Ferratum ist ein finnisches Unternehmen, das an der Börse Frankfrut notiert ist und Konsumentenkredite über das Internet vergibt.
Paul Wasastjerna, Head of Investor Relations at Ferratum war so nett investresearch ein paar Fragen auf Englisch zu beantworten.
What´s the business of Ferratum and which problem you want to solve?
Ferratum is an international provider of unsecured mobile consumer loans and a pioneer in the field of mobile consumer loans in Europe. The company’s customers can utilize digital media to apply for consumer credits in amounts varying between EUR 25 and EUR 2,000. Ferratum also offers successful small businesses instalment loans with a term of six to twelve months. The group’s headquarter is in Helsinki, Finland. The company has expanded its operations since 2005 to 22 countries and employed 383 people as of 31 December 2014. We have 1.1 million active and former customers who have been granted one or more loans in the past and 3.2 million total accounts in our database (as of 30 June 2015).
In addition to the lending products, we plan to launch a mobile bank during the first quarter of 2016 which will be available free of charge. The account opening process is very simple and is made either online via a computer or a mobile phone. The mobile bank will provide customers with a range of products including instant transfers, multi-currency accounts, a debit card, attractive deposit rates and the consolidation of the customers bank accounts with other banks to name a few.
With which brands are you present on the different markets and how do you want to strengthen the brand(s)?
Ferratum is the leading and most well-known brand we currently work with. In some cases we also use sub brands such as xpresskredit which is used in Germany for tactical reasons.
Important to know is that Ferratum Bank Plc is a fully own subsidiary of Ferratum Oyj which the group uses in countries where a banking licence is required or has other operational benefits. As a result, expansion in countries which require a banking licence for lending (e.g. in Germany) is possible. We are also planning to further expand our cross-border activities of Ferratum Bank Plc into several countries, in which we are currently operating under local licences.
The financial and banking crisis has shown that transparency and trustfulness are very important aspects for financial institutions and services. Transparency has always been a basic value for the Ferratum Group, therefore we actively decided to apply for the banking licence and for more regulatory requirements especially in view of the reporting standards.
What do you want to do different than competitors ?
There is a wide range of companies targeting the market for small consumer loans, including various smaller locally operating consumer loan companies as well as larger companies operating in several markets and traditional consumer banks.
Ferratum has a solid business model with high growth potential due to the mobile platform with outstanding mobile banking services (e.g. the consolidation of customer’s bank accounts, EU current account, deposits, real-time loans ≤ EUR 2,000). The company already offers multi credit products and plans to implement payment products for further market penetration and geographic diversification.
We also see ourselves as specialists for online processes with a centralized technology infrastructure and act as a sales expert with a continuously enlarged customer base, our Big Data Scoring System which includes a state-of-the-art security for credit approvals and an automatic anticipation of individual customer wishes is continuously refined. Ferratum adjusts its credit scoring models to specific economic conditions and is gradually improving its scoring models in each country the company operates.
As already mentioned, the EU banking licence is an important milestone for further market expansion and is a competitive advantage in comparison to what most newcomers and competitors in Europe have to offer. Contrary to most of our competitors Ferratum is ready for stricter regulation. After the launch of the mobile bank we will probably see new competitors such as Paypal.
How fast is the credit application process and payment process?
Ferratum has from a customer’s point of view a very simple and straight forward application process. The customer applies for the loan either on our website or via our mobile application where the customer inserts the requested amount and the term for the loan. Thereafter the customer will be asked to fill in some personal details including employment details. The loan decision is made instantly and if the loan application is approved we transfer the funds to the customer’s bank account within 15 minutes.
How do you see different business models like credit comparison or P2P Lending?
These different business models show the digitalization of traditional financial services. The banking sector is in a time of great reform. There is a number of companies that provide financial services and attract customers of traditional banks. This development increases the pressure on traditional banks and enhances our market opportunities at the same time. Ferratum is well positioned in this changing banking environment. The expansion of our business to a mobile bank is now the next logical step to make use of our huge customer base and customer loyalty, our Big Data Scoring technology and the EU banking licence.
Where are the challenges for Ferratum?
