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The Transcend team recently travelled to Sofia in Bulgaria for our annual strategy meeting. We spent a couple of days exploring Sofia, team member Dimitar’s home capital. This included a fascinating tour of sights linked to the communist era, together with a few bars and restaurants.
In our strategy session we discussed the past year at Transcend and our plans for the future. We find this time away from the office is really important for strategic planning and team bonding alike.
The post 2019 TRANSCEND TEAM STRATEGY MEETING appeared first on Transcend Corporate.
Do you recall the days when you would have to submit a loan application and wait for days to get it approved? Sometimes even not having the required documents or knowing the process would have kept you from availing a loan. But now, thanks to digital lending apps, you do not have to face that anymore. You can apply for loans digitally and financial institutions can reach a wide customer base by offering services transcending traditional banking.
As of 2022, the total digital loan disbursement in India was valued at INR 21.6 lakh crore and is expected to reach a whopping INR 47.4 lakh crore by 2026, representing a CAGR of 22%. This shows that digital lending is at its ever-growing phase and is making its mark in the Indian economy. As the industry continues to evolve, so do the demands and expectations of lenders and borrowers, which makes digital lending platforms a necessity and not a trend.
Reviewing The Best Digital Lending Apps in 2024
As customers are transitioning rapidly into the digital age, the use of smartphones has increased significantly. This has resulted in a 40-60% jump in the purchase of digital loans. The digital lending market is set to become a $1.3 trillion industry by 2030, and what could contribute to that is the overwhelming number of personal loan apps currently in the market and the number of users actively taking loans.
The target audience for instantpersonal loan apps is primarily individuals or borrowers and the features offered should cater to their needs. However, even the best rated apps in the current market will always have a scope for improvement.
Hence, we will break down some of the key features every personal loan app should have, common positives that customers enjoy, and the negative aspects that need to be fixed or avoided when developing the app. Common customer reviews and suggestions observed from the Google Play Store are highlighted below for various lending apps: popular and not so popular.
Category 1: User Experiences (UX)
A large number of reviewers have positively reviewed the user interfaces of every loan app.
Positives
Some of the most popular digital lending apps have a multitude of positive feedback complimenting the user interface of these apps and how easy it is to navigate the app.
Lending apps with as many as a few hundred thousand downloads have users complimenting their easy-to-understand interface and seamless navigation.
Category 2: Security & Transparency
Regarding security measures, even the best digital lending apps have seen mixed reviews in this aspect.
Positives
Most apps have received praise for their in-built security features such as two-factor authentication and data encryption.
Though security has been a point of concern even for some of the best personal loan apps with higher ratings and downloads, users have praised their transparency levels, mentioning that they had immediate access to crucial loan information such as interest rates, processing charges, eligibility criteria, etc.
Negatives
Some have been deemed as fraudulent apps that collect confidential information of borrowers and don’t issue any loans.
Users have negatively reviewed some apps due to their unclear loan terms and conditions, lack of instructions and tutorials for easy navigation, and even for incorrect information about interest rates and charges.
Category 3: Technical Issues & Customer Support
The performance and customer support reviews of the top personal loan apps leaned more towards the negative side.
Positives
Some customers reported the apps had a proactive and friendly customer service team.
Negatives
Frequent technical issues such as the app crashing, blank screens while submitting loan applications, and login issues have been reported by borrowers.
They have also complained about longer loading times while navigating the app.
Borrowers reported horrible customer support where they did not give prompt responses and follow-up systems were not in place for addressing grievances.
Category 4: Loan Application and Foreclosure
Digital lending apps have received mixed reviews regarding the loan application, disbursement, and foreclosure processes.
Loan Application
Negatives
Customers have faced several technical glitches and longer loading times while submitting applications and in some cases, even after filling the form, the application doesn’t go through successfully.
Frustrated borrowers gave negative reviews stating longer wait times for application processing and loan approvals.
A few customers also expressed their grievances with document uploads, which sometimes never went through due to technical glitches.
Lengthy KYC processes in several apps have also been reported.
Loan Disbursement
Positives
Several customers complimented the loan disbursement process, stating that lenders process their applications quickly and disburse the loans within a short time span.
Negatives
Users have negatively reviewed the disbursement, reporting delays by weeks and even months to receive their loan.
Foreclosure and Loan Management
Negatives
Loan foreclosure reviews have been limited although some users have faced foreclosure issues from the lenders’ side.
Sudden changes in interest rates and repayment periods without the customer’s knowledge are also common complaints.
One of them includes the predatory practice of increasing the final loan amounts. For example, a borrower had taken a loan of Rs. 36,000 but was wrongly credited Rs. 42,000. On repayment of Rs. 42,000, the final loan amount suddenly increased to Rs. 46,000, which is nothing but an unnecessary expense the customer had to bear and a malpractice on the lender’s side.
Despite completing the loan foreclosure process, customers have stated that in some cases, the foreclosure status read incomplete, which has impacted the credit scores of users even after the timely repayment of the loans.
Many users have also reported unprofessional behavior from lenders or recovery agents and have even been subject to threats against borrowers and their families in case of delayed payments.
Category 5: Interest Rates and Charges
Most apps have been negatively reviewed for charging high interest rates and processing fees, which has caused difficulties for some borrowers to settle their debts on time.
