Centralway looks to take on UK banks with app for all accounts
A fintech start-up backed by hedge fund mogul Alan Howard is to target UK banks’ hold on mobile banking with an app that allows users to view all their accounts in one portal and apply for loans.
Centralway Numbrs, a two-year-old Swiss company, is already being used to manage more than 1m German bank accounts, according to Severin Ruegger, its chief financial officer.
Mr Ruegger said the company, which has 100 staff, will expand into the UK in the middle of this year. It has applied for a UK licence that would allow it to offer loans and other financial products via the app from a range of banks and providers.
Banks have spent years developing their own apps. Aggregation — allowing multiple accounts to be managed together — is seen as the next frontier. Some banks are also working on aggregation apps.
“It’s about first-mover advantage,” said a person at one large lender, adding that banks have a head start because they have well-known brands.
Raman Bhatia, HSBC’s head of digital, said: “Helping customers take control of their finances is important in helping them manage their money and enabling them to see multiple bank accounts in one place is a good move, but making sure customer data is secure and fully protected is paramount.”
Centralway Numbrs has some heavy-hitting investors. As well as Mr Howard, its 33 backers include Marcel Ospel, former chief executive of UBS, Sir Ronald Cohen, co-founder of Apax Partners, Swiss private bank Lombard Odier and the Mirabaud family, which controls the private bank that bears its name.
The investors have put SFr70m into Centralway Numbrs, though it has yet to earn any revenue as the app will only make money once it begins selling products for banks.
Mr Ruegger said Centralway wanted to sign up a critical mass of users before approaching banks but was in discussions with Postbank, a subsidiary of Deutsche Bank, and a deal is expected by mid-2016.
Postbank declined to comment on Centralway but said it was “involved in a permanent exchange with several providers/suppliers to expand our leading market position with the help of innovative solutions”.
Centralway Numbrs would receive a 25-30 per cent cut of the revenue generated by sales from its portal. Mr Ruegger said on “conservative” estimates, it should be making a “comfortable” profit by 2017.
He said the app would offer clients “tailored products that really do suit their needs” based on account activity. “Banks have a shotgun kind of approach to shoot whatever products they have to their clients,” he said. “We will be a fair, transparent middleman ensuring retail clients are put first.”
UK banks did not want to comment on Centralway Numbrs specifically. Lloyds Banking Group said it welcomed new competitors and was investing £1bn in its own digital capabilities.
As well as the UK, Centralway Numbrs is planning to enter two other European markets this year but declined to give details. The app will also try to add credit cards such as American Express.