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Fintech Ant Group Affiliate MYbank Is Planning to Expand Operations in China to Serve More Rural SMEs

China-based MYbank, an online private commercial bank and an affiliate of the Ant Group with a special focus on working with rural areas and SMEs, has revealed that it will be doubling the number of rural counties it serves in the coming years.

MYbank and its business partners plan to provide financial services in 2,000 rural counties in China within the next four years (by 2025). This should coincide with the bank’s 10th year since its launch. The initiative will ensure that rural clients are able to access the same modern financial services that are offered in some of China’s largest cities. The initiative should also help with addressing the last-mile problem in the rural finance sector.

This latest announcement from MYbank has come along with the release of the firm’s 2020 annual report, which reveals that MYbank had been serving 70% more (year-on-year) SMEs in 2020 when compared to 2019. This rise in activity has mainly been driven by MYbank’s expansion into rural areas.

Since launching operations 6 years back, MYbank has managed to serve clients in over 750 different counties across China.

Xiaolong Jin, President of MYbank, stated:

“We have continued to record remarkable growth in customer base for five consecutive years. We expect rural finance to play a significant role in advancing financial inclusion, and will further our efforts to make rural finance more accessible with our financial institution partners.”

MYbank has reportedly kept its non-performing loan ratio at around 1.52%, which is a lot lower than the 2.99% average for Chinese SME loans (as of June of last year).

MYbank had teamed up with the All-China Federation of Industry and Commerce and the China Banking Association (in March 2020) in order to introduce a “Contactless Loans” initiative, in which 118 Chinese banking institutions had come together to provide supportive loans for small and medium-sized businesses as they tried to maintain operations.

The initiatve reportedly offered more than RMB 870 billion worth of loans to many different SMEs in sectors that were negatively impacted by the COVID-19 outbreak (including local dining and retail outlets).

During the 6 months since the campaign began, MYbank and its partner banks have waived RMB 665 million in interest payments for Chinese SMEs.

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Monetary Authority of Singapore Dedicates S$42 Million for Regtech Initiatives

The Monetary Authority of Singapore (MAS) has announced a new grant program targeting Regulatory Technology or Regtech that is said to be an enhancement of the Digital Acceleration Grant (DAG) scheme to accelerate technology adoption.  In a public statement, MAS said it will commit S$42 million for the Regtech grant scheme and enhanced DAG scheme.

Sopnendu Mohanty, Chief Fintech Officer at MAS, stated:

“MAS remains committed to the digital transformation of the Singapore financial sector. We expect the RegTech ecosystem to flourish with widespread use of innovative solutions to aid risk management and compliance. The Digital Acceleration Grant has enabled the smaller FIs and FinTech firms to adapt to the challenges in the past year and we will continue to support these firms as they accelerate their digital transformation journey. We encourage FIs to tap on these grants to embed technology into the firms’ DNA.”

The grant is being made available to Singapore-based financial institutions (FIs) and seeks to promote the adoption and integration of technology solutions in the risk management and compliance functions of financial services firms.

There will be two tracks for the grants including:

  • The pilot track: FIs can seek funding to pilot potential RegTech solutions before embarking on full-scale integration of the product into its operating environment. Funding for this track will be capped at S$75,000.
  • The production level project track: FIs can seek funding to develop larger-scale customised projects that can be fully integrated into the FI’s systems. Funding for such projects will be capped at S$300,000.

MAS states that both tracks can be used to support either in-house development or commercial partnerships with Regtech firms based in Singapore.

The DAG was launched in April 2020 to help smaller FIs and Fintech firms adopt digital solutions to better cope with the impact of COVID-19, and to position themselves for subsequent recovery and growth. As of 31 March 2021, MAS reports that it has received over 1,100 applications from both FIs and Fintech firms.

MAS said it will commit an additional S$30 million to the DAG until 31 December 2021 to encourage the industry to adopt digital solutions that enhance productivity, cybersecurity, and operational efficiency. This brings the total grants available under the DAG scheme to S$65 million.

Ian Lee, Vice President of Business Development at Merkle Science, a Singapore-based blockchain transaction risk monitoring and analytics platform, issued a comment on the new Regtech funding.

“Regtech solutions are having a difficult time gaining market share here in Singapore and abroad. Oftentimes, startups at their initial stages have to give away their solutions at a low cost — or sometimes even for free — in order to gain traction and receive feedback on their product. With startups’ limited resources, it is difficult for these innovative new startups to compete with larger legacy firms. With this new $42 million grant, the MAS is supporting the development of local Regtech startups and encouraging innovation in two ways. Firstly, the grant furthers the existing Digital Acceleration Grant (DAG) scheme, which is available to any startup that services financial institutions. Through the extension of the DAG, financial institutions can also use the grant to subsidize their cost of operation.”

