Future of FinTech | Edition #42 – Oct 2022

Tea-time Tuesday, FinTech Buffs!

Weekdays seem flavourless without a warm cuppa brimming with the latest FinTech affairs, which is why we’re here to add the much-needed zing to enliven up your week ahead!

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Bank-FinTech collaborations have been a rising trend, helping to unlock the financial ecosystem orchestration at scale. Four High Street UK Banks are moving the needle on this collaboration mandate to meet the market's evolving needs. Discover how the UK ‘Big 4’ are walking the talking through their ecosystem initiatives as they?Bet Big on FinTech!

Edition #42?brings with it the delectable headlines from last week that are sure to captivate your curious tastebuds!

Here's the TL;DR:

• Players across diverse industries continue to ramp up their efforts in the FinTech field, bringing in a fresh breeze of novelty and innovation.?Samsung?is one such participant, who ramped up its FinTech play the past week by launching new finance products in India and South Korea.?
• Speaking of ramps, taking things to the fashion ramp were?Square?and?ClearPay, who launched a programme to help?British Fashion Council emerging designers establish their online storefronts. All fun and games until responsibility comes into the picture, and?WeBank?is surely considering that in mind as it signed the?United Nations’?Principles for Responsible Banking.??
• In an interesting turn of events, the?Monetary Authority of Singapore?published two consultation papers that would stop crypto firms from offering leveraged training to retail customers. On the contrary,?Revolut?added a crypto spending feature for Revolut card owners.
• BNY Mellon, too, prioritised providing a wide range of payment choices to US-based institutions by launching Vaia, its new aggregated payment platform, while?Alipay?enabled transfers to?WeChat?users via QR codes, bridging the two Chinese digital payments providers.
• Additionally, various ecosystem participants joined forces to embrace and drive openness in the FinTech landscape –?Capco?and?Plaid?forged an open alliance to help financial institutions,?Klarna?partnered with?Krea?to drive Open Banking initiatives for SMEs, and?Curve?chose?Salt Edge?as a partner for Open Banking compliance.

For the longer read, let's get going –

It was all about players greasing the wheels through collaborative efforts in the?Open Finance?segment the past week, as diverse brands formed alliances to power Open solutions for the ecosystem.

• Open finance technology provider?Brankas?successfully integrated?Visa?Cardholder Transaction Score (VCTS) and Visa’s broad range of payment rails into its core solutions to deliver new credit decisioning and payment products to increase financial inclusion across Southeast Asia. TrustDecision (Tongdun) and IziData have been cited as two of the pilot customers already using the joint solutions.
• Curve?chose?Salt Edge?for a compliance and regulatory partnership to continue to meet the highest regulatory standards for Open Banking at all times as it brings new payment technologies to its customers.
• At the same time,?Klarna Kosma?partnered with Swedish digital loans platform?Krea?to make loans more accessible and affordable for Swedish SMEs.
• While?Capco?and?Plaid?forged an open finance alliance to help financial institutions unlock the value of open finance across the banking sector through more secure and accessible data, Enterprise resource planning solution?myCorazon ERP?teamed up with?Nordigen?to enable financial data import for streamlined accounting processes.
• Codat?and?Basiq, too, came together to enable better underwriting for Australian businesses. Codat chose Basiq as its partner due to the ‘Basiq 3.0 Platform’ unique capabilities, which extend past the Consumer Data Right’s (CDR) Open Banking system, with the platform allowing access to financial data across several institutions.
• Additionally,?Sambla Group?made the news for its plans to embed?Tink’s?full-risk product suite – including Income Check, Risk Insights and Expense Check – into its current offering to let lenders access real-time data, ensuring faster and more accurate affordability assessments.

The?Digital Finance?sphere witnessed an assortment of events as they contributed to enhancing the ongoing digital adoption in the financial landscape.

