The warning from Nigel Green, chief executive and founder of deVere Group, follows the landslide victory for Mr Johnson’s Conservative party in the UK’s general election last week in which he secured an 80-seat majority, and as stocks rose across Europe on Monday.

The Queen will officially open Parliament on Thursday, outlining her new government's legislative programme.

It is expected that the Withdrawal Agreement Bill on leaving the EU could be put before MPs as early as Friday. Nigel Green affirms: “The decisive win for the Conservatives triggered one of the pound’s biggest ever rallies, the FTSE 250 index of UK shares climbed by 3.6% and the FTSE 100 rose 1.3%.

“On Monday, European stock markets reached all-time highs.

“This has been driven in part by investors’ relief that a hung parliament had not been delivered, meaning years of uncertainty and indecisions over the UK’s way out of the EU is coming to an end. Also, perhaps, because the Conservatives promised a more pro-business agenda.”

He continues: “But Boris Johnson now has the daunting task of turning his powerful election campaign slogan of ‘Get Brexit Done’ into reality.

“When Britain leaves on January 31, there will be only 11 months to thrash out the basics of the future relationship with the European Union.

“The self-imposed end of December 2020 deadline is a mammoth challenge or Britain will fall through the ‘trap door’ of no-deal Brexit on January 1 2021.”

The Prime Minister could request another extension for the transition period. The government has until 1 July 2020 to agree with the EU a one-off extension, until the end of 2021 or 2022.

But, says Mr Green, this is unlikely. He notes: “I don’t believe that Johnson will use his significant majority to slow down or soften - the Brexit process.  

“Instead, his assumption from the election outcome will be that people want quick, easy answers.

“Indeed, in an interview on Sunday, Michael Gove guaranteed that the Brexit transition period will not be extended.”

He goes on to add: “The task ahead is monumental. The time frame in which to complete it is narrow. Failure to agree a free trade deal by the end of next year will mean the UK crashing out of the EU and all the far-reaching negative economic implications, including the likelihood of a recession.

“With such uncertainty, following the election bounce, in 2020 investor confidence in the UK is likely to remain subdued and Boris Johnson’s Brexit stance could be a major source of volatility in financial markets.”

The deVere CEO concludes: “Despite the markets currently surging, investors must avoid complacency.

“2020 promises to be a year in which political factors – including Boris Johnson’s Brexit plan and the U.S. presidential election, amongst others – could potentially spook markets.

“Investors should assess and, where necessary, rebalance their portfolios to take advantage of the potential opportunities and to mitigate the risks.”

Here is Finance Monthly’s list of the hottest FinTech startups which are expected to continue attracting new customers in 2020. Some of them are well-known companies which will remain at the forefront of the sector and some are new startups which have the potential to disrupt FinTech in the new decade.

2019 has been a remarkable year for Revolut in terms of growth. Founded by Nikolay Storonsky, the digital finance platform which offers banking, currency exchange, cryptocurrency and stockbroking services, currently has around  6 million customers (up from 1.5 million a year ago) and is welcoming around 16,000 new users every day. It also currently has around 1,200 employees – the bank has recruited around 800 new team members in the space of a year. Despite the fact that Revolut reported a pre-tax loss of £33 million in 2018, compared with £15 million the previous year, exciting things such as a potential $1.5 billion funding round, as well as reports that Japanese investment giant SoftBank might invest in the challenger, are happening.

Founded in 2012 in San Francisco, Coinbase is a digital currency exchange which provides you with a platform where you can buy, sell, and manage your cryptocurrency portfolio. To wrap up an exciting year, Coinbase recently announced that it’s added five new cryptocurrencies to its offering (BAT, REP, XLM, XRP and ZRX), which brings the amount of the cryptocoins it supports to nine (with the original four being BTC, ETH, BCH and LTC). It’s also launched in 10 fresh international locations - Bulgaria, Croatia, Denmark, Hungary, Iceland, Liechtenstein, Norway, Poland, Romania, and Sweden. With its secure storage and insurance policy which covers all cryptocurrency stored on Coinbase’ servers, the FinTech is one of the most trusted cryptocurrency platforms in the world.

