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Future of FinTech | Edition #35 – Sept 2022
Hola, FinTech Fanatics!
Surviving the week on coffee? No worries, we've got another hot and piping FinTech cuppa to keep you going all week! Enjoy the tang of our Future of FinTech newsletter with six tempting themes covering the hottest stories from the FinTech industry! ☕
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All About That BaaS: The APAC’s love for BaaS services outweighs EMEA and the Americas. What's cool is that across APAC, 88% of senior executives across multiple industries are actively rolling out BaaS solutions now or in the near future, as opposed to 80% in EMEA and 87% in the Americas. APAC certainly is all about that BaaS. Read the full report here.
Edition #35 will jazz up your week by highlighting the global FinTech scoop that is guaranteed to get the wheels turning!
Here’s the TL;DR:
Genius steps in the FinTechaverse seemed to be the theme last week, with SMBC Group launching its own digital consumer banking business in the US named Jenius Bank, followed by Singapore’s GXS Bank launching savings account for the underbanked.
Taking a turn towards Europe 一 TrueLayer announced its collaboration with Bybit through which European customers can fund their accounts more efficiently, securely, and digitally. At the same time, Colendi announced its acquisition of London-based blockchain and payments provider SETL.
Speaking of all things blockchain and Web3, crypto bank Sygnum announced it would open a metaverse hub on Decentraland, while Web3 startup Spectral raised $23M in a funding round led by General Catalyst and SocialCapital.
Removing blockages for consumers was also Block, which began letting users of its Cash App platform make payments on eCommerce sites that aren’t part of the Square network. Helping customers was also on the plate for TSB Bank, which launched TSB Marketplace on its mobile app to help customers make informed financial decisions.
Taking things on a higher note, Highnote partnered with Visa, paving the way for innovative enterprises to leverage the Visa network. Temasek Holdings and HSBC Holdings’ collaboration to introduce their sustainable infrastructure debt financing company, Pentagreen Capital, served as another key highlight for the week’s scoop.
For the longer read, let’s get going –
The Open Finance landscape was infused with many captivating headlines highlighting partnerships among players:
Nacha recognised MX as their Preferred Partner for Risk Management and Fraud Prevention, where the latter is now a part of a select group of innovators that offer products and services that align with Nacha’s core strategies to advance the ACH Network.
Not only that, but MX also made the news for announcing a reseller agreement with MeridianLink that will integrate MX’s Instant Account Verification (IAV) product into MeridianLink Opening to ensure a more seamless user experience, mitigate fraud and risk, and increase conversion while opening a digital account.
Property management company Quota also chose Nordigen’s Open Banking network to improve its client screening and scoring mechanism, allowing tenants to reduce their financial barriers.
FinTech Kevin was monetising on the idea of lower transaction costs for merchants as it teamed with Monet+ to deliver its clients and partners account-to-account (A2A) payments in physical stores via the Monet+ Switchio platform.
Meanwhile, Brankas was banking on Dana Fintech to drive seamless open finance and open core platforms in Bangladesh, enabling banks and financial institutions to rapidly build new and differentiated products.
Furthermore, crypto exchange Bybit grabbed headlines for collaborating with TrueLayer, a partnership that helps the former not only have improved experiences for its customers, but also gain significant operational benefits.
The tea has only just started to brew – IDV technology provider Credas just checked off financial checks from their list of offerings via its new Open Banking module; Tink also joined the checking spree by introducing its new Expense Check product to simplify and streamline the customer affordability process for lenders; and in an intriguing turn of events, ING decided to phase out Yolt’s B2B Open Banking operations to focus on its technology business instead.
The Digital Finance sphere was simmering with some delightful happenings – dishing out the scoop from partnerships to launches and even licencing affairs.
When it comes to the novel launches in the digital realm:
Singapore’s GXS Bank, backed by Grab and telco Singtel, officially launched with savings account for the underbanked as its first product on offer.
Standard Chartered also had its eye on the Singaporean market, as its joint venture with an arm of Singapore’s biggest trade union started digital banking services in the city-state.
