Ferratum - Fintech Europe

Ferratum

Ferratum was founded by Jorma Jokela in May 2005, and it is headquartered in Helsinki, Finland. This is not the first endeavor for Mr. Jokela, as he founded another finance-related enterprise, Jokela Capital Oy, in 1998 and acted as a CEO till 2000, after which he sold the business in 2004. Moreover, Ferratum is one of the FinTech pioneers and was one of the first to be enlisted at the Frankfurt Stock Exchange on February 6th, 2015.

Currently, Ferratum operates as a big data-based global finance platform for real-time scoring, lending, and banking services. Their proclaimed goal is to spearhead the FinTech revolution and deliver simple, easy-to-use customer interface that would be available 24/7 and accessible online. Furthermore, the vision stands as a desire for becoming a “most valued financial platform”. Interestingly, the vision incorporates all the stakeholders, meaning that they do not prioritize any, as instead, they are envisioning a balanced goal for the platform. Moreover, the open API architecture of the app allows for all the stakeholders to gain additional benefits by choosing Ferratum, making it even more attractive as a financial platform.

Ferratum debit card

Before diving into what separates Ferratum further, we will take a glance at some of the important values and numbers for the platform and present them in a concise manner.

Customer centricity, entrepreneurial spirit, candor, respect, and winning teams are embedded as core values since the foundation of the enterprise.

Currently, there are 763.000 active customers and enterprise operates in 23 distinct markets worldwide. Ferratum dissects its business into five major categories: 

• Microloans – €25 – €1000, 7 – 90 days
• PlusLoans – €300 – €5000, 2 – 36 months
• Credit Limit – up to €4.000, digital revolving credit line
• Ferratum Business (SME) – up to €250.000, 6 – 24 months
• Mobile bank (including Primeloan) – €3.000 – €20.000 E, 1 – 10 years

Out of the beforementioned categories, Credit Limit is the biggest contributor to the group’s revenue. 

Ferratum Bank as a part of the Ferratum group offers creation of the bank account in the following European countries: Sweden, Germany, Norway, Spain, and France. Ferratum Bank is regulated by the laws of Malta and has a license to operate in other European Union countries. Accounts are solely for personal usage and they do not offer joint or business accounts. However, they offer an option to open an account for each of the available currencies. Additional limits on the accounts are daily ATM withdrawal (€1.000) and daily online and credit card purchases (€3.000). Maintenance costs of the accounts are minimal with the primary cost related to the banking services being ATM withdrawal charge (€2.99 for an account that operates in Euros). Furthermore, there are several promises that help Ferratum bank standout in the evolving FinTech market. The creation of the account shouldn’t take more than ten minutes and all the major European currencies should be available for choosing. There are no foreign exchange fees and currency convertor is integrated. Moreover, four times per month, one can withdraw from ATM for free!

Finally, there are a few downsides worth mentioning. First, not all the mentioned services are available for all the serviced markets, therefore some limitations in less developed markets could be expected. Second, the approval rate across all the applications for loans is approximately 15%, therefore there could be some unpleasant surprises for some applicants.

Ultimately, Ferratum does have some of the inherited flaws from the FinTech industry, however, it is constantly evolving and improving therefore it is a considerable candidate for tech-savvy customers.