Millennials are the generation most likely to embrace new technologies such as Open Banking but they also hanker after the human touch when it comes to managing their finances, according to new research. A survey of 1,000 adults conducted by Altus, a UK-based financial services consultancy, suggested that over half (53 per cent) of 25-34 year olds would be happy to allow a web-based service to review and manage their personal finances, compared to 35-44 year olds (51 per cent), 45-54 year olds (47 per cent) and the over 55s (38 per cent).
Security flaws in a number of market-leading mobile point of sale (MPoS) devices could leave customers open to fraudulent charging and vulnerable payment methods, according to researchers. Leigh-Anne Galloway and Tim Yunusov, researchers from security firm Positive Technologies, looked at seven MPoS devices popular in the US and Europe, including devices sold by Square, iZettle, PayPal and SumUp.
Capital On Tap has secured £90 million in debt funding from M&G Investments and Triple Point Investment Management, along with a £50 million debt line from Citibank and Pollen Street Capital. The startup is not publicly disclosing its valuation, but it has now raised over £30 million of equity and £200 million of debt to date.
Millions of fax machines could be vulnerable to malicious hackers using booby-trapped image data to gain access to internal networks, security researchers have found.
Yaniv Balmas and Eyal Itkin, security researchers at CheckPoint, a US software company, found that the owners of more than 300 million active fax numbers could be leaving themselves open to so-called ‘faxploitation’ attacks.
The Bank of England (BoE) is looking to explore the demand for introducing synchronised settlement to the renewed Real-Time Gross Settlement (RTGS) service. It has issued a call for interest from FinTech firms to help investigate the potential and understand the design implications for organisations which would interface with the system.
Moneyhub has secured Payment Initiation Services Provider authorisation from the Financial Conduct Authority, a step further from its current Account Information Services Provider status. The financial management platform has also launched an application programming interface (API) gateway, which it described as a ‘one stop shop’ of personalised, permission-based, financial data sources, giving development teams access to data streams to help build innovative customer solutions.
The World Bank has chosen Commonwealth Bank (CBA) to be the sole arranger of the first global bond to be created, allocated, transferred and managed using blockchain technology. The Australian dollar denominated ‘bond-i’, or Blockchain Offered New Debt Instrument, has been developed with input from the investor community, including Northern Trust, QBE and the Treasury Corporation of Victoria.
Norwegian banks Sbanken, Sparebanken Vest, and Sparebanken Sogn og Fjordane have joined forces to let customers view accounts from across all three in either’s online banking platform. The initiative is set to be rolled out well in advance of next autumn’s mandated introduction of the second Payment Services Directive (PSD2), giving the banks a head start in the FinTech-led account aggregation space.
INTL FCStone’s London-based Precious Metals Division has started using Paxos’ technology to automate trade confirmations, reduce errors and secure instantaneous reconciliation. The startup’s service will confirm all of the trades INTL FCStone executes on a daily basis, eliminating thousands of manual tasks every day, while improving operational precision.
A combination of incumbent insurers wanting to update their propositions, and startups realising they require help scaling up, means the InsurTech space is ripe for partnership. This is according to the Association of British Insurers’ assistant director and head of strategy, data and analytics Matt Cullen, who suggested that the market is finally getting closer to making technology pay.
JDA Software has completed the acquisition of Blue Yonder, which builds artificial intelligence (AI) solutions for retail and supply chain. JDA hopes the acquisition will accelerate its Autonomous Supply Chain capabilities by connecting its systems and data to enable automated and more profitable business decisions. Blue Yonder’s software-as-a-service (SaaS) solutions also further fuel development of JDA’s Luminate cognitive SaaS platform and solutions.
Serious security vulnerabilities have been discovered in several leading mobile, desktop and web stock trading applications by IOActive. Alejandro Hernandez, senior security consultant at the cyber security firm, tested 16 desktop applications, 30 websites and 34 mobile applications, finding “major vulnerabilities” that can allow malicious actors to gain access to a user’s personal banking information, steal money and gain insights into net worth and investment strategies.
Visa has announced an investment and partnership with Israeli FinTech firm, Behalf, which provides working capital solutions for small businesses and financing for business purchases. As part of Visa’s investment, Behalf’s small-business clients will be offered a tokenised virtual card, a credit-based payment solution that gives businesses instant financing for their business purchases.
More than 33 billion records will be stolen by cyber criminals in 2023 alone, according to Juniper, representing an increase of 175 per cent on the 12 billion records expected to be compromised in 2018. Despite this, Juniper forecasts that cyber security spend will only increase by an average of nine per cent per company per annum, in spite of new legislation mandating strong cyber security and authentication measures.
CurrencyFair has announced an Asian expansion through the acquisition of Hong Kong-based Convoy Payments. The deal is part of the Irish money transfer service’s €20 million investment plan to drive global growth, which will also see the creation of 90 new jobs over the next 18 months. These will be created with particular emphasis on product development, customer service, compliance and marketing and global partnership development.
US FinTech firm Steady has secured $9 million in a Series A funding round, led by Propel Venture Partners – BBVA’s venture capital investment unit. Steady is an income-building platform for the Build-Your-Own (BYO) workforce, offering income-building opportunities, an income tracker and exclusive discounts. The firm helps workers to find and apply to new opportunities that match their availability, abilities and interests.
The Financial Conduct Authority (FCA) has, in collaboration with 11 financial regulators and related organisations, announced the creation of the Global Financial Innovation Network (GFIN). The network builds on the FCA’s proposal earlier this year to create a global sandbox, providing a more efficient way for innovative firms to interact with regulators, helping them navigate between countries as they look to scale-up new ideas.
CYBG is working with The ID Co. to integrate its DirectID Open Banking platform into the bank’s mobile banking app. Customers of CYBG’s banking app - called B - will now be able to import banking data from a range of UK banks including: Barclays, HSBC, Lloyds Group, Santander, RBS, and Nationwide, as well as digital banks such as Starling and Monzo.
Facebook has reportedly asked several leading US banks to share financial information about their customers – including card transactions and checking-account balances. As part of a push to become the portal where people buy goods and services, the social media platform has been in talks with the likes of JPMorgan Chase, Wells Fargo and Citigroup, according to the Wall Street Journal.
The Arizona Attorney General’s Office will launch the first FinTech sandbox in the US, easing regulatory burdens for companies to test innovative FinTech products and services while remaining subject to the state’s consumer protection laws. Navigating state regulatory requirements can often take several months and cost tens of thousands of dollars. The new sandbox will provide firms with relief by lifting some regulations and allowing some products and services to be live-tested in a marketplace limited to a capped number of consumers.
Australia’s digital-first UBank has introduced a new feature that allows customers to follow the real-time progress of their home loan application online. The bank wanted to streamline a process that is generally complex and confusing, with customers often getting frustrated when trying to get a status update from different customer service agents. Earlier this year, UBank also launched a chatbot to help potential home buyers and refinancers complete their online home loan applications.
Intercontinental Exchange has revealed plans to form an open and regulated platform where consumers can buy, sell, store and spend digital assets. Called Bakkt, the new company will be working with various organisations including BCG, Microsoft, Starbucks and others to add expertise in risk management, technology and consumer experience. By leveraging trusted market infrastructure, Bakkt is being designed to help the digital asset markets evolve securely while supporting transaction flows.
Investors who backed Revolut in the digital bank’s latest investment round on Crowdcude have now realised returns of 19x on their original investments. In July 2016, Revolut held a funding round on Crowdcude which enabled the public to invest as little as £10 or as much as £5,000. In April this year, Revolut received a $250 million investment led by DST Global, setting a valuation of £1.2 billion.
Russia’s Sberbank has appointed senior vice president and chief technology officer David Rafalovsky as head of the Technology Block, where he will carry out strategic management of Sberbank’s technology functions. Prior to joining Sberbank, Rafalovsky spent 20 years at Citigroup in the US, where he started his career as a lead solutions architect and worked his way up to global head of finance and risk infrastructure technology.
UK-based FinTech firm Zopa has announced it has raised £44 million in the first phase of its latest fundraising round, marking its largest funding round to date. The funding comes during an exciting time for the firm, who reported full profitability last year for the first time since 2012. The injection of funding will be invested towards the capital needs of the new bank it has been building.
Asian online to offline (O2O) mobile platform Grab Holdings has raised $2 billion in its latest fundraising round. Toyota Motor Corporation joined the likes of OppenheimerFunds, Ping An Capital, Mirae Asset Management, Cinda Sino-Rock Investment Management Company, All-Stars Investment, Vulcan Capital, Lightspeed Venture Partners and Macquarie Capital.
