Digital Banking Weekly | 2021 #30
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!
REPORT
71% of British digital bank customers would be highly interested in receiving embedded insurance offers based on their transaction data, as would 64% of traditional bank customers.
A recent survey of 527 bank customers in the United Kingdom from Momentive.ai, commissioned by Cover Genius, sought to understand how customers of banks, neobanks, and other fintech apps would react to embedded insurance offers based on real-time transaction data.
👉 Read more here.
PODCAST
The podcast recommendation of the week belongs to Episode 68 of the Digital Commerce Alliance: Are Big Banks Really Healthy?
👉 Read more here.
NOW, ON TO THE SUMMARY OF LAST WEEK'S DIGITAL BANKING SPACE
NEWS HIGHLIGHT
Digital bank Monzo Bank saw £114m in pre-tax losses last year according to the company’s annual report for 2020–2021. The company saw a similar loss rate last year but insisted it would be profitable by 2022. Revenues grew 18% to £66m.
The filings also revealed that Monzo’s accountants had “material uncertainty” over the company’s future, following on from last year’s warning, which posted “significant doubt” on its ability to continue.
👉 Read more here.
INDUSTRY HIGHLIGHTS
⭐️ Anne Boden, the CEO of British fintech start-up Starling Bank, is worried about cryptocurrencies. Link here.
⭐️ Monzo Bank's biggest investor has reduced its stake in the digital bank. Link here.
⭐️ JPMorgan Chase & Co. Morgan’s secretive UK bank project — and its upcoming launch: The Chase UK project has been shrouded in mystery. Sifted has the latest on its plan of action, product exclusives, and its exec team. Link here.
UNITED KINGDOM
For the first quarter of 2021 Starling Bank was the most switched-to UK bank, marking the 4th quarter in a row that Starling has been among the top two according to the Current Account Switch Service (CASS). Link here.
Also, Starling Bank announced the acquisition of specialist buy-to-let mortgage lender Fleet Mortgages in a £50 million cash and share deal. Fleet Mortgages focuses on providing mortgages to professional and semi-professional buy-to-let landlords, only via mortgage adviser distribution channels. Link here.
Varo Bank has selected financial crime investigation firm Quantifind’s Graphyte platform to optimize its adverse media screening and investigations automation performance. Link here.
Zopa has hired J.P. Morgan to advise on a £100 million funding round. Investors who have been approached about the raise told Sky News that Zopa was targeting a post-money valuation in excess of £500m. Link here.
Mastercard and Lloyds Banking Group Commercial Banking have partnered to deliver a new Open Banking payment solution to Lloyds Bank’s business clients. here.
Also, looking to overhaul its famously tech-unsavvy Scottish Widows retirement savings arm as well as its investment offering, Lloyds Banking Group snapped up fast-growing digital wealth group Embark. Link here.
Tesco Bank is to close all of its personal and business current accounts at the end of November after it found that the vast majority of its customers were not using it for their main account. Link here.
Alif announced plans to establish a presence in the UK in August. With its head office in Tajikistan, Alif will use this expansion to grow its investor network and pursue new business development opportunities in the UK and Europe. Link here.
Earlier this month, the team at Atom bank reported reaching a key milestone: £3 billion in residential mortgage lending. Hitting this number “represents an important step for our bank, and gives us a real sense of progress as we continue helping more to buy, move, or remortgage,” according to a blog post recently published by Atom Bank. Link here.
Challenger bank Metro Bank booked a first-half loss, pinned on impairment and remediation costs following asset sales, as it grinds on with a turnaround plan. Pre-tax losses for the six months through June amounted to £138.9 million, compared to year-on-year losses of £240.6 million. Link here.
A new lender is seeking a license in Gibraltar with plans to become the overseas territory’s first digital merchant bank. Greengage says it will focus on two underserved business segments in UK small businesses and cryptocurrency firms. Link here.
