Digital Banking Weekly | 2021 #39

Marcel van Oost
On the road!
As I mentioned last week, I am attending the New York FinTech Week and Money2020 in Las Vegas later this month. However, here in Europe, we still have travel restrictions to the US; all the way up to November. Long story short, I need to be outside of Europe for at least two weeks, before I can get into the US…
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INTERVIEW

The interview recommendation of the week belongs to disruptionbanking and their interview with ZEN founder and CEO Dawid Rożek.

“Moreover, combining our value for business with our offer of consumer benefits brings more value to the former, because these people also buy things for the company and use ZEN as a payment method. Various reports show that modern B2B relationships are going to resemble B2C ones, as young people, who are used to the benefits of consumer-oriented e-commerce, are becoming the decision-makers in the businesses. And this is just one example of how that is coming true.”

INTERVIEW

REPORT

Check out this detailed report by Commerce Ventures on the rise of America’s super apps.

Requirements For “Super App” Status

In order to succeed, “super app” competitors must meet a handful of conditions to successfully scale and consistently engage consumers:

  1. Scale: Dominant scale across consumers both AND merchants

  2. Behavior: Highly habitual and interactive behavior within the app

  3. Functionality: Platform must natively incorporate commerce and payments

Report


NOW, ON TO THE SUMMARY OF LAST WEEK'S DIGITAL BANKING SPACE

NEWS HIGHLIGHT

A month ago, we discussed Andreessen Horowitz’s belief that credit unions’ perceived weakness could become their greatest strength, amplified by the internet. 

Now four regional credit unions are cooperating to launch a neobank that caters to low-to-moderate-income (LMI) customers and aims to reduce racial and economic disparities in the financial services sector.

"Supporting the communities we serve, improving financial well-being and creating enduring relationships is at the heart of what we do," David Araujo, CEO of Service Credit Union, said in Tuesday's press release. "We understand that financial service isn't one-size-fits-all. We are excited, through Dora, that we will be able to extend our impact in order to provide a trusted financial partner for people in our community who need it the most.

NEWS HIGHLIGHT

INDUSTRY HIGHLIGHTS

⭐️ Israel’s fintech (financial tech) ecosystem has been readying for potentially “dramatic” banking reforms that will pave the way for more competitive rates and new financial services for customers. Link here.

⭐️ Modularbank has become Tuum! Link here.

⭐️ 5 new challenger banks with ultraspecific niches. Link here.

⭐️  45% percent of Nigerian adults that have a bank account. Link here.

⭐️ German financial watchdog BaFin has publicly rebuked online bank N26 for weak anti-money laundering controls and imposed a €4.25m fine on the fast-growing lender. Link here.

⭐️ New technology may mean fewer reasons to go into a bank. Link here.

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UNITED KINGDOM

ComplyAdvantage will provide UK business lender Hampshire Trust Bank (HTB) will a suite of anti-money laundering (AML) solutions. HTB’s says its rapidly expanding client base and movement into new markets means increased risks of financial crime. Link here.

Chase has partnered with 10x Banking, the UK-based cloud-native banking technology business, to create a modern technology platform that has powered Chase’s entry into the UK retail banking market. Link here.

Chip wants to raise £100 million over the next 24 months, beginning with a crowdfunding round on Crowdcube. The company has opened pre-registration for the upcoming Crowdcube campaign. Link here.

Revolut, a FinTech company with a $33 billion valuation that offers cryptocurrency buying as part of its services, is looking to launch its own cryptographic token, according to two people with knowledge of the plans. Link here.

EUROPE

Bankse, a new digital bank in Spain, is aiming to offer financial support and management to users it thinks have been let down by traditional players. Still in the waiting list stage, the challenger is offering free accounts, loyalty programs, wealth management, and several other options to new users. Link here.

Banking-as-a-Service (BaaS) provider Swan has closed a $16 million Series A round led by VC firm Accel. The investment, with funding also from existing investors Creandum and Bpifrance, will boost Swan’s European expansion through enhancements to the platform and the addition of market-specific features. Link here.

Backbase entered into a long-term collaboration with Raiffeisen Switzerland. It involves Backbase supporting Switzerland’s third-largest banking group in the development of their customer interface. Link here.

Dragoneer Investment Group has been in discussions about injecting a substantial sum of money into N26, which is based in Germany. Link here.

