Fintech Insider Podcast by 11:FS
00:15:57 · Deniz Guven
[00:15:57] S4: Hi, FinTech Insider. Hi, everyone. I'm very excited to share that we have just unveiled our brand MOX. Early days, but I can tell you that there's a big excitement already. And mox.com visited more than 100,000 times without any paid media. And LinkedIn followers are going up very quickly. MOX is a virtual challenger bank in Hong Kong, powered by Standard Chartered in partnership with PCCW, Hong Kong Telecom and trip.com. We are the combined power of a leading international bank, the city's telecom, and Asia's largest online travel agency. We will also redefine the digital banking experience in Hong Kong by providing a suite of financial and lifestyle services instead of traditional products to unlock more possibilities for our customers. Our name MOX reflects endless opportunities we can create. Mobile experience, money experience, exponential growth, exploration. We call ourselves and our customers generation MOX. Jam MOCs is not about age or digital savviness. It's a mindset. It's an attitude for more possibilities. We believe banking should be simple, intuitive and of course delightful to gain customers trust and win their hearts. We are also the first bank in Asia to launch all in one numberless bank card. It's a card carrying all functions of an ATM, debit, credit without any printed card numbers, expiry date or CVV. We launched this card because we know security and privacy is core to our customers and I believe everyone will like our card design. MoxApp will be the remote controller of your card and will be a great convergence between a physical product and digital service. To be a successful virtual bank, I truly believe one of the most important elements is to gain heart share in Hong Kong instead of market share. We will launch the bank in upcoming months. Stay tuned. Take care.
00:17:56 · Ross Gallagher
[00:17:56] S0: Okay. I think we can all agree on I think Deniz's passion and enthusiasm there was really quite charming. Okay. I'm gonna move us on to our next story, which I I... I'm kinda loving right now, sat next to Valentina Christensen. The story itself comes from the Financial Times and concerns Oak North Bank reporting a spike in pretax profits. So the UK neobank made £65,900,000, a 95% increase from its 2018 totals. The bank, which specializes in lending to midsized businesses, reached 2,000,000,000 in loans this year, more than doubling its previous year's totals. It also raised revenues by 74% to £104,000,000 last year. And unlike many neo banks, Oak North has been consistently profitable even amid uncertainty in The UK market. So, Val, do you mind if I throw to you, Cara, to tell us a little bit about this story?
00:18:52 · Valentina Kristensen
[00:18:52] S3: Yeah. Sure. Well, they... You've kind of run run through the numbers there. I mean, you know, really great to see, again, you know, strong double digit growth despite, you know, so much uncertainty last year. If you think about what Oak North does, obviously, raising deposits and then using those deposits to to fund lending to SMEs. You know, very much there was a view that because of Brexit, because of the general election that you'd see demand for loans dry up, demand for business loans dry up and you know what's great is that we continue to see you know high demand, we continue to support those businesses, you know, and obviously, you know, we've got now, unfortunately, more uncertainty with coronavirus. But, know, we've still got over 2,000,000,000 of qualified deals in the pipeline. So the hope is that you will still see, you know, strong businesses. I think what this demonstrates is that even in times of economic uncertainty, you know, some will see a threat, but there'll be an opportunity for others. Right? Yeah. Whether it's, you know, you're a recruitment firm and one of your competitors goes out of business and then that's an opportunity for you to gain those clients or gain their best talent. You know, it might be that there's a a property company that can then buy up, sites at a discount. So there's... You know, there will always be opportunity in times of turmoil, and and the strongest businesses will be able to thrive, not just survive.
00:20:12 · Ross Gallagher, Valentina Kristensen
[00:20:12] S0: Yeah. I completely agree. I think what what came out quite nicely in in in terms of what you've just said as well is is it's not just a a boon for Oak North, but it really is a boon for the British economy. Right? And, you you know, I think that that sort of missing middle, those small businesses that I think are the backbone of the British economy and I... You know, it it have been so underserved. [00:20:33] S3: Well, it's those it's those middle businesses. Right? I think you always hear small businesses are the backbone of the economy, but actually, if you think about the corner shop where you buy your your newspaper, you know, they're probably not really, you know, contributing that much in terms of GDP growth, you know, in terms of jobs creation, in terms of productivity. It's, you know, the Lyons Mhmm. Which might have, you know, 60 sites now across The UK hiring thousands of people, you know, paying huge amounts in in taxes. So that is, you know, those are the ones... It's those sort of the missing middle who are the the real drivers of of of productivity, of growth, you know, they're they're the ones that sort of scale up businesses, I'd say. [00:21:10] S0: And those those Oak North loans have enabled those businesses to create almost 12,000 new affordable and social homes, 17,000 new jobs. Yeah. I mean, you know, genuine, demonstrable [00:21:22] S3: Multiplier. [00:21:23] S0: Meaningful benefit in the British economy.
00:21:23 · Ross Gallagher, Valentina Kristensen
[00:21:23] S0: Meaningful benefit in the British economy. [00:21:25] S3: Yeah. I mean, I think also, you know, the the the point here is that having a very focused business model. Right? So we... We're not trying to be all things to all people. You know, we're just focusing on doing one thing really, really well and then going very deep on that. Whereas if you look at some of the other fintechs, obviously, they've taken a strategy which is, know, you to try and do a lot of different things, to gain, you know, to gain market share, to attract customers because maybe that customer doesn't necessarily want to have them as their current account, but they wanna use them for stock trading or they wanna use them for buying gold or whatever the the latest thing is now, buying crypto. So I think, you know, by being really, really focused and then obviously the efficiency that the platform has helped us to to get. So, you know, if you look at other metrics, you know, cost income ratios, you know, run rate is 26%, ROE, return on required equity is is 22%, you know, you compare that to the figures from other banks and and, you know, that's dramatically different. [00:22:21] S0: Yeah. Absolutely. I I I know Rishi as well sort of believes in not spending money that you're not gonna get back. I know I've heard him say that a couple of times. And and and I suppose the contrast being other fintechs that are prioritizing scale. I think that's something that is sort of really ingrained in the Oak North culture.
00:22:21 · Ross Gallagher, Valentina Kristensen
[00:22:21] S0: Yeah. Absolutely. I I I know Rishi as well sort of believes in not spending money that you're not gonna get back. I know I've heard him say that a couple of times. And and and I suppose the contrast being other fintechs that are prioritizing scale. I think that's something that is sort of really ingrained in the Oak North culture. [00:22:37] S3: Yeah. I mean, I think the guess... The thing is because the the Feet headline said, you know, profits have have grown, you know, but growth has slowed. I mean, the reality is that when you're... You can't have triple digit growth forever. Right? Because the the the sum gets larger. And I think we'll see... You know, we'll continue to see, hopefully, double digit growth on the bank and and then triple digit growth for the for the platform.