The Fintech Fix, Weekly Roundup 08/12/2021

Welcome to the eighth week 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 breaking news.

Hot Topics – This week’s hot topics include the dangers of BNPL and how blockchain could be its savior, advancements in Open Banking across Europe and the growing urgency of the need for firms to push sustainability measures into action. If you missed last week’s roundup, then enjoy an early Christmas present and check it out here!

To begin, first we want to congratulate all of our finalists and winners at the FF Awards 2021. The night began with Monzo winning the award for the ‘Best WOW Moment in Consumer Banking’ and ended with Recognise Bank & Mambu winning the award for ‘WOW! We Can Build A Bank.’ In total there were over 200 hours of video entries watched and 5,000 votes casted to decide the winner, removing the element of pay-to-play. It was a great event and we look forward to next year!

Christmas time and Q4 normally lends itself to an increased emphasis on consumer spending across the board. With that, the emergence of BNPL should aid the customer.  However, new research from Barclays has revealed that despite 27% of UK Adults using BNPL, 39% of those UK adults admitted they lacked full understanding of how BNPL works, and a further 24% have missed repayments as a result. Financial literacy is a key cornerstone for projects like BNPL, but failure to fully inform users of its purpose can cause a growing indebtedness bubble. Antony Stephen, CEO of Barclays Partner Finance, said ‘we believe regulation should ensure all BNPL providers are required to undertake appropriate affordability assessments, consistent with those in place for other regulated consumer credit products’ to help counteract this dangerous problem. 

BNPL also came under more scrutiny from @pay’s Australian entrepreneur, Adam Mazzafero. @pay is a DeFi e-commerce solution for consumers and merchants. With this in mind, Mazzafero promulgated how BNPL will only survive as a model because of blockchain technology. While the lack of regulation has helped BNPL firms grow rapidly and keep costs down, it is inevitable tougher rules will arrive and profit margins will be squeezed. Mazzafero believes blockchain and cryptocurrencies will allow the development of a new model for BNPL, ensuring more prudent and responsible financial activity. 

The Bank of London made history earlier this month as they launched the World’s First Purpose-Built Global Clearing, Agency & Transaction Bank. The bank also enters the market with a $1.1 billion valuation, making it the first pre-revenue bank in history to attain ‘unicorn’ status upon debut. Anthony Watson, Founder & Group Chief Executive of The Bank of London, voiced how the banks works ‘to remove unnecessary risk, unlock liquidity and deliver revolutionary products and services.’’ Harvey Schwartz, Group Chairperson of The Bank of London, went on, commenting that the bank ‘is going to address an arcane part of the global financial system – the sleepy worlds of clearing and global transaction banking.’ 

Open Banking provider, Yolt, has laid a foundation for the rollout of their European expansion after securing a PSD2 license from DNB. Nicolas Weng Kan, Chief Executive Officer at Yolt, said that obtaining the license was monumental; ‘From making the first ever open banking API call in 2018, to surpassing one billion API calls in 2020, to now obtaining these dual licenses – all of this is a sure sign of the growing momentum and demand for open banking services and adoption across Europe.’ This will improve access to financial information, increase efficiency and further insights for businesses, which is especially pertinent in a post-Covid world.

Austrian Fintech unicorn Bitpanda, an digital asset investment platform founded by Eric Demuth, Paul Klanschek and Christian Trummer, continues on its mission to unlock the world of investing as it sets up local operations in the Nordics, with Denmark as the first country to launch. This comes just four months after raising $263M in a Series C round led by Valar Ventures. Demuth commented on the expansion; ‘We do believe that digital assets and blockchain technology are reinventing what it means to invest, and we’re committed to keep building simple, easy-to-use, and fully regulated financial products for everyone.‘

Our FF Virtual Arena made way for more hot topics this week. Watch Craig Wellman from Microsoft discuss how urgent action is required for at least half of all UK organizations to meet the UK Government’s 2050 net zero carbon emissions targets with our host, Doug Mackenzie. 

And our last hot topic this week comes from The European Central Bank. The ECB plans to redesign euro banknotes by 2024. ECB President, Christine Lagarde, highlighted how the notes are ‘a visible symbol that we stand together in Europe’, but should be redesigned to be made more relatable for all. Fabio Panetta, ECB Executive Board member, voiced that this redesign ‘will run in parallel with our investigation on a digital euro.’ 

