The Fintech Fix 28/10/2022

Welcome to The Fintech Fix, where we cover the biggest fintech stories of the working week. Whether it’s the next groundbreaking trend in crypto 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.

The Age of Fintech as Companion

The talk around personalisation and customer-centricity has been fintech’s broken record for the past 5 years now. 2018 and the introduction of the Payment Services Directive (PSD2) brought about open banking as we know it today, and since then, millions of banks and financial institutions have been clambering for new and unique ways they can retain customers.

With this era of fintech, companies are thinking out of the box, both with what services they offer and to whom they are offering them.

Financial health-orientated fintech, Jack Henry, has announced the launch of a real-time person-to-person (P2P) payment solution. The product will be offered as a standalone and strategic component of Payrailz® Digital Payments Platform, which Jack Henry acquired in September of this year. At the heart of this offering, is its open-loop capability, where customers will have the ease to send and receive payments, regardless of whether the other beneficiary is part of the same network – with payments being actioned through email and phone numbers alone.

On the line of financial health and ease of access, neobank Revolut has partnered with global rewards and discount service UNiDAYS to tackle the age-old problem of students and their propensity for broke-ness. Students who sign up to the Revolut via UNiDAYS will be welcomed to a £15 reward waiting for them in their new account. UNiDAYS’ recent 2022 Tech Report, found that 40% of students rely on parental support for their finances, and 1 in 4 students struggled with their financial security. Both companies are hoping to ebb this issue by marketing financial services to students head-on with the incentive of reward and online money management.

Consciousness around the environment has also become prominent among financial services customers, with the industry being well known for its excessive use of fossil fuels and energy consumption. Credit Union Vancity, will be the first FI in Canada to allow its individual and business customers to track the estimated amount of carbon emissions they set off with each credit card purchase. The Carbon Counter will give customers a monthly insight into their credit card purchases, showing what set off the most emissions, and what customers can do to reduce their footprint.

“We know many Vancity members are looking for ways to reduce the impact they have on the environment, particularly when it comes to the emissions that cause climate change,” said Jonathan Fowlie, Vancity’s Chief External Relations Officer who oversees the credit union’s impact and climate efforts. “As a member-owned financial cooperative, we believe it is our job to do everything we can to help, especially when it comes to the decisions people make with their money. This tool will equip Vancity Visa credit cardholders with valuable information on their purchases and enable them to connect their daily spending decisions to the change they want to see in the world.”

You Get a Reward! And You Get a Reward!

The race to ultra-personalisation cannot be discussed without looking at fintech’s heavy reliance on rewards. They do not make up the whole user experience, but they cater to one of the world’s most understood principles: everybody loves a freebie. On the 5th of November, the Bank of America will introduce More Rewards Day, a one-day event where BofA credit cardholders will earn bonus rewards for every purchase they make on their credit card. Automatically added directly to their account, customers will earn 2 per cent cashback, two points per $1, or two miles per $1 spent on top of the rewards they typically earn.

Jason Gaughan, Head of Consumer Card Products at Bank of America shared: “We created More Rewards Day to show appreciation for our clients’ loyalty and to help with the expenses that come during the holiday season. Earning the extra rewards is easy and automatic – all clients have to do is shop using their Bank of America credit card and they’ll earn bonus rewards while they’re checking items off of their holiday lists.”

Another win for credit cardholders, fintech entrepreneur Bill Harris is launching Nirvana Money, a credit card specifically marketed to middle-income earners. With a gamified rewards platform, the initial product will offer customers a credit line that can increase when they directly deposit their paychecks into their accounts.

Harris, who has founded several successful fintechs, and has served as the founding CEO of PayPal and Personal Capital, hopes Nirvana Money will aid those with a middling relationship with money, focusing on structuring savings and improving financial health.

Where the Funding Never Stops

Fintech investment seems to be in its recovery stage as million-dollar deals are becoming more common again. Open finance payments platform, Moneyhub, has secured £35 million in funding from Legal & General and Lloyds Banking Group, growing to a further £40 million, with £5 million coming from debt facilities provided by Shawbrook. The funding will be used to further Moneyhub’s product development goals, with a bigger focus on pensions and wealth, payments, distribution, affordability, and Data-as-a-Service. Expansion goals also apply to their growing international presence, with a foothold in the UK, Europe, Brazil, and Japan. Moneyhub’s main product is its Open Finance solutions, and as the funding becomes more aggressive in this space, the solution is shaping up to be fintech’s most prized global offering.

The last story for today’s fix encompasses all touchpoints of customer-centricity, financial health, and funding. Hello Divorce, a of its kind fintech helping estranged spouses with their financial health, has secured $3.25 million in its Seed round, led by The Artemis Fund, which invests in female founders that are modernising and diversifying wealth. The investment will be used to scale and help their services reach a wider audience and innovate the technology in key areas of family law, making the process of divorce less time-consuming and financially stressful.

“Divorce is a transformational life experience and a significant financial event that has long been overlooked by innovation and often disadvantages women,” said Leslie Goldman, General Partner at The Artemis Fund. “At its core, Hello Divorce allows people to take better care of themselves and their families during and after a divorce, regardless of income. We led this round because we have high conviction in the unique experience and skill set of this team to build the precise tools needed to minimise the financial and emotional impact of divorce at scale.”

That concludes your weekly Fintech Fix! Stay tuned for another round of big fintech buzz, right here at FF News.