Robinhood Reaches $10.2 Million Settlement
Happy Monday fellow FinTech Fanatic,
Let’s start this week with the news trading platform Robinhood has reached a settlement of $10.2 million with the California Department of Financial Protection and Innovation (DFPI).
According to reports, the financial services company is paying the penalty for “operational and technical failures” that harmed investors.
Reportedly, the $10.2 million settlement includes the platform’s outages in March 2020 and operational deficiencies prior to March 2021. These failures left the stock trading and investing platform’s users unable to process trades.
Some more Revolut news, as reported by Reuters last Friday.?
After the accuracy of Revolut Ltd.'s accounts drew scrutiny from regulators, the firm's plan to secure a U.K. banking licence is facing delays, according to two people familiar with the company.
Last month, audit firm BDO issued a so-called qualified opinion for Revolut's 2021 accounts. While BDO said Revolut's financial statements gave a "true and fair view of the state of the group," it cautioned in the same filing that some information related to revenues may have been "materially misstated."
The concern from regulators around BDO's warning will probably slow down the approval for its banking licence in the UK, according to one person familiar with Revolut.?
Finally, I would like to highlight an interesting article I came across. As many neobanks have to come up with a plan to accelerate their path to profitability, there are several questions these companies have to address.?
In a series of insightful articles Dmitriy Wolkenstein tries to find answers on these questions. Worthwhile reading in my opinion.
I have nothing left but to wish you a nice week, and please find selection of the best FinTech news below??
INSIGHTS
Brazil's top FinTechs have made huge strides in profitability over the past year, except for one. Read this comprehensive analysis on this topic written by Simon Rodrigues . Link here
Stripe experienced slower growth last year. The company processed about $817 billion in payments for its customers in 2022. That was a 26% increase over 2021’s $640 billion in payments, but paled in comparison to the 60% increase Stripe experienced from 2020 to 2021.
Singapore reportedly developing standards around banks and digital assets. Banks, the central bank and police in the city-state are working together to develop standards for vetting potential customers from these sectors, Bloomberg reported.
Which money transfer companies have the best customer ratings? Take a look at this FXC Intelligence research and find out which companies remain the standouts.
Cashless payments in Japan top one-third of spending. Cashless payments have grown to account for more than one-third of all consumption in Japan, fueled by the demand for touchless purchasing options during the COVID-19 pandemic.
Why have FinTechs become essential in Latin America, and how vulnerable are they? In an environment of higher interest rates it remains to be seen how credit quality will be maintained by fintechs in Latin America , a report by the International Monetary Fund (IMF) states.
FINTECH NEWS
Google to prohibit personal loan apps from accessing user photos, contacts. The search giant pushed an update to its Personal Loans policy for apps on Play Store to bring new restrictions prohibiting apps from accessing external storage, photos, videos, contacts, precise location and call logs
Goldman Sachs -backed ZestMoney to fire 20% staff: Report. This decision comes shortly after the company's discussions with PhonePe for a sale fell through. The founders and top leadership team of ZestMoney held a Townhall to inform employees about the layoffs that will occur across departments .
Former head of talent sues fintech Current for discrimination. Isabelle Mitura , former head of talent at Current, filed a lawsuit against the $2.2 billion fintech company, alleging racial and sex-based discrimination. Read more
Nigeria’s consumer protection agency, the Federal Competition and Consumer Protection Commission (FCCPC ), released a list of all the loan apps licensed to operate in the country. Per its statement, 173 digital loan companies have been approved, with 119, including Renmoney and FairMoney , holding full approvals.
#FINTECHREPORT
The World of Open Banking Map, Feb 2023. Open Banking and Open Finance are making their way around the globe, with many countries looking at how financial data can be shared and managed via open APIs.?
Embedded finance is rapidly gaining traction in the financial services industry. It will have a profound impact on the distribution of financial services, hence this article dives deeper into its benefits and applications.
Check out “Mercury rising: The Future of Fintech”, report by Barclays and Money2020 . The report reveals what’s driving innovation for the sector, spotlights new technologies and outlines strategies for growth, promoting customer loyalty and attracting new talent. Read more
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DIGITAL BANKING NEWS
SoftBank LatAm sees past recent losses, remains bullish on region. About $7.6 billion of that capital has been allocated across more than 80 investments, according to Juan Franck, managing partner of the SoftBank Latin America Funds.
BLOCKCHAIN
Binance 's US arm struggles to find bank to take its customers' cash. The company has unsuccessfully tried to establish relationships with Cross River Bank and Customers Bancorp Inc (CUBI.N), adding that banks are reluctant due to concerns over regulatory risk.
Swiss state-owned banking giant Postfinance to offer crypto services. The state-owned financial institution will be using the banking platform developed by the Swiss-licensed digital asset bank Sygnum . Link here
M&As
Mexican Fintech startup NetPay Acquired by FEMSA . With the acquisition of NetPay, FEMSA can further strengthen Spin’s market reach in the mobile payments space. This strategic move by FEMSA is indicative of the company’s focus on increasing its share in the fintech segment and digital solutions markets.
PARTNERSHIPS
SG’s Eleos Labs and Grab join forces to combat Web3 cyber threats. Grab’s anti-fraud solution, will assist Eleos Labs in deploying services that protect users from the theft of private keys, hacking of smart contracts, and misuse of ERC-20 approvals.
Vietnam’s ABBANK steps up digital transformation plans with Backbase . Backbase will deliver the full suite of its Engagement Banking Platform , which encompasses Digital Onboarding, Digital Banking, Digital Assist and Digital Engage.
Klap , a Chilean fintech company, has partnered with Mastercard to bring technology to Chile that transforms smartphones into contactless payment terminals. This technology will allow merchants to accept contactless payments through their smartphones, without the need for additional hardware. Read more
#DONEDEAL
Amsterdam-based cryptocurrency platform Change raises €2M to empower wealth creation globally. As a result, the Dutch company ramped up its investment options , including stocks, shares, exchange-traded funds (ETFs), and even commodities, as well as its established crypto and DeFi products.?
Colombian fintech company Kuadra has raised $100,000 to continue its growth in the country. The investment was led by angel investor Miguel McAllister and will be used to expand Kuadra's customer base and product offerings. Link here
Forme Financial raises $18MM, launches as Earned . With this new round of funding, Earned plans to expand its services to become a one-stop shop for physicians, providing access to high-fidelity investments, tax prep, filing, insurance optimization, debt management, lending solutions, and career advisory.
Volkswagen has launched the first FinTech in the Brazilian automotive industry. The platform is expected to provide a simpler and more convenient way for customers to access Volkswagen's financial products and services, as well as to streamline the company's operations.
Looking to work with me in any of the following areas?
Cheers,
Marcel van Oost
Re: a couple of remarks on the embedded finance article. 1/ the idea that manufacturing and distribution will be decoupled with digital was already touted during the dot.com era. McKinsey & Company wrote in 2000 a famous article called "unbundling the corporation" (which was extended in a 200+page book by AT Kearney with little input on their own). The main reason this "revolution" did not happen is that incumbents did not want to be disintermediated. Why would they today? Embedded finance enthusiasts systematically forget to consider this nagging question. 2/ the article - like most similar article - also assumes that the digital partner "will likely have access to much more data about their customers than a bank could have on its own". Really? How many digital players do fit that description?