Our main challenge and at the same time the main chance is to further implement our growth strategy in the coming years. Thereby the focus is on organic growth in existing markets, the continued geographic expansion and diversification of the product portfolio. We aim to expand the operations from currently 22 countries to a total of 30 countries in the mid-term. Furthermore, Ferratum aims to address different customer segments by new products, in particular by the launch of further banking services on our mobile banking platform. It should become a central platform with an open architecture for third-party products, enabling our customers to open a current account with deposits.
On which elements is your credit score algorithm based on?
In addition to the information provided by the customer during the loan application process we also monitor the customers’ behaviour on our website: type of browser used, time spent on our website, time spent on filling in the application, time spent on reading the terms and conditions, the customers geographical location and residence and whether the customer compares our product with competitors’. The customer can also choose to give us access to his or her social media. To achieve better scoring results, our software-based scoring procedures are refined and updated on an on-going basis.
Ferratum also offers customers and individuals who aren’t customers yet a product called Balancion, the product is free of charge. Here users can automatically consolidate their bank accounts, mortgages, loans and credit cards at multiple banks in order to get a clear overview of their finances. Customers using this product can choose to give Ferratum access to their account in order to get a clear overview of the customer’s financial situation.
How big do you estimate the market and the growth for consumer credit online in Europe?
There is a substantial growth potential for mobile consumer loans in Europe. The smartphone boom acts as a driver for the development of digital applications – including financial services. The yearly smartphone sales volume is expected to reach more than 1 billion in 2017. At the same time it is expected an explosion in the number of registered smartphone SIM cards to 6 billion by 2020. The number of users who use their smartphones for private banking purposes will probably double from 590 million to more than 1 billion users globally from 2013 to 2017. We are well positioned in this new banking environment pursuing the mobile bank strategy.
Why do you have the right team to lead Ferratum?
The experienced management team including the company’s founder and owner Joma Jokela, has a deep know-how in finance and technology and has successfully implemented the business model since the foundation of the company in 2005. Dr Clemens Krause has since 2012 been the company’s CFO, Dr Krause is also Managing Director of Ferratum Capital Germany GmbH. He has extensive experience from various management positions. Lea Liigus heads the legal department of the Group and she is also the CEO of our Maltese bank and heads the banking operations in Malta.
Does Jorma Jokela wants to hold the majority of the stocks for the forseeable future?
The company’s founder and majority shareholder Mr Jorma Jokela currently holds 57.3% of the company’s shares. He has after the IPO a two-year soft lock up period, but has not made a definite decision in the matter. Mr Jokela sees that the company will grow significantly with both its current products and new ones in both new and existing markets. The launch of the mobile bank is an exciting and revolutionising product which he feels passionate about.
How do you see your corporate culture and which kind of employees you want to attract?
The corporate culture in the company is very dynamic. We have a lot of young motivated talents in the group while we at the same time have recruited more senior personnel with experience in relevant fields. We have noticed a change when recruiting personnel after the IPO. A listed company is always more attractive in terms of recruiting new employees, especially among senior management.
What´s your vision or strategic objective for the next couple of years?
Ferratum is to expand its geographical presence to a total of 30 countries in the mid-term. We are currently working on opening operations in Mexico, Italy and Turkey. The current product portfolio includes products with a lot of potential that hasn’t been implemented in all countries, for example Credit Limit has currently only been implemented into six countries while the product stands for 31 % of the groups revenues in the first six months of 2015. This gives an indication on the growth we could see when implementing the product into additional countries.
We are naturally always looking into launching new products as well and what we should not forget to mention is the launch of our mobile bank. The mobile bank is to be launched during the first quarter of 2016.
Why should buy someone the Ferratum stock?
We believe that the company has a lot to offer: We are going to launch new markets, products and our 10 year-record shows that we can sustain a profitable business while increasing revenues and opening new markets. In the first half of 2015 Ferratum continued its growth trend. Revenues were up by 61.5% to EUR 49.8 million and the Adjusted EBIT increased by 27.5% to EUR 6.8 million, resulting in an EBIT margin of 13.6%.
The possibilities we see in the Mobile Bank are extensive and we hope our current and potential investors can see this as well.
Thank you for the conversation Mr. Wasastjerna!
Eine Analyse zu Ferratum findet man hier.
