Munepene has developed an on-line and mobile social game/leisure activity using innovative micro-trading of stocks and shares. Playing for pounds with pennies, ‘Munepene’ will have a global application and will allow its players to participate in the world’s financial markets in a social environment with real money but at only leisure levels of risk –hence the money penny moniker.
A product feasibility and de-risking project was carried out by Brodies LLP, Brightsolid Online Innovation and an independent fund manager to produce a demonstration product and provide answers to key regulatory, finance risk management and technology issues. The project was funded by £80k of private investment and a Scottish Enterprise SMART: Scotland award.
In Munepene, thousands of individual players will own many small denominations of fractionalised company shares. Fractionalisation of real share values with real money portfolios is an innovative step; however, as trading in micro-shares is a relatively new concept, there was no empirical data to support this assumption, which creates a risk for the business and any future investors. Whilst a strong correlation in the behaviour between real markets and fractionalised portfolios has been assumed, independent validation against historical data was required.
Interface – the knowledge connection for business partnered the company with the University of St Andrews, who was able to provide data that demonstrated the performance of micro-share portfolios and gave an independent validation of the performance of Munepene micro-share portfolios against real and historical market data.
This was achieved by delivering a market analysis model within which various scenarios could be explored in order to better understand the impact of changing parameters within the Munepene product when tested against historical market data. This data will inform future decisions regarding the development and subsequent structure of the Munepene product.
The project provided the company with valuable data to better able it to manage the performance and financial risks of its product. This knowledge will be built into the company’s business plan, making it more robust, and into the definition of its product helping to make it more commercially successful. The company builds upon the expertise of Scotland in the financial and gaming sectors and, if successful, will bring a significant international gaming and financial product to the Scottish economy.
For the University, this project will provide an opportunity to explore a completely new concept within share trading. There is a possibility that micro-share trading will develop into a global leisure activity that may have as yet undefined implications for existing markets. Being at the forefront of such research can only further support the status of the University within this academic area.
It is anticipated that the Scottish economy will benefit by the creating of another potential anchor to retain the core of Munepene Limited within Scotland with the attendant anticipated jobs and gross value added. Munepene has ambitious expansion plans which it is anticipated will have a positive impact on the Scottish Economy over a number of years.
Besides providing a commercially viable game activity this ‘gamification’ of finance will bring significant engagement benefits to the public by demystifying financial markets and may lead to greater equity participation.
Munepene Limited viewed this project as an entry to utilising Higher Education Institutions’ capability to support the company in development of its products. Whilst the simulation model is very useful in its current state, it could provide more significant value if developed with the complexity to better match the financial market and social media behaviour across which Munepene operates. Having enjoyed the ease of the Interface referral process and the enthusiasm, capability and awareness it found in the HEI’s, Munepene is now developing a Follow-on Project with another HEI and the Company Directors have also successfully engaged Interface and yet further HEI’s in another technology Company.
According to Mark Abbs, CEO Munepene, "The delivery of this project has confirmed the long held belief within the management of Munepene Limited that there is significant commercial advantage to be gained from developing meaningful interactions with appropriate Higher Education Institutions."