Launching today, the taskforce will use its convening power to influence high growth investors, the wider business community, and to raise the aspirations of the next generation of female entrepreneurs, especially looking to encourage women based outside of the capital.

Read more: GOV.UK

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Storonsky will tap his experience raising $1.8 billion to build fintech Revolut, which was valued at $33 billion in July 2021, and his earlier career working as a Lehman Brothers and Credit Suisse quant trader to use machine learning to identify promising Series B and C startups.

Read more: Forbes

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In an email to investors seen by Sifted, Tandem’s General Counsel Ed Freeman said Knox was departing on 30 June, and was seeking investor approval for a departure agreement.

The change in leadership follows a sharp pivot for the fintech, which has struggled to break even and scrapped its consumer credit card last year.

Read more: Sifted

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But the entrepreneur is ready to get hands-on again as an angel investor, he tells Sifted.

He’s quietly backed four startups in the past few months. His latest bet is in Pento, a SaaS startup focused on automating payroll in-house, which has just raised $15.6m.

Read more: Sifted

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In a brief but candid telephone interview, Blomfield also revealed that, as well as being unhappy during the last couple of years as CEO when the company scaled well beyond a “scrappy startup”, the pandemic and subsequent lockdowns exacerbated pressures placed on his own mental well-being. “I’m very happy to talk about what’s gone on with me, because I don’t think people do it enough”, he says.

Read more: TechCrunch

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Making banking more compatible with the everyday lives of consumers is one of the top goals of fintechs everywhere. London-based fintech startup, TheWaay, which made its Finovate debut last year in Dubai and followed that appearance with a Best of Show winning return to the Finovate stage a few months later in Singapore, has built a solution designed to do just that.

Founded in 2016, TheWaay offers a Lifestyle Banking platform that helps banks and other financial institutions better understand and meet the needs of their customers. The platform’s Lifestyle Assistant leverages deep behavioral profiling to give users personalized lifestyle advice and suggestions on financial services and banking products, as well as travel and e-commerce opportunities that might interest them. The technology helps financial services firms increase customer engagement and transaction volume, as well as grow revenue through increased up-sell activity.

“This product organically grew from inside our company for one reason,” company CEO Ivan Kochetov said during a demonstration of the company’s Digital Family Office solution at FinovateAsia. “We were sad because everybody was doing neo and digital banking for the mass market, and nobody was doing neo and digital banking for people like you and I, for the affluent market, for the premium market. Is it fair? No.”

For TheWaay, this neo digital banking solution for the affluent market should be about more than changing designs, Kochetov said. Instead, it should be about “new value (and) new promise.” The goal is to provide what Kochetov called “the first digital family office” for the affluent market that works within an institution’s banking app to provide a private banking level of service.

We caught up with Kirill Lisitsyn, Head of Business Development with TheWaay, who facilitated our email conversation with company CEO Ivan Kochetov earlier this year. The transcript of our exchange follows.

Finovate: Congratulations on winning Best of Show at your first Finovate event! What was your experience at FinovateAsia like? 

Ivan Kochetov: Thanks a lot! Oh, that was incredible! It was our first step to test the ground in Asia and we surprisingly got the award! 

Finovate: For those who are just getting to know your company, what problem does TheWaay solve? 

Kochetov: We are a fintech startup aiming to shift current “old school” communications between bank and its customers to a new way of personalized non-banking communications based on customers’ lifestyle and needs. And we believe that this is the right way to support banking industry transformation in the era of the engagement economy. 

Finovate: How does TheWaay solve the problem better? 

Kochetov: We develop a software that is called Lifestyle Banking Platform. We help banks to understand people and become a Lifestyle Assistant for their customers to boost daily engagement, card transactions and up-sell metrics in their mobile banking app. We use over 500 attributes for each customer and a model trained with over 1 billion in transactions. 

Finovate: Who are your primary customers? 

Kochetov: We are a B2B2C business. Historically we have been building our expertise within banking industry, but now also see the growing interest from telco and retail industries as well. Especially accounting the trend for virtual banking, you do not need huge branches network to become a bank and serve customers. But once you are a digital-only bank you need to engage your customers in your digital channels. And here we could definitely help. 

