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Discover Europe’s premier conference for credit scoring

It’s an exciting time to be working at the crossroads of finance and technology, helping businesses improve their customer journeys and making the most of new sources of data. 

Credit Scoring and Credit Control XVI, Europe’s premier conference for credit scoring and related topics, will see 400 delegates from over 40 countries converge on Edinburgh between 27 and 30 August. 

The lending market is changing more rapidly than ever before with rapid entry by lenders without branches, fintech startups with new services, open banking facilitating account moves as well as increasing regulations.

Every two years for the past 30 years, the conference has helped connect academics and practitioners. It is the agenda-setting forum for research and new methodologies for credit scoring and control, with talks covering a huge range of modelling issues such as machine learning, the use of new forms of alternative data, fraud prediction, interpretability of AI models, IFRS9, stress testing and SME risk modelling. Hear risk modellers opening their bonnet on their new developments and academics describing futuristic research that may set the agenda for the next decade.

Our previous event, in 2017, captured the mood of the time, with warnings that the growth in UK consumer debt had become a serious problem. Unsecured consumer credit had risen to £200bn for the first time since 2008. We heard fresh concerns about whether past models would be good into the future and naturally, concerns over Brexit. Two years on these worries still loom large!

I’m looking forward to hearing from our keynote speakers: Javier Frassetto, Chief Risk and Analytics Officer of LenddoEFL, leader in use of non-traditional data and identity verification; Diederick Potgieter, Risk Specialist at the Bank of England; and Paul Russell, Director of Analytics at Experian Consumer Services UK & Ireland. 

The discussions that take place in Edinburgh this August will have a ripple effect across industry and academia for months and years to come. 

Jonathan Crook
Director of Credit Research Centre,
Professor of Business Economics and Director of Research
University of Edinburgh Business School

Discover SDI’s Fintech Export Programme

If you’re a Scottish Fintech company with a great product or service offering and you have the drive, commitment and tenacity to expand into overseas markets you might want to sign up for Scottish Development International’s Fintech Export Programme, where you’ll be guided through both the essential, and advanced, requirements of doing international trade.

To help you succeed, they’ll guide you through producing a robust International Action Plan to drive your company’s growth in 2019 and beyond.

Over the course of the Programme they’ll cover all necessary topics to ensure you’re well-prepared to exploit new market opportunities and compete

on the international stage.

 

What’s in it for me?

  • Help and resource to develop your own international action plan to implement into your business
  • A step-by-step guide to develop insights into key topics such as:
    • Profiling International Clients
    • Understanding International Market Requirements
    • Identifying your Business Model / Route to Market
    • Developing an Export Plan
  • Plus, it’s the ideal setting to network with other like-minded Scottish businesses

 

What will I learn?

  • How to effectively research and exploit international opportunities
  • What market entry options are right for your business
  • Next steps for your business

 

Who’s it for?

If you’re a Fintech company (or a tech company with Financial Services customers) based in Scotland and you’re interested in growing internationally, then Export Workshop is a good place to get started. It’s fully funded and open to all businesses, except for intermediaries or suppliers of international trade services.

 

When and Where?

Tue 20th August 2019

Fintech Export Programme (click on link to register)

EDINBURGH – Scottish Enterprise, Apex 1, 99 Haymarket Terrace, Edinburgh, EH12 5HD

Time: 09:30 ”“ 17:00

You can also view these via www.scottish-enterprise.com/events. Scottish Enterprise’s Preparing to Export Programme is fully funded to Scottish companies and is part funded through the European Structural and Investment Funds (Investing in a Smart, Sustainable and Inclusive Future). You should note that this support is a form of state aid, and on attendance it will count towards your overall De Minimis allowance (Please see event page for a breakdown of De Minimis levels)

 

Discover Ellis Accelerator for expansion into the US

Ellis Accelerator is an equity-free three-month program designed to empower international startups as they expand to the US market and become global companies. We support international B2C and B2B startups by providing them with all the resources required to scale successfully in the US – including 150+ mentors, housing and office space in NYC, workshops, $350k benefits package, and access to an exclusive community.

The program begins once a startup is accepted – we work with them prior they arrive to NYC, helping them get their visas, set up their legal US entity, and refining their US go-to-market strategy. Thus, providing the participating startups the foundation necessary to focus on strategic initiatives and generating traction in the US once they arrive in NYC.