Regarded as one of the most popular neobanks out there, Monzo is currently used by 3,437,886 people and counting – according to its website, 40,000 people open a Monzo bank account every week. With its new features such as the ‘get paid a day early’ and the ‘salary sorter’ which separates your money between savings, bills and spending so you can't overspend, the FinTech’s super user-friendly app is continuously disrupting online banking.

Despite its unicorn valuation though, UK-based Monzo operates under the “disrupt-now-and-make-money-later” approach – it reported losses of £47.2 million in the fiscal year ending February 2019, which are expected to rise further this year due to a £20 million marketing drive. However, with its rapidly growing number of users and staff (1,351 people at present), Monzo will definitely continue to drive innovation and be a trusted partner to tens of thousands of people in 2020 and beyond.

Founded by internet entrepreneurs Jeremy Allaire and Sean Neville in 2013, Boston-based Circle is a platform which helps you use, trade, invest and raise capital with open crypto technologies. With offices in Boston, New York, San Francisco, Dublin, London and Hong Kong, the company has caught the attention of Jim Breyer (Facebook), Goldman Sachs, IDG Capital (Baidu, Tencent), General Catalyst (AirBnB, Snapchat) and Accel Partners who have supported the company with $250 million.

Starling Bank is another online-only challenger bank which is disrupting traditional banking through innovation and technology. Launched in 2017 by Anne Boden in the UK, it recently hit 1 million users and is growing at a similar pace to Monzo. Over the past couple of years, Starling Bank has won a number of awards such as Best British Bank and Best Current Account 2019 and is also reportedly on-track to reach profitability by the end of 2020 - a rarity among the challenger banks.

Founded by Bulgarian entrepreneur Vladimir Tenev and American entrepreneur Baiju Bhatt, Robnhood is a commission-free investing platform. The company is currently valued at $7.6 billion after closing its most recent, late-stage funding round in July 2019 when Robinhood raised $323 million. With its over 6 million customers in the US and a planned expansion into the UK in early 2020, the company and its billionaire co-founders won’t be stopping anytime soon.

London-based Greensill specialises in supply chain finance, where businesses raise funding backed by supplier payments, with serious establishment backing. Founded in 2011 by Lex Greensill who used to be a Director at Morgan Stanley and Citibank, the company raised a round of $800 million in May 2019 from SoftBank’s Vision Fund which valued the company at $3.5 billion. Five months later, in October, it raised another $655 million in new funding from the same fund, bringing its total capital raised to $1.7 billion.

Headquartered in Berlin, N26 is one of Europe’s most prominent digital banks which target millennials. Labelling itself as ‘not your grandad’s bank’, the challenger is investing a lot in marketing campaigns and does not see profitability as a “core metric”. Earlier this year, the bank raised a further $170 million from existing investors at a valuation of $3.5 billion (increasing its market worth by $800 million from the last raise). With its 3.5 million customers in Europe, the neobank has big plans for 2020 and plans to expand into the US market in the near future.

2019 has been a good year for Berlin-based FinTech Raisin – it raised €25 million from Goldman Sachs in August on top of a €100 million Series D round three months before. It now has 84 partner banks from 24 countries and eight platforms which cover all of Europe. Founded in 2012 by Dr Tamaz Georgadze (CEO), Dr Frank Freund (CFO) and Michael Stephan (COO), the company offers an open banking platform for online savings and investments for customers across Europe, claiming that it has delivered more than €115 million in interest to its 200,000 savers across Europe.

With its US platform launching in 2020 and plans to buy potential businesses in the retirement market, it looks like Raisin is set for another exciting year.

With its offices in Stockholm, London, New York and Berlin, Klarna is on its way to become one of the world’s top FinTech companies. In 2019, the startup that makes shopping easier launched a new $460 million fundraising round, which resulted in a post-money valuation of $5.5 billion and made it the highest-valued private FinTech company in Europe.