Features and Suggestions Made By Customers
Customers who’ve reviewed the top personal loan apps have also given a few recommendations to improve the apps, some of which include:
Frequent bug fixes and consistent updates to prevent server issues and app crashes.
More flexibility in repayment tenures and more credit limit options in case of good credit scores.
Prepaid credit limit mechanism, a feature similar to prepaid credit cards can be beneficial for users with poor credit scores.
Pre-EMI payment facility for reducing repayment burdens.
Criteria for Evaluating the Digital Lending Applications and Recommendations for New Developers
Individuals or developers looking to go into the digital lending space need to understand the elements that make a successful lending app. The following criteria can be used as a benchmark for lending platforms to improve their services. Lending app developers can also look into the criteria and recommendations for building a good personal loan app that will stand out among the competition and provide the best of its services to borrowers.
1) User Experience & Interface
Whether it’s a personal loan app or any other app for that matter, a simple and intuitive user interface can enhance user experiences and attract new customers, or in this case, borrowers.
Developer Recommendations
The app should have a simple and intuitive interface that is visually appealing and easy to use.
Additionally, it should have faster loading times and minimal bugs to ensure maximum performance, especially when prospective borrowers are attempting to complete the loan application process.
2) Loan Application & Approval Process
Sometimes, despite completing the loan application process, there may be delays in receiving approvals. Borrowers need to understand the intricacies involved in the application process and the time taken to get them approved. Normally after completing a loan application process, the app analyzes the credit scores of the applicants and after an underwriting procedure, the loan may be approved or denied.
In case of non-approval or non-receipt of information, borrowers can follow an escalation matrix, contacting customer support and compliance heads and addressing their grievances. To prevent such concerns, application tracking facility should be implemented in digital lending apps so borrowers will be able to monitor its status at all times and make decisions accordingly in case of any issues.
For seamless application and disbursal of loans, customers can check if Loan Origination Systems have been implemented into the apps. They are built to automate and support the entire loan lifecycle, from application submission and approval to disbursement, complying with regulatory and internal requirements at the same time.
Developer recommendations
Several digital lending apps do not provide customers the option to foreclose their loans within the same platform. This is a primary feature that should be implemented.
When building a personal loan app, higher transparency should be maintained where customers have access to clear instructions and guidelines from the application process till foreclosure.
The app should also give them a comprehensive understanding of the eligibility criteria, the features they can leverage, regulatory information, interest rates, and processing fees payable.
Additionally, the implementation of a Loan Origination System (LOS) is also advisable since it makes borrowing easier for loan seekers and helps lenders control the risk of payment defaults.
The LOS market, which was valued at $100 billion in 2023 is expected to reach a staggering $177.1 billion by the end of 2030, indicating the rapid growth and implementation of this system into digital lending platforms.
3) Compliance with Digital Lending Guidelines
Besides offering the best loan services, app developers are also responsible to ensure that personal loan apps are compliant with digital lending guidelines. The guidelines are applicable to digital loans offered through any platform provided by banks and non-banking financial institutions. For starters, the RBI drafted a new framework that ensures borrowers have prior information about the potential lenders so they can make informed decisions.
Developer Recommendations
App developers must ensure full transparency in terms of interest rates, fees, loan terms, and repayment schedules.
They should obtain explicit consent from borrowers for data collection and processing, which is crucial under data protection laws.
They should also ensure maximum compliance with consumer protection laws, data privacy regulations like the GDPR or CCPA and all regulations governing digital lending.
Additionally, app developers must comply with Google Play Store’s policies to ensure smooth launch of their APK.
4) Customer Support & Service
An app with a proactive and dedicated customer support team who’ll be available 24/7 to take care of customer needs is crucial. Digital lending apps can crash often due to bugs or server issues and these issues can only be resolved by a highly responsive technical support that consistently monitors the app and performs bug fixes.
Developer Recommendations
The platform should house a sound technical team that can instantly resolve performance issues.
Additionally, multiple support channels like chat, email, and phone should be open for customers to seamlessly communicate with the support team.
5) Security & Privacy Measures
Safety and security in instant personal loan apps are crucial to protect the personal data of borrowers and prevent them from being scammed.
Currently, in the digital lending market, fraudulent applications that phish for personal documents or private user information are on a rapid rise and customers need to watch out for such apps. Prospective borrowers should look into all the security features provided by the app, such as advanced data encryption, multi-factor authentication, data minimization, etc.
According to a report by the Fintech Association for Consumer Empowerment (FACE), it was revealed that one-third of high-confidence customers in India had limited knowledge of their digital loans and had no idea on how to differentiate between illegal loan apps. This is also one of the banking industry’s pressing issues and customers need to verify the apps thoroughly and analyze their authenticity before installing them.
Developer Recommendations
Digital app developers can implement several security measures such as the ones mentioned above along with a few more measures such as incidence response, where the app will instantly notify users and authorities in case of a data breach.
Regular security audits should be conducted and biometric authentication should also be included as an extra layer of security.
6) Features and Functionality
Quick personal loan apps offer a plethora of varying features, ranging from loan services to security features and much more.
