Financial technology vendor Misys is rolling out software that will allow banks to provide peer-to-peer lending to their customers as competition from young companies in the sector continues to intensify.
The technology would enable retail and corporate banks to connect their customers looking for loans with individual or institutional investors digitally, the private London-based software company said on Tuesday.
P2P lenders, which allow consumers and small businesses to borrow from investors online, emerged in response to a contraction in bank lending following the financial crisis of 2008.
Misys said the software would allow banks to maintain a relationship with clients that they would otherwise have to turn away without have to originate loans from their balance sheet.
“Banks are losing market share to P2P platform providers. By embedding crowdlending into the overall credit lifecycle, a bank can maintain and expand its client base, recapture business from alternative finance marketplaces and boost lending growth,” Jean-Cedric Jollant, senior product officer at Misys, told Reuters.
The launch comes as the nascent peer-to-peer lending sector expands, despite facing some growing pains. Research by Morgan Stanley estimates that P2P lending companies, also known as marketplace lenders, could originate up to $490 billion in loans globally by 2020.
Banks have been reacting to the trend by either partnering with younger companies or launching their own online lending operations. Spanish banking group Banco Santander in 2016 partnered with U.S. small business lender Kabbage to provide loans, while JP Morgan Chase & Co. previously partnered with OnDeck.
Jollant said Misys was launching the product because it was already an established provider of financial lending software to many large global lenders. He added that the company was in discussions “with a number of interested banks in the U.S., Europe and India.”
There’s something quite noble about Phil Larsen, Luke Muscat and Hugh Walters, and their reasons for turning their collective backs on Halfbrick.
The trio had been partly responsible for some of the biggest games in the smartphone space, including Fruit Ninja and Jetpack Joyride, but they felt they had nothing left to learn working at the developer, so took the gamble to go it alone.
“There weren’t too many more challenges, and the challenge of starting something new and being small and agile seemed like a smart idea,” says Phil Larsen, who is the MD at the studio. “And we are all basically in our early 30s, and we thought that maybe we wouldn’t get another chance. So we decided to go for it.”
The team left Halfbrick at the start of 2015 and attended GDC with “no money, no game, no nothing”. Although Larsen felt the newly formed team, named Prettygreat, had the capacity to pull in some big investors, they instead decided to aim a little lower, and accept funding from the founders of Crossy Road makers Hipster Whale.
“Matt [Hall] and Andy [Sum], being so successful with Crossy Road at the time, wanted to put some investment into other studios, and they were the perfect fit for us,” Larsen explains. “They were other developers who understand what we do, they trust in us as a team because we’ve done it all before, and it just helped us get everything off the ground. It has basically been the best possible decision we could have made.”
Prettygreat has only been going for 18 months, but it’s already created two games, with a third deep in development. The firm initially made the modestly popular smartphone title Landsliders, a casual collect ’em up project that it managed to pull together in just four months.
“Although we’d worked together before, working on our first game is always going to be tricky, you’ll be understanding each other and finding a new approach,” Larsen explains. “The way we did that was to try and create something a little bit unique, a bit weird, with some control innovation… as a game, it was profitable, which is good. It wasn’t the mega hit of the year or anything like that, it wouldn’t have reached any Top Ten charts in terms of downloads, but we made that game in four months, and we supported it for six months after launch, which we wouldn’t have done if there wasn’t profit to be made. The game has about 5m downloads so far, which is not bad. We’ve come from a place where 200m or 300m downloads were the norm, so we’re scaling back, which is fine. But Landsliders is a first game that says: ‘hey, this is what we can do. Make a game fast and make it successful’.”
It may seem like a rapid turnaround, but Prettygreat managed to outpace that with its second game, Slide the Shakes, which was designed and released in just six weeks.
“Basically, we had about three weeks left at the end of last year, because we’d done everything for Land Sliders. So we just decided to make a game. It also made a profit and had 3 or 4m downloads already. That was also a game where we understood its scope and potential, so we invested the appropriate amount of time – which was six weeks, but I think our quality level for that was quite high.
