Monthly Archives: February 2023

News

New era for Harper McDermott with sale to Employee Ownership Trust

LEADING personal insolvency firm Harper McDermott Ltd, one of the largest providers of Protected Trust Deeds and Debt Payment Plans under the Debt Arrangement Scheme in Scotland is embarking on an exciting future after transferring to employee ownership in a transaction led by business advisers Grant Thornton UK LLP.

The Glasgow-based company trades as Trust Deed Scotland, which, since 2009, has helped more than 25,000 people resolve their problem debt. The Trust Deed Scotland brand was founded by Mark Sommerville and Jon Paul Kelly and is the best-known provider of Protected Trust Deeds in Scotland. It has an industry leading No.1 ranking on Trustpilot in the debt relief service category with over 5,000 5* reviews from Scottish customers.

The business is currently managing debt solutions for over 9,000 customers with £234m of debts under management, and a team of around 70 people – who are all now part-owners of the business – led by Managing Director and Insolvency Practitioner, Thomas Fox.

Thomas Fox said: “I am delighted to have become a part-owner in the business alongside our knowledgeable and experienced team, who I believe provide a best-in-class service to our customers.”

“We are all looking forward to the future with excitement and confidence and to helping many more people deal with their debt issues in a practical and compassionate manner.”

“Employee ownership provides many benefits; from existing staff retention through to attracting the best talent, it gives our team job security and brings us closer together as one team all working towards similar goals.”

“I am very grateful to the Grant Thornton team for leading us through this transition with such dedication and diligence.”

Neil McInnes, Partner and Head of Corporate Finance in Scotland at Grant Thornton said:

“We have been working with the business to help them consider the range of strategic options open to them.”

“Ultimately the best option for all stakeholders was to move to employee ownership via an Employee Ownership Trust (EOT), which gives the entire team a stake in its future success and provides a great incentive for staff loyalty.”

“We are seeing an increasing number of profitable mid-sized companies looking at EOT as an option. For exiting shareholders it can be an attractive alternative to the more traditional trade sale or private equity process, and allows the business to continue to thrive in the safe hands of the incumbent team.”

“We wish Thomas and the whole team at Harper McDermott every success in the future.”

Neil was assisted in the transaction by Akshay Sharma and the firm’s dedicated EOT team led by Monique Beaulieu and supported by Ollie Dewdney and Amarveer Johal, which provide a holistic end-to-end service advisory service to businesses transitioning to employee ownership.

International News, Marketing, PR and SEO, News

Multi-local digital marketing agency, Digital Uncut, sets its sights state-side in rapid US expansion

Digital marketing agency, Digital Uncut, has today announced its ambitious plans for expansion into the US market as the company continues its phenomenal growth.

A leader in data-driven digital marketing, Digital Uncut are experts in the channels they operate, with expertise in SEO, PPC, Web Development, Content and Data. Having already achieved excellent growth in the US, comprising nearly 50% of their portfolio, the firm are looking to accelerate further as part of a wider strategy of international expansion.

Since its inception in 2016, the digital marketing agency has honed a clear niche in delivering data-driven campaigns for start-up and scale-up businesses, bridging the gap between what agencies typically offer and what businesses need.

Digital Uncut has already established an exciting state-side portfolio comprising of disruptive brands, including Matterport, Helpshift and PredictSpring, along with recent client win, NETDepot, a leading cloud solutions provider with nearly 30 years experience in the IT space. Digital Uncut have been appointed to assist with tripling revenue within the next 2 years through a comprehensive SEO and Web Development strategy.

Sam Martin-Ross, Founder and Director of Digital Uncut, said: “The US represents a key market for us, and I’m delighted to be leading our expansion into this space. We take immense pride in the service we provide to our clients, and we are incredibly lucky to already be working with so many exciting US brands.

Growth is my biggest driver, so working closely with scaling companies to directly see the impact of our hard work on growth is so rewarding. As a company, our passion is doing things bigger and better, and expanding our presence within the US gives us an opportunity to do exactly that, replicating the success we have already enjoyed in the UK, and applying that to the US market.”

