Digital Banking Weekly | 2021 #34
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!
INTERVIEW
This week’s interview recommendation belong’s to Efma and their Q&A with Jayden Hwang, a spokesperson at Kakaobank. Jayden explains how Kakaobank’s explosive growth from the very beginning set them on a path to an IPO in the near future.
The first priority of kakaobank is focusing on expanding market share in the domestic market where big commercial banks dominate.
kakaobank will look into a global expansion strategy after its planned IPO. We keep an eye on global neobanks such as Revolut, Chime, and Nubank to monitor up-to-date trends in the industry.
👉 Read more here.
REPORT
The State of Banking and Financial Wellness Report is a must read for the APAC region. Commissioned by Backbase, this Forrester study features the insights of 1K+ business decision-makers and retail-banking consumers.
Outdated technology is the top challenge that surveyed APAC financial services firms face when implementing or developing digital money management tools (67%).
A lack of skilled and knowledgeable staff causes uncertainty, and fear of failure prevents transformation initiatives from even starting.
👉 Read more here.
PODCAST
This week’s podcast recommendation belongs to Mambu and their industry-specific series: Architects of Change. Dive right in for some truly binge-worthy content.
👉 Read more here.
MVO’s CARD COLLECTION
Nubank and the pet products company Zee.Dog launched, a rubber card with the color and design of the digital bank made to be bitten by their customers’ pet dogs.
Called NuDog, the toy was created after more than 6,000 customers reported that their four-legged friends destroyed the magnetic cards.
The date chosen for the product launch was World Dog Day, celebrated on August 26th. According to Nubank, NuDog was developed to be the ideal card for pets to bite all they want.
👉 Read more here.
NOW, ON TO THE SUMMARY OF LAST WEEK'S DIGITAL BANKING SPACE
NEWS HIGHLIGHT
Check out Andreessen Horowitz’s article on credit unions. It asserts that credit unions are well-positioned to retain ownership of consumer experiences and offer new and better products.
And in the wake of COVID, as foot traffic to bank branches plummeted, credit unions have embraced digital experiences with a new sense of urgency. With a focus on tech and the right software tools, these long-tail banks have the opportunity to go from the providers of capital and regulatory “supply” to capture consumer “demand”—something that, to date, has been owned by fintechs.
👉 Read more here.
INDUSTRY HIGHLIGHTS
⭐️ Yolt Technology Services (YTS) published a report stating lenders could see the time they spend processing the average loan reduce by more than 85% with the adoption of Open Banking technology. Link here.
⭐️ Nerve CEO, John Waupsch, tells us more about how and why he started a neobank for musicians. Link here.
⭐️ Not one to make unfounded claims, Lanistar has reportedly hit one million pre-registered customers. Link here.
⭐️ A day after media reports about Bafin’s threats, N26 announced that it was making major changes to its management. Link here.
⭐️ Can digital challenger banks create a competitive edge? Link here.
UNITED KINGDOM
W1TTY has just secured a license from the Financial Conduct Authority (FCA) to roll out services in Britain early next year. Having secured an EMI license in Lithuania in January, as well as passporting rights across the European Economic Area (EEA), smart finance start-up, W1TTY, is now planning to launch its suite of products in the UK - targeting young people starting their first jobs and building their careers. Link here.
New research from Experian has revealed that bank account fraud is now tracking at its highest level for more than three years. Drawing on the latest data from the National Hunter Fraud Prevention Service, the analysis uncovered an alarming surge in fraudulent activity targeting British businesses and consumers. Link here.
Bank North - previously B-North - is set to begin operations as a regional SME lending bank in October after securing a restricted banking license from the Prudential Regulation Authority. The Manchester-based banking startup aims to disrupt the UK’s £150 billion SME lending market by establishing a network of regional ‘lending pods’ combined with a cloud-based banking system, with the aim of delivering loans to businesses 10x faster than the industry standard. Link here.
Digital savings and loans bank Atom bank has reported an underlying operating loss of £36 million for the year to end-March 2021, down from £46 million in the year prior. Link here.
New SME bank, Recognise Bank Limited, announced a successful £14 million capital raise, including fresh investment from one of its existing shareholders. Link here.
NatWest has developed an app called 'Housemate' that helps renters living in shared housing split and pay their bills. Using Experian's Open Banking platform, the app can track who owes each other money and could provide an easy way to repay instantly. NatWest also says the app could help renters build their history with Experian. Link here.
Also, NatWest and Mastercard have announced the extension of their Pay by Bank app (PbBa) for secure online payments to mobile app users across NatWest Group brands Royal Bank of Scotland, Ulster Bank and Coutts. Link here.
EUROPE
ICICI Bank Germany, a part of ICICI Bank, announced the launch of a digital and instant Blocked Account* for students aspiring to study in Germany. A Blocked Account* is a special type of account wherein students are required to keep a certain amount of money in order to get a Balance Confirmation Certificate (BCC), a mandatory requirement for a Student Visa in Germany. Link here.
Svea Ekonomi announced the acquisition of P.F.C. Together, they will build Generation Z's first choice among neobanks. Link here.
VTB Bank (Europe) SE has offered customers the opportunity to issue debit cards for children from 6 years old. Link here.