Upon arrival, startups go through a two-week bootcamp comprised of 15+ workshops to give them a thorough understanding of key concepts vital to scale successfully in the US. Our bootcamp is comprehensive and covers everything from pitch coaching, to building a US company, to sales and more.

Startups are paired with one or two lead mentors and have access to an additional 150+ specialist mentors. Our mentors and our team work with the participating startups 1:1 throughout the program to empower them to achieve their goals.

As part of the program, Ellis provides office space in SoHo, inclusive of free rooftop event space and conference rooms. Ellis is one of the only accelerators in the world providing furnished housing for the entire duration of the three-month program – allowing the startup founders to focus on running their company, instead of searching for accomodations.

While the program is three months long, once a startup is a part of the Ellis family, they are in it for life and will always have access to our community and our benefits package worth over $350K. The Ellis community consists of 150+ mentors, entrepreneurs and investors that will enable participants to scale dramatically faster.

As the Ellis program is equity-free, there is a participation fee which covers all program components. Third parties, including governmental, educational organizations and others, may sponsor participation.

 

Applications for the Fall 2019 cohort are open until July 15. Startups may apply here.

Additionally, we will be hosting the Ellis Accelerator Spring 2019 Demo Day at SAP Next-Gen in NYC on July 9th. This event will feature pitches fromEllis Accelerator‘s Spring 2019 cohort,Artboost,Bearaby, and DerButton. Register here and use code “EAS19” for a free ticket.If you are in New York at that time then we hope to see you there!

Introducing Sagecity IPS

SageCity’s Internal Payments System (IPS) is a financial infrastructure tool for enterprise. It allows for immutable tracking and management of a user’s assets and data but primarily focuses on financial balances.

The main benefit of this innovation is that by using sidechain technology on the SageCity network, enterprises can accurately distinguish users and their financial resources in a secure and low-cost manner. IPS works in conjunction with payment processors by tracking payments received into a user’s account and assigning them representative tokens for that payment.

With it, enterprises can:

  • Limit the involvement of payment processors;
  • Gather real-time analytics; and
  • Have a sidechain foundation that can be used to handle further processes in the future.

 

The Cryptocurrency Token

A token is deployed on the sidechain network and the tokens are held by the platform operator, ready for use. Tokens are divisible and can have their own value. Or, they be used to accurately represent a fiat currency, for example: £1 = 1 Token or £0.59 = 0.59 Token. Value can be enforced by the token operator as, in order for them to be circulating, they must have been paid for by a user. This allows an enterprise to maintain its own internal stablecoin. There are also opportunities to monetise elements of this solution for the enterprise.

 

Focusing on a Positive User Experience

On the intended platform, a user would proceed to the payment portal as expected. The user would input their card details, confirm, and approve the charge. That money is then facilitated by the payment processor and transferred from the user to the enterprise’s bank account. Once the transaction is successful, the platform operator issues a fiat equivalent in the token. This then sent to the user’s unique account and can then be used on the platform in their desired way.

When a user spends or sends those tokens, they choose their destination and hit a “Buy” or “Send” button. Once confirmation is received, tokens are sent to the desired destination.

In platforms in which redemption or “cashing out” happens, the tokens are sent to the platform operator and the equivalent in fiat is then sent from the enterprise bank account to the destination as requested by the user. The payment processor carries out this last step.

We believe that the blockchain revolution should be almost silent. Users should seamlessly carry out their usual activity and behaviours. They don’t need to know that they have adopted a form of cryptocurrency. Our goal with IPS was to make sure that the product doesn’t negatively impact the experience.

IPS has revenue benefits as an enterprise can allow users to have a “balance”. It can then introduce simple practices to get users to commit more in spending to the platform. Setting up a minimum deposit amount is an example of this.

 

What’s in It for Enterprise?

1. Operating Costs Reduction

SageCity’s IPS mechanism reduces the involvement that payment processors have over the handling of money. With one of our pilot companies, we calculated that we saved them around 80% in transaction fees.

2. Real-Time Analytics

By using a cryptocurrency token on a blockchain you automatically gain a standardised way to track and monitor all data circulating on the network. You can track user balances, exactly when, how much and to whom they are sending transactions. As a result, you can view and collate real-time reports.

