This Week in Fintech (10/7)

This Week in Fintech (10/7)

Hello Fintech Friends,

Today, we’re excited to make an announcement about the next phase of This Week in Fintech’s growth: our global online community.

As a team, we’ve been long-time members of the Global Finnovation fintech group, an online fintech community with close to 5,000 members, founded by Shamir and the team at Sila.

Today, in partnership with Sila, we’re announcing the rebrand of the community to TWIF Finnovation. We have a long list of resources, launches, and community initiatives that we’ll be releasing to members over the next few months. We’ll use the community to move from just broadcasting fintech news to better facilitating fintech connections and conversations. Most importantly - membership is free, and always will be.

You can see our full announcement in the group here.

If you’ve ever wanted to interact with us directly, come join us in TWIF Finnovation!

Please enjoy another week of fintech and banking news below.


💬 Quote of the Week
📖 Read of the Week

At the 30,000-foot-view level The Economist this week published Banking in 2035: three possible futures (h/t Jon for the callout). In the style of one of my favorite recent reads, the report outlines three possible future states for global banking: (1) banks regain trust, (2) banks become climate actors, (3) the banking system fragments.

I found the most interesting to be the third state, the “US hegemony of the global financial system has been fractured by rivals’ alternative payment systems as well as the rise of digital currencies.” Given the news from our China Fintech edition this week about China’s efforts to de-dollarize their economy, I think this is increasingly likely as countries tweak their monetary systems for national security reasons.

The question then becomes: how does such a globalized economy continue to function with a balkanized banking system? My heavy suspicion is that the breakup of dollar hegemony and the global banking system will create a massive opportunity for system integrators and resolvers - nimble fintechs and banks that can facilitate cross-system trade and transactions compliantly - to keep the commercial wheels turning.

📊 Stat of the Week

There were some interesting data from Senator Elizabeth Warren’s fraud report on Zelle that published this week (source):

  • $213.8 million: the collective value of 192,878 cases of fraud across four banks in 2021 and the first half of 2022
  • 3,500 cases: cases where the banks reimbursed the customer
  • 47%: percentage of dollar amount reimbursed in cases where it’s clear funds had been taken out of customers’ account without authorization
  • $90 billion: Scam and fraud claims in 2020 for the four banks that shared data

Meanwhile, in the UK, the implementation of controversial Strong Customer Authentication has led 73% of retailers to report a decline in fraud. (Source)


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🏦 Financial Services & Banking
🚀 Product Launches

Dutch bank ABN Amro launched a digital ID with payment functionality.

Mastercard launched a platform to help card issuers assess the risk of crypto transactions across 2,400 exchanges.

EBA, The Clearing House and SWIFT launched their immediate cross-border payments pilot.

📰 Other News

Rumors are circulating that a major investment bank is close to insolvency, with speculators pointing to Credit Suisse. Meanwhile, UK market turmoil caused a run on pension funds that required action from the Bank of England and caused mortgage lenders to temporarily pause, withdraw, and reprice new mortgage products.

The Federal Reserve introduced an interesting new rule that will enable merchants to choose between multiple networks for routing card-not-present transactions. The Fed is also reviewing bank merger and concentration rules in light of increased competition from fintechs.

Mastercard partnered with Inswitch to create an embedded payments platform for LatAm. German commercial bank Nord/LB partnered with Trade Ledger to speed up credit decisions.

NatWest introduced lower prices for its point of sale system for small businesses.

The central banks of Israel, Norway and Sweden are exploring a digital currency together. but the European Central Bank says that a digital euro will not be available until 2026 at the earliest. Swift and Chainlink are working on a blockchain proof-of-concept, though.

The Federal Reserve, European Central Bank, Monetary Authority of Singapore, and Bank of International Settlements met in Paris to discuss crypto regulation. Meanwhile, industry groups have pushed back on the Basel Committee’s proposed crypto rules.

The UK’s banks will shut down Paym, the interbank instant payment service that they launched as a consortium. This comes as 240,000 UK businesses are calling on the government to lower card fees (and an interchange-driven class-action lawsuit against Visa and Mastercard).

I forgot to mention last week that Chase’s UK bank passed £1 billion in deposits. This week, the app suffered a day-long outage. M&T Bank, meanwhile, will have to compensate users for issues arising out of a digital account switchover.

The SEC fined Barclays $361 million for selling too many securities.


💻 Fintech
🚀 Product Launches

PartyRound * rebranded and relaunched itself as Capital, a business banking and payments platform.

Lithic launched Lithic Send, a new suite of tools for card disbursement programs.

Daffy launched Daffy for Families to let families give charitably together.

Commercial banking blockchain solutions provider Tassat launched its Digital Interbank Network, a network that allows its business customers to send instantaneous payments at any time.

Gamified savings and investing app Moneyworld launched its private beta.

Yotta released an ibond-buying feature.

Hopscotch released a new tool to manage business invoices.

📰 Other News

TBD - helmed by Jack Dorsey - teamed up with Circle to build a global dollar-based savings and remittances app for countries with devaluing currencies. Robinhood meanwhile released a beta version of its open web3 / crypto wallet to 10,000 users. And Eco and ZeroHash partnered to enable USDC-based financial services to their end users.

UK neobank Chetwood Financial plans to launch family-focused financial services next year. WisdomTree is planning to launch a fund that tokenizes fiat assets.

Gigable and Weavr partnered on instant contractor payouts. GreenDropShip partnered with Stripe on b2b e-commerce payouts.

Business payments platform Routable added OCR.

Nubank passed 1.8 million crypto users in Brazil. Better passed $100 billion in funded mortgages.

Apple’s pay later product will be delayed until next year due to engineering issues. (But Square now supports Apple’s tap-to-pay from iPhones.)

The SEC charged crypto market-makers Hydrogen and Moonwalkers for manipulating market prices. The CFPB charged MoneyLion for trapping customers in costly memberships.

UK neobank Bank North went out of business with immediate effect due to difficulties raising capital. Robinhood will close 5 offices.

Interpol put out a red notice for Terra founder Do Kwon.