“We are game strategy agnostic, for want of a better way of expressing that. We are not sitting here saying we’re going to make triple-A games on mobile, or make six months projects every time. We are going to pick projects that we like and we are going to develop it to the level that we think it will be successful – and if that means it is six weeks, fine, if it is six months, which is our current project, then we will do that. We just want to make all sorts of crazy ideas. We don’t have any specific business model or genre.”
The Prettygreat team seem to know a thing or two about building sustainable smartphone games, which is difficult in a market where discoverability is difficult and the competition is plentiful. Even some of the world’s biggest mobile developers struggle to enjoy repeat success in this space. It’s a fact that’s not lost on Larsen, but he says if developers are smart, plan carefully and make sure the projects are in tune with the team’s talents, then success is not necessarily that hard to come by.
“A lot of people talk about how competitive it is, which is true. And they talk about how hard it is to make a whole bunch of money, which is true. But a misconception that a lot of people have is that you have to be making Clash Royale money, or you need to be spending loads of money, or you need to take years making the games,” Larsen begins.
“There is a lot of competing factors as to what makes a business successful. For a while it was Angry Birds, and building a brand, and merchandise. Then it was all about free-to-play. We have been through all of that at Halfbrick. Our perspective is, it is competitive but you need to pick the right business model for your team, and you need to pick the right approach for you. With three dudes at the start of a company, we weren’t saying: ‘Let’s do a Candy Crush and make $1m a day.’ No. We will pick something that we know we can get out there in a short amount of time, know generally what monetisation trends that are happening, and what is the easiest way of getting some revenue going for our games.
“Yes it is hard, but it is not impossible. A lot of people say it’s impossible, but no, you just need to be smart about how you approach it for your team specifically. If we had taken AUS$2m in funding when we started, or attacked it in a bigger way, then people would be expecting us to make a Candy Crush. But we didn’t want to do that.
“Our biggest strength as a company is scoping products right, and making them for the right people at the right time. It is very easy for an indie team to say mobile is hard, but that’s possibly because they’ve spent 18 months making the game – that might be hard to recoup as an investment. We would sooner spend four months on a game.
“Having a team that works together really well, and approaching it with a clear focus, then you can make money. We haven’t made millions of dollars yet, but that’s ok, you don’t need millions to pay three people.”
Prettygreat’s next product is currently not announced, although Larsen says it is an online multiplayer project that will be unveiled soon. This title has a much bigger scope and has already been in the works longer than its previous projects. However, Larsen is reluctant to suggest the team will continue to make bigger, more ambitious projects. He tells us that the following game could take six weeks again, or four months.
Yet don’t take this to mean there is a lack of ambition on the part of the former Fruit Ninja makers.
Larsen concludes: “I don’t want to be perceived as just three guys making stuff for the hell of it, and it’s all crazy and whatever happens, happens. That’s true to an extent, and day-to-day things are very fun and casual. But we are very serious about success financially, and our reputation is very high and we want to keep that going. The path we take is sometimes a bit unconventional, and it doesn’t necessarily have a simple six month or 12 month goal, which is what the bigger investors want to see. But we still have our eyes on the prize. We are probably not going to become a 100-person studio anytime soon, but the idea that we can create some of the biggest games in mobile and strategically scale to support them, then that’s fine. If that happens, then we will make that happen.
“We have come from a place where we were working on Fruit Ninja and Jetpack Joyride, which were some of the biggest mobile games ever for a few years. We are not strangers to that environment. We haven’t started a studio to figure out how to do mobile, we absolutely already know how to do that. We’ve been through the highs and lows of some of the biggest things out there. We know what to expect and we are definitely aiming for it, but we are not going to compromise quality or our studio culture to get there.”
ATMs running XP Embedded are not affected because Microsoft is not cutting off its support until 2016.
The process of upgrading to an alternative such as Windows 7 is both complicated and expensive for ATM operators – with many older machines needing to be altered one by one. Most are not expected to have made the switch within the next month.
