Future of FinTech | Edition #39 – Oct 2022
Happy Tuesday, FinTech Folks!
As we get ready to transition into the cosy Autumn bliss, we know that a hot cuppa brewing with the latest FinTech news is just the right companion to go! Indulge in the warmness of six dynamic themes that will surely satisfy your curious appetite.
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‘Revolut’ion has become an integral result of the consequences of innovation in the digital finance world, and financial super app Revolut is certainly turning heads for bringing the same to the table with its many moves. Having recently been accepted by the Financial Conduct Authority for crypto services, the neobank has added another win to its list of global licences. Journey through the many events that mark Revolut’s global endeavours in Revolut Juggernaut: In Search of a New World Order in Finance!
Edition #39 is here to boost your week with the added pumps of zesty happenings that surround the buzzing FinTechaverse!
Here's the TL;DR:
Several industry players seemed to have been laying their cards on the table the past week, with Uber partnering with Mastercard, Marqeta and Branch to launch a new card offering for drivers, and CWallet joining forces with M2P to launch prepaid and multi-currency cards in Qatar.
The collaboration affairs have only just begun here – Adyen embeds Tink’s payment initiation technology to enable access to A2A payments, eToro and OpenPayd joined forces to deliver embedded account infrastructure, while HSBC and Oracle NetSuite unveiled a solution for embedding banking services into a cloud ERP system.
However, HSBC wasn’t the only one tapping NetSuite’s capabilities, as Brex also expanded its integration with the latter to help businesses optimise spend management.
For Vietnam’s Cake Bank, it has certainly been a cakewalk in attracting more than 1.5 million customers in just over a year, particularly the Generation Z and millennial group the bank is targeting.
It has been cakes and ale for the regulatory events, too, as several global initiatives came to the forefront last week – the U.S. Financial Stability Oversight Council (FSOC) announced the launch of the Climate-related Financial Risk Advisory Committee (CFRAC), the Monetary Authority of Singapore (MAS) established a Sustainable Finance Advisory Panel (SFAP), and the Banque de France announced new projects to achieve the benefits of central bank digital currencies (CBDCs) used at a wholesale level.
For the longer read, let's get going –
The Open Finance sphere opens the week with quite the delightful reads, where regulatory affairs and partnerships come out on top!
To begin with things on the regulatory front:
The Financial Conduct Authority’s amendment to the 90-day Payment Services Directive (PSD2) rule, where customers were required to confirm access to their data for each Open Banking service and bank they use every 90 days, finally came into effect. Users can now simply pick “yes” or “no” every 90 days.
In Brazil, the Central Bank authorised open finance platform Belvo to operate as a Payment Transaction Initiator (ITP), enabling the firm to offer its customers the possibility to transfer money via Pix between accounts of different institutions.
Moving onto the numerous partnership-related events:
Fidel API joined Visa Fintech Partner Connect, where the endorsement of Visa will help the company become more visible as a provider of real-time transactions APIs.
Dutch FinTech Adyen made headlines for embedding Tink’s payment initiation technology to enable businesses to access account-to-account payments, beginning in the UK with more markets to follow in 2023.
Pelrio opted Nordigen as its Open Banking provider to deliver bank balance and transaction data straight to its platform.
What’s more – UK’s Ecospend also announced its partnership with QR-code-based payment services app PENG to enable the latter’s customers to benefit from Open Banking services through free transactions and enhanced security.
Players in the Digital Finance space have been looking to simplify the process of payments, resulting in several notable moves in the last week.
When it comes to the partnerships:
To get in on the BNPL trend, Deutsche Bank added artificial intelligence from Visa subsidiary Cybersource, which enables merchants to obtain a fraud risk score for transactions. The technology will cover all payments and play a role in the bank's pilot of its BNPL product.
Dutch digital bank Knab was in the news for extending its existing partnership with payments technology provider Worldline to now include support for back-office processing for handling SEPA Batch payments and multi-currency payments.
Payment processing FinTech startup CWallet also partnered with M2P to enable prepaid and multi-currency cards in Qatar, aiming to promote financial technology intelligence, financial inclusion, and services.
At the same time, Taiwan’s SinoPac selected Temenos for digital banking software modernisation.
