Digital Banking Weekly | 2021 #45
BLOG
ARTICLE
Few apps change how an entire nation behaves. PayTM can claim to have done so by helping India digitize its payments. 11% of India’s 1.38B people have paid with PayTM in the last 12 months. As many people have PayTM wallets as they live in America.
Behind any such rise is a fascinating story. PayTM was until recently the most valuable startup in India. CEO Vijay Shekhar Sharma took what started as a prepaid mobile recharge platform to a US$ 20B valuation in 11 years.
PODCAST
The much-anticipated money app from buy-now-pay-later giant Afterpay has been switched on, the first product to leverage Westpac’s banking as a service model and the “most modern banking architecture in Australia”, according to Jason Yetton.
Speaking to Westpac Wire, the chief executive of the bank’s specialist businesses says the partnership, which enables Afterpay to offer its Australian customers access to spending and savings bank accounts underpinned by Westpac, provided “a really innovative way to digitally bank”.
NOW, ON TO THE SUMMARY OF LAST WEEK'S DIGITAL BANKING SPACE
INDUSTRY HIGHLIGHTS
⭐️ N26 is set to refocus its attention on the European market after deadly forays into the US and UK. Link here.
⭐️ SME Neobanking in Africa. Link here.
⭐️ Meet Shoal, Standard Chartered’s new “green” fintech brand powered by Starling Bank. Link here.
⭐️ Bunq is burnishing its green credentials, celebrating the planting of five million trees in Kenya and Madagascar. Link here.
⭐️ Form3, a leading cloud-native payment technology provider, and Barclays have announced the addition of a SEPA Credit Transfer (SCT) service to their combined directly connected access solution. Link here.
⭐️ Mastercard is working with the digital banking platform provider Mobility Capital Finance on a contactless multifunction card that will provide 125 New Orleans residents with a monthly universal basic income for 10 months. Link here.
⭐️ Equity Bank has announced that it’s already positioning its network of 190 branches into centers of providing advisory and consultation services for SMEs and large customers as retail clients shifted to digital channels. Link here.
UNITED KINGDOM
Digital SME banking startup Recognise Bank is to use ClearBank for the provisioning of key account infrastructure and access to the UK’s payment schemes alongside Confirmation of Payee services. Link here.
UK-based banking and crypto app Ziglu has raised a record £7.19 million and closed its crowdfunding campaign early on leading crowdfunding platform Seedrs after a surge in investments. Link here.
Monument, a digital banking startup for the well-heeled, is set to launch in the UK as a fully-licensed deposit-taking institution following the lifting of regulatory restrictions by the Financial Conduct Authority. Link here.
Virgin Money’s “Digital First” strategy will include the launch of a digital wallet including embedded rewards through the Virgin Red loyalty scheme and payment solutions including a buy now, pay later (BNPL) service. Link here.
A technology start-up that helps entrepreneurs in developing countries gain access to loans has raised $120 million in fresh capital. Jumo, which is based in London, tapped A technology start-up that helps entrepreneurs in developing countries gain access to loans has raised $120 million in fresh capital. Link here.
Atom bank and Landbay are partnering in a £500m funding deal. The partnership will see the Durham-based neobank use its growing deposit base to fund Landbay’s prime residential buy-to-let mortgages as Atom plots a path to grow its lending book. Link here.
EUROPE
Two years after making an equity investment in Ebury, banking giant Santander is turning to the fintech to roll out a competitive trade finance offer for small German businesses. Link here.
Tot, an Italian fintech startup serving freelancers and micro-enterprises, has finalized a €2 million seed funding round from Banca Sella ahead of market entry in early 2022. Link here.
ABN AMRO is a proud co-founder of the new Energy Efficient Mortgages NL Hub (EEM NL Hub). Charissa Cardon will represent the bank on the EEM NL Hub’s board. Link here.
After Tencent’s $100 million, it’s time for Tiger Global’s $ 400 million. From China to the United States, the French neobank for pros Qonto has not finished attracting international investment funds. Link here.
Germany-based Süd-West-Kreditbank (SWK Bank) has announced partnering with the SME and freelancer bank Penta to enable the option to invest fixed-term deposits. Penta is a digital platform for business banking for SMEs, sole proprietors, and freelancers. Link here.
On 5 October 2021, the Federal Financial Supervisory Authority BaFin ordered N26 Bank GmbH to take measures to ensure the institution once again has in place a proper business organization and to mitigate risks to the institution’s operational resilience. Among these measures, customer acquisition is to be substantially reduced with N26 Bank GmbH only permitted to acquire a maximum of 50,000 new customers per month. Link here.
US
Oxygen, a startup that is bringing digital banking services to freelancers and micro-and small-sized businesses, is in talks to raise a new round at a valuation of over $500 million. Link here.
Enzo, a spending and wealth optimization platform, announced its $3 million seed funding round led by White Bay Group, a growth equity firm that is focused on financial services and FinTech. Link here.
Cash App became the latest fintech to aim its services at the Gen Z demographic when it announced last week that it would open the app to 13- to 17-year-olds. Link here.
