REPORT
𝟮𝟬𝟮𝟯 𝘀𝗮𝘄 𝟳𝟴𝟲 𝗕𝗮𝗻𝗸𝗧𝗲𝗰𝗵 𝗶𝗺𝗽𝗹𝗲𝗺𝗲𝗻𝘁𝗮𝘁𝗶𝗼𝗻𝘀 𝗮𝗰𝗿𝗼𝘀𝘀 𝟯𝟱𝟲 𝘃𝗲𝗻𝗱𝗼𝗿𝘀 𝗶𝗻 𝟵𝟮 𝗰𝗼𝘂𝗻𝘁𝗿𝗶𝗲𝘀.
Some key takeaways from Cedar Capital & Cedar-IBSi FinTech Lab annual research in this space:
► North America dominates with 43% of all BankTech implementations.
► Continent-wise, Europe (25%) and Asia (23%) continued to show demand for new systems.
► Integration, risk management, and personalization are the key "must haves" in every rollout.
► Temenos , Jack Henry , Finastra & Adenza continue to be some of the world's leading suppliers in this space. Among many others.
The terms KYC (Know Your Customer) and AML (Anti-Money Laundering) are often used by regulators and compliance officers, sometimes interchangeably, which may cause confusion.
👀 NEWS HIGHLIGHT
Visa and Mastercard reported strong annual performance due to increased consumer spending and cross-border volumes, with cross-border growth slowing to 16% for Visa and 18% for Mastercard from previous higher rates.
Card counts rose by 6% for Visa and 9% for Mastercard, with a 2% increase in average spend per card, rebounding from previous declines.
📰 ARTICLE
Banking-as-a-Service (BaaS) is growing in popularity among businesses as a strategy to improve client engagement and retention. BaaS in Latin America will grow at a compound annual growth rate of 14.27% between 2022 and 2027. The market's size is anticipated to expand USD 2,430.08 million.
The notion of open banking, which promotes a secure interchange of financial data between banks and authorized third-party providers, is central to the evolution of BaaS.
💡INSIGHTS
So far, 2024 is gearing up to be a game-changer for the world of digital banking, making staying ahead of the curve as crucial as ever. This transformation is driven by technological advancements and a relentless pursuit of meeting customer needs, particularly among younger generations born into the digital age.
They are the ones setting the pace and standards in the tech industry. Now, let's dive into the seven digital banking trends set to redefine the financial industry in the coming year.
Across its UK customer base in 2023, Revolut found that 60% of all of its reported UK scam cases originated from just three sources: Facebook, Instagram, and Whatsapp.
Additionally, 33% of the total value of all money lost to scams began on Meta platforms across the same period.
NOW, ON TO THE SUMMARY OF LAST WEEK'S NEWS
🔦 DIGITAL BANKING HIGHLIGHTS
⭐️ Neobanking Market Poised to Reach $3.3 Trillion by 2032.
⭐️ Nubank’s security feature “Modo Rua” surpasses 1.5 million users and is more popular among adults aged 25 to 44.
⭐️ Coinbase and LHV Bank celebrate decade-long partnership.
⭐️ Tyme Group’s gameplan for winning digibank race in Philippines and Vietnam.
🌎 REGIONAL HIGHLIGHTS
UK 🇬🇧
Allica Bank completes over £2 billion of business lending. While in 2022, it also became one of the quickest UK fintechs to become profitable. At that time, Allica forecast that it would lend £3 billion in the next three years.
HSBC installs first of ten 'Cash Pods' in town with no bank branches. The Cash Pods enable all residents and businesses to withdraw cash and allow HSBC UK customers to deposit cash.
Cashplus boss: More challenger banks to go up for sale as big lenders see ‘brain drain’. The consolidation of mid-sized challenger banks will likely ramp up in 2024 and more lenders will start winding down.
Barclays to buy most of Tesco’s banking business for £600mn. Barclays said on Friday that it would take on Tesco Bank’s credit cards and unsecured personal loans, totalling about £8.3bn of lending balances.
EUROPE 🇪🇺
In 2023, bunq reported an impressive pre-tax profit of €53.1 million. This achievement solidifies bunq's position as a financially sound and growth-focused institution.
Tuum raises EUR25m series B financing. The company plans to enhance its direct sales and marketing operations, while also fortifying its partner channel with key managed service relationships to amplify sales reach and implementation scalability.