JPMorgan has bought a custom one-year tech support agreement from Microsoft and will not begin migrating its 19000 machines to Windows 7 until July, the bank has told Bloomberg. Wells Fargo and Citi say that they are working on upgrading their networks.
It’s not just ATMs that are at risk – Microsoft recently warned that the Indian banking industry’s reliance on XP could put more than 34,000 branches at risk.
In a notice on its site, the PCI SSC is urging firms to take the plunge: “Don’t make yourself an easy target, talk to your technology provider today and make sure your PC and systems are not putting your customers’ confidential payment card data and your business at risk.”
Over 90 million people play Candy Crush Saga every day. Say whatever you like about London- based social game developer King, but its headline game is an unquestionable success. Like many games (most games, perhaps) it iterates upon previously existing formulae rather than being a breakthrough, unseen innovation. Like many games, the real DNA of its success can only be analysed honestly if we first admit that one of the dominant genes involved was luck. Still; 90 million players. About 1.3 per cent of the entire population of the planet try to clear candies and jellies at least once a day. Whether you consider that to be a depressing reflection of the state of humanity or not is entirely subjective; whether you consider it to be a remarkable business success is not. King’s got a touch of magic in its sweet jar.
Now King wants to convert that magic into cold, hard cash, so it’s going to float on the New York Stock Exchange. It’s proposing an initial public offering valued at $500 million, but given that its net income last year was $568 million (on revenues of $1.9 billion), everyone involved will clearly be hoping to make a killing off an early spike in share value.
When any company announces an IPO, it’s reasonable to ask why it’s happening. There are two ways for an entrepreneur to “exit”, cashing in his or her chips on the company that’s been built. One is by being acquired by a bigger firm (like the recent purchase of a major stake in Supercell by Puzzle & Dragons publisher GungHo). The other is an IPO. In both cases, there are two clear reasons for cashing in – the first one, which everyone always claims to be pursuing, is to raise more money to facilitate further growth and make your company bigger and better. The second is shadier but not uncommon. You reckon you’ve taken the business as far as you can – organic growth is looking rocky from here, maybe you sense a change in the market or an oncoming headwind, and you want to grab as much cash as you can while the going is good, before your valuation starts to heavily decline.
“Take the money and run” isn’t an uncommon reason for a sale or an IPO, although none of the parties involved would ever be so gauche as to admit to such a thing. Still, the logic underwriting such a thing is cold and undeniable. If you can sense that your company is facing rocky ground and its valuation has likely peaked, you want to make sure you get as much of a return on your holdings as possible before they become devalued. Laws and rules force lots of disclosure of financial data, of course, so you can’t hide a decline that’s already started – but if your instinct says next year won’t be as good as last year, now’s the right time to sell, and “instinct” doesn’t appear on SEC-mandated documents.
Is King taking the money and running? Yes, I think they are. I think this IPO is actually a little late – it’s going to occur just as King is on a downslope – but it’s far better timed than the easiest comparison, Zynga. Zynga launched on the stock exchange far too late, after it had already become obvious that the company was completely hobbled by the rapid transition from Facebook to smartphones in social gaming. Its IPO was a flop from an investor’s perspective, although plenty of people still made a lot of money from it – it certainly made more money than it would have if they’d waited around until the depths of the company’s troubles became apparent. On its current timeline, King will be IPOing while it’s still within touching distance of Candy Crush Saga’s peak.
“Is King taking the money and running? Yes, I think they are”
I foresee two problems, both of which ought to ring huge alarm bells for investors interested in the company. The first is that Candy Crush Saga’s peak is just that – a monolithic, dramatic peak climbing up out of a landscape of foothills and gentle valleys. There are no other peaks in sight. King’s other games do “okay”, but nearly 80% of its revenue comes from Candy Crush Saga, whose 90 million daily users figure is six times greater than the daily users figure for the firm’s second-place game, Pet Rescue Saga. There is nothing on the horizon which might replace Candy Crush Saga; once you start descending from that peak, the danger is that you end up back in the foothills with no more peaks to ascend. There’s simply no evidence, let alone proof, that King is capable of recreating the lightning-strike success of Candy Crush Saga. Bluntly, I don’t think King believes it can manage that either – because if the firm and its investors genuinely believed that they could repeat the success of Candy Crush, they would IPO after doing so, knowing that a company with a proven ability to turn out enormous hits is vastly, vastly more valuable than a company with one lucky strike and a string of also-rans to its name.
