The Fintech Fix 17/08/2022

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.

Big News

This past week saw a plethora of milestones and open banking successes.

Next month, blockchain-based operating system L3COS will be launching the world’s first-ever Fiat-on-Chain (FoC) with three initial currencies – GBP, Euro, and USD. Safeguarded by central banks, L3COS closed-loop digital assets marketplace will allow individuals, businesses and governments to trade on a global scale. The FoC will initially be used for payments by launch partners, supply-chain platform AgriDex, and entertainment and sports marketplace, ENT Global. This regulated space will facilitate a more secure base for blockchain trading.

On the speculative side of the industry, guest contributor Helen Child, Founder of Open Banking Excellence (OBE), and a panel of fintech leaders interrogate the growing threat of fraud in the financial services industry. Mike Haley, CEO of Cifas and panellists shared some damning statistics:

“We’ve seen in the first five months of this year that identity fraud has increased by 39%, whilst facility or account takeover has increased by 109%, mainly hitting the telecoms and online retail industries. And false applications for bank accounts are up 59% – these are startling figures for us. With open banking, there are opportunities to contribute to reducing fraud through mechanisms such as being able to check bank account information to verify identities.”

Open banking draws a mark of maturity for the fintech sector and is backed by a constantly developing security model. The solution to growing fraud lies in the trust between businesses and consumers in personal information, and a move to more thorough protocols in data handling and consent.

For the promise of open banking, look no further than NatWest’s recent success with its platform Payit™. The open-banking solution has now processed over 5 million payment transactions, amounting to an astounding £1 billion since its 2020 launch. A first for UK banks, the Payit platform allows consumers and businesses to transfer money in real-time, securely and without having to share their bank details.

Mike Elliff, CEO of Payit, said on the milestone, “Speed and cash flow management are critical for everyone – whether you’re a business or a consumer. We are immensely proud to hit this milestone and demonstrate the value that open banking technology has on businesses and the public. We know we’re at the forefront of applications of this technology, and cannot wait to see what another two years will bring.”

Mergers and Acquisitions

Following the line of security, the latest M&A and partnerships are prioritising the goal of safer and secure payments.

Global payments company Wise has partnered with financial software provider Plaid and announced an open finance agreement that will give customers a way to move money across different financial institutions. With the growing presence of fintech apps in customers’ daily lives, developing a solution which can easily connect them all would be a game changer in the space.

With Plaid’s Core Exchange solution, 13 million Wise users will be able to connect and move money from their Wise USD local accounts across the 6000+ fintech apps powered by Plaid – the likes of which include Venmo, Chime and Truebill. This venture props up the most effective advantages brought about by open finance.

With the use of free-flowing data, customers of Wise will have more engaging experiences using the fintech apps they use on a daily basis.

In the corporate world, customer experience is about to get even more personal. Private banking firms Wells Fargo and Bank of America together will be launching Fidelis Capital, advisor-owned wealth management aiming to connect clients with a financial specialist who can best support their needs. With teams based across the US, Fidelis will be focusing on providing hyper-personalised financial services to clients on anything from investments to speciality asset management.

“We have cultivated the best talent from across big banks like Goldman Sachs, Citibank, Wells Fargo, and Bank of America,” said Founding Partner, Client Advisor of Fidelis Paul Ayotte. “With Fidelis Capital, we have brought the personalised service of private banking into the independent realm. I look forward to working with our teams here in Tampa and in Dallas to deliver a differentiated approach to ultra-high-net-worth clients, institutions, and family offices.”

Cryptocurrency has travelled further on the road to legitimacy with a new partnership between payments platform Pomelo Pay and cryptocurrency services provider TripleA. As a unified Whitelabel solution, Pomelo has opened up more businesses to accept crypto directly through secure QR codes and payment link technology. Such an approach has guaranteed quicker settlement periods and low transaction fees. APAC hospitality company Soneva will be the first company beneficiary of this new venture, being able to accept Bitcoin and Ethereum cryptocurrencies across each of its resorts.

Funding and Expansion

Though a relatively quiet week for fintech funding, goals of world domination are charging on. Netherlands-based investment platform Trive is taking a big leap into the Turkish market – adding an established multi-asset broker in Turkey to its network, now named Trive Yatırım. The connection will allow Trive customers access to the broker’s extensive multi-asset product range from stocks to IPOs.

Trive Yatırım is already a well-established 35-year-old multi-asset brokerage company. It was the first in the country to offer commission-free stock trading in 2021. This new touch point into the lucrative Istanbul Stock Exchange (BIST) will only solidify Trive’s foothold as a global competitor. 

Moving closer to home, Manchester-based embedded-banking provider BankiFi secures £4 million in additional investment to continue its global expansion efforts. The company, which focuses on the payment needs of SMEs, will use the funding in hopes to bring its platform to over 2 million small businesses across four continents by 2024. The funding was spearheaded by local firms Praetura Ventures and the Greater Manchester Combined Authority (GMCA).

“BankiFi has proven to be an industry-leading open cash management provider in Europe, Australia, New Zealand and other countries,” said David Foreman, managing director of Praetura Ventures. “Now that they have launched in North America, BankiFi has an opportunity for dramatic growth. We’re looking forward to continuing our partnership and seeing their solutions continue to transform bank channels, in order to support SMEs around the world.”

This week’s funding stories show that fintechs are aiming big with their goal to go global. From big-time players in the Netherlands to home-grown underdogs in Manchester, the services that they provide are ready for the world stage.

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.