Transactions with Revolut up 75% from 2022. Romanian customers conducted more than 644 million transactions with Revolut digital bank, which is almost 74,000 transactions per hour on average.
N26’s CEO Valentin Stalf predicted a 2023 IPO. Now he’s got a new timeline for going public. German neobank N26 is one of many tech companies that’s had to eat some humble pie in recent years.
USA 🇺🇸
LendingClub Completes Standard Operating Agreement for New Bank. The company now has more autonomy and flexibility in how it runs the business and deploys capital, while it continues to work closely with regulators.
NYC $53 million pilot program to make pre-paid credit cards accessible for migrant families. As per reports by The Post, the NYC pre-paid credit card pilot program is being run by New Jersey company Mobility Capital Finance.
City National Bank imposed with USD 65 million fine. The OCC mentioned that the fine was imposed because the financial institution was reportedly engaged in unsafe and unsound practices.
EY announces alliance with MoneyLion to help banks accelerate their digital transformation and extend financial services. The Alliance leverages MoneyLion's embedded finance platform to help enhance the technological capabilities of banking institutions.
Bunq is planning to reapply shortly after it withdrew its US application on January 30th. Bunq’s latest step in the application process is merely procedural.
Chase Makes Multi-Billion Dollar Investment in its Branch Network. Chase announced that it will open more than 500 new branches, renovate approximately 1,700 locations and hire 3,500 employees over the next three years.
Fiserv CEO details special bank charter pursuit. Fiserv is pursuing a merchant acquirer limited purpose bank charter in Georgia.
JPMorgan Chase dominates AI research in banking. The figures suggest that the banking giant has steadily increased its share of AI research output from 30% in 2018 to 45% in 2023.
LATAM
Mexico-based neobank Hey has announced that it will go independent from Banregio by year 2025. The goal is to complete this extensive process within 2024, aiming for a late December 2024 or early 2025 operational launch as an independent entity.
Nubank has laid out ambitions to be Latin America’s biggest financial services group as the $44bn-valued digital lender is predicted to hit the milestone of $1bn in annual profits. The company has also announced the launch of Tap to Pay on iPhone for its three million SME customers in Brazil.
Mercado Pago explores becoming a bank in Mexico. The firm also provides aggregator services (via MP Agregador) and financing (via Mercado Crédito). All this has allowed fintech users to access more products than a traditional IFPE can offer.
Brazil Digital Bank Inter&Co Beats Profit Forecasts in Fourth Quarter. The bank, which counts Japanese technology investor Softbank among its main shareholders, posted a net profit of 160 million reais ($32.2 million).
RapiCredit granted more than 3M loans in almost 10 years of operation, impacting more than 590 thousand customers.
ASIA
Youth-focused neobanking startup Muvin has reportedly shut its operations. Muvin app said, “muvin card program has been closed. Any available balance is being migrated to issuer Livquik app.
Advanced Info Service (AIS) is in talks with PTT Oil and Retail Business (OR) and a digital platform provider on a potential partnership to apply for a virtual bank licence from the Bank of Thailand.
Mastercard collaborates with the Egyptian Banks Company on digital payments. The collaboration marks a significant step towards fostering sustainable economic growth activities, further enhancing the digital payments.
Paytm Sets Up Advisory Panel On Compliance, Regulatory Matters. Fintech firm One97 Communications, which owns Paytm brand, on Friday announced setting up of a group advisory committee headed by former Sebi Chairman M Damodaran.
AUSTRALIA 🇦🇺
Westpac turns to Dancerace to simplify invoice finance operations. The upgrade is expected to simplify and streamline Westpac's entire lending process from application to approval and settlement.
Revolut is set to introduce credit cards and expand unsecured lending in Australia. responding to the increasing reliance on debt by households facing rising living costs.
MOVERS AND SHAKERS
Santander appoints Petri Nikkilä as new global CEO of Openbank. Petri is an excellent addition and brings a deep knowledge of financial services and a broad strategic vision in the consumer sector.
Building leadership team to transform financial services for Canadians. Saba El-Hilo has joined Neo as Vice President, Software Engineering, bringing a track record of innovation, leading technical strategy, and building high-performing teams.
Revolut partner leaves for publicly traded rival. Aaron Elliott-Gross joins Wise as global director of product compliance in London, leading "the first line product compliance function."
Alba Bank CEO steps down. Jonathan Thompson, currently chief commercial officer, will take the role of acting CEO. Before joining Alba, Thompson was CEO and co-founder of Bank North.