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Europe Fintech

Crowdz Adds A Financial Responsibility Focus To The FCA’s Regulatory Sandbox

Crowdz has announced that it will be participating in a new test, undertaken as part of the FCA’s regulatory sandbox. The regulatory sandbox allows firms to test innovative offerings in a live environment.

The invoice financing marketplace has also confirmed its partnership with leading business credit score provider, Wiserfunding, to provide its investors with a new element to its credit risk assessment capabilities, as global economies undertake recovery efforts in the wake of COVID-19.

Wiserfunding, the latest venture from renowned NYU Stern professor Edward Altman, builds upon the famous Z-Score model, using cutting edge technologies to source and process structured and unstructured data. Wiserfunding SME Z-Score and Probability of Default will deliver up to 95 per cent default prediction accuracy for Crowdz’ receivable financing investors, 20-30 per cent higher than other industry standards which rely on manual risks assessments to identify high-risk customers. The score is tailored specifically for SMEs with revenue between £500,000 and £200m.

Wiserfunding will join a number of indicators that comprise Crowdz’ proprietary SMARTSCORE, delivering the market’s most accurate risk assessment, as more small and medium enterprises (SMEs) than ever seek financing.

The Crowdz SMARTSCORE provides a real-time assessment of probability of default, payment, and soon, probability of supply, and ESG (Environmental, Social, and Governance) reputational risk.

Crowdz CEO and founder Payson Johnston said: “The UK market is a high priority for Crowdz and this partnership, alongside our participation in an FCA Sandbox test reiterates our focus on building a responsible and impactful presence in the region as we expand.

“With more UK businesses than ever seeking additional capital to sustain their businesses, the partnership will safeguard Crowdz’ investors in providing financial relief to SMEs and support the broader economy by reducing reliance on government or bank funding.

“Since the start of the COVID-19 crisis, Crowdz has seen a 5000 per cent increase in business users globally. Partnering with Wiserfunding is expected to boost this figure significantly by enhancing the comprehensiveness of our SMARTSCORE.

“As an addition to Crowdz SMARTSCORE, the introduction of Wiserfunding will help investors funding Crowdz’ SME community to better allocate funds, and help SMEs hardest hit by COVID-19, get back on their feet. More broadly, by increasing our capacity to fund more SMEs, this partnership makes the market more efficient, mitigates the risk of an SME credit bubble, and will help to rebuild the economy,” he said.

The partnership comes as the UK’s debt soars to its highest levels since the Second World War, with borrowing surpassing GDP at a record £103.7bn and economic outlooks bleak.

80 per cent of UK small to medium enterprises say their revenues are declining due to the pandemic, with one in four concerned about defaulting on loans. Under current conditions, more than half of the UK’s 5.9 million SMEs would be out of business in less than a year, especially if revenues take a 10-30 per cent hit, according to new McKinsey & Co data.

Gabriele Sabato, CEO of Wiserfunding said: “We are absolutely delighted to be able to support Crowdz in their efforts to fund SMEs’ growth. By providing our independent, accurate and credible credit risk assessment for SMEs, Crowdz will be able to attract more institutional investors to their platform and ultimately, benefit the UK economy by funding a larger number of SMEs. In these difficult times, SMEs desperately need smart solutions such as the Crowdz platform and we look forward to playing our role in boosting investors’ confidence”.

The announcement builds on Crowdz’ and Wiserfunding’s ongoing relationships, both members of the COVID-19 Fintech Taskforce, responding to the urgent need for financial support from UK SMEs impacted by the pandemic. The initiative aims to enable banks, alternative lenders and private debt lenders to digitally deploy funds to businesses during the crisis.


  • Gina is a fintech journalist (BA, MA) who works across broadcast and print. She has written for most national newspapers and started her career in BBC local radio.

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