?To begin with the partnerships:

• Cross River?announced a new collaboration with?American Express?that allows issuing credit cards on behalf of FinTechs, in addition to providing them with access to select American Express benefits.
• On the other hand, SMB lender?Kapitus?selected?Mambu’s?cloud banking platform to leverage its low-code lending engine to “achieve a faster time-to-market” as it looks to release new financing solutions for SMBs.
• Galileo?and?Technisys?also joined forces to offer Cyberbank Digital as a managed service, which is a robust, end-to-end solution enabling financial institutions and FinTechs to create and deliver digital-first tailored customer journeys.?

In terms of the launch-related happenings,?Revolut?grabbed headlines for its plans to add a crypto spending feature that will enable customers to use their crypto balance to pay for everyday purchases using their Revolut card, whereas internet-only bank?Kakao Bank?was in the news for its plans to enhance its banking services for the self-employed business, seeking to expand its customer base.

As for the other news, while?Juni?secured the Electronic Money Institution (EMI) licence from Swedish regulator Finansinspektionen, Chinese neobank?WeBank?signed the United Nations’ Principles for Responsible Banking to align its business practices with the Sustainable Development Goals and Paris Climate Agreement. That’s not all – it was a celebratory week for?Nubank, which ended the third quarter of 2022 with a recorded 52% growth in assets under custody in Brazil, and for Akulaku-backed?Bank Neo Commerce, which posted a profit in Q3 of 2022. The lender’s profit in July-September 2022 stood at $643,387, compared with a loss of $17M in the same quarter last year.

The?Embedded Finance?space was simmering with delightful headlines covering partnerships and launches.

The?Embedded Finance?space was simmering with delightful headlines covering partnerships and launches.

Immersing into the collaborations:

• Investment and savings platform?Raisin?migrated its UK platform to banking infrastructure provider?ClearBank, in which the latter will underpin the Financial Services Compensation Scheme (FSCS)-protected account used by Raisin UK customers and will provide access to payment rails through its embedded banking platform.
• AAZZUR?embarked on an embedded lending partnership with?Channel Capital?to secure embedded lending products for small and medium-sized enterprises (SMEs).
• Payments specialist?Square?and BNPL giant?Clearpay?also teamed up to launch a program to help?British Fashion Council (BFC)?emerging designers establish their online storefronts. The bespoke programme will provide designers with technical support, mentorship and an e-commerce platform to create an online retail presence for their brands.
• Zip?and?WebBank?launched the Zip BNPL physical card that extends the company’s 'Pay-in-4' functionality offline, enabling instalments payments wherever Visa is accepted.
• Furthermore,?Cashew?and UAE-based?du?partnered to offer BNPL solutions on device financing for its customers, which can be paid over 24 months.?

Onto the launches of the week:

• Samsung?ramped up the FinTech amp by launching new products in India and South Korea, including credit cards, loans for consumer electronics purchases, and a new all-encompassing FinTech app via its digital lending program Samsung Finance+.
• Lendflow?unveiled its new Partner Program, designed to create an ecosystem of FinTechs that are pioneering the world of embedded finance. The purpose of the partner program is to create a hub of connected and integrated FinTechs and data providers that together can enable new SMB credit products to get to market faster.
• Synctera?released two products – the Synctera Smart Charge Card for helping FinTechs and businesses create and issue charge cards for their customers and Synctera White Label Banking App for letting customers immediately launch a neobank or customise to their specific product vision.?
• Decentro?also announced the expansion of its product portfolio by launching Digital Escrow Accounts as a service, to ensure smarter and safer digital payments.

The?DeFi?universe experienced various initiatives the past week, with the launch-related news coming out on top.

• WEFI?introduced a new hybrid staking platform in the DeFi space that has no strict restrictions, penalties or requirements.?
• To further decentralise finance,?Frax Finance?unveiled ETH staking service with a dual token model.
• deBridge?made the bulletin as it is set to launch DeSwap Liquidity Network (DLN), allowing users to complete cross-chain transfers without all the associated risks of using a bridge network.
• With staking being the talk of the town as of late,?Kava?grabbed headlines for?launching liquid staking feature with its successful update on the mainnet network.

