Digital Banking Weekly | 2021 #40
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Listen to this exceptional episode on the Banking Transformed podcast. Host Jim Marous is joined by Lane Martin, Partner and Head of U.S. Banking and Payments at Capco. He discusses the challenges firms face in putting a digital strategy in place, and the path to an effective and attractive digital platform.
REPORT
If we look at the historical evolution of branchless banking, we see that several incumbent banks have experimented with the model right from the 1980s and 1990s, through a branchless banking proposition called Direct Banking.
Q&A
INTERVIEW
Matt Swann, head of technology at Nubank, gave an exclusive interview to Canaltech on how the company uses data to create new experiences and increase credit.
nubank spent two years developing the artificial intelligence project that led to the credit increase of 26 million customers, which was announced in July and will be gradually implemented until June of next year, with a total increase of R$ billion distributed to the entire audience.
NOW, ON TO THE SUMMARY OF LAST WEEK'S DIGITAL BANKING SPACE
NEWS HIGHLIGHT
N26 has collected around 700 million euros from old and new donors. Because of this, the Berlin-based company would be now valued at around 8 billion euros.
N26 was already ordered to pay a fine of 4.25 million euros by the German financial regulator BaFin. For more than two years now, the supervisory authority has criticized the bank’s deficits in the fight against fraud and money laundering.
N26 stated that the reason for the fine was almost 50 late money laundering reports from 2019 and 2020. The fine has been paid and the required measures have been implemented.
INDUSTRY HIGHLIGHTS
⭐️ Monzo Bank has withdrawn its application for a U.S. banking license following discussions with regulators at the Office of the Comptroller of the Currency. Link here.
⭐️ Fintech startups’ multi-billion valuations, such as that achieved by US neobank Varo Bank, are inflated and don’t reflect reality, according to the CEO of 3S Money. Link here.
⭐️ Investors in Zopa have been struggling to withdraw their money and to see up-to-date statements as the result of a nine-day IT outage at the peer-to-peer lender. Link here.
⭐️ A new social finance app in the US is aiming to help young users decrease their debt by playing video games. Link here.
UNITED KINGDOM
Monzo has teamed up with Freetrade to give all eligible Monzo Plus and Monzo Premium customers 3 free shares worth between £3 and £200 each when you sign up to a new Freetrade account and deposit at least £2. Link here.
Ziglu, led by Mark Hipperson, is in the process of becoming an Appointed Representative to offer investment products such as equities, funds, and commodities. Link here.
ClearBank, the cloud-based clearing bank, announces the launch of a new multi-currency solution that will reduce friction for fintechs and financial institutions that offer cross-border payments and FX capabilities. Link here.
Aldermore Bank PLC and Cashplus Bank have announced an exclusive partnership that delivers an easy-to-manage business savings solution for time-poor SMEs with returns 50 times that of those offered by the largest high street banks. Link here.
EUROPE
Berlin-based fintech startup FinMarie has just received early-stage funding of €1.4 million. Link here.
Thousands of Catalan people celebrated the launch of the first-ever community digital bank account, El Canut. The digital account adds to 11Onze’s existing offering of the first-ever private social network in Europe - La Plaça. Link here.
Telecomm's carrier Orange is reinforcing its commitment to mobile banking with a €250 million capital increase in Orange Bank and the buy-out of its bancassurance partner Groupama. Link here.
Holvi plans credit card launch, fundraise, and IPO after split with BBVA. Holvi lost 60% of its customers and 50% of its staff after buying itself out from BBVA earlier this year. But according to founder Tuomas Toivonen, the small business banking startup is now making more money than ever. Link here.
Banx, a fully digital, Belgian banking experience, imagined by Proximus, powered by Belfius, was officially launched yesterday. Link here.
US
The United States Postal Service (USPS) has taken the most dramatic step in a half-century to re-establish a postal banking system in America. In four pilot cities, customers can now cash payroll or business checks of up to $500 at post office locations and have the money put onto a single-use gift card. Link here.
Productfy Inc., a banking-as-a-service (BaaS) platform that aims to build “DeFi for traditional finance,” has raised $16 million in a Series A round of funding led by CM Ventures. Link here.
First Women's Bank celebrates its Grand Opening with a Ribbon Cutting ceremony at its flagship location in Chicago. Link here.
‘Buy now, Pay smarter.' company, Opy USA, Inc., and its parent company Openpay Pty Ltd, have strategically partnered with Cross River Bank, a technology-driven financial services organization that provides core infrastructure and embedded financial solutions, to offer Opy’s differentiated next-generation “Buy Now, Pay Smarter” products for consumer banking loans. Link here.
