The Fintech Fix 12/01/2022
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, this is the place to keep up with breaking news.
Hot Topics – Starting off this week of the fix, we have to talk about the release of the 2021 Global Rankings by Open Future World. In this report, over 1500 organizations across 72 countries were included to assess progress in Open Banking and Open Finance. The likes of Plaid, TrueLayer, Mastercard and Tink all led the pack. Marie Walker, Co Founder of Open Future World commented that ‘these rankings provide a rich reflection of what is happening globally.’
Matt Briers, CFO of Wise, the cross border payments provider, generated headlines as he discussed the company’s evolution. Wise is now one of the world’s fastest-growing tech companies, having raised over $1billion in primary and secondary transactions from some of the world’s leading investors. When asked about what the future holds, Briers said how Wise are ‘building an aspirational product. Whether you want to manage your money better, or your international banking, then Wise is a cool place to do that, and it will get increasingly better in every jurisdiction. Will there be new features? Yes, definitely. But built in a way that just helps people manage their money around the world, in an easier and wiser way.’
Within our latest issue of The Paytech Magazine, John Lyons, Head of Operations at TSB, discussed the best plans of action to tackle the massive upheaval in the payments industry. One of Lyons’ key predictions was that ‘the mobile banking app will be increasingly replaced with embedded finance, with the payment initiation happening elsewhere – initiation embedded in customer journeys will be a critical theme.’ Lyons also went on to discuss the continued importance of partnerships for the industry’s mid tier and smaller players, as well as the growth of Open Banking and increased transparency within the sector.
The Fintech Magazine also hosted a wonderful conversation about the adoption of cloud technology. Here, we spoke with Wayne Freeman, CTO of Mettle, Chris Thacker, who was until recently CTO at digital mortgage broker Mojo Mortgages, and Hyve’s cloud specialist, Paulo Machado, about the difference the cloud actually makes. Freeman highlights how the cloud acting as an ecosystem is crucial, since ‘the customer is at the centre of everything we do, and we serve their needs through technology, whether that’s apps, websites or the services they support.’
Both Mettle and Mojo were built on Cloud architecture, which, Freeman and Thacker agree, is a prerequisite for financial startups to provide the speed and agility they need. Thacker goes as far to say that Mojo may not have even existed if it wasn’t for cloud systems, highlighting the essentiality of the technology at hand which Machado echoes. Do find out more on this fascinating topic in the magazine itself, as Machado also underpins a crucial debate between whether private or public cloud solutions provide the best security.
Big Partnerships To Watch – I’ve moved this section up in this week’s roundup, because the sooner you hear about the huge collaborations that have emerged in the news recently, the better!
Virgin Money announced their new fintech partnership with Expend, the all-in-one spend and expense management platform. Expend has designed its service to be a one-stop shop to empower SMEs and employees to submit and manage their expenses. This saves businesses time, boosts efficiency and increases transparency in its business spending process. This partnership will therefore help Virgin Money improve its digital-first proposition, helping ‘solve a core business pain point’, according to Grame Sands, Interim Head of Business Banking at Virgin Money.
In what I believe to be huge news, Nium, one of the world’s biggest fintechs, have partnered with the fiat-cryptocurrency gateway solution providers, Alchemy Pay. This is a big milestone for Alchemy Pay, as the partnership will allow them to leverage Nium’s huge covergate in over 190 countries and territories. Alchemy Pay’s CEO, John Tan, spoke more about the significance of the collaboration, as the company will now be able to provide ‘crypto and fiat acceptance at even more competitive prices and tap into lucrative new markets where we know there is serious demand.’ This will also help the company continue its success on the back of 2021 where they integrated their fiat payment channels with leading blockchain networks Polygon, Avalanche, and NEAR meaning users can now bypass multiple barriers to entry and enter crypto ecosystems directly with fiat payment standards such as Visa, Mastercard and Paypal. Once again, crypto continues to market itself as more mainstream in 2022, day by day.