Headquartered in London, Digital Uncut was acquired by French international marketing agency, Eskimoz earlier this year following a period of impressive growth for the firm. The group now boasts a headcount of over 150, with a turnover in excess of £20 million.

For more information visit https://digitaluncut.com

Business & Property News, News

SME confidence takes hit as cash flow causes sleepless nights

  • Latest research by alternative lender Capify finds SME business confidence at lowest point since survey began
  • Results suggest some cause for optimism but also finds declining cash balances and cash flow concerns proving a barrier to growth

The outlook from the UK’s SME community has fallen to a record low level, according to the latest quarterly survey from alternative finance provider Capify. Released today, its Business Confidence Survey revealed that SME confidence has fallen in response to ongoing economic uncertainty, rising prices and the impact of industrial action.

Only 40% of respondents revealed turnover growth in the past 12 months, a 17pp drop year-on-year. At the same time, 40% of businesses reported a reduction of profitability last year, compared to 32% in Q4 2021.

As a result, the cash position for Britain’s SME has deteriorated in the past year. The average level of cash held in the bank has more than halved from £188,474 to £90,320. Correspondingly, over 50% are now significantly worried about the level of cash the business holds.

Stalling performance

The survey also found that SMEs are struggling to keep ahead of the curve of rising costs and cash inflow requirements to keep their businesses afloat. 51% of respondents reported falling short of their annual targets for last year, compared to 2021’s level of 32%.

This is having a significant impact on cash flow concerns. The number of business owners worried about cash flow has grown to 37%, a 14% increase from 23% in January 2021. Last year’s period of inflation and consequent price rises in the supply chain have been a major contributor to this. Over half of SME owners (54%) cited inflation and rising costs as a cause for sleepless nights, as they try to reconcile increased production costs with their own pricing strategies.

Consequently, the SME appetite for investment has fallen away sharply quarter-on-quarter.

The number of firms planning no investment in the coming year has risen to 30%, a 22pp increase on Q3’s findings. For those that are planning to invest, the number of investment areas has also fallen. UK SMEs identified an average of 1.625 initiatives in Q4’s survey, compared to 2.63 in Q3 of 2022. Perhaps reflecting a desire for efficiency to drive down costs – or to take advantage of the forthcoming super deduction deadline – 31% of respondents plan to invest in technology-led initiatives, whilst 23% are looking at plant or machinery investments.

Worrying signs

The survey, which canvasses the insights of hundreds of SME business owners from across the UK on areas of business performance, outlook, and investment intentions, uses the data to produce an overall confidence score between -10 (very unconfident) and +20 (very confident). The confidence score now sits at -6.89, a 16-point decrease on the Q4 2021 score of 8.93.

John Rozenbroek, CFO/CCO at Capify, said: “It is deeply worrying to see how much confidence has fallen in the UK’s vital SME community over the past year. Despite a slight rally in the third quarter – in response to a perceived improvement in economic and political stability – the overall confidence curve has been heading downward throughout the year, highlighting just how challenging last year has proven to be for SME owners and operators.

“Last year’s ‘perfect storm’ of ongoing supply chain issues, inflation, political turmoil, market turbulence, war in Ukraine, energy crises and domestic industrial action have unsurprisingly taken their toll on SME confidence and outlook.”

Brighter horizons

Despite the significant challenges of last year, there are some signs of cautious optimism that 2023 may be a better year for UK SMEs. 58% are projecting turnover growth over the next 12 months, whilst 52% predict an increase in profit performance. These factors combine to mean that nearly 40% expect headcount to grow over the same period.

Access to finance continues to be a major problem for SMEs though, both in supporting the cash flow needs of today and for funding potential growth opportunities. Exactly a third of respondents identified working capital and cash flow management as a reason for requiring external finance, but only 42% of respondents felt confident they would be able to secure that finance from their bank.

“After the unprecedented challenges of the last year, it is absolutely vital that smaller businesses have access to finance” said Rozenbroek. “We can see the impact that the economic conditions have placed on cash flow and cash balances and helping UK SMEs weather the storm is imperative. Equally, as we hopefully turn a corner, it is just as important to increase finance availability for longer-term, sustainable investment opportunities.”

