Stanhope to provide banking services to mid-sized companies through its new fintech platform.
A new fintech is riding to the rescue of mid-sized and smaller companies bypassed by the large banks to offer a suite of new banking services. Global fintech provider Dublin-based Stanhope Financial Group will launch tier-one banking services comprising both transaction and investment banking opportunities to small and medium sized businesses, following successfully raising US$3.5m in its first round of funding. Services will include FX, treasury and access to finance plus other services typically difficult to access from the big banks via a single digital platform, says Khalid Talukder, Managing Director, Stanhope Financial Group.
“Stanhope is essentially filling a gap in the market that traditional Wall Street banks used to fill,” says Talukder, explaining how ever since the global financial crisis and other issues of the last decade, tier one global banks have pulled back from offering transactional and investment banking solutions to mid-sized corporates, especially in developing markets. “Technology through Fin and RegTech has allowed us to reduce the need for a bricks and mortar footprint, and digitise access to tier one banking by aggregating services from both an investment, and transactional bank perspective through our platform,” he says.
Growth
Talukder says Stanhope already has agreements with up to ten clients. That number is set to grow to 30 in one year, 50 in two years with a target of 70 clients by the end of year three on a net-net basis. “The reason I can say this with confidence is because I personally looked after these types of clients for over a decade; I know the mid-market commercial client landscape well,” says Talukder, referencing his previous roles at UBS, Citi and Deutsche Bank. Moreover, international mid-market SMEs have been “untouched” by the fintech revolution which has focused mainly on retail banking to date, he says.
That said, he does note rivals like Starling Bank making footholds in the UK corporate market. “In the UK Starling Bank has picked up business banking clients Lloyds and NatWest don’t find profitable any longer. Banks make money from lending; once they can’t offer credit, all other products become very expensive.”
The offering
Stanhope will focus on offering clients both treasury management solutions and international transactional banking, giving corporate clients access to global payments services, payment schemes such as SEPA, and deliverable foreign exchange services and financing opportunities. A key service offering will include dedicated local relationships in key markets, aggregation of payments and foreign exchange services, as well as consultancy and e-banking industry expertise.
However, as corporate clients “move up the cash pyramid”, the platform will provide them with access to the capital markets. “We will allow clients to invest in the capital markets to buy exchange traded funds, money market funds, equities, options and futures and fixed income.
Companies fortunate enough to have residual balances not required for working capital are at the top of the pyramid and can invest cash,” he says. “Stanhope will provide investment services so companies can gain from movement in the capital markets and make a healthy return on their reserve cash.” The fintech is currently talking to two vendors to provide this front-end service that companies will be able to customise. “Clients will be able to access tier one banking experience with less fixed overheads,” he says.
Importantly, Stanhope’s license also allows the fintech to advise corporate clients on capital market strategies. “We have the necessary permission to advise clients on their investment portfolios,” he confirms. Stanhope will kick off with a Dubai launch serving the UAE, African and Asian markets and a Lithuania base, serving European customers in global payments and FX. The company also has plans to apply for a licence to operate in the UK and other key markets in the coming months.
