Connect with us

Top Stories

IN LARGEST EVER EQUITY INVESTMENT IN A GERMAN FINTECH COMPANY, KREDITECH RECEIVES EUR 110 MILLION INVESTMENT FROM PAYU AND EXPANDS STRATEGIC PARTNERSHIP

Published

on

IN LARGEST EVER EQUITY INVESTMENT IN A GERMAN FINTECH COMPANY, KREDITECH RECEIVES EUR 110 MILLION INVESTMENT FROM PAYU AND EXPANDS STRATEGIC PARTNERSHIP

PayU and Kreditech agree global partnership to increase access to credit services in high growth, emerging markets

Kreditech, the leading technology group for digital consumer credit using machine-learning based underwriting, has closed a EUR 110 million investment from global online payment service provider PayU.

The landmark investment is the largest ever equity investment in a German fintech company and builds on a successful 12-month pilot programme in Poland.

As part of the deal, Kreditech and PayU agree a global partnership to deliver a joint proposition for Point of Sale Finance. The agreement combines PayU’s strong international footprint with Kreditech’s unique technology to bring innovative credit services to underbanked markets around the world. Kreditech will expand its Lending as a Service (LaaS) offering and deliver its unique AI and machine-learning credit underwriting and loan management technology to PayU’s 300,000-strong network of merchants.

The announcement follows a successful pilot programme managed by Kreditech and PayU, offering Polish consumers improved access to credit in a real-time online process. The pilot programme issued more than EUR 10 million in credit.

Through this major growth financing, PayU has acquired a significant minority stake in Kreditech, joining existing prominent fintech investors including JC Flowers, Varde, Blumberg Capital, HPE, Peter Thiel, Rakuten and the World Bank’s IFC.  Additional transaction parameters were not disclosed.

Increased purchase power for online shoppers in emerging markets

The strategic investment is part of PayU’s global plan to build on its payments heritage to become a leading fintech provider in high growth markets. PayU has a strong track record building payments businesses in growth markets, including Eastern Europe, India and Latin America.

Kreditech can reach its full potential and expand into new territories through its partnership with PayU, meeting its vision to improve financial freedom for the underbanked through technology. The agreement will enable retailers in high growth, emerging markets to offer their customers new ways of financing online purchases – conveniently, transparently, and at competitive interest rates.

Kreditech’s and PayU’s non-exclusive partnership is the first such strategic cooperation pact between a payment service provider and a technology driven consumer finance company.

Retailers benefit from increased sales potential

“We are thrilled to offer online point-of-sale finance in markets where the development of consumer credit has been severely constrained by the lack of reliable credit risk assessment. Our credit scoring and underwriting technology allows PayU and its merchant partners to offer a competitive, convenient credit product to their retail customers”, Alexander Graubner-Müller, CEO of Kreditech, explained. “Teaming up with PayU provides underbanked customers new possibilities and supports our mission of providing financial freedom through technology. At the same time, we enable retailers to reach a new customer group and significantly increase sales volume.”

Laurent le Moal, CEO at PayU, says: “We are excited to build a leading innovative online consumer lending player in high growth markets. With our substantial investment we deepen our relationship with the industry-leading management team at Kreditech, and help to bring pioneering machine learning and AI technology to the many high growth markets around the world that need better access to financial services. At PayU we believe in the enormous potential of technology to unlock credit and financial services for underserved populations. In the past 12 months, we have become the leading corporate venture capital investor in FinTech, investing more than EUR 245 million around the world. This latest investment in Kreditech fits perfectly with this vision.”

Kreditech’s Lending as a Service product line is an API-based solution which enables partners to offer tailor-made consumer finance products to their customers build on top of Kreditech’s technology and machine-learning based underwriting. Partners gain access to the complete Kreditech consumer lending value chain including loan application management, credit risk management, know your customer principles (KYC), e-signature, loan refinancing, loan processing and servicing, collections as well as customer service.

Top Stories

Three questions the financial services industry must answer in 2021

Published

on

Three questions the financial services industry must answer in 2021 1

Xformative, a Mastercard Start Path recipient, shares what these questions mean for fintech partners and their innovations

This year, fintechs and institutions alike pushed the limit on how fast, innovative, and digitally-savvy they could be. Buzzwords like cloud and faster payments made headlines, but 2021 will be about refining best practices and putting them into action. Xformative believes that more industries should benefit from digital payments and that it’s not just about faster payments, but the option to offer multiple methods.