In a genius move, Japan’s Sumitomo Mitsui Financial Group, along with its subsidiaries (SMBC Group), made the bulletin for their plans to launch a new digital consumer banking business in the US named Jenius Bank. The digital bank aims to provide personalised insights for consumers to make the most of their money.
And if that wasn’t enough, then the First National Bank of Omaha announced the launch of Bend by FNBO, a new credit card-as-a-service solution that expands FNBO’s technological agility to offer customised credit card issuance for today’s digital landscape.
On the regulatory front, Qatar Central Bank issued the first licence for digital payments to two companies that provide electronic payment services — iPay by Vodafone Qatar and Ooredoo Money. Similarly, in Kuwait, Kuwait’s Competition Protection Authority was said to be looking into requests for licences from three alliances that seek to establish digital banks in the country. Two digital bank licences are expected to be granted by the end of 2022. The APPG for Challenger Banks and Building Societies in the UK also published findings from its inquiry into the role challenger banks and building societies could play in levelling up the UK economy, containing five recommendations for policy changes. Additionally, Japan’s Kanto Local Finance Bureau issued a business improvement order against Revolut Technologies Japan, Inc. to improve AML measures, as per discoveries of “serious problems” in several business areas.
In other news, Bukalapak and Standard Chartered introduced the BukaTabungan digital banking platform in Indonesia that offers financial products, high interest rates, as well as other cashback and promos for new users. Rippling and Brex expanded their partnership with a new set of features allowing customers to automate and customise their financial operations for more efficient corporate spending. Tonik also enabled the BillsPay feature in collaboration with Bayad, enabling users to seamlessly pay their bills on time, without the hassle of long queues and even in the comfort of their own homes – all through a few taps on their mobile phone.
Serving to be a flavourful additive to the already brimming cuppa, the Embedded Finance segment was painted by the many vibrant activities of the week –
Starting with the various partnerships and acquisitions:
Panning its way into the embedded space, Commerce Bank announced the launch of Commerce Connections® Direct, developed in collaboration with FISPAN, to provide an enhanced banking and treasury experience with a limited technology burden.
Enhancement was also on the mind of Indian Oil Corporation, which joined forces with Fiserv to enhance customer payment experiences and streamline its operations.
What’s more – Jack Henry & Associates closed its previously announced acquisition of Payrailz to support its technology modernisation strategy that helps banks and credit unions successfully compete with industry disruptors, innovate faster, and meet the evolving needs of consumer and commercial account holders.
Turkey-based Colendi also grabbed headlines for signing a strategic acquisition and incorporating SETL to further its aim of integrating with Web3 and reaching 100 million users.
On another note was Highnote’s expansion of its partnership with Visa to pave the way for enterprises to leverage the latter’s network to bring to market differentiated consumer or commercial card programs across prepaid, debit, and credit use cases.
As for the other events, Danish FinTech platform Moneyflow raised ~$248M in a debt financing agreement with BaaS provider Aion Bank to accelerate the roll-out of its embedded finance services across platform partners in the Nordics and broader Europe. Embedded finance platform Solid, too, caught attention for securing $63M in Series B funding to expand into new verticals related to bank accounts, crypto wallets, sending payments, and issuing cards to end users.
But not all was gold for BNPL firm Klarna, which revealed that it lost about ~$575M in the first half of 2022, saying the losses were driven by an increase in employee costs and credit losses as a result of its market expansion, as well as continued investment in the business.
The DeFi sphere remained in full swing, thanks to a slew of happenings and news to keep the dynamism going.
Contributing to the sea of new launches, market participants like Orbit Markets announced the launch of an Impermanent Loss (IL) Protection product which provides full and exact protection against volatility in certain decentralised exchange liquidity provisions. Furthermore, creating waves in the market was DeFi startup Kulfi Finance attempting to grow its DeFi presence launched its V1 protocol, offering opportunities to earn a real return on money.
Money flowed in the sea of DeFi, with Web3 credit startup Spectral raising $23M in a funding round led by General Catalyst and SocialCapital to transform credit scoring into an open and publicly accessible network.
Saying bye-bye to the FinTech world was DeFi protocol Babylon Finance, which announced that it would shut down its operations after struggling to recover from the consequences of the Rari Fuse exploit. Just when we thought it couldn't get any worse, Kyber discovered a vulnerability to its website code that allowed exploiters to run away with a whopping $265,000!