Lee added that an interesting feature of the new Regtech grant is for providers to pilot their solutions and test for efficacy under a paid model.

“While the details on this feature have not been released yet, it sounds like there may be subsidies for established companies to use and test the solution before the startup moves the solution to full-scale production.”

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Leading UK Fintech Firms Now Working with PwC to Streamline Digital Financial Services with AI, Data Analytics

Ten of the United Kingdom’s leading Fintech companies are now working with Big Four auditing firm PwC in order to showcase how the future of banking will focus on both collaboration and innovation, along with greater personalization.

After 3 years of ongoing development, the 10 Fintechs have managed to contribute to the company’s “Tysl” ecosystem which includes various solutions related to software, automation, AI, data management and analytics.

These solutions aim to make it easier or more convenient for clients to open new bank accounts, obtain specialized financing services, move house and digitally sign official documents.

By leveraging an API-powered approach, which lets software apps communicate with each other, Tysl has enabled these firms to work cooperatively and innovate together with PwC to create a banking tech proposition that helps organizations with significantly enhancing performance across several different measures.

This includes dealing with complex customer or user experience journeys like advanced Customer Relationship Management (CRM), Know Your Customer (KYC), Credit Decisioning, and in life account and loan servicing across several key areas such as mortgages, savings and corporate lending.

By leveraging Tysl, PwC can effectively develop all-digital solutions through an innovative, affordable, and user-centric online lending platform. This can help the company’s customers with enhancing their customer-facing business operations and improve products and services in order to meet the speed and multi-channel expectations required by companies today.

James Morgan, Lead Partner on Tysl stated:

“Banking is changing, people expect more and require personalised digital interactions. Based on the needs and expectations of tomorrow’s customers, we have developed our Tysl platform. This is helping our clients reach new customers, upsell and grow topline revenue by delivering enhanced capabilities whilst significantly reducing the costs of servicing the client from onboarding to in life servicing.”

The companies or businesses that are now integrated with the Tysl platform include:

Mambu – is a software-as-a-service or SaaS financial services platform supporting innovation in banking, lending, and – a Cloud-native alternative to more traditional core banking systems.

Yoti – is a global identity platform that makes it more seamless and safer for banking clients to prove who they are via ID verification and biometrics

Kompli Global – created a remote due diligence solution that harnesses artificial intelligence and “human expertise” to provide intelligence on organizations and their workers.

DueDil – is an insights provider assisting financial services organizations and insurers with a better understanding of their client base to handle digital or online onboarding, manage compliance, risk, and in-life monitoring.

Just Move In – provides a home setup experience for people moving home that arranges essential services including council tax, insurance, and broadband.

SignNow – is a legally binding eSignature application, allows users to create and complete legally binding electronic signatures on any device.

Codat – connects the tools and services that small businesses need for their operations to their financial service providers and takes care of the “heavy lifting” of those integrations.

Flexys – is a specialist tech firm focused on enhancing the value and performance of debt management and collection systems with a low-code, Cloud-native platform.

Saltedge – develops PSD2-powered solutions that are used by Fintech firms, banking institutions, and other financial institutions across the globe. The company provides connectivity to over 2500 banks across Europe for data aggregation and payment initiation capabilities – through a single API.

Credit Kudos -an open banking credit reference agency that uses real-time financial behavior to “measure creditworthiness” and “affordability” to assist lenders when unwriting consumer and commercial loans.

Lendingmetrics – Auto Decision Platform (ADP) is a decision engine environment that may be applied across “unlimited” brands, products or lending journeys under a single license and offers a comprehensive (no-code) editor, helping non-technical staff to make real-time changes to credit risk logic

Gazeal – enables the seller of a property to provide key details required to meet the estate agent’s Consumer Protection Regulations requirements, and, as a Licensed Provider of the Law Society, all of the requirements of the Conveyancing Quality Scheme. By using Gazeal’s reservation service, it will “almost” completely eliminate abortive transactions.

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ZA Tech Global, the Technology Initiative Backed by Softbank Vision Fund I, Launches Asia Fintech Center

ZA Tech Global Limited, the technology venture established by ZA International and supported by Softbank’s Vision Fund 1, revealed on Friday (April 9, 2021) that it’s launching its Asia Fintech Center (AFC) in Singapore. The new center will focus on financial services innovation projects and it will also assist industry participants in the region so they can develop new products that will accelerate their digital transformation strategies.

The AFC launch is reportedly a global first for ZA Tech, as the business increases its focus on supporting the vision of providing a unified tech platform that aims to support the future of financial services and offer access to underserved consumers.

The Singapore-headquartered Center will aim to address specific use-cases in insurance and the financial services sector with assistance from industry partners. It will initially work on various insurance use-cases by co-developing innovative projects with ASEAN region-based insurance service providers. It will also work with local academic institutions or universities to develop appropriate Fintech-related expertise and talent.

