Fintech is a buzzword that has been around for a few years now – and it seems it is here to stay. The Fintech – or financial technology – sector has shown impressive growth all over the world; the valuation of the industry has tripled from $928 million to $2.97 billion. Essentially, fintech start-ups are companies that aim to change the finance industry with technology. The internet is changing finance, just as it has changed all other sectors – in our so-called “snapchat generation”, people want things quicker, faster and easier than before. By developing and using new technology, start-ups can use their lower costs to undercut banks and established industry players with a cheaper and faster service. According to Anthemis group, a leading digital financial services investment advisory firm, finance “is in the midst of a revolution”; a revolution that was kick-started by the financial crisis. A combination of a lack of trust in the banking system, as well as the refusal of banks to lend money, led to a real gap in the market for companies that offer the same services as banks, but easier and cheaper to access. Two of the biggest London-based companies are TransferWise, who transfer money abroad far cheaper than banks, and Funding Circle, an online crowdfunding platform. Both of these companies offer services that would, in the past, have been a monopoly of the banks. For many, these fintech start-ups are not just a phase; they are the future. Instead of the traditional route out of university and into jobs or grad schemes, more and more graduates are setting up their own businesses; and given it’s potential, it’s unsurprising that many of them are in the financial technology sector. One such company is FundingInvoice, set up by seven graduates straight out of university, several of whom had turned down highly-paid jobs in the city to pursue their vision. Essentially, FundingInvoice aims to bridge the gap between suppliers selling their stock and being paid by the buyer. They recognise that many small and medium size enterprises (SMEs) may have problems with cashflow, and hope to provide an online platform where SMEs can “sell” their invoices to investors and receive payment up front, rather than having to wait to receive the money. SMEs will not pay any fees to use the service; they will only pay the investors a small percentage of each invoice value. The founding team, led by founder and CEO Aamar Aslam, anticipate that the investors involved will be High-Net Worth (HNW) Individuals, Hedge Funds and Family Offices. They are effectively “developing a new asset class that yields annualised returns of up to 20%. It’s safe, it’s high-yield and it’s easy.” Marina Yakas is one of FundingInvoice’s founding team, and has just graduated from Queen Mary, University of London. When asked what it was that made her want to work for a start-up, she said: “It took a lot of courage to take the step and work for a brand new start up. I, like many of my colleagues, was offered an entry-level job with an asset manager. It meant financial and social stability, moving out of my parents’ house, and more money in my pocket for the weekend. But I’ve always worked better with a smaller team where we all share the responsibility rather than having a manager delegate tasks. We’re a tight knit group, and most importantly, we all absolutely love what we’re doing.” “The digital age is something which is outgrowing its conquerors. Once you think you’ve mastered Twitter, Facebook, LinkedIn etc, someone comes up with a brand new idea on how to gain more followers, get more likes, and connect with new people. It is constantly changing. But people are constantly trying to keep up with it. Why? Because it’s addictive. We’re all desperately keen to see our company take off in the impending “Fintech revolution”.” Currently FundingInvoice is still testing the product, and is enrolled in the Warwick Ventures Software Incubator; the launch date for the platform is set for August/September 2015. If the original venture proves successful, the founders aim to expand into other asset classes, including small business loans and even crowdfunding. Currently, there are separate online platforms for each type of peer-to-peer lending; Funding Invoice eventually aims to to create one platform for all asset classes. According to the team, they’re “simply a marketplace, much like Amazon, who just take a commission from both sides.” “This is a world where Uber, the world’s largest taxi company owns no cars, Facebook, the world’s most popular media owner, creates no content, Alibaba, the world’s most valuable retailer, has no inventory and, AirBnB, the world’s largest accommodation provider, owns no real estate. There is room for a bank which owns no capital.” I have to say, I’m inclined to agree. Given the incredible growth of Fintech and the success of similar peer-to-peer lending platforms, including Funding Circle, Crowd2Fund and LendInvest, it’s easy to see why this group of graduates are so excited about the venture. These start-ups simplify and discount financial services that are used by all industries, and Fintech should not be underestimated. It is a revolution – one that every business should be looking to be part of.   Miranda Wadham

China’s key share indexes ended lower for the day yesterday, following three days of rebound, as a substantial correction in blue chips offset gains in small caps. This follows efforts by the Chinese authorities to curb the slide of key Chinese markets after they crashed by more than a third in mid-June. The “Beijing Put” – whereby policy makers act to keep a floor under share prices, providing similar protection against losses as the derivatives contracts that give the right to sell a security – was introduced a few months ago in order to prevent further drops; however, the Shanghai Stock Exchange Composite Index has fallen 25% over the past four weeks and the Shenzhen Stock Exchange Composite Index has pulled back by around 28%. The Chinese government have since taken more aggressive measures to support the market by cutting interest rates, suspending initial public offerings, relaxing margin lending and collateral rules and enlisting brokerages to buy stocks, backed by cash from the central bank. The Chinese government’s efforts to support the market has parallels with the U.S., where traders came to rely on the so-called “Greenspan Put”, initiated by former Federal Reserve Chairman Alan Greenspan. He often stimulated the market by lowering interest rates in the late 1990s and early 2000s. However, not everyone has as much faith in the Beijing Put method. “I do not believe in the ‘Beijing Put’,” says Lim Say Boon, the Singapore-based chief investment officer of DBS Group, Southeast Asia’s largest lender by market value, in an interview with Bloomberg. “Chinese policy makers face a dilemma. If they stimulate the economy, particularly through monetary and credit easing, they risk reigniting the credit explosion of 2009-2012.” The plunge in China’s previously booming stock markets has created a major problem for the Chinese premier and other top leaders. “They created this monster,” a senior trader at a major international trading firm said of China’s leadership. “Only they can figure it out,” Premier Li Keqiang commented: “We do not take the risks and challenges to growth lightly. We have the ability and confidence to prevent regional systemic risks and keep the economy growing within a reasonable range.”