Who is financial infrastructure provider, Banking Circle?
We take a closer look at the financial infrastructure provider that has just received a banking licence from Luxembourg's regulator: Banking Circle.
Banking Circle, a financial infrastructure provider, has obtained a banking licence from the Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg. The provider can now give financial institutions access to real-time payments, regardless of borders or company size. As a result, the company has moved its HQ to Luxembourg.
Pierre Gramegna, Luxembourg Minister of Finance with Anders la Cour, Chief Executive Officer and co-founder of Banking Circle said: “Given Luxembourg’s role as a leading financial centre in Europe and a hub for payment services, it made complete sense for Banking Circle, a provider of banking and payments infrastructure for businesses transacting globally, to choose Luxembourg as its headquarters. Being able to operate on a pan-European basis with a Luxembourg banking licence enables businesses like Banking Circle to give their clients additional confidence when it comes to security and compliance rigour.”
Anders la Cour, CEO, Banking Circle, believes that obtaining this licence will greatly elevate the company’s position in the financial economy. He says: “In the last four years we have built a financial infrastructure that numerous Payments businesses have adopted to process their cross border payments. We have also tackled the limited access to funds for SMEs with our lending solutions.”
He continues: "Securing our Banking Licence gives us the ability to deliver bank accounts on a global scale so that we can extend our propositions, enabling Payments businesses, such as PSPs and acquirers, to offer banking services to their clients without having to invest in their own costly infrastructure.
"We’re also providing banks with the ability to extend the services they can offer to their business clients without facing hefty infrastructure investment and regulatory burden."
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What does Banking Circle Do?
Started at the end of 2015, Banking Circle was founded as a means to create a new type of financial service: financial infrastructure for payments and banking. It achieves this by delivering mission-critical infrastructure for a range of financial services, such as online cross border payments and loans. In 2018, the company was acquired by the EQT VIII fund (“EQT VIII”) and EQT Ventures fund (“EQT Ventures”) (jointly “EQT”) and has since leveraged the EQT network to accelerate the company’s growth.
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FIVE things fintechs must do to keep investors onboard
New investors flocked to the stock market during the COVID-19 pandemic. Thirty-eight percent of investors said they had never had a brokerage or similar account before opening one in 2020.
Low or no-fee trading options have helped accelerate the trend – nearly half of new investors said they accessed their account primarily through a mobile app. As FinTechs, how do we create the trust needed to keep new investors in the market and create a fruitful customer experience for them?
The financial industry does a disservice to individual investors if we merely offer tools that focus on making money quickly, an approach that usually backfires. Instead, the surge of interest presents an enormous opportunity for those who want to help more consumers use financial technology to educate them on responsible spending, saving, and investing in order to achieve financial wellness current fintech tools have welcomed individual investors in the door.
Now, it’s time to focus on education and improving their experience going forward. There are several ways those of us in fintech can step up to shape the future of retail investing so that it works better for everyone, starting with the following areas.
Equal access to financial wellness education
Financial health should be available to everyone — but today, not everyone has the educational resources to achieve it. One study shows that only 3.9% of students from low-income schools were required to take a personal finance class. What they aren’t learning in school or from family members, fintech companies can provide on their platforms.
The companies should move from solely offering financial services to a more responsible model of education, advice, and prescriptive choices to help consumers develop better habits and make wiser financial decisions. Not only can they empower consumers and bridge historical wealth divides, but they can also stimulate growth by opening up new consumer segments.
Just as we’ve come to expect that our fitness routines are tailored to our individual bodies, we’re also ready for finance tools that go beyond one-size-fits-all solutions. But only six percent of financial institutions say they’re using the kind of technology that allows them to deliver a deeply personalized experience. Fintech tools need to reflect that financial success looks different for each of us.
For one consumer, it may mean providing guidance on how to pay off student loans early; for another, it may mean prescriptive actions that enable them to stick to a budget for the first time; for a third, it could look like prioritizing environmental, social and governance (ESG) investments, so that her portfolio aligns with her political beliefs.
Now, we are seeing financial technology beginning to meet the demands of personalized finance in a substantial and meaningful way.
The rise of AI-Powered Advice
Big-picture advice and predictive guidance used to be a feature of high-end financial advisory firms — a perk only available to those who could afford it. But thanks to rapid advancements in data analytics and artificial intelligence (AI), that kind of holistic advice is now more accessible than ever. AI-driven robo-advisors can parse many different streams of financial information, delivering customized answers to key questions: Is it time to buy a home, or is it smarter to keep renting? Can I afford to take out another student loan?
Intelligent connectivity powered by AI can anticipate consumers’ needs and next steps, making proactive suggestions that guide them along the path to financial wellbeing. Fintech companies can also help consumers identify when their financial picture becomes too complex for a robo-advisor, and help them find a human financial advisor to meet their needs.
Focus on financial mental health
New investors are quickly finding that the market can be overwhelming. That’s not surprising, financial anxiety is common and studies show that financial stress can have an impact on mental health for some.
It’s not enough for fintech companies to give retail investors access; they also must provide the guidance and support that help consumers manage their financial well-being. Educational tools can ensure that consumers are well informed about their options.
Predictive analytics can anticipate consumers’ questions, serving them key information and insights before they ask. Features that emphasize a comprehensive notion of financial well-being, rather than short-term wins and losses, can also help ensure that consumers are keeping their eyes on the bigger picture.
Gamification for good
The surge of gamification apps has done an impressive job making investing as engaging as playing a video game or joining a social media platform.
Much of the current use of gamification emphasizes short-term thinking, but there’s also an opportunity to help consumers think more broadly about their overall financial picture. One example is peer benchmarking, a feature that enables help consumers to see how their financial habits compare to those of friends and fellow consumers.
Gamification can also be used to incentivize making smaller, smarter choices — for example, rewarding saving over making an impulse buy.
The future of fintech is about more than just broadening access to the markets. It’s about making sure more individuals have access to the tools that can help improve their financial well-being—in the ways that suit their own circumstances and needs. The potential to act within their own set of individual priorities, with their long-term financial wellness in mind is much more empowering to a consumer than simply relying on short-term, high-risk investments.
About the author: Brandon Rembe is CPO at Envestnet Yodlee. He has over 18 years of experience building high-growth technology, software, and information service companies, Brandon has worked across a broad spectrum of enterprises from early-stage ventures to global businesses.