Barclays is partnering with Europe’s largest online invoice financing platform MarketInvoice to help small and medium enterprises (SMEs) in the UK manage cash flow and accelerate growth. The bank has committed to a significant minority stake in the FinTech firm to give Barclays’ SME clients access to innovative forms of finance. Founded in 2011, MarketInvoice has funded invoices worth more than £2.7 billion, helping small businesses with their cash flow.
Nearly two thirds of UK companies are planning a significant increase in IT investment next year, in response to fears around the impact of Brexit, according to new research by MHR Analytics. The business intelligence and analytics provider commissioned Censuswide last month to survey 200 decision-makers in large and medium sized UK businesses.
Almost three quarters (72 per cent) of UK adults have not heard of Open Banking, while just one in three (28 per cent) are aware of it, according to a YouGov survey. In terms of who has heard of the term, it is those in the older age groups that are more likely to be aware. Almost 40 per cent of those aged over 55 have heard of open banking, against just 14 per cent of those aged 18-24.
Nationwide Building Society has announced its second investment as part of a £50 million Venturing Fund designed to create long-term FinTech partnerships. Hazy, based in London and formed just 18 months ago, is an online platform that helps businesses share data responsibly. Its artificial intelligence-driven solution is able to seek out and anonymise personal data, supporting businesses in ensuing customer data is as private and secure as possible.
The Financial Conduct Authority (FCA) is consulting on rules and guidance to improve conduct standards and communications in the payment services and e-money sectors. Its paper proposes to extend the application of the Principles for Businesses and certain specific rules about promotions and communications so that they cover wider categories of businesses – including those authorised or registered under the Payment Services Regulations or the Electronic Money Regulations.
The US Department of the Treasury has outlined improvements to the regulatory landscape in support of FinTech innovation. “Creating a regulatory environment that supports responsible innovation is crucial for economic growth and success, particularly in the financial sector,” said secretary Steven T. Mnuchin. “We must keep pace with industry changes and encourage financial ingenuity to foster the nation’s vibrant financial services and technology sectors.”
New research from Frost & Sullivan has found that UK consumers have only a marginal degree of trust in organisations to protect their digital data. The Digital Trust Index is based on various metrics, including how willing customers are to share personal data with organisations, how well they think organisations protect that data and the extent to which consumers believe companies sell their personal data to third parties. The index is based on a rating out of 100, with 100 representing “total trust”.
The UK has attracted more FinTech investment than any other country during the first half of the year, with fundraising worth $16.1 billion (£12.3 billion). KPMG’s industry report found that China came in second place with $15.1 billion, followed by the US at $14.2 billion. Globally, FinTech investment took in $57.9 billion across 875 deals during the first half – up 34.2 per cent compared to the whole of 2017, which recorded just $38.1 billion overall.
Australia’s Commonwealth Bank has demonstrated a new blockchain platform to ship and track seventeen tonnes of almonds from Sunraysia in Australia to Hamburg in Germany. The trade was underpinned by distributed ledger technology (DLT), smart contracts and the internet of things (IoT), which tracked the shipment from packer to end delivery in parallel to existing processes.
AXIS Capital Holdings has launched AXIS Digital Ventures, a new unit to lead partnerships with entrepreneurial companies focused on data and analytics with high value insurance applications, new product opportunities and new distribution models. The Digital Ventures business is also charged with introducing innovative technologies across the company’s businesses, following an announcement earlier this year about strengthening its operating model to become more agile and better positioned to leverage change.
Legal & General’s FinTech business has made a £3 million investment in software as a service (SaaS) company Smartr365. The business was established in 2016 with the aim of helping mortgage brokers deliver a digital and more efficient service for customers. Its services include online fact finding tools, customer verification processes and a unique customer portal.
Contrary to widespread perception, new research has revealed that 88 per cent of crypto exchanges want industry regulation. The figures come from crypto-friendly payment company Mistertango, which interviewed 24 crypto exchanges across Europe, Asia, South America and Oceania, with total daily trading volumes of over $100 million.
Driven by payment cards and mobile wallets, in-store contactless payments will reach $2 trillion by 2020 – representing 15 per cent of total point of sale transactions. This is according to new research from Juniper, which found that contactless payments will exceed the $1 trillion mark for the first time in 2018, a year earlier than previously anticipated. The study found that growth will be driven by strong adoption in Europe as well as the Far East and China.
Financial market infrastructure group CLS has announced a collaboration with IBM to develop a proof of concept (PoC) for distributed ledger technology (DLT) platform LedgerConnect. The aim is to enable banks, buy and sell side firms, FinTechs and software vendors to deploy, share and consume services hosted on a shared distributed ledger network.
Cross-border B2B payments technology firm TransferMate has announced a €21 million investment from Dutch bank ING. The two companies have also agreed a strategic partnership, with TransferMate’s services made available to all SME and corporate clients of ING. TransferMate’s cross-border API technology and global payment licences will reduce international payments costs and improve cash flow for ING business customers who send or collect funds cross-border.
TSB has reported a £107.4 million first half loss, with its botched IT migration in April at least partly to blame. For the first six months of 2018, the British High Street bank recognised additional post-migration costs totalling £176.4 million.
While just 15 per cent of travel companies have attempted new payments innovations in the past three years, 81 per cent plan to initiate at least some new innovation projects in the next three years. These are the findings of 78 in-depth interviews with payments managers from hotels, airlines and travel intermediaries conducted by technology firm Amadeus.
Following a post-implementation review of its crowdfunding rules, the Financial Conduct Authority (FCA) is opening a consultation on new rules for loan-based crowdfunding platforms. The changes are designed to address the ways in which the loan-based crowdfunding model has developed since the regulator last reviewed the sector in December 2016. Since then, the FCA has observed the variety of loan-based crowdfunding business models, some of which have become increasingly complex.
Several law firms and technology companies have agreed to work together to launch a public, permissioned blockchain network, which aims to redefine how legal products and services support the networked economy. The Agreements Network brings together law firms BakerHostetler, LegalBono and ErdosIP and FinTechs Clause, Crowdcube, LexPredict, Libra, Mattereum, Monax, Rymedi, TransparentNode and Wolfram Blockchain Labs.
CYBG - owner of Clydesdale Bank, Yorkshire Bank and digital banking service B - has announced a strategic partnership with PayPal, designed to enhance digital payment options for customers. The partnership will enable customers to link their debit and credit cards with PayPal accounts directly from the B mobile banking app.
Visa has signed a strategic agreement with MoneyGram that is aimed at modernising and digitising the process of sending and receiving money overseas. Using Visa’s real-time push payments platform, Visa Direct, the agreement will enable secure cross-border remittances. Once live, MoneyGram’s service will enable its users to choose their preferred method of sending and receiving funds.
The UK’s banking industry is stepping into a new era, according to one challenger bank boss, with traditional High Street players starting to take notice of the FinTech revolution. “I think we are definitely beginning to take steps in to a new era of banking, but this will largely be influenced by technology,” stated Norris Koppel, chief executive and founder of mobile banking app Monese. “This is something we have seen the traditional banks begin to embrace, perhaps this is to keep up with the fast pace being set by digital challenger banks.”
Dutch FinTech Five Degrees has acquired Icelandic banking IT provider Libra as part of its international growth plan. The deal adds value for customers of Five Degrees through its core banking solutions in the field of securities and loans, offering a clear roadmap to retire obsolete and expensive back-end systems.
Credit Suisse Asset Management’s FinTech fund NEXT Investors has announced final closing with approximately $261 million of capital commitments. The fund has a diverse group of investors, including financial institutions, ultra-high net worth individuals, fund of funds, and family offices across the Americas, Europe and Asia Pacific.
The Financial Conduct Authority (FCA) has banned the former directors and shareholders of the now dissolved Secure My Money for taking fees of over £7.2 million from approximately 124,000 online customers by duping them into believing they had been approved for short term loans. Between November 2013 and July 2014, David James Carter Mullins, Edward John Booth, Christopher Paul Brotherton and Mark Robert Kennedy all lacked honesty and integrity as they had deliberately misled often vulnerable customers, in relation to fees and services provided through web-based brands i-loansdirect, LoanZoo and the1loan.