In other news, Studio Bank, a digital bank in Nashville, implemented a credit card program to offer new payment solutions through FinTech Corserv’s Account Issuer program. Hong Kong’s livi Bank also introduced Travel Now travel insurance plan to expand its product offers to meet its customers’ lifestyle needs as they decide to travel amid the relaxation of COVID-19 quarantine rules. As for the various funding activities, neobank firm Vance raised $5.8M in a seed round led by Hummingbird Ventures to further their vision of building a borderless banking account that opens up realms of using banking products that are currently not possible. Jiko, on the other hand, banked $40M in Series B funding to offer companies a way to park their cash in T-bills.
That’s not all – eventful milestones were also the talk of the town the past week. Brazil’s Nubank grabbed headlines for reaching 70 million customers in Latin America, while also announcing that almost 2 million of its said customers are cryptocurrency investors. Similarly, JPMorgan Chase’s UK retail bank amassed 1 million customers and more than $10.8B in deposits one year after its launch. To add the cherry on top of the cake, Vietnam’s latest digital bank Cake, too, attracted more than 1.5 million customers in just over a year, with the number of banks connected to or served by the digital bank also rising to 44 from 12.
The Embedded Finance landscape witnessed an assortment of ecosystem participants joining forces to bring forth novel initiatives.
Speaking of the collaborations:
HSBC and Oracle NetSuite unveiled the NetSuite AP Automation solution that embeds banking services into a cloud enterprise resource planning (ERP) system, helping organisations improve profitability by making it easier to process invoices and pay vendors.
Paymob and Tabby teamed up to help Egyptian retailers grow by ensuring a smooth integration of Tabby’s BNPL solution into Paymob’s platform so that it can be offered to the company’s online and in-store shops.
Tabby also hit the headlines for its partnership with EROS to offer a smarter, transparent, secure, and convenient way for EROS’ customers to purchase their preferred electronics and appliances.
eToro and OpenPayd forged a partnership where the latter will help eToro issue Euro virtual IBANs (International Bank Account Numbers) unique to each of its customers, while also giving it access to SEPA Instant rails.
Railsr made the bulletin for partnering with DND Finance to launch the new Score Credit Mastercard credit card aimed at personal users and business owners with a less-than-perfect credit record, including entrepreneurs and students.
Uber, too, had a card up its sleeve, as it collaborated with payments giant Mastercard, card-issuing platform Marqeta and FinTech Branch to launch a new loyalty and payments card for its drivers. The Uber Pro Card will help drivers save on fuel, fees and other associated expenses, with earnings automatically deposited into a business checking account.
Furthermore, gig economy platform Gigable partnered with Weavr to enhance its payments and business banking infrastructure to transform how gig workers access earnings and control finances.
Swedish BNPL provider Klarna also forged an alliance with FinTech firm CellPay, where the latter will offer Klarna’s interest-free ‘Pay in 4’ option to consumers in the US who are buying its prepaid cell phone minutes.
To top it all off, Carrefour signed a Memorandum of Understanding (MoU) with Bank Alfalah to launch its BNPL initiative, where customers with an Alfa account can now scan a product’s QR code to pay in instalments in-store without experiencing any price markup.
As for the other events, Railsr also made the news for raising $46M in its Series C round of funding, where the investment includes $26M in equity and $20M in debt financing. BNPL FinTech Afterpay debuted interest-bearing loans, adding a monthly payment option at the point of sale so users may opt to stretch payments out for specific items for up to a year. Pine Labs also entered the wearables segment in the consumer electronics category by announcing Pay Later EMIs on branded wearables.
The DeFi universe observed new launch-related headlines that floated around in the cyberspace. Gliding our way into the happenings:
DeFi platform Ribbon Finance rolled out its high-stakes lending product ‘Lend’, which allows institutional investors to borrow funds without having to lock in collateral. The protocol has already seen users deposit 15M USDC, with firms like Folkvang and Wintermute borrowing more than 10M USDC from the same.
Singaporean firm Cake Defi launched its Ethereum Staking feature, offering a 5% staking yield for enthusiastic investors.
MONEY Protocol (also known as MOY Protocol) deployed a DEFI mechanism and Auto-Stake function to achieve rapid ecological development and create a Web3.0 platform that users trust in.