“At Capify, we understand the uniquely challenging climate that SMEs are operating in and the impact that has had on confidence and outlook. But we also share the optimism of a better year ahead. We will continue to be there to support SMEs with finance provision for both today’s challenges and tomorrow’s opportunities.”

Appointments, News

CoreGenic kick-starts ambitious 2023 with two key new hires

CoreGenic, a specialist health & safety consultancy based in Neath, which serves companies across the UK, has kick-started its plans for growth in 2023 with two key new hires.

The first is the appointment of Senior Health and Safety Consultant, William Griffiths, who will be responsible for maintaining the company’s clients’ health and safety management systems. The role will also see him implementing procedures and policies, sharing best practices and advice, and completing site inspections with fire risk, and health and safety risk assessments.

Griffiths has previously held positions as Health and Safety Coordinator and QSHE Manager at various companies and holds TechIOSH and PCQI qualifications. He has also been tasked with building a successful team to facilitate the growth the company plans for 2023.

Additionally, Griffiths’ appointment reinforces CoreGenic’s commitment to supporting the military community, with Griffiths having completed two tours of Iraq in a nine-year military career. This support for military veterans by CoreGenic has also recently included its Managing Director, Cherie Coughlan completing a trek across Wadi Rum, Jordan, to raise £1,820 in support of ABF The Soldier’s Charity.

The second appointment is CoreGenic’s new Business Support Coordinator, Sarah-Jayne MacDonald, who joins the company having previously worked within the care and retail sectors.

MacDonald will be responsible for office administration, including providing efficient and effective secretarial and administrative support, to include handling enquiries, word processing, record keeping and correspondence.

The new hires have been made necessary as a result of the growth the company has recently been experiencing, as more companies seek out professional advice around increasingly complex health & safety and environmental standards regulations.

Cherie Coughlan, Managing Director at CoreGenic, said:

“I am extremely glad to welcome William and Sarah-Jayne on board. We have ambitious plans for 2023 and are focusing on continually growing while ensuring we provide the very best service to our existing and prospective clients. It is an exciting time for the company and both William and Sarah-Jayne will play a pivotal part in our development moving forward.”

Business Advice

How to Identify a Scam

Scams are becoming increasingly prevalent in the UK, with more and more people losing their hard-earned money each year. These scams became a huge problem during the pandemic, and since then, they’ve shown no signs of stopping. Unfortunately, these scams are also becoming harder to spot, which is part of the reason why more people are losing money. If you’re worried about scams and want to avoid becoming a victim, then here are some of the best ways to identify a scam.

 

Verify the phone number

Calls from random numbers can be quite concerning, which is why most people choose to ignore them. There’s a chance that the call could be genuine, but how can you know this without answering the phone and potentially talking to a scammer? If you often get calls from unknown numbers, you should check them on the Unknown Phone website. All you need to do is type in the number (e.g. 01315614532 missed call) and read reviews from other users, who’ll tell you whether the number is dangerous or legitimate. 

However, some scammers are able to spoof phone numbers, which means they can display the phone number of a trusted organisation on your screen (e.g. your bank) to trick you into thinking they’re genuine. This is why you should also use additional methods to help you identify a scam, as shown below.

 

Identify well-known scams

Some scams become so prevalent that they end up all over social media or even in the news. When this happens, you should become very wary of any calls, emails or texts from companies that are often impersonated, as you could become a victim of these scams too.

Famous examples include the recent Royal Mail scam texts and Paypal scam texts. These scams have already tricked a lot of people, so be extra cautious of messages claiming to be from these companies. If in doubt, log into your accounts manually to check them rather than clicking on any links.

 

Urgency

Urgent messages can be a huge red flag. Scammers will often try to scare you by pretending that your money is in danger or your account has been breached, as this will make you panic and therefore be more likely to act without thinking. You should always be suspicious of calls, texts or emails that try to scare you into immediate action.

 

Asking for personal details

Never give someone sensitive information (e.g. bank account information, credit card numbers or account passwords) over the phone, especially if the other person is trying to scare you into immediate action. Legitimate companies will never ask for these kinds of details over the phone or in a text.

