Oct 30, 2020

Lufax becomes China’s second fintech IPO this week

Lufax
Ant Group
Fintech
IPO
William Girling
2 min
Announced shortly after the news of Ant Group’s record-breaking IPO, Lufax is reportedly preparing a smaller but still significant IPO of US$2.4bn
Announced shortly after the news of Ant Group’s record-breaking IPO, Lufax is reportedly preparing a smaller but still significant IPO of US$2.4bn...

Announced shortly after the news of Ant Group’s record-breaking IPO, Lufax is reportedly preparing a smaller but still significant IPO of US$2.4bn.

Founded in 2011, the Chinese company is an internet-based wealth management and lending platform backed by Ping An Insurance Group, the country’s largest insurer.

Utilising big data and cutting-edge analytics technology, Lufax’s specialities include risk management, financial assets trading and consulting services.

According to an article by Yahoo!, “The company plans to use the funds from the IPO for purposes which may include investment in product development, sales and marketing activities, technology infrastructure, acquisitions or investments, according to the prospectus.”

Chinese fintech: becoming a world leader

Although the US and European markets have established a strong foothold in the global fintech sector, with Latin America and APAC developing quickly, perhaps none of these have experienced the rapid growth demonstrated by the Chinese industry.

In its report ‘Fintech in China: hitting the moving target’, Oliver Wyman cites the relentless progress of tech giants like Alipay, ZhongAn and Lufax itself as prime examples of tech-driven companies enforcing “disruptive business models.”

“Despite having very different backgrounds and business models, these players have all been enjoying the fruits of the industry’s unprecedented growth by filling the gaps in China’s structurally imbalanced financial system in an open regulatory environment,” it said.

However, Oliver Wyman adds the caveat that many Chinese ‘fintechs’ are more comparable to traditional institutions, merely shifting their channel emphasis from offline to online. Tightening regulations to restrict this misrepresentation could reduce associated cases of fraud and unsustainable growth.

Placing the emphasis on tech

Eric Jing, CEO of Ant Financial, described his company as a potential ‘techfin’ pioneer, a knowing inversion of fintech’s implied emphasis. Indeed, there is a growing sense that businesses in the space are ‘technology companies dealing with finance’ and not the reverse.

As such, it could be surmised that a company’s use of technology will ultimately shape its success, with big data analytics, IoT and blockchain indicated by Oliver Wyman as the most substantial tools currently available. 

Fintech’s ability to enable financial inclusion for unbanked communities using these technologies is also significant: Jing himself alluded to this, and, of the estimated 1.7 billion unbanked adults worldwide, 225 million reside in China.

The country, therefore, stands to gain significantly from the development of its fintech capabilities. Whether this is a contributing factor in its rapid growth is unknown, but Ant Group’s and Lufax’s strong IPOs indicate that China could soon take a leading global position in fintech.

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Jun 24, 2021

Islamic fintech Waheb plans UK expansion: Hires expert GM

wahed
islamicfinance
Fintech
Sharia
4 min
The world’s leading Islamic fintech company has hired top industry expert Umer Suleman to oversee Waheb Inc’s UK-wide expansion plans

Wahed Inc has hired a leading industry expert to take Islamic finance forward in the UK marketplace. 

Umer Suleman has been appointed as General Manager of UK operations for Wahed Inc.. His role will include overseeing Wahed Invest’s nationwide growth strategy and strengthening the firm’s position as a leading provider of ethically focused investment services. 

Suleman’s track record includes over 15 years of regulatory, risk, and strategy consultancy roles, as well as advisory positions across a variety of businesses and sectors including positions at UKIFC, Daiwa Capital Management, and Ernst & Young (EY).

He also spent seven years at HSBC as Head of KYC Risk globally within their Global Banking and Markets business, Head of Business and Conduct Risk for MENA within Retail Banking, and headed up the CCO function for Digital (GLCM) within the UK with a global remit.

Wahed and the growing role of Islamic finance

The startup fintech was founded in 2017 and is an American company based in New York City. Since its inception,  it has grown from strength to strength and in July 2019, launched the first exchange-traded fund in the US that was compliant with Sharia law. 

Islamic finance typically refers to the way businesses and individuals raise capital in accordance with Sharia, or Islamic law. It also refers to the types of investments that are permissible under Islam. 

Wahed currently operates in 130 countries and has offices in Washington D.C, New York, London and Dubai. It has also developed an easily accessible digital platform that balances ethical finance with modern investments, attracting over 200,000 active clients from around the world with features such as free portfolio recommendations and no hidden fees.

Wahed UK expansion plans

According to reports, the UK is highly receptive to services in the Islamic finance sector and is also one of the fastest-growing markets globally.  It has a three million-strong Muslim population and one of the most developed Islamic finance sectors outside of the traditional Muslim regions, with global population figures projected to double over the next forty years. 

It is hoped Suleman’s leadership of Wahed will address the underbanked needs of the Muslim community while also serving the increasing number of retail investors currently seeking ethical alternatives to wealth creation. 

Speaking about the new role, Wahed CEO, Junaid Wahedna, explained  “Mr. Suleman’s appointment reaffirms our commitment to providing innovative and outstanding ethically driven financial services to a market that, historically, has been underserved.

“We’re delighted to welcome Umer to the team and firmly believe that with him at the helm, our operations in the UK will continue to go from strength to strength and provide customers seeking ethical investments with accessible, trustworthy and innovative solutions.”

The appointment follows on from Wahed’s recent investment round and its acquisition of the UK-based fintech Niyah.

These events will support the company in its plans to build an Islamic marketplace that meets growing demand for socially conscious investors – and not just those of Islamic faith. 

The fintech firm also plans to utilise the UK’s position as a leading hub for Islamic finance as a springboard into other European cities, and believes it has a central role to play in providing Shariah-compliant services that address inclusion and inequality.

The Islamic finance industry is currently valued at around US$2.4trn and is expected to grow steadily by 10-12% over 2021 and 2022, having experienced rapid growth in recent years.

THREE reasons why Islamic finance is a growing sector

  1. The UK Muslim population is growing - and has been traditionally underserved by incumbent banks. The Muslim population is growing twice as fast the world’s non-Muslim population and Islamic finance address this group’s needfor  Shariah compliant financial products.
  2. It encourages financial inclusion. According to the World Bank, financial inclusion is defined as individuals and businesses having access to useful and affordable financial products and services that meet their needs – transactions, payments, savings, credit and insurance – delivered in a responsible and sustainable way.
  3. It supports Sharia compliant products. Transactions that work with industries forbidden in Islam (gambling, usury and speculation) are forbidden. Islamic banking only works with businesses that adhere to their ethical and moral standards.

 

Image credit: Wahed Inc team

 

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