The Fintech Fix 10/08/2022

Welcome to The Fintech Fix, where we cover the biggest stories of the financial week. Whether it’s the next groundbreaking trend in cryptocurrency or Blockchain technology, or a new partnership that’s about to change the global economic landscape, this is the place to keep up with the breaking news of the future.

Hot Topics

Congratulations are in order. Serrala, a global financial automation software company has announced a new CEO to catapult their business worldwide. Hartmut Wagner, previously the CEO of COLLENDA, will join Serrala to further expand the company’s services outside of Europe. With an annual recurring revenue (ARR) of over $100 million, the goal post is a sprint away.

In 2021, the estimated market size for neobanks was around $47 billion. It is projected to be worth $2.05 trillion in 2030. Demand is skyhigh. [source: Statista research Department].

The same cannot be said for Neobanks. From attracting millions in capital expenditure to complying with government regulations, the new kids on the block have a few battles to win before they challenge big banks. This is where the cloud may be a solution. Digital financial services provider Neofy has developed a full-stack cloud system that allows a bank or fintech to launch from scratch, with a predominantly pay-as-you-go SaaS model. They recently partnered with HPS (Hightech Payment Systems) to provide a Cloud-based Digital Cards platform.

With the expertise of industry power players at Tricount, Aion Bank, and Mastercard, FF News embarks on an exploration into fintech’s crowning achievement: open banking. In the first part of our new Virtual Arena series How Open Banking and BaaS are enabling fintech innovation, we talk about the recent venture between these companies and Vodeno. For example, launching an in-app banking feature at Tricount which allows customers to reimburse expenses through a one-click bank transfer.

“At Tricount, we have always been neutral. We want to offer our service to a large number of people. So it was important for us to have something that was bank agnostic. Open banking and PSD2 in this context seemed a promising fit and with great enthusiasm, we partnered with Aion, Vodeno, and Mastercard to make this happen – and the success is there,” said Johnathon Fallon, the Co-Founder and Managing Director at Tricount.

Mergers and Acquisitions

Despite the austere economic environment brought about by record inflation, M&As are still pushing forward. Most interestingly, we are seeing an excess of in-house exchanges. First off, Jack Henry and Associates announced its definitive acquisition of digital payment solution provider Payrailz. The move will see the Payrailz Cloud and AI-based payment solutions incorporated into Jack Henry’s already burgeoning tech-forward ecosystem.

“We plan to acquire Payrailz as a strategic addition to our payments ecosystem, which enables our clients to simplify the complexity of payments, modernise their existing payment channels, and remain at the centre of their account holders’ payment experiences,” said Greg Adelson, President and COO of Jack Henry.

The ever-entrailing saga of US insurtech Lemonade now sees a new business partner in EIS. The global digital insurance platform provider will acquire Metromile’s Enterprise Business Solutions, from the insurer. For EIS, this is hugely beneficial, as this acquisition will open them up to new markets and offer a wide range of insurance services to new and existing customers. End users have the most to gain, as the use of a more robust automated claims solution will enable EIS customers to lower their total cost of ownership and Loss Adjustment Expense (LAE) whilst increasing their speed to market.

Similar to Lemonade, global financial services organisation Sun Life Financial will be selling its UK business to Phoenix Group for a closing price of £248 million (approximately C$385 million). The sale will see SLF become a strategic asset management partner to the London-based firm. Phoenix is no small-fry, being the UK’s largest long-term savings and retirement business with more than 13 million customers and £310 billion of assets under administration.

Investments

Sophomore players in fintech are also taking leaps into big market opportunities. The Bank of London announced this week its intention to expand its US Global Platform & Services headquarters in Charlotte, North Carolina. Mecklenburg and surrounding counties can expect an annual payroll impact of nearly $33 million when fully staffed. The venture aimis to create 350 new jobs by 2026.

Jim Ditmore, Co-President and Group Operating Officer of The Bank of London, said: “We will be continuing to invest heavily in our technology offering for clients and we’ve chosen Charlotte as a key location to drive our agenda forward, enabled by Charlotte’s unique combination of banking talent, technologists, and financial business leaders.”

Last, but certainly not least, fintech firm MerQube raised a further $8 million in a funding round led by Laurion Capital Management. This comes off the back of their last series A round, where they raised $5 million led by J.P. Morgan. The index-linked investments market is a rapidly evolving field now valued at $17 trillion. MerQube hopes to develop sophisticated rules-based strategies to handle the level of expertise needed in this new market.

Vinit Srivastava, CEO at MerQube, commented: “We are delighted to have Laurion Capital Management, Citi, J.P. Morgan, Morgan Stanley and UBS as investors, and are proud to collaborate with them as clients. The demand for customised, scalable and cost-efficient solutions is driving our growth and the revolution of indexing. The support we are receiving during these times of market uncertainty is testament to the value we bring to our clients with our unique technology.”

So that’s your weekly Fintech Fix! Stay tuned for next week’s dose so that you can stay up to date with the biggest stories of the future, right here at FF News.