 

Poor grammar or design

Finally, you should check the grammar and logos within all of your texts and emails. Legitimate messages should be error-free and use the right company logos, so if something looks a bit off, this is a sign that the email or text was written by a scammer. Report and delete these messages and never click on the links they contain.

The increase in scams in the UK is certainly worrying, but there are many things you can do to protect yourself. Always follow the advice in this article to avoid giving your money to a scammer.

 

FInance, News

Swansea Building Society celebrates centenary with £100K donation to local charities

Swansea Building Society, with branch offices in Swansea, Mumbles, Carmarthen and Cowbridge, celebrates a milestone 100 years as a mutual during 2023. The Society’s centenary celebrations will include multiple initiatives, events and fundraisers to occur throughout the year, all based around the number 100.

The largest of the Society’s centenary initiatives will see it donate £100,000 to local charities. The majority of the funds will be divided between three main charitable causes, which have already been agreed and will be announced by the Society in the coming months. Furthermore, £15,000 will remain for the Society’s Swansea, Carmarthen, and Cowbridge branches to donate to charities related directly to their local communities which will be decided by the teams at these offices.

This £100,000 donation will be made in addition to the Society’s usual annual fundraising for its official staff charity, which has been named as Maggie’s Swansea for the second year in succession.

Other Society initiatives during 2023 include: 100 days of volunteering, where the Society will encourage its staff to volunteer on local projects; 100 trees planted, planting trees across Wales in collaboration with Stump Up For Trees; and a 100-mile fundraising trek, which will be broken up over a nominated timescale across various locations in South Wales, with the funds raised going to the Society’s staff charity.

The centenary celebrations will also include a fundraising gala dinner at Swansea Arena for past and present Society staff members and Non-Executive Directors, along with the Society’s partners, supporters and local dignitaries.

Later in the year, the Society is also set to announce the launch of its Charitable Foundation – a legacy project linked to its 100-year celebration – which will commence at the start of 2024. The aim of the foundation is to enable charities to apply directly for support, allowing it to bring focus to charities that might currently be overlooked. The funds will then be awarded by an independent board of trustees.

Swansea Building Society was founded as a mutual Building Society in February 1923. The Society’s principal objective has always been the provision of loans secured on residential property for the use of customers particularly in the South Wales area. These loans are funded by personal savings deposited in a variety of savings accounts offered by the Society.

The Society is one of only three remaining mutual Building Societies in Wales and the only Building Society or Bank with its headquarters in West Wales.

Alun Williams, Chief Executive Officer, Swansea Building Society, said:

“2023 is, understandably, a big year for the Society. To be able to celebrate 100 years as a mutual is a tribute to all the Society’s staff, directors and members across the years. Our Society has had to deal with many ups and downs over the last century, but it has weathered all of the storms – financial and otherwise – that have come its way, which makes us all very proud.

“Currently, the Society is seeing a period of sustained growth, with many successful years recently behind us. We have passed many significant milestones, including exceeding £500 million in total assets, and having been named the most profitable building society of our size in the UK – all this while increasing investment, expanding our offering, and continuing our ethos of opening and not closing branches.

“With all that in mind, it is wonderful to be able to reach our centenary on a genuine high and be able to give back to our local communities with this £100,000 donation as well as the myriad of initiatives we have planned for the year. There is more to come, in terms of announcements of our forthcoming centenary celebrations, so keep an eye out for what we have planned and how you might be able to get involved and help us to support our local communities across South Wales and beyond.”

Careers, Healthcare, News, Northamptonshire

Rhys Walden doesn’t let disability hold him back from his dream career as an occupational therapist

People who thought a disability would ruin one man’s shot at education have been proven wrong now he’s achieved a top class allied health degree.

Rhys Walden, 30 years old, who comes from Northampton, graduated with a first class degree in Occupational Therapy from the University of Northampton (UON) last year. He is now six months into his role as an occupational therapist with North Northamptonshire Council’s Community Occupational Therapy team.

Rhys has cerebral palsy, a lifelong condition that affects movement and coordination. He first encountered occupational therapy after his Mum had a brain haemorrhage. When she was discharged from hospital, the friendly occupational therapy team helped her adapt to getting the most out of life until she fully recovered.