Developer Recommendations
For digital lending app developers, a highly recommended feature would be to include a Loan Management System (LMS) to streamline loan servicing, support, reporting, and monitoring for customers.
Other features such as pre-EMI payment facility, integration with bank accounts, and prepaid credit limit mechanism can also be added.
7) User Reviews & Feedback
Finally, user reviews and customer feedback are also critical towards choosing the best apps for instant personal loan. Going through the platform’s official website, testimonials, app store reviews, and verified review sites will give a comprehensive understanding of the app’s features, customer support, authenticity, etc.
Developer Recommendations
App developers can also review customer feedback of multiple apps to gain a comprehensive understanding of what to do and not to do when developing the application.
Enhance the Power of Digital Lending Through Loan Origination and Loan Management Systems
As digital technologies continue to grow, the sheer increase in the number of digital lending platforms in the near future should not come as a surprise. Customers are actively looking to get hassle-free loans where the entire loan lifecycle is seamlessly managed, from the point of application to closure of the loan. For that, CloudBankin offers Loan Origination System and Loan Management Systems to streamline the entire process for borrowers and lenders, respectively.
Book a demo today for comprehensive insights into the platform’s capabilities and revolutionize lending for your borrowers
The post Review of the Best Online Digital Lending Apps and How to Successfully Build One appeared first on CloudBankin – A digital loan software by Habile Technologies.
Equipment malfunctions can severely disrupt business operations, leading to delays and lost productivity. Whether it’s a computer crash, machinery failure, or technical breakdown, these unexpected issues can disrupt your workflow. However, maintaining productivity despite such challenges is central to ensuring your business runs smoothly. By implementing strategies to manage equipment failures effectively, you can minimize downtime and keep things moving forward.
1. Assess the Issue Quickly
The first step after an equipment malfunction is to diagnose the problem efficiently. Quickly identifying the cause of the breakdown helps you determine whether an immediate fix or more extensive repair is needed. Start by checking for simple issues, such as loose connections, outdated software, or power supply problems. If the problem is more complex, contact your IT or maintenance team as soon as possible to avoid further delays. A swift assessment allows you to plan your next steps without wasting valuable time.
2. Temporary Workarounds
While waiting for repairs, finding temporary workarounds is essential to keep the workflow going. For example, if a computer crashes, you can switch to a backup system or cloud-based tools to continue your tasks. In manufacturing, alternate machinery or manual methods may serve as temporary solutions. The goal is to utilize available resources that can help maintain progress, even at a reduced capacity, until the primary equipment is restored.
3. Prioritize Tasks
During equipment downtime, focusing on your most critical tasks is essential. By prioritizing urgent work, you can ensure that the most essential operations continue, even if other tasks are delayed. Create a list of high-priority tasks that can still be completed without the malfunctioning equipment, and delegate responsibilities to team members accordingly. This approach helps you remain productive while reducing the overall impact of the breakdown.
4. Communicate Delays
If the malfunction is likely to cause delays in deliverables or project timelines, it’s essential to communicate this information to your stakeholders or clients. Transparency builds trust, and letting people know about potential delays allows them to adjust their expectations. If possible, provide a clear timeline for resolution and offer alternative solutions or partial progress updates to keep them informed.
5. Efficient Use of Downtime
Instead of sitting idle during equipment malfunctions, use the downtime productively. The time can be an excellent opportunity for employees to learn new skills, complete non-dependent tasks, or review projects that may not require immediate attention. Encourage your team to focus on administrative work, training, or planning tasks that can help improve long-term productivity, even while equipment is being repaired.
Long-Term Strategies
To prevent future disruption, implement long-term strategies such as regular equipment maintenance and having backups in place. Routine checkups and timely repairs can help you avoid unexpected malfunctions. Additionally, developing contingency plans ensures that your business is prepared for potential breakdowns. These plans should outline clear procedures for diagnosing issues, deploying temporary solutions, and maintaining stakeholder communication.
Keep Productivity Alive Even When Equipment Fails
Staying productive during equipment malfunctions requires adaptability and proactive problem-solving. You can minimize downtime and maintain momentum by quickly assessing the issue, utilizing temporary workarounds, prioritizing tasks, and communicating with stakeholders. Additionally, efficient use of downtime and implementing long-term strategies, such as regular maintenance and contingency planning, will help your business stay resilient during future challenges. If you don’t already have a plan in place or coverage for equipment failures, there’s no time like the present to make a change! Talk to one of our local insurance agents today if you’re looking for insurance solutions to protect your business from unexpected equipment failures.
Artificial intelligence (AI) was the most raised issue in the past 12 months among asset manager respondents to the annual Index Industry Association (IIA) member survey. Sustainable investing, thematic investing, and customized investment, respectively, ranked as top of mind after AI among survey respondents.
Overall, the results illustrate that the asset management industry in Europe and America is in transition, facing mounting levels of complexity and a need for new partnerships, new and more specialized information sources, new skills, and stronger ecosystems and alliances.
Background
Four years ago, IIA began publishing a survey in partnership with our member firms and fielded with the support of Opinium Research. Each year, we engage with 300 chief investment officers, portfolio managers, and chief financial officers across a wide range of investment providers in the United States and Europe to gauge how asset managers view progress against current challenges and opportunities, and the key factors shaping the longer-term evolution of the industry.