Finovate: What in your background gave you the confidence to tackle this challenge? 

Kochetov: The core of our team has a well-balanced mix of background in behavioral psychology, machine learning, product development and in implementing innovative tech and consulting projects for large financial institutions. 

Finovate: Tell us about a favorite feature of your platform. 

Kochetov: Ha! You know, based on our user surveys and the metrics we track, we figured out that one of the favorite features of our Lifestyle Assistant product is the advice on how to spend one day of a weekend. Users do not have to worry about what to do on their free day; our system will suggest a set of recommendation and ideas coupled with geo-routes, all based on user’s lifestyle, interests, and preferences. 

Finovate: What are some upcoming initiatives from TheWaay that we can look forward to over the next few months? 

Kochetov: We plan to launch several pilot projects of our Digital Family Office product that we presented on Finovate Asia. We successfully delivered PoC projects, and now very much look forward to scaling that success. Also we have prioritized our international expansion and plan to get few international contracts within next 3-6 months. 

Finovate: Where do you see TheWaay a year or two from now? 

Kochetov: We plan continue our rapid growth which will be supported by our presence in 3-4 large international markets and focus on 2-3 industries. Also we aim to sign one or two global mutually-beneficial partnerships which could even speed-up our expansion.

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Tom Blomfield doesn’t think big banks will ever undergo a digital transformation.

The British fintech entrepreneur says banking behemoths like Barclays and HSBC are saddled with outdated technology and a risk-averse culture to respond to the challenge that upstarts like his digital bank, Monzo, present.

“The banks really focus very hard on their existing set of financial products,” Blomfield, co-founder and CEO of Monzo, said in an interview. By that, he means things like mortgages, loans and credit cards — “balance sheet products, basically.”

“When you go out on the street and talk to people about their banking, they don’t mean their mortgage, they mean, ‘When am I going to get paid?’ or, ’Can I afford to buy lunch today?” he added. “Human beings mostly focus on day-to-day payment processing.”

Blomfield said he felt there was a “disconnect” between large lenders and their customers. To be sure, “they have all of the customers and all of the money at the moment,” he said, “but it does feel like a dying industry.”

What is Monzo?

Founded in 2015, Monzo has swiftly grown from a start-up offering prepaid debit cards and an app to a regulated bank that’s managed to pull in over 3.5 million users. The company is one of many so-called neobanks that flooded Europe following the 2008 financial crisis, with firms like Revolut and N26 also gaining momentum.

The movement hasn’t been limited to the continent, however, with U.S. challenger bank Chime seeing rapid growth as well. Meanwhile, Europe’s neobanks have been making inroads in America, with N26 racking up 250,000 customers there and Monzo launching a waiting list.

That’s put increased pressure on the large incumbent banks to respond and introduce new offerings for younger, tech-savvy customers. RBS for example recently introduced a standalone digital bank called Bo to take on the fintech challengers. J.P. Morgan had less success with its app-only brand, Finn, which it decided to shut down last year.

“You’ve got massive technology problems and massive cultural problems,” Blomfield said of the traditional banks. “I don’t think that people in banks are necessarily incentivized to think about the customer in the right way.”

He added: “You add on 100,000 staff. How do you transform that whole thing? I think it’s very, very tricky.”

Banks ‘set up to prevent change’

Blomfield blasted the big banks’ approach to tackling the threat of rising competition from the fintech players, saying their method is often to spin out a part of the institution and “send them off into a trendy office with exposed brickwork, Converse and Ping-Pong tables.”

“Banks are set up to prevent change basically,” he said. “A lot of the systems inside the bank — particularly risk and compliance functions — are there to stop things changing. Because if things change it creates risk. And so they’re like these antibodies that go around hunting out change and trying to kill it.”

“Starting from scratch presents its own problems but it’s in a sense easier to create a culture that’s well aligned to creating something new,” Blomfield added.

Monzo and its peers have raised huge sums of cash and notched multi-billion dollar valuations thanks to the willingness of venture capitalists to fast-track their growth. N26 last year raised a whopping $470 million at a $3.5 billion valuation, while Monzo’s market value rose to $2.5 billion on the back of a £113 million ($146 million) capital injection.

