Digital Banking Weekly | 2021 #3
Founder Tom Blomfield is departing Monzo entirely at the end of the month...
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From February 2021 (next week!) this weekly digital banking update will only be sent to paid subscribers.
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Now on to this weeks news overview:
Arguably, the biggest leap in terms of tech adoption during the pandemic was seen by SMEs. Tomer Guriel's article for Fintech Futures provides deep insights as to the road ahead for them.
After a year that’s been disrupted by COVID-19, Guriel, CEO of ezbob, has identified three key trends that will shape the evolution of SME banking in 2021:
"1. The pandemic has accelerated digital transformation in banks’ lending platforms, with more now using advanced technology for onboarding and loan management.
2. The much-publicised government lending programmes have enabled banks to establish new relationships with many SMEs. The challenge now is how to deepen these relationships to drive profitability.
3. Open banking will continue to be further embraced by financial institutions and their customers."
Written in Q&A format, this engaging article covers banking trends for the upcoming year, SME lending post-COVID, and digital transformation at the core of corporate efficiency.
Read more here.
PODCAST
Our podcast recommendation of the week belongs to episode 380 of Bank On It and their interview with Justin Adler of NorthOne. In this episode the host John Siracusa chats remotely with Justin Adler, Co-founder & Chief Operating Officer of NorthOne. NorthOne is a mobile-first, API-enabled banking platform that serves the unique needs of small businesses, freelancers, and startups. Listen here.
NOW, ON TO THE SUMMARY OF LAST WEEK'S DIGITAL BANKING SPACE
NEWS HIGHLIGHTS
Monzo Bank founder Tom Blomfield is departing the U.K. challenger bank entirely at the end of the month. In a brief but candid telephone interview Yahoo Finance, Blomfield also revealed that, as well as being unhappy during the last couple of years as CEO when the company scaled well beyond a "scrappy startup," the pandemic and subsequent lockdowns exasperated pressures placed on his own mental well-being. Link here.
INDUSTRY HIGHLIGHTS
⭐️ U.S. challenger banks recorded a user growth of 39.28% between 2019 and 2020. Link here.
⭐️ Two-thirds (66%) of Brits do not trust that they are safe to conduct all of their banking needs online. Link here.
⭐️ Want to co-invest alongside me in the most promising FinTechs? Join my Angel Investors Syndicate. Link here.
UNITED KINGDOM
HSBC will close 82 branches in the UK, Goldman Sachs mulls acquisitions to bulk up Marcus, and Quirk scoops £300,000 in pre-seed funding.
HSBC will close 82 branches in the UK this year as the Covid-19 pandemic accelerates the trend away from in-person banking and towards digital channels. The closures, which will leave HSBC with 511 UK branches, will take place between April and September, with the bank planning to avoid any redundancies by redeploying staff. Link here.
Also, HSBC UK and first direct have announced an increased cooling-off period to their gambling block feature, from 24 hours to 72 hours. The self-restriction tool, which prevents customers from being able to make gambling payments on their accounts after it’s switched on, will automatically decline any gambling transactions for three days, to help people control their urge to gamble. Link here.
Tandem Bank filed its 2019 annual financial results on 11 January, quoting “material uncertainty” around its continued business operation as losses continue to rise. First reported by The Block, results show the UK challenger lost £18.9 million in the 12 months to 31 December 2019. That’s up around 38%, from £13.7 million in 2018. Link here.
PensionBee, has launched a flexible product for self-employed consumers, enabling them to start a new pension with no minimum contributions. From today, self-employed consumers wanting to join PensionBee will have the option to start a brand-new pension by setting up a contribution as part of their sign up. Link here.
Revolut is offering its UK savers with USD balances a new option to park their cash in an Investec-powered savings account. The USD Saving Vault comes with interest rates of between 0.40 percent and 0.65 percent, depending on the customer’s Revolut subscription plan. Until now, UK savers with GBP balances have been able to earn between 0.20 and 0.40 percent depending on their Revolut subscription. Link here.
Also, insurance giant Chubb has teamed up with Revolut to offer a broader range of insurance to Revolut’scustomers. Chubb will offer Revolut customers insurance products like purchase protection, refund protection, and ticket cancellation when a Revolut card is used. Link here.
New FinTech on the block Quirk has scooped £300,000 in pre-seed funding for its unusual personality-based financial advice app. The round was led by SFC Capital, and also included participation from angel investors. With the help of psychologists, Quirk uses behavioral research to deliver bespoke financial advice and insights into customers’ spending habits. Link here.
Goldman Sachs is mulling acquisitions to bulk up its UK-based digital savings and lending service Marcus. One area of interest is digital banking businesses which will bring in either new customers or unique technology. A source says the bank believes online activity will be central to future growth. Link here.
EUROPE
UniCredit's mobile banking app available in Slovenia, Aion Bank signs a deal with Form3, and Northmill introduces its third savings account.
The enhanced version of UniCredit’s mobile banking app, now available in Slovenia. The app will harness Meniga’s cutting-edge personal finance management solution and market-leading data management technology to improve the digital user experience of UniCredit customers across Slovenia. Link here.
Aion Bank has signed a deal with Form3 for its real-time payment processing, clearing and settlement services. Form3 will run the Belgian bank’s real-time payment processing via “a simple application programming interface (API) integration”, common across all payment types. The two have already worked to enable the latter’s participation in SEPA Instant, SEPA Credit Transfer, and SEPA Direct Debit. Link here.
The neobank Northmill Bank, which has the vision to improve people’s financial life, launches a new 24 months fixed-rate savings account with a 1.35 % annual interest rate and state-provided deposit insurance up to SEK 1,050,000. The introduction of the neobank’s third savings account takes place almost exactly one year after the launch of the first one, and just two months following the membership in RIX, the Swedish Central Bank’s payment system. Link here.
