Banking Circle believes payments will become simplified for the end user – with no differentiation between national and cross-border transactions. It sees a future where all payments will be rapid and low cost – a future where payments will simply be payments, regardless of geography. Under the bonnet, Banking Circle's cross-border payments utility is highly sophisticated. It runs a Cloud-based system built on the Oracle FLEXCUBE platform that allows business-to-business transactions to be made in seconds, not days. Banking Circle Virtual IBAN allows fintechs and other financial institutions to issue multi-currency IBAN accounts for customers in their own name and in multiple jurisdictions, increasing the ease, speed, and clarity of payments. It is a 25-plus multi-currency, multi-jurisdictional banking solution that negates the need to have several banking relationships. With Virtual IBAN, payments acceptance, settlement times and reconciliation are improved because payments are made in the name of the Virtual IBAN account holder. Building on this success, in June Banking Circle launched its application programming interface (API)-based white-label SME lending product, which it sells to fintechs and smaller banks. According to Banking Circle research, the latter have traditionally struggled to effectively cater for this market because it can be difficult for them to collect the necessary credit information on a loan applicant. For the hopeful borrower, Banking Circle's entire application service takes no more than three days – rather than the weeks SMEs often face when dealing with mainstream lenders.
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They can find themselves buffeted by financial headwinds, such as a customer delaying a payment, and that is reflected in their borrowing needs. Banking Circle research revealed that while larger SMEs were often willing to take out traditional one to three-year loans from a bank, only a third of micro-businesses would do so because their needs were more short-term. Because of this, they tend to rely heavily on overdrafts. Banking Circle's response was to build flexibility into its SME lending product with repayments either fixed or with a variable percentage, so a business owner can increase repayments when trade is good and reduce them when funds tighten. Looking to the future, the firm is examining the development of insurance products and has talked of applying for a banking licence, while geographically it is eyeing moves west to the Americas and east into Asia. The business currently has offices in Denmark, Luxembourg and the UK. La Cour says: “We want to make Banking Circle global, so that our clients can have access to Europe, Asia and North America. We would be the infrastructure so they can operate there. “We'll focus on continuing to build our infrastructure, growing it and making sure we enhance the product capabilities so that our clients can grow their business into new verticals and new areas, should they want to.” Banking Circle is particularly bullish about the potential for Asia because banking infrastructure was slower to develop in many Asian countries than in Europe or the US. That gives fintechs an advantage because the pace of technological innovation means established players and banking methods can be overtaken. Take mobile payments. Banking Circle says about 70 per cent of the Asian population is expected to have access to a smartphone by 2021 and mobile payments will soar as a result. It believes
I believe the trend of banks outsourcing non-core services will continue. They need to focus on their core
EXPANDING THE PORTFOLIO Following a period of market research, Banking Circle tailored its product to provide the flexibility needed by smaller firms.
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the shift to digital payments is most apparent in China, where the size of the mobile payments market is estimated to be 90 times bigger than in the US. La Cour says: “I really like the growth of competition in the part of the value chain that is close to the end client. Because growth there means we've got more potential clients that we can serve.”
AT A GLANCE COMPANY:
Banking Circle FOUNDED: 2013 CATEGORY: Global banking services KEY PERSONNEL:
Anders la Cour, CEO (right) HEAD OFFICE: Copenhagen OFFICES IN: The business currently has offices in Luxembourg, Denmark and the UK TEL: +44 (0)20 7073 0421 WEBSITE: www.bankingcircle.com LINKEDIN: linkedin.com/company/ bankingcircle/ TWITTER: @bankingcircle
WHAT WE DO ‘The network for global commerce’ – Banking Circle is a financial utility that focusses on providing global banking services to financial institutions, including financial technology companies and banks TheFintechPower50 19 The