On the funding forefront, MakerDAO put $500M in US Treasuries and corporate bonds to diversify its investment portfolio. The government doesn’t step away from the limelight when it comes to DeFi either, as the Banque de France announced new projects to achieve the benefits of CBDCs used at a wholesale level by banks and financial markets.
In other news, Nexo grabbed attention by acquiring a stake in the Summit National Bank of the US, as the traditional bank is looking to reinvent itself as a modern FinTech bank.
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The Platform Finance space further added sweetness to the already brimming tea with some more interesting events to offer. Taking a sip into the notable activities on the partnership front:
Brex integrated itself with Oracle’s Netsuite to help businesses optimise their spend management through one centralised place.
P2P payments platform MoneyGram announced a strategic partnership and a minority investment in Jingle Pay to enable consumers in the UAE to use the Jingle Pay app to send money in near real-time to over 200 countries and territories worldwide.
Coming to the launch-based developments:
CRED launched a ‘Scan and Pay’ feature for UPI payments exclusively for CRED members.
‘Revol’utionising the crypto aspect in the FinTech space, Revout rolled out an in-app educational module to help its Singaporean users learn more about the specific risks, nature, and characteristics of cryptocurrencies.
OneConnect announced the launch of its regional operations in Abu Dhabi Global Market (ADGM) to further aid in developing the FinTech ecosystem and accelerate the digital transformation of financial services in the UAE.
On the M&A side of the business, we saw Razorpay, which acquired PoshVine to allow merchants on its platform to attract customers by offering them personalised rewards through PoshVine’s customer loyalty platform.
Additionally, Pomelo announced its preparation to support the expansion of its Payment Platform as a Service offering with a brand uplift and a broader regional presence in Asia and Europe. And to again celebrate the super app's growth, Revolut won FCA's approval for crypto service, finally being accepted on the FCA's registry of crypto asset firms following a protracted authorisation process.
As more countries step into the sustainability world, the Green Finance space keeps growing its roots deep in the FinTechaverse.
The Monetary Authority of Singapore (MAS) grabbed most of the weekly headlines – beginning with the launch of an ESG Impact Hub to spur collaboration between ESG FinTech startups in Singapore. Further, it forged an alliance with Convergence Blended Finance to launch a ~$3.48M (S$5M) Asia Climate Solutions Design Grant to help provide early-stage grant funding for innovative and scalable blended finance solutions. Lastly, MAS also established a Sustainable Finance Advisory Panel (SFAP) for guidance on its strategies and initiatives to build a credible and vibrant sustainable finance ecosystem.
Taking a look at other noteworthy events for the week:
The U.S. Financial Stability Oversight Council launched the Climate-related Financial Risk Advisory Committee aimed at helping the council with identifying, assessing, and mitigating climate-related risks to the financial system.
Saudi Arabia’s sovereign wealth fund, The Public Investment Fund, launched $500M dollar-dominated green bonds as it plans to increase renewable energy production to 50% of the grid by 2030.
Funding took precedence yet again for Saudi Arabia’s Public Investment Fund, as it completed its debut bond issuance raising $3B to finance its green investments.
Walden Mutual Bank made the bulletin for its plans to soon open its virtual doors to anyone interested in supporting a more sustainable and equitable local food ecosystem.
On the regulatory front, the following news pronounced:
Philippine thrift banks embraced sustainable finance as the regulator issued guidelines on the implementation of the Environmental and Social Risk Management (ESRM) System.
A committee of experts at the International Financial Services Centres Authority (IFSCA) recommended promoting a regulatory sandbox for green FinTech to support the development of innovative financial products in green and sustainable finance.
Regulators in the US and Europe caught headlines for their attempt to tighten rules on ESG investment products, triggering a backlash from investors and businesses.
U.S. Treasury also was in the news for announcing a $950M loan to the Clean Technology Fund (CTF), a multilateral trust fund that helps developing countries accelerate their transition from coal power to clean energy.
Some other happenings in the FinTech universe 🪐
A few more scrumptious headlines to snack upon with your FinTech brew for the week –
Cashfree received in-principle approval from the Reserve Bank of India for payment aggregator licence,
DBT secured $284M financing from NatWest and Värde Partners,
Colendi secured a $150M credit line from Fibabanka, and
Korea Credit Data raised $24.7M in Series D extension financing.
And that's a wrap 👋
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