Digital Banking | 2022 #8
Weekly news up to Monday, February 21st, 2022
MVO BLOG
REPORT
In retail banking, new competition has emerged in recent years from so-called Neobanks. But traditional banks are not standing still. They are fighting back by investing in online banking and improving the client experience – denying the Neobanks further market share.
👉 This report by RFS examines the reasons for the emergence of Neobanks, what makes them so unique, and where they score particularly well. Further, they look at the current state in different geographies.
The report offers a glimpse into the future, discussing the challenges Neobanks will have to overcome to remain relevant in the future. Download it here.
👀 NEWS HIGHLIGHT
A new mobile banking platform called Spruce, built by tax preparation company H&R Block and powered by SoFi-owned fintech Galileo has been launched in the US.
Galileo says its cloud-based financial technology platform allows new and established brands to launch innovative financial services that can adapt quickly to evolving customer needs.
The fintech cites its own research that shows 44% of US consumers use digital-only banks as a primary or secondary account, while 61% say they are somewhat or highly likely to switch to a digital-only bank as their primary provider.
H&R Block’s chief financial services officer Les Whiting says the firm wants customers to be able to “easily, quickly and reliably access, deposit, transfer and grow their money through Spruce”.
👉 Read more here.
😎 SPONSORED CONTENT
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📊 INFOGRAPHIC
While the financial details of most of the deals remain undisclosed, the sheer size of the acquirers has been sufficient to garner attention.
In this post, WhiteSight is taking a closer look at some of the mega mergers and acquisitions that the sector witnessed in recent years.
👉 Read the full article by Sanjeev Kumar & Risav Chakraborty here.
📰 ARTICLE
The CEOs of the UK’s leading fintech firms including the likes of Monzo, Starling, and Checkout.com have called on regulators and the UK government to speed up new reforms aimed at better financial regulation.
In an open letter signed by 70 of the biggest fintech firms in the UK, signatories say that existing regulation needs an overhaul in the manager suggested through the Kalifa review, published almost exactly one year ago, and warns against “resting on our laurels”,
“The regulatory rule book requires further updating, and regulators must have the capability and culture in place to allow them to fully embrace innovation while protecting the consumer and financial stability,” it said.
In addition, the letter says “we should seize on the opportunities afforded to us from leaving the EU” to bring in a regulatory and capital requirements regime “more proportionate” for scaling and challenger banks.
👉 Read the full article here.
👨💻 BLOG
In 2021, despite the pandemic’s initial blow to the stock market, Digital Banks continued to attract investors, acquire funding, increase their customer base, diversify revenue streams, and reach a profit to boot.
👉 Read the full article by C-Innovation here.
💡INSIGHTS
Nubank’s value proposition heavily emphasizes a marriage between customer service excellence and relationship marketing.
The firm’s strategy counts on the dissemination of the brand through the construction of relationships with its consumers, with the objective of focusing on the identification and satisfaction of customer needs.
Such a strategy is clearly reflected in the language utilized in communication with clients, as well as through the company’s core values of client empowerment.
👉 Read the full Efma article on Nubank here.
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NOW, ON TO THE SUMMARY OF LAST WEEK'S NEWS
🌎 DIGITAL BANKING HIGHLIGHTS
⭐️ Climate FinTech: Using Data and AI To Fight Climate Change And Create Business Opportunities. Link here.
⭐️ More than 1.33 million of the UK’s children have invested in cryptocurrency, according to a new report from teen neobank GoHenry. Link here.
⭐️ Warren Buffett's Berkshire Hathaway dumped a portion of its Visa and Mastercard holdings and increased exposure in Nubank, the largest fintech bank in Brazil that's also popular among the country's Bitcoin investors. Link here.
⭐️ Throughout the years, Apple has employed a clever ‘acquihire’ strategy, where it has focused on acquiring small firms employing a limited number of people. Read more about it here.
⭐️ What's Going On In Banking 2022: Rebounding From the Revenue Recession. Link here.
⭐️ Q1 2022 Open Banking Trends: 175% annual growth rate, regulations move to data sharing. Link here.
UK 🇬🇧
UK challenger 3S Money has partnered with ClearBank to offer multi-currency accounts to both its retail and corporate clients. Link here.
After shifting to a 4-day working week last month, lender Atom Bank has raised “more than £75m” in a fresh round of funding. Link here.