Customers of digital currency exchange Coinbase will now be able to spend their cryptocurrency balances on e-gift cards, following a partnership with WeGift. Customers in the EU and Australia will now be able to spend the funds in their crypto accounts with retailers including Nike, Tesco, Uber, Google Play, Ticketmaster, Zalando and more. There will be no Coinbase withdrawal fees, while there will be bonuses on selected e-gifts.
SWIFT, along with a number of corporates and banks, has announced plans to start testing an enhanced multi-bank standard to improve cross-border payments for multi-banked corporates. This enhanced standard, designed and built in conjunction with 10 multinational corporates and 12 leading banks, streamlines the process for treasurers by allowing them to initiate and track SWIFT global payments innovation (gpi) payments to and from multiple banks in a single format.
The Payments Systems Regulator (PSR) is looking to carry out a market review into card-acquiring services and has published draft terms of reference for consultation. Card payment use is growing, with the PSR stating that last year in the UK, 13.2 billion payments were made by debit card and an additional 3.1 billion payments by credit card. Also in 2017, for the first time, debit cards became the most frequently used payment method.
Mobile biometrics will authenticate $2 trillion worth of in-store and remote mobile payment transactions annually by 2023 – 17 times the $124 billion expected in 2018. This is according to a new study from Juniper, which expects the growth to be driven by over 2,500 per cent growth in remote biometric transactions. The study predicts that remote m-commerce transactions will reach over 48 billion in volume by 2023, representing around 57 per cent of all biometric transactions – up from an estimated 28 per cent in 2018.
Distributed ledger technology (DLT) provider Digital Asset has partnered with Google Cloud to make its blockchain platform and developer tools available on the Google Cloud platform. Developers now have access to a comprehensive suite of tools and services to build, test and deploy distributed ledger applications on-demand and without having to configure the underlying platform. In collaboration with Google Cloud, Digital Asset has expanded its developer programme to include the DAML platform-as-a-service (PaaS) on Google Cloud Platform.
Banks are increasingly using advanced ATM software platforms to modernise customer identification and authentication, improve customer personalisation and maximise the performance of self-service channels. This is according to consulting firm RBR, which interviewed 30 leading banks, finding that while most ATM transactions are still carried out using the traditional card and PIN combination, advanced software platforms now support a wider range of technologies and form factors.
PayU has announced the acquisition of Israeli payment technology provider ZOOZ, supporting ongoing expansion into high-growth markets. The move brings PayU’s total sum of investments and acquisitions to more than $350 million since it began a series of strategic moves across the globe in 2016. The ZOOZ and PayU teams will work together to build a flexible ‘Payment OS platform’ that can support evolving merchant and broader payment industry needs.
PropTech company Goodlord has partnered with Open Banking provider TrueLayer to enhance its functionality and service offering to letting agents, landlords and tenants. Founded in 2014, Goodlord’s proprietary technology streamlines deposits, contracts, compliance, tenant move-in assistance, insurance and referencing.
Barclays has announced plans to develop a new campus in Glasgow, which will provide a state-of-the-art workplace for the bank’s functions, technology and operations teams. Barclays has agreed to purchase the office development from Drum Property Group and is currently working with them to finalise the design of the new facility as part of the wider Buchanan Wharf development on the River Clyde.
Singapore’s OCBC Bank has revealed plans to reduce the number of bank teller positions by half over the next two years, as it drives forward with branch digitalisation. Bank tellers will be retrained over the next five years to be able to perform digital or advisory roles, while $14 million will be invested in the deployment of new ATMs and digital service kiosks across the bank’s estate.
The Investment Association (IA) has established the first cohort of innovators for Velocity, its FinTech accelerator for the asset management industry. The 24-strong Velocity advisory panel, chaired by Schroders’ chief digital officer Graham Kellen, will oversee the selection process, providing guidance on the adoption of emergent technology across front, middle and back office operations.
Key industry stakeholders have warned that the UK’s exit from the European Union could lead to a serious ‘brain drain’ in the booming FinTech sector. Speaking at last week’s London FinTech Week, senior spokespeople at various venture capital firms with stakes in the industry gave honest opinions on what impact Brexit could have.
Cambridge City Council has installed two contactless donation terminals, where members of the public can donate to Cambridge Street Aid – a charitable fund for the homeless in the city. Passers-by can donate using contactless debit or credit cards, or smartphones – 24 hours a day at one terminal, or any time during the Visitor Information Centre’s regular opening hours.
The US Consumer Financial Protection Bureau (CFPB) has appointed Paul Watkins to lead its new Office of Innovation. Acting director Mick Mulvaney said the Office of Innovation “will make significant progress in creating an environment where companies can advance new products and services without being unduly restricted by red tape that belongs in the 20th century”.
The prolific MoneyTaker hacking group has stolen around $910,000 from Russia’s PIR Bank by gaining access to its network by compromising a regional branch’s router. Cyber security firm Group-IB confirmed that the attack started in late May 2018. The router had tunnels that allowed attackers to gain direct access to the bank’s local network – a characteristic technique of MoneyTaker.
The Hong Kong Monetary Authority (HKMA) has published its Open application programming interface (API) framework for the banking sector. Its formulation is one of the seven initiatives announced by the HKMA last September to prepare Hong Kong for a new era of Smart Banking.
Cisco will be investing $100 million to accelerate digital innovation in the UK, supporting partnership with industry, government and academia. As part of the initiative, the IT and networking company has collaborated with University College London (UCL) to open one of the world’s largest artificial intelligence (AI) research centres, with a focus on addressing industry challenges and developing AI talent in the UK.
UK FinTech firm PayBreak has secured an additional £15 million of funding from specialist banking group Paragon as part of its growth plans. PayBreak specialises in digital point of sale finance through online retailers, allowing customers to spread the cost of payments on purchases through its online lending platform.
JLT Employee Benefits has acquired digital saving and investment service Moola, subject to regulatory approval. The deal is aligned to JLT’s strategy of helping UK businesses deliver better employee financial, emotional and physical wellness. Moola offers ISAs, GIAs and tax efficient investment portfolios, along with free educational content to empower individuals with the knowledge to make smarter decisions with their money.
Moneysupermarket has revealed plans to launch a new FinTech firm dedicated to the mortgage market, Podium, as part of its interim results. “Customers are already looking to us for help with mortgages and we are developing a new mortgage comparison tool to find them the most appropriate mortgage online,” read the report.
An academic has warned that even the smallest error in RegTech solutions can create systematically erroneous outcomes, leading to large scale liability risks. Veerle Colaert, a professor of financial law at KU Leuven University and a member of the European Securities and Markets Authority stakeholder group, published a paper this week looking at how technological solutions have emerged to help with regulatory compliance requirements.
The Depository Trust & Clearing Corporation (DTCC) has announced intentions to open a Dublin office ahead of the UK’s planned withdrawal from the European Union in March 2019. “DTCC has had a strong presence in Europe for over two decades, including in London, Wrexham, Brussels, Frankfurt and Stockholm. Our continued growth and desire to get ahead of new regulatory obligations, because of Brexit, now takes us across the Irish Sea to Dublin,” said Simon Farrington, managing director for EMEA at DTCC.
Santander has installed a new bank operating system from nCino, which will provide business customers with faster loan processing and a superior digital experience. The new cloud-based platform is accessible to customers from any device and will cut the time taken to deliver loan processing by 40 per cent. The solution combines customer relationship management, loan origination, account opening, workflow, enterprise content management and instant reporting capabilities.
BlackFin Capital Partners is positioning itself as the largest independent FinTech fund in Europe after finalising a €180 million final closing. BlackFin Tech 1’s investment thesis attracted a range of high profile investors, including: Bpifrance, Vaudoise Assurances Group, Groupama, Sogecap (Société Générale Insurance), Natixis Assurance, Swiss Life, German public bank KfW, Belgian insurer Securex, the groups MACIF, BNP Paribas, as well as large family-offices from the sector and regional entities of banking groups Crédit Agricole, Banque Populaire et Caisse d’Epargne.
The Financial Stability Board (FSB) has published a report delivered to the G20 Finance Ministers and Central Bank Governors on crypto-assets, stating that they do not pose a material risk to global financial stability at this time. The FSB has developed a framework, in collaboration with Committee on Payments and Market Infrastructures (CPMI), to monitor the financial stability implications of developments in crypto-asset markets. The report sets out the metrics it will use to monitor these markets as part of an ongoing assessment of vulnerabilities in the financial system.