ABN AMRO clients can withdraw cash from ATMs without using their bank card. In partnership with Geldmaat and Mastercard, ABN AMRO is the first major bank in the Netherlands to make it easier for its clients to get cash from all Geldmaat ATMs. The cardless cash initiative is a new way of withdrawing money. Link here.

US

Alloy, which has built an identity operating system for banks and FinTechs, announced Thursday that it has raised $100 million at a $1.35 billion valuation. Lightspeed Venture Partners led the Series C round, which comes just over one year after New York-based Alloy raised $40 million in a Series B financing. Link here.

Banking technology vendor Fiserv is to move to a new campus in New Jersey, adding approximately 2000 new jobs to its existing presence. The majority of the roles will be technology-related and the campus will serve as a strategic center of excellence for product innovation. Link here.

ModusBox is pleased to announce its partnership with Mambu - the Global Fintech Platform. The partnership will support the next generation of financial institutions to challenge the status quo. Mambu and ModusBox bring a combination of local and global experiences and assets to the US market. Link here.

Betterment has reached a Unicorn-level valuation of $1.3 billion after securing $160 million in growth capital comprised of a $60 million Series F equity round and a $100 million credit facility. Link here.

FinTech 1099 payroll platform Gig Wage has announced its partnership with national nonprofit Commonwealth in a new project aimed at addressing the financial insecurity of the growing non-traditional workforce. Link here.

The US construction and interior design industry is set to get a dedicated banking service in the form of New York-based neobank Vergo. Link here.

CANADA

Square announced the launch of Square Card in Canada to address one of the biggest challenges small businesses face: managing their cash flow. The announcement marks a milestone in Square’s goal of expanding financial access in Canada. Link here.

Scotiabank introduced ScotiaRED – a series of state-of-the-art electronic trading tools, to deliver high-quality execution to Equities, Fixed Income, and FX clients that includes the use of advanced analytics such as artificial intelligence. Link here.

Read more on my Fintech LATAM Newsletter

ASIA

The establishment of digital banks in the country is expected to boost the government’s financial inclusion objectives, according to the Bangko Sentral ng Pilipinas (BSP). Governor Benjamin Diokno said the establishment of a digital banking framework is particularly relevant as billions of people affected by the pandemic are driving a historic and dramatic shift in consumer behavior. Link here.

Japanese e-commerce firm Rakuten Group Inc said it is preparing to list its online banking unit, raising funds as it soaks up losses incurred from building its low-cost mobile communications network. Link here.

Shariah-compliant payment gateway PayHalal has partnered with Buy Now Pay Later platform Atome, to enable seamless Murabaha buy now pay later (iBNPL) acceptance across the former’s merchant touchpoints in Malaysia. Link here.

Taiwanese financial institution CTBC Bank has selected Avaloq to provide core banking software for its international banking operations. Link here.

South Korean financial technology firm Kakao Pay Corp said it had decided to push back it’s planned initial public offering, worth as much as 1.5 trillion won ($1.28 billion), to November from October. Link here.

Fresh from a faster payments link-up with India, the Monetary Authority of Singapore has announced plans to commence a phased linkage of the country's PayNow plumbing with Malaysia’s DuitNow real-time payment systems. Link here.

Aspire, the Singapore-based neobank that wants to become an “end-to-end financial operating system” for Southeast Asian businesses, is moving closer to its aspirations with a $158 million Series B. Link here.

Hong Kong fintech Statrys is getting a new look and feel to bring a more human approach to banking in preparation for even more global growth and expansion. Link here.

LATAM

PagoNxt, the payments fintech run by Banco Santander, will discontinue its international money transfer app PagoFX, with plans instead to integrate the technology into its trade services business. Link here.

AUSTRALIA

Stake has chosen Australian fintech unicorn Airwallex as a global cross-border payments and FX partner. This move comes after Stake’s recent announcements of an AU$40 million capital raise and its move to add CHESS-Sponsored ASX trading to its product. Link here.

AFRICA

Chipper Cash, Africa’s fastest-growing fintech announced that they have launched money transfers to and from the United States. The United States is already home to millions of Africans and the largest remittance corridor into African countries today. Link here.

Discovery Bank will soon offer its customers a multicurrency foreign exchange account, a platform to buy and trade shares, and discounts on their travels, highlighting its focus on attracting more businesspeople. Link here.

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MOVERS AND SHAKERS:

GoCardless has appointed Ben Knight as head of environmental sustainability and Lena Tailor as director of diversity and inclusion (D&I) to strengthen its ESG (environmental, social, and corporate governance) pledge. Link here.