Blomfield’s start-up is said to be lining up another £100 millionin funding, an extension to last year’s round, while Revolut is reportedly seeking to raise as much as $1.5 billion through a mix of equity and convertible debt to fuel its global expansion.

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Waking up at 3:45am, on the treadmill by 4am while going through emails, reading a book a day and finding time to meditate – that’s the myth of the superhuman startup founder. It would be “pointless even if it were true”, says Tom Blomfield, the 33-year-old co-founder of one of Europe’s newest unicorns – digital bank Monzo. Recently, the company raised more than £200m in funding and plans to expand into the US.

“It’s like, come on. I typically get up after 8am, I love to sleep,” laughs Blomfield as he sits in his Finsbury Square office. His downtime is spent playing Starcraft or cooking with his girlfriend. “I read these things and feel inferior for about a second, until I realise it’s bullshit.”

Blomfield has worked hard to find his zen. When he was younger, he put in 90-hour working weeks, edging close to a burnout. He founded his first company, Boso.com, when he was 21, but failed to raise any money. His next venture, fintech startup GoCardless, struggled to get seed capital. He readily acknowledges that what he did was risk-free: “I went to a good school, went to Oxford university – I had an amount of privilege.” In the early days, the law graduate worked for about a year without a salary. “And I knew if I failed, I could just go live in my parents’ garage.”

After GoCardless, he served as chief technical officer at Starling Bank, now a competitor – which he left to found Monzo. “When we started four years ago, people said ‘You’ll never get any customers, it’s going to be impossible getting them to switch from a traditional bank, you’ll never make a dent’,” Blomfield recalls. Now, he says, he’s being asked whether he worries “that other banks are going to catch up”.

Monzo is a fast-moving target. The bank is currently acquiring 100,000 new customers a month, growing by roughly 1.2 million accounts each year. The runner-up is Nationwide, with about 900,000 new clients a year, although the building society pays each new customer hundreds of pounds as an incentive.

But legacy banks aren’t standing still. More and more are now offering services similar to Monzo, forcing their digital rival to keep innovating. That’s why Monzo came up with the option to “freeze” your debit card temporarily if a user suspects it is lost or stolen, instead of cancelling it. If found, it’s easy to get it working again. Major high street banks now offer the same feature.

Similarly, incumbents have started allowing online customers to track when and where they spend their money using Google maps. Finally, the digital bank recently introduced “gambling blocks” to help cardholders kick gambling addiction. Transactions at bookmakers are stopped before money leaves the account; Blomfield is certain that traditional banks will soon copy this move, too.

But he is not worried. Overall, he says, legacy banks won’t be able to follow Monzo because they are too focused on where the challenger bank is today rather than where it will be in the near future. Monzo is also inherently different, says Blomfield; indeed, analysts praise its transparency and the communities it developed for both customers and software developers. On the bank’s forum, users can vote for new features, which prompted the name change from the original Mondo to Monzo, and help the startup determine an acceptable fee for cash withdrawals. And then there’s the financial inclusion feature that Blomfield says he’s particularly proud of, which allows people without a fixed address to open a bank account, even refugees.

Blomfield says that Monzo will co-exist with legacy banks, but he hopes his bank will become a personal finance hub where customers manage their mortgage and savings accounts along with products from other banks.

All Monzo customers now have current accounts by default, as opposed to the prepaid cards the company originally launched. Back then, in 2015, the coral-coloured card was especially popular with travellers, as it offered free cash withdrawals abroad. That ended a year ago, when Monzo capped free withdrawals at £200 a month (after which a 3 per cent fee applies) and moved cardholders to its new current account.

While Monzo is a experiencing fast growth, the health of the European fintech ecosystem has also helped its progress. “If you take Monzo, N26 and Revolut, three relatively similar products, we each had hundreds of millions of investments in one sector,” Blomfield says. “I can’t remember a time ever in the history of European technology where three companies have raised hundreds of millions in a single sector, let alone one company.”

By KATIA MOSKVITCH

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At the beginning of 2019 luminous yellow adverts promoting a mysterious new app began spreading across London.

Called Dozens, the app appeared almost out of nowhere with a digital banking service similar to a Monzo or Starling, but with the addition of a curious 5% fixed interest bond aimed at “savers”.