The company has recently faced some criticism because the ‘pay later with Klarna’ button is used too much by young people who then end up in debt, so there are definitely some things that the Swedish FinTech needs to work on in the future when it comes to its image. However, with its more than a million transactions a day between 170,000 merchants in 17 core markets, Klarna is definitely one to watch!

Set up in 2011 by Estonian friends Taavet Hinrikus and Kristo Kaarmann in London, TransferWise has revolutionised the way we transfer money overseas. With its wise model of not moving money across borders, which would incur fees, the startup maintains separate pots for each currency, which it then disburses funds from. Backed by investors such as Richard Branson and Silicon Valley VC firm Andreessen Horowitz and collaborating with FinTech rivals such as Monzo and N26 which have integrated TransferWise’s software into their platforms, TransferWise is one of the FinTechs that are actually profitable – it reported an annual post-tax net profit of £10.3 million for the fiscal year ending March 2019, which was 66% more from the previous year.

Founded in 2018, Bita is a FinTech company that offers infrastructure and software for the development, backtesting, calculation and administration of indexes and systematic investment strategies. By using BITA's open infrastructure, asset managers, banks and institutional investors can run any type of systematic strategy or index in house, retaining their IP and avoiding costly data and index licensing costs. Bita is one of Frankfurt’s fastest-growing FinTech companies and this year, it secured  €1.25 million from a group of local and international investors.

Cleo is a London-based artificial intelligence startup that offers an assistant to help users with managing their finances. Through connecting to your bank accounts and credit cards, the app provides you with insights into your spending and can answer all of your questions. Founded in 2016, Cleo has so far raised $13.3 million and is set to become everyone’s virtual financial assistant.

With over 600,000 users, Curve provides a smart platform for all of your cards which replaces your wallet. Launched in 2018 and based in London, the startup recently raised €49 million and offers its customers to become part of the ownership structure of the company through launching a Crowdcube campaign in September this year.

Founded in 2017, Goin is an award-winning app which helps people save and invest money automatically. You don’t need any previous investment experience – all you need is the Goin app. Based on a simple system which understands the user’s profile and habits through questions and answers, it offers automatic ways and methods to save money. Once you’ve saved enough money, Goin provides its users with options for investments – including through crypto. The startup has raised €2.2 million in the past 2 years.

Lunar Way is a Danish digital banking app which operates in Denmark, Sweden and Norway. Founded in 2015, the startup received its banking licence this year and has offices in Aarhus, Copenhagen, Oslo and Stockholm, having raised $53 million so far. Lunar Way provides its users with a basic account, money transfers, bill payment, and budgeting tools. You can also create personalised goals, save money and choose credit lines depending on your needs.

German FinTech Penta offers SMEs and startups a digital financial services platform which saves them time and money. Hoping to disrupt business banking in Europe and worldwide, the company connects a number of services and provides a platform for all of its users’ financial needs. Earlier this year, Penta was acquired by finleap and in August 2019, it raised €8 million in an investment round led by HV Holtzbrinck Ventures.

London-based startup Trussle is your free online mortgage broker, helping you wherever you are on the ladder. All you need to do is create a Trussle profile which indicates your unique needs and Trussle will go through 12,000 deals to find the right one for you. Set up in 2016, the company is the first online mortgage broker and has raised £19.3 million in the past three years.

Since its inception in 2016, TrueLayer has been building universal APIs that allow companies to securely and efficiently access their customers’ bank accounts to share financial data, make payments and validate their identity. London-based and available in the UK, the company will be expanding into the EU soon, aiming to become the leading provider of APIs that will power a new era of financial innovation. In June this year, the startup raised $35 million in funding in a round led by Chinese financial giant Tencent and Singaporean sovereign wealth fund Temasek, which will fuel its expansion into Asia.

