Hamburg, 17 December 2018 – With a systematically optimised structure, profound expertise and meticulous market analysis, Varengold Bank continues to establish itself as a partner of Fintechs. For the first 20 marketplaces, the onboarding process has already been completed and the conditions required for further growth in 2019 have now been fulfilled.
“With total assets of almost 700 million euros we may be one of the smaller banks. In future, however, assessing the attractiveness and viability of a financial company will be reflected in other parameters. All regulatory requirements must of course be met, and with a Tier 1 capital ratio of around 15 percent, we have built a rock-solid capital base. But the race for market share will be determined by how well the services and products on offer fit the necessities of customers as well as how user-friendly and how easily accessible they are,” says Dr. Bernhard Fuhrmann, Member of the bank’s Board of Managing Directors. He says this with reference to both the value and the role of start-ups in the financial ecosystem.
Over the past few months, the bank has laid out its strategic direction and, together with its shareholders and business partners, defined how it intends to position itself in the changing financial sector. The outcome is clear: to be a partner of Fintechs, and of lending platforms in particular. To put this plan into practice, the capital increase undertaken this summer has ensured a significant increase in business volume and further strengthened the company’s growth prospects for 2019.
“In terms of competition, transparency and availability, large marketplaces have almost all the advantages on their side, in real life and online. They are the ideal framework for a meaningful cooperation between smart Fintech solutions and established banking expertise and are also a key element in the renewal of the financial sector,” says Fuhrmann, explaining the new strategy, whilst also implying that he does not want to cede this area entirely to the big tech players. The synergies of industry-internal approaches are obvious: banks bring regulatory expertise and financial resources to the table and, as licence partners, can get business models, which are optimised in theory, up and running in real terms. Fintechs have a near infinite creative ability to rethink financial services from a customer perspective, set a decent pace and, without any IT legacy burden, are streets ahead technologically.
Significantly expanding the Marketplace Banking business
Fuhrmann is together with his fellow board member Frank Otten the driving force behind the bank’s change of course. The Marketplace Banking business area, a team of some 20 members, is now dedicated to the screening of loan platforms, due diligence as well as all aspects of relationship management. “To help us decide which platforms we can collaborate with, we have developed our own assessment model. In this process, we benefit from our prior engagement with the lending sector which began in 2013,” says Otten, explaining how his company deals with the fact that there are no consistent standards for assessing the creditworthiness of borrowers or the risk of credit default within Europe.
The bank’s well-thought-out approach is proving successful – 20 marketplaces are already ongoing partners of Varengold. Each onboarding process is designed individually and the team actively and directly participates from an early stage of a platform’s formation.
In 2017, around 3.8 billion euros of credit were brokered through platforms throughout Europe. Given the spread of digital financial solutions and the implementation of the PSD2 guideline, which is conducive to the expansion of marketplaces, Varengold Bank expects this volume to triple by 2022. “The PSD2 guideline is a good example of how the intelligent and secure use of data can enhance the performance of new technologies while at the same time greatly simplifying the process,” says Otten, who recently represented the bank and its new focus as a panellist at the LendIt conference in London.
Modernisation in a decent way
“We tend to prefer to just do our job and not talk too much about it. But we want to be more visible in the market, and so we decided to communicate more actively,” says Otten, describing the changed and more offensive market presence. The new website recently went online. “For us, putting the focus on customers means clearly presenting what we offer and being easily accessible in our collaborations. The faces you see in the video are the same faces you will see in the personal conversations.” In addition to the new digital presence, the branch in Sofia, Bulgaria was inaugurated at the end of November. The choice of location confirms the potential that Varengold sees in Southern and Eastern Europe.
Varengold Bank AG is a German bank founded in 1995, which acquired its full banking licence in 2013. It is headquartered in Hamburg, with additional branches in London and Sofia. Its core business areas are Marketplace Banking and Transaction Banking (Commercial Banking), and it focuses on cooperating with European Fintechs, in particular lending platforms. The product range on offer includes funding, debt and equity capital markets products, fronting services for products subject to banking licence requirements and international payment services. Members of the Board of Managing Directors are Dr. Bernhard Fuhrmann and Frank Otten, who together with a 70-strong international team continuously help to modernise the financial sector. Varengold Bank is registered with the Federal Financial Supervisory Authority (BaFin) under 109 520 and the Varengold share (ISIN: DE0005479307) has been listed on the Open Market of the Frankfurt Stock Exchange since 2007. For more information, see www.varengold.de/en/home/.
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