The only question on everyone’s mind was – who was behind this mysterious startup?

When Aritra Chakravarty left HSBC’s wealth management division in Hong Kong in 2017 after a decade with the bank, he never wanted to launch a startup, he wanted to join one.

“I even applied for a role at Revolut and I’d been to see Monzo. It wasn’t like I’d left banking and I had this dream,” Chakravarty tells AltFi, sat in Dozens’ Tower Bridge office.

“The family wanted to come back to London from Hong Kong and I was seeing these startups who were doing tech in financial products, putting the tech in fin, but not really innovating on those financial products.”

So in the end, that’s exactly what he set out to do.

Meet Dozens

“You either become a bank and you do overdrafts, or you become a platform and you’re just a shiny face,” the CEO says.

“Both of those paths are, in my opinion, fundamentally wrong things for digital brands to do.”

Dozens isn’t your run-of-the-mill digital banking app, instead its suite of products are built around what Chakravarty calls the “financial journey”: spending, tracking, saving and investing.

Spend and Track are not dissimilar to what you’ll find in a digital bank (although Dozens doesn’t have a banking license, so it’s more akin to a Monese or Revolut in the UK), transactions made on its bright yellow contactless card, broken down by retailer and location, and categorised by type.

It’s on the Invest and Save (now renamed Grow) tabs that things get interesting, and controversial.

“Most of the banking world is reliant on you borrowing, but how about aligning our incentives with you, so that when you save and invest, we do better?”

It was this hypothesis which led Chakravarty’s team to create an eye-catching 5% fixed interest bond.

Mired in controversy

Called a ‘Trust Bond’, Dozens referred to it in marketing and in their app as a ‘Savings’ product (despite bonds being investments), which caused confusion and concern among customers.

Indeed the Daily Mail’s financial site ThisIsMoney complained that these Trust Bonds are “complicated and it is difficult for an everyday saver, such as those seeing adverts on London Underground, to ascertain where on the risk scale they stand.”

Essentially the Trust Bond is an uninvested bond which Dozens pays 5% interest on, as part of its marketing and customer acquisition costs.

The money is held in a separate trustee account, which Chakravarty says is “not under our name” and would be safe from administrators should the business fail.

At the end of the investment period the money is simply returned, plus 5%.

“The idea of doing it through the bonds was 1) we could do it through our current licence structure [Dozens has an e-money license, not a full banking license], and 2), we wanted to get a product that took market risk out of the investment as much as possible.”

Dozens has also capped the total amount that can be invested in its Trust Bond at £7m, which it is drip-feeding out to customers, giving the business a total liability capped at around £350,000.

“We could have just paid you £5 for joining us, like some fintechs do, but instead we’ve managed to align our mission with your growth.”

What’s next?

With the controversy quietening down, Chakravarty tells me his next priority is hiring and funding.

While meetings with several London-based venture capital funds have yet to bear fruit, the company’s crowdfunding campaign on Seedrs has smashed expectations.

With £2.5m raised from existing shareholders, crowdfunders have helped Dozens beat its overall target of £3.5m, and the money is still coming in.

“But the amount of money that we need to take on the giant banks is probably not going to come from crowdfunding,” the CEO admits.

Conversations with VCs are continuing “all the time”, but Chakravarty says it’s been difficult as Dozens isn’t “following many of the conventions of startups, like ‘launch first’ or ‘iterative builds’, because I think financial services are more about trust.”

“The product is mature, but the business isn’t and we don’t yet have the customer traction that they’d like to see.”

That could quickly change however, and not just with the help of high-interest bonds.

Dozens, which is currently 30 people, but will soon be 50, is working on a series of features for its already full-featured app.

“We have a relationship with ClearBank and we can launch direct debits in the next few weeks,” Chakravarty says.

“There’s some low hanging fruit like joint accounts and child accounts, I think we can do some of that before the summer.”

Dozens Invest products should also arrive soon, a mixture of funds managed by the likes of BlackRock and UBS, exchange-traded commodities, and bonds.

“We eventually do also want to become a bank.”

Because of Dozens focus on savings, its average customer deposits are significantly higher than most of its rivals with banking licenses, at around £750.

