Digital Banking Weekly | 2021 #33
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!
ARTICLE
The percentage of Millennials (consumers 26 to 40 years old) who call Bank of America checking account their primary account declined from 22% in October 2020 to just 13% in July 2021.
The megabank also lost market share of primary status among Gen Xers (ages 41 to 55), dropping from 18% to 10% over that same time period.
👉 Read more here.
REPORT
The Paycheck Protection Program doled out cash to help businesses stay afloat amid the Covid-19 pandemic. CBINSIGHTS looked at how many have since exited, raised rounds, and became unicorns
👉 Read more here.
PODCAST
Speaking to Mortgage Business director Alex Whitlock for the Mortgage & Finance Leader podcast, Volt Bank founder and CEO Steve Weston outlined the journey of the bank. Volt Bank was Australia’s first neobank to gain a RADI and has been rapidly growing ahead of its digital mortgage solution launch, distributed through brokers.
👉 Read more here.
SURVEY
Banking can be a minefield for consumers, but the Competitions and Market Authority (CMA) has published its latest survey results for the best personal and business banking providers in the UK.
Digital banks have performed equally as strongly in both the business and personal banking categories, with Starling topping the SME banking table and Monzo coming in first for overall best personal banking experience.
👉 Read more here.
NOW, ON TO THE SUMMARY OF LAST WEEK'S DIGITAL BANKING SPACE
NEWS HIGHLIGHT
MoneyLion Inc. announced preliminary financial results for the second quarter ended June 30, 2021.
Second Quarter 2021 Highlights:
Net revenue increased 122% to $37.7 million, compared to $17.0 million in Q2 2020, while adjusted revenue increased 117%, reaching $36.9 million, compared to $17.0 million in Q2 2020
Contribution profit1 increased to $22.3 million, compared to $8.7 million in Q2 2020
Total customers grew 113% to 2.2 million, compared to 1.0 million in Q2 2020
👉 Read more here.
INDUSTRY HIGHLIGHTS
⭐️ Nerve announces the first neobank created specifically for musicians. Link here.
⭐️ Britain’s big banks have taken an “early step” toward providing permanent shared local branches, as lenders come under increasing political and regulatory pressure to help preserve access to cash for older and more vulnerable customers. Link here.
⭐️ Revolut has turned over 70 employees into millionaires. Link here.
UNITED KINGDOM
Glory has unveiled plans to invest in Scottish fintech OneBanks as part of a Series A funding round, supporting its ambition to become a leading player in the provision of everyday banking services. Link here.
Ziglu is advising cryptocurrency investors to plan for the long-term as valuations recover across the market following the recent sell-off. Bitcoin prices have climbed more than 40% in the past month with other cryptocurrencies including Ether, Litecoin and Dogecoin also recording strong gains, while remaining on the whole well below previous record highs. Link here.
Revolut is releasing a new product to help customers access up to 50 percent of their salaries just a day after the next pay cycle has begun. Called ‘Payday’, the feature is cost-free for employers and only available to eligible customers across the UK, with the EEA and US to follow shortly after. Link here.
Challenger Bank GBB has secured a further investment of £28m from its cornerstone investor the Teesside Pension Fund. The new bank, which has pledged to get the UK and its regions building again, secured the investment in top of previous pledges totalling £20m from the fund, to be made when GBB obtains its provisional banking licence expected later this year. Link here.
ANNA Money, the business account and tax app for small businesses, has announced it is working with Currencycloud, the experts simplifying business in a multi-currency world, to enhance its international banking solution for entrepreneurs and small businesses. Link here.
iSpent19 has launched in a bid to elevate personalisation in money management through its new money management App. The UK fintech underlined following its launch that money management is a personal matter, which not only requires the ‘me’ approach when dealing with bank transactions but should also offer people an opportunity to interact with friends and loved ones through its transaction sharing feature. Link here.
Property finance asset manager LendInvest has announced a £150m lending collaboration with two of Britain’s biggest banks, just weeks after its £255m IPO on London’s AIM index. The new tie-up is geared towards financing UK property entrepreneurs and will see the British banks provide funding for short-term mortgages through LendInvest’s digital platform. Link here.
UK startup Hapi has launched an app designed to help parents plan and invest for their children's future. Through the app, parents can open a Junior stocks & shares ISA or a general investment account to help them plan and afford future expenses such as university fees, school fees and first home deposits. Link here.
Kroo, a UK-based neobank, has received a UK banking licence with restrictions from the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA). The authorisation’s restrictions mean that Kroo, which plans to launch in 2022 can accept deposits up to £50,000 in total in the near term. Link here.
Scallop is on the verge of completing its $2.5 million seed funding round led by BlackEdge Capital. The funding round has also attracted investments from several institutional and angel investors, including X21 Digital. Link here.
EUROPE
kompasbank, a Denmark-based challenger bank for SMEs, has gone live on Mambu’s SaaS banking platform. According to kompasbank, SMEs in Denmark represent about 99% of all companies, so the company tries to fill a gap in the financial market, where small and medium-sized businesses suffer from poor access to financing options and advisory services. Link here.
An Post, which is targeting a push into the mortgage market next year, has further extended its financial services offering with the launch of an app for its An Post Money brand and a current account for people aged between seven and 15. An Post Retail head Debbie Byrne said the app and the kids’ account products were “industry leading”. Link here.