Reaching the light to the end of the tunnel, one of the ecosystem players said hello to the world of Metaverse ─ Swiss crypto bank Sygnum announced it would open a metaverse hub on Decentraland, securing a slice of the metaverse economy.
Can’t get enough of the latest in the Web3 space? We have just the right thing for you – the Web3 Weekly Wonderland newsletter that explores 6 wonderous themes surrounding the immersive Web3 universe!
The Platform Finance arena witnessed quite the spectacle, with many ecosystem participants showing up to put their best foot forward!
A raft of new launches took off, with TSB Bank launching TSB Marketplace on their mobile app to help customers make informed financial decisions. Further, to support the BFSI industry in India, NPST invested in building a Super App solution that can be a game changer for several large and medium businesses. That’s not all – taking away blocks from the path to making payments easier than ever, Block's Cash App was in the news for now letting users make payments on e-commerce sites outside the Square network. The company partnered with big names like American Eagle, Aerie, Tommy Hilfiger and many more.
Speaking of partnerships, StrideOne and ZipLoan announced their affiliation to dive deeper into the MSME credit space by looking forward to bridging technological and financing gaps of MSMEs by leveraging the startups’ ecosystem of vendors and suppliers.
Moreover, Vivid received its own investment licence, granted by the Dutch supervisory authority, thus becoming a bit more independent of partner banks. However, the company still does not hold its own banking licence.
The Green Finance world gained traction as more businesses got on board with sustainable practices. Let's get to the exciting stories from last week –
Joining hands seems to be the best way to make the world greener and better. Acting on the same thought, LHV UK announced that Single.Earth, an EQT-backed startup tokenising nature, chose LHV UK as its banking partner to gain access to real-time EUR payments and other banking services. Painting the basketball court green, NBA superstar Giannis Antetokounmpo made headlines for lending some star power to a new ESG fund launched by Calamos Investments. Moving the green carpet forward, pulsESG announced a new pilot program with private investment firm Clayton, Dubilier & Rice (CD&R), aiming to facilitate portfolio management and stakeholders' validation and benchmarking of ESG performance. Furthermore, UBS unveiled the launch of new long-term collaborations with Swiss-based carbon removal solutions companies Climeworks and neustark, aimed at enabling the removal of 39,500 tonnes of CO2 from the atmosphere over the next 13 years and helping to scale the startups’ technologies and infrastructure. Green is the colour of the future!
FinTech players’ plates were filled with a variety of new greens the past week ㅡ Temasek Holdings and HSBC Holdings officially launched their sustainable infrastructure debt financing company, Pentagreen Capital, which aims to deploy "blended finance at scale over time" to accelerate the development of sustainable infrastructure in Asia. TD Asset Management (TDAM) launched TD Global Carbon Credit Index ETF, a new ETF offering investors exposure to the global carbon credit market. Moving ahead, OP Financial Group introduced its new sustainability program, unveiling a series of ESG goals primarily focused on lowering emissions in loans and investments.
Bringing money into the equation, Low Carbon announced that it reached financial close on a new $228.33M senior debt facility with commercial banks NatWest, Lloyds Bank and AIB, with a further ~$232M expected to follow. The financing will enable the construction of large-scale solar PV projects in the UK and the Netherlands, supporting at least 1 GW of capacity.
Following the humane route, The Insurance Council of Australia (ICA) and insurers made the news for their plans to travel to South-East Queensland and northern New South Wales’ flood-impacted communities for in-person meetings with customers affected by this year’s floods and severe weather.
Some other happenings in the FinTech universe 🪐
Adding a little more sweetness to your FinTech tea, a few more notable activities from the bustling world of FinTech –
FinTech startup iPiD announced a $3.3M seed funding round,
Alloy got $52M to help FinTech companies fight fraud with identity tools,
Lending platform Boopos raised $58M in its Series A round, and
Dubai-based Stake secured $8M in a pre-series A funding round.
And that's a wrap 👋
We hope you enjoyed this edition of the Weekly FinTech Brew, and we'll be back with more next week!
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