Here is a list of the six most read stories from the first six months of 2020.
2020 has been a rollercoaster of a year so far—since the outbreak of coronavirus, of which the first case recorded in the UK was back in January, we’ve seen mass unemployment, the economy crashing and the government attempting to firefight with several loan schemes.
Fintech has not come out unscathed, several of the largest players have had to furlough staff and make redundancies, all while working remotely under lockdown.
So, without further ado, here are the top six most read stories of 2020 on AltFi so far:
Just a few months later, as lockdowns started to come into effect across the world, Robinhood found itself in hot water after it suffered an outage on a day where the US stock market surged $1.1tr.
As a result of the outage, some customers reportedly lost up to hundreds of thousands of dollars and three class-action lawsuits in California, Illinois and Florida were taken out against the trading platform.
The planned launch was meant to happen in Q1 of 2020, but for reasons reportedly not related either Covid-19 or its various outages, the timings changed.
At the beginning of May, Robinhood closed a $280m Series F funding round, giving the company a valuation of $8.3bn.
As you will soon see, stories about Bounce Back Loans have been incredibly popular in the past few months.
This next entry on the list was technically published in The AltFi Weekly Newsletter but, as a result of interest in the Bounce Back Loan scheme, a version was also published on AltFi.com.
A lot of questions began being raised surrounding the 100-per-cent-backed scheme as fintechs saw huge levels of demand (see No. 2 & No. 3 in our list).
Bankers began to predict that we could see defaults of about 20 per cent once collections begin next year, with nearly half (43 per cent) of borrowers admitted to the Business Banking Resolution Service that they aren’t planning to pay their loans back.
As a result, we could see a deadlock between borrowers and lenders as borrowers will argue that they were inappropriately lent to, while the lenders will rightly respond that they were instructed by the Treasury to not check affordability.
Revolut saw a string of executives leave the banking service since the middle of March this year.
The eight departures included chief financial officer David Maclean, who departed the e-money service after less than six months at the company, head of wealth and trading André Mohamed, who co-founded Freetrade, deputy chief financial officer, Stefan Wille and Revolut’s interim head of finance Anna Borzenko.
According to a spokesperson, the departures were not linked to Covid-19.
Despite the management reshuffle, Revolut is also on the hunt for a UK Chairperson to help it obtain a UK banking licence, something the bank has operated in the UK for five years without one.
Despite getting its system up and running in about a week, Starling Bank was the recipient of fierce criticism from SMEs.
Starling’s BBLS garnered 18,000 applications in a week and because of this “record demand”, Starling had to stop accepting new sole trader business accounts.
This decision was met with anger as many sole traders had patiently waited for Starling to open its doors, only for the bank to close them in just under a week.
Despite the backlash, Starling’s SME customer base grew to 155,000 business accounts, an increase of 55,000 new customers since the beginning of February.
Much like the story above, the second most read story on this list is to do with Bounce Back Loans.
Starling was one of the first fintechs to gain Bounce Back Loan accreditation but as soon as applications opened it began to face backlash (see number 3).
Similarly, it appeared that almost as soon as Tide’s BBLS applications opened, it faced a flurry of anger from customers who felt left in the dark.
Both fintechs appeared to be drip-feeding BBLS funds, angering customers who were badly affected by the pandemic and needed cash to stay afloat.
It was then revealed that the British Business Bank had placed a limit on how much certain lenders could dish out, with the limits only being lifted once the maximum has been reached and a second higher limit is approved.
Again, both Tide and Starling prioritised existing customers, prompting backlash from SMEs who were not yet on their books.
Revolut has not come out of the coronavirus pandemic unscathed—the banking service has slimmed down its employee numbers in Europe, asked employees to take part in a salary swap scheme and co-founders Vlad Yatsenko and Nikolay Storonsky sacrificed their salaries to save cash.
The new app enables users to manage their finances all in one place, promising to “reimagine and redefine” Revolut’s current offering.
Customers of the e-money service can now access their open banking-linked accounts as well as other budgeting and analytical tools and trade stocks, cryptocurrencies and commodities from just two tabs in the app.
As the digital challenger rolled out its new app, it was also revealed that it had hit 12m customers globally, including 1 in 4 in Ireland.