Islamic Finance

UK payments and wealth management platform Kestrl readying summer roll-out


LONDON - Young Muslims care less about ticking an arbitrary ‘no interest’ box than they want to know that their money is doing good in the world, says the co-founder of a new payments and wealth management platform eyeing a summer roll-out.

“We aim to help people align their financial goals with their personal values and make a real impact on the world around them,” Areeb Siddiqui, CEO and co-founder of UK-based Kestrl told Salaam Gateway.

Kestrl was shaped by market research and due diligence through surveys with around 300 people in various locations, of different ages and ethnicities, according to Siddiqui.

What the start-up found was that simply being ‘for Muslims’ and ‘digital’ isn’t good enough, and this is now also reflected in its choice of name, which stays away from being overtly Islamic or Arabic.

The kestrel bird is a common sight along the British woodlands and grasslands. The name choice was inspired by the likes of Shariah-compliant property fintech Yielders, using ethical branding to appeal to a wider audience, from sceptical younger Muslims to non-Muslims.

The idea behind Kestrl was conceived last year when Siddiqui met co-founder Daeng Termizi during their MBA at Cambridge University. They wanted to combine Siddiqui’s experience in wealth-tech with Termizi’s in Islamic finance to help a massively underserved community in the UK.

Originally based at the Cambridge accelerator programme, Kestrl’s headquarters is now based in London.

To boost its Shariah and ethical credentials, Kestrl aims to become AAOIFI-compliant and will be signing up to the UK Good Business Charter.

PRODUCT LAUNCH

Kestrl will be a mobile application on both iOS and Android. There will be a free version and multiple premium tiers with varying features, from automated wealth management services to concierge services, according to Siddiqui.

To begin with, the firm plans to launch the budgeting tool by the end of June.

“The budgeting tool uses 'Open Banking' to plug in multiple bank accounts to the Kestrl app,” he said. “This helps users view their spending habits across all accounts, break it down by category like groceries, bills, entertainment etc. as well as set monthly savings targets and save for specific goals.”

He explained that the development of the tool was accelerated as businesses were disrupted and jobs lost or furloughed due to the COVID-19 pandemic.

Siddiqui added that Kestrl will also launch additional features like a carbon calculator, a charity comparison tool and a joint family account.

It is also planning a subscription-based debit card to be released by October.

“In terms of pricing, we aim to follow other ethical fintechs like Triodos,” said Siddiqui. “We are becoming an appointed representative of an e-money institution in order to provide the debit card service.”

He said Kestrl will be appointed representative of True Layer for the Open Banking license and that the application is in process. Similarly, it will be appointed representative of Wirecard for the e-money license and the application is in process.

“Once we’re appointed reps we will be listed in the FCA website as appointed reps of both companies,” Siddiqui said.

 

Kestrl has a customer waiting list of around 500 beta users, claims Siddiqui. It is aiming for around 5,000 customers by the end of the year.

Siddiqi said Kestrl will focus on organic growth and use word-of-mouth to promote the product and brand. “We will host webinars over the next few weeks.”

However, despite the upcoming product launches, Siddiqui stressed that Kestrl has no plans to become an online lender.

“We don't intend on loaning out people's deposits, which is the main thing a banking license would allow us to do.”

LONG-TERM PLANS

Looking ahead, Kestrl has plans to launch even more services.

“We’ll also be launching a marketplace of investment products that meet our users' needs, from portfolios offered by the likes of Wahed Invest, to property investment opportunities from Yielders,” said Siddiqui. He hopes the marketplace can kick off by October.

Towards the end of next year Kestrl is also planning to introduce a home purchasing product to help people who are unable to make a deposit on a property.

FUNDING

Kestrl secured £150,000 of pre-seed funding earlier this year from investors including high net worth individuals and family friends.

The start-up remains conservative in terms of its financial expectations, aiming to break even by year 4 or 5.

It plans to do more fundraising this year and will look to raise £1 million, according to Siddiqui. This will be open to institutional and high net worth individuals.

“Funding will primarily be used to expand our in-house tech team in Malaysia to enable them to work on multiple features.”

At present, the fintech has four senior staff including Areeb Siddiqui who is chief executive officer, Daeng Termizi who is chief operating officer, chief financial officer Ayaz Siddiqui, and Irfan Radzi who is chief technology officer. It has an in-house tech team of 6 based in Malaysia.

The fintech has two external advisors-James Bagshaw and Oz (Arsalaan) Ahmed, who are advising them on their go-to-market strategy as well as operations.

(Reporting by Hassan Jivraj; Editing by Emmy Abdul Alim emmy.abdulalim@salaamgateway.com)

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Hassan Jivraj