Archived article: please remember tax and investment rules and circumstances can change over time. This article reflects our views at the time of publication.
On 31 July, the new Consumer Duty regulations introduced by the Financial Conduct Authority (FCA) will become effective.
It’s been described as the biggest shake-up to UK financial services regulation for a decade. It affects nearly all financial services firms: from banks to insurance providers and investment firms.
To protect consumers, the FCA requires companies to monitor, regularly review and assess for risks to “good consumer outcomes” at every stage of the customer journey.
To prove compliance, financial firms must be able to produce an audit trail across the entire lifecycle of every single product they offer.
And yet, close to the rollout date, the FCA has warned that preparations by some of the firms it has reviewed would not meet the new expectations.
One of the issues is that legacy IT systems were not designed to cope with the sheer volume and complexity of the data firms are now required to collect, collate, analyse and store.
It’s a huge challenge financial institutions cannot avoid facing. Nor is it a UK-only issue: regulations are being tightened around the world. Failure to comply could mean a fine running into the £billions.
At the same time, this could also be an opportunity for companies and solutions that can help financial institutions comply without needing a time-consuming and risky overhaul of existing systems.
Important: The information on this website is for experienced investors. It is not advice nor a research or personal recommendation to invest. If you’re unsure, please seek advice. Investments are for the long term. When you invest in early-stage businesses you should expect some to fail. EIS investments are high risk and only for experienced investors. Single company deals have no diversification. You could lose all your capital: you should not invest money you cannot afford to lose.
A pioneering young company that could be well placed to take advantage of this opportunity is Kore Labs Limited – our latest EIS single company deal.
In 2019, Kore launched what it deems the world’s first Product Relationship Management as-a-Service platform. It has since achieved rapid commercial progress to become a mission-critical technology used by 10 major international banks and institutions – including NatWest, Investec and Intesa Sanpaolo (Italy's largest bank by total assets, and the world's 27th largest).
As a product lifecycle management platform, Kore gathers, collates and applies analytics to a firm’s large volume of complex data from all its disparate sources – to provide a digital audit trail across all products and functions, accessible via a simple dashboard. The labour-saving and quick-to-implement platform integrates seamlessly with a client’s internal systems – saving time, labour and potential costly fines.
Industry veterans Darren Carter (former chair of Peel Hunt) and Phil Smith (former global managing director of Barclays Wealth Management and founder of investment platform Embark Group, sold to Lloyds for £390 million) have invested £2.4 million to date.
By 2026, over half of global compliance budgets is expected to be spent on RegTech – contributing to a RegTech global market estimated to grow to US$28.33 billion by 2027.
Within this market, Kore could have first-mover advantage in the specific area of product lifecycle management.
Steered by a management and board with a combined 250 years in financial services, Kore has trebled revenues since FY21 (£2.7 million expected this year) and forecasts profitability by 2025 – not guaranteed.
Kore is now seeking to raise £3 million under EIS. Based on the Company’s forecasts, mid-case target return is 12x (64% IRR) – high risk and not guaranteed. The minimum investment is £16,850 and you can apply online.
Wealth Club has an exclusive allocation for £1 million until 3 July (50% was filled within one week of the deal opening) – applications accepted strictly on a first-come, first-served basis.
Important: this is a single-company EIS private offer with no diversification. There is no guarantee the company will be successful: you could lose your money. Before investing, please read carefully all the information to ensure you understand and are comfortable with benefits and risks.
Wealth Club aims to make it easier for experienced investors to find information on – and apply for – investments. You should base your investment decision on the offer documents and ensure you have read and fully understand them before investing. The information on this webpage is a marketing communication. It is not advice or a personal or research recommendation to buy any of the investments mentioned, nor does it include any opinion as to the present or future value or price of these investments. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination.
Alex Davies
Chief Executive
Alex was a board director at Hargreaves Lansdown, where he worked for 15 years. He was responsible for building Hargreaves Lansdown into the biggest direct-to-consumer SIPP provider in the UK with more than 150,000 clients and over £12 billion under management. He is a keen investor with a portfolio of shares, funds, student property, EIS and VCT investments.