Future of FinTech | Edition #40 – Oct 2022
Welcome back, FinTech Fanatics!
A warm cuppa of some FinTech infusion is certainly how we intend to start our week, and we don’t want you to miss out on this brew as we sip into six tempting themes!
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From payments to lending and even insurance, non-banking entities have levelled up their game in providing financial services in recent times. One such game-changer is e-commerce giant Amazon, which has been supremely focused on building financial services that support its core business objective of increasing participation in the ecosystem. Embark on a journey to venture through Amazon’s Payments Adventures and discover how the internet company is unlocking the value of financial data to aid its personalisation objective.
Edition #40 brings the piping-hot cuppa of FinTech tea straight off the stove, ready to be served to satisfy your curious tastebuds.
Here's the TL;DR:
Numerous participants were seen to be banking on partnerships the past week to bring forth innovative offerings to the ecosystem. One of these was Bank of America, which tapped UK’s Banked Ltd to expand its Pay by Bank online payment solution to euro currency payments.
Now that we’ve landed in Europe on the map, while the European Union Commission grabbed headlines for its plans to study “embedded supervision” of DeFi protocols on the Ethereum blockchain, the London Stock Exchange announced the launch of its voluntary carbon market (VCM) to direct finance to climate mitigation projects.
Lending further help on the climate front, the International Monetary Fund’s Resilience and Sustainability Trust became operational as a vital financing instrument to help countries deal with climate change, pandemics and other longer-term issues.
Speaking of lending, several BNPL initiatives made for an engaging scoop last week: Hokodo provided a new BNPL plug-in for Shopify merchants; Revolut launched Revolut Shops to offer Irish customers instant cashback and the ability to split payments; and Deliveroo partnered with Klarna to offer ‘Eat Now, Pay Later’ services.
Taking a bite into Apple’s partnerships, the technology company and Goldman Sachs teamed up to introduce high-yield savings accounts. Riding on a funding high was also GoHenry, which raised $55M in Series B funding from existing investors after its losses shot up by almost 2000% in 2021. At the same time, bridging the gap to financial wellness, Broadridge and MX joined forces to utilise the company’s financial data aggregation and personalised financial management automation solutions.
For the longer read, let's get going –
The Open Finance sphere witnessed some zesty collaborations that sure will go perfectly with the already brewing latte. Diving right into it:
‘Open’ing with a bang, the Open Banking platform Tink extended its partnership with Snoop, a mobile saving app, to give UK consumers real-time insights on how to cut their bills, pay off debt, grow their savings and save where they spend.
At the same time, Boogi selected Nordigen as their Open Banking provider.
Further bridging the financial gap, Broadridge teamed up with MX to utilise the company’s financial data aggregation and personalised financial management automation solutions.
Bank of America’s Pay By Bank solution also became available in Euro currency payments, thanks to the collaboration with Banked Ltd.
Furthermore, Yapily joined hands with financial e-commerce platform Juni to help businesses get better access to credit.
Lastly, Finom chose Salt Edge to expand its EMI offerings for SMEs and professionals across Europe.
In other news, Ayoconnect closed a $13M Series B extension financing round led by SIG Venture Capital with participation from CE Innovation Capital and existing investor PayU.
On the regulatory front, the Financial Conduct Authority was in the news for its plans to undertake a two-day ‘policy sprint’ to explore key considerations for a regulatory framework for open finance.
Unlocking the Digital Finance box led us to discover the various goings-on via diverse segments of partnerships, launches and fundings.
Starting with the partnerships:
Tech giant Apple stole headlines as it partnered with Goldman Sachs to introduce high-yield savings accounts for Apple Card holders.
At the same time, on a mission to make banking better for SMEs across the US, BankiFi and Axiom Bank teamed up to help small business owners track and manage their finances. Deutsche Bank and Fiserv had a similar vision in mind, as they also joined hands to launch SME payments and banking solution Vert to provide members with a secure, fast and technologically advanced payment acceptance solution.