3. Accurate and Secure Recordkeeping

Blockchain technology is immutable as all data is verified and encrypted when it gets added to a block. Sidechains also have an added layer of “backing up” with the main SageCity network. This means that it is near impossible for someone to manipulate balances or information and it eliminates key person risk.

4. No Downtime

As long as you have at least one node on the sidechain, the network will run 24/7/365 with little to no latency issues.

5. Scalable and Adaptable Infrastructure

While the IPS and SageCity blockchain technology is being used to manage financial balances, a blockchain can store any type of data. This means that we have extremely adaptable infrastructure. In the future, it can be used to handle extra functions and features.

 

Implementation

By the time this product is available to the public, a user will be able to input some custom information such as token name and Stripe API key. Then, the sidechain and token will be deployed. The user is given a program to run alongside the SageCity Wallet, some instructions, and code to insert into a few elements on their platform. The setup is incredibly straightforward.

To cover maintenance, the enterprise can purchase a small amount of SAGE from our company to pay monthly network fees.

 

Our Goal with the IPS

Over the last 3 months we’ve seen a clear demand for this type of system. This demand came mostly from innovative startups and SME’s. These have led us to design the product and roll out a small pilot program with 3 local Edinburgh companies.

We’re working closely with them to understand their needs and make sure our system is as accessible and beneficial as possible. So that when we release the solution globally on our SAGE store, the product can handle all kinds of usages.

We also see a natural progression of this system into the gaming industry. In 2017, $22 billion was generated in gaming micro-transactions. This is a figure that was no doubt hampered by payment processors and financial middlemen. We believe that indie game developers in particular will find this beneficial. IPS provides a way to reduce these fees by providing a framework to track and assign balances to users. That being said, IPS is an industry agnostic system and we would be happy to explore adaptations to suit other industries.

 

Interested in knowing more or want to explore using IPS within your enterprise? Drop the Sagecity team an email team@sagecity.ioto know more.

How Can Space Technologies Benefit the Development of Blockchain?

A new funding opportunity has recently become available to drive innovation in the development of blockchain through space technology.

The blockchain kick start activity scheme is searching for companies and organisations developing new technology to benefit blockchain in various sectors.

 

What’s So Important About Blockchain?

The development of blockchain technologies and applications has the potential to revolutionise wide-ranging sectors which affect our everyday lives.

The internet is being transformed into an internet of value, allowing people to exchange digital information and assets without the need for centralised structures such as banks and government agencies.

Digital assets include things as varied as currencies, identity information and property titles.  Through blockchain technologies, these can all be stored securely, in a far more transparent way than ever before. This could help prevent against fraud or hacks across all business transactions in the future.

The industries in which blockchain could have the biggest potential include:

  • Insurance: The digital storage of assets could eliminate the need for paperwork and make processes more streamlined.
  • Financial services: Blockchain has the potential to cut out middlemen and banks from transaction processes through satellite technologies. It could even become a platform in itself for the trade of goods and services.
  • Utilities: Distributed power grids run by IoT networks could decentralize the energy industry.
  • Supply Chain Management: Blockchain could enhance asset tracking for better security and trust between stakeholders.
  • Government institutions: Digitizing health records, tax systems and other documents could greatly improve efficiency within government institutions.

 

What’s Space Technology Got to Offer?

Space enabled technologies such as Satellite Communications, Satellite Navigation, Earth Observation and Human Space Flight Technology have a lot to offer the development of blockchain;

  • Satellite Communications (SatComs) can expand coverage for blockchain users in remote areas or areas lacking in terrestrial communication infrastructure.
  • Satellite Earth Observation (EO) could benefit the insurance sector through satellite imagery. For example, in the case of damage caused by flooding, satellite images could provide the evidence needed to speed up claims. It could also aid the supply chain management sector by providing detailed information on the location of valuable assets in real time.
  • Global Navigation Satellite Systems (GNSS) are essential for any blockchain application that relies on geographical referencing.

 

Keen to Apply?

Any business or organisation wishing to apply for the KickStart activity funding need to follow these steps:

  • Complete an online questionnaire found on the ESA-BA website
  • Download the invitation to tender from the site and set up a Bidder Restricted Area’
  • Produce a written proposal
  • Submit your proposal and supporting documents by 8thApril 2019

Successful applicants could receive up to €60,000 in funding to complete their project.