Providing access to finance and boosting financial inclusion has been a key theme for fintechs since their inception. Keebo and Experian have positioned themselves to maintain this sense of duty, as the two partnered to greatly improve access to credit for millions of underserved consumers. In the UK alone, close to 5.2 million people are virtually invisible to the financial system due to there being insufficient information available about their financial history for organisations to act with them. Using Experian’s credit risk, affordability, and compliance services, as well as their open banking data, Keebo conducts robust credit decisioning and affordability checks to help these ‘invisible customers’ gain access to credit and build their credit overtime with real-time insights.
Codat created much positive attention for themselves as they entered a product partnership agreement with Moody’s Analytics. This partnership is similar to the above for aiming to, in the long term, improve credit access. Here, the focus is on small business owners nationwide. Peter Lord, CEO and Co Founder of Codat, highlighted that ‘this partnership holds the potential to meaningfully reverse the credit crunch facing SMEs while opening up new profitable lines of business for financial institutions.’ Eric Grandeo, Product Head for Moody’s Analytics, supported this by recognizing how ‘Codat provides a seamless interchange of real-time data to enable valuable credit insights and predictive capabilities’
The focus on SMEs continued, as Cashplus Bank partnered with leading UK insurtech, Superscript, to offer flexible business insurance through the bank’s digital SME Marketplace. Henry Newby, Partnerships Director at Superscript commented on the complementary nature of the partnership. ‘Small businesses move fast, and increasingly they need quick and easy online services that can be set up in an instant. Both Superscript and Cashplus recognise this, developing proprietary technology to help SMEs make better decisions, more simply.’
OTP Bank and SambaNova Systems have partnered on their mission to build Europe’s fastest AI Supercomputer and lead the modern day space race to post AI business. The supercomputer will be used for national research that will aid the private and public sectors, as well as higher education across all of Central and Eastern Europe in cooperation with the Hungarian Ministry of Innovation and Technology. The supercomputer will also benefit OTP’s 17 million users with faster, more personalized AI-based financial services.
Our last exciting partnership to comment on in this week’s roundup is between Ecospend and Contis, in their mission to offer the best in class BaaS products. By integrating the ‘pay-by-bank’ technology from Ecospend, customers of Contis will have the option to make account-to-account payments, as well as utilise account information services (AIS) for financial insights. This makes payments, withdrawals and refunds an immediate process. Andy Lyons, MD Head of Banking Solutions, also observed that by adding an authorization code functionality to their holding accounts, ‘customers can be more confident in the payment process and manage their finances more accurately.’
Funding – We have two big funding stories to report this week. As the world constantly looks towards a more sustainable future, Twig successfully raised a total of $35M in their Series A funding round to fuel Web 3.0 green payment infrastructure. This is huge news, Twig is the fastest growing fintech app in the UK since July 2021, when it was launched, growing at a rate of over 100,000 monthly downloads. In its mission to reduce landfill waste by rerouting goods into the second hard market, Twig are no doubt holding the torch high for sustainability and ESG measures.
iProov, the world leader in online biometric face authentication, raised $70M growth investment from Silicon Valley based group, Sumeru Equity Partners. iProov will use the new capital from Sumeru to rapidly build on its leadership in the United States and expand its international customer base, accelerate the growth of its global partner network, and maintain its position at the forefront of technology innovation while hiring top-quality staff worldwide. Andrew Bud, Founder and CEO of iProov expressed that iProov’s strong balance sheet will give our customers and partners confidence in our long-term ability to keep them and their customers secure.’
Transfer News – In what is our last story on this week’s roundup, the PropTech platform, GetGround, have added ex-Google Cloud Senior Executive and ex-Head of SMB Advertising at Facebook, Marco Grossi, to their roster. GetGround’s mission, as Grossi puts it, is to ‘democratize the property market’ through helping customers and users set up and maintain one’s own buy-to-let business. Grossi brings a wealth of experience and insight, from time spent at some of the world’s biggest tech brands and more recently Stocard, a German digital wallet app used by 60 million people worldwide, Grossi brings in-depth knowledge of what it takes to get to the top. When speaking to Marco about his plans for the future at GetGround, there were two things he remained stern on: ‘keeping the value high’ and remaining ‘a product led company.’
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.