The second problem is Zynga itself. The stock market has already had one market-leading social game company perform absolutely dismally after flotation. Investors now know that this sector, while it’s exciting and interesting and extremely profitable, is also insanely volatile, completely hit- driven and largely subject to the rapidly changing whims of technology. On the surface, the F2P model is far more investor-friendly than the old-fashioned boxed game model, since you actually get a steady revenue stream from your products rather than a single burst of revenue after a couple of years of expensive development. In practice, though, you still need to keep turning out hit titles in order to ensure revenue growth (which is all the stock market gives a damn about). Few studios have shown any capacity for doing that – there are laudable exceptions like Supercell and Nimblebit, but most mobile gaming studios are still dining out on single successes. King has Candy Crush Saga; Rovio has Angry Birds; GungHo has Puzzle & Dragons. None of these companies have managed to create another game as popular as the one that made them famous – lacking a track record, each of them can fairly be considered a one-hit wonder until proven otherwise.
What about recent controversies around King? The company’s aggressive approach to trademarks, its reputed cloning of games and so on have done nothing to endear it to the gaming world and cultivated an atmosphere of negativity around the company. I would caution against reading too much into the likely impact of such stories on an IPO, though. Investors, bluntly, don’t really care if a company stands accused of not being terribly innovative, as long as the results are good. They certainly couldn’t care less about trademark spats with independent developers, I fear. Such issues are important and relevant to those directly involved, but of no consequence to the IPO prospects of a company like King.
What they do, however, is set mood music around the firm. Being seen as a bit ruthless is no bad thing, but I suspect that investors burned by Zynga will be quick to note the parallels between the sort of behaviour of which King stands accused, and the sort of behaviour in which Zynga engaged. The two companies are, in my mind, very similar both in culture and in approach. Neither was founded out of any attachment to games as a medium, a culture or an artform; both are simply entrepreneurial vehicles to exploit a potential market, and as such, it’s to be expected that both would struggle to adapt and succeed at points where they encounter obstacles that can only be surmounted by creativity rather than by management bullet points or business model refinement.
That’s not entirely a criticism, by the way; in a capitalist economy, there’s no sin to creating a business just to exploit a gap in the market. If the market in question happens to be a creative medium, one has to expect significant blowback to this approach. Moreover, there’s a limited lifespan to such a strategy – a company in a creative sector which is not founded on creative principles cannot expect to significantly outlive the market conditions it was originally designed to exploit.
In summary, I find it hard to view King’s IPO as anything more than Zynga 2.0. It is better-timed, certainly, but the companies involved are similar enterprises facing similar challenges – and thus far, demonstrating a similar lack of capacity to overcome them. Zynga is much, much further down the slope from its peak than King, so of course there remains a reasonable possibility that King can surprise us all with a second title on the scale of Candy Crush – and by doing so, establish itself as a genuine leading light of this new market. For all the negativity poured upon the company of late, I honestly hope King can make lightning strike twice for itself. I don’t like Candy Crush Saga personally, but that’s a subjective view – objectively, I cannot find a trace of the supposed immorality, grasping and nastiness of which the game regularly stands accused, and can’t help but recall all the awful stuff of which Flappy Bird also stood wrongly accused when it dared to be a break-out mobile gaming success. King faces problems down the line and I question whether it represents a good investment opportunity for anyone – but should it overcome those issues and prove itself capable of the creativity required to replicate its Candy Crush success, it would be churlish to call that anything other than a fresh triumph for UK game development. Fingers crossed that it happens.
Goldman Sachs Group Inc, JPMorgan Chase & Co and six other financial institutions have agreed to join a new instant messaging network from Markit and Thomson Reuters Corp to connect disparate messaging systems.