US
Moneyworld raises 2M USD seed round. Moneyworld is a mix between a video game and digital banking — and brings fun, prizes, and a sense of community to the usually lonely act of saving towards a goal. Link here.
Varo Bank will make several updates to its small-dollar loan offering, Varo Advance, that range from changing the fees charged to revamped underwriting for borrowers. The US neobank said that they would kick in on October 1, 2021. Link here.
One, a startup that aims to bring “all-in-one banking” to the middle class, announced today that it has raised $40 million in a Series B round of funding. The financing brings One’s total raised since its 2019 inception to $66 million. Link here.
The Charlie Finance Co. team is joining Chime. Charlie Finance's talented group, whose mission is aligned with Chime’s, will continue working on new and better ways to provide people more control over their financial lives. Link here.
Aspiration Partners, one of the first challenger banks to focus on the environment, is going public. Los Angeles-based Aspiration is merging with InterPrivate III Financial Partners Inc., a special-purpose acquisition company, in a deal valued at $2.3 billion. Link here.
W1TTY, a smart finance innovator set to launch this fall, aims to offer customers a clear choice in how they manage their money with hyper-personalized products and services. Running on Oracle Cloud Infrastructure (OCI), W1TTY will use Oracle Banking suite to deliver an easier and more rewarding financial experience for customers. W1TTY is designed to appeal to everyone dissatisfied with what banks are currently offering. The company is initially targeting Generation Z, students, and other young people starting their first jobs and building their careers. Link here.
OCEANIA
After the first wave of neobanks went on to mixed success, the Australian regulator has its eye firmly planted on the next generation of challengers. Last week, APRA announced new requirements for what it expects to see when issuing new unrestricted banking licenses, the final hurdle for a new digital bank to begin operations in Australia. Link here.
One month after receiving its restricted banking license (RADI), FinTech Alex Bank is poised to close a $20 million Series C capital raise. It’s understood that existing investors have taken out a large portion of the raise. Link here.
On August 16, just after Up announced it had grown to 400,000 customers in only three years, Up co-founders and Ferocia owners Dom Pym and Grant Thomas announced the successful sale of Ferocia to Bendigo Bank, and the appointment of Xavier Shay as Up’s new CEO. Link here.
LATAM
Angel Sahagun Fernandez is now on his third company, and it has already raised tens of millions of dollars to completely disrupt a major industry. On the DealMakers Show, Sahagun shared his journey through several startups. Including how his third venture has managed to gain 40% market share in a major industry in just a few years. Link here.
Almost a year after buying Easynvest, Nubank is leaving behind the brokerage firm's brand and changing its name to Nu Invest - another step in integrating the two companies and the fintech's investment strategy. Link here.
AFRICA
Carbon Microfinance Bank, a fast-growing FinTech company with a presence in Nigeria, Kenya, and Ghana, has launched debit cards to its Nigerian customers. Since announcing its partnership with Visa, Carbon has attracted a waitlist of thousands of Nigerian users excited to get a hold of the new debit card and access the many features the bank has to offer. Link here.
ASIA
When Razer announced last week it was suspending its e-wallet service Razer Pay, one cannot help but wonder if that was the case. When contacted, Razer Fintech’s CEO LiMeng Lee noted that the “Razer Pay e-wallet app was concepted as a testbed for Razer Fintech to better understand the e-wallet and scheme card ecosystem in Singapore and Malaysia.” Link here.
South African digital bank TymeBank will export its business concept and experience to its international sister company Tyme’s newly established banking operations, GOtyme, in the Philippines. Link here.
Tonik, the Philippines' first private neobank operating under its own digital bank license by the Bangko Sentral ng Pilipinas (BSP), has launched the physical debit cards for clients of its mobile app. Tonik customers can now order physical debit cards through the app, and use these cards at any ATM or merchant that is part of Mastercard's global network, which includes the majority of the ATMs and card-accepting merchants in the Philippines. Link here.
Azentio Software has agreed to acquire “certain software assets” from Islamic core banking vendor Path Solutions. The deal includes the firm’s flagship iMAL, iShraq, Path Digital, and Path Analytics platforms. Azentio says the deal, the figure of which is undisclosed, will strengthen its banking portfolio. Link here.
MIDDLE EAST
The National Bank of Bahrain launches the Digital Banking Challenge in strategic partnership with Bahrain FinTech Bay; one of MENA’s largest FinTech Hubs open for all Bahraini youth to develop new and creative solutions focused on NBB's new digital banking app. Link here.
MOVERS AND SHAKERS:
Starling Bank has just added a 13th member to its executive team, appointing Damian Thompson into the newly-created role of chief asset management officer. In his new role, Thompson will be responsible for looking after Starling’s activities around acquiring and managing loan assets. Link here.
Uncapped, a London-based start-up changing the way online companies fund their growth, marketing and inventory costs, announced the appointment of Vaidas Adomauskas as Chief Product Officer. Link here.
Experienced technology leader Xavier Shay has been appointed CEO of Up, to spearhead the next phase of growth. Xavier has a deep understanding of both financial technology and industry disruption. Link here.
UK-headquartered challenger bank, Kuda, has unveiled the design of its new Lagos office, created by renowned interior designer, Spazio Ideale. Founded in 2019 by Babs Ogundeyi and musty Mustapha, the startup is the challenger bank for Africa, making banking accessible, affordable, and rewarding for all Africans on the planet. Link here.
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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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