Tobias Baer shares an article on credit risk and the perils of the buy-now-pay-later trend.

A just-published TransUnion study shows that buy-now-pay-later (BNPL) takes the UK (just as other markets) by storm, with 35% of the population having used it in the past 12 months (driven in particular by Gen Z and Millennials with up to 60% usage). There are both obvious and not-so-obvious implications for traditional lenders.

BNPL promotes further fragmentation of consumer debt – and therefore will make it even harder for less disciplined consumers to keep a grip on their financial obligations. 50 years ago consumers could easily understand their financial capacity by checking the amount of cash in their wallet – that was all available to spend. The credit card has greatly increased both financial flexibility and the haze through which consumers see their financial capacity – but many cards give consumers at least some orientation by indicating the credit line and the available “open to buy” portion. By contracting loans one merchant transaction at a time, a consumer needs to be a real accounting wizard to know at every point of time how much money she owes or still can afford to spend.

For traditional lenders, this means that the large portion of borrowers with relatively low “conscientiousness” (i.e., limited financial planning and self-control) is becoming even riskier as the risk of excessive borrowing has become even greater. This is not only because BNPL fragments the financial affairs of consumers but also because BNPL is offered through retailers who want to use credit to maximize sales – in a sense, retailers suffer from insufficient conscientiousness themselves when they prioritize short-term sales maximization over long-term trouble for their customers (as customers going through personal bankruptcy barely make an attractive consumer). In addition, many retailers (rationally) subsidize borrowing cost by sacrificing a part of their margin, essentially to bear credit losses. As traditional lenders only can use interest and fees to cover their losses, they are at a structural disadvantage.


Key points include:

  • Consumer psychology
  • Limited financial planning and self-control
  • Credit bureau regulations


Read the full article, How will BNPL Affect Credit Risk?, on LinkedIn.

Luiz Zorzella shares an article designed to help improve strategy by understanding your net Interest margin (NIM). 

If you are a bank executive and want to manage the bank’s business strategically, you must understand the key drivers of your bank’s profitability and the trade-offs they imply.

For example, to some extent, banks can trade the cost of deposits for efficiency ratio by making it more convenient for clients to make deposits.

At the same time, the equilibrium of these trade-offs depends on a number of external factors which change all the time. In our example, while the status of the labor market impacts banks’ efficiency ratio, the compression of interest rates impacts the attractiveness of low-cost deposits.

Take interest rates for example. In 2019 10YTs paid on average 2.14%. They then fell to 0.89% in 2020 (a 125 bps reduction) and up to 1.42% in 2021 (a 53 bps increase).

The NIM of JP Morgan, Bank of America, and Citibank have been decreasing, having lost between one and one and a half percentage points in the same period. To put this in perspective, my rule of thumb is that banks need around one percentage point of NIM just to pay their cost of equity to hold banking assets, which is not accounted for in the NIM formula.



Umbrex is pleased to welcome Hugo Teophilo Rufino. Hugo has worked for McKinsey in the practices of financial services, public sector mostly serving clients in strategy, org design, performance implementation and digital transformation

Besides McK, he worked for PwC/Strategy&, Altran and as Executive Director for companies in the Tech and Insurance industries

He lives in Brazil with his wife and baby daughter. Hugo is passionate to serve clients and collaborate in strategy and transformative projects.

Peet van Biljon shares a recently published article on quantum computing in finance.

There are two competing narratives on quantum computing. The first is that the technology is overhyped, still in its infancy, beset by enormous technical challenges and that full-scale, reliable quantum computers are decades away. The second is that many companies, including some of the world’s most prominent financial institutions such as Barclays, BBVA, JPMorgan, Goldman Sachs and RBS are investing in, and experimenting with, quantum-computing applications and that business impact can be expected in the near term.

Which narrative is the correct one? Perhaps surprisingly, both are true. That creates an urgent need for finance leaders to understand the technology better in order to discern the short- versus medium-term implications for their companies, and to shape a viable quantum-computing strategy.

The information revolution of the last few decades was built on our ability to miniaturise transistors. In modern digital computers, now called classical computers to differentiate them from quantum computers, billions of little transistors switch on and off to execute binary logic. At the lowest level, a logical bit can either be a 1 (the transistor is on) or a 0 (the transistor is off).

