2020 will be known as the year of a decade of digital transformation
We recently connected with Yann Murciano, CEO of a UK based company Mixing network, an online peer to peer (P2P) lender.
Murciano spoke at length about the “unbundling” of banking and FinTech, and how we are seeing banking and FinTech rebundling again. He pointed out that recently Starling Bank said wanting to buy a lender. He also mentioned that JP Morgan CEO Jamie Dimon also had flattering words for alternative lenders.
Murciano further noted that FinTech emerged in the aftermath of the 2008-09 global financial crisis and saw FinTech platforms take away a lot of activity that banks were no longer willing or able to do (for example, SME loans or development finance loans).
But now it looks like we’ve reached a point where some FinTech companies are threatening to grow “too big to compete” from a traditional banking perspective, Murciano said. He also thinks that we are on the verge of witnessing a “rebundling” of banking and FinTech. Our conversation is shared below.
Crowdfund Insider: The past twelve months have brought unprecedented challenges to many companies across different industries.
But beyond Covid-19, what opportunities do you see for the FinTech sector globally and also in the UK?
Yann Murciano: Indeed, this year has been very difficult for many companies, many individuals and their families. But this year has also been rich in opportunities and innovations on many fronts.
I think many people will agree that 2020 will be remembered in financial history as the year that saw the equivalent of a decade of digital transformation, such is how quickly the global FinTech industry has responded to the demand at all levels, for digital payments. digital asset management.
The Covid-19 pandemic has given FinTech companies the opportunity to show what they can do and has accelerated the adoption of digital financial solutions in a way that has hitherto been difficult to conceive. Technologies developed, tested and deployed today are not only helping here and now, but will also shape the future of finance across the globe for years to come.
For us at Blend Network, the last twelve months have also been filled with exceptional opportunities which we have fortunately been able to take advantage of. I firmly believe that the “loan freeze” of 2020 saw the consolidation of alternative lenders. In a sense, Covid-19 has offered FinTech companies and alternative lending platforms like ours the opportunity to prove our worth and show how we can be strong partners with traditional financial institutions.
As for the opportunities for the FinTech industry in the future, I think those opportunities lie in partnerships with traditional financial institutions, and I think banks have started to recognize the importance of these partnerships with FinTech companies. innovative.
Crowdfund Insider: Fintech emerged in the aftermath of the 2008-09 global financial crisis and saw Fintech platforms take away a lot of activities that banks were no longer willing or able to do (e.g. lending to SMEs or development finance loans).
Have you seen a change in the way banks and fintech platforms interact over the past few years?
Yann Murciano: Yes you are absolutely right. It was the global financial crisis that really sparked the wave of FinTech revolution that was to come in the following years, as 2008-09 was a time when banks decided to redeploy their resources and stay away from it. anything that has not formed. part of their commodity mix.
As a result, banking products such as SME loans and development finance loans have been affected, and we have seen FinTech platforms such as P2P lenders emerge to do business that banks no longer do. And the banks didn’t bother at all. But I believe that more recently we have started to see a subtle shift in this trend. It seems more and more that banks are looking at FinTech companies out of the corner of their eyes and saying “better watch them closely”.
I think we may have reached a point where some FinTech companies are becoming too big to ignore from a traditional banking perspective, and banks are keen to collaborate. So in that sense, I think after the “unbundling” of banking and FinTech that we saw ten years ago, we are now seeing a “rebundling” of banking and FinTech.
In fact, the CEO of Starling Bank recently said that they are actively looking for loan-to-buy companies and the CEO of JP Morgan also had flattering words for alternative lenders when he predicted a shift to non-bank lending.
Crowdfund Insider: You mentioned the “unbundling” and “rebundling” of banks and FinTech companies. How do you think banks and FinTech platforms can coexist and prosper by teaming up?
Yann Murciano: I think a clear example of collaboration between traditional and non-bank financial institutions is the Bank Referral Scheme (BRS). In 2016, the UK government created the BRS, the aim of which was to help businesses that failed to obtain credit from a traditional bank to obtain financing from non-bank lenders.
The device (which according to the latest information available to us has failed to refer borrowers to non-bank lenders) was designed as a partnership between traditional banks and FinTech platforms within a regulated framework.
To me, this is a real life example of how banks and FinTech companies can thrive by cooperating with each other and helping end users. It’s a win-win situation for all parties involved: for traditional banks because they help their clients unlock finance, for non-bank lenders because they can make more loans, and for the borrower. final because they have access to funding for their projects.
Crowdfund Insider: Do you think we will see consolidation in the FinTech sector in the years to come?
Yann Murciano: Consolidation in the sense of more partnerships between different players and more mergers and acquisitions activities between companies with strong synergies, yes. Specifically, the P2P home lending space in which our company Blend Network operates has seen the barrier to entry increase dramatically in recent years, primarily due to industry regulatory requirements.
We recently got direct clearance from the FCA, but our understanding is that few platforms have been licensed in the past two years. So for platforms that have got their direct authorization like us, we have a competitive advantage and certainly in the eyes of our lenders and borrowers.
Crowdfund Insider: Blend Network recently won the FinTech Business of the Year award at the GoTech Awards. Tell us more about what Blend Network has been up to over the past few months and what lies ahead for 2021.
Yann Murciano: Yes indeed our company recently won the FinTech Company of the Year award at the 2021 GoTech Awards, so I want to thank all of the judges and other Business Leader members who worked so hard on these awards. .
Putting aside the challenges and hardships that Covid-19 has brought to many people, the past 12 months have been extremely exciting at Blend Network. For starters, we doubled our lending volume last year in the midst of the pandemic and were able to support many other SME real estate developers who were looking for financing as the “ loan foreclosure ” left many behind. promoters unable to borrow.
As a result, Blend Network was also included in the Business Leader list of the 32 Best Commercial Heroes of Covid-19. We also continued to expand our team; we have hired loan managers and loan associates, and more recently we have also hired an operations manager.
We also recently obtained direct clearance from the FCA, which we had been working on for several months. On top of all that, we moved to bigger, nicer offices in January amid the lockdown. We did this to be able to accommodate our growing team and to be able to ensure that everyone returns to the office in a safe and secure environment by Covid.
So it would be safe to say that our team hasn’t stopped in the last few months. Looking ahead, we believe 2021 will be another banner year for Blend Network as we continue to see an increasing number of lenders on our platform every month.
As part of the trend described above for increased collaboration between FinTech companies and traditional financial institutions, we are also working on some exciting partnerships, which we will announce in due course.