Wagestream is an app which gives your employees the power to stream their earned wages into their accounts whenever they need it. The company has an expanding list of partners – all of which are seeing up to a 40% increase in staff retention, 10% increase in employee productivity and a huge competitive recruitment advantage - as much as a 10x increase in job applicants by offering flexible daily pay to employees. Backed by Jeff Bezos and Mark Zuckerberg, the London-based FinTech was founded in 2018 and has so far raised an impressive £44.5 million.

But it’s not a perfect world, of which you are undoubtedly aware. And the fact is, 2020 is not going to be open banking nirvana. The vision has been well articulated. But the vision is not reality — and it will take considerable work for the reality to emerge.

That is not to say that 2020 isn’t going to be incredibly significant for open banking and its future. With PSD2 and its related Strong Customer Authentication (SCA) firmly in place, many more European consumers are going to become more familiar with the new frontier of banking.

For them, a world in which consumers can conveniently, in one place, see their full financial profile and easily compare terms, fees and interest earned on multiple accounts, loans and investments will be tantalisingly within reach. The promise of easily budgeting and accurately examining every expenditure they make — the ability to better rein in unnecessary or ill-advised spending, the capability to manage subscriptions and suspend underused ones  — will be right there in front of them.

Regulations and rules allowing for data to be shared among banks, third-party service providers and businesses, including retailers and others selling services, make a whole, new kind of commerce possible.

But new paradigms are complicated. This one requires constructing the right technology, alliances and incentives. And the truth is, banks are not fully prepared to offer all that is necessary to seamlessly provide this new form of commerce and consumers appear not ready to take advantage of it.

For the unbanked, open banking is a non sequitur and a non-starter.

In short, things are going to break.

User experiences will vary by bank and by third-party provider — and even by consumer. Open banking tilts toward the haves and the have-nots — those who have enough money to make use of apps that keep an eye on it for them, and those who have smartphones, connectivity and a second-nature comfort with the technology and apps that deliver the value provided by third-party apps.

For the unbanked, open banking is a non sequitur and a non-starter.

The convenience that comes with sharing data will be accompanied by the risk of having a larger surface area for cybercriminals to attack.

If some financial accounts integrate seamlessly through banks with third-party providers, but others fall short, consumers could be faced with a half-baked view of their financial standing. Worse yet, they might operate under the assumption that they are getting the big picture, when in fact, vital information is missing from the resource they consult to make important financial decisions.

All that means is rather than 2020 being the year when open banking flourishes, 2020 is the year that banks, FinTech and regulators need to sell consumers on the new model of conducting commerce — a model that more than likely will get off to a shaky start.

Banks seeking to deliver on the open banking promise are going to have to over-index on communication — relentlessly explaining to customers why things are the way they are and how things actually work. And, yes, maybe sometimes, how they intend to do better in the future.

More importantly, they will need to listen. What are their customers’ experiences with open banking? What works? What doesn’t? What new services and possibilities would make open banking more valuable?

All that means is rather than 2020 being the year when open banking flourishes, 2020 is the year that banks, FinTech and regulators need to sell consumers on the new model of conducting commerce — a model that more than likely will get off to a shaky start.

Banks and FinTech businesses looking to provide services enabled by open banking need to practice humility, compassion and customer obsession because they have some catching up to do.

The stated goals of PSD2 and open banking were to provide increased security, more choice and better experiences for consumers. But regulators and open banking architects moved ahead without consulting the end-users of their model.

Consider that vision of building meaningful online portfolios for consumers by sharing data across banks, businesses and institutions. Sharing that data requires a consumer’s consent, which is a good and necessary thing. But public opinion polls show that consumers are reluctant to allow their banks to share their data.

At the dawn of the open banking era, Accenture Research found in late 2017 that 69% of consumers in the UK said that they would not share data with third-party service providers. And 53% said they’d never make use of open banking options, instead sticking with the way they’ve always banked.

Sure, people change, and as more services are rolled out it’s possible that some who thought they’d never embrace open banking will give it a try. But the idea is hardly catching on like wildfire. Earlier this year, the Financial Times reported that only 25% of those polled by banking technology company Splendid Unlimited had heard of open banking. Only 20% of those said they actually knew what open banking meant.