What’s more – global crypto payment solution?Mercuryo?jumped the partnerships bandwagon as it expanded its crypto asset offering through integration with?Fireblocks.

On the funding forefront,?DeFiHelper?announced an open strategic funding round. Through this, it seeks new partners and investors for its Web3-focused portfolios. Further down the road,?PayPal?filed a trademark application that is related to cryptocurrencies and blockchain technology pointing to its emergence in the Web3 space. Lastly, to curb the risks associated with cryptocurrencies, the?regulators in Singapore?rolled out new regulations that will make it more difficult for retail investors to trade cryptocurrencies. With that, crypto trading platforms are not allowed to offer incentives like deposit bonuses to attract retail customers.

The?Platform Finance?industry offered promising opportunities with big names joining their hands together. Let us take a look at the notable partnerships of the week:

• ‘Revolut’ionising the finance industry,?Revolut?has yet again grabbed headlines with not one but two partnership events. It partnered with?Sweatcoin?to offer six months of Sweatcoin premium and three months of Revolut premium, all for free. On top of that, the second partnership was with?Up Romania?to offer businesses free access to expense management services for 6 months through Revolut Businesses and extra salary benefits to employees through Up Multibeneficii.
• Alipay?enabled transfers to?WeChat?users via QR codes through its product ‘WeChat Friend Transfer’, bridging the two Chinese digital payments providers.?

Moving onto the launchpad,?BNY Mellon?took off with its new aggregated payment platform – Vaia, which gives US-based institutions access to the latest digital payment options for disbursements. At the same time,?Citi?unveiled its integrated payments and billing platform, which will let Citi’s institutional clients collect payments across a range of US payment methods.

With the promise to make a greener world, the?Green Finance?space bustled with various activities to acknowledge the same.

Starting with partnerships,?EKI Energy Services?joined forces with?First Source Energy India?to launch Climate EdTech & Climate Finance Marketplace. Inching towards conscious choices,?Suncorp Bank?unveiled a new bank account called Carbon Insights Accounts to help consumers make sustainable choices on their consequential footprint, developed in collaboration with?Cogo.

Speaking of launches:

• Vortex?launched a fully automated online weather insurance portal.
• Hong Kong Exchanges and Clearing Limited?rolled out Core Climate, a new marketplace for trading voluntary carbon credits and instruments.

On the product side of the industry,?the Royal Bank of Canada?released new interim financed emissions reduction targets for several carbon-intensive sectors, including oil & gas, power generation, and automotive.?

The regulatory fort, too, had some actionable insights to offer in the green finance space –

• European Securities and Markets Authority (ESMA)?added ESG disclosures to its list of Union Strategic Supervisory Priorities (USSPs). The move forms an important step in the implementation of its 2023-2028 strategy, which gives a prominent role to sustainable finance.
• Australia?stepped closer to a sustainable finance taxonomy, with the release of a new report outlining the key considerations that will inform its development.
• And lastly,?Kigali International Financial Centre (KIFC)?launched its Sustainable Finance Roadmap that will guide Rwanda to implement and pool investments in green and sustainable growth.

Some other happenings in the FinTech universe ??

Adding more sweetness to your tea, here are some more affairs that add the needed zest to the already brewing cuppa –?

• ConnexPay?nabbed $110M in growth investment to expand into Europe, and
• REAP?raised $40M investment in Series A funding to quickly expand into international markets.

And that's a wrap ??

We hope you enjoyed this edition of the Weekly FinTech Brew!

If you're hungry for more FinTech insights, check out some of our other work at?WhiteSight.?

Our latest publications include exploring The UK Big Banks’ Bet on FinTechs and dwelling into the?Green Cogs in the Corporate Machine: A Business Case for Sustainability

If you're someone who likes to read think pieces, you will likely love our monthly blog,?Fintersections, where our team members analyse the convergence of FinTech with the world.

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