Quantum bits, called qubits, are encoded and measured in two equivalent binary states called |0> or |1>, which are usually associated with the up or down spin of an electron. However, two strange properties of quantum mechanics, called superposition and entanglement, allow qubits to take on a continuum of non-binary values and interact with one another in that state to perform calculations. Any measurement collapses superposition, which means that the only two states a qubit can be measured in is either |0> or |1>.

While in superposition, qubits can be manipulated to process exponentially more information than classical bits. In fact, n qubits can process the same information as 2 to the power of n classical bits. When quantum computers eventually scale to hundreds of usable, error-corrected qubits, 2 to the power of n will become a truly astronomical number, allowing more calculations than classical computers can ever do. This explains the excitement about quantum computing technology.


Key points include:

  • The processing power of quantum computing technology
  • Managing qubits’ decoherence
  • translate real-world finance problems into quantum computing algorithms


Read the full article, Closer than you think – quantum computing in finance, on 

Sanjay Gandhi shares an article that discusses strategies for companies and High Net Worth families and individuals that can provide a silver lining amidst the tough news and provide long-term benefits when valuations rise again.

The coronavirus (COVID-19) has resulted in significant public market losses, as reflected in daily stock market gyrations and volatility. Private companies, asset and debt values have equally been affected by the pandemic. For High Net Worth individuals and companies, certain strategies can provide a silver lining amidst the tough news and provide long-term benefits when valuations rise again. For many private holdings, COVID-19 will provide some downward impact on value. This can result from significant disruption in operations, revenue/margin drop off, challenges in accessing capital, slower growth and delayed exit timelines. Certain direct impacts can already be seen as the market for secondary sales has started to shrink. Another immediate impact is revision of near and medium-term cashflow projections.

What’s Different?

COVID-19 is a “Material Disintermediating Event”

For valuation purposes, we often consider past performance when looking at value. This can include recent financing rounds or historical financial performance of a company and market transactions/sales of companies. However, COVID-19 is a “material event” which can disrupt the assumption that historical data points are presumptively the foundation of the future.

This triggers the need for a fresh look to consider the value of a company in light of its prospects in current and future economic circumstances.

Key points include:

  • Top strategies
  • Factors impacting valuation
  • How to estimate forward-looking performance?

Read the full article, Smart Strategies in a Lower Valuation World, on

Umbrex is pleased to welcome Marco Berizzi.  Marco acted as Chief Financial Officer within pharmaceutical and medical device space and as Head of Business Solutions for a company developing business intelligence, advanced analytics and planning platforms in Switzerland since 2013. Prior to this, he spent almost six years in Bain & Company, Italy accomplishing business due-diligences underlying private equity transactions, serving financial institutions customers within corporate banking & risk management projects and dealing with business improvements & BPR projects in Oil & Gas sector. At the beginning of his career, he worked for Italian Stock Exchange mainly in the equity market listing department dealing with forty IPO’s.

He lives in the south part of Lugano lake in Switzerland with his wife and daughter. Marco is happy to collaborate on projects involving strategy, corporate development, financial issues for both industrial corporations and banks, organization and business efficiency and operational excellence.

Umbrex is pleased to welcome Michael D Pollack with Pollack Consulting.  Michael has over 25 years at driving industry transformation and delivering insights through leveraging best in class analytics. Prior to Pollack Consulting, Michael was a Managing Director at JP Morgan in Asset & Wealth Management where he was the Global Head of the Portfolio Analysis Group, the group that provided investment analytics for both external and external analysis of JP Morgan’s investment performance.

Prior to this role, Michael was a Managing Director in the Corporate and Investment Bank also at JP Morgan. Before joining JP Morgan he was a Managing Director and Divisional CFO at Citigroup where he led the reengineering of the capital markets operations. Prior to Citigroup, Michael was the CEO at Pollack Consulting Group, an independent management consultancy that assists clients with their most difficult strategy, operational, and technology issues.

Michael also held senior roles at American Express and Booz & Company (now part of PwC). Michael was the founding Chair of the Board and a current Board member of School in the Square, a public charter school in New York City.