  • Which industries are lagging in the digital payments space and why? The pandemic forced financial institutions and their partners to move digital transformation into a new phase of maturity. But this doesn’t mean every industry has transformed, there are still laggards. According to a survey of more than 1,400 American freelancers and contractors, conducted by Bill.com, more than half said they were still receiving their money in the form of a physical check. Checks still exist in spaces like Property and Casualty, though we did see some reassuring industry changes this year. The year ahead will require businesses to offer more payments flexibility outside of physical checks to meet the payment needs of their gig workers, freelancers, and contractors. Businesses will rely on technology partners to bring them up to speed and simplify the payments process.
  • How can fintechs overcome the challenges of building in the cloud? Most businesses want to architect using a select cloud provider, or at least offer cloud-based services, to remain competitive in today’s fast-paced, disruptive landscape. There are assumptions that cloud architecture will inherently be less expensive to operate than legacy mainframe systems, but for many, these assumptions have turned upside down when developers fail to understand cloud cost optimization principles. As fintechs look to build in the cloud, they should ensure their technology is highly optimized, only leveraging real-time capabilities and transactions when required. Responsible fintechs should focus on balancing customer experience and economics with a mix of batch and real-time capabilities, constantly asking themselves, “is real-time the best choice?” Just because real-time can be offered doesn’t mean it should, and 2021 will be about drawing the line between utilization and optimization.
  • Why is offering more payment choices important? Emerging faster payments are working in parallel, not as a replacement for other methods. People want options to be able to pay however they like, whether it’s with Zelle, Venmo, Apple Pay, or traditional methods like cash or card, and financial institutions need to be prepared to meet this demand. The card that consumers once kept in their wallet was a key component of the bank’s and/or program manager’s brand value, as well as potentially communicating the cardholder’s lifestyle and socioeconomic status. 2021 will reinforce the value of financial institutions having partnerships with fintechs who can help them evolve their brand value to include the broad scope of emerging payments.

It’s time fintechs and institutions partner to digitize payments and offer choices. 2021 is about building smart and partnering for capabilities that can open the door to new opportunities at a financial institution.

Continue Reading

Top Stories

2020: The paradoxical year that has reshaped the future of motor insurance and related sectors

Published

on

2020: The paradoxical year that has reshaped the future of motor insurance and related sectors 2

By Alan Inskip, Tempcover CEO & Founder

There’s no doubt that 2020 will be remembered as the year that changed the world. Whether that overall change was for the better or for the worse is a matter of perspective. One thing is for certain, 2020 has been the year of immense innovation and adaptability in the face of seemingly insurmountable adversity caused by the COVID-19 pandemic. In this piece, I’ll touch on some of the greatest challenges that could have had a potentially crippling effect on the economy but instead were overcome and ultimately paved the way for increased resilience and innovation.

Public transport shunned in favour of private vehicles, but driving patterns dramatically shift

With ten months of varying national and regional lockdown restrictions, passenger numbers on public transport have plummeted[1] as many people continue to work remotely, and with most opting for the safety of travelling by private vehicle when they do need to get out and about. But because of restrictive travel measures, motorists have been using their vehicles far less frequently.

This posed a major challenge for traditional motor insurers that were not able to swiftly adapt to this change, with many coming under fire for failing to adjust annual premiums in line with new driver trends[2]. As motorists became increasingly frustrated having to pay the same premiums or sometimes even more despite their vehicle usage being substantially minimised, the relatively new and still largely unfamiliar InsurTech industry was able to rise to the occasion.

In short, InsurTech involves the utilisation of the latest technological innovations such as data analysis, cloud computing, artificial intelligence and machine learning to enable insurance products to become more agile and flexible in line with modern consumer demand – all while remaining price competitive.

Being fully-digital and technology-driven, InsurTechs demonstrated the flexibility and agility that enabled them to adapt to the huge shift in customer demand and step change in how insurance is purchased and consumed. They did this by offering an entirely digital user experience in near real-time, with temporary policies tailored to the time actually needed – anywhere from 1 hour to 28 days.

In a time of furlough and economic uncertainty, this meant that many motorists who were not using their vehicles regularly did not have to take drastic action like declaring their vehicle SORN to achieve short-term financial relief. Nor did they have to risk driving uninsured or committing to an annual policy that they could ill afford at the time.

