Apple Finance Empire strikes again: adds recurring payments ??; Huge: First Open-Source Financial LLM is here ??; Monzo hits monthly profitability ??

???Hey,?Linas here!?Welcome to a????monthly free edition????of my daily newsletter. Each day I focus on 3 stories that are making a difference in the financial technology space. Coupled with things worth watching & most important money movements, it’s the only newsletter you need for all things when Finance meets Tech.

If you’re not a subscriber, here’s what you missed last month:

1. Investor list that don't need warm intro????[read this if you want to grow your startup ??]
2. 3 templates to make startup life easier???
3. 4 Essential M&A Templates to Master the Art of Dealmaking??? ???[Read this if you want to supercharge your M&A strategy ]
4. The most powerful pitch deck framework in the world that helped create over $4 trillion in value????[a list of resources to build the next unicorn faster and easier]
5. Apple might become the First Super App of the West????[deep dive into why & how + lots of bonus reads]
6. The Pitch Deck that raised Europe’s biggest-ever Seed round????[or how $105M was put into a 4-week-old startup with no product to take on OpenAI ??]
7. Prospering amid economic weakness: Visa acquires Brazil's Pismo in one of the largest FinTech M&A deals in LatAm??????[deep dive into Visa & my investment thesis]
8. Game-changer: the world’s first banking-specific large language model???
9. Cash App Pay + Stripe, or how Cash App is growing beyond just a financial app????[& how Cash App is growing beyond just a FinServ app + bonus dive into Cash App as PayPal 2.0]
10. Challenger banks have a new competitor… JPMorgan???
11. Klarna to achieve profitability before the end of 2023???
12. Adyen keeps dominating in payments???
13. JPMorgan is building the largest payments ecosystem in the world???
14. Nasdaq buys Adenza in one of the biggest FinTech M&As in 2023???
15. Open Banking is gaining more and more traction???
16. More investors wipe 40% off Revolut valuation???
17. Plaid's building the identity layer for Finance???
18. Are Europe’s top VCs still investing?????[+ resources on how to fund your startup 10X easier]
19. Wise is now about all things money???
20. Is Google buying Stripe????
21. Open Banking is keeping FinTech alive???
22. QED raises ~$1 billion to invest in FinTech????[+ bonus reads on how to make your fundraising efforts much easier & 60,000+ startup resources]

and more! Don't miss out and join the community here????

June was the most intense and important month in FinTech this year so far.?We will look at the rising Apple Finance Empire as Apple Cash adds recurring payments (why this is BIG + dive into how Apple is building JPMorgan 2.0); the first Open-Source Financial LLM (why it’s a game-changer that will transform finance as we know it); Monzo which hit monthly profitability for the first time ever (how we got here + a deeper dive into Monzo’s strategy), and other interesting news and developments.

Without further ado, let us dive into what happened in the financial technology sector last month. Let’s connect the dots.

Apple Finance Empire strikes again: adds recurring payments ??

The launch ???Tech titan?Apple?is adding support for recurring payments from its 苹果 Cash digital card.

More on this ???The feature, coming in the autumn with the arrival of iOS 17, means that Apple Cash users will be able to set up weekly, biweekly, or monthly payments.

Apple says this will make it easier, for example, for parents to pay allowances or for users to pay back friends and family for regularly shared expenses, such as rent payments.

Users can also choose to automatically top up their Apple Cash balance from their designated bank accounts when it runs low.

?? THE TAKEAWAY

Building Finance Empire ???Step by step Apple has been bringing new features to Apple Pay thus offering users more options for how to send money and facilitating growth. Recurring payments join its expanding financial services ecosystem, which now includes Apple Card, Apple Pay Later, and a high-yield savings account. These products are not only attracting new users but also tie customers to the company more closely, which could drive spending and revenues from services. More importantly, Apple’s fiercely loyal customer base includes many younger consumers, which should help sustain Apple Pay’s long-term growth as Gen Zers get more buying power. The tech giant can easily use the new feature to appeal to families and younger consumers by automating things like allowance payments. If this gets good adoption, Apple could seriously start challenging other payment platforms like Venmo or Cash App . Huge.