Michael earned his BA, Magna Cum Laude, in Computer Science from Princeton University and his MBA in General Management from the Stanford Graduate School of Business.

Umbrex is pleased to welcome Paul Browne with Lexington. Paul is combines a wealth of experience in international blue-chip companies with an intellectual drive, curiosity for data, and experience in helping high-performing complex executives get outstanding results. He has lived and worked extensively across Asia, Africa, Europe and the Middle East. He lives with his author wife, (N.M. Browne) in Richmond-on-Thames, UK – useful for Heathrow.

Paul is an Associate at the Møller Institute at the University of Cambridge and also operates as an independent strategy consultant. Following a highly successful career within consulting then banking, he served in various law firm CEO and finance roles, and now focusses on consultancy to professional service firms.

After starting his strategy career with Bain & Company, Paul spent a decade in senior positions with Standard Chartered where he led the Board recommendation in the early 90s to exit the UK, US and Continental office network to focus on the fast growing markets of Asia Pacific and South Asia- a strategy that was not only ahead of its time, but resulted on SCB being the best performing FTSE 100 share in the year following the strategy’s announcement. He also led a global crisis team centred on India as well as being Regional Head, Sub-Saharan Africa. He then moved to Barclays Bank as Director for Group Strategy.

Paul completed his MBA jointly from Manchester Business School and HEC, Paris, also attending an executive programme at Harvard Business School which entailed study at Harvard, in China, and in Singapore as well as analyzing opportunities in India. His undergraduate degree was in Politics, Philosophy and Economics at Trinity College, Oxford. In addition, he also has a first class Oxford University degree equivalent in Archaeology.

Paul takes a data-driven approach to solving problems, informed by his wide experience and a strong thirst for new insights and approaches to analysing and solving business and people challenges.


Marcin Mazurek shares interesting financial insights on the major bank challengers in Europe.

A review of operations of major bank challengers after a year of significant challenges offers some interesting insights.

  1.   Slower customer growth

The group of major* players representing top bank challengers in Europe (Revolut, N26, Monzo, Monese, Starling, TransferWise, Curve, and Tandem) served nearly 39 million customers as of Q4 2020 as compared to nearly 27 million as of Q4 2019. What is striking here is a fast decelerating customer growth. While the acquisition rate remained stable at above 100% p.a. on average between 2016 and 2019, the growth decelerated to “only” 46% in 2020.

What happened that the customer growth rate halved in just one year?

Incumbent banks catching up. Large financial institutions might be slow, but they keep improving their value proposition and gradually reduce the service/offer gap to challengers. This includes leveraging PSD2/open banking opportunities as well as various product fixes and eliminating key pain points which helps to prevent further loss of customers;


Key points include:

  • Competition from incumbent financial institutions
  • Changing needs of customers
  • Falling valuation multiples


Read the full article, Back to Reality – Major bank challengers in Europe switch gears and focus on profitability, on LinkedIn.


Umbrex is pleased to welcome Piotr Bendykowski. Piotr has led and participated in over a hundred consulting projects at McKinsey, Accenture, KPMG and on his own. He has also spent over 10 years as CFO, CEO, board member and chairman of the board. His industry experience is wide, with most time in financial services and manufacturing. His specialty is rapid and radical improvement of key metrics, for example revenue and income. A strategy expert, he has also worked in finance, marketing, operations, and IT. Projects have taken him to the US (East Coast, West Coast and some in between) and Europe (Western, Eastern, Northern, and Central).

Piotr has an MBA from Stanford, Engineering BS from MIT, and an IB from Atlantic College in the UK. He is fluent in English and Polish and familiar with five other languages. Piotr lives near Warsaw, with his wife and son. He is a certified pilot, scuba diver, lifeguard, and sailor. He leads an active lifestyle: hiking, cycling, kayaking, swimming, skiing, mountaineering, sailing, riding horses. He has travelled through dozens of countries on all continents except Australia. Interested in history, art, books, politics, and nature.

