Banking and financial technology (fintech) heavyweights, including former TSB chief Paul Pester, are behind the latest fintech that will enable people to share money.
According to reports, the former TSB CEO, who was forced out after a massive IT disaster, has joined money-sharing fintech Loop, alongside Atom Bank and Metro Bank founder Anthony Thomson and former Comparethemarket boss Matthew Donaldson.
Pester stepped down from his role as CEO at TSB in 2018 in the wake of an IT disaster that blighted customers after the bank migrated their accounts to a new core banking platform.
Loop, which is being beta tested, is an app that enables people to share money and will target a market estimated be worth more than £12bn a year.
The current wave of digital challenger banks have not addressed the money-sharing market and, after a Covid-19 lull, investors are again flocking to fintechs with the right business plans.
Global investment in fintech reached record levels in the first half of this year, totalling $98bn from about 2,500 deals.
Figures revealed in KPMG’s latest Pulse of fintech report show the recovery is in full swing after investments were largely stalled during the pandemic.
Last year, $121.5bn was invested in fintech globally, with $87bn of that in the second half. The figures include venture capital and private equity investment, as well as mergers and acquisitions.
Pester left TSB in April 2018 after problems when thr firm moved millions of customer accounts from the Lloyds Banking Group IT system that had been hosting them to a new banking platform, known as Proteo4UK, from TSB’s Spanish parent Sabadell. Proteo4UK is an in-house banking platform based on Sabadell’s Proteo system.
The Proteo system was introduced to give TSB the infrastructure required to harness the latest IT and become a challenger to the big high-street banks.
Problems following the migration included customers being locked out of their accounts, others reporting money disappearing from online accounts, and some were even able to see other customers’ accounts.
A TSB-commissioned report into the disaster by city law firm Slaughter and May said the bank’s management and the IT supplier that supported it were not ready to implement and run the new core banking platform, which resulted in its botched launch.
Read more about fintech in the UK
- Importance of immigrant workers to the UK’s fintech sector highlighted by government planned fintech visa.
- Less-established fintechs hit hardest by drop in investment capital, but there is light ahead for those that survive.
- UK government faces a ‘now or never’ moment if it wants financial technology to play a central role in the economy for years to come.