Crypto-broker Bitpanda is taking pre-orders for a new Visa debit card that combines all assets like cryptocurrencies, fiat and precious metals into one card in real-time. The card is linked to any asset in a user's Bitpanda portfolio, allowing the cardholder to switch the linked asset at any time via a mobile app and to shop online and in stores worldwide. Link here.
Banking service provider Temenos announced 60 challenger banks around the world now use its technology to power their services. Its customers range from Alba in Glasgow to Banco del Sol in Argentina and Varo Bank in the US, as well as Alpian, Flowe, FlowBank, Lunar, Next Commercial Bank, Pepper, WeLab Bank. Link here.
Also, Temenos has redesigned its Temenos Enterprise Solution to bridge the gap between banks and smaller, more agile fintechs. Temenos Enterprise Solution helps banks to design, manage and price products and services at a more competitive rate, speeding up the time it takes for customers to start using them and helping to lower costs. Link here.
Nordic API Gateway signs Svea Finland for account-to-account payments. As the EU directive, PSD2, is set to simplify the payment ecosystem across Europe, payment service providers are starting to look into the opportunities of providing new account-to-account payments to let merchants initiate instant payments from the customers’ bank account to the merchants’ bank account. Link here.
Digital bank N26 announced that it would be expanding its Allianz Assistance travel insurance included with N26 You, N26 Business You, N26 Metal and N26 Business Metal to cover epidemic and pandemic related claims. The announcement is the latest update that the Mobile Bank has accelerated to market to help customers bank and live more confidently in uncertain times. Link here.
UNITED STATES
Cryptocurrency exchange Gemini might go public in the foreseeable future amid the growing interest in cryptocurrencies. In an interview, Gemini's Co-Founder and President, Cameron Winklevoss, says the company is considering going public and making sure that it has that option. Link here.
Brigit, a New York-based personal finance management (PFM) app, has finally revealed the value of its Series A round. First reported by the Wall Street Journal back in May 2019, the outlet speculated the round valued the fintech at around $150 million. In an interview with Forbes this month, co-founder, Zuben Mathews, revealed that the value of the round was $35 million, and said it closed “in early 2020”, roughly a year after WSJ’s report. Link here.
CANADA
Chime’s new Vancouver outpost is currently home to 20 employees (fully remote during COVID-19) from their engineering team and they hope to have 100 by the end of 2021. The new office, Chime’s first outside of the United States and third overall, is being led by Engineering Manager Steve Mynett. Mynett has spent time at Hootsuite, Unbounce, and most recently Dapper Labs. Link here.
Mogo, a digital payments and financial technology company empowering the next generation of consumers, announced that their first-of-its-kind bitcoin rewards program has been extended to include the Mogo Visa Platinum Prepaid Card, or MogoCard, and digital spending account. Beginning this month, members will earn 1% bitcoin cashback rewards for every purchase made on their MogoCard. Link here.
LATAM
Belvo has developed a new solution that allows credit lenders in Latin America to get a real picture of their clients' income. The solution uses Belvo's API to access customer data, then aggregates and enriches this information using data science techniques to identify account movements that correspond to income with up to 90% reliability. Link here.
AUSTRALIA
The Douugh Limited share price remains suspended today as the company released a response to an ASX query regarding potential breaches of its recent acquisition of Goodments. This is now the fourth week that shares in the tech minnow have been suspended. As such, the Douugh share price remains static at 17 cents. Link here.
ASIA
Revolut targets a million local customers in Asia-Pacific push. Revolut foresees a spate of growth opportunities across the Asia-Pacific region, including Australia, where it believes consumers are underserved and paying “exorbitant foreign exchange fees”. Link here.
Tide announced its first steps to expand internationally, as it plans to launch in India in the first quarter of 2021. Tide selected India as its first international market due to the considerable commercial opportunities available. With over 63 million SMEs in India – nearly one in 10 of all SMEs in the world – these digitally savvy companies are vital to the Indian economy but are underserved by the banks. Link here.
Grab Financial Group (GFG), Southeast Asia (SEA)’s leading FinTech platform, announced it has raised over US$300 million in its Series A funding round, led by Hanwha Asset Management Co., Ltd., South Korea’s leading asset management company. The Series A financing marks the next step in GFG’s growth as its total revenues increased by over 40% in 2020 vs 2019, amidst key milestone developments. Link here.
MOVERS AND SHAKERS:
Santander UK announced the appointment of Rakshit Kapoor as Chief Data Officer for Santander UK and Head of Data Transformation for Europe. In his UK role, Rakshit will be responsible for developing Santander’s data strategy, organisation, operating model, technology and governance. This will include leading the creation of a data and analytics centre of excellence. Link here.
Moven announced the expansion of its executive leadership team with the naming of Bryan Clagett as Chief Revenue Officer. With Mr. Clagett’s appointment, the company is poised to continue its hyper-growth, particularly in the US. Link here.
Ziglu, the personal money app and fully FCA authorised Electronic Money Institution, has announced the appointment of Daniel Sale as Marketing Director. Daniel brings a wealth of experience as a senior marketer at fintech and financial services firms, driving growth in companies. Link here.
Investment firm ADQ has found a CEO for its planned neobank in former EmiratesNBD man Jayesh Patel. Patel arrived at the as-yet-unnamed bank in December 2020. His new firm has plenty of cash backing it, with ADQ stumping up as much as $545 million. Patel spent nine years at Emirates NBD. 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
marcelvanoost.com