Umbrex is pleased to welcome Peter Kovacs.  Peter spent almost nine years in various Strategic, Finance, and Business Unit roles at MUFG Union Bank in California. Prior to that, he spent four years in the FIG practice at McKinsey out of Budapest, Hungary. Since 2016, Peter has been balancing his time with independent consulting both as an individual and leading teams in a variety of engagements primarily for FIG and PE clients, as well as owning and operating several unrelated small businesses in the beauty, health, and wellness space. Peter’s passion is for strategy and execution work in the finance and banking space, but is always open to and excited to broaden his experience in an ever-changing market. He lives in Orange County, California with his wife and three young children and is either in the gym or mountain biking every morning. Peter particularly looks forward to collaborating on projects involving strategy, operations, and / or execution throughout the U.S.

Umbrex is pleased to welcome Christophe De Greift with NEXUSQUANTS. Christophe De Greift has 15 years of experience in management consulting, part of it at The Boston Consulting Group and more recently running his own consulting firm focused on business analytics. Christophe has led 75+ projects in Latin America and Europe and has particular expertise in marketing analytics and supply chain analytics in sectors such as media, finance, logistics, consumer goods, energy and mining.

He lives in Lima, Peru with his wife and two young children and will keep exploring Peru with them, as soon as lockdown ends.

Christophe is happy to collaborate in transforming data into business value, both remotely and in Latin America or Europe.

Umbrex is pleased to welcome Yevgeniy Rikhterman.  Yevgeniy Rikhterman spent three years as the Director of Strategy at Herff Jones, a PE owned CPG company. Yevgeniy has experience in creating strategic plans, as well as an evergreen strategic planning processes. Yevgeniy led the strategic planned that helped to maximize the value of Herff Jones during a critical PE transaction.

He also led the corporate development, and M&A aspect, and as such has specific experiences that is applicable to mid-size companies looking to grow through partnerships and acquisitions. In addition, he led multiple product transformations, and is experienced in not only understanding root causes, but also guiding the implementation of the solution. Prior to Herff Jones Yevgeniy spent two years as a consultant at the Boston Consulting Group (BCG), working on a variety of projects in finance, retail, pharmaceuticals, telecom, industrial goods, and aviation.

Yevgeniy lives in New York City, and when not working enjoys travelling around the world, and outdoor activities. He is happy to work projects globally.


This in-depth article from Boris Galonske explains how digitization helps improve resilience in commodity trading.

Commodity trading suffers from shrinking margins and in some commodity classes also from low price volatility. At the same time operating environments struggle with manual routines, legacy processes and systems resulting in high cost income ratios (CIR).

How can this challenge be addressed and how can the profitability and the resilience of trading businesses be increased?

Situation today

Commodity trading exhibits still several manual routines in its workflows, given the physical nature of the business and established processes in the industry. At the same time margin pressure increases as the inherent profitability of several trading businesses decreases. How can this be addressed?

Commodity trading business characteristics

Commodity trading businesses are typically lean by nature. Several years back, high performing businesses exhibited cost-income ratios (CIR) in the range of high 30% – medium 40%. These days these ratios are significantly higher. Large European commercial banks – as a comparison –  even exhibit cost income rations in the range of 70 % – 90% +.

In order to tackle the profitability gap, analytics and middle office activities have been scaled down.

However parts of the trading process have remained untouched.


Points covered in this article include:

  • How digitization can help
  • Reservations about digitization
  • How to approach trading digitization


Read the full article or download the PDF, Monetizing Digitization Levers, on the Silverberg Partners website.


Robyn M. Bolton provides a few inside tips on how to work with resource constraints and the people who control them when you need to access the resources that will fund your innovation.


The process of setting annual goals and budgets can be frustrating and even demoralizing for employees and managers alike as their visions and budgets get slashed in each round of management reviews.

This process can be especially painful for Innovators who feel like they are expected to do more with less and, as a result, can’t even try to do anything new or game-changing because they barely have the resources to operate the current business.

Resource constraints are a reality in every organization. The trick is not to give up when you run into them, but to figure out how to work with them and, more importantly, the people who control them.


The steps are:

-Acknowledge reality

-Know where there’s flexibility

-Channel your inner Mick Jagger

-Make your case


Read the full article, 4 Steps to Get the Resources You Need to Innovate, on LinkedIn.