Copper Banking, a digital banking service aimed at teens, announced today it has raised a total of $13.3 million in seed funding. Link here.
Louisville, Kentucky-based Republic Bank is suing Green Dot, alleging breach of contract, after the prepaid card company-turned-bank backed out of a $165 million deal to buy Republic’s tax refund processing unit. Link here.
Temenos, the banking software company, announced that upSWOT has joined Temenos MarketPlace, helping Temenos’ banking clients build loyalty and grow engagement among their Small and Medium-Sized Enterprise (SME) clients. Link here.
ASIA
South Korean financial technology unicorn Viva Republica said Friday it has signed a deal to acquire a controlling 60 percent stake in mobility firm VCNC, known for premium ride-hailing app Tada, in its new rights offering. Link here.
GrabPay announced that it has recently strengthened its safety and security features designed to protect its users from fraud and security risks. The in-app wallet of super-app Grab has multi-layer security features that will enable users to perform real-time digital transactions on the platform securely. Link here.
Toss Bank failed to fulfill its previous promise to embrace Korea's residents of foreign nationality, at least in time for the day it kicked off its operations. Link here.
Neo-banking startups in India are yet to hit critical mass but they continue to mop up big cheques. After raising $12 million in August at a 3X premium in its valuation, Fi (formerly EpiFi) is reportedly in late-stage talks with B Capital to raise a new round. Link here.
A recent Backbase commissioned study, conducted by Forrester Consulting revealed that 64% of Malaysian retail banking decision-makers said their company is increasing spending on digital and engagement financial wellness initiatives – the highest figure in the APAC region; more than Singapore, Japan, or Australia. Link here.
Homegrown e-wallet player MyMy announced its partnership for a principal membership from Mastercard to add prepaid physical and virtual cards to their offering. MyMy said in a statement that it is the only Malaysian startup that was able to receive this approval from Mastercard. Link here.
LATAM
Nubank started receiving complaints from users trying to do online banking at 11 am, and the peak of complaints on the DownDetector website was at 1 pm. The failure in the bank’s online system continued into the afternoon and was confirmed by Nubank in a note to UOL: “We verified that part of our customer base found fluctuations in the app on today’s date. We regret what happened and we inform you that the operations have already been normalized”. Link here.
Mexico's Deputy Finance Minister Gabriel Yorio said on Tuesday that the revocation of the banking license of Bank Accendo was an isolated situation and did not pose a threat to the country's banking and financial system. Link here.
AUSTRALIA
Australian small business lender Judo Capital Holdings Ltd. and a group of shareholders are seeking to raise about A$653 million ($477 million) in a Sydney initial public offering priced at A$2.10 each, after lining up cornerstone investments for most of the shares already. Link here.
In Australia, Treasury recently announced amendments to its Consumer Data Right (CDR) rules that will support increased participation in open banking and 'empower' customers to reap value from their data. Link here.
Visa is joining forces with ANZ to bring its installment payments product to Australia, enabling the bank's credit card customers to buy now, pay later at the checkout. Link here.
Carbon footprint tracking startup CoGo has partnered with the Commonwealth Bank (CBA) to help CBA customers track the carbon footprint generated by their spending. The feature will initially involve a trial of CommBank app customers able to view their carbon footprint and offset the previous month’s transactions by buying carbon credits. Link here.
MIDDLE EAST
Rakbank has recently announced that it has partnered with Mastercard, a leading technology company in the global payments industry to launch firefly – a first-of-its-kind companion app for the Rakbank Emirates Skywards World Elite Mastercard Credit Card. Link here.
AFRICA
Buy Now, Pay Later: Africa's not getting left behind 🚀. Carbon now enables customers to buy products instantly while paying in small equal installments at a 0% interest rate. Recognizing the opportunity to serve customers using a direct-to-customer (D2C) approach, Carbon intends to integrate its BNPL solution into the banking application. Link here.
Be Mobile Africa, a neobank for the unbanked and underbanked in Africa, announced that it has joined Visa's Fintech Fast Track Program. The program allows FinTechs to leverage the speed, security, reliability, and scale of Visa’s global VisaNet network and its enablement partners to introduce new payment experiences. Link here.
TymeBank is teaming up with The Foschini Group to introduce its financial products and services in TFG stores and on digital platforms. This will give the digital bank access to more than 26 million Foschini customers in South Africa. Link here.
MOVERS AND SHAKERS:
Monese has appointed Atul Choudrie as managing director of its push into banking-as-a-service (BaaS). Choudrie joined Monese in 2019 and made CCO in 2020, to help it establish its cloud-based transactional BaaS platform, which launched last month. Link here.
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