Does Chakravarty regret the way Dozens marketed its bond? Would he do things differently next time?

“I don’t think so, obviously. I would take responsibility for everything that we’ve put out so far. But I think it was right to question us, and keep us on our toes.”

As I walked out the room the founder stopped me, and explains his team will be making one change to their future marketing with a bold new disclaimer.

“We are not a bank.”

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Mr King, an adviser to local neo-bank Xinja, worries that traditional banks’ conservative cultures have created an “iterative” – or incremental – approach to making money that has put them years behind rapidly emerging digital disrupters famous for their willingness to take risks and break through.

“Banks can survive but have to become part of this new ecosystem,” said Mr King, who is based in Manhattan and visiting Australia.

“They need to get over the concept that a customer comes to the bank branch. A bank is a platform that extends to other parts of your life if it is embedded when and where you need it.”

A new era of open architecture, which enables third-party developers to build applications and services around a financial institution, is creating competition from deep-pocketed, determined disrupters, such as Apple, which often turn traditional rivals, from newspapers to retailers, into digital superhighway road kill.

“If they can pull in your data into these systems then they can develop solutions based on your behaviour, which might not be existing banks. This is different from the traditional cross sell. It is about more optimal financial solutions,” Mr King said.

Smartphones will become even more personalised and a gateway into their owners’ financial lives.

Digital proselytisers

Mr King, who failed to complete two university courses that he ended up teaching, is the founder of Moven, a mobile banking system, and author of Augmented, which is about the digital age, and recommended by China’s President Xi Jinping.

He was also a member of the so-called “Fintech Mafia”, an informal group of about 16 digital proselytisers who advised the Obama administration and Federal Reserve on disruptive technology and “fintech” – the word coined to describe computer technology, artificial intelligence and behavioural science being used in banking and financial services.

His role models are the Chinese challenger banks such as WeBank, which in about three years has acquired about 80 million customers, more than JP Morgan Chase has in the US.

The Shenzen-based branchless bank has a blockchain core that monitors marketing campaigns, transactions, applications, cyber security threats and other operations in real time.

Mr King estimates traditional Western banks are about eight years behind in research and application, which is light years in the fast-moving world of cyber-technology.

Future global leaders will combine predictive artificial intelligence based on sophisticated behavioural analysis and digital delivery where and when the consumer requires it.

“It’s about delivering core utility in real time,” he said, which could accelerate the extinction of bank branch networks.

“Credit cards will disappear over the next decade but the function of providing credit will still be provided by banks. You do not need plastic cards with 16 digits.”

Instead, a phone message will provide details on existing balance, available credit, cost of using that credit and real-time overdraft.

“You will not need to apply for credit because, based on previous behaviour, the bank will know how much credit you can afford to use.”

Mr King’s company Moven can predict a user’s need for credit 90 days out with 90 per cent accuracy.

Mortgages are also facing a digital rebirth, he predicts.

“Finance options will appear on smartphone, on your glasses, or from a smart speaker when you walk into a listed home. You will get an offer for a home loan from banks that are bidding for your business based on key data they have about you.”

Frustrated sci-fi writer

Roles of mortgage broker and real estate agent are likely to merge because property buyers like some human contact, particularly for their first purchase.

For car buying, the technology will predict financing based on offers in the buyers’ price range.

“Another option might be suggesting that the buyer might be able to bridge the funding gap by, say, signing up with Uber and committing to driving three days a week,” he said.

“The big shift in all these scenarios is that you are getting help when and where you need it. You are not having to visit a bank branch and jump through hoops.”

Mr King, who describes himself as a frustrated sci-fi writer, said the big shift in the past 40 years has been consumer willingness to rapidly embrace new technologies, particularly the post-Boomer generations that grew up with digital devices.

“I currently see changes in leadership in Australian banks. But I don’t see cultural shifts within their banks. The big concern is that the culture on how to make money is not changing,” he said.

“More than half of fintech is being driven by frustrated bankers who could not change the culture of their former employer. Banking cannot stay in the 19th century when their customers are embracing these changes.”

Pressure on banks to report quarterly made it difficult to break out of the short-term earnings/revenue cycle and drive pioneering change, Mr King warned.

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