Finastra, too, grabbed a spot on the bulletin last week for integrating with Contour to increase access to trade finance while enabling seamless and secure transactions.
Moving onto the launch pad:
Gen-Z neobank Step rolled out its crypto investing and rewards on its platform, offering teens with consent from a legal guardian or parent to buy and sell Bitcoin.
Coming through with some sass, Temenos launched a SaaS offering that enables banks to manage financial crime mitigation with composable banking services on a secure, continually evolving, self-service platform.
On the funding forefront, GoHenry tapped existing investors Edison Partners and Revaia for $55M in Series B funding after its losses shot up by 2000% in 2021. Speaking of losses, Goldman Sachs made the news for aiming to cut back its plans for its mass-market digital bank Marcus amid sky-high losses and discontent among employees. Neobank N26, too, saw its losses widening by 14% as it ramped the fraud controls.
On the product side, Bunq rolled out an 'Update 21' with features to help users stay on top of inflation. Lastly, the Prime Minister allocated 75 Digital Banking Units or DBUs to 75 districts in India to promote financial inclusion and further improve the banking experience for Indian citizens.
The Embedded Finance space is headed with interesting alliances lined up to brighten up the week.
Galileo Financial Technologies partnered with Visa for its certification on its ‘Payment Cards as a Service’ API technology.
HSBC turned to Trade Ledger for digital receivables finance capability through its new platform Digital RF, which will cut the approval process for new receivables finance (RF) customers from one to two months to under 48 hours.
FuturePay integrated its MyTab digital revolving credit platform with Bold Commerce's headless checkout to offer flexible, secure, and seamless financing options in checkout to the shoppers.
Things in the BNPL segment were interesting yet again as Deliveroo and Klarna partnered to offer ‘Eat Now, Pay Later’ services, enabling customers to buy groceries and takeout food on credit. Hokodo also provided BNPL plug-ins for Shopify merchants, while EzyAgric and Pezesha launched BNPL services for Ugandan agro-dealers.
In other news, Easymytrip.com launched “Save Now Buy Later” as an investment scheme for its customers to help them manage their finances better while they travel. Further riding the BNPL bandwagon, One Finance debuted its BNPL solution in Egypt. On the funding front, OatFi secured capital with $8M in new equity and $50M in debt to power BNPL services for SMBs. At the same time, Mondu bagged $19.4M in debt to provide BNPL payment solutions to B2B companies.
The DeFi universe was a mix of some hot and cold headlines, serving tea on various activities that piqued curiosity.
There’s no stopping venture capitalists when it comes to funding DeFi projects, and Uniswap’s $165M raise serves to be just an example of it. The Series B funding round was led by Polychain Capital.
On the other hand, the European Union Commission launched a proposal to study “embedded supervision” of DeFi protocols on the Ethereum blockchain, with the aim to “develop, deploy and test” a built-in technology to supervise activities within the DeFi space, signalling greater EU regulation is on the horizon.
DeFi infrastructure company CANVAS was in the news for announcing the testnet launch of CANVAS Connect, the Layer 2 scaling solution built in partnership with StarkWare, allowing users to invest, trade, and transfer payments without paying the prohibitively high and unpredictable gas costs.
Digital asset custody platform GK8 teamed up with Brazilian crypto holding company 2ND Market to expand cryptocurrency product offerings in Brazil. Under the partnership agreement, GK8 will licence its institutional-grade custody platform to 2ND Market to give Brazilian users access to a broader range of crypto products and services.
In other news, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed a fine of about $24M on crypto exchange Bittrex related to the exchange’s violations of anti-money laundering regulations and sanctions on the residents of certain countries and territories.
And in an interesting turn of events, Mango DAO offered a $47M deal to the hacker who made off with $100M in crypto from an exploit in the Mango Markets platform to avoid a criminal investigation and pay off bad debt.