The network, called Markit Collaboration Services, launched on Monday and allows members to chat with one another regardless of the proprietary messaging technology that each firm uses.
This open platform differs Bloomberg LP’s messaging system, which is a closed network only for users of Bloomberg terminals.
Bloomberg messaging is the most popular form of chat on Wall Street, and often cited as one of the reasons banks are willing to pay around $20,000 a year for a subscription to a Bloomberg terminal.
Markit and Thomson Reuters said they hoped their open messaging network will attract banks that want to chat with their clients or other financial institutions but cannot currently do so because they are on different messaging systems.
The other banks that have joined the new network are Deutsche Bank, Bank of America Merrill Lynch, Barclays, Citigroup, Credit Suisse and Morgan Stanley, according to a statement from Markit.
The banks collectively employ more than 1 million people worldwide, though it was not immediately clear how many individuals will use the new Markit service.
David Craig, president of Thomson Reuters’ Financial & Risk division, said one of the challenges facing banks is that their messaging systems do not always talk to one another. “That creates costs and complexity,” he said.
Markit and Thomson Reuters said the messages on the new network are encrypted, and the system does not store them.
Representatives from Bank of America, Deutsche Bank, Goldman Sachs and Morgan Stanley were not immediately available to comment on the new messaging system. Representatives from Barclays, Citi, Credit Suisse and JPMorgan also declined to comment.
King.com Ltd, the British mobile gaming firm best known for its popular puzzle game ‘Candy Crush Saga’, has filed confidentially for an initial public offering (IPO) in the United States, a person familiar with the matter said on Sunday.
Online technology companies are rushing to the stock market on the backs of Twitter Inc’s announcement earlier this month that it plans to go public in the most eagerly anticipated IPO since last year’s flotation ofFacebook Inc.
Emerging growth companies such as King can use a secretive IPO registration process in the U.S. thanks to the Jumpstart Our BusinessStartups (JOBS) Act, which loosened a number of federal securities regulations in hopes of boosting capital raising and thereby increasing job growth.
King has hired Bank of America Merrill Lynch Corp, Credit Suisse Group AG and JPMorgan Chase & Co to lead the offering, said the person, confirming an earlier report by the Daily Telegraph and asking not to be identified because the information is confidential.
Representatives for King and the banks either declined to comment or did not respond to requests for comment.
King offers 150 games in 14 languages through mobile phones, Facebook and its website. It boasts more than 1 billion gameplays per day from its users.
The company’s games appeal to a growing trend for players to play puzzles with their friends in short bursts, especially as games are increasingly played on the move on phones or tablets to kill spare minutes.
Rival Zynga Inc went public two years ago in a high-profile IPO that raised $1 billion. Since then, Zynga has suffered from sagging morale during several quarters of worsening performance and repeated waves of layoffs.
Founded in 2003, King has been profitable since 2005 and has not had a funding round since September of that year, when it raised 34 million euros ($46.04 million) from investment firms Apax Partners and Index Ventures.
An international gang of cyber crooks is plotting a major campaign to siphon money from the online accounts of thousands of consumers at 30 or more major U.S. financial institutions, security firm RSA warned.
In an advisory last week, RSA said it has information suggesting the gang plans to unleash a little-known Trojan program to infiltrate computers belonging to U.S. banking customers and to use the hijacked machines to initiate fraudulent wire transfers from their accounts.
If successful, the effort could turn out to be one of the largest organized banking-Trojan operations to date, Mor Ahuvia, cybercrime communications specialist with RSA’s FraudAction team, said today. The gang is now recruiting about 100 botmasters, each of whom would be responsible for carrying out Trojan attacks against U.S. banking customers in return for a share of the loot, she said.
Each botmaster will be backed by an “investor” who will provide money to buy the hardware and software needed for the attacks, Ahuvia said.
“This is the first time we are seeing a financially motivated cyber crime operation being orchestrated at this scale,” Ahivia said. “We have seen DDoS attacks and hacking before. But we have never seen it being organized at this scale.”