Bill Song, CEO of ZA Tech, stated:

“We partner with industry players to strive to boldly redefine financial services, and the AFC is an important pillar of making that happen. As we have entered 2021, the year the internet economy continues to rapidly reshape consumer expectations across Asia, digital transformation is becoming as crucial as ever for financial services firms. AFC will bring together technology, talent and partner network to build innovative propositions that fit closely with the evolving customer expectations across both online and O2O and to help financial services prepare for the next chapter of the digital revolution.”

George Kesselman, Head of Commercial for ZA Tech, remarked:

“I am incredibly proud of the work that the team is doing with our partners in the region. AFC will allow us to bring collaboration to the next level by launching new innovative use-cases and enable rapid product-market fit testing and iteration. Southeast Asia is the major epicentre of financial services transformation. We strongly believe that Singapore, as the hub of innovation and talent in the region with its innovation friendly environment and forward oriented regulator Monetary Authority of Singapore, provides the perfect location to launch and scale fintech innovation across Southeast Asia.”

ZA Tech is the tech platform for ZA International that focuses on expanding its global operations by teaming up with major internet firms and financial services companies based in Southeast Asia, Japan and Europe. ZA Tech offers technical solutions and professional services as well.

ZA Tech aims to digitally transform the insurance sector by working with several different customer technology platforms. It’s focused on creating innovative insurance solutions while offering the digital core system to insurers as the infrastructure for their distribution.

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British Business Bank: Recovery Loan Scheme Open for Applications

The Recovery Loan Scheme is now open for application. Administered by the British Business Bank, this is a new scheme to support access to finance for UK businesses as they turn the corner on the COVID-19 health crisis. The scheme, announced at the Budget on March 3, 2021, is scheduled to run until December 31, 2021.

The new program will allow UK firms to borrow up to £10 million for individual businesses and up to £30 million across a group. Funds may be used for any legitimate business purpose, including managing cash flow, growth, and investment.

The British Business Bank has been the organization that has been administering the Bounce Back Loan Scheme (BBLS), Coronavirus Business Interruption Loan Scheme (CBILS), and Coronavirus Large Business Interruption Loan Scheme (CLBILS). The Recovery Loan Scheme seeks to continue to support smaller businesses.

Features of the scheme include:

  • Up to £10 million per business: The maximum amount of a facility provided under the scheme is £10m per business (maximum £30m per group). Minimum facility sizes vary, starting at £1,000 for asset and invoice finance, and £25,001 for term loans and overdrafts.
  • Wide range of products: Businesses can choose from term loans, overdrafts, asset finance, and invoice finance (subject to the lender being accredited for each of these finance types).
  • Term length: Term loans and asset finance facilities are available from three months up to six years, with overdrafts and invoice finance available from three months up to three years.
  • Interest and fees to be paid by the business from the outset: Businesses are required to meet the costs of interest payments and any fees associated with the RLS facility.
  • Access to multiple schemes: Businesses that have taken out a CBILS, CLBILS or BBLS facility are able to access the new scheme, although the amount they have borrowed under a previous scheme may in certain circumstances limit the amount they may borrow under RLS.
  • Pricing: The annual effective rate of interest and upfront and other fees cannot be more than 14.99%.
  • Personal Guarantees: Personal guarantees are not permitted for facilities of £250,000 or less. Above £250,000 the maximum amount that can be covered under RLS is capped at a maximum of 20% of the outstanding balance of the RLS facility after the proceeds of business assets have been applied. No personal guarantees can be held over Principal Private Residences.
  • Recovery Loan Scheme-backed facilities are provided at the discretion of the lender.
  • Guarantee to the lender: The scheme provides the lender with a government-backed guarantee against the outstanding balance of the facility. The borrower always remains 100% liable for the debt.

Eligibility criteria include:

  • Covid-19 impact: The borrower must confirm to the lender that it has been impacted by Covid-19.
  • UK-based: The borrower must be carrying out trading activity in the UK.
  • Viability test: The lender will consider that the borrower has a viable business proposition but may disregard any concerns over its short-to-medium term business performance due to the uncertainty and impact of Covid-19.
  • Credit and fraud checks for all applicants: Lenders are required to undertake credit and fraud checks for all applicants, as well as customary checks such as Know Your Customer and Anti-Money Laundering. The checks and approach may vary between lenders.
  • Turnover limit: There is no turnover restriction for businesses accessing the scheme.
    How to apply

Lenders previously accredited to provide CBILS have been invited to apply for accreditation for the Recovery Loan Scheme.  Businesses are advised to first approach their own finance provider via the lender’s website. The Bank notes that if a lender can offer a borrower the choice of a commercial loan on better terms, without requiring the guarantee provided by the RLS, they should do so.

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