Digital Banking Weekly | 2021 #21
Hi, there! Welcome back to another Digital Banking Weekly Newsletter. In this newsletter, I cover all the major weekly news related to digital banking around the world. The newsletter begins with recommended articles, reports, podcasts, interviews, etc. I then cover the news highlights for that week before diving into a regional breakdown. Thank you for subscribing!
PODCAST
Morten Sønderskov, Chief Operating Officer at Lunar chats to Ali Paterson about the background behind Lunar and their core underlying infrastructure.
👉 Listen here.
REPORT
Mambu released a study of 2,000 global consumers, revealing that both banked and unbanked individuals feel underserved, with 56% of banked customers claiming that there are other services they should be able to access.
The study found that, according to consumers, financial institutions aren’t taking the necessary steps to boost accessibility.
More than half of unbanked customers (65%) were less than pleased with their financial situation – even in the banked community.
One in four (25%) are not happy with their current level of understanding about their finances and options available to them.
👉 Read more here.
INFOGRAPHIC
The oldest Gen Zs are already entering the world of work and finance. Experts predict their collective earnings will make up more than a quarter of global income by 2030.
How can FinTechs attract this group of ‘digital natives’ while turning a profit? And in the battle for Gen Z’s hearts (and wallets), who will win — the incumbents or the FinTechs?
Sifted had put these questions to the experts in their latest Sifted Talk, including: Stephen Ritter, CTO at digital identification company Mitek; Louise Hill, cofounder and COO of gohenry, a banking app for under 18s; and Maisum Dairkee, product owner of neobank Revolut Junior.
👉 Read more here.
ARTICLE
In a new campaign launched by challenger Starling Bank the company wants to point out that women are not represented respectfully in terms of their depiction with money.
Anne Boden, founder and CEO of Starling Bank, said:
“We began our Make Money Equal campaign three years ago, looking at the discrepancy in the language used when women and men are spoken to about money in the media.”
This infantilisation is most evident in images of women enthusiastically placing their money in, or even hugging, piggy banks or savings jars (in 24% of images of women, compared to 8% for men).
👉 Read more here.
NOW, ON TO THE SUMMARY OF LAST WEEK'S DIGITAL BANKING SPACE
NEWS HIGHLIGHT
Continued federal prohibition has kept the US cannabis industry in an uncertain position: heavily reliant on cash and with uncertain prospects for banking partners.
Much of the compliance challenges are due to the unique position that the cannabis industry continues to find itself in; while it’s legal in 16 states, with medical usage legal in 36, it remains illegal on a federal level.
Furthermore, guidance has not been particularly clear on how safe it is for banks looking to get involved as partners. Banking legislation through Congress continues to merit discussion, but the likelihood of a bill passing remains uncertain.
👉 Read more here.
INDUSTRY HIGHLIGHTS
⭐️ Tiv, a payments platform for gamers, emerged from stealth this week, announcing a $3.5 million seed round led by 4490 Ventures. Link here.
⭐️ Hong Kong’s virtual banks are facing years of red ink on the bottom line after making limited inroads against their brick-and-mortar rivals in the financial hub. Link here.
⭐️ For the past decade, the notion of divergence has dominated the banking sector in the UK. Link here.
UNITED KINGDOM
The Advertising Standards Agency (ASA) upheld its ruling and concluded that there was no evidence to support Lanistar’s claims of being the “world’s most secure payment card”. Link here.
Starling Bank announced this week it secured a £50 million investment from Goldman Sachs Growth Equity. According to Starling Bank, the investment is an extension of the oversubscribed £272 million Series D funding round announced in March 2021, which valued it in excess of £1.1 billion pre-money valuation. Link here.
EUROPE
Lunar has added another feature to its ever-growing product offering, it just launched its first corporate credit card to help entrepreneurs and businesses simplify spending. Lunar’s new card marries its existing business banking services with better cash flow management tools to allow businesses to see all their finances in one place. Link here.
neon has unveiled a sustainable account for everyday banking, backed by certified CO2 compensation from myclimate and a pledge to plant five trees per user, per month. Link here.