Credit checking company ClearScore is to use Open Banking to give consumers detailed insight into their financial situation to prompt mortgages and credit card switching. Set for a Spring 2019 launch, the OneScore service will combine credit scores with information pulled from current accounts, savings and insurance to give a financial ‘healthscore’, with analysis of spending patterns and recommendations on how to save money.
Amir Nooriala has joined FinTech challenger bank OakNorth as chief operating officer, where he will be responsible for internal operations, technology and change delivery of the bank, including all IT systems and operational processes. Nooriala joins the bank from BGC Partners, where he led the restructuring of the broker’s change function.
NatWest has joined Marco Polo, the trade finance platform that uses blockchain technology to reduce the costs, risks and time involved in businesses trading with each other. The initiative is coordinated by the financial technology firm TradeIX and R3 to collaboratively apply emerging blockchain technology to the global trade finance market.
The European Insurance and Occupational Pensions Authority (EIOPA) has released a survey to collect views on the emerging InsurTech industry. The industry body is aiming to get a better picture of those not directly active in the insurance value chain on InsurTech and the technology-enabled innovation in insurance that could result in new business models, applications, processes or products.
Since implementing a new advanced operations management system, Nationwide Building Society has enjoyed better real-time visibility of work and available-skilled resources. Nationwide felt that it was no longer sufficient to just review past performance as a guide for future operational plans, but required breaking down the data silos, cross-training employees and sharing skilled resources. The building society enlisted the support of ActiveOps to provide new tools and proven training for staff.
The UK has all the resources, as well as industrial and governmental will, to become a global hub for blockchain and the crypto economy by approximately 2022, according to a new report. This year should mark the inflection point at which it will become clear if the UK has marshalled its existing resources across industry, government, academia and thought leadership to achieve this exciting opportunity.
UK consumers are looking for innovative, digital payment experiences with their banks, according to a new YouGov survey on behalf of Ondot. The results found that online security and fraud prevention tops the list of what British consumers think banks should guarantee – with 60 per cent wanting peace of mind when using their cards online. The survey also discovered that consumers are keen to play a much more proactive role in managing their personal finances.
Mastercard has announced a partnership with payments technology firm Worldpay, focused on expanding acceptance options and making digital payments more convenient and secure. Through the partnership, Worldpay will offer Mastercard’s Pay by Bank app to merchants in the UK starting in early 2019. Pay by Bank enables customers of UK businesses to make online payments for goods via their mobile banking app, directly from their bank account.
The wealth management sector has a new entrant, in the form of Tiller, which promises to combine proactive investment management with intelligent technology. Looking to differentiate itself from other digital-only wealth managers, Tiller is offering actively-managed funds and themed investment baskets alongside low-cost passive investment products.
Saudi Arabia’s Capital Market Authority has granted FinTech experimental permits to Riyadh-based startups Manafa Capital and Scopeer. This follows the regulator’s backing for FinTech earlier this year, aiming to provide a regulatory framework that is conducive for financial innovation.
Only 20 per cent of companies surveyed believe they are compliant with the General Data Protection Regulation (GDPR), while 53 per cent are in the implementation phase and 27 per cent have not yet started their implementation. This is according to a survey carried out by Dimensional Research on behalf of TrustArc in June among 600 IT and legal professionals with responsibility for privacy at companies required to meet GDPR compliance, split equally among the US, UK, and European Union.
Japanese payments firm Paidy has seured $55 million in a Series C funding round, led by ITOCHU Corporation, with participation from Goldman Sachs. Paidy provides an instant post-pay credit service for e-commerce customers in Japan. No pre-registration or credit card is required to use Paidy; customers simply purchase products online using a mobile phone number and email address, settling a single monthly bill via bank transfer, auto credit or at a convenience store.
Metro Bank has launched its developer portal, opening up its platform to Financial Conduct Authority-registered third parties wishing to build services on top of its application programming interfaces (APIs). Built in collaboration with Google’s Apigee team using Apigee’s Edge API management platform, the self-service portal allows access to the bank’s PSD2 API documentation and sandbox. Developers will also be able to access the API documentation and test out simple API queries that return sample data.
Today marks six months since the second payment services directive (PSD2) was introduced across Europe, promising to open up the traditional banking and payments space to the innovation of FinTech challengers. But, as several industry experts admit, so far there has been little to show in terms of new products or consumer communication.
BBVA has announced the finalists of its FinTech competition Open Talent, which received more than 6,000 entries from startups across 80 countries. Open Talent has been designed to drive and support disruption in the banking sector, seeking innovation that allows it to build services beyond those traditionally offered by a bank. The competition will help the FinTechs grow by providing them with access to the bank’s services and processes.
Banking app Emma has closed a £420,000 seed funding round led by Kima Ventures and Aglaè Ventures. The London-based FinTech aims to provide money management for Millennials, helping them avoid overdrafts, find and cancel subscriptions, track debt and save money.
Nationwide has announced it will work with government and other businesses through the Inclusive Economy Partnership, challenging the FinTech community to develop Open Banking technology that helps improve the lives of the one in four UK households who are financially squeezed – equivalent to 12.7 million people. Launching in September, Open Banking for Good will convene established FinTechs and start-ups, through to innovators and debt and money charities.
The financial services industry could expect to add up to $512 billion to global revenues by 2020 through ‘intelligent automation’, robotics process automation (RPA), artificial intelligence (AI) and business process optimisation. This is according to a new study from Capgemini, which surveyed 1,500 senior executives from 750 global organisations.
In order to stay relevant in the financial services space, traditional institutions must have a strong collaboration programme. This is according to a panel at London FinTech Week, which discussed how banks must prioritise innovation and collaboration with FinTech players. “Innovation is a mindset – a willingness to change,” said Simon Rogerson, chief executive of Octopus Investments and co-founder of Octopus Group.
The chair of the Financial Conduct Authority (FCA) and Payment Systems Regulator (PSR) has warned that FinTech cannot be complacent in the face of algorithms taking over. Speaking at an event in London yesterday, Charles Randell explained that algorithms are now everywhere in digital services, noting that some have suggested in the future democracy will be replaced by an algocracy, where algorithms decide everything on our behalf.
Cryptocurrencies like Bitcoin offer a viable evolutionary ‘next step’ for money and have the potential to become a mainstream form of payment within the next decade, according to research from Imperial College London and eToro.
In the paper, William Knottenbelt from Imperial College London and Zeynep Gurguc from Imperial College Business School argue cryptocurrencies already fulfil one of the three fundamental roles of traditional fiat money: acting as a store of value.
Investment banks are set to increase their use of public cloud by over 50 per cent within the next five years, as greater awareness of hosting banking specific applications with cloud vendors’ drives industry-wide confidence. A global study of over 32 tier one and two investment banks by IT consultancy GFT found that three quarters are more attracted by cloud computing’s ability to introduce agility into their businesses than its ability to simply deliver cost reductions (50 per cent).
Money management chatbot Plum will now support challenger banks Monzo and Starling Bank via Open Banking and a partnership with TrueLayer. Users can now avoid sharing their login details by logging in with their actual banking provider and then authorising another party - TrueLayer - to access their data. This allows Plum to request access to account data held by Monzo or Starling, simply and securely via an API, without ever learning the user’s login information.
The use of artificial intelligence (AI), machine learning and data science has matured in the financial services industry over the past couple of years, according to a panel at London FinTech Week. AI strategist Yannis Kalfoglou described an environment in which banks, FinTechs, asset managers and technology firms are now comfortable with the technology, developing new products designed specifically for ease of use and enhancing the experience for the end user.
Accenture has announced that it will build a platform to develop and implement blockchain and distributed-ledger use cases on behalf of the Institutes RiskBlock Alliance, a consortium for the risk management and insurance industry. The platform will enable the RiskBlock Alliance to implement and test multiple use cases by the end of 2018.
The giants of the tech sector will make platform model plays into financial services within the next five years, according to experts at London FinTech Week. That specific prediction was made by Mia Iwama Hastings, head of business development at Priviti Group, but was backed by Elie Shuggi, global head of startup delivery at Aviva, who added: “The ball game’s about to change quite quickly and dramatically.”
The Tax Incentivised Savings Association (TISA) is set to launch a workshop this week around an Open Asset Management initiative to follow in the footsteps of Open Banking in the UK. TISA’s director general David Dalton-Brown revealed the plans in a speech a London FinTech Week yesterday afternoon, explaining that the project came in response to complaints from members that solutions were required in the same vein as the TISA Exchange (TEX) electronic transfer service.