This is when the seed to become an occupational therapist was first planted, but when Rhys left school at 18 he wasn’t ready academically. At the time going to university wasn’t even a consideration so he went to college to do an accountancy qualification. After this though he realised that he wanted to work with people rather than numbers.

He left college and did various admin jobs, including an admin role at St Andrew’s Healthcare. It was here that he learnt more about what being an occupational therapist (OT) entails and he decided it was what he was going to do.

Although Rhys was a late bloomer for university, having had a knock-back after being told his disability meant he’d never be able to go into higher education, he is someone who is up for a challenge – and tackling it – after being bitten by the ‘OT bug’.

He said: “I’ve known of the UON course for some time as friends of mine are graduates, but academia was never my strong point. I was never predicted good grades; in fact, I was told at school and college to just do as well as I could.

“I have cerebral palsy hydrocephalus (a blockage in the brain) which means I have irregularities in my cerebral spinal fluid. Because of this, I had some brain damage as a child that left me with a mild learning disability, but I’ve never let that hold me back.

“My parents have been the driving force behind me my entire life. They taught me that, if things are a challenge, that it is really an opportunity in disguise with the potential for personal growth. University was always going to be on the table if I wanted it. And I wanted to become an occupational therapist with University of Northampton.”

At 26 years old Rhys applied and got onto the OT degree course at UON. Before starting he spoke to the university about his disability and they reassured him he would be fine. He said: “Their whole approach and willingness to support me told me it was the right place for me. As they said it wouldn’t be a very good OT course if they couldn’t adapt to my disabilities.

“Before starting the course, I had an assessment with the University’s ASSIST team. They helped sort out lots of things that would support my learning, such as installing specialist software on my laptop to record, transcribe and read out my classes. I’m an auditory learner and this way I could digest large chunks of information within half the time if I had tried to read it.

“I had unwavering, unparalleled support from UON staff and other students. Even when the pandemic came about and I had to ‘shield’ for almost the whole of those two years, the teams here helped. If I phoned up and asked for book chapters to be scanned and sent to me, the library staff were more than happy to do that. My peers were understanding and supportive and were there if I needed to talk though something being taught. I’ve never experienced that level of dedication to my progression. I feel like I’m an entirely different adult to the one who started the degree.”

In recognition of his incredible work and progress, Rhys received the Sara Simons Award when he graduated with a First Class honours degree. Sara was practice lead for occupational therapy at the University of Northampton before her retirement in 2018 and the award recognises practice excellence and students who have overcome adversity.

He is now enjoying his first job in the role he’s dreamt of doing for so long. He adds: “I wanted to work in community physical health (the team that supports people like me and my mum to live at home) before I started at the University so perhaps there’s some fate in my working in my field of choice. The Council’s service is hugely supportive of me and very open-minded about the benefits of having a practitioner who also happens to have a disability.

“I love the variety of the job, there’s never a dull day and no two people I support are ever the same. I feel privileged to work with people who are going through a difficult time. I’ve achieved more than I – or others – ever thought possible and hope to go on exceeding expectations, but now for my service users as well as myself and my family.”

Find out more about Occupational Therapy (BSc) and the Advanced MSc course at the University of Northampton.

Business & Property News, News

Archway Vets builds a paws-itive future under employee ownership

Archway is the first veterinary practice in Wales to go into employee ownership

Archway Veterinary Centre, which has branches in Chepstow and Caldicot, has transitioned into an employee-owned business, the first veterinary practice to do so in Wales.

The practice is now owned by 26 of its staff and is governed by an Employee Ownership Trust. Andrea Reynolds, who has been one of the directors of the business since 2011 – taking over sole interest in the small animal practice in 2014 – has sold her interest in the business to an Employee Ownership Trust (EOT).

Andrea will remain at Archway as one of three clinical Directors, while there are also three Trustee Directors, including John McEwan who originally established the practice, before retiring.

Andrea, who graduated as a vet in 1996 and worked around the UK and Australia before settling in Chepstow, explained her reasons for selling the practice to her colleagues: “In South Wales, a large number of Veterinary Practices have been taken over by corporates and I was becoming increasingly concerned that a monopoly of these companies and private equity firms buying out small independent practices was affecting our industry, and those linked with it.

