Top Five FinTech Reads for the Week

In an effort to start more conversations with my Aussie and New Zealand FinTech mates, I’ve been highlighting some recent FinTech reads here on LinkedIn. This is the third instalment. Please follow my profile or connect with me directly to stay in the loop. 

One thing that’s different this week is that the links to the articles are in the comments vs. in the post as it’s obvious that LinkedIn is restricting the reach of the article when I embed them in the body. You can also google the article titles to find them that way! 

If you have some great reads, please share them in the comments or message me directly and I'll add them to the next round of posts! Cheers! 

1. TransferWise,the $3.5B FinTech firm, posts its third year of profit. 

My Comments: For an English major, I’m definitely a numbers geek. I’m also originally from the Midwest back in the states so not only do a love numbers, I love positive ones. This article talks not just about TransferWise’s recent round and $3.5B valuation but also its overall profit of￡10.3 millionon￡179 million of revenue this last year. It does this while highlighting losses from Monzo and Revolut. 

To dig into the numbers listed on valuation, revenue, and customers, we see that TransferWise is at 19.5x earnings, which is amazing. At 6M customers, their valuation is only $583 per customer. At $48B in annual transaction volume, the average customer is transferring $8,000 per year of which TransferWise makes $29.30 per year (.3729% clip). Not sure of the lifetime value of the customer because we don’t know much about churn but I’d be quite pleased with these numbers based on the likely lower cost to service. But I can see how Monzo can justify its ￡47 million loss last year as it’s a pure retail play and growing at 35k to 50k customers per week. 

I get the concept of aggressive growth but also believe that growth doesn’t have to come at all costs. It helps that TransferWise picked out a great business model where you’re matchmaking users international transfers instead of absorbing the costs of the actual transactions. 

Speaking of Monzo… 

2. Is Monzo Ready to Grow Up  

My Comments:This article was passed on to me by a fellow FinTech founder with a comment around Tom Bloomfield’s work week of 40-45 hours and how healthy that is to see in the founder of an aggressively growing company. And opposite of the pervious article’s number focus, this one is way more heart in how they dive into the changing business models in banking, being proactive for the customer, and how an organization tries to maintain its identity as it grows. And the ideas of fear and safety even get into the article. 

Perhaps that is what growing up is all about: becoming introspective and mitigating risk. That’s something I’d encourage from all founders and anyone in FinTech. 

3. The Future of PropTech Will Be Mass Integration

My Comment: I was having lunch and some beers with a good FinTech friend who has transitioned into PropTech and he was advocating that PropTech belongs under FinTech. Now I’m not a PropTech student but I was willing to be open to the auguement when this article popped across a FinTech newsletter from the states. 

What I found massively interesting was this idea of mass integration. The article talks about the rationale of bundling services, features, data, etc. under what is one of the most massive asset classes in the world. And when you think about it that way, it makes sense. Why shouldn’t your property (whether renting or owning) have its own financial hub outside of banking? Why shouldn’t the property anchor the relationship and technology dynamic instead of an institution? 

I also loved how the article talked about how employees and the work work or workspace can have the same dynamic as a central point for all the tech you need based on your employment contract and then spiralling outward? 

If you want to think expansively, this is the article for you. 

And to my PropTech friend…you win…my shout next time. 

4. Do Neobanks Spark Joy in their Users? AI Gives us the Answer

My Comment: Please ignore the creepy as hell header image on this article and focus instead on the content. I think I just increased the CTR about 453% with that sentence. 

This is a great example of digging deeper into the data within FinTech, especially as it appeals to an incumbent vs. disruptor lens. The article sifts through the data around mobile banking app ratings and brand value. Logic says that most challenger brands have a “bit” more customer focus and that should extend to their design and usability within the app. But then most of these incumbent banks are so large that they could afford to (and mostly do) employ some of the largest most respected design and tech firms for their own apps. What the article does best is to go to sentiment and I’ll let you read the rest. 

5. Best Bank + FinTech Partnership Award 2019: TD Bank and Hydrogen

My Comment: I didn’t choose this article because it’s the best example of journalism or an award or even of a project. Quite frankly, I had to work pretty hard in the article and the links to really understand what the project produced. No, I included it here because FinTech partnerships between startups/scaleups and incumbents need more spotlights on the process and what’s working. 

In that regard, there’s a decent amount of effort put into the Q & A about what the bank was looking for, what the startup expected, how the bank prepared internally (an all too often missed step), and more. Other than an article from ClearGraph in 2017 (find in comments), I haven’t seen a lot of oped talk about the processes, challenges, and outcomes within these partnerships. That said, I haven’t documented my own yet but promise to add that to my list. 

Interesting that we started with some numbers, went to heart and growing up while also being worried, travelled into the property market, went back to the heart with sentiment, and ended up with some partnerships. Head, heart, home, heart, partnerships. Much like life! 

That’s it for now. Back in a couple weeks with more!

Please comment or add some links to your recent reads to help add to the conversation!