EUROPE
Solarisbank AG raised €190 million ($224 million) in a Series D that values the company at €1.4 billion ($1.65 billion) and announced the acquisition of one of its competitors in the space, Contis. Link here.
Mambu unveiled a fully digital solution for SME lenders that cuts costs and time to market. The platform not only provides banks and fintechs with robust, scalable loan management technology but also easy access to an ecosystem of partners such as web-based identity authentication, credit checks, and loan origination. Link here.
US
The Financial Brand - Ideas & Insights for Financial Marketers introduced the Neobank Tracker — powered by Nymbus — in mid-April 2021 as the first public database of neobanks, challenger banks, digital-only banks, direct banks, and FinTechs offering direct-to-market solutions. It proved to be incredibly popular. Link here.
Greenlight® Financial Technology, Inc., the fintech company on a mission to help parents raise financially smart kids, announced the launch of two new savings incentives: 1% Cash Back to Savings and 2% Greenlight Savings Reward. Link here.
Fiserv Inc., a leading global provider of payments and financial services technology solutions, introduced enhanced Fiserv Digital capabilities for integrated digital banking and card management. Link here.
M1 Finance, the Finance Super App offering automated investing, borrowing, and banking products, launched the Owner’s Rewards Card by M1. Keeping with M1's vision for a single integrated money management tool, the Owner’s Rewards Card by M1 brings all elements of a card holder's finances together in one place, while helping those cardholders grow and maximize their wealth with everyday transactions. Link here.
As part of its vision to deliver comprehensive money management capabilities through a single platform, Unifimoney integrated Atomic’s market-leading payroll connectivity solution into its offering. Link here.
Landis, a startup that uses technology and data science to help renters reach homeownership, announced the close of $165 million in debt and Series A equity financing. Link here.
Fardows, a US-based Halal Islamic Neo Bank, has officially launched its waitlist to consumers nationwide. Fardows was started to meet the growing consumer and business demand for halal loans, halal banking, and other halal financial services. Link here.
Revolut is simplifying cross-border payments between the US and Mexico with the launch of its US-Mexico remittance corridor. With this launch, Revolut customers in the US and Mexico can now easily transfer money between one another without any hidden fees, at the real exchange rate. Link here.
CANADA
Equitable Bank, announced that it has received approval from Canada Mortgage and Housing Corporation to launch a CAD $2.0 billion legislative covered bond program in accordance with the Canadian Registered Covered Bond Programs Guide, published by CMHC. Link here.
Angel Oak has announced its intention to purchase Canadian start-up Covience, a deal that will grow Angel Oak’s global footprint. The acquisition, expected to happen next month, is part of the mortgage lender’s strategy to enhance its digital capabilities in the US while expanding its global presence. Link here.
AUSTRALIA
Airwallex launched its online card payments solution in Australia, strengthening its capability to provide end-to-end financial products and services for businesses looking to grow without borders. Link here.
Challengers to Australia’s big banks have accused the major lenders of being too cautious towards cryptocurrencies and stifling innovation by denying the fintech sector vital services. As financial services face a wave of disruption, a Senate inquiry has put the spotlight on simmering tensions over “de-banking,” where fintechs that compete with banks are denied core banking services due to regulatory concerns. Link here.
NAB Ventures, Grok Ventures, and Perennial Value Management have all backed children-focused FinTech Spriggy in a $35 million Series B round. Spriggy is a mobile app fitted out with a prepaid card for digital ‘pocket money’ that aims to help children learn the concepts of digital money and financial responsibility. Link here.
Judo Bank is considering listing on the Australian stock exchange this year via an initial public offering that would seek to raise about A$350 million ($258 million), sources told Thomson Reuters. Link here.
LATAM
Nubank released a new interface for its application. With the aim of making everyday life uncomplicated and making it easier to access information in the app, the new design promises to be more practical and intuitive. Link here.
The virtual bank has launched several services since the beginning of this year. Also, Nubank began offering an international remittance service in partnership with the Brazilian platform Remessa Online powered by Beetech. Link here.
