 we will learn three things about
Open Payments:
a) We are going to realise that Open Payments architecture is larger and more complex
technology stack than Open Banking today. It requires a whole bunch of additional modules.
b) Identity and payments are merging together thanks to open APIs: streamlined onboarding
flows, empowering businesses with additional data.
c) We have to continue believing into mobile as the key technology for the consumer.
• Justin Fitzpatrick, CEO and co-founder @ DueDil:
o Dynamic pricing.17
o We kind of see many nish financial service providers.
7.5 Quantum computing
Ilyas Khan, CEO @ Cambridge Quantum Computing (CQC):
• Quantum computing has become a topic in mainstream media. It has been described as the next
Industrial Revolution. There is no reason for this topic to be a mystery.
17
Dynamic pricing is the flexible pricing of products based on context. It can take into account things like the day of
the week, time of the day, and location as well as detailed information about a particular customer. Airline ticket
prices and Uber surge pricing are examples.
It would be beneficial to banks and alternative lenders. To win new customers and keep existing customers, legacy
players and new entrants could price products more competitively with dynamic pricing, taking into account
variables like the lifetime value of the customer.
https://www.businessinsider.com/fintech-breifing-alt-lenders-could-offer-dynamic-pricing-online-payments-firm-
gets-13m-a-new-fintech-vc-2016-
3#:~:text=Dynamic%20pricing%20is%20the%20flexible,Uber%20surge%20pricing%20are%20examples.
[Accessed: 19 Nov. 2020]

31
• This technology breakthrough has a major impact to everything from cyber security (virtually
everything that we have now, is becoming hackable!) to medicine (new pharmaceuticals etc.) to
economic wellbeing (e.g.: meaningful language processing). Innovations in more important areas than
finance (our security, our health and our wellbeing) are going to affect finance.
• The boundaries of what can be done are changing. We now compute in the way the nature is
computing.
• We are in the early stages of commercialisation of quantum computing. There are about 100
companies building quantum computers, incl. Google, Microsoft, Huawei… Banks like J.P. Morgan and
City have secured cloud access to quantum computing. At the same time, many businesses cannot
answer the question: “How is quantum computing going to change your business plan?“
• Many fintech innovators are still building solutions that do not take into consideration the
perspective of quantum computing. (!)
• In the next 3-5 years, we will see an acceleration in adoption; the change will be exponential.
Projected timelines:
o Cybersecurity: the time for adoption is now, in the coming weeks, months, next year.
o Financial sector will adopt these solutions very-very soon. Optimisation, risk reporting, asset
management – everything that has to do with the Monte Carlo simulations. In these areas,
adoption is starting now.
o Machine learning: adoption will start in less than five years.
• The capabilities already exist. IBM’s Five Qubit Quantum Computer is already open to everybody for
free.18
• Geographical centres of quantum computing: UK is extremely well positioned; China, the US,
Germany, Canada and Japan will be the other leading states. For spotting the leader, take a look at
the budgets; building these things requires huge resources. Google… major universities.
8 Misc. topics
8.1 Business models and profitability
Profitability has gone from humdrum to being all the rage…
Giles Andrews, Founder @ Zopa:
• You become profitable, because you have right margins. Marketing costs have a tendency to only go
up as you grow. If people say that they were profitable, were they not investing into growth, they
often don’t know how to acquire customers. You have to enable yourself the luxury of choice.
18
IBM offers cloud access to the most advanced quantum computers available:
https://quantum-computing.ibm.com/ [Accessed: 15 Nov. 2020]

32
• ‘We just need to grow’ camp is really challenged right now. The second camp that is not yet profitable,
is having reasonable gross margins – is investing ahead of revenues; this camp has higher risk
compared to the camp of ‘already profitable’, yet it is reasonable.
• Unfortunately, I think European companies are more into the ‘just need to grow’ camp… They don’t
really focus on gross margins.
• Many investors are overly focused on growth, advising doing marketing campaigns – valuation deals,
obsession on valuation. Those investors are valuing wrong thing.
Matt Briers, CFO @ TransferWise:
• Cash and profitability are very difficult conversations: it is very hard to convince anyone in a vision-
driven organisation. The sooner you make the shift to profitability, the easier it is as you make
customers used to the cost of the service from the start. Introducing margins later on is more
complicated.
• We had to cut marketing costs. On the other hand, there may be some markets where one needs to
build the brand first.
• Internally, we are talking about sustainability. We pick a number and rationalise it very clearly; you
want to be very clear so that you can track on it. There are not many decisions made centrally.
• Investors being obsessed about growth becomes dangerous when bigger businesses with lots of
customers start getting hundreds of millions and fail subsequently. Investors get burned.
8.2 Financial inclusion
Is fintech always a good thing? Financial technology is helping more people manage their finances than
ever before. On the other hand, there are also risks and questions about the need for new regulations for
this fast-growing space.
Bailey Kursar, CEO and co-founder @ Toucan:
• Is fintech good or bad? It’s really about how we mitigate the risks. All the things that we do, are good,
but there are downsides.
• Where is fintech NOT doing well?
o New methods of payments really have made people spending more, have caused mental
health issues. It’s about finding ways, about wider perspective in the industry.
o It’s not only about charges, it’s also about accessibility: some people may not have access to
smartphone. How can we be sure that we are not building for specific groups? Unfortunately,
companies go for the groups that can offer profitability.
Norris Koppel, CEO and Founder @ Monese:
• Is fintech good or bad? We are a driver of good. Banks are very clunky. Fintech makes things easier;
this cannot be seen as bad thing. We help people in opening current accounts, in saving money…

