skip to Main Content
Get your free newsletter: Actionable insight each morning for self-directed investors. 

This week we had the opportunity to speak to Richard Shearer, CEO of Tintra Group about St James House (LSE:SJH) and why the company decided to take a stake in AIM-listed business. Tintra was driven to find a solution for providing superior cross-border banking services for wealthy individuals who live and work in emerging markets.

The emerging markets banking market is NOT dominated by the usual brands in global banking. But while you might have the impression that we are living in an increasingly borderless world when it comes down to the provision of banking, in reality it has become tougher for wealthy families to access cross-border banking.

Shearer calls it inherent prejudice, and admits this is a strong word, but as he explains, toughening of compliance and AML regimes within banking has created a gap in the market where successful entrepreneurs in regions like the Middle East and East Africa, just taking a couple of examples, have found it tough to access banking services. As he says “We found that we could do this better ourselves than anyone else who is doing it.”

St James House has a payments business already, which Tintra has been a client of for many years, but now Tintra is aiming to scale this up.

Banks find risk in the unknown: that is why you see some very specialised banks in the emerging markets space, only onboarding clients from a very specific jurisdiction. But these banks don’t service the full spectrum of needs.

Emerging markets

Emerging markets are very buoyant right now – they are more dynamic and technologically savvy than they were even 10 years ago. But successful family-owned businesses find that even basic services from credit cards to trade finance, are just tougher to get access to. The service offering has not changed, what has changed is the cultural API. I would even say it is that developed world banks are expecting rich people in the emerging world to get a square peg through a round hole.

The compliance infrastructure in western banks is simply having difficulty in distinguishing between the bad business and the good business because all the business for a specific jurisdiction is getting tarred by the same brush. “What I rail against…is understanding the true risks and making a decision based upon fact and not on biased assumptions,” Shearer says.


We also discuss cryptocurrency and blockchain and how this will fit into the emerging markets banking equation. Shearer sees a major generational shift occurring in emerging markets and see western-educated and forward thinking entrepreneurs who don’t just want to have money outside their jurisdiction of doing business. There is less emphasis on purchasing overseas trophy assets, now acquisitions have to make sense from a business or investment perspective.

We talk about changes in banking within the emerging world and how new mobile technology is changing that, especially in Africa. Businesses need liquidity and access to real-time forex and there is a real market opportunity for companies that can deliver that across the emerging world. The most eye-opening part of this podcast for me was just how under-banked this market is at a time when, if anything, much of the developed world is over-banked.

Related

Become a better investor with SharePad Designed to give you the confidence to pick your own investments, Sharepad gives you access to a wealth of information on UK, US & European stocks. Find out more

Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

Stocks in Focus

Here are some of the smaller companies we are following most closely. They all represent significant growth stories in our view. Our in-depth reports go into more detail on why we like them.

Comments


Get your free daily newsletter: 

Thanks to our Partners

Our partners are established, regulated businesses and we are grateful for their support.

Pepperstone
FP Markets
IG
Spreadex
Trade Nation
WisdomTree
ActivTrades
Back To Top