Penta raised an additional EUR 15 million of Series B venture funding in a deal led by ABN AMRO Ventures on August 17, 2021. Link here.
US
Airwallex, a global FinTech platform, announced its launch in the U.S. This launch represents Airwallex’s expansion into North America as Airwallex continues its international growth momentum. U.S.-based businesses can now enjoy a full suite of products to support their cross-border payment needs in a fast, transparent and secure way. Link here.
b1BANK ($3.9 billion AUM) and Citizens Bank of Edmond ($350 million AUM) are the first community banks in the US to build out challenger solutions using Moven’s financial wellness platform, placing the two forward-thinking banks at the vanguard of personalized digital banking. Link here.
A new financial services app has emerged in the UK as Peach aims to help users manage their spending and financial assets. The new app plans to help users track property, pension, financial and physical assets in a single dashboard. It aims to create shared spaces for users to share their details with family, friends, or others. Link here.
Aspiration is taking that model to the public markets, having just announced a merger with Interprivate III Financial Partners Inc., a special-purpose acquisition company (SPAC), which will see it listed on the New York Stock Exchange with a projected initial valuation of $2.3 billion, perhaps as soon as the end of this year. Link here.
MovoCash, a California-based fintech company, is enhancing their customers’ on-demand banking experience with the addition of new money movement options enabled by Fiserv, Inc., a leading global provider of payments and financial services technology. Link here.
CANADA
National Bank of Canada invests $103M in Flinks, including $30M in growth capital towards acceleration of the Montreal-based fintech's expansion activities in North America. The investment follows a successful launch by Flinks in the United States. Link here.
LATAM
Nubank has released a pre-approved credit line with a reduced rate and discount condition if the customer wants to pay off the credit in advance. The loan application can be made directly through the Nubank application, where the customer can check the amount that will have been approved, the information, and the interest rate on the loan. Link here.
Flink México, a Mexico City-based neobroker, has raised $57 million in a Series B round of funding led by Lightspeed Venture Partners. The financing comes just over six months after Flink raised $12 million in a Series A round led by Accel. Link here.
Brazil has about 12.7 million individual micro-entrepreneurs (MEIs) – and several startups are looking to serve this slice of customers. The latest startup in the industry to capture an ambitious round, with heavy investors, is Cora. The FinTech received a series B investment of more than R$600 million (US$116 million) to become the bank for small businesses that earn up to R$4.8 million per year. Link here.
ASIA
India’s FinTech sector has come a long way from merely automating financial services to disrupting the mainstream financial systems through various innovations across payments, banking, and financial management. The sector has raised more than $10 billion in the last 5 years while the market is estimated to grow from $31 billion to $84 billion by 2025 with a CAGR of 22%. Link here.
The Bangko Sentral ng Pilipinas (BSP) says the submission window for license applications from new digital banks, including converting banks, will close on 31 August 2021. The window will remain closed for three years, according to Bloomberg. The central bank says the decision has been made to maintain “a stable and competitive environment for banks”. Link here.
Russia's largest online bank Tinkoff plans to apply for a digital banking licence in the Philippines. The application for the licence in the Philippines is a part of TCS's strategy to enter the Asian financial market. Link here.
AUSTRALIA
Douugh, a fintech budgeting app, launches a new robo-advisor feature. Douugh also owns Goodments, a $0 commission trading platform. With Douugh’s new robo-advisor feature, known as Douugh Wealth, you’ll have access to curated investment portfolios as well as Douugh’s core platform which includes a checking account and debit card. Link here.
British-based digital banking app Revolut is seeking a banking license in Australia and is engaged in talks with the country's regulator to be allowed to take customer deposits. Link here.
AFRICA
Branch International wants to change partial financial inclusion to complete financial access. Managing Director of Branch Nigeria, Dayo Odulate-Ademola was a guest on the Nairametrics Business Half Hour, where she explained that there are a significant number of Nigerians who only have access to one financial product and not the entire suite. Link here.
Chinese-backed and Africa-focused FinTech company OPay raised $400 million in new financing led by SoftBank Vision Fund 2, valuing the company at $2 billion. Link here.
Hijra Bank, a new challenger looking to join Ethiopia’s growing Islamic banking sector, has selected Path Solutions’ iMAL core banking platform. Path Solutions, a specialist provider of banking software to Islamic banks and financial institutions, says it won the deal following “a highly competitive bidding and selection process”. Link here.
MOVERS AND SHAKERS:
Monit affirmed its commitment to enhancing the connections between banks and their SMB customers with a series of senior leadership appointments across the organization. Rian Stockbower has been named the company’s first Chief Technology Officer, Max Koenig appointed Head of Business Development, Ian Spector introduced as the Director of Customer Experience, and Russell Hall joined the team as Product Manager. Link here.
Scotiabank is looking to recruit 100 digital and technology workers over the next month to staff up new regional hubs in Ottawa and Vancouver. The Canadian lender is actively recruiting architects, engineers, cyber security professionals, software developers, mobile developers, and digital designers. Link here.
Currencycloud, a global platform that enables banks and fintechs to provide foreign exchange services for cross-border payments, has hired a pair of industry veterans to take on the COO and CTO roles. Link here.
ING announced the appointment of Marnix van Stiphout as chief operations officer and chief transformation officer (COO/CTO) and member of the Management Board Banking. 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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