Digital Banking | 2023 #20
Weekly news up to Monday, 15th of May 2023
Happy Monday Fellow Digital Banking Fanatic,
Let's start with a question:
Will Revolut obtain a UK 🏦 Banking License❓
This is what the experts say:
⚫ Customer Behavior and Loyalty in Banking: Global Edition 2023 report by Bain
The unbundling of banking services pervades all countries in the survey, with the sharpest rise in developing markets.
As consumers use more providers, they’re more apt to buy from digital-native direct banks.
⚫ In this report, Flagship Advisory Partners explains opportunities for Banks in FinTech.
Point ⓸ Become BaaS and PaaS platforms to penetrate the embedded finance opportunity.
Point ⓼ Innovate cross-border payments to manage declines in FX and wire transfer fees.
According to Boston Consulting Group’s latest paper, there are a total of 431 DCBs worldwide today, and of this total, only 20, or 4%, have achieved breakeven. The banking landscape has seen significant changes over the past decade.
👀 NEWS HIGHLIGHT
First Citizens gained $9.82 billion in Q1 2023 from its acquisition of SVB. More than a third of those deposits came from SVB, which First Citizens had scooped up with the backing of U.S. regulators.
But who is afraid? Combined, the top two Brazilian neobanks Nubank and Neon have 96 million customers — nearly as many as all other neobanks combined (101 million).
If they follow through, Apple and its banking partner Goldman Sachs would enjoy a major influx of new savings accounts.
⚫ At Lightspeed they believe that the successful consumer neobank path looks like this:
1️⃣ Find a wedge: one with strong cultural tailwinds and a business model change, and low CAC.
2️⃣ Exhibit signs of primary account usage for that initial wedge: strong engagement and transaction/deposit activity retention.
3️⃣ Ride that first product’s success for a few years to ~$50M+ sales.
⚫ Check out Dave Inc.'s Q1 2023 financial highlights:
Q1 GAAP revenue was up 38% Y-o-Y to $58.9 million;
Q1 net loss improves by 57% Y-o-Y; Adj. EBITDA Loss was reduced by 75% to $4.5 million;
Reiterates 2023 financial outlook and maintains nearly $200 million available liquidity.
Key Takeaways from Block's First Quarter 2023 Results:
▸ Gross Profit is ~$1 billion per quarter now
▸ 53M monthly actives
▸ 20M active cards
NOW, ON TO THE SUMMARY OF LAST WEEK'S NEWS
🔦 DIGITAL BANKING HIGHLIGHTS
⭐️ Charlie launched with $7.5 million in funding.
⭐️ Slash raised $19 million in seed and Series A funding rounds led by NEA.
⭐️ Vice President of Growth at Revolut, Le Nel stated that consumer loans will be available to its 2 million+ French users from the 30th of May.
🌎 REGIONAL HIGHLIGHTS
The UK saw a slight dip in financial fraud losses in 2022, to £1.2 billion, driven by a 17% fall in authorized push payment losses.
Lanistar has seen rapid growth and in recent months has added an additional two offices to its roster - Dubai and Sao Paulo.
Revolut is eyeing an acquisition in the BNPL space, CEO Nik Storonsky told Axios on the sidelines of the Web Summit Rio conference. Revolut will also see a decision on the fate of its much-delayed UK banking license in a matter of weeks, sources say. Additionally, the company’s CFO Mikko Salovaara resigned for “personal reasons”.
Revolut expands its educational offer to the crypto-enthusiasts with a new Learn & Earn lesson, this time dedicated to Avalanche.
After reaching an interest rate of 3.33 percent in March, Kroo announced its current account will pay 3.6 percent from 1 June.
Resistant AI announced that the Bank of Valletta is to adopt its Transaction Forensics product for anti-money laundering.
Green-Got is an alternative bank, whilst it guarantees that customers’ savings and deposits aren’t going to finance fossil fuel projects and other polluting industries.
Mastercard unveiled a digital account opening tool that uses Open Banking to integrate customer verification with identity insights into a single API.
MoneyLion’s Q1 2023 results highlight growth and a steady path to profitability. GAAP revenue of $94 million in Q1 2023, up 34% year-over-year.
Cross River Bank CEO Gilles Gade says banking failures must be a wake-up call for regulatory modernization.
Rapid Finance and Mambu partner to provide a comprehensive Lending-as-a-Service offering.
The Asian Development Bank and Switzerland signed a co-financing agreement of up to $5 million for Vietnamese FinTechs focused on addressing financial inclusion.
The Commonwealth Bank Group unveiled its latest technology hub in Perth, as part of its broader strategy to contribute to Australia’s digital economy.
Alex Bank launched its Fixed Term Deposits following a rapid deployment where Temenos and Alex Bank partnered to design, test, and implement over less than four months.