Digital Banking Weekly | 2021 #37
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 main reason these early neobanks flourished was because they went after the customers the big banks deemed unprofitable. Today, neobanking products are highly commoditized and copying features is the law of the land. Given the crowded landscape and little differentiation, new entrants will likely have a hard time competing with established brands if they target the same consumer base.
There are, however, populations who remain underserved by incumbent big banks and whose needs still aren’t being met by the top neobanks. To me, that spells opportunity. Fintech is actively rebundling, shifting from a product strategy to an audience one.
NOW, ON TO THE SUMMARY OF LAST WEEK'S DIGITAL BANKING SPACE
INDUSTRY HIGHLIGHTS
⭐️ N26 is considering a launch in the Turkish market. Link here.
⭐️ JP Morgan has (finally) put a date on the digital banking app’s launch. Link here.
⭐️ Revolut is partnering with WeWork. Link here.
⭐️ MoneyLion is adding crypto trading to its all-in-one financial services app. Link here.
⭐️ Nubank and Creditas announced a partnership that will bring Creditas products to Nubank customers in Brazil. Link here.
UNITED KINGDOM
Revolut announced a significant milestone in its global sustainability efforts. The company has signed up Watershed, the leader in building world-class climate action programs, to measure and help it reduce its global carbon footprint. Link here.
Also, Revolut informed its alumni that they’ll face a 2.75% processing fee for taking part in an upcoming secondary share sale. This has prompted an internal protest, with one describing the charge as “extortionate” and lacking in transparency. Link here.
FORM3 announced its Series C investment funding of $160 million. The fundraising was led by the Growth Equity business within Goldman Sachs Asset Management (Goldman Sachs) and included participation from existing investors. Link here.
MoneeMint, an ethical financial services provider announced the launch of MoneeMint Labs for clients in the United Kingdom and Europe. Link here.
Integrated Finance has raised £2 million in a seed funding round led by Octopus Ventures. 500 Start-Ups, Superseed Ventures, and Chris Adelsbach, Srin Madipalli, and John Erdimansinga joined the round. Link here.
Monzo has reached 100,000 business account customers, the challenger bank announced on Twitter. Some 58 percent of Monzo business users are sole traders, while 42 percent are limited companies, according to the bank. Link here.
EUROPE
So far, Tomorrow has lagged behind its own goals in some respects. In the past, an interim target of 1 million customers was set – although it remained unclear how quickly this milestone was to be reached. The FinTech company is now receiving $16.5 million (€14 million) to further develop. Link here.
Russian fintech Tinkoff has launched Tinkoff Private, a new offering geared to affluent customers. It is a digital private banking service combining a range of actions for the HNWI segment that is now available in the Tinkoff and Tinkoff Investments apps. Link here.
11Onze’s launch of universal bank account and PSD2 compliant digital wallet, El Canut will shake up the fintech and traditional banking sector in the region which is still coming to grips with the post-Covid closure of local branches. Link here.
After a successful open banking integration of the Cake cashback platform in Argenta's app, Cake for Banks is ready to expand to other European banks. Link here.
bunq partnered with leading specialized payments platform, Paysafe, to provide customers with access to cash services. Link here.
Northmill is entering the Norwegian market. The first step is an entry into the refinancing market with Reduce, which has already helped thousands of Swedes lower their interest rates on existing loans, installments, and private loans. Link here.
ING-backed Yolt is shutting down its consumer-facing smart money app in order to focus on its open banking technology platform. Link here.
US
An early decision to pivot from a direct-to-consumer model to a business-to-business one was a critical step in the evolution of BankMobile, now BM Technologies, said the banking-as-a-service (BaaS) provider’s CEO, Luvleen Sidhu, during a fireside chat at the Finovate Fall conference. Link here.
The wild adoption of bitcoin as a store of value and a medium of exchange is permeating into traditional banks, so much so that a national bank like the Bank of New York, Mellon, announced that bitcoin will be a part of the assets they’ll manage for customers. Link here.
FintechOS, the global technology provider for market-leading financial services brands, announces its launch into the US following success in its native Europe, as well as in Asia and the Middle East. Link here.
Goldman Sachs is buying digital lender Greensky for $2.24 billion as part of its push into the consumer finance market. Link here.
Arkansas-based Arvest Bank has selected Thought Machine’s Vault as its new core banking system, part of a multi-year transformation. Link here.
TrueLayer is formally announcing its Payouts feature which does exactly that, instant refunds and payouts. Link here.