The rise of the digital dealership offering temporary insurance as part of the purchase journey

In the automotive retail market, dealerships were forced to make drastic changes to their operating models to comply with social distancing guidelines. Showroom footfall and subsequent sales initially plummeted[3]. But in the face of this immense adversity, we witnessed the rise of the digital dealership, a concept that would have been unfathomable even just a year ago.

Cazoo was the first fully-digital platform to enter the vehicle dealership market in late 2019, and there has also been significant investment this year in new entrants such as Cinch and Carwow. Traditional dealerships such as Arnold Clark, Cargiant and Motorpoint have extended the digital aspects of their purchase journeys with services including home delivery and Click and Collect as alternative options to the full show room experience.

InsurTech has been instrumental in ensuring that car insurance supports this shift to digital, as several national blue-chip dealerships, with both physical and digital showroom floors, now offer temporary driveaway insurance policies that cover the vehicle for a fixed-term, usually between five to seven days.

Alan Inskip

Alan Inskip

The entirely online one-step user experience is the first of its kind in the traditionally outdated and inflexible driveaway insurance industry and it is dramatically simplifying the process of how insurance is purchased and consumed. Due to the flexibility and agility of the digital solution, each retailer has its own unique URL, where the customer can obtain a simple single-cost policy in just 90 seconds through an entirely digital process, which fits in line with the evolving consumer purchase trends.

This takes the stress out of searching for annual insurance on the spot and provides the driver with near instant cover so that they can immediately drive their new car while giving them the opportunity to thoroughly research the best annual policy to suit their needs. It’s also an ideal solution while the car is under its money-back warranty, as the driver does not have to commit to an annual policy on a car that might be returned. Another benefit is there’s no risk to any existing No Claims Discount, as it’s a separate and standalone policy.

Declining brand loyalty and a demand for a more personalised and convenient user experience

Insurance has an unenviable reputation for being inflexible and even unwilling to adapt to shifting consumer trends – making it confusing for most customers. Even pre-COVID, there was a clear trend that brand loyalty was in decline, as modern day consumers are no longer prepared to remain blindly loyal to any company for a long-term period. Instead, they will reward businesses that offer a simple and convenient user experience at best value. COVID accelerated this trend and many large insurers have struggled to adapt accordingly.

Conversely, this has enabled InsurTech to thrive, as the products and user journeys are developed with direct input from customers to ensure that they are receiving a straightforward and fit-for-purpose solution that best fits their needs and requirements. Just some examples of this are simplified terms and conditions, near-instant and paperless policy documentation via the web or dedicated app, and data-driven customer engagement initiatives that offer personalised discounts and communication via email and text messaging. The end result is a user experience that is easier, more convenient and better value for potential consumers in the market.

Cautiously optimistic (if somewhat uncertain) future

Even in the most stable periods, it’s a challenge to accurately predict future market trends. And with 2020 completely rewriting the rulebook on how business is conducted, it would be remiss of me to make outright predictions. One thing is for certain, the days of slow, inflexible and costly motor insurance are numbered. It is important to note that this doesn’t mean that InsurTech is gaining the upper hand at the expense of the traditional insurers in a bid to replace them.

Instead it is there to fill a gap and act as a complementary add-on to provide the best possible value to the consumer. Industry players that enter new collaborative partnerships will dramatically improve the consumer experience, leading to new business wins and return custom, which ultimately impacts positively on the bottom line. But those that fail to adapt will be left behind.

I believe that we can look forward to a futuristic economy in 2021, where ground breaking technology continues to advance at an unprecedented rate to adapt to rapidly evolving consumer lifestyles and subsequent purchasing habits. The real winner will be the consumer and that is in everyone’s best interest.

Continue Reading

Top Stories

Leadership and management in a WFH world

Published

on

Leadership and management in a WFH world 3

By Carolyn Moore, SVP of People at Auth0

Although many of us will have settled into some kind of groove, having worked away from the office for the best part of a year, there are still numerous challenges that businesses and their workforces face in this new reality.

One particularly pertinent challenge is the one faced by people managers, especially those managing virtually for the first time. How can you ensure productivity from those in your charge when you don’t have direct oversight? How do you have those more difficult conversations over a video call? Some of your team may be handling remote working better than others, so how differently should you be handling them day-to-day?

For the majority of businesses these will be questions they’re still grappling with. When the pandemic hit, we happened to be in the fortunate position of being a remote-first business, where 60% of our nearly 700 employees were already working from home. As a result, the uptick to 100% was far less taxing for us. In seven years of working from home, we’ve learned a lot about managing teams remotely, a few of which may help leaders who are still navigating the transition.