When we started this endeavor in 2020, the goal was to make sure index providers understood the future needs of asset managers in terms of environmental, social, and governance (ESG)- and sustainable-related indexes.
Based on our learnings over the last three years and feedback from our IIA members, we decided to broaden the 2024 survey beyond ESG- and sustainable-related questions. ESG and sustainable investing of course remain central and material to global investors, but we wanted to make sure that our aperture was wide enough to capture the full pallet of drivers and trends impacting our clients. I am so glad we took this approach as our findings revealed a much deeper set of challenges, opportunities, hopes, and concerns. What is clear from this year’s results is that industry is facing growing complexities.
What Factors Will Have Greatest Impact on Investment Performance?
We asked which factors over the next 12 months would have the greatest impact on investment performance. Over the next year, asset managers are more keenly focused on macroeconomic issues like interest rates, inflation, and a potential economic slowdown than they are elections and geopolitical events. Notably, 81% of US respondents prioritized interest rates and inflation as the most important issues.
We asked managers what trends they have been thinking about the most during the last 12 months. I was surprised by the substantial number of respondents who ranked AI as their most raised issue, overtaking sustainable investing. Other technological issues like tokenization and blockchain were only raised by approximately 10% of managers. Managers focused on thematic investment and customized products after sustainable investing. Only about 25% identified crypto products as a topic they are discussing with their colleagues — about the same percentage as those thinking about how to bring private markets into their firms’ offerings.
Generative AI: A Game Changer
One big dividend from our decision to expand the range of topics in this year’s survey is the insights we gained around AI, and what it means in the eyes of asset managers.
ESG Exuberance Tempers
We revisited ESG and sustainable investing in this year’s survey to see if the torrid pace of growth cited in prior years was continuing. What we found is that while ESG is still a very important part of global asset managers’ strategy, the high expectations for future growth we saw in prior years of the survey have tempered.
When viewed over the four-year arc of the survey, survey respondent expectations for ESG portfolio implementation have come back to earth after the spike we saw in 2022 and 2023, landing back down near 2021 levels. For us, this indicates not that ESG is going away, but rather that it is settling into a more realistic long-term growth curve. Once again, environmental factors (the “E” in ESG) continue to be most on the radar of investors when it comes to sustainability.
Private Markets: A Puzzle to Solve
Private markets continue to be an area of opportunity for global asset managers but also an area of challenge, according to our survey. While asset managers like the concept of private markets for investment opportunity and diversification, they cited several challenges when it comes to implementation.
Difficulty integrating private equity into their investment lineup, liquidity concerns, and data gaps were cited as top-of-mind issues. This is not surprising given the historically slow pace of the development of global indexes which capture private equity market data and performance.
Index Providers in Demand
While our survey pointed out several categories that represent significant challenges for our clients, it was encouraging to see that asset managers’ top four areas to partner with index providers are for sustainable investing, direct indexing, thematic investing, and customized investment solutions. The survey shows that more than half of respondents believe that index providers and the services we offer will become more important to their success in the next 12 months. Importantly, about 20% expect to use more index providers in the next 12 months.
This is a very high-level snapshot of our survey findings. I invite you to take a deeper dive into this year’s results. I welcome your feedback and suggestions for future research.
The investing world often feels like a popularity contest.
Intel Corp. (Nasdaq: INTC) was once the prettiest girl in school as one of the largest chipmakers by revenue.
Companies wanted to install Intel chips in their personal computers (PCs) and other products, and people wanted to buy those computers in droves.
But Intel’s popularity waned alongside the PC market…
In 2023, the PC shipments fell 14.8%, marking the second straight year of double-digit declines.
Suddenly, it’s as if Intel was forced to eat lunch alone because no one was buying what it had to offer.
Until now…
In the span of a few days, Intel has been elevated back to popular status amid reports of semiconductor maker QUALCOMM Inc. (Nasdaq: QCOMM) potentially acquiring Intel.
Bloomberg also reported that asset management firm Apollo Global Management had also approached Intel about a multibillion-dollar investment offer.
Is Intel “Mr. Popular” again?
Today, I’ll look at Intel’s fall from grace and share which deal I believe has the most potential and … more importantly … what it means for you as an investor.
Semiconductor Companies Coming in Hot
In 2022, major semiconductor companies like Nvidia Corp. (Nasdaq: NVDA), QUALCOMM Inc. (Nasdaq: QCOM) and Advanced Micro Devices Inc. (Nasdaq: AMD) all posted declining revenue.
The eight largest semiconductor companies in the U.S. combined reported a nearly $10 billion revenue drop for the year.
However, after a rough first quarter of 2023, the tide started to turn, and semiconductor companies picked up steam, thanks in large part to the massive artificial intelligence (AI) mega trend.
Revenues for companies in the S&P Semiconductor Select Industry Index reached nearly $100 billion in the second quarter of 2024.
A bulk of that gain comes from Nvidia and increased demand for its AI-related chips.
However, Nvidia wasn’t the only semiconductor company gaining additional revenue:
Right in the middle of the chart above, you’ll see what was once the leading chipmaker by revenue: Intel Corp.
Its revenue growth has been pretty stagnant … especially in 2024.