The General Data Protection Regulation (GDPR) has been in force for less than two months, and already some well-known brands have fallen foul due to data breaches. Luxury retailer Fortnum & Mason admitted the loss of some 23,000 customer records - which included emails, telephone numbers and delivery addresses of customers who filled out a survey - due to the use of a third-party survey provider.
The EQT VIII fund and EQT Ventures fund have agreed to acquire Saxo Payments Banking Circle from Saxo Bank. Founded in 2013, Banking Circle is an online cross-border payments infrastructure provider, which now processes around €60 billion run-rate annual payment volumes for several high-profile customers.
Investment app Moneybox has raised £14 million in a Series B funding round led by Eight Roads, the proprietary investment arm of Fidelity International. Existing investors, including Oxford Capital Partners and Samos Investments, also participated, bringing the total amount raised by the company to £21.3 million.
Two fifths (40 per cent) of Brits willing to share their bank transaction data with a new lender would do so if it provided them with product recommendations which save them money. Six months into Open Banking, an online survey of 2,002 adults by Equifax looked into the perceived benefits. They included the ability to easily compare products from different financial institutions (36 per cent), being offered tailored incentives for switching to a new provider (34 per cent), and a streamlined process when applying for mortgages (28 per cent) and loans (25 per cent).
Only 60 per cent of employees in financial services firms have suitable processes and technology in place to capture, record and consequently retrieve real-time business communications, meaning 40 per cent are risking non-compliance with Article 16 of MiFID II. The second Markets in Financial Instruments Directive comes at a time when many firms have been concentrating on compliance with the new General Data Protection Regulation (GDPR), which requires significant change to operations, staffing and technology.
European Union regulations coming into place next September will lead to a significant increase in the use of biometric technology to authenticate who is paying, according to Mastercard. In terms of card payments, currently just 1-2 per cent of online transactions require cardholder authentication to complete a transaction - mostly likely using a password - but this is set to rise to 25 per cent from next autumn.
The Bank of England, Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) have given financial services firms in the UK a three-month deadline to demonstrate operational resilience in the event of a cyber attack or IT breakdown. The joint discussion paper on an approach to improve the operational resilience of firms and financial market infrastructures (FMIs) stated that boards and senior management can achieve better standards through increased focus on setting, monitoring and testing specific impact tolerances for key business services.
Retail technology firm JDA Software has signed a definitive agreement to acquire Blue Yonder – a market specialist in artificial intelligence (AI) retail solutions. The acquisition builds on JDA’s strategy of developing cognitive and connected solutions to power digital transformations for companies seeking to improve their supply chain technology.
Revolut has signed up one million customers in the UK and is now bringing in between 6,000 and 9,000 new users every day. The London-based digital challenger bank also revealed plans for expansion outside of Europe, with launch expected in the United States, Canada, Singapore, Hong Kong, Australia and New Zealand within the next few months.
Lloyds Banking Group has appointed Dan Makoski to the newly-created role of chief design officer, as the bank moves to a more digital-based offering. Makoski has a wealth of experience in the design world, joining from Walmart where he served as vice president of design. Prior to that, Makoski also worked at Google, Microsoft, led design research globally at Motorola and was the first vice president of design at Capital One.
ThetaRay, a specialist in artificial intelligence (AI) and big data analytics, has secured funding of more than $30 million, taking total investment in the firm to over $60 million. Investors in the funding round included Jerusalem Venture Partners, GE, Bank Hapoalim, OurCrowd, SVB Investments and others. ThetaRay will use the new injection of funds to expand its presence in Europe, Asia and the US, significantly increase its workforce and scale operations to meet growing demand.
Incumbent banks with bad loans and legacy systems risk being left behind by less encumbered challengers, according to the European Banking Authority (EBA). The European banking watchdog assessed FinTech risks and opportunities in the sector, stating that problems are “particularly challenging for some large complex incumbents” which have “a very formal and slow governance structure, further restricted by legacy ICT systems or legacy non-performing assets”.
The Financial Conduct Authority (FCA) has announced the 29 firms that were successful in their applications to begin testing in the fourth cohort of the sandbox. Some 69 firms applied this year to take part in the sandbox, an increase on the number that applied last year. Successful applicants covered a range of sectors, locations and firm sizes.
Monzo has reported both annual losses and admitted a data breach, in a challenging few days for the digital-only challenger bank. After pointing out that it spotted the Ticketmaster data breach last week – spotting a spike in account fraud back in April – Monzo itself fell victim to a hack which saw the personal details of around 20,000 customers stolen from third party survey firm Typeform.
Bank of America Merrill Lynch has added biometric security to its CashPro mobile banking platform, as well as an embedded token to enable secure access and payment approvals. The platform has more than 475,000 active users among the bank’s commercial, large corporate and business banking clients. The mobile app’s popularity is growing, with more than 28,000 payment approvals made via CashPro Mobile in the first quarter of 2018 – a jump of 188 per cent from the same period in 2017.
we.trade, a blockchain-based trade platform established by a consortium of European banks, has completed the first real-time customer transactions on the platform. Over the last five days, 10 companies have executed trades through four banking institutions. These trades signify the first commercially viable open account trades harnessing blockchain technology.
The progress made by Open Banking and the second Payment Services Directive (PSD2) could be undone by the lack of similar global standards, experts have warned. Emerging Payments Association (EPA) director general Tony Craddock called Open Banking a “seismic shift” in a message to members, explaining that it gives consumers instant, free and global access to financial data and control over their financial lives.
Oracle will be collaborating with B-Hive Europe for a FinTech innovation programme in Brussels, to accelerate enterprise readiness for participating financial institutions. Brussels was chosen as Oracle’s European FinTech hub because of its central location and the presence of leading institutions of the European Union. Johan Van Overtveldlt, Belgium’s minister of finance, said he expects the relationship to create real momentum in the acceleration of financial innovation
The Open Banking sector could be worth £2.8bn by the end of this year and £7.2bn by 2022, according to a report from PwC. The professional services firm combined with the Open Data Institute to survey over 1,000 retail and small and medium-sized enterprise (SME) banking customers across the UK, along with interviews among banks, FinTechs, technology firms, regulators and industry bodies.
The New Payment System Operator (NPSO) has taken over running and managing the cheque paper and cheque image clearing systems at the same time that the Cheque and Credit Clearing Company has become a subsidiary of the NPSO. All payments will continue to be processed as usual through the paper clearing system for cheques and the recently launched Image Clearing System, which speeds up the process by enabling digital images of cheques to be exchanged between banks and building societies for clearing and settlement.
Nordea has entered into an agreement to acquire Gjensidige Forsikring – a leading online bank in Norway – for a total of €578 million. Gjensidige Bank offers private individuals a suite of digital banking services, mortgages, car financing, unsecured loans and investments online through a network of partners. The agreement also includes a long-term distribution cooperation between the two banks in Norway.
New regulations, new technologies and evolving commercial demands could be reducing demand for investment bank research and speeding investor uptake of artificial intelligence (AI) solutions. This is according to new research from Greenwich Associates, which found that around 70 per cent of portfolio managers, CIOs, analysts, and other investment professionals expect MIFID II regulations and other factors to result in the further “unbundling” of investment research from trading—not only in Europe, where the rules took effect earlier this year, but around the world.
In the 11 Russian host cities of the 2018 FIFA World Cup, approximately one in five (17 per cent) purchases with Visa has used contactless technology. This is according to new data from Visa, which found that in the stadiums themselves, the share of contactless payments was 54 per cent, inclusive of purchases made by fans from Russia and abroad. On average, Visa cardholders have spent $56.65 per transaction, with fans from the US spending the most – followed by China and Mexico in second and third respectively.
For the first time in Italy, it is now possible to pay for tickets at the point of sale (PoS) terminals in Milan’s subway stations – following cities like London, Moscow, Chicago, Singapore and Vancouver. Made possible by technology from SIA, the upgrade marks a significant step in Milan’s digital transformation programme for public transport. SIA’s platform connects every PoS terminal on which contactless cards can be used to open the turnstiles of the 113 stations on the Milan subway network, as well as payment circuits and ATM’s fare calculation system.
A collection of 39 banks, institutions and financial firms have completed a trial of more than 300 transactions on a Know Your Customer (KYC) application built on R3’s Corda blockchain platform. The transactions were conducted in 19 countries across eight timezones. Banks were able to request access to customer KYC test data, whilst customers could approve requests and revoke access. Customers were also able to update their test data which was then automatically updated for all banks with permission to access it.
