Fintech companies are flourishing in the UK’s capital. London has historically always been one of the world’s most important centres of trade and finance, and this trend seems set to continue well into the coming century.
This has been achieved by a combination of factors. The main three are specialists who carry out financial research, have a financial-tech background and use this expertise to come up with innovative ideas; backing from far-seeing private investors and the encouragement of both successive governments and the industry regulator, the FCA. It is little wonder that investment in the fintech sector doubled in a year (from 2016 to 2017) with growth forecast for the future.
Let’s look at twofintech companies which are making waves in the industry but in very different ways.
The name ‘Iwoca’ stands for ‘instant working capital’, and the company’s objective is to provide small or micro loans for SMEs which might face problems getting a loan approved by a mainstream lender but which have need for funding (perhaps to tackle a cash flow problem or expand by investing in larger stock).
Founded in 2012, the company has provided loans to over 150,000 businesses located in the UK, Germany and Poland, worth an estimated £350 million. The firm uses a risk assessment model before lending with data provided by their would-be borrowers. This takes into account information such as online retail sales, customer reviews, profit margins and any seasonal variations in sales (if applicable). From an analysis of such data, Iwoca is able to predict the borrower’s future financial health.
Tried-and-tested loan companies have been operating online for many years. A payday loans direct lender for bad credit helps borrowers with a straightforward and fast application. Knowing that the company is FCA authorised reassures them that they are dealing with a reputable and ethical lender.
Although it’s clear that lending is an important part of the fintech industry, there are vast possibilities of how cutting-edge technology can be used to improve the provision of financial services. Onfido is a clear example of what other issues need to be tackled.
Founded in 2012, Onfido’s mission is to help financial companies abide by the KYC (know your client) requirements. Checks that these companies have to carry out on new clients to avoid identity theft can be both time-consuming and costly. This fintech firm has the solution to verify the identity of would-be clients using a photo-based document, a selfie and artificial intelligence software. This software takes live pictures of clients responding to simple instructions (for example, blink, smile, etc.) to confirm that it is not a static photo (which can be easily stolen or forged) and compare the face with the photo ID. At the same time, Onfido also carry out a comprehensive background check of the client. After this verification procedure, a risk profile is then sent to the client. So far, the firm has raised over £42 million.