 

Funding Blockchain Innovation

This funding initiative is being driven by ESA business apps, providing expert support to businesses looking to utilise space enabled technology in the development of new commercial services.

To find out more about the types of funding and project management support available, visit the ESA-BA funding page.

Greetings from a new Scottish fintech

Blog by Adam Greenberg, founder of SageCity

Welcome to our first blog post and a big thank you to Fintech Scotland for inviting us into the community. We are an early stage business and have been really touched by the warm welcome we have received from everyone in the community when we attended the fintech fusion event on Thursday.

One of the most explosive growths in the fintech sector in recent years has been the emergence of cryptocurrency and blockchain technology. Our team have gravitated around the industry since 2013 and we’ve seen the technology evolve from initial Proof of work systems to smart contracting all the way through to DAG technology and mimble-wimble protocol (We didn’t make that last one up).

Blockchain technology is often heralded as the beginning of a new technological era and it has now reached a point where the stage is set for some good old-fashioned adoption. At SageCity, our focus is on bridging the gap between the technology and those who could truly benefit from it. Edinburgh has a vibrant and successful startup industry with some amazing ideas for the future and we’ve been fortunate enough to rub shoulders with a few and offer our support in their vision. Since our inception in August, we’ve been working with local Edinburgh based businesses who are facing challenges which are limiting their business potential by taking the time to listen and design blockchain solutions which are not only successful but efficient and sustainable for the future.

Blockchain had become a bit of a buzzword in recent times with a lot of loosely linked terms tossed around alongside it and that makes it difficult to decipher and comprehend. At its root, we like to think of blockchain as the swiss army knife of ledgers because of the multiple functions and purposes it can serve. Blockchain technology at its core has three key qualities which depending on the situation can offer a number of long and short term benefits to businesses, especially startups and those looking for a competitive edge.

 

It’s adaptable

Blockchains are system agnostic meaning they can be adapted and managed where and when required. Their primary function is often finance related but can equally be data or communications orientated. They can be the top dog running the show or compliment an existing system, be public or private and in some cases, both. The key advantage here is that unlike typical traditional solutions, blockchain technology is extremely flexible and can often be adapted and built upon with minimal difficulty.

 

It’s cheap to operate

In most cases, we can design systems where the only maintenance cost related to a blockchain is the electricity that the computer or server consumes to remain online. Also, depending on the business model, these costs could be cancelled out by the issuance of tokens as a “reward” for those running the blockchain and creating forms of circular economies within the overall business’ ecosystem.

 

Its reliable and secure

Blockchains come in many shapes and sizes but they are almost always designed to be peer to peer. This means that the network has no single point of failure which can be crucial for modern businesses. The nature of peer to peer makes sure that the integrity of the data stored within is virtually untamperable and that content is also heavily encrypted making the blockchain an ideal candidate to be reliable and secure.

Our long term vision is to be able to provide tailored blockchain solutions to startups and businesses around the globe and make deployment a quick and hassle free experience. We’ve got some interesting concepts in the works which we are looking forward to sharing soon which will not only be useful for our endeavours but could be utilised by other Fintech companies who offer industry leading products and solutions.

Hopefully you’ve found this introduction into SageCity and blockchain interesting and hopefully even enjoyable. We are proud to be part of the Scottish Fintech community and looking forward to sharing our journey and helping others on theirs too. We love talking blockchain so if you have any questions you want to bounce off us we’d be happy to help at team@sagecity.ioand sure to follow us on twitter @teamsagecity to stay in the loop.

Mi Rewards: the first card-linked, city-wide loyalty scheme. Here’s how it works

In 2018 we launched Mi Rewards, the cardless, city-wide loyalty scheme, in Perth. It’s the first UK scheme to offer rewards that can be earned and spent across a town or city.

Mi Rewards is unique: consumers don’t need a loyalty card or app. They link their payment cards to the programme and, when they spend in participating businesses, they are automatically rewarded.

Over 2600 consumers and 60+ businesses have signed up. So how and why did we develop Mi Rewards?

 

 

Miconexhave nearly a decade of experience working with UK towns and cities on digital communication and local currency programmes. We manage a successful Gift Card programme with Perth & Kinross Counciland we’ve helped nearly 30 other cities and regionsto replicate this model.

