The Fintech Fix 02/03/2022

Welcome to The Fintech Fix, where we cover the biggest stories of the financial week! Whether it’s the next groundbreaking advancement in Blockchain technology, a new partnership about to trigger an economic revolution or an upcoming startup generating a huge following.

Hot Topics – We kick off this week’s roundup with an exclusive from the Finastra Forum Europe 2022, looking at why banks need BaaS. Finastra, leaders in the open finance movement, provided a platform where high profile market characters such as Angus Ross, CRO of BaaS at Finastra, Ritesh Agarwal, a Partner at McKinsey, Mark Williamson, Managing Director at HSBC, and more could discuss the topic at hand. Some of the key takeaways from the panel included the need to modernise tech stacks, deliver open API’s, encourage CEO driven imperatives and also ensuring that ‘what we’re building is on the modern, scalable and secure Finastra platform that our financial institutions trust”, according to Jeannette Kescenovitz, Senior Director at Finastra. Banks are vital for banking as a service, and platforming and partnering is the key to get there. With Finastra’s platform, financial institutions have no reason to remain aloof when it comes to BaaS, as the tools required to move to embedded financial services are readily available to them.

Zopa Bank are being highlighted in this week’s hot topics section for two very important reasons. Firstly, CEO Jaidev Janardana announced that the tech unicorn will immediately launch new supporting measures for eligible Ukrainians, sponsoring 50 work Visas and encouraging the wider UK fintech community to do similar, after UK Home Secretary, Priti Patel, announced new work Visa concessions for Ukraine nationals.

Zopa continued to gain deserved attention this week by launching their ‘hybrid’ saving account. This was built in mind to help the younger generation, after recent customer insights showed that while 8 out of 10 adults under 30 want to organise their savings based on what they’re saving towards, most saving accounts do not have a Pot functionality. Thus, Zopa’s account offers faster payments, best in class mobile servicing, and no financial penalties for withdrawals. “And we’re only getting started”, said Merve Ferrero, Chief Strategy Officer at Zopa; “Over the next 12 months we plan on doubling our savings portfolio to £2 billion while continuing to find innovative ways to help our customers grow their savings”.

One of the UK’s leading providers of home, bike and car insurance, Hastings Direct has become the first motor insurance company to adopt what3words technology. What3words divides the globe into 3m x 3m squares and assigns each area a unique combination of 3 words. For example, drivers can provide “///adventure.secure.lined” to instruct their insurance provider to come to Moor Lane Car Park in The Peak District. This will greatly assist those in accidents or breakdowns by pinpointing their location with complete clarity, minimising errors and time wasted in potentially dangerous moments.

Wallex, a B2B cross-border payments provider with licences in Hong Kong, Indonesia and Singapore, is in agreement to be acquired by M-DAQ, a leading Singapore-based fintech. The acquisition is the first of a series for M-DAQ, as it embarks on a global growth plan to capture market opportunities and expand In addition to acquisition, M-DAQ will also be injecting fresh working capital to accelerate the Wallex business. The combined entity is expected to process in excess of S$15 billion (US$11billion) of Gross Transaction Value (GTV) this year.

Big Partnerships To Watch – We have 3 partnerships in this week’s roundup that are impossible not to highlight! Firstly, Microsoft and U.S. Bank have partnered in order to accelerate the future of banking with cloud computing. Cloud technology no doubt became a strong trend in 2021 and looks set to continue showing its usefulness amongst the industry’s biggest players in 2022. The transition to the cloud offers numerous benefits:

• Improving the security of data, financial assets and customer privacy
• Rapidly accessing and analysing data, improving agility
• Adding resilience and strengthening technology risk management
• Creating compelling, personalised and leading-edge experiences

Customers will be better taken care of and partners are better equipped to cater for their financial needs in real-time, in an industry where “success is increasingly driven by technology capability”, according to Andy Cecere, Chairman, President and CEO of U.S Bank.

Secondly, we announce the partnership between Standard Chartered and International Air Transport Association (IATA) to launch IATA Pay, an airline industry payment platform, in India. The launch of IATA Pay builds on Standard Chartered and IATA’s existing partnership to co-create an industry-wide payment solution. In this latest chapter, consumers will be able to pay instantly for airline tickets from their bank accounts, whilst participating airlines will be able to avoid bilateral integrations with multiple service providers, eliminating the need to pay an acquiring fee to card acquirers.

Our last partnership seeks to improve the view of an indiivudals’ financial standing and creditworthiness by providing a more complete picture than is currently allowed to be made available. TransUnion, one of the UK’s leading credit reference agencies, and CreditLadder, the UK’s biggest rent reporting platform, have agreed to partner to embed UK tenants’ rental payments into their credit information. This will be a great step in furthering financial inclusion, authenticity and literacy. After all, “having a strong credit report and score can help tenants improve their access to credit and accomplish their financial goals, whether for everyday living or for bigger ticket items like buying their own home or going on holiday”, as Sheraz Dar, CEO at Credit Ladder, rightly highlights. This is a great step for renters.

Funding – We have two funding stories to conclude this week’s roundup.

Sticking on a similar theme of renting, we head to Proptech startup Piñata, who raised $13 million in Series A funding led by real estate and proptech-focused venture firm Wilshire Lane Capital. The funding comes amid Piñata’s massive 1100% year-over-year growth as of January 2022. The funding puts the company in a much stronger position to democratise credit access for renters who can report renters’ payments to the major credit bureaus for free. Members can also earn rewards and discounts from leading brands, leading to hundreds or thousands being saved each year.

And lastly, Nosso announced a successful funding round of £2.1m capital. The fintech was built to help parents plan for their children’s financial futures by offering children investment accounts that parents can contribute and manage together. Family members can also donate via special link without additional paperwork. The funding will allow Nosso to launch a number of new financial products regularly used in family financial planning such as more flexible Junior Investment Accounts (Bare trusts).