Hello Fintech Friends,
We got some great feedback when we asked for it over the last couple weeks. Thank you for weighing in on how we can make this newsletter better!
Some of the ideas we’ll pursue: use visual differentiators between sections (emojis, more spacing) to make it less dense, and keeping the newsletter split into two weekly editions to make it more digestible.
There were other great ideas like adding flag emojis by country (doesn’t seem to work on Substack) and scheduling the newsletter by timezone (also not supported) which I would love to do! As Substack rolls out more features, I look forward to adding them.
Please enjoy another week of fintech and banking news below.
💬 Quote of the week
“Eventually, every consumer will access his or her savings, loans, and investments via a mobile app. This reshuffling of the deck is being quickly adopted by consumers, but it should be appreciated even more by governments, who can finally offer monetary goals directly to their constituents.”
- Alex Rampell, Andreessen Horowitz (source)
📖 Read of the Week
If you follow me on Twitter, you’ve seen me fanboying over decentralized finance, which I believe is the future of fintech (once it works through its growing pains). This week, two stories came out in support of that future.
Goldfinch, which launched a stablecoin in December, has already lent out $1 million to fintechs including PayJoy in Mexico, Aspire in Southeast Asia, and QuickCheck in Nigeria, which then converted the coin to their local currency and re-lent the money. Elsewhere, an engineer used his own cryptocurrency as collateral to lend to himself and refinance his bank mortgage at a lower rate via Notional Finance. Relatedly, here is a piece on the strengthening case for banking with stablecoins.
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🏦 Financial Services & Banking
🚀 Product Launches
Bolsas y Mercados Españoles is launching an AI-based roboadvisor.
The Royal Bank of Canada launched its own buy-now-pay-later solution in partnership with Alliance Data's Bread.
UBS is rolling out a feature to let small business customers make payments from other providers in its platform.
📰 Other News
The Reserve Bank of India is exploring the creation of a digital currency at the same time as its government drafts a law to ban bitcoin and other private cryptocurrencies. Meanwhile, Thailand’s largest commercial banks implemented ACI Worldwide’s real-time payments technology.
BBVA will invest another $150 million in its fintech venture firm, Propel.
TSB Bank in the UK saw its losses plunge to £204.6 million in 2020, as it moves ahead with branch closures. Germany’s Commerzbank will cut 10,000 jobs and close 340 branches. Piermont Bank appointed a Chief Credit Officer.
Goldman’s Marcus Bank and Myers-Briggs teamed up to make a financial personality quiz, and I think we can call the top now.
🚀 Product Launches
Safaricom launched MPESA bill manager, including automated reminders for small businesses. Mobile open banking platform Spot Money launched in South Africa. Tap Tap Send launched a free remittance transfer service in Kenya.
Social app Clubhouse pivoted into fintech, enabling creator payments.
Israeli mobile keyboard developer PayKey expanded its keyboard to enable customers to manage investments and apply for loans from within any app.
📰 Other News
In a restructuring deal with Chinese regulators, Ant Group will become a financial holding company, bringing it under the supervision of more regulatory authorities.
Jeff Bezos is stepping down from Amazon, but the firm’s banking ambitions remain. PayPal’s transaction revenues rose 12% following its introduction of crypto, and the company said users who trade crypto log in twice as often.
Neobank Chime reached 12 million customers. N26 took heavy losses on its €27 million effort to expand into the UK. UK agricultural challenger bank Oxbury went live on the low-code platform Naqoda. Current relaunched its app and announced $100 million in overdraft fees saved. Cashplus, a UK checking and card provider, secured a full UK bank license.
HMRC, the UK’s tax authority, granted a £3 million open banking contract to startup Ecospend to enable taxpayers to submit payments directly from their bank accounts. Meanwhile, Yolt is bringing open banking data to mortgage lenders.
Klarna released massive growth numbers: the buy-now-pay-later giant has 15 million customers in the US and is adding 1 million per month.
Nigerian digital bank Carbon processed $240 million in payments in 2020, up 89%. Mono is building Plaid for Africa and now has backing from Y Combinator. Asset & Resource Management partnered with Nigerian roboadvisor Rise Vest. And Yoco, a South African digital payments network, has grown to 120,000 merchants.
Elastacloud ran a hackathon to build sustainable finance solutions.
Moody’s and S&P Global gave Grab a B- / B3 rating, projecting the Indonesian fintech behemoth’s cash burn to continue into 2023 due to local competition.
Courtesy of Ben White at Plaid.
- The Federal Reserve pushed up its highly anticipated FedNow real-time payments launch a full year, from 2024 to 2023, and announced the first 110 participants in the FedNow pilot program.
- The House Financial Services Committee has called Robinhood CEO Vlad Tenev to testify about the GameStop phenomenon on February 18.
- Acting CFPB Director Dave Uejio published a letter outlining the Bureau’s priorities, including relief for consumers facing COVID hardship, and racial equity.
- Letters to the CFPB on Dodd-Frank 1033, the stipulation granting consumers rights to their financial data, were posted to the Federal Register. Lots of fun reading to get a sense of where stakeholders in the financial data ecosystem see the future.
- The OCC is hosting virtual Innovation Office Hours in mid-March, fintech companies seeking to discuss new products or bank partnerships with the OCC can register for a spot.
- Germany’s top financial regulator at BaFin lost his job over the Wirecard scandal.
- Britain’s Financial Conduct Authority is set to introduce new rules regulating Buy Now, Pay Later firms.
🔎 Weekly Deep-Dive
Need a deeper dive?
- What really happened?
- Why is everyone so mad?
- How should regulators respond?
📚 Deeper Reads
The following policy articles are from Allon Advocacy: