The Fintech Fix, Weekly Roundup 05/01/2022
Happy New Year! The FF News Team wishes you all a happy and healthy start to 2022, and welcomes you to the tenth edition of 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 CEO creating an economic revolution or an upcoming startup generating a huge following, this is the place to keep up with the breaking news.
Hot Topics – As we say goodbye to 2021, what stories walked with us into the future that you must know? Well, in the week of Christmas, Visa announced their acquisition of Currencycloud, an international platform which helps banks and fintechs provide foreign exchange solutions for cross-border payments. This is huge news, for Currencycloud already supports banking and technology clients through its cloud-based platform in over 180 countries. With Visa’s acquisition, this will only accelerate outreach and dominance.
Open Banking was undoubtedly one of the biggest pillars and themes throughout the course of 2021. This was showcased by the first ‘Global Open Banking Report’, presented by CBI and PwC Italy. Whilst PwC Italy focuses on the themes for growth in, predominantly, the Italian Market, CBI, as the collaborative hub for technological innovation and digitization of the financial industry, extends the view to a global perspective too. The report concluded that at European level, the adoption of PSD2 has undoubtedly laid the foundations for the development of Open Banking, stimulating competition in the financial services market and opening the doors to new players, thus contributing to an enrichment of the banking offering for customers. Liliana Fratini Passi, Managing Director of CBI, commented that the report ‘shows that we are still in an early stage of growth’, but those who do invest in digital skills, sustainability and technological advancements ‘will be the leaders in the transformed competitive arena.’
CBI continued their discussion on the state of Open Banking, with a focus on Italy, as our host in the FF Virtual Arena, Douglas Mackenzie, was joined by CBI’s Alessio Castelli. Some fascinating debates revolved around the report mentioned above. Whilst the adoption rate is still low, Italy is moving on its path towards Open Banking, and will likely accelerate its growth in doing so through improvement of interfaces and increased collaboration to create an open culture within the market.
2021 began with viewing AI as something still of the future, yet by the end of it there is no doubt that it is very much something of the here and now. Once again, our Virtual Arena hosted important conversations about the future of financial services, as Expert.Ai’s Daniele Cordioli and esure Group’s Chris Pearce discussed the implementation of AI in insurance. What emerged was a very nuanced talk on how to use AI meaningfully for customers beyond to reduce risk.
Cryptocurrency was another key trend last year and seems to continue to solidify its importance in the mainstream world. VIP$ Coin, the asset backed Blockchain Cryptocurrency, is in talks with the Mexican government about how to bolster the country’s economy. Chris Brice, Co-Founder of VIP$ Coin powerfully noted the globality of this moment; ‘For the first time in history, a digital currency other than Bitcoin has been identified as a viable asset to support Governments across the world. This is a major step in the world of decentralised finance… Today, we’re witnessing the change of banking and public finance as we know it, and we’re excited to be part of the change.’ Mexico stands as the 8th biggest economy in the world, and could truly revolutionise itself if this union strengthens beyond discussions.
A lot of these stories focus on signing off 2021. What is in store for 2022? Well, David Poole of MYPINPAD highlighted his predictions for the payments industry this year. These included an increasing emphasis on digital, contactless and mobile payments, a more certified SDK architectured solution and further regulation of BNL services. Poole also explored how SoftPos products will continue to proliferate, and that MYPINPAD will continue to grow, as they aim to be operational in all five continents at the end of the year.
And lastly, our new editions for The Paytech Magazine (Issue 10) and The Fintech Magazine (Issue 22) are out and readable for you now! The Paytech Magazine evaluates where technologies banks should be investing their money, India’s transformation of the payments scene and how companies like Microsoft and ACI Worldwide tackle fraudsters through the benefits of the cloud. The Fintech Magazine has even more, from Oak North and LSE’s ‘Mentorpreneurship Programme’ to how Lawrence Levy, former CFO of Pixar, navigated one of the most successful IPOs in history.
Funding – My New Year’s resolution was to watch my spending – Deliveroo is killing me! But where have our leading financial organizations chosen to put their spending in 2022? ING announced their investment in Thought Machine, a British fintech founded by ex Google Engineer, Paul Taylor, which supports banks moving towards cloud-based banking platforms. Thought Machine has raised $200 million in a funding round that lifts its valuation above $1 billion. These funds can truly revolutionize customer experiences from banks who have enhanced their services beyond old IT legacy structures.
SMEs across Africa face the problem of access to continuous capital. With this in mind, Paylend, a Kenyan Fintech startup, has raised $2 million in seed investment from Next Chymia Consulting HK Limited to combat the issue. The investment will also allow Paylend to bridge the consumer data gap by connecting consumers to products and services. Eliutherius Juma, CEO of Paylend, voiced that the investment will provide a massive opportunity, as ‘the formal bankinglandscape in Sub-Saharan Africa supports around 20% of Africa’s bankable population with the majority of people excluded from access to finance and wealth creation.’ The investments will therefore support the Kenyan market, as well as new markets in Tanzania, Zambia and Nigeria as part of its next 3 years growth plan.
Ledn Inc., a global digital asset savings and credit platform, successfully raised $70 million in a Series B funding round last month. Ledn will use this new capital to strengthen its balance sheet to support the rapid growth of its digital asset lending business, including its new Bitcoin-backed mortgage product, a complete unique offering on the market at this time by allowing Ledn clients to use Bitcoin to purchase a property. This blend of crypto and fiat currencies is an evolving trend in 2022, which Mauricio Di Bartolomeo, Co Founder and CSO at Ledn, believes will ‘help more people save in Bitcoin and other strong digital assets to preserve their wealth and escape poverty traps.’ This is especially relevant considering that data gathered by Buyshares.co.uk show that over the last five years between June 26, 2015 and June 26, 2020, Bitcoin’s ROI was 70.16 times higher compared to the average of five major indices.
Big Partnerships To Watch – Two huge names combined forces in December to benefit its customers. Amazon announced they are working with Barclays to allow UK consumers access to pay in instalments through the method ‘Instalments by Barclays.’ Financing options range between 3 to 48 months, giving consumers a huge degree of flexibility and reflecting the continued appreciation and implementation of forms of BNPL services. All lending is fully regulated by the FCA, and Barclays carries out robust credit and affordability checks to ensure that the customer is not given access to more credit than they can comfortably afford. This ensures customer protection from being exploited and ‘provides greater comfort for customers making bigger purchases’, according to Rob Levy, Head of Instalment Lending at Amazon UK.
Tink, an Open Banking platform, treated themselves to an early Christmas present by acquiring FinTecSystems, a leading German Open Banking infrastructure fintech. FinTecSystems’ 78 employees become part of the Tink organisation, with the new DACH management team including René Sauer, Hannes Rogall and Caroline Jenke alongside Tink’s Cyrosch Kalateh. FinTecSystems’ unrivalled product suite and expertise in the DACH market, will offer both local and international customers in the region the most complete solution when partnering for open banking technology.
We all love a bit of downtime and sticking something on Netflix. But SweepBank announced its plans to deliver a ‘Netflix experience’ to the banking industry, with the help of next generation core banking platform, Tuum. This so-called ‘Netflix experience’ will provide customers with personalised offers, products and services to optimise the way they manage their money based on customer feedback and expectations. Rivo Uibo, co-founder and CBO of Tuum, said that ‘with their innovative approach towards personalised banking, SweepBank is able to deliver what customers have been demanding for years: relevant services, and tailored financial advice and support.’
And last but not least, Santander revealed they are now partners of Scuderia Ferrari. Whilst I’m a McClaren fan, this partnership still pleases me. F1 aims to become net zero by 2030. When combined with Santander, who were the world’s leading bank in renewable energy for 2020, there is no doubt bound to be hugely valuable and sustainable mobility solutions at hand for the future here.
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.