Next we wanted to add a town/city rewards scheme, to:

  • encourage shopping in the city;
  • stimulate additional spend;
  • better understand and communicate with customers;
  • develop new consumer communication channels;
  • measure the impact of events, marketing and planning decisions.

The main issue with traditional town and city loyalty programmes is that the consumer has needed to identify themselves at the point of sale. This means that either all staff in all the businesses require training or that additional hardware/software is required (expensive and unwelcome). We had to remove this friction.

Following extensive research, we concluded that payment-card-linked technology would remove the barriers. We partnered with Stampfeet, Perth and Kinross Council’s City Centre Management Team and a steering group of Perth businesses.

“Stampfeet has vast experience with card-linking technology, and our flexible loyalty platform supports the requirements of a city-wide scheme. We were excited about delivering an excellent product with a great vision.”
Asaf Rozin, Stampfeet CEO

Our proposition provides a frictionless solution:

  • Automatically rewardsparticipating customers;
  • No joining fee;
  • No staff training, additional hardware/software;
  • Cost to business is 1% of qualifying transactions;
  • Points are converted into Perth Gift Cards.

This is highly attractive for consumers and businesses. Once they have registered for the programme the rest of it works automatically. We reward our customers just as Tesco and Nectar do ”“ but without a loyalty card. Mi Rewards and the businesses benefit from data insights into consumer behaviour; we are essentially creating a “single view” of a consumer across a whole network of businesses.

“Mi Rewards allows Place Managers to better understand how people engage with towns and cities and how we can adapt to satisfy evolving consumer preferences. We can improve residents’ experiences and the local economy.”
Leigh Brown, Chair of the Association of Town and City Management and City Centre Manager at Perth & Kinross Council

“I love that Mi Rewards encourages people to shop locally. And it doesn’t pitch one business against another but rewards customers for shopping with us all.”
Dawn Cotton Fuge, owner of Precious Sparkle

We now have 2600 Mi Rewards users (1400 of those have linked at least one payment card). We’ve tracked over £100,000 of local spend to date, gaining powerful insights into retail trends. To engage customers further, we introduced “Points, Perks & Prizes”, where they earn points, win prizes or get perks, e.g. exclusive discounts and offers.

How it works

Because Mi Rewards is cardless and requires no additional software, hardware or training, it’s easy to use. Consumers register at Mi Rewardsand link their payment card(s). Businesses register at Mi Rewards Business. Shoppers are rewarded with pre-loaded credit cards (e.g. a Miconex Gift Card) to spend in registered businesses.

Moving forward

We’ve recently partnered with Stagecoach Group to offer Mi Rewards to bus users. We will also shortly introduce mobility tracking apps which will reward people for walking/cycling into the city centre.

Mi Rewardsallows us to communicate more effectively with consumers, gain insights, reward loyalty and encourage healthier living. We’re in discussions with many towns and cities about the UK/Ireland programme rollout. We believe that Mi Rewardsis the future of town/city loyalty.

Contact

Colin Munro, Managing Director, Miconex
01738 444376
colin@mi-cnx.com

Would your business benefit from an in-depth piece of research and analysis?

The University of Edinburgh is currently looking for projects for MSc Business Analytics, MSc Banking and Risk, and MSc Finance.

Their students are among the best in their field and combine their strategic business and management skills and specialist knowledge with the refinement offered through our 12-month, intensive programmes. They offer different types of projects and will match you with an individual postgraduate student with the specialised skill set suited to your research needs.

The University of Edinburgh MSc in Finance covers all aspects of investment, corporate and energy finance. MSc Banking & Risk projects could cover such topics as analysis of corporate financial information, credit risk management, econometrics applications and many others.

They University can consider almost any topic that has a finance, accounting, investment, energy market, banking or risk focus. Successful projects tend to have an empirical element, which has practical relevance. Most students are keen to work with practitioners on projects which will be of real value to them, helping them find solutions to strategic financial issues such as validity forecasting, forecast asset market returns, risk modelling, dynamic lifecycle strategies etc.

The MSc in Business Analytics (recently ranked 9th in the world in the QS Global Business Masters ranking) is designed to train analysts capable of taking on complex challenges and getting them industry-ready. The programme prepares students not only to be able to analyse and digest data available, but also to translate this into effective decision-making.