33
• Where is fintech NOT doing well? Our focus always has been making things possible where they have
not been. We started from the current accounts. Things have moved on. The next frontier is pricing
transparency, of course. Two weeks ago, we launched proxy address for homeless people to have a
current account. How do you make things possible in low income brackets? Credit without relying on
credit reports, for example.
Perrine Farque, Founder @ Inspired Human:
• Is fintech good or bad? Black clouds matter. The society is more aware than ever about the inequalities
in the world. I think, fintech plays a huge role for enabling people to use their financial services.
Innovation comes from diverse voices. I think, yes, fintech can be a great thing as long as we keep
serving diverse customers.
• Where is fintech NOT doing well? We know that fintech has a diversity problem. 83% of people in
fintech are males. Female founders are struggling to raise capital. If I had to summarise why it’s good
for business to have diversity… More diverse groups are better in reducing cyber security risks.
Further, diversifying workforce brings competitive advantage: as long as the workforce doesn’t reflect
the entire population, products are missing out part of the market.
8.3 ‘Banking On It’
The Starling Bank CEO Ann Boden shared insights and unpacked the learnings from her second book,
‘Banking On It’ – her first-hand account of leaving the world of traditional banking to build a new bank.
Below is shortened version of the interview.
Q: What is the reason for publishing the story right now?
A: Starling expects to be profitable before the Christmas; it’s a great milestone for the company, right time
to publish the story. It’s not about fintech; the book tells you about the ups and downs in the
entrepreneurial life.
Q: How did the current and former employees of Starling react to the book?
A: I did not tell anybody that I was writing the book. Some people were very excited, calling me:
“Look! I’m on page x!”
Q: It’s in the book, but tell us a bit about bringing people to Starling in early days.
A: I did not have money to pay to the people. I managed to persuade those people. I painted a vision –
and made people believe that they can help by this. Lesson here is that everybody’s problem is different
and everybody’s resources are different. You have to find your own way.
Q: In the middle of the book, you write about the near-death experience of Starling – and rebuilding
from there. Can you tell us some of the lessons!

34
A: The takeaway is: stay true to what you are doing. People who truly believe into the mission will stay in
difficult times.
Q: Speaking of funding… It’s the most unusual funding story. The deal with Harald19
…
A: It gave us certainty and a large junk of money. This enabled us to build something that had not been
built before. Harald offered £48 million for 66% of the company. That was a big decision… I had an investor
who was a technologist – an algorithmic trader, very-very focused.
Q: What about your vision of creating a perfect bank? Is Starling 10x better? Is it a perfect bank?
A: It’s not a perfect bank yet, but we have built the foundation. We have the infrastructure – the
architecture that allows us to go anywhere. This is the starting position for the story to come.
Q: What lessons you want people reading the book to take with them?
A: Be resilient. Realise that there are as many downs as there are ups. There are lots of inspiration that
readers can take with them. I hope, people will find it fun.
Q: What next?
A: For me, this is the time to start a new phase, the time to spread the wings. You will see what is coming
next.
[Comment: I listened to the audiobook after the interview. As a story, I found it engaging – especially the
chapters about Starling’s near-death experience and getting on the feet yet once again. The book, among
others, provides an interesting point of comparison: how an experienced female banking professional is
setting up the next generation bank vs how a 30-years-something young man is doing it. What I especially
value, is that it is the first-hand account, Ann writing about her very own thoughts and experiences.]
8.4 Metro Bank’s acquisition of RateSetter in 202020
An interview with Daniel Frumkin, CEO @ Metro Bank
Q: Talk us through the Metro Bank acquisition of RateSetter!
19
Harald McPike; about the investment see e.g.:
https://markets.businessinsider.com/news/stocks/starling-bank-funding-harold-mcpike-tranches-2017-2017-4-
1001933051 [Accessed 15 Nov. 2020]
20
Metro Bank plc, a London-based retail and commercial bank, announced in August 2020 that it had agreed to
acquire Retail Money Market Ltd for a price of up to £12 million, with £2.5 million paid upfront and the remainder
to be paid over the next three years; the latter component is conditional on meeting certain performance criteria.
The announced purchase price marked a sharp decrease in the company's value, which was £200m during its last
round of funding in 2017. Metro Bank acquired 100% of RateSetter shares but its stake in RateSetter Australia, valued
at £13.7 million, was excluded from the transaction and remains with RateSetter shareholders. The purchase was
subject to regulatory and RateSetter shareholder approval, and completed on 14 September 2020.
Source: https://en.wikipedia.org/wiki/RateSetter [Accessed 19 Nov. 2020]