Revolut's ambition to provide a one-stop-shop for business banking services has been given a boost with the introduction of integrated payroll management software. Link here.
TSB has teamed up with Manchester-based fintech Bankifi to launch a small business banking app that helps ease the burden of chasing overdue invoices. Link here.
Metro Bank's chief financial officer has quit the troubled UK lender just eight days before it presents its preliminary financial results. Link here.
EUROPE 🇪🇺
indó - a new Icelandic startup in the consumer digital banking sector – announced it is emerging from stealth mode with $4,5 million in seed-level funding. indó is the first challenger bank to emerge in Iceland. Link here.
Challenger bank Tinkoff has launched a fully digital mortgage offering, which it claims to be Russia’s first. Link here.
USA 🇺🇸
U.S. Bank announced a new solution with Payactiv to bring Earned Wage Access (EWA) to U.S. Bank clients. Link here.
GreenBox POS, an emerging and rapidly growing FinTech company announced that it has entered into a licensing partnership with Cross River, a respected technology-driven infrastructure provider that offers embedded financial solutions. Link here.
Homebound is announcing it has raised $75 million in a Series C funding round led by Khosla Ventures toward its efforts to help address those inventory shortages with its technology. Link here.
Piermont Bank, a digital commercial bank that serves the fintech ecosystem, announced that it has entered a strategic partnership with Unit, the banking-as-a-service startup that empowers companies to embed financial services into their products. Link here.
JPMorgan, the largest bank in the U.S., said it has become the first lender to arrive in the metaverse, having opened a lounge in Decentraland, a virtual world based on blockchain technology. Link here.
LATAM
Nubank is still the most downloaded neobank application in Brazil. It was downloaded 3.2 million times in January, according to Bank of America (BofA) latest report. Link here.
German digital bank N26 is partnering with GFAI, a financial and career planning platform, in another move to position itself as a fintech that focuses on customers' financial health. Link here.
AltScore raised a $400k Pre-Seed Round. Also, the Ecuadorean-born company joined TechStars Boulder in the 2022 Winter Program. Since they met in 2020 founders Andrés Pérez, CEO, and Mateo Semerene, COO, have wanted to solve the lack of financial inclusion in LatAm. According to the World Bank, there’s a $1.8 trillion dollar lending gap in the region. Link here.
ASIA
M2P Fintech, a Chennai-based application programming interface (API) infrastructure company, announced that it has signed a definitive agreement to acquire BSG ITSOFT, a leading provider of core banking solutions. The deal size was not disclosed. Link here.
DBS Bank, Singapore’s largest bank, is working on expanding its cryptocurrency exchange beyond its current investor base of institutional clients, according to the CEO. Link here.
MIDDLE EAST
A new digital “bank for youth” called LINC has launched in Jordan, which claims to take a holistic approach to supporting the country’s university students and young adults. Link here.
Abu Dhabi investment firm ADQ is set to launch a new digital banking platform called Wio following an in-principle approval from the Central Bank of UAE. Link here.
Saudi Arabia’s sovereign wealth fund is a key investor in a new digital bank being established in the kingdom with a capital of 1.65 billion riyals ($440 million). The Saudi cabinet approved a license for D360 bank on Tuesday, the central bank said in a statement. Link here.
Zand, the UAE's first digital bank that will cater to retail and corporate clients, has unveiled new international and local shareholders as it prepares for an “imminent launch” in the country. Link here.
AFRICA
The Central Bank of Kenya (CBK) has issued a discussion paper assessing the applicability of a central bank digital currency (CBDC) in the country and seeking comment from the public on the technology. Link here.
MOVERS AND SHAKERS
Revolut, the global financial superapp with over 18 million customers worldwide, announced the appointment of Ibrahim “Ibo” Dusi as its Chief Risk Officer for Americas as the company continues to build out its capabilities on a global scale. Link here.
Zein Malhas has joined Blink, a new challenger bank in Jordan, as its CEO. Malhas moves from Capital Bank of Jordan, where she spent nearly four years in various senior roles, most recently as Chief Digital Officer. Link here.
Temenos AG, a Switzerland-based company specializing in enterprise software for banks and financial services, has announced the appointment of Erich Gerber as President and Chief Revenue Officer as part of the company’s effort to strengthen its Executive Committee. Gerber’s appointment is effective from March 1, 2022. Link here.
If you are a fintech startup and have over 100 questions send me an email, maybe I can answer a few.