IBS Journal April 2016
WEIGHING UP THE NEW ENTRANTS
In this issue of IBS Journal, I chat to Noel Moran, CEO of Pre- paid Financial Services (PFS), about whether the FinTech bub- ble has been over-inflated; is it a case of the Emperor’s New Clothes?
One of my LinkedIn contacts recently made the following comment: ‘Just completed set-up of a new current account with a multi-award winning digital (only) bank. Took two weeks (yes, that’s WEEKS!!), including two document scan uploads, one telephone call, one email exchange, one piece of snail mail, two SMS authorisation codes, five automated emails and one online banking notification (that didn’t work). I actually only wanted to open a savings bond. Oh, and there’s no mobile app on iOS yet. Not quite what I was expecting...’
I bring this up as 2016 is set to be a key year for alternative financial institutions, with a number of launches rapidly approaching (including digital-only bank Atom, fronted by Mark Mullen, former CEO of first direct). But whenever there’s a buzz around something, a backlash is usually not far behind. The altFi doubters have been particularly vocal of late. Their argument goes like this…Most of the new guys are running off legacy core software solutions or are reliant in one way
or another upon the banking establishment. And their service offerings are not different enough from what’s already out there (current accounts, debit cards, mobile apps etc). A new dawn? Pah! They’re just building old financial institutions.
Critical barbs aside, my sense is that we’re on the cusp of something substantial here. There’s a reason why JPMorgan Chase and BBVA have been busy in this area, the latter taking, for instance, a 29.5% stake in Atom, and buying US digital bank Simple. They know it’s a great way to access new markets and strengthen the user experience of their customers.
Certainly, PFS’s Moran makes a compelling case for the defence. Launched in 2008, his company is authorised and regulated as an e-money issuer by the FCA in the UK and has passported its e-money license across the SEPA region to enable card issuance in up to 40+ countries. If you have any com- ments on my interview with him or indeed anything else in this issue, feel free to drop me a line at the email address below.
Scott Thompson, Editor
scott.thompson@
ibsintelligence.com
© IBS Intelligence 2016
www.ibsintelligence.com
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editor’s note
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