After declining in 2022, Intel’s revenue started to pick back up in 2023. But a rough start to 2024 has led to flat revenue growth.
The slowdown is related to headwinds in the PC market that I mentioned earlier and a significant increase in market competition in the semiconductor space.
QUALCOMM, Apollo or Go It Alone?
INTC stock got a boost after recent news of QUALCOMM’s “friendly” deal to acquire it.
The boost was made even stronger the following week, when Apollo announced its interest in a $5 billion investment.
However, neither of those reports has propelled INTC to its former glory yet:
Despite INTC’s stock pop, it remains well below both its 50-day and 200-day exponential moving averages … mainly due to the bearish price movement since the start of 2024.
When considering if either of these two deals comes to fruition, my money is on Apollo’s investment.
Intel has spent billions pivoting away from its PC segment and into AI computing. This got a significant boost when Amazon.com Inc. (Nasdaq: AMZN) announced a multibillion-dollar deal with Intel to co-invest in a custom AI semiconductor.
That investment could be strong enough to push the raiders from the gate and keep Intel independent.
Adding in a potential $5 billion equity investment helps buoy that position.
Accepting a deal to be acquired from QUALCOMM amounts to Intel admitting defeat. It says they couldn’t rebound from a tough few years.
Plus, going with QUALCOMM is going to introduce a new foe to the mix: U.S. government regulators.
These are the kinds of deals that face heightened scrutiny amid antitrust laws.
As an investor, you have to look at all the angles.
And here’s one more fact to consider…
Based on Adam’s Green Zone Power Ratings system, Intel rates a “High Risk” 1 out of 100 and rates in the red in five of the six metrics that make up its overall rating.
Neither of these propositions to bring Intel back to the cool kid’s table is a guarantee.
And our ratings system says Intel is one stock to avoid right now.
In 2023, the luxury sector demonstrated robust growth, despite facing global economic complexities, an overall slowdown in consumer demand, and inconsistent performance across different markets. Bain & Company reported a global market value of €1.5trn, with personal luxury goods reaching €362bn – a four percent increase at current exchange rates and eight percent at constant rates. Notably, menswear emerged as a rapidly expanding segment, driven by the demand for high-quality, classic pieces reflecting brand heritage – a trend corroborated by our group’s recent results.
Entering 2024, the luxury sector faced additional hurdles, including adapting to a swiftly changing digital landscape and combating counterfeiting while upholding ethical supply chains. The geopolitical environment, including the Russia-Ukraine war and most recently the Israel-Palestine conflict, has also presented challenges for sector growth. Despite these obstacles, the sector has demonstrated resilience, emphasising its ability to thrive amid volatility. As the year progresses, luxury brands must continue to navigate geo-political and economic challenges, technological shifts, and evolving consumer preferences. This adaptability is essential as brands aim to meet the sophisticated demands of a global consumer base seeking authenticity, sustainability, and exceptional quality.
Navigating new norms The luxury market is experiencing significant changes in 2024, influenced by economic shifts and an evolving demographic profile. The Knight Frank and Douglas Elliman 2024 Wealth Report highlights a 4.2 percent increase in global ultra-high-net-worth individuals (UHNWIs), with notable growth in North America, the Middle East, and Africa. This surge provides luxury brands with opportunities as $90trn in assets is set to transfer from baby boomers to their children, setting the stage for millennials to become the wealthiest generation ever.
However, capturing this wealth requires more than traditional strategies and this becomes even more imperative in the face of Bain & Company’s prediction that younger generations (Generations Y, Z, and Alpha) will emerge as the predominant consumers of luxury goods, accounting for nearly 85 percent of global purchases by 2030 (see Fig 1).
Today’s affluent consumers, especially millennials and Gen Z, demand authenticity, sustainability, and ethical practices from luxury brands, reshaping the market’s landscape. These consumers are not just looking for prestige but also for a genuine commitment to social values and environmental responsibility. Sustainability has become a crucial aspect of luxury branding. The younger generation’s environmental concerns are prompting luxury brands to adopt sustainable practices and transparently communicate these efforts, moving sustainability from a trend to a business imperative and an integral part of their global legacy.
Digital transformation is also critical. As wealth mobility and younger consumers’ digital fluency increase, luxury brands must integrate advanced technologies such as AI to enhance online and in-store experiences. AI can enable brands to drive design with data insights, authenticate products, optimise supply chains, and much more. These innovations are not just about keeping pace with technology but are crucial for connecting with a digitally native audience, thereby ensuring that luxury brands remain relevant in an ever-evolving market landscape.
Additionally, according to Bain & Company, the retail landscape is witnessing a remarkable shift towards enhanced in-store experiences. Monobrand stores, in particular, are leading this change. In our group’s experience, personalised clienteling has been instrumental in attracting luxury consumers who are eager to return to face-to-face interactions, thereby demonstrating a preference for a more tailored and intimate shopping experience. This era is about leading change, not just adapting to it. Luxury brands that can effectively harness shifts in wealth demographics, consumer expectations, and technological advancements are set to succeed. The evolving luxury landscape continues to demand a blend of exclusivity, responsibility, innovation, and authenticity, all tailored to meet the diverse needs of a global consumer base, just as it has in the past.
