Digital Banks in the Black: Zopa & Freo's Profitable Climb
Digital Banks in the Black: Zopa & Freo's Profitable Climb
Future of Fintech - Edition #114 (9th-15th Apr)
Get set for a Fintech Turbo Boost! 🚀
Profits reach peak performance, privacy stays under lock and key, and small businesses get their moment to shine! It's a financial revolution, one twist and turn at a time!
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What’s on the fintech menu today?
📖 Today’s Must Read: Revolut celebrates its "Rupee-volution"
🌟 Fintech Fiesta: The Week's Hot 10!
🌐 ‘Byte’ Buzz: Fintech highlights, sorted by segment!
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Fin-teresting Stories in Fintech 📰
Revolut celebrates its "Rupee-volution"
Revolut India has received a significant boost in its quest to become a leading digital financial services provider in the vast Indian market. The Reserve Bank of India (RBI) granted it in-principle approval to issue Prepaid Payment Instruments (PPI), including prepaid cards and wallets. This PPI licence is a game-changer for Revolut India. It allows them to operate as a Category-II Authorised Money Exchange Dealer, enabling the issuance of multi-currency forex cards and facilitating cross-border remittance services. This paves the way for Revolut to offer Indian consumers a one-stop shop for managing both international and domestic finances seamlessly through their digital platform.
Interestingly, while Revolut is making significant strides in India, they are yet to secure a full banking licence in their home turf, the UK. Our in-depth report, "Revolut's UK Banking Quest," explores their extraordinary growth trajectory, the challenges they've faced in obtaining a UK banking licence, and the actions they're taking to overcome these obstacles.
Dive into this insightful piece to understand Revolut's global ambitions and the regulatory hurdles they navigate in different markets! 🌐
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Unlock the door to fintech's future with Edition #114, where innovation knows no bounds >>>>
The Week's Hot 10! ♨️🔟
Fintech goes global:
⤷ M&S Bank and HSBC UK signed an agreement that is focused on M&S’ credit offering, payment solutions and bringing together digital payments and loyalty for M&S customers.
⤷ Salt Bank was launched in Romania as a 100% digital bank. To power the launch and provision of its digital remit, the bank enlisted Engine, the BaaS technology platform of UK-based Starling Bank.
Digital banks turn profitable:
⤷ Zopa, the UK digital bank, swung to profitability with pre-tax profits of £15.8M for 2023; taking the fintech group a step closer to an anticipated public listing.
⤷ Freo, the digital banking app in India, achieved profitability in Dec '23, experiencing a fivefold increase in gross revenue over five years. Freo reported a gross revenue of ~$42M (INR 350 crore) for FY 2023-24.
⤷ Embedded finance fintech Parafin secured a $125M warehouse facility from Silicon Valley Bank (SVB), alongside its lending partner Trinity Capital.
Focusing on compliance and protection:
⤷ SurePay APIs were made available on Temenos Exchange, helping banks to integrate a trusted Confirmation of Payee (CoP) and Verification of Payee (VoP) solution into their existing systems to protect their customers and ensure regulatory compliance in the UK and EU, respectively.
⤷ The US federal lawmakers unveiled the American Privacy Rights Act, giving Americans fundamental, enforceable data privacy rights.
⤷ US-based fraud prevention company NICE Actimize announced a new Integrated Fraud Management platform that delivers pervasive AI across fraud prevention.
Big guns leading with their presence :
⤷ Barclays led the Series B financing round for Funding Xchange (FXE), a provider of white-label software for lenders to SMEs.
⤷ 1inch Network, a decentralised exchange (DEX) aggregator, unveiled a crypto debit card with developer Baanx, powered by Mastercard, allowing users to use their crypto for online and in-person purchases.
Now, for the ‘byte’-sized fintech buzz –
In the bustling world of Embedded Finance, payment pioneers unite to craft a fintech ecosystem that is leading to a more streamlined payments landscape.
PayDo, a leading Electronic Money Institution (EMI), launched an embedded finance feature for SEPA, SEPA Instant, FPS and SWIFT transactions. PayDo aims to improve cross-border payments. It will provide access to SEPA, SEPA Instant, and SWIFT transactions. PayDo’s clients will be able to embed such payments directly into their products via API, making transfers in Euro and Pound Sterling faster and more reliable.
