Following the successful launch of CAMFI, we asked TAB CEO, Emily Mackay, about the past, present and future of the world’s first single measure for crowdfunding and marketplace finance.
Emily, has the idea of building an index that measured alternative finance been in your mind since the earliest days of TAB?
Back then I had smart people tell me that the data we were producing could form an index, and that that index could be the measure by which the world educates itself about the health of alternative finance. Those conversations were exciting. They told me how powerful indices could be in driving communication and understanding in an industry. Those requests got louder as the company grew.
And, in time, the amount and the type of data TAB was producing aligned with this purpose?
Very quickly we were cleaning and presenting enough data to make us think an industry metric was possible. A few years on, we have this deep data set that tells us about every aspect of the industry. When we combine that data, we have a really strong indication of the entire industry’s health.
So when was CAMFI first discussed?
The first meetings took place at the end of 2016 with our Chinese partners. An MOU was signed between the partners in April, and we worked extremely hard since then to make sure we were ready for the July launch date.
You mention the partnerships with BBD and Hangzhou Academy of Internet Finance. How important have they been? And is there a future to them?
They’ve been very important. Building CAMFI has been a team effort, and I can see future projects. The first step is the consolidation of CAMFI, but there are many possibilities for the future.
Could you briefly talk us through the 6 months leading up to launch?
The project had three parts. The first involved strategy, discussing scope, target market, evolution. This was time spent thrashing out CAMFI’s shape and involved the project management side of the build. The second involved mathematicians, economists, engineers, computer scientists agreeing methodology. We knew there was no right way to do this. So we chartered our own, building the most fair and transparent metric for the industry. From there, the code and algorithms were written and the index came to life. The final part was focused on the launch, with the priority being that the index needed to be delivered to the people who needed it most. This involved a lot of PR.
The process has been resource intensive, combining disciplines from all over the world. It’s been a challenge bringing all those parts together.
And how was the launch? What’s the industry response to CAMFI been?
Fantastic. Within hours, we had responses from industry players from all over the world wanting to be involved. And that is what CAMFI and TAB are about. We’re here to support a whole industry, helping it become established, providing education to anyone who wants to be involved. We want to move alternative finance up the ‘maturity ladder’. So the positive responses we’ve received have been most pleasing.
So we’ve been pleased with launch and excited about the next phase, We know that this is only the beginning, we’re at the start of the adoption curve, needing to build trust over time, but it’s started well.
Looking forward, have you set any benchmarks for the next 12 months?
Success will be when people demand that CAMFI is presented inside the tools they use everyday. When we know the industry looks to this number as a measure for the appetite that the world has for crowdfunding and marketplace lending, we’ll know we’ve become a trusted partner, and we’ve achieved success. But the aim for the next 12 months is to build relationships and firm foundations.
What about future functionality? Is it possible for products to be priced against the index?
Yes. Eventually, the aim is to make it a regulated index against which financial products can be priced. Having said that, you don’t have to be participating in deals to benefit from CAMFI right now. It should primarily be considered a barometer of health for the market, which is allowing new participants to approach the market for the first time.
Do you see any changes in the formulation of CAMFI over the coming few months? Will segregation of CAMFI be important?
This is our aim. We constructed CAMFI to be modular, with the modules being debt, equity and rewards, but there are other ways we can split the index. Right now we have the functionality to run the methodology with specific cuts to the data to provide insights for users. So if anyone wants to dig inside CAMFI, they should get in touch with requests.
Are there plans for CAMFI to be hosted on financial news service providers?
Our priority is to build a track record and trust over time. Once this is established then, yes, there are plans. Any organisation who wants to carry the index number on their site, that’s a conversation we want to have. For starters, we’re collaborating with Reuters who will be hosting CAMFI within the TAB Dashboard which has been recently launched on Eikon App Studio.
There is interest from the traditional end of the market because this is the future. This is the way that money is going to be moving around the planet in a much more online and transparent way, so the traditional players are keen to be involved as first movers.
Where do you see the index in 3 years?
As the industry gets bigger and more diverse, there is going to be demand for a wide range of metrics. We’re aware of that, but it will still be the headline composite index that gives a general view on the health of the market. For example, the debt market is already significant enough to demand its own measure. This will happen in the not too distant future, with a discrete index for this purpose. Within a matter of years, we expect to be answering the diverse questions that the market is asking.
When will you know that the launch of CAMFI has been a true success?
If we pop up on a Bloomberg ticker anytime soon, I think we can be pretty happy!