Keeping communication channels open to build trust

Leading a remote team is wholly different to the usual, in-office set up. Strict hierarchy, and any notion of presenteeism do not translate well into the remote working environment. You have to accept that your employees’ domestic life will necessarily overlap with their professional one.

Leading a virtual team requires trust and a philosophy of work based on results, and managers need to learn to give them more freedom to do work on their own terms, as long as they produce the intended results.

Building trust is best managed with regular communication. Frequent written communications from leaders regarding strategy, objectives, and organisational learning is crucial. It’s natural when working remotely for team members to isolate themselves and get wrapped up in their own workload. Managers need to help their teams understand how their work impacts on the broader corporate objectives. At Auth0, we adopted and adapted a technique created by Google called ‘Objectives and Key Results’ (OKRs) to enable this.

Now more than ever, make it a priority to regularly check in with your employees and always be up to date and aware of what their needs are. One of the first initiatives we kicked off in an effort to do so was our Slack ‘Coronabot’. This is a tool we integrated with our main form of communication that allows employees to self-identify if their work capacity was impacted by the pandemic. Another way that we tried to better understand the concerns and needs of our employees was holding listening sessions. From these listening sessions, we’ve rolled out a couple of initiatives to combat burnout, including Slack-free weekends and no internal meeting Fridays.

Make flexibility a priority

As the worlds of home life and work life collide, the traditional ‘9 to 5’ workday needs to evolve. Leaders need to encourage their team to devise their own schedules and complete work at those times when they’re most productive.

If in doubt, ask your employees how best you can help and trust that their answers will be honest. In our own experience we saw a need for a different approach when it came to supporting our employees who are caregivers. With childcare much less accessible, caregivers are doing double duty. We rolled out a survey to these individuals to hear directly how best we could support them and used the feedback to plan future programmes and supports.

We have encouraged these employees to take advantage of flexible working hours, should they need to adjust due to the pandemic, and are using tools like Clockwise or Slack that allow our employees to set their working hours and snooze notifications when they’re offline. This alleviates the pressure to respond, and we’ve found employees are actually happier and more productive this way, especially if you have a team spread across several time zones.

Put your culture front and centre

When you work remotely interactions between management and staff become increasingly transactional. Leaders need to avoid making decrees without explaining the reasoning behind them, and the thought process that led to them. Failure to do so can create a secondary culture within the workforce composed of rumours and hearsay, which can lead to mistrust.

Leaders therefore need to firstly be clear in the reasoning for their decisions, but also explicit about the culture they want to create. Your corporate culture must be written down and communicated frequently so employees can use them to guide their everyday work.

Carolyn Moore

Carolyn Moore

This is particularly beneficial for multinational companies spread across geographies and timezones and encompassing multiple cultures. Whether your teams are based in Singapore or San Francisco, they all have a code of conduct to adhere to This is crucial for dealing with conflict in a productive way and creating teams that collaborate and respect each other.

Create virtual spaces to socialise

Leaders mustn’t forget the more pastoral benefits of the workspace. Spontaneous water-cooler chats may seem trite, but they’re an essential means of colleagues building rapport and learning about one another’s lives outside of work.

Socialising should not disappear when you transition to remote work. That would be bad for business, productivity, and employee wellbeing. Instead, I would encourage you to get creative and use different functionalities of the collaboration tools you’re probably using daily. We use Donut within our Slack channels, that randomly pairs three employees together and schedules them for a meeting. The intention is to bring employees together that otherwise may never interact and have them connect on topics beyond the workplace, such as life, family, etc. Donut has been a fantastic aid in keeping our distributed workforce feeling connected. We’ve also utilised the results of both our semi-annual engagement survey and more frequent pulse surveys to give us insight into how effective these engagement programmes have been and where we could tweak them to make them even better.

Don’t neglect security

Security should always be a top priority, especially especially as people are logging into more services remotely. Your business’ IT and Security teams should have set up multi-factor authentication as the minimum standard. As new apps are connected to better enable any of the measures described above, your IT teams and managers should also be educating their teams about the access third-party providers have to their data.

Managers have a crucial role to play as evangelists of security best practice. They should be monitoring whether their teams are completing their security awareness training and, if new apps or technology are being introduced, ensuring that the appropriate channels are open for them to ask questions. The pandemic has been a lucrative time for cybercriminals, who have taken advantage of some lapses in security best practice. Ensuring security is everyone’s business, but it starts from the top.