PayToMe.co integrated with Stripe Connect to redefine the Banking-as-a-Service (BaaS) and Software-as-a-Service (SaaS) realms. This integration is crucial for facilitating smooth onboarding and global payouts and navigating the complex landscape of payment compliance and KYC regulations.
The openness of Open Finance created waves with strategic collaborations tailored to small businesses’ needs the past week!
GoCardless extended its strategic partnership with Sage, the specialist in accounting, financial, HR, and payroll technology for SMBs. The latest agreement builds on a successful six-year collaboration and allows businesses to manage one-off and recurring payments with greater efficiency and control while cutting down on manual admin.
multifi, a leading innovator in business finance solutions, entered a strategic partnership with Plaid to simplify financial applications for UK SMEs. This collaboration aims to reduce the lengthy process that businesses often face when seeking financial services.
Riding the digital wave, the players in the Digital Finance realm unveiled plans for global expansion and enhanced customer experiences.
Santander announced plans to launch its digital bank, Openbank, in the United States and Mexico in the second half of 2024. With Openbank’s rollout in the US market, Santander will combine all its core, proprietary technology into a cloud-based banking platform and will generate deposits to fund the auto franchise of Santander US.
Brazilian challenger Nubank partnered with Wise Platform, Wise’s payment infrastructure for banks and fintechs, to power the launch of its new Global Account offering and international debit card. The digital bank’s Global Account product will offer its high-income Ultravioleta customers a means to access and manage their money when travelling abroad.
Powering the future of finance, the Fintech Infrastructure innovators focused on redefining security and payment efficiency in the financial industry.
Flagright, an AI-native anti-money laundering (AML) compliance and fraud prevention solution, announced its latest customer, Nodabank, a digital bank. This collaboration aims to set a new benchmark for digital banking security by combining Flagright’s advanced security technologies with Nodabank’s banking services.
HighRadius launched a B2B payments platform designed to improve payment processes across more than 100 payment methods globally. The platform is designed to meet the demand for cost-effective B2B payment solutions and for easier ways for customers to make payments.
Decentralised finance took centre stage as innovation sparked new collaborations focused on the expansion of both - interest in DeFi and its use cases.
Binance Labs invested in BounceBit to transform Bitcoin from a passive asset into an actively engaged ecosystem component. With the backing of Binance Labs, BounceBit is set to explore new possibilities for Bitcoin (BTC). It aims to enhance yield generation and broaden its applications through a secure and efficient proof-of-stake (PoS) layer 1 ecosystem.
Crypto payment solution Blockchain.com Pay partnered with MetaMask to support secure crypto payments for MetaMask users. The collaboration facilitates direct crypto transactions within MetaMask wallets, leveraging Blockchain.com's existing user base of verified users.
Immerse yourself in the Green Finance revolution as industry leaders embrace sustainable integration in financial strategies.
allpay Limited attained the Mastercard Sustainability Badge, positioning the company at the forefront of environmentally conscious practices. Mastercard's Sustainability Badge reflects a commitment to the use of sustainable materials in card manufacturing.
Standard Chartered, KPMG and the United Nations Office for Disaster Risk Reduction unveiled the Guide for Adaptation and Resilience Finance (the Guide) that sets out the eligible financeable activities and guidance on what constitutes adaptation and resilience investment.
And that's a wrap 👋
We hope you enjoyed this edition of the Weekly Fintech Brew!
As a reward for making it all the way here, enjoy a curated list of awesome fintech resources to keep your curiosity cup full to the brim. Cheers to continuous learning!
🔗 Link Up! –
Optimising online fraud prevention with payment orchestration Report -Fabrick
From Transactions to Interactions: The emergence of embedded loyalty Report - Arthur D. Little
The loan life cycle: transform with end-to-end automation Blog - Mambu
Data quality where it matters Blog - Frollo
2023 Roundup: SMB Financing Gets a Makeover with Embedded Finance Blog - WhiteSight
The State of Open Finance Report - Open Future World X WhiteSight
Hungry for more fintech insights? Check out some of our other work at WhiteSight.
If you're someone who likes to read think pieces, you will likely love our monthly blog, Fintersections, where our team members analyse the convergence of fintech with the world.
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