ICYMI: Apple Savings account is a massive hit???

Apple is building JPMorgan 2.0????[deeper dive + lots of bonus reads]

Game-changer: the first Open-Source Financial LLM is finally here ??

The hit news???That was fast! Meet?FinGPT, an open-source financial large language model (LLMs) that aims to democratize Internet-Scale financial data, providing researchers and practitioners with accessible resources to develop FinLLMs and build the future of finance. Which is?open.

This is a paradigm shift so let’s take a closer look here.

More on this ???Large language models (LLMs) have shown massive potential for revolutionizing natural language processing (NLP) tasks in various domains, sparking significant interest in finance.

Yet, accessing high-quality financial data is one of the biggest challenges for financial LLMs (FinLLMs).

While proprietary models like?BloombergGPT?have taken advantage of their unique data accumulation, such privileged access calls for an open-source alternative to democratize Internet-scale financial data.

ICYMI: ChatGPT for Finance is here????[a closer look at BloombergGPT]

This is where FinGPT comes into play aiming to disrupt the finance sector.

Data ???Unlike proprietary models, FinGPT takes a data-centric approach and focuses on accessible and transparent resources to develop FinLLMs.

The FinGPT pipeline involves the collection of extensive financial data from a wide array of online sources. These include, but are not limited to the following:

• Financial news:?websites such as Reuters, CNBC, and Yahoo Finance, among others, are rich sources of financial news and market updates.
• Social media:?platforms such as Twitter , Facebook, Reddit, Weibo, and others, offer a wealth of information in terms of public sentiment, trending topics, and immediate reactions to financial news and events.
• Filings:?websites of financial regulatory authorities, such as the SEC in the United States, offer access to company filings.
• Trends:?websites like Seeking Alpha, 谷歌 Trends, and other finance-focused blogs and forums provide access to analysts’ opinions, market predictions, the movement of specific securities or market segments, and investment advice.

The USP ???Potential applications of FinGPT and FinLLMs include:

• Robo-advising
• Algorithmic trading
• Low-code development & more!

And this is just the tip of the iceberg. Given it's open-source, FinGPT will continue to stimulate innovation, democratize FinLLMs, and unlock new opportunities in open finance.

?? THE TAKEAWAY

Game-changer ???This will undoubtedly be a game-changer for finance as we know it. At the core, open-source financial LLMs have the potential to revolutionize the future of finance by democratizing access to advanced financial expertise and insights. These FinLLMs, built on open-source frameworks, offer a range of benefits, the most important of which is increased transparency, collaboration, and innovation in the financial services industry. In addition to the aforementioned use cases, they enable individuals and organizations to leverage powerful language models for tasks such as financial analysis, risk assessment, portfolio management, and regulatory compliance. But most importantly, the open-source nature of these FinLLMs encourages developers and researchers to contribute and improve the models, fostering a collective intelligence that drives continuous advancements in the financial technology space. Looking ahead, open-source financial LLMs have a massive potential to level the playing field, empower users with sophisticated financial capabilities, and pave the way for more inclusive and efficient financial systems of the future. Systems that are built on Open Finance.

Bonus:?The insurance sector is more and more exploring the benefits of AI???

Generative AI will completely transform FinTech and Banking over the next 3 years?????

JPMorgan is developing a ChatGPT-like AI service for investors????[+6 more reads]

FinGPT paper:?https://arxiv.org/abs/2306.06031

FinGPT code:?https://github.com/AI4Finance-Foundation/FinGPT

Major milestone achieved: Monzo hits monthly profitability for the first time???

The news ???British challenger bank?Monzo?has hit profitability for the first time this year. It marks a major milestone for one of the UK’s most renowned digital banks.

Let’s look at the numbers and how we got here.

The numbers ?? Monzo Bank reported a net operating income of ￡214.5 million ($266.1 million), almost doubling year-over-year from ￡114 million.

Losses at the bank nevertheless came in at a substantial ￡116.3 million — though this was slightly lower than the ￡119 million net loss Monzo reported in 2022 and allowed the neobank to reach profitability in the first two months of the year.