Building for the future

For many businesses the move to remote working will have been, and is continuing to be, a difficult transition. Admittedly, remote work is not a perfect substitute for personal communication. When circumstances allow, we would recommend managers meet with their teams in-person at least once a year. managers meet with their teams at least once a year.

However, even whilst the pandemic still hampers our ability to travel and meet face to face, it is still possible to have a distributed team that is productive, collaborative, and happy. If leaders take the time and make the effort to foster a culture built on trust, it will open up opportunities for you in the long-term, no matter what that future may be.

Continue Reading
Editorial & Advertiser disclosureOur website provides you with information, news, press releases, Opinion and advertorials on various financial products and services. This is not to be considered as financial advice and should be considered only for information purposes. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third party websites, affiliate sales networks, and may link to our advertising partners websites. Though we are tied up with various advertising and affiliate networks, this does not affect our analysis or opinion. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you, or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish sponsored articles or links, you may consider all articles or links hosted on our site as a partner endorsed link.

Call For Entries

Global Banking and Finance Review Awards Nominations 2020
2020 Global Banking & Finance Awards now open. Click Here

Latest Articles

The Coming AI Revolution 4 The Coming AI Revolution 5
Technology1 day ago

The Coming AI Revolution

By H.P Bunaes, CEO and founder of AI Powered Banking. There is a revolution in AI coming and it’s going...

Q&A with Joe Steele, Head of Workplace Technology at Starling Bank 6 Q&A with Joe Steele, Head of Workplace Technology at Starling Bank 7
Interviews1 day ago

Q&A with Joe Steele, Head of Workplace Technology at Starling Bank

In just under a year, many businesses had no choice but to go online and with digital transformation on the rise...

How financial services organisations are using data to underpin future growth 8 How financial services organisations are using data to underpin future growth 9
Technology1 day ago

How financial services organisations are using data to underpin future growth

By John O’Keeffe, Director of Looker EMEA at Google Cloud In addition to the turmoil caused by the COVID-19 pandemic, a...

Three questions the financial services industry must answer in 2021 10 Three questions the financial services industry must answer in 2021 11
Top Stories2 days ago

Three questions the financial services industry must answer in 2021

Xformative, a Mastercard Start Path recipient, shares what these questions mean for fintech partners and their innovations This year, fintechs...

A quarter of banking customers noted an improvement in customer service over lockdown, research shows 12 A quarter of banking customers noted an improvement in customer service over lockdown, research shows 13
Banking2 days ago

A quarter of banking customers noted an improvement in customer service over lockdown, research shows

SAS research reveals that banks offered an improved customer experience during lockdown A quarter (27%) of banking customers noted an...

Is Digital Transformation the Key to Business Survival in the New World? 14 Is Digital Transformation the Key to Business Survival in the New World? 15
Business2 days ago

Is Digital Transformation the Key to Business Survival in the New World?

After a turbulent year, enterprises are returning to the prospect of a new world following an unprecedented pandemic. Around the...

Virtual communications: How to handle difficult workplace conversations online 16 Virtual communications: How to handle difficult workplace conversations online 17
Business2 days ago

Virtual communications: How to handle difficult workplace conversations online

Have potentially difficult conversation at work, like discussing a pay rise, explaining deadline delays or going through performance reviews are...

Black Friday payment data reveals rapid growth of ‘pay later’ methods like Klarna 18 Black Friday payment data reveals rapid growth of ‘pay later’ methods like Klarna 19
Finance2 days ago

Black Friday payment data reveals rapid growth of ‘pay later’ methods like Klarna

Payment processor Mollie reveals the most popular payment methods for Black Friday Mollie, one of the fastest-growing payment service providers,...

Brand guidelines: the antidote to your business’ identity crisis 20 Brand guidelines: the antidote to your business’ identity crisis 21
Business2 days ago

Brand guidelines: the antidote to your business’ identity crisis

By Andrew Johnson, Creative Director and Co-Founder. How well do you really know your business? Do you know which derivative of your...

COVID-19 creates long and winding road for startups seeking investment 22 COVID-19 creates long and winding road for startups seeking investment 23
Investing2 days ago

COVID-19 creates long and winding road for startups seeking investment

By Jayne Chan, Head of StartmeupHK, Invest Hong Kong Countless technology and other companies describe themselves as innovators, disruptors or...

Newsletters with Secrets & Analysis. Subscribe Now