“Therefore, when I was considering the future of the practice, I was adamant that Archway would and should remain independent long after my stewardship ends.

“I have always been aware that the success of a Veterinary Practice depends on all of the staff who work there, and I believe the Employee Ownership model recognises and rewards each staff member’s contribution and gives them a voice in the future of the business. That’s why it was the perfect way for me to pass on the Practice knowing it is and will remain with people that I know and trust.”

Andrea added: “I have been delighted to work with Cwmpas, who have advised and steered us every step of the way in setting up Archway Veterinary Centre as an employee owned business, to hold shares on behalf of current and future employees and ensure the future of the practice is in safe hands.”

Andrea was advised on the transition into being employee-owned by Social Business Wales, which is delivered by Cwmpas, the new name for the Wales Co-operative Centre. Capital Law acted on behalf of the company on the EOT.

Derek Walker, Chief Executive of Cwmpas, which delivers Social Business Wales, said: “To have a business such as a veterinary practice go into EOT just shows the flexibility and benefits of employee ownership rather than selling a business to a third party and we are proud to have supported Archway into being the first to do so in Wales.

“Succession planning is a very difficult thing to navigate and Andrea has recognised that by selling her practice to her colleagues via an EOT means that her beloved business will remain independent and that she can also remain working there.”

Newly appointed Director at Archway Veterinary Centre, Eleanor Gough, said: “Our team is unreservedly dedicated to promoting animal health and welfare. Becoming an EOT has meant we are able to stay true to ourselves and to protect the core ethos of our practice for years to come.

“I could not ask for a better team to take Archway Veterinary Centre towards a bright new future.”

The Employee Ownership Wales service is part of the Social Business Wales programme delivered by Cwmpas. It is part of the Business Wales family and funded by Welsh Government and the European Regional Development Fund.

For more information about employee ownership, visit: https://employeeownershipwales.co.uk/.

Absence Management, HR, News

Top 5 most bizarre reasons for absence in 2022, as revealed by BrightHR

We’ve all heard some weird and wacky reasons for absence in our time. But in 2022, HR technology firm BrightHR had some particularly, let’s say eye-catching entries.

Here are the top five most bizarre words and phrases given as reasons for absence last year, as recorded by BrightHR’s absence management software.

  • Potentially inspired by the Netflix smash hit Stranger Things, we saw a dramatic increase in the number of people booking annual leave to go ghost hunting. The word ghost featured frequently in annual leave and sickness absence requests and spookily, so did alien abduction. Whether or not that was a genuine reason for absence is still up in the air…….

 

  • From food poisoning due to undercooked or ‘dodgy’ sausages, to people taking time off to attend Sausage and Cider Festivals, the humble banger sizzles swiftly into second place, both in terms of sickness absence and annual leave requests.

 

  • They may have been extinct for millions of years, but that doesn’t stop dinosaurs taking third place on our list. From taking time off for museum visits to throwing dinosaur parties for little ones, it’s clear that these prehistoric creatures continue to fascinate and entertain.

 

  • We can certainly see a lot of clown-ing around with our fourth entry. From a fear of clowns making people too scared to come in to booking time off to attend clown school, employers will clearly need a sense of humour when they hear some of the excuses people give for not attending work….

 

  • And finally, the dog ate…..it’s an excuse as old as time. Who, at one time, hasn’t tried to get out of an assignment by blaming the dog? And it seems many an innocent pooch is still taking the blame long after their owners enter adult life. While some absences are certainly genuine, with people taking time off for emergency vet visits after the dog has eaten something they shouldn’t have, others are much more tenuous. It appears ‘the dog ate my bus pass’, and ‘the dog ate my timetable’ are fast becoming the adult version of ‘the dog ate my homework’.

 

Alan Price, CEO at BrightHR, says, “Employees are free to do whatever they want with their time off, and this certainly shows. It’s great to see life returning to normal again with people prioritising time with families and looking to pursue their hobbies.

“However, we’ve also seen some quite frankly laughable excuses for absence and the side-hustle continues to be an area to watch for many employers. As the cost-of-living crisis deepens, it’s only natural that people will look at ways to make extra money. But when the so-called side-hustle starts impacting on employees’ full-time roles then that becomes a concern.