RSA’s warning comes at a time when U.S. banks are already on high alert. Over the past two weeks, the online operations of several major banks, including JP Morgan Chase, Bank of America, Citigroup and Wells Fargo were disrupted by what appeared to be coordinated denial-of-service attacks.
The Financial Services Information Sharing and Analysis Center (FS-ISAC) has prompted U.S. banks to go on high alert against cyberattackers seeking to steal employee network login credentials to conduct extensive wire transfer fraud.
The alert warns banks towatch out for hackers using spam, phishing emails, Remote Access Trojans and keystroke loggers to try and pry loose bank employee usernames and passwords.
The FBI has noticed a new trend where cyber criminals use stolen employee credentials to wire transfer hundreds of thousands of dollars from U.S. customer accounts to overseas banks, the FS-ISAC noted.
“The wire transfer amounts have varied between $400,000 and $900,000, and, in at least one case, the actor(s) raised the wire transfer limit on the customer’s account to allow for a larger transfer,” the alert said. The FS-ISAC noted that it has moved it cyberthreat level from ‘elevated’ to ‘high’ as a result of the activity.
A majority of recent victims have been small and medium-sized businesses, small banks and credit unions, the FS-ISAC said. However, a few large banks have also been hit by fraudsters.
The FS-IACS’s warning comes the same week that two large U.S. banks — Bank of America (BofA)and J.P. Morgan Chase –suffered unexplained network disruptions.
A group, calling itself the “Cyber fighters of Izz ad-din Al qassam ” on Tuesday warned of an attack against BofA and the New York Stock Exchange. In a PasteBin message, the hitherto unknown group said it was targeting the two organizations in retaliation for a controversial anti-Islam movie that has roiled much of the Middle East for the past several days.
Both Chase and BofA acknowledged the network problems earlier this week but neither spelled out what caused it.
U.S. banks, small businesses and credit unions have been dealing with online wire fraud for several years. In recent years, overseas-based cyber attackers have siphoned out tens of millions of dollars from small businesses, school districts and local governments.
American Express has just debuted a digital payment and commerce service that makes it possible to use Android-based devices and Apple iPhones for person-to-person online payments. Visa announced a similar personal payment product in the U.S. on March 16.
Analysts say the moves by Visa and American Express are clearly aimed at challenging PayPal in the personal payments business.
The new Amex service, named Serve, allows consumers and small businesses to make purchases and person-to-person payments on iOS- and Android-based devices. Serve accounts are also accessible on personal computers through Facebook and at Serve.com.
Serve also allows users to create and manage sub-accounts for friends and family members.
The new service is based on technology that Amex obtained through its $300 million acquisition last year of Revolution Money.
Visa on March 16 said that it will rely on internal network enhancements and agreements with CashEdge and Fiserv to bring its personal payment system to the U.S. by the end of June. CashEdge and Fiserv will access VisaNet, which is Visa’s global payments processing network.
Separately, Visa officials at the International CTIA Wireless show last week said they are in the midst of four pilot programs in New York and San Francisco to test Near Field Communications (NFC) technology on smartphones, to assess the feasibility of using smartphones to make purchases at NFC-ready terminals. Those trials are being conducted with Bank of America, US Bank, Chase and Wells Fargo. No rollout date for the service is being announced, said Elvira Swanson, a Visa spokeswoman.
Amex also plans to waive one consumer fee for the next six months during the ramp-up, he said. Putting money into a Serve account will normally carry a fee of 2.9% plus 30 cents per load-in, but during the first six months that fee will be waived for cash, debit and Automated Clearing House payments. Otherwise, the fee for ATM cash withdrawals will be $2 — though there will be no fee for the first one each month.
The Serve program calls for consumers to set up online accounts through a smartphone app or at Serve.com. Once a user establishes an account, he can transfer funds to it directly from bank accounts or other Serve accounts or via debit or credit cards.
Customers can use Serve accounts to send money to friends, to receive money from friends, to pay bills or to make purchases online. In addition to having the ability to make payments using smartphones, customers will issued reloadable prepaid Serve cards linked to their Serve accounts that can be used at any retail outlet or ATM that accepts Amex cards.