On-trend in China China has been a reference for luxury goods for decades and the diversity within China’s regions plays a critical role in shaping the luxury market. For example, while mainland China has shown strong performance post-reopening, emerging economic challenges have hinted at potential slowdowns. In contrast, Hainan’s Sanya Haitang Bay is on track to become a new luxury hub, set to transform into a duty-free island by 2025, which could significantly alter the luxury retail landscape.
The retail landscape is witnessing a remarkable shift towards enhanced in-store experiences
Furthermore, Bain & Company forecast that by 2030, Chinese consumers are expected to reclaim their pre-Covid-19 position as the leading nationality for luxury goods, accounting for 35–40 percent of global purchases. Additionally, mainland China is anticipated to surpass the Americas and Europe, becoming the largest luxury market worldwide, representing 24–26 percent of global purchases.
While the luxury sector faces a complex array of challenges in 2024, the opportunities within China’s expanding and evolving market are significant. Brands that can navigate these complexities with strategic agility, a strong digital presence, and a commitment to sustainability are likely to outperform and continue to captivate the sophisticated and increasingly diverse luxury consumer base in China and beyond.
Must-haves in the Middle East The Middle East is experiencing significant economic growth, driven by government investment of energy sector revenues into new economic areas. This is fostering a notable increase in wealthy families in the region. Projections suggest that by 2027, the number of high-net-worth individuals (HNWI) in the Middle East will increase by 82.4 percent, and UHNWIs by 33 percent, exceeding the global growth rate.
In addition to these trends, the Middle Eastern luxury goods market, primarily driven by the UAE and Saudi Arabia, is expected to double in size from nearly €15bn in 2023 to €30–€35bn by 2030. Saudi Arabia, in particular, is rapidly becoming a major hub for luxury, with Vision 2030 playing a pivotal role in transforming the country into a luxury destination. The country plans to develop nearly 500,000 square metres of luxury commercial real estate in Riyadh alone, including three major shopping malls. This development is aimed at retaining the luxury expenditure of Saudi nationals within the country, which is expected to grow significantly. Additionally, the proposed luxury destination in the Red Sea by Neom is anticipated to bring substantial economic growth to the area.
This burgeoning growth sets the stage for the Middle East to become an increasingly important market for luxury goods, potentially comparable to established markets such as the US, Europe, and China. The emphasis on creating a regional luxury shopping paradise, coupled with massive economic transformation initiatives, positions the Middle East as a vibrant landscape for luxury brands looking to expand their global footprint.
Redefining the industry In 2024 the luxury sector is on the brink of a significant transformation, offering a wealth of opportunities for forward-thinking brands. To thrive, companies must innovate, evolve, and resonate with the shifting dynamics of the luxury market. The foundation of this transformation lies in understanding and engaging with the new generation of consumers who demand both authenticity and innovation.
Companies must innovate, evolve, and resonate with the shifting dynamics of the luxury market
Over the next decade, the fusion of traditional luxury values with cutting-edge technology will redefine the industry, creating a new era that appeals to a more diverse and sophisticated global audience. Brands that leverage data-driven insights, embrace seamless omni-channel experiences, and expand into emerging markets will be at the forefront of this evolution. Overall, the future of luxury is about more than just quality products; it’s about creating strong long-lasting relationships with consumers and offering them personalised, meaningful experiences that they connect with deeply.
Assetz Capital has successfully structured a funding package of £9.95m facility for VOCO Leicester Hotel financed with Atom bank.
Last year, hotel management company Kew Green Hotels announced their plan to reflag two existing properties in Leicester and Manchester under IHG’s VOCO brand.
The group acquired management of Hotel Brooklyn Leicester and Hotel Brooklyn Manchester and has signed a franchise agreement with IHG to rebrand them as VOCO properties during 2024.
David Hehir, relationship director at Assetz Capital, said: “I enjoyed playing a vital role in structuring this finance package with Atom bank to ensure its successful delivery for the Voco Leicester Hotel.
“Following Assetz Capital recent completions of an IBIS Styles Hotel in Glasgow for £5m, it is positive that we have expanded our reach structuring this fantastic hotel in Leicester.
“We would also like to pass on our thanks to Paul Goodman of Goodman Corporate Finance for his help with the transaction.”
Andrew Fraser, chief commercial officer at Assetz Capital, said: “We are pleased with the commerciality and speed shown by Atom on this £9.95m transaction.
“Assetz Capital and Atom bank have now completed a series of deals including office investments, leisure assets and now a branded hotel chain.
“The transaction completed in less than 12 weeks from initial discussion. We look forward to continuing to work further with Atom bank in the real estate space providing loans up to £10m.”
David Castling, head of intermediary distribution at Atom bank, added: “Our capability to fund loans of up to £10m in size at speed across the whole of the UK, reinforces our ongoing appetite to support the whole SME debt spectrum from small to large loan sizes.
“Assetz Capital and Atom bank’s collaborative approach ensured a smooth and efficient transaction, and we look forward to providing further funding to companies like VOCO in the future.”
Knowing when to diversify company assets is crucial to a successful business strategy.
Embarking on the journey of business ownership requires not just passion but also strategic foresight. In this article, Simon R. Barth, from ONEtoONE Corporate Finance Colombia, unravels the Rule of 130–an indispensable compass for entrepreneurs.