The Prudential Regulation Authority’s deputy governor has written to chief executives of banks, insurance companies and investment firms to warn them about their obligations regarding exposure to crypto-assets. Sam Woods’ ‘Dear CEO’ letter acknowledged that firms may have taken limited exposure to crypto-assets to date, and recognised that the underlying distributed ledger or cryptographic technologies have significant potential benefits to the efficiency and resilience of the financial system over time.
A debate among industry experts revealed the mixed messages at the heart of Open Banking risk slow adoption and consumer confusion. As David Parker, founder and chief executive at Polymath Consulting, pointed out: “When you’ve been told for many years not to give your bank details out, now you’re going to have lots of unheard of FinTechs asking for them.”
Ticketmaster has admitted that 40,000 customers’ personal information and credit card details have been compromised in a data breach on Saturday. The company said in a statement that its systems had been hit by “malicious software” through a third-party supplier to the site. Ticketmaster said that the affected accounts – five per cent of the firm’s customer base – have been contacted and advised to change their password.
UK challenger bank Tide has signed a partnership with PayPoint to enable customers to deposit cash directly into their Tide accounts at any of PayPoint’s 29,000 UK retail locations. Launched in January 2017, Tide is a digital banking service made for small businesses. The bank has more than 30,000 business customers, who now have more control of where and when they can add funds to their account; beyond BACS or Faster Payments.
The age old debate about using cash or new electronic methods was ignited again at a panel session about payments infrastructure – with one participant stating consumers are being pushed down routes where they have no choice. The Westminster Business Forum event on the future of payments in the UK was opened by New Payment System Operator (NPSO) chair Melanie Johnson, who laid out the work her organisation was doing to bring the country’s disparate payment systems under one umbrella.
The Financial Conduct Authority (FCA) has published an update on its Strategic Review of Retail Banking Business Models, expressing concerns about captive customers and the fees they pay. The review includes looking at how personal current accounts are paid for, the possible impact of technological and regulatory developments such as Open Banking and changes to payment services due to the revised Payment Services Directive (PSD2).
Alipay has worked with GCash to launch a cross-border remittance service through their e-wallet platforms, powered by Alipay’s blockchain technology. This is reportedly the first blockchain-based cross-border digital wallet remittance service in the world, offering a secure and low-cost way to transfer money directly between individuals in Hong Kong and the Philippines.
Nationwide is launching a £50 million FinTech fund to invest and partner with early stage startups exploring innovative products and services that could provide real benefits for it members. The building society will also have a senior member of staff with relevant experience to provide support, guidance and expertise to the startups.
While cryptocurrencies should not supplant traditional currencies due to scalability limitations, Central Bank Digital Currencies (CBDCs) could create a more stable financial system, according to the European Parliament’s Economic and Monetary Affairs Committee. A paper authored by various members of the Kiel Institute for the World Economy concluded that the prospect of CBDCs could act as an alternative to the current fractional reserve banking system.
Santander UK has partnered with Infosys Finacle to implement a new interbank cash management system for its corporate customers. The bank will introduce an interbank cash management portal to provide corporate customers with secure cash management services accessible through any device of their choice. Finacle’s liquidity management solution will enable multi-bank reporting and cash management capabilities
The Financial Conduct Authority (FCA) is consulting on new measures to help tackle the rise of authorised push payment (APP) fraud. This is where a fraudster tricks an individual consumer or micro business to instruct their payment services provider (PSP) - such as their bank - to send money from their account to an account controlled by that fraudster.
The Open Banking initiative will improve underwriting assessments, but could also result in higher consumer leverage, according to Moody's Investors Service. “We think Open Banking will improve consumer risk assessments because widespread access to bank account details among all lenders will enable a clearer picture of affordability,” said Greg O'Reilly, vice president and senior analyst at the credit rating agency.
A government-funded centre dedicated to cyber innovation - the London Office for Rapid Cybersecurity Advancement (LORCA) - is being opened in London today. The centre has also released research which found that more than half of large businesses have suffered a cyber attack in the last 12 months, with 24 per cent of respondents believing that their security solutions are not fit for their needs.
BBVA has deployed a new facial recognition payment system, where a camera booth next to the cash registers recognises the customers and automatically bills their accounts. Currently being trialled by BBVA employees at its Madrid headquarters, the system was developed by startup Veridas – a joint venture between BBVA and Das-Nano. It forms part of BBVA’s strategy to lead the development of frictionless payments.
Starling Bank has launched the UK’s first joint account with a fully mobile-only application process. Using Google Nearby technology, existing Starling customers can securely apply for a joint account in just five minutes by sitting next to each other with their phones, via a combination of Bluetooth and WiFi.
SWIFT is to universally adopt the global payments innovation (gpi) service, in a move which will see all 10,000 banks on the network use gpi for cross border payments. The decision has been taken against the backdrop of unexpectedly fast adoption rate of gpi to date, according to a statement. It has already been taken up by 49 of the world’s top 50 banks, with SWIFT predicting that by the end of 2020 every bank on the network will be able to offer same day end-to-end delivery with full tracking and transparency, throughout the payment chain.
PayPal look set to continue their spending spree with the $120 million acquisition of fraud prevention and risk management platform Simility. PayPal hopes that the purchase will enhance its ability to deliver fraud prevention and risk management solutions to merchants around the world. Merchants will gain access to fraud tools that can be customised to suit the needs of their business.
The Bank of Ireland yesterday experienced technical problems with the processing of debit card transactions, leaving thousands of customers unable to withdraw money or pay for goods. According to the bank, one in seven customers were affected by the problem, which it stated has now been resolved.
Trade finance platform TradeIX has closed a Series A investment round of $16 million, led by ING Ventures with participation from Kistefos, BNP Paribas and Tech Mahindra. TradeIX has established partnerships with various leading banks, corporates and enterprise resource planning (ERP) providers. The company also works with enterprise software firm R3 to lead the Marco Polo initiative involving international trade banks aimed at further developing the use of distributed ledger into trade transactions.
Digital payment problems are behind a trend of UK small-to-midsize businesses (SMBs) planning to switch their banking provider soon, according to a new study. The FIS PACE survey of 253 SMBs - across industries, from startups to established business - found that while 70 per cent of SMBs are satisfied with their banks, of the 30 per cent that are unhappy, most plan to change bank in the next year.
The chair of the cryptocurrency trade body, CryptoUK, has warned politicians that the UK risks missing out from the global cryptocurrency economy if it fails to bring the sector within the remit of financial services regulation. Iqbal V. Gandham - who is also UK managing director of eToro - gave evidence yesterday to the Treasury Select Committee, calling on government to take a straightforward, light-touch approach to regulation, by bringing cryptocurrency exchanges within the remit of the Financial Services and Markets Act.
IBM’s artificial intelligence (AI) powered Watson Financial Services has announced changes to its portfolio of services to help companies tackle risk and regulatory compliance challenges. These include ‘significant’ enhancements to IBM’s OpenPages 8.0 with Watson, which leverages the AI technology to let users more easily interpret complex issues and match them automatically to controls and obligations, as well as analyse losses, emerging risks and failed controls.
Wealth management FinTech SigFig has secured $50 million in Series E funding, led by General Atlantic with participation from UBS, Bain Capital Ventures, DCM Ventures, Eaton Vance and New York Life. Founded in 2011, SigFig provides more accessible investment advice for investors of all wealth levels. The company uses data science technology for its end-to-end digital wealth management platform, which is behind automated investment services for banks including Wells Fargo, UBS and Citizens Bank.
Lloyds Banking Group will reduce its staff numbers by a further 450, following an announcement earlier this year that it would be axing 930 jobs alongside hundreds of branch closures. “Today’s announcement involves making difficult decisions, and we are committed to working through these changes in a careful and sensitive way,” a Lloyds spokeswoman said.
Mobile point of sale (mPoS) devices connecting wirelessly or via mobile devices will account for 24 per cent of all point of sale transactions by 2023, according to new research. The study from Juniper found that mPoS devices, such as those from iZettle and Square, will account for 87 billion transactions by 2023, representing a threefold increase over an estimated 28 billion transactions in 2018.
PayPal has agreed to acquire global payout platform Hyperwallet for $400 million in cash. The deal enhances PayPal’s payout capabilities, improving its ability to provide an integrated suite of payment solutions to e-commerce platforms and marketplaces around the world, according to a statement.