It also added 1.6 million new customers this year, bringing them up to 7.4 million and more than 10% of the UK population.

How we got here? ???One word -?lending. Monzo’s strong revenue performance was mainly driven by a bumper year for its lending business. Challenger bank’s total lending volume reached ￡759.7 million, almost tripling year-on-year, while net interest income spiked by 382% to ￡164.2 million.

Subscriptions play an important role in profitability too as paid accounts now total 350,000.

Monzo declined to share a figure on how much of a profit it is making currently. The firm said it is on track to reach full-year profitability by the end of 2024.

?? THE TAKEAWAY

Lessons learned???Monzo is a brilliant reminder of a story as old as time: lend money + solid risk management = make money. It’s that simple yet 90% of neobanks don’t get it… ?? Obviously, you have to be good at it too. And Monzo is really good at what they do - their net promoter score is +67 (even the mighty Apple gets +47), so customers love them. Hence, focus + lending + strong brand makes wonders, and Monzo definitely deserves to be the 7th largest UK retail bank. More about how they got there here:

ICYMI: The Monzo Pivot, or how challenger bank transformed itself in just 2 years???

Extra Reads & Quick Bites for Curious Minds??

• Teen Spirit ???PayPal-owned mobile payment service?Venmo?launched its new Teen Account solution to offer parents the possibility to open a debit card account for teenagers. Following this launch, parents and legal guardians can open a Venmo Teen Account for children that are in between the age range of 13 and 17 years old. Young adults will be able to send, receive, and spend their money with the guidance of their families.?The new product was designed with built-in parental controls over the balance of their teenagers, with oversight capabilities and offerings as well.?Smart move to appeal to a younger demographic and further focus on PayPal’s key strengths.?ICYMI: PayPal’s focus on efficiency is starting to pay off???
• Visa + Africa ?? Visa?is launching a fintech accelerator program for African startups as part of its recent $1 billion pledge to accelerate the deployment of digital payments across the continent. The Visa Africa FinTech Accelerator will see up to 40 start-ups each year go through a three-month intensive learning program focused on business growth and mentoring. Following the program completion, Visa says it intends to make capital investments in select participating businesses while accelerating their commercial launch through access to Visa technology and capabilities. Startups throughout Africa can apply to be part of the program through two application phases each year, starting from July 2023.?ICYMI: Visa knows that Africa is the world's next superpower. You should pay attention too??
• Plaid keeps delivering ?????US-based data network?Plaid?has launched Beacon, an anti-fraud network addressed to fintechs and financial institutions.?The latest offering is specifically designed to put an end to the ongoing cycle of fraudulent activities that stem from identity theft and compromised accounts. To do this, Beacon leverages a set of APIs that enable real-time, secure information sharing throughout the ecosystem to reduce recurring fraud targeting businesses, safeguard consumers and create a reportedly safer digital finance ecosystem.?Reread:?Plaid's building the identity layer for Finance???

Money Moves??

• Global payments and banking infrastructure provider?Episode Six?has announced the raise of $48M in a Series C funding round, led by?Avenir.
• India-based cloud-lending company?Lentra?has secured $27M as part of its extended Series B round led by MUFG Bank and Dharana Capital.
• PayPal Ventures?has led a $14M Series A funding round for?nocnoc, a firm that helps facilitate cross-border e-commerce between global sellers and Latin America.

Continue reading by subscribing to?Linas's Newsletter.?You will receive fresh news about FinTech with hot takeaways every day.

P.S.?You might enjoy my earlier pieces as well:

?? Top 10 FinTech predictions for 2023 ??

?? Top banking trends to watch in 2023 ??

***

About: I am?a business developer, sales professional, FinTech strategist, as well as Cryptocurrency and Blockchain enthusiast. I'm highly passionate about Financial Technology and Digital Innovation, and strongly believe that it will change the world for the better. Apart from my daily job at a global payments startup where I'm leading the company's expansion into Europe, I'm an active member of the FinTech community and a TechFin evangelist.

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