Funding – We saw history being made again this month, as DNB approved a €193 million funding round between bunq and Pollen Street Capital. The deal values the Amsterdam-based challenger bank at €1.6 billion and sets a new world record for a Series A investment in a European fintech company. bunq will use the injection of funds to fuel the company’s growth across Europe, following this year’s introduction of German, French and Spanish IBANs to its offering and the opening of offices in Paris and Cologne. Ali Niknam, Founder and CEO of bunq, announced that being self funded had given bunq freedom, but now European expansion is possible and excitingly so. 

Simpl, a cardless payment network based in India, raised a $40M Series B round led by Valar Ventures & IA Ventures. ‘Simpl built the first payments network we’ve seen that treats small and medium merchants as true partners,” said Jesse Beyroutey, Partner at IA Ventures. Ames Fitzgerald, Partner at Valar Ventures, further this; ‘India’s e-commerce market is at an inflection point and we believe Simpl’s solution is a key enabler in accelerating adoption of digital payments in e-commerce.’ Simpl are clearly on their path to democratize ecommerce.

And lastly, Enfuce, the leading European Card-as-a-Service platform, announced a successful €45 million Series C investment round led by international growth investor Vitruvian Partners. The new capital will be used to further accelerate growth internationally as well as development of the Company’s leading technology platform. Denise Johansson, Co Founder and CCO, Enfuce added that ‘our market is currently on the verge of disruption – and pioneers and innovators such as Enfuce are needed to accelerate that change’, especially with their integrated carbon footprint calculator.

Transfer News – StrikeX, the London-based blockchain technology company, has received an early Christmas present, after hiring Rob Clark as their new Interim Chief Technology Officer. Rob has 25 years of experience in the global IT market, working at BT, Zycko and Nuvias. On the move, he voiced that ‘Innovation in blockchain technology is revolutionizing trading as we know it. This development is immensely exciting, and I am delighted to be able to play a part by working on the next generation of financial infrastructure.’

Big Partnerships To Watch – Klarna continued making moves to expand their services further, as they partnered with Marqeta to go into 13 new European markets. This follows on from the launch of Klarna’s UK shopping app in May 2021.  Koen Kӧppen, Chief Technology Officer at Klarna, voiced that ‘Klarna has seen significant growth of our consumer base in the past years, most especially in the US and partners like Marqeta support this trajectory. Marqeta’s tech platform has helped us quickly realize new or improved products in complex markets.’ Klarna uses Marqeta’s industry-defining Just-in-Time Funding feature to give it control over the full transaction flow, as well as Marqeta’s robust, flexible technology and suite of more than 300 open APIs to power customisable product experiences and support Klarna’s rapid global scale.

ClearBank, the cloud-based clearing bank, announced its partnership with e-money scale-up  PRIVAT3 MONEY (P3). The partnership comes with the intention of improving the experience of clients using P3 accounts and e-wallets for deposits and payments, as well as multi-currency accounts and foreign exchange in the near future. ClearBank’s infrastructure will improve transaction speed and efficiency for P3’s clientele, which is primarily professionals, entrepreneurs and high net worth individuals. Charles McManus, CEO of ClearBank. “We pride ourselves on working with digital-first firms such as P3 who are looking to differentiate themselves within the competitive fintech and financial services markets. It is great to have the initial offering up and running and we’re looking forward to further developing our partnership with P3 in the coming months and years.

Yapily made headlines as they secured a partnership with Sprinque. In this partnership, the two will be able to enable buyers to effortlessly and seamlessly settle invoices online. This is a huge improvement in the B2B marketplace, which often relies on antiquated workflows. Juan Espinosa, CEO of Sprinque said, ‘Yapily’s connectivity and reach across Europe allows us to simplify and standardize the payment experience for business buyers, making it easier than ever for businesses to manage payments.” Chris Scheuermann of Yapily said that partnering with Sprinque is huge for Sprinque are ‘redefining online B2B payments and it’s transforming the industry, enabling more businesses and merchants to keep pace and evolve with this digital-world. We’re excited to share this journey with them and watch as they continue to innovate the space.’ 

And for our last story of the day, Moody’s Corporation acquired Passford Limited and has entered into an agreement to acquire 360kompany AG, two of Europe’s providers for onboarding and KYC technology solutions. The acquisitions complement Moody’s technology, data, and analytical capabilities, and enhance its industry-leading customer solutions for KYC, anti-money laundering, compliance, and counterparty risk.

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.