Multitude SE

Ferratum Group

Company type	Private
Founded	May 1, 2005 (2005-05-01)
Headquarters	Helsinki , Finland
Key people	Jorma Jokela, CEO
Products	Plus Loans, Credit Limit, Ferratum Business, Ferratum P2P, Prime Loans, and Mobile Banking
Website	ferratumgroup.com

The Ferratum Group (“Ferratum” or the “Group”) is an international provider of mobile financial services. Ferratum, headquartered in Helsinki, Finland and was founded in May 2005. Ferratum is a specialist for automated banking processes with a centralized technology infrastructure and sales experts.

History and founder

Ferratum was founded in 2005 by the Group’s Founder and CEO Jorma Jokela. He studied accounting at the Commercial College of Kuopio and the Helsinki Business College. He is the founder of Jokela Capital Oy in Helsinki where he headed the company as CEO from 1998 to 2000. He subsequently sold the Jokela Capital business in 2004. In 2005, he founded Ferratum and has been its CEO since formation.

Geographical presence and operation

Ferratum is one of the leaders for mobile loans to consumers and small businesses and is currently represented in Europe, North America, South America, and the APAC region. The EU banking license enables operation in all EU countries.

Leadership

Lea Liigus, who studied law at the University of Tartu in Estonia and completed the Master of Laws (LL.M) Programme in Contract and Commercial Law at the University of Helsinki in Finland, is the Head of Legal and Compliance of the Group and CEO of Ferratum Bank p.l.c., the Group’s banking subsidiary.

Saku Timonen, who studied marketing and finance & economics at the Helsinki School of Economics and Business Administration between 1996 and 2001, is the Head of Lending and has worked for the Group since 2009.

Dr. Clemens Krause, who studied business administration at the Westfälische Wilhelms-Universität in Münster, is the Company’s CFO and the managing director of Ferratum Capital Germany GmbH.

Ari Tiukkanen, who studied industrial engineering at Jyväskylä University of Applied Sciences, is the Head of Commercial and Operations (COO) of the Group.

Listing on the Frankfurt Stock Exchange

Ferratum was listed on the Frankfurt Stock Exchange Main List on February 6, 2015. Ferratum was the first FinTech company in the stock exchange. In the announcement, Ferratum sold its shares to international institutional investors. The sale price of the shares was EUR 17, with the company's market value of approximately EUR 370 million. A total of EUR 48 million was collected for the purpose of financing the company's future growth: new product areas and business expansion. After the listing, Jorma Jokela is still the largest shareholder in the company.

Production

Combining financial services and technology, Ferratum currently has seven products: Microloans, Plus Loans, Credit Limit, Ferratum Business, Ferratum P2P, Prime Loans, and Mobile Banking.

Partnerships

In the Ferratum Group 2016 Annual Report, it states “creating value for customers and investors has been Ferratum’s aspiration since its launch in 2005. But creating value to partners is just as important.”

Unlike traditional banks, Ferratum says it “does not rely solely on its own innovative power, but creates a highly flexible financial ecosystem through partnerships to maximize the customer experience. The partnership approach allows for faster growth with limited capital expenditure. Products will be built around the entire customer lifecycle by involving partners from both the financial industry and non-financial technology companies.”

The Annual Report continues “new partnerships will not only be based on technology or the relevance to our financial ecosystem” and Ferratum “favors partnerships with companies sharing similar core values: professionalism, innovation, profitability and clear ethics.”

The “Jorma Principle” and Sustainable Profitable Business Development

Growth with a sense of proportion – this is the core of what Ferratum calls the “Jorma Principle.” Profitable since its formation in 2005, over the last ten years, the Group has steadily grown steadily in revenues. They say they have achieved this by continuously expanding geographic reach, as well as its customer and user base.

The Group says it focuses on sustainable development and expanding its business as a leading mobile lender. This expansion strategy, which is at the core of their business strategy, involves diversifying their geographic presence by extending their reach in Europe and internationally. Ferratum will continue to promote its growth and enhance its product portfolio in its existing markets throughout Europe, Australia, New Zealand, Brazil, Mexico, and Canada.

Mobile disruption

The use of mobile banking worldwide has continued to rise. The share of smartphone and tablet owners who use mobile banking stood at 47% in April 2016 compared to 41% the previous year across selected European countries, the US and Australia. Analysts expect that by 2021 over 2 billion mobile users will use their mobile phones for banking purposes, compared to 1.2 billion in 2016.

The adoption of mobile banking is highly dependent on regular access to the internet. In 2016, mobile-broadband networks already covered 84% of the world’s population. Mobile broadband penetration across all OECD countries reached 95.1% in mid-2016, with subscription rates exceeding 100% in northern European countries and Australia. The trend towards mobile banking is also embracing lower income segments of the population which own smartphones and are currently not bank customers or only use limited bank services such as an account provided to receive their salaries (so-called “underbanked” customers).

The global fintech sector saw a 50% decline in investment during 2016 with an annual funding total of US $24.7 billion, down from US $46.7 billion in 2015.9 Crowdfunding and lending fintechs were among the most optimistic, especially regarding P2P lending. The survey also identified a trend to more diversified business models and expansion to other countries.

At the same time, traditional banks are under pressure to reduce costs as they experience a negative earnings impact from the low-interest rate environment. Across Europe, banks have been closing branches in recent years, thereby losing their most important competitive advantage. A study has found that disruption in the banking sector could lead to revenue losses of 10% to 40% percent by 2025, while fintechs will serve a significant part of the market.11 For the German market, it is expected that fintechs will be able to win an aggregate market share of up to 5% by 2020.

Launch of Ferratum Mobile Bank

The Ferratum Mobile Bank launched to the public in 2016 in Germany, Sweden and Norway, is claimed to be a revolutionary new platform assembling customers’ full financial lives in one app. Users can access their current accounts, savings, and debit cards in real-time in an easy, secure, and mobile manner, regardless of the currency.

With the launch of the Mobile Bank, Ferratum says it has established a global platform connecting customers, peers and service providers alike. The open architecture of the mobile banking app allows the easy integration of service widgets published by other companies. Thus, they gain access to Ferratum’s large and growing international customer base as well as invaluable customer intelligence.

Mobile Bank uses behavioral data analysis to generate intelligent, real-time and targeted recommendations to improve customer experience and add services over time according to users’ preferences.