A key part is a research-based dissertation project. They are particularly interested in dissertation topics in optimisation or data science. Can you help?

If so, the University is looking for companies to submit project ideas by 26 January 2019. In return, you’ll benefit from the insight of one of the high-calibre postgraduate students, including a substantial report featuring extensive research, rigorous analysis and practical conclusions. To find out more, visit Sponsored Dissertations

To discuss further, contact Ksenia Siedlecka, Business Development Manager, ksenia.siedlecka@ei.ed.ac.uk for MSc Business Analytics

or

Aidan Hetherington, Corporate Engagement Manager aidan.hetherington@ed.ac.uk for MSc Banking and Risk and MSc Finance

A journey through the FCA regulatory sandbox

The Financial Conduct Authority (FCA)’s regulatory sandbox has now been in place for two years, and has continued to draw in innovative firms keen to test their business models, products and services in the market.

The FinTech team in Deloitte’s EMEA Centre for Regulatory Strategy, in collaboration with Innovate Finance, interviewed several current and previous FCA sandbox participants to seek their views on their sandbox journeys.

The result is A journey through the FCA regulatory sandbox: the benefits, challenges, and next steps.

It highlights the key themes, challenges, unexpected benefits and broader observations that firms expressed in relation to their sandbox journey, including their views of what the FCA’s next steps should be.

The unequivocal message is that the FCA sandbox has delivered real value to firms. In particular, being accepted into the sandbox and proving the underlying technology in a live environment has helped firms to better understand and fine tune their business models. Many also believe that the sandbox journey increased their credibility with both investors and customers.

Yet, while the usefulness of the sandbox is undisputed, the report also highlights areas where there is still room for improvement.

Overall, this report should make compelling reading for anyone considering a sandbox application.

FCA consultations on Innovation PSD2

Article written by Nicola Anderson, Senior Manager Retail Banking Supervision at the FCA.
Nicola just joined FinTech Scotland on a 1 year secondment.

After a slightly delayed start I’m delighted to have arrived at Fintech Scotland and I’m looking forward to being part of the team there for the next year.

Thanks to Stephen, Mickael and Shery for making me feel so welcome and part of the team. I’ve been out and about most of the week, meeting stakeholders and learning about the work, the innovation, collaboration and general mood of optimism! I’m looking forward to more of the same over the coming weeks and hope to meet many of the Fintech businesses in the next few weeks.

One point of interest has come up this week that I wanted to mention. I’m sure you’re already aware that the FCA has published a couple of consultation papers relevant to Fintech, Innovation and PSD2. Both papers are still open for views or responses, and links to both are attached below. The FCA welcomes input and perspective from interested parties and in particular those with experience on the subject. Through gathering views, next steps and further direction can be shaped in an informed and useful way. You can feed back directly on some or all of the questions posed in each paper.

PSD 2 consultation paper – closes on 12th October. The paper is focuses on:

1. The Regulatory Technical Standards for strong customer authentication and common and secure open standards of communication (SCA-RTS).
2. Domestic implementation before the EBA exemption guidelines are finalised
3. New fraud reporting requirements that will affect the data collected and reported by all PSPs

In addition the FCA is taking the opportunity to update its Payment Services and E-Money Approach Document guidance to reflect other legislative changes and clarify existing expectations based on experience of the regime (eg, of processing applications) since September 2017. These proposed amendments and additions are in Annex 3 of this consultation paper

https://www.fca.org.uk/publications/consultation-papers/cp18-25-approach-final-regulatory-technical-standards-and-eba-guidelines-under-revised-payment 

Global Financial Innovation Network (GFIN) – deadline for responses is 14 October.

https://www.fca.org.uk/publication/consultation/gfin-consultation-document.pdf

This consultation sets out three main functions of the GFIN:

1. Act as a network of regulators to collaborate and share experience of innovation in respective markets, including emerging technologies and business models:

2. Provide a forum for joint policy work and discussions; and

3. Provide firms with an environment in which to trial cross-boarder solutions.

As part of consultation the FCA is seeking views on the mission statement for GFIN, its proposed functions, and where it should prioritise activity.

Do contribute to both or one of the consultations if you can and think it’s relevant to your business.

Best

Nicola