Wyshcast, founded in September, is led by former JP Morgan digital strategist Nancy Shah, who also founded and led LucidianAI between March and September. Link here.
Stretch, an early-stage FinTech startup, is now making the audience its sole focus in an attempt to win over a group of people who are up against all kinds of financial challenges, including securing work. Link here.
Current, a six-year-old New York-based neobank that counts 3 million users, went the less popular route of building its own core banking infrastructure. Link here.
Green Dot reported Q3 2021 B2B services revenue of $118 million, over a third of its overall revenue. B2B services revenue was up 53% year over year, nearly three times the rate of the company’s top-line growth. Link here
The U.K. neobank Monzo has withdrawn its application for a U.S. national bank charter and federal deposit insurance — only days after publishing an enthusiastic blog interview about its future with U.S. CEO Carol Nelson. Link here.
ASIA
One of Vietnam’s fastest-growing digital banks Cake has announced a new partnership with BPC‘s leading payment processing provider firm Radar Payments, as it plans to scale its offering towards a full suite of digital banking services. Link here.
The central bank of the Philippines, the BSP, released its Guidelines on the Establishment of Digital Banks, which took effect in November 2020 and went through a round of awarding digital bank licenses to a select number of digital challenger banks in 2021. Link here. Also, the nation's six newly licensed digital-only banks are set to grab a slice of the $35 billion remittance market from brick-and-mortar lenders and nonbank platforms, analysts said. Link here.
As part of its robust market expansion plans, India’s indigenous youth-focused neobank, muvin has onboarded ace cricketer Hardik Pandya as its brand ambassador to propel its multi-channel marketing campaigns. Link here.
In a presentation made during the Singapore Fintech Festival, Annerie Vreugdenhil, chief innovation officer of ING, announced the firm is working on a trial of its decentralized finance, or DeFi, peer-to-peer lending protocol with the Netherlands Authority for the Financial Markets. Link here.
The Fintech disruption has led to a tectonic shift in the banking industry. At present, there are 2000 Fintech companies in India. Link here.
Western Union, a global leader in cross-border, cross-currency money movement and payments, has announced Metrobank, one of the leading financial institutions in the country, as its newest direct bank account payout partner for inbound money transfers in the Philippines. Link here.
China's Ant Group said on Monday that it is making efforts to "differentiate" part of its short-term consumer loan business Jiebei, as it pursues a Beijing-led restructuring aimed at reining in some of its freewheeling businesses. Ant, the financial affiliate of e-commerce giant Alibaba Group, saw its $37 billion IPO derailed by regulators last year and has since been working to turn itself into a financial holding firm. Link here.
LATAM
Credit card-led fintech Stori announced that it has closed one of the largest Series C equity financing rounds in Latin America to date, accompanied by a debt raise that will be used to fund Stori's rapidly growing credit card portfolio. Link here.
Delivery mobile application Rappi wants to get regulatory approval to operate as a digital bank in Colombia in the first quarter of next year. Link here.
Nubank customers who wish to become fintech partners can register for the NuSócios program starting on Tuesday. Link here.
Neobanks for immigrants are proliferating, and one group, in particular, is catching the eye of fintechs: transplants from Latin America, especially from Mexico. Link here.
AUSTRALIA
Afterpay has officially launched its Money app in Australia, granting 3.6 million users access to savings accounts, a debit card, and a suite of features designed to bind the buy now, pay later giant with even more everyday spending. Link here.
Temenos’ digital banking platform, which is powered by the Temenos Banking Cloud, will help MyState Bank accelerate growth by streamlining digital onboarding and origination, as well as making banking faster and easier to use. Link here.
Avenue Bank, the country’s newest start-up bank, is raising fresh capital to fund it to get a full license, which it expects by June 2022, as it eyes Judo Bank’s success in targeting small businesses unsatisfied with major banks. Link here.
AFRICA
Digital bank TymeBank has partnered with fintech and payments provider Adumo to extend the newly-launched MoreTyme, a buy-now-pay-later (BNPL) service, to small and medium enterprises (SMEs) in SA. Link here. Also, TymeBank has reached the four million customer mark, a milestone for the three-year-old financial institution. Link here.
DriveWealth, LLC announced a partnership with Chipper Cash, the fastest growing African FinTech startup enabling peer-to-peer money transfers and cross-border payments for nearly four million users. Link here.
MOVERS AND SHAKERS:
TrueLayer, the global open banking pioneer, announced the appointment of Rob Hale as Head of Banking in Australia. An expert in banking technology and strategy, with extensive experience in Australia and overseas, Rob is a leading advocate, innovator, and collaborator in the open finance movement in Australia, harnessing the power of the CDR. Link here.
OPPORTUNITIES:
Fast-growing digital bank N26 is weighing up plans to establish an Irish operation that could employ up to 100 people. In an interview with The Irish Times, co-founder and co-chief executive Maximilian Tayenthal also said the fintech intends to roll out more services to its customers here, including crypto trading. Link here.