UKTI - Thai Business Delegation

Transcription

1 UKTI - Thai Business Delegation June 3 rd, 2016 Level39, Canary Wharf

2 Agenda Welcome, introductions and agenda Julian Skan Overview of TheCityUK Cameron Jones & Bryan Cress Fintech and the emerging landscape Julian Skan An introduction to alternative finance Sean Rudd Fintech and the payments landscape Jeremy Light Innovation in action: PayKey Dario Mutabzija Perspectives on Fintech in Thailand All Delegates

3 Overview of TheCityUK Cameron Jones & Bryan Cress

4 Fintech and the emerging landscape Julian Skan

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9 An introduction to alternative finance Sean Rudd

10 Alternative Finance Definition Alternative Finance Definitions Example Platforms In scope Out of Scope (2) Peer-to-peer Lending Invoice Finance Equity crowdfunding Rewards crowdfunding Donations crowdfunding Crypto Currencies P2P Lending is debt-based transactions between individuals or businesses (mostly SMEs) with many investors contributing with any one loan In invoice finance transactions, businesses sell their invoices to a pool of individuals or institutional investors Equity crowdfunding is when investors receive equity in the business in exchange for their investment Individuals donate towards a specific project with the expectation of receiving a tangible but non financial reward in exchange for their contribution Individuals donate small amounts to meet the larger funding aim of a specific charitable project while receiving no financial or material return in exchange A digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds (e.g. Bitcoin) (1) Source: The Rise of Future Finance: The UK Alternative Finance Benchmarking Report, Nesta [2013]; Oxford Dictionary (2) Other forms of modern alterative finance include Community Shares, Pension-Led Funding, Debt-based securities 10

11 Market Size UK Alternative Finance Originations by Category, F (5) GBP Billion % +123% (3) 2016 Q2 Q4 F Equity Crowdfunding Invoice Trading P2P Lending Q1 actuals F (1) Lower band 40% growth rate calculated using the same number of campaigns originated in 2015 for 2016 (2) Upper band 60% growth rate based on midpoint from current growth and lower band (3) Nesta estimates total Alternative Finance market size in 2015 was 3.2bn (which includes additional categories of Donations and Rewards at ~ 0.3m) (4) UK total Small Business lending in 2015 was ~ 10bn. (Nesta, Pushing Boundaries, February 2016) (5) Source of data AltFi, Crowdsurfer, BBA, Accenture analysis 11

12 Platform View UK Alternative Finance Originations by Platforms, 2015 (1) GBP Billion Saving Stream ThinCats Cogress Lendinvest 0.30 Crowdcube Market Invoice 0.30 Wellesley & Co Seedrs Folk 2 Folk Assetz Capital Syndicate Room Platform Black Cumulative Originations Zopa Funding Circle RateSetter 0.0 Key: P2P Lending (1) Source of data AltFi, Crowdsurfer, Platforms websites, Accenture analysis (2) 6 high street banks control ~90% of current accounts market. CMA, Personal current accounts - Market study update, July 2014 Top bn (76%) Next 6 to bn (17%) ~38 0.2bn (7% ) Invoice Trading Equity Crowdfunding # or Platforms 12

13 Fundraiser Numbers Consumer Fundraisers, 2015 (3) # of Campaigns and Fundraisers (K) Business Fundraisers, 2015 (1)(3) # of Campaigns and Fundraisers (K) Total Campaigns 170 Campaigns K Unique Consumers 161 Unique Businesses K Total P2P Consumer Lending in bn Average size of P2P consumer loans ~ 3K Average number of loans originated per consumer 1.1 Total Business Funding in bn Average size of P2P business loans ~ 63K (2) Average number of loans originated per business 1.3 (1) Business Fundraisers figures include P2P, Equity, Invoice Trading (2) Average size of an equity crowdfunding campaign ~ 530K, average size of a market invoice ~ 30K (3) In context ~267K loan facilities and over drafts approved In 2015 BBA data (4) Source of data AltFi, Crowdsurfer, Platforms websites, Accenture analysis 13

14 Investor Make Up Debt Investors, 2015 (1)(2) GBP Billion, % Equity Investors, 2015 (2) GBP Billion, % Financial Institutions (28%) Consumers and others (72%) 0.23 Financial Institutions (8%) Consumers and others (72%) 0.02 (1) Debt Investors figures include P2P, Invoice Trading (2) The major UK lender banks account for 70% of the stock of lending to businesses (BoE, Trends in Lending, April 2015) (3) Source of data AltFi, Crowdsurfer, Nesta, Bank of England, Accenture analysis 14

15 Selected Partnerships Institution Description Alt Finance Partner JPM-branded digital lending for SMEs using OnDeck platform Business Digital lending platform for UK SMEs based on Kabbage technology Partnership for referring UK SME customers denied lending to Funding Circle Strategic partnership with OnDeck Capital to use credit scoring capability Partnership Allowing Metro Bank to lend through Zopa s platform Developing auto-credit decisioning capability Consumer Peer to Peer lending in South Africa Venture investment in Lending Club (1) Source of Data: Company Websites, Accenture analysis Partnering between mobile telco and Ratesetter Purchase of up to $1bn student loans refinanced by Lendkey

16 Summary Fast growing market UK 2.9 Billion in originations in 2015, up 80% on year before It is diverse Addresses unmet needs in UX Becoming core part of finance Platforms matter Regulation Key Enabler But lots of open questions remain Equity crowdfunding, peer to peer lending, invoice financing plus rewards and donations User experience is different including speed, transparency, rates, availability, and engagement between lenders / borrowers Partnerships with banks and other institutions forming Efficiency / network benefits from scale Clarity of regulatory position key enabler (UK vs. US and Rest of Europe) Future market structure, cost of customer acquisition on Main Street, Through the cycle credit quality, and impact of secondary markets unresolved (1) Source of Data: Accenture analysis

17 Fintech and the payments landscape Jeremy Light

18 A banking view of payments Payer Money transfer Payee Bank Payment System Bank Automated Payment Schemes BACS CHAPS Faster Payments Bilateral payments Cheque and Cash Schemes Cheque and Credit Clearing The Currency Clearing Committee Link ATM Card Schemes Visa MasterCard American Express Diners JCB China Union Pay

19 The end-user reality End User Domain Interaction/ Connection Branch ATM Call centre Internet Mobile NFC POS Social media Embedded APIs Cloud Host-to-host Payer Payment Intermediary Domain Stored Value Account Banking Domain Stored Value Account Provider Third Party Biller/ Creditor/ Remitter Money transfer Value transfer Stored Value Account Payment Service Provider Payee Bank Payment System Bank Digital Wallet Digital Wallet Provider

20 Payments Landscape in DOMINANT FEATURES DIGITAL COMMERCE Real-time account-toaccount payments Addressing Services Cross-border Commerce HCE/Tokenised/Dematerialised Cards Crypto Currencies Digital Wallets New Entrants APIs USA and Europe 2015: $132bn mcommerce sales 25% CAGR

21 Innovation in Action: PayKey Dario Mutabzija

22 Perspectives on Fintech in Thailand All delegates

23 Thank you