In rural areas, a higher proportion of people have difficulty getting to a bank and tend not to be able to use online banking, although they are more likely to be satisfied with their overall financial circumstances. This is according to a survey of nearly 13,000 adults by the Financial Conduct Authority (FCA), which conversely found that people living in urban areas are less likely to be satisfied with their overall financial position, are more likely to use high-cost loans and on average have higher levels of unsecured debt.
A rare malfunction of hardware in one of Visa’s data centre was the cause of the outage that left millions of people across Europe unable to make card payments on 1 June. In an 11-page letter to Nicky Morgan, chair of the Treasury Committee, Visa detailed the reasons for the system failure, its effect on the UK and Visa’s response and plans for avoiding such problems in the future.
Canadian interbank network Interac has announced the opening of the Interac Lab – an innovation centre and accelerator, aimed at supporting research and development projects. The focus of the lab will be on tackling product and industry challenges, which will in turn accelerate the development of the next generation of products and features for Canadians. The lab will have three key priorities:
Global Processing Services (GPS), the payments processor and technology firm behind the UK’s digital banks, challengers, FinTechs and financial institutions, has received £44 million in funding from Dunedin. GPS is the market leader in issuer processing, enabling next generation payment technology with 100+ clients including Starling Bank, Revolut, Pockit, Volt Bank, Loot, Stocard, Glint, Osper and Curve.
Deutsche Bank has teamed up with Allianz and European startup Auto1 to launch a new FinTech firm called Auto1 Fintech, which will offer financing and insurance products to automobile dealerships buying and selling used vehicles via Auto1. Auto1 employs around 2,800 people and generates a turnover of 1.5 billion euros per year. Around 3,000 vehicles change hands every day via the online platform – amounting to just under 1 million vehicles since it began operating in 2012.
The Bank for International Settlements (BIS) has weighed in on the cryptocurrency trend, stating they are an “environmental disaster” and have the potential to “bring the internet to a halt”. The ‘central bank of central banks’ explained in its Annual Economic Report that distributed ledger technologies (DLT) are not currently able to scale up sufficiently, so are not suitable as a replacement monetary system.
Nordea Bank recruited the help of The Robotics Centre of Excellence (RCoE) to handle the large number of requests resulting from the implementation of the General Data Protection Regulation (GDPR). The bank used Robotics Process Automation (RPA) to handle the customer data requests and to implement the complex GDPR project in a matter of weeks, instead of months.
Clydesdale Yorkshire Bank Group (CYBG) has agreed to buy Virgin Money for £1.7 billion, with the group’s retail customers set to move to Virgin Money over the next three years. The deal will create the UK’s sixth-largest bank, with around six million customers. CYBG has agreed with Virgin Group to license the Virgin Money brand for £12 million a year, later rising to £15 million.
The popularity of contactless payments, online shopping and smartphones has led to debit cards overtaking cash as the most frequently used payment method in the UK, according to trade association UK Finance. Its latest report showed new technology, payment innovation and changing consumer habits contributed to 13.2 billion card payments at the end of 2017, overtaking cash payments (13.1 billion) for the first time.
There is a strong appetite among younger consumers for banking services from technology firms such as Amazon, Facebook, Google or Apple, as they could offer greater convenience and more personalised services. This is according to a new report from MuleSoft, which surveyed more than 8,000 consumers across the UK, US, Germany, Netherlands, Australia and Singapore. It found that one in three global consumers would consider using the likes of Amazon for banking services; a figure which rises to 52 per cent for those aged 18-34.
Spanish banking group BBVA is aiming to have mobile customers make up 50 per cent of its customer base by 2019. The global number of digital sales now conducted through BBVA’s digital channels has topped 37.5 per cent for the first time this week, and during the first four months this year, it almost doubled the number of products and services sold through online channels.
Wirecard is launching a supply chain payment platform based on blockchain technology, targeted at producers and processors of raw materials. The prototype focuses on linking merchants with producers, capturing all business processes in smart contracts – digital contracts based on blockchain – while minimising the risk of fraud. By completing transactions this why, all steps along the commercial chain are mapped transparently in a decentralised database.
InsurTech startup Ethos has launched with $11.5 million in financing led by Sequoia Capital, along with the somewhat unlikely celebrity backing of Robert Downey Jnr’s Downey Ventures, Kevin Durant’s Durant Company and Will Smith’s Smith Family Circle. Other participating investors include Stanford University, Roc Nation subsidiary Arrive, and a credit facility from Silicon Valley Bank.
Bank branches are closing at a rate of 60 a month, according to research from consumer organisation Which?. Branch closures were tracked across the UK since 2015, with 2,868 having closed since then, or are scheduled to close by the end of 2018. This trend has been accelerating since 2016 and so far this year 670 branches have closed or been scheduled for closure.
Barclays has signed a licence agreement with simulation firm Simudyne to explore ways to manage risk in a simulated virtual environment. The simulations that the bank has been building replicate real-life complex networks, such as financial markets, by examining how the interactions of large individual agents may drive broader behaviour. By analysing the results of the simulation, Barclays hopes to achieve smarter business decisions in the future.
Yulife has partnered with AIG Life to create a new insurance proposition for the UK market. The InsurTech startup will launch later this year, providing life insurance and wellbeing tools to businesses and consumers, delivered instantly via mobile technology. All policies will be underwritten by AIG Life, the UK life insurance arm of US insurer AIG.
Businesses including Ocado, Amazon, Rolls Royce and McKinsey are backing an industry and government collaboration to develop the next generation of artificial intelligence (AI) experts in the UK. This follows the government’s £1 billion AI sector deal, which brings together more than 50 businesses and organisations to work on promoting the sector.
Almost a third of Australians are willing to share their personal data under the new Open Banking regime, but only if privacy and security concerns are addressed. An online survey conducted on behalf of Unisys among a nationally representative sample of 1,000 adults across various Asia Pacific countries, also found that Australian consumers are less willing than those in other Asia Pacific countries to embrace new bank services based on emerging technologies such as artificial intelligence (AI) and machine learning.
The financial services industry is spending around $1.7 billion a year on blockchain, as banks and other firms move beyond the proof-of-concept stage and begin rolling out commercial products. This is according to a new study from Greenwich Associates, which surveyed 200 market participants on blockchain budgets, team sizes, use case exploration, key challenges and other issues.
The Norwegian parliament, Storting, has requested that a regulatory sandbox for the FinTech industry be set up by the end of 2019. A majority agreed that the sandbox should be established in cooperation with the financial industry and, if appropriate, also include other relevant supervisory bodies such as the Data Inspectorate, the Competition Authority and the Consumer Ombudsman.
ING and AXA have announced a long-term, multi-country partnership to provide insurance products and related services through a central digital platform. Under the partnership, ING will bring its digital banking experience and AXA its expertise in modular insurance products and services, offering property and casualty, health and protection insurance solutions to ING customers in six of its challenger markets: Germany, Australia, Italy, France, Czech Republic and Austria.
More than a quarter (29 per cent) of UK small and medium businesses now give their customers the option to pay using an app in store – fuelled by the popularity of mobile payments apps such as Google Pay and Apple Pay. The research conducted by Verve Partners Research and commissioned by Verifone also found that almost a fifth (17 per cent) of micro businesses are also tapping into the trend and accepting payment apps.
John Flint, group chief executive of HSBC, has revealed plans to invest $15-17 billion in technology as part of the bank’s growth strategy. In a trading update, Flint explained that the bank is ready to get back into “growth mode” following a period of restructuring. “The existing strategy is working and provides a strong platform for future profitable growth,” he said.
Canada-based Luge Capital, a new venture capital fund specifically focused on early-stage FinTech companies and artificial intelligence (AI) solutions for financial services, has launched after securing $75 million investment. Initially, $50 million of the raised capital was announced in October 2017 by the Caisse de dépôt et placement du Québec (CDPQ) and Desjardins Group, two of the fund's major investors.
The number of connected Internet of Things (IoT) sensors and devices is set to exceed 50 billion by 2022, up from an estimated 21 billion in 2018. This is according to a new study from Juniper Research, which found that the 140 per cent growth will be driven by edge computing services (the processing of data away from the cloud and closer to the source), increasing both deployment scalability and security.
Enterprise Ireland has launched a €750,000 ‘Competitive Start Fund’ for Fintech startup companies that have the capacity to succeed in global markets. The fund is designed to enable recipient companies working in areas including FinTech, PropTech, artificial intelligence (AI), machine learning, augmented and virtual reality, the Internet of Things (IoT), blockchain and cloud.