Mexico City-based Vexi. Tarjeta de Crédito aims to serve underbanked Mexicans with credit cards and a mobile app for managing transactions and budgeting. A $500,000 debt investment from Pomona Capital comes as Vexi prepares to launch a new American Express card for “buy now, pay later” promotions, said Vexi’s Gustavo Rojo Blasquez. Link here.
ASIA
YES BANK may have to forgo the issuance of 100,000 new credit cards in three months. The private lender, which has an exclusive tie-up with Mastercard says the curb will not impact profitability. Link here.
UOB Malaysia announced the launch of a digital account opening service that enables customers to open a personal bank account anytime, anywhere via the bank’s UOB Mighty app. The bank said that its customers can now complete the onboarding process in just 10 minutes, reducing the average time it typically takes to open an account in person by up to 60 percent. Link here.
Bambu B2B Robo Advisor, a leading provider of robo-advisory technology solutions, and Moven Enterprise, the pioneering global digital banking platform, today announced a strategic partnership to help financial institutions deliver the next generation of digital wealth management solutions. Link here.
Gig workers-focused neo-banking platform Yelo has shut down operations as the company didn’t find product-market fit and manage to raise a follow-on round, said two people aware of the details. Link here.
The Bancorp announced its newly-established banking services partnership with New York-based leading challenger bank Current serving Americans working to create a better future for themselves. Link here.
As part of a digital transformation strategy, Fukuoka Financial Group (FFG), Japan’s largest regional financial group, decided to build a future banking system from scratch. As Japan’s ‘first digital bank’, Minna Bank’s services are designed to cater to the needs and sensibilities of digital natives – a segment traditionally underserved by the financial services industry. Link here.
Indonesia’s PT Bank Jago Tbk said it has recorded a 695% jump in loan disbursements from a year earlier. The digital bank, in which super app Gojek holds a 22% stake, said that it had disbursed loans worth 2.17 trillion rupiah (US$149.8 million) by the end of June 2021. Link here.
MOVERS AND SHAKERS:
GBB announced the appointment of Sue Hayes as its CEO. GBB will be a dedicated lender to SME property developers in key underserved UK regions, with a focus on regional property developers, initially in the North East, and will support the leveling up agenda and help get Britain building again. Link here.
Derek White, Galileo Financial Technologies' new CEO, is stepping into his new role at a really busy time for the banking-tech provider — and for fintech. He will be taking over from Clay Wilkes, Galileo's revered founder who has led the company for 21 years. Link here.
Revolut added Daniel Gosarevski as Head of Lending, bringing a wealth of experience in the Australian lending sector that has taken in stints at Citibank and HSBC, including working within their Consumer Lending department. Link here.
OakNorth Bank announced the strengthening of its Board of Directors by the new appointment of Carolyn Schuetz as a Non-Executive Director. Schuetz has over 30 years of experience in the global financial service and is a veteran with a track record for delivering large-scale transformational changes and creating new ventures. Link here.
Amsterdam-headquartered Backbase, a global leader in engagement banking platforms, has recently appointed Iman Ghodosi as Regional Vice President for the Asia Pacific region. The new role is based in Sydney and will see Ghodosi drive the company’s international expansion, product development, and Asia Pacific market growth. Link here.
A new core banking provider on the block, SaaScada, has appointed Paul Payne as its chief technology officer. Payne joins from hospitality platform provider IRIS Software Systems, where he spent five and a half years as joint CTO and chief operating officer. Link here.
Wirex, the leading payments platform, has hired Diana Carrasco-Vime as their first Non-Executive Director. The Head of Risk for Digital Channels at Lloyds Banking Group will bring her vast experience to help the company move to the next level as it endeavors to become the go-to digital payments platform for everyday users. Link here.
Mox Bank has appointed Haymans Fung as chief customer officer, effective from 4 August 2021. Fung replaces Peony Wu, who joined Accenture Interactive as managing director, marketing advisory lead for Greater China. 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
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