The Platform Finance space was bustling with novel launch-related happenings as well as partnerships that made for an intriguing scoop for the week.
To further its goal of becoming the online shopping destination of choice for its over two million Irish customers, Revolut launched Revolut Shops, offering customers 3% instant cashback on their spending and the ability to split their payments using Revolut’s recently-launched Pay Later service.
Robo-advisor Betterment launched its crypto offering with four-themed portfolios, where customers can invest up to 5% of their Betterment balance in digital currencies like Bitcoin, Ethereum, and other popular currencies.
MENAP region’s Xpence also introduced an expense management solution in the UAE. The financial management platform is now issuing VISA cards in the UAE and Bahrain, where business owners can leverage benefits like real‐time monitoring and automated bookkeeping.
As for the partnerships, Walnut Insurance announced a strategic partnership with Canadian FinTech Neo Financial to support the latter’s recently launched subscription-based credit card reward Bundles. Bundles allow customers to subscribe to specific insurance and reward plans based on their needs and lifestyle.
At the same time, Arab Financial Services (AFS) entered a strategic alliance with financial super app Jingle Pay to provide payment services out of Bahrain servicing GCC residents.
An assortment of buzz-worthy events helped address the gaps due to climate change acceleration in the Green Finance landscape the past week. To begin with:
The London Stock Exchange announced the launch of its voluntary carbon market (VCM) to facilitate the financing of projects that are focused on climate change mitigation.
Investment giant BlackRock made the bulletin for setting up a new website titled “Energy investing: Setting the record straight,” aimed at responding to growing claims accusing the firm of “boycotting” oil and gas companies in pursuit of an ESG-focused social agenda.
Furthermore, HSBC Asset Management launched the new HSBC US Dollar ESG Liquidity Fund to provide a sustainability-aligned cash investment option for institutional investors, including large corporates, pension funds and insurers.
That’s not all – the International Monetary Fund’s Resilience and Sustainability Trust also launched last week, adding a vital financing instrument to help countries deal with climate change, pandemics and other longer-term issues.
As for the other affairs, Wells Fargo Foundation and Elevate joined forces to provide Chicago residents with access to clean, low-cost energy and inclusive workforce development opportunities while helping to lower carbon emissions in underserved neighbourhoods via a two-year project supported by $3.15M in grant funding from the former. Crypto-as-a-service solution provider Zumo became the latest member of the World Economic Forum’s Crypto Sustainability Coalition, where the newly formed coalition will explore how blockchain tools can be leveraged to contribute to meaningful progress toward positive climate action. Mexican authorities also captured headlines as they are preparing to launch a series of financial instruments, including bonds and derivatives, whose proceeds would fund environmental projects. What’s more – JPMorgan Chase announced it would give five organisations philanthropic commitments of $3M each for climate-resilient, affordable housing for Black, Hispanic and Latino households. The Swiss government announced the completion of its inaugural green bond issuance, raising $766M to fund expenditures supporting its environmental goals in areas including clean transportation and biodiversity. The Board of Directors of the African Development Bank (AfDB) also approved a grant of $2.5M to the Mozambican government to develop renewable energy resources. The funding will be used to implement the Mozambique Renewable Energy Integration Program (MREP).
Some other happenings in the FinTech universe 🪐
Nothing is more brilliant than a few more add-ons of some FinTech goodness to the already buzzing tea –
FinAccel turned unicorn with $140M in Series D funding round,
Airwallex sustained a $5.5B valuation with a $100M Series E extension,
Coinbase secured a crypto payments licence in Singapore, and
BNP Paribas acquired FinTech Kantox for the development of technological innovation.
And that's a wrap 👋
We hope you enjoyed this edition of the Weekly FinTech Brew!
If you're hungry for more FinTech insights, check out some of our other work at WhiteSight.
Our latest publications include digging into Goldman's Pot of FinTech Gold: Global Investments and Bumping Up the BaaS: Banking-as-a-Service Roundup 2022
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