Join us in exploring when and why you should contemplate selling a portion of your business to embark on asset diversification.
What is the Rule of 130? When to diversify company assets?
The Rule of 130 involves calculating how much your company’s value contributes to your personal net worth. This percentage, converted into a number, must be added to your age. If the resulting value is greater than 130, it is advisable to start diversifying.
This is the breakdown of the Rule of 130 equation:
Age + percentage of net worth tied to the business
A hypothetical case: applying the Rule of 130 to diversify company assets
Let’s take the hypothetical case of a businesswoman called, for example, Mary. She is 48 years old. For the last 15 years, she has been developing her own construction business. Today, she owns the following assets:
To simplify, we will assume that:
She has no personal debt.
The 10 million dollars in equity value is the result of subtracting a 5 million financial debt from the company’s 15 million enterprise value.
As you can see, 84% of her personal assets are tied up to the construction company, which has generated most of the other wealth and provides a stable income and good quality of life.
What would happen if the company went bankrupt for not diversifying assets?
Mary could end up losing the company and the other assets she has accumulated over her entire life.
It’s essential to note that a prevalent practice among small and medium-sized firms involves obtaining bank loans supported by guarantees tied to the business and personal guarantees from the owners.
Now, as you know, construction is a risky business and is subject to market cycles, supply and demand, and interest rates.
In the event of a market contraction or a major project failure for any reason, Mary could lose everything.
Let us apply the Rule of 130 in this case. We need to add Maria’s age, 48, to her personal wealth tied to the business, which is currently 84%:
48+84=132
The result is bigger than 130, so it is advisable to consider selling a stake or completely exiting the business to diversify her risk.
Options to diversify company assets
Mary has a number of options to diversify risk.
1. Searching for a strategic buyer
Una alternativa para logar este objetivo es buscar un comprador estratégico, como otra empresa de construcción dentro del mismo país o una entidad extranjera, para explorar una estrategia de salida.
An alternative is to look for a strategic buyer, such as another construction company within the same country or a foreign entity, to explore an exit strategy. Normally, this buyer has the most synergies and will pay more.
Why would they buy this company? They could be aiming to expand their own business by acquiring sales and getting access to the expertise, brand reputation, human workforce, and existing project backlog or pipeline.
2. Searching for a private equity fund
Another alternative would be to look for a private equity fund interested in growing the business. They could do a cash-in and cash-out operation.
The cash-in approach involves the company issuing shares to the investor to raise capital. This capital will be utilized to boost the company’s growth. Also to increase future cash flows for all shareholders; this operation will partially dilute Maria’s stake in the company.
The cash-out approach, which consists of selling Mary´s stock, will provide her with some liquidity to buy additional profitable assets, like rental warehouses, bonds, or index funds. This strategic move ensures that, if the company doesn’t survive, she secures enough passive income to live comfortably for the rest of her life and even create what is known as generational wealth.
Getting advice to protect these assets from creditors and using corporations, family trusts, private interest foundations in other jurisdictions, or other mechanisms is crucial.
Advantages of private equity
Mary has now diversified her risk and found an intelligent partner with significant connections in the financial world to leverage more projects for the company. She can now work for another eight years, until her retirement age, without bearing the entire responsibility for the company’s outcomes.
The PE funds usually exit their investments within 5 to 8 years. As Mary remains a minority shareholder of the company, she will probably sell her stake before retirement and, therefore, secure a higher price for her shares. Several times, I have seen second liquidity events in which the minority stake surpasses the price or the proceeds of the majority stake initially sold.
With some investors, you can do a combination of a cash-in and a cash-out, providing liquidity for both the business and the owner at the same time.
This is a theoretical example based on real-life examples. Usually, PE funds target large transactions, but I wanted to demonstrate this with simple figures.
The Rule of 130 and the safety of diversifying assets
In a nutshell, if you are a successful business owner, apply the Rule of 130. Add your age to the percentage weight of your business in your net worth. If the result is greater than 130, consider seeking a strategic or financial partner.
This approach can help you:
Ensure your family’s financial freedom.
Reduce the personal risk associated with having most of your assets tied to a single business.
Remember to get the best financial and legal advisory to execute this path.
*Note: The rule of 130 was introduced by the best-selling author Adam Coffey in his book “Empire Builder: The Road to a Billion“.This author has been a CEO for 21 years in 3 multi-billion dollar companies. He has bought more than 58 businesses in his roll-up strategies and successfully exited some of them, creating a lot of value for his shareholders.
About the author
Simon R. Barth, Partner of ONEtoONE Corporate Finance Colombia.
Simon is a Professor of Finance, Board Member, and Investment Banker. Master in Finance from Universidad de los Andes. Certificate in Advanced Valuation with High Honors from NYU | STERN. Certified in Negotiation at Harvard Business School and certified in Real Estate Investment Strategies at Columbia Business School. He is an expert in the valuation, merger, and acquisition of companies.
Strategic planning is essential for the success of a business. If you need advice for your company, contact us now.
Founded in 2019, Trade Republic has rapidly become one of Europe’s leading broker and savings platform, marking a significant presence in the financial landscape. Since its foundation, the platform has attracted 4 million customers across 17 countries and manages assets worth approximately 35 billion euros.