Plum is aiming to triple its valuation with the launch of a crowdfunding campaign at the end of September combined with a raise via institutional investors. Link here.
Allied Payment Network has launched a bitcoin wallet app for banks and credit unions on Finastra's FusionStore. Link here.
Data Center Inc. a leading provider of core and digital banking technologies is partnering with Fintech digital investment and wealth management platform Unifimoney to enable their bank customers to offer innovative digital wealth management services through their online and mobile banking portals. Link here.
LATAM
Jaime Lázaro Ruiz, general director of BBVA AM Mexico, said: “At BBVA Mexico we know that financial health and savings strategies are a priority for our customers and clients, and BBVA Invest is a great tool for receiving high-quality and personalized digital advice for those not familiar with the investment world.” Access to BBVA Invest is available through the bbva.mx portal. Link here.
Nubank, the world’s largest independent digital bank, announces on Tuesday (14) the launch of a platform that allows customers to schedule the payment of their recurring accounts in automatic debit and receive notifications in case of eventualities, such as lack of balance or increase in account value. Link here.
ASIA
Neobanking start-up Jupiter had raised funding from fintech investor QED Investors, sources said. QED Investors is a leading fintech investor, and its portfolio includes Nubank, Clearscore, SoFi, Klarna, among others. The funding is part of Jupiter's Series B round when the company was valued at $300 million, the source said. Link here.
Tonik, the Philippines' first digital-only neobank, has launched a pioneering Quick Loan product on its platform. The launch of Quick Loan marks Tonik's entry into the deeply underserved consumer lending market in the Philippines, in which it intends to establish itself as one of the market leaders. Link here.
Mox Bank is continuing its one-year anniversary celebrations with the launch of ‘Instant Loan’, allowing Mox Credit customers to borrow money instantly if approved for an ‘Instant Loan’. Link here.
Jeff App, the Latvian fintech startup providing a data-enabled loan brokerage platform for unbanked and underbanked customers in Asia, has closed a $1.5 million seed extension round led by J12 Ventures, bringing the total amount raised by Jeff App to $2.5M. Link here.
CANADA
Equitable Bank is pleased to announce that it has issued €350,000,000 of legislative-covered bonds due September 16, 2024. The 3-year Covered Bonds, which are in line with the Bank's stated goals of diversifying its funding structure and reducing funding costs, will be listed on the Irish Stock Exchange (Euronext Dublin). Link here.
Neo Financial Technologies Inc., a self-described “disruptive online bank” that operates without any physical locations or branches for customers to visit, closed a second fundraising series of $64 million Wednesday. Link here.
AUSTRALIA
Digital bank Alex has raised $20 million in a series C that values the neobank at more than $120 million The raise came from existing shareholders and new investors, including Washington H. Soul Pattinson, Regal Funds Management, Wunala Capital, and SG Hiscock & Company, topping up the $34 million already raised. Link here.
S&P Global Ratings has issued Judo Bank with a BBB- rating, a move that surprised Australia’s first challenger bank for small and medium-sized businesses given its relatively short life cycle. In issuing its rating on Thursday, S&P explained its methodology, underlining that Judo Bank is well-capitalized, allowing for continued growth despite its limited profitability to date. Link here.
Gandel Invest is set to join fellow Melbourne heavyweight Chemist Warehouse on the register of unlisted buy now pay later group, Fupay. Link here.
AFRICA
African Rainbow Investments, which owns 23.9% of TymeBank, says it expects the digital bank to break even in 2022. This will be three-and-a-half years after launch. Discovery Bank, by contrast, is targeting breakeven in approximately three years’ time – in 2024. This ought to be no surprise given that the latter is not intended to be a so-called skinny ‘neo-bank’. Link here.
MOVERS AND SHAKERS:
Welcome Tech announced the addition of Daniel Ayala as Executive Vice President, Managing Director of Financial Services. Link here.
Just weeks after rebranding from B-North and securing a banking licence from the UK’s Prudential Regulation Authority (PRA), Bank North has appointed two new directors. Madis Toomsalu, Estonia’s LHV Banking Services group CEO, is joining Bank North as an independent non-executive director. Link here.
Monzo Bank’s finances have been the point of great debate for a while now and the digital bank has appointed a new CFO to help it turn its fortunes. Link here.
Find The Right Fintech Partners at Fintech Meetup! With 30,000+ 1-1 meetings, we make it easy to meet fintechs including Dave, FlexPay, NestWealth, Vikar Technologies and hundreds more! Online, March 8-10.
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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