The inevitable hiccups in these early stages of open banking will undoubtedly increase consumers’ scepticism. It’s hard for people to trust you with their data and especially the personal financial information they hold dear when you don’t seem to be able to accommodate everyday digital transactions and requests.

So, banks and those in the FinTech sector have a big job ahead of them — not just in keeping up with the changes required to successfully deliver on open banking, but in evangelising the value that the new model offers. The rewards for those who can get out ahead in 2020 will be substantial. They will be the ones that early adopters turn to and those early adopters will potentially become advocates.

Some players are at least showing the way. There’s HSBC with an app that allows consumers to access all their accounts, including those at competitors, Chip, which algorithmically determines how much a person can afford to save each month and then automatically deposits that into a savings account; Credit Kudos, which analyses a user’s finances and determines their creditworthiness and what financial services they are eligible for; and dozens of others that monitor the mortgage market, create spending reports, automate loyalty programs and more.

The open banking operators in the market today provide a reason for optimism. They are a strong sign that the open banking vision can become a reality. Plenty about how much of a reality - and how soon - will come down to how the key participants perform in the year to come.

With current trade ‘talks’ with China, the US in a not in a great position money wise. According to Congressional Budget Office the US is heading for an annual budget deficit of more than $1 trillion (£707bn) by 2020, on the back of tax cuts and higher public spending.

Although these measures may bring ease to the current economic climate, it’s predicted they will exacerbate long term debt. The Congressional Budget Office believes such debt could amount to similar historical depths, such as World War II and the financial crisis.

This week Finance Monthly asked the experts Your Thoughts on the prospects of long-term debt in the US, and here’s what you had to say.

Andy Scott, leading UK serial entrepreneur and property developer:

With growth and confidence at record highs, unemployment low, and at best guess being mid-point through the economic cycle, Trump should be fixing the roof of his house while the sun is shining for the benefit of his children's generation and beyond. The temptation to focus on voter incentives to win a second term in November 2020 and to try out his unproven trickle-down policies for the few, seems short sighted from the President.

With a trade war underway, it appears banking on increased growth and mass job creations from tax cuts, whilst not tightening the already loose belt elsewhere, and not paying as you go, seems at best optimistic and at worst, reckless.

Deficits are nothing new, having run one every year since 2002. However, what should concern those of us with hopefully 30-40 years left on planet Earth is that even the most upbeat forecasts - taking into account no impact from any external factors (which seems highly unlikely given the confrontational leadership style) - show that not only are we heading for the trillion dollar deficits, but they are likely here to stay, and become the norm over the next decade. A legacy surely no one wants to be remembered by?

The US should think more long term otherwise the next generation will be burdened with more debt meaning lower growth, more tax, reduced services, higher inflation and ultimately fewer employment opportunities.

Josh Saul, Investment Manager, The Pure Gold Company:

Whilst there are clear and obvious benefits to having tax cuts with higher spending such as driving economic growth over the short-term, the question we should ask is, at what cost? the problem is that we are kicking the can down the road.

The Pure Gold Company has seen a 74% increase in US nationals investing in gold this year compared to the same period last year citing fears that escalating US debt will in the long run make the US and it’s economy vulnerable to fiscal shock. Our clients are concerned that given the high debt to GDP ratio, the US may have problems paying back its loans and this could increase the interest that the US will have to pay for the amplified possibility of default. The issue here is that the US having to pay more interest further accelerates the debt problem and with the dollar in the firing line – repeat problems like the current trade war with China put the US on the back foot. Our clients who are currently purchasing gold are concerned that over the next 20 years the social security trust fund won’t cover retirement benefits and the US will have to raise taxes and curtail benefits in order to cover various short-term monetary requirements. Incidentally this notion of escalated debt has doubled since 1988 and if you look at the gold price – that’s increased by 200%.