35
A: We went into the lockdown in the end of March. Bank of England lowered rates substantially. We were
staring at something that was a rather medium-term problem: low rates for longer. It became clear that
accelerating our lending was crucial. How can we make that happen? There was a buy vs build
conversation. There were a few great businesses that had their funding under threat. RateSetter was
pretty uniquely positioned in this space: great risk people, great tech people, long origination history.
Q: Give us a bit of a timeline…
A: We started talking in the middle of May. We even could not meet face-to-face. We agreed the deal
within 6-7 weeks. Metro addressed the constraints that RateSetter felt. Cultural fit was pretty quick.
Q: The deal sounds like almost inevitable. Do you expect this kind of deals in near future?
A: Meaningful economic disruptions lead to changes in landscapes. It’s just inevitable. Language like ‘this
is the end of P2P’ is not appropriate. Inevitably there will be some more consolidation.
Q: What does the acquisition mean from the back-office perspective?
A: We closed the deal in September. Metro funded the first RateSetter loan within the first 40 days. The
question was this: How do we take the talent and skills that RateSetter has, and leverage it up in Metro
Bank? Metro wasn’t really good in consumer lending. In terms of technology, RateSetter was ahead of us.
Why not to leverage it? They further had some collection expertise. It’s not a typical overlap acquisition.
We use the skillset of RateSetter to help Metro grow quicker.
Q: It has been managed separately from core Metro?
A: Legal team and the people team needed to come together. We’d continue using RateSetter’s brand.
Q: What about the future of RateSetter’s property finance and vehicle lending?
A: It’s under review. Metro has property lending itself; there is an overlap… They are not as seamless as
the unsecured personal lending.
Q: How is Metro progressing against its BCR21
targets?
A: We are on track with the public commitments. It started from BBLS. For the start, Metro Bank did not
have any infrastructure for this.
Q: How does Metro Bank see itself in comparison to branchless banks like Monzo and Starling?
A: I think there is a fundamental difference between what Monzo and Starling are building, and us. I think
we are the only challenger bank that is trying to build a full-service bank. We believe that the customer
should be able to choose the channel. If they want physical meeting, they can get it. We do invest in all of
our channels. It’s a very large % of customers who want the ability to go into the store. We stay flexible,
but we are completely committed to stores.
21
Banking Competition Remedies Limited (BCR) has been established to implement the Alternative Remedies
Package of measures agreed between the UK Government and the European Commission. See: https://bcr-
ltd.com/about-us/ [Accessed: 22 Nov. 2020]

36
Q: Is Metro looking to partner with fintechs to streamline current processes or build?
A: The short answer is ‘yes’. We love entrepreneurialism; people can do this as part of the Metro family.
We do partner with the fintechs – we are looking forward to help the ecosystem.
8.5 Fintech pitch-off: newcomers
During the lunch break of the first day, the following companies were pitched. Audience was asked to vote
for the favourite Pitch Off fintech. (See voting results below.)
Genuine Impact – Truman Du (CEO)
Genuine Impact empowers individual investors by making institutional level analysis and insights
accessible to them. We aim to help investors understand how investments will perform over the long term
and help you to avoid making investment decisions based on emotion. Using Genuine Impact you can
discover investments, monitor your portfolio, and learn new insights on the go.
Koodoo – Seb McDermott (CEO and Co-founder)
Koodoo is a digital mortgage platform on a mission to make securing home financing seamless and
transparent through data and technology. We power mortgage journeys and decisioning for major online
communities and lenders, helping them serve their customers better.
Wollit – Liad Shababo (Founder & CEO)
Wollit is a technology company that builds financial products for people living a new kind of work life. Shift
workers, freelancers and gig workers use our software to stabilise their income, build their credit and keep
on top of their money - so they can enjoy a smoother life.
Lumio – Charlie Richardson (CEO)
Lumio empowers customers to connect their accounts in one place, de-clutter the marketplace and begin
growing their money in a meaningful manner.
indó Iceland – Haukur Skúlason (CEO)
indó is the first new Icelandic bank in decades. We want to make a difference by offering you 100% safe
deposits. We will offer you a current account and a debit card, better rates and lower fees, total
transparency and an easy to use app.
Voting results came as shown in the figure below. The competition was intense.

37
Figure 4 – Voting results for the favourite Pitch Off fintech
indó Iceland
24%
Wollit
24%
Genuine Impact
20%
Lumio
16%
KooDoo
16%
What's your favourite Pitch Off fintech?

The AltFi Festival of Finance 2020 - Notes

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The AltFi Festival of Finance 2020 - Notes