“Unplanned absences can cost business around £522 per employee, so it’s important to make sure that all procedures are followed properly. Encourage employees to take their full allocation of annual leave and make sure that any periods of sickness absence are followed up with return-to-work meetings, ensuring that staff are healthy and fit for work as well ensuring reasons given for absence are genuine.”

Business Advice, Finance and Banking, Finance News, Fintech, Investment, Investment News

SSV Capital: Why Investment is Growing in the Fintech Space

Ankur Ghosh, Founder & CEO, SSV Capital Ltd discusses how fintech investments are rising – and why it’s such an attractive space at the moment for portfolio holders

Fintech is an exciting investment opportunity for investors who are looking for new and innovative ways to diversify their portfolios. But what exactly is fintech and why is it so attractive to investors?

What is Fintech?

Fintech is short for financial technology and combines the latest technology, AI, and software to deliver easier access to financial services.

Fintech startups are disrupting the financial space by making banking more user-friendly and less costly for customers.  It’s a growing market, and with projected growth of the fintech industry from $11.8 billion in 2018 to about $306 billion in 2023, it’s a space that’s attracting a lot of interest from investors at the moment.

Strong funding support for fintechs

Fintech investment is growing fast. It’s growing faster than overall VC funding, which is a positive sign for the industry. In addition to the fact that fintechs are attracting more investment than other sectors of venture capital, it’s also important to note that fintech investment has been rising consistently for years now.

Fintech offers portfolio diversification and a healthy return on investment.

There are multiple reasons why fintech has become a strong investment space in recent years, but the primary reason is that it offers portfolio diversification while offering a healthy return on investment.

Fintech companies are also an excellent way for investors to access new markets. Blockchain technology can be used to connect economies around the world that haven’t previously been connected through traditional financial services infrastructure. This will widen the investor and customer pool significantly and help expand existing industries into new territories.

Wide range of opportunities for investment.

Fintech is global and diverse, encompassing everything from payment processing to lending to cybersecurity solutions. As a result, there are many different opportunities for investors – which spreads risk and increases potential opportunities.

The sector is also geographically diverse.  While traditional tech is all located in Silicon Valley, fintechs are spread across a variety of cities around the world. You’ll find them in finance hubs such as London, Sydney, Boston, and Singapore, but also in places you wouldn’t normally think about when it comes to financial services, such as Berlin and Tel Aviv.

Traditional Banks are also investing in fintech

Consumers have become disenchanted with traditional banks and have been moving away from them at an alarming rate: between 2012 and 2016, more than 20 million consumers switched away from their banks when they would have stuck around had they been offered better services or products.

According to Deloitte, the reason for the success of new challenger banks is their focus on customer experience.  Unlike traditional banks, they don’t maintain old legacy systems which are updated to only focus on compliance rather than the customer. It means that data is also easier to mine.

Banks have recognised this shifting trend and are investing heavily in fintechs, partnering with them, or outright acquiring them. They’ve also started to launch their own digital-only products, as consumers want to use smartphones and tablets to manage their finances and no longer want to bear the hassle of visiting branches.

This collaboration will only increase as banks look to improve data and cyber security as the sector is already seeing massive growth in digital payments.  The move towards a cashless economy will see fintech continue to grow in influence as the customer continues to demand a more user-friendly and transparent banking experience.

How to invest

If you’re looking for a way to diversify your portfolio, and spread your risk across different asset classes, fintech makes an ideal addition to an investor portfolio, and the market is set to boom.

SSV Capital offers a diversified portfolio of disruptive companies operating in the banking fintech, real estate and funds sectors with the aim of maximising returns for our investors whilst upholding strong values – adopting a sustainable and ethical approach in everything it does, following a triple ‘P’ philosophy of People, Planet, and Prosperity.

 

About the author

Ankur Ghosh is the Founder & Ceo, SSV Capital Ltd.  SSV Capital offers fixed income investments to investors that qualify as high net worth or sophisticated. If you feel you qualify, and would like to explore our range of investment opportunities click here