This article dives into key statistics surrounding Trade Republic, including its assets under management (AUM), user base growth, revenues, and other critical metrics that reflect its evolving role in the European financial ecosystem.
Revenues
As a private company, it is difficult to get a complete picture of its financial statements. In the German company register, the company’s official name is “Trade Republic Bank GmbH”. The latest available information (30.09.2022) shows a relatively healthy balance sheet. The assets comprise €1,894mn, and the liabilities side is €1,506mn. However, it made a net loss of €145mn.
According to the Financial Times (article from January 2024), Trade Republic co-founder Christian Hecker reported a “solid double-digit million euro amount” of net profit in the year ending September 2023.
Trade Republic AUM and number of users
As of October 2024, the Assets Under Management (AUM) of Trade Republic was €35 billion in client assets and cash. Besides, the number of users was 4 million, spread over 17 countries, as shown on their website:
Trade Republic about
Average account balance
By dividing the assets under management by the number of accounts, we get an estimated average account balance of €8,750per user.
Who are Trade Republic investors?
Trade Republic is backed by several well-known investors/funds, such as:
Sequoia
Founders Fund
Ontario Teachers
TCV
ACCEL
Thrive Capital
Creandum
Trade Republic investors
Business model
As a brokerage firm, Trade Republic’s main revenue source is related to the users’ transactions in stocks, ETFs (exchange-traded funds), cryptocurrencies, and other financial products.
Here’s a breakdown of how Trade Republic earns money:
1. Transaction fees
Although Trade Republic markets itself as commission-free, it charges a flat fee of €1 per trade, called an “external settlement cost”. This covers operational expenses such as order routing and settlement. Compared to traditional brokers, this fee is considered small, but it still provides Trade Republic with a consistent revenue stream from active traders.
2. Payment for Order Flow (PFOF)
One key way that Trade Republic earns revenue is through Payment for Order Flow (PFOF). This practice involves receiving payments from market makers (such as financial institutions or liquidity providers) in exchange for routing clients’ trades to them. While the end-user gets commission-free or low-fee trading, Trade Republic monetizes the transaction by sending it to a specific market maker, compensating the platform. According to the same Financial Times article above, “Payment-for-order-flow agreements only accounted for about a third of Trade Republic’s overall income, Hecker [Co-founder of Trade Republic] said” (our bold).
PFOF can be controversial, as it raises concerns about potential conflicts of interest in how orders are executed (e.g., ensuring the best price execution for the user). According to this paper, prepared on behalf of Trade Republic, PFOF “does not harm private investors. On the contrary, customers benefit from this new”.
However, the European Union has agreed a general ban on PFOF. This practice must be phased out by 30 June 2026.
3. Securities lending
Another revenue stream comes from securities lending. Trade Republic can lend out the securities held in users’ portfolios (typically to institutional investors, hedge funds, or other entities) for short-selling or other purposes. The firm earns fees or interest on these loaned securities, while the user retains ownership.
Please note that since Trade Republic passes through the entirety of the “deposit facility rate” (3.50%) to its customers, it effectively gets no revenue from the clients’ uninvested cash.
As a curiosity, DEGIRO takes the opposite approach (pays no interest).
Trade Republic valuation
Trade Republic, a German-based fintech company, reached a valuation of over $5 billion USD after its Series C funding round in 2021, led by Sequoia Capital. In 2022, it raised an additional €250 million in a Series C extension, led by the Ontario Teachers’ Pension Plan Board (Ontario Teachers’), reaffirming this valuation.
In 2023, it received a full-scale European banking licence which may increase the company’s overall valuation for next funding rounds (or IPO valuation), if needed.
Is Trade Republic planning an IPO?
To the best of our knowledge, Trade Republic has not made any official announcements or confirmed plans to pursue an initial public offering (IPO). The company has not made any public statements or shared press releases indicating an intention to go public.
Still, in a recent podcast, Johan Brenner (one of Trade Republic’s VC investors) predicted that Trade Republic would be a public company in 5 years, anticipating an IPO in the next few years.
The decision to pursue an IPO in the future is not straightforward. Various factors, such as the company’s financial performance, future prospects, market conditions, regulatory environment, and strategic growth plans, have a major impact on such a commitment.
Several Trade Republic competitors like Interactive Brokers, XTB and DEGIRO are listed on stock exchanges, so it is something that Trade Republic may aspire to achieve as well.
Competitors statistics
Curious to get a similar analysis on Trade Republic competitors? We have also explored Trading 212, Interactive Brokers, and eToro.
Bottom line
Trade Republic has grown rapidly, becoming a major player in the European fintech and brokerage market. With 4 million users across 17 countries and €35 billion in assets under management (AUM) as of October 2024, the platform has shown impressive scale.
While the company initially posted losses, its shift to profitability by September 2023 reflects strong business fundamentals. Revenue is primarily driven by transaction fees, payment for order flow (PFOF), and securities lending, despite the forthcoming EU ban on PFOF by 2026.
Additionally, Trade Republic’s valuation, hovering around $5 billion USD, is supported by major investors like Sequoia and Ontario Teachers’. The firm has yet to announce plans for an IPO, though it has secured a full European banking license, potentially setting the stage for future expansions.