Temenos, the banking software company, is accelerating its leadership in the cloud by introducing the next-generation in SaaS, The Temenos Banking Cloud. Link here.
Paysend has closed a round of $125 million, a sizable Series B that the company’s CEO and founder Ronald Millar said it will be using both to continue expanding its business geographically, to hire more people, and to continue building more fintech products. Link here.
deineStudienfinanzierung platform has reached profitability after investment from finleap, Europe's leading FinTech ecosystem, and announces its new financial platform for Generation Z. Link here.
US
Stash is exploring options for a market listing, such as merging with a special purpose acquisition company or a traditional initial public offering, according to people with knowledge of the matter. Link here.
Social Finance, Inc., and Social Capital Hedosophia Holdings Corp. V, a publicly traded special purpose acquisition company, completed their previously announced transaction to take SoFi public. The combined company is expected to start trading on Nasdaq on June 1, 2021 under the new ticker symbol “SOFI” for SoFi common stock and “SOFIW” for SoFi warrants. Link here.
Aspiration, a financial technology company that’s gained the backing of high-profile actors, is laying the groundwork for a public listing. The Los Angeles-based firm may seek to go public through a traditional initial public offering or another route, according to a person familiar with the matter, asking not to be identified discussing the firm’s plans. Link here.
NorthOne has joined forces with The Bancorp Bank to provide banking services to NorthOne customers, and with Galileo Financial Technologies to bring new and improved processing services to customers. Link here.
Agora Services - What's in Your Core?, the challenger bank technology platform for community banks and credit unions, announced that it has partnered with i2c Inc., a leading global provider of digital payment and open banking technology, to provide modern digital first issuing and processing. Link here.
Mission Lane, a purpose-driven financial technology company, announced the acquisition of Honeydue (incorporated as WalletIQ), a financial technology company providing digital applications and banking services to help consumers manage their finances and develop stronger financial literacy and habits. Link here.
Wicket by Paybby, a challenger bank offering services targeted toward Black and Brown communities, plans to launch cryptocurrency investing on its platform this summer. Link here.
Zopa has launched its first major advertising campaign since gaining its full banking licence last summer. The FinTech is hoping to show UK customers how it has broken down barriers in the banking industry and bring more customer-centric banking to the market. Link here.
Banking tech startup Zeta Suite has achieved unicorn status after scooping a $250 million investment from SoftBank. The Series C investment values Zeta - which offers a modern mult-stack platform to replace legacy software at banks - at $1.45 billion. Link here.
MIDDLE EAST
First Digital Bank, controlled by veteran entrepreneur Amnon Shashua, is aiming to raise $100 million from foreign investors at a valuation of several hundreds of millions of dollars. Link here.
MOVERS AND SHAKERS:
The co-founder and CEO Tandem Bank, Ricky Knox, is to be replaced by former Credit Suisse executive, Susie Aliker. Link here.
Also, Tandem’s General Counsel Ed Freeman, said the board had agreed that Knox — who founded Tandem in 2014 — would “step down”. However, it then described the move as a “loss of office” and said Knox was seeking “certain payments” and benefits to compensate. Link here.
Zopa has become the latest fintech to play their hand with a new policy for the rest of 2021 allowing employees to work wherever they like, including from abroad for 90 days. Link here.
GBB, a new bank targeting SME property developers in underserved UK regions, has appointed industry veteran Sue Hayes as CEO. Hayes joins as CEO (subject to regulatory approval) to lead GBB through the process of becoming a fully-licenced bank after more than three decades in the business. Link here.
This ends my weekly digital banking newsletter. Thank you for reading to the end! If you liked it, I invite you to like, share and/or leave a comment below. You may also subscribe here.
Let me know if there are any questions or news/insights worth mentioning in next week's newsletter. Until the next!
Regards,
Marcel van Oost