Our clients do not necessarily look at their investment having grown by 200% but instead it takes more currency to purchase the same ounce of gold. Therefore, our clients purchase gold to maintain their dollar’s purchasing power and with the US debt being the highest in the world they are not merely looking at the next 4 years but instead the next 10 – 20 years.

We would also love to hear more of Your Thoughts on this, so feel free to comment below and tell us what you think!

Led by growth in Asia Pacific, the global insurance industry has been experiencing moderate growth in recent years. However, a slowdown in the industry is likely, though growth is going to remain steady.

While the life insurance sector remained the most profitable in 2015, the non-life insurance sector was not far behind, according to Global Insurance Industry - Forecast, Opportunities & Trends 2015-2020, a report recently released by Taiyou Research. The industry remains fragmented, thus increasing the level of rivalry within the market. Large, international companies have more or less entered most countries now and have either driven many smaller players out of business or have formed partnerships with them.

Online insurance is also a rapidly growing business, competing successfully with existing players. Apart from insurance market players, many financial service providers and banks are also entering into the global insurance business, thus creating even more competition for existing players.

Stringent regulations govern the insurance industry and it remains to be seen how this scenario plays out in the coming years.

(Source: Taiyou Research)

According to a new whitepaper from asset management strategy consultancy Casey Quirk, a practice of Deloitte Consulting LLP, the industry is likely to experience "the largest competitive re-alignment in asset management history" through merger and acquisition activity from 2017 to 2020.

According to its new Investment Management M&A Outlook, "Skill Through Scale? The Role of M&A in a Consolidating Industry," Casey Quirk expects strong merger and acquisition activity in 2017 with a continued historic pace of deals through 2020.

Among the factors driving this brisk activity in 2017 and beyond are an aging population, affecting industry asset levels and flows, as well as a broad shift to passive management that has created pressure on industry fees and placed greater value on firms with valuable distribution platforms and those investing in technology. Forty-four deals took place in the first quarter of 2017, and Casey Quirk expects 2017's volume to likely outpace the last two years.

"Investment management has become a fiercely competitive industry, increasingly shaped by the same winner-take-all dynamics influencing other maturing financial services sectors," said Ben Phillips, a principal and investment management lead strategist with Casey Quirk and one of the authors. "Amid this challenged marketplace, the gap is widening between leading and lagging asset and wealth management firms. Unlike deals of the past, consolidation pressures, with a focus on scale, will likely drive the next round of M&A activity to position firms for growth."

According to Casey Quirk, most of the investment management merger and acquisition deals in 2017 and in the next few years should fall in the following categories:

• Transformative scale acquisitions driven by the quest for revenue and cost synergies. These deals should be larger than in the past several years and should include more global mergers of equals.
• Capability-based transactions, mostly representing additions of innovative investment products and technology needs.
• Shifting value chain deals, with many asset managers acquiring firms that help them extend their capabilities in such areas as distribution, wealth management or advice.
• Pure consolidation deals structured to spread costs over a larger client asset base; several may take place in the US mutual fund marketplace.

"Economic pressure, distributor consolidation, the need for new capabilities, and a shifting value chain are the catalysts that are fueling M&A activity," said Masaki Noda, Deloitte Risk and Financial Advisory managing director, Deloitte & Touche LLP, and co-author of the paper. "Asset managers are feeling pressure from many corners and are looking for ways to secure a competitive advantage. Strategic deals may be the answer."

In 2016, 133 mergers and acquisitions occurred in the asset management and wealth management industries, down slightly from 145 in 2015, but with a higher average deal value, up from $240.9 million in 2015 to $536.4 million last year. In investment management, about half of the deals rose from the need to add capabilities such as innovative investment strategies or access to new market segments. In wealth management, the vast majority of transactions—64 out of 78—resulted from consolidation, as various smaller wealth managers sought to improve profitability through economies of scale. Merger and acquisition deal volume by category is from SNL Financial, Pionline.com, Casey Quirk analysis and Deloitte analysis.

(Source: Casey Quirk)