UniCredit has signed a strategic partnership with digital banking provider Meniga, while at the same time has taken a stake in the company with a €3.1 million investment. UniCredit will integrate Meniga’s software globally, starting with Italy and Serbia, to make its customers’ digital banking experience more personalised with a focus on data-driven content. Customers will now be able to see a consolidated view of all their cards and account transactions, along with functionality such as advanced search, financial planning, alerts and targeted advice.
FinTech startup MarketInvoice has appointed Rija Javed as chief technology officer (CTO) as the company is set to heavily invest in its technology. Joining from Silicon Valley-based startup Wealthfront, Javed becomes one of the first female CTOs at a UK FinTech firm. She will be responsible for the engineering, data, science, and product and design teams. Javed began her career in Canada with roles at IBM and Research in Motion, before moving to Silicon Valley in 2012.
NatWest is trialling new mobile technology to provide customers an alternative way to pay which doesn’t require the use of a debit or credit card, becoming the first UK High Street bank to do so. The service removes the need to input long card numbers by providing customers with the option to press a button at the end of the purchase process which will take them through to their mobile app. Then the customer will login with Touch ID, or their standard password, before the process completes automatically – cutting the times involved from minutes to just seconds.
London has been dubbed the artificial intelligence (AI) capital of Europe, with double the number of AI firms as closest rivals Paris and Berlin combined. The announcement comes as part of research commissioned by the Mayor of London, Sadiq Khan, which maps the capital’s AI ecosystem, highlighting the strengths and complexities of the industry and its growing importance to the UK economy.
Over a third of UK consumers believe that the UK will be a cashless society within the next 10 years, according to new research from Equifax. Furthermore, some 53 per cent of 16-34 year olds believe the UK will be reliant on digital and card payments by 2028, compared to just 22 per cent of those aged 55 and above. Despite this, the survey also found that cash still has its place in society.
Goldman Sachs and Immersive Labs today announced the commencement of a new programme for improving the cyber skills of the bank’s employees around the world. Goldman Sachs will initially use Immersive Labs’ browser-based platform to provide cyber security teams with scenarios and gamified lab environments which encourage best practice by addressing attacker psychology, digital countermeasures and breach response.
Ant Financial has agreed Series C equity financing totalling approximately $14 billion – believed to be the largest single fundraising round in history. It includes an RMB tranche raised by Ant Financial from domestic investors and a USD tranche raised by Ant International from international investors – which should increase the value of the Chinese group above $100 billion.
The Dutch central bank, DNB, has concluded that for the time being blockchain technology cannot meet the high demands of a financial market infrastructure.
This was the finding from its project Dukaton experiments over the last three years. “The biggest shortcomings are inadequate capacity, inefficiency due to high energy consumption and lack of complete certainty about having paid a payment,” read a statement.
Coinbase is on track to operate a regulated broker-dealer, pending approval by federal authorities. If approved, the US-based digital currency exchange will soon be capable of offering blockchain-based securities, under the oversight of the US Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
Spanish bank BBVA has announced a partnership with IPsoft for the joint development of an artificial intelligence-powered customer support platform, using IPsoft’s virtual assistant Amelia. Through use of machine learning and natural language processing, the system is capable of automating tasks and communicating with customers using natural language. The AI bot can detect and adapt to the caller’s emotions, making decisions in real-time. It is also able to suggest improvements to the processes for which it has been trained.
Mastercard will soon be rolling out its Send platform, which allows financial institutions, FinTechs, digital customers and other businesses to send real-time payments to UK bank accounts and receive payments by the same means. The network is the first example of Mastercard’s integration of Vocalink and its real-time payment capabilities.
A group of 14 Italian banks has started an operational trial of blockchain for interbank reconciliations. After an initial test phase, the trial will be extended to a larger number of banks, according to the Italian Banking Association’s ABI Lab. The aim is to achieve transparency and visibility of information, greater speed of execution and the possibility of carrying out checks and exchanges directly on the application.
Paysafe has announced a partnership with Google which means its prepaid business paysafecard is now accepted as a payment method in the Google Play app store. The card enables consumers who prefer or need to use cash to pay online by using the 16-digit PIN to complete the transaction.
Revolut has hit two million customers in Europe and is actively working on a commission-free trading platform. The digital-only bank will soon allow customers to instantly invest in UK and US listed companies, as well as other instruments such as Exchange Traded Funds and options – aiming to tackle high fees, confusing trading interfaces and tedious onboarding processes.
The Bank of England has today launched a six-week consultation on the adoption of a common global ‘language’ or messaging standard, known as ISO 20022, for payments in the UK. In conjunction with the New Payments System Operator (NPSO) and the Payment System Regulator (PSR), the study suggests that this standard will be adopted across CHAPS, Faster Payments and Bacs, the UK’s three main interbank payments systems, which together process over eight billion payments per year, with a total value of over £90 trillion.
Many traditional banks are unable to invest in innovative new technologies, as they can only concentrate on plugging holes in their balance sheets, according to an analyst at Citi. Speaking at the Money 20/20 Europe conference, Ronit Ghose shared insights from his work on assessing today’s banking industry for Citi’s Bank of the Future research.
Artificial intelligence (AI) firm Clinc has partnered with Turkish bank İşbank to launch call centres powered by the technology. Announced at the Money 20/20 Europe conference, the Spotlight self-service AI platform will be rolled out to İşbank’s 5.5 million mobile users. Later this year, the bank also plans to integrate Clinc’s AI into its call center, enabling representatives to provide quicker and more accurate responses to customer inquiries made over the phone.
A panel of sector experts agreed unanimously at Money 20/20 Europe that cryptocurrencies need to be regulated if they are to ever gain mainstream acceptance and investment growth. A session trying to answer the question of how the emerging asset class should be viewed – currency, commodity, utility or security – found consensus that a definition was a good place to start for global authorities.
Tesco Bank has fixed an online glitch that was preventing customers from accessing their online banking services via desktop or mobile. The outage affected customer accounts for approximately four hours from 10:30am on Tuesday. A statement from the bank read: “We apologise to customers who are currently unable to access Online and Mobile Banking.
The Treasury Committee’s chair has written to Visa’s European chief executive to find out what went wrong on Friday 1 June, how Visa will ensure that a similar failure doesn’t happen again, and whether customers or merchants will be entitled to compensation. Nicky Morgan commented that given a third of all spending in the UK is processed by Visa, “it’s deeply worrying that such a vital part of the country’s payment infrastructure can fail so catastrophically”.
A new report from Visa has named Starling Bank the best banking app in the UK, followed by fellow mobile-only challengers Monzo and Revolut in second and third respectively. Launched at the Money 20/20 Europe conference, the inaugural mobile banking app review carried out by Optima Consultancy collected and analysed more than 15,000 data points from 51 apps and 40 different brands over a two-and-a-half-year period.
FinTech Circle, a UK-based community of entrepreneurs, investors and financial services professionals, has announced a strategic partnership with China’s Global FinTech Lab. Announced at the Money 20/20 conference in Amsterdam, the partnership will see FinTech Circle and the Global FinTech Lab host the first FinTech Bridge Conference in London in late 2018 to help strengthen the ties between mainland China, Hong Kong and the UK. The conference will bring together finance and government leaders from both countries, including top FinTech VCs, banks, insurance companies and asset managers.
Two of Europe's largest payments businesses, Nets and Concardis, are set to form a company with £1.1 billion of annual net revenue. Announced at the Money 20/20 Europe conference, the transaction is a structured as a share exchange, which will see Concardis' private equity shareholders contribute their shares in return for Nets shares. Private equity giants Advent and Bain, who own Germany-based Concardis, will swap their holdings in Concardis for Nets shares.
Ripple has pledged $50 million to a blockchain research initiative at 17 universities around the world, including University College London, the University of Pennsylvania and Korea University. The money will support academic research, technical development and innovation in blockchain, cryptocurrency and digital payments.
Mobile-only challenger Starling Bank is making its business account available to the UK’s 3.4 million sole traders, two months after launching the business account service. According to the bank, this will be the first time that sole traders – who make up more than 60 per cent of UK businesses – will be able to manage their business account entirely from their mobile, while being able to manage their personal finances from the same app.
Steve Wozniak, the co-founder of Apple, used a keynote speech at Money 20/20 Europe to address artificial intelligence (AI), bitcoin, banking and regulation. “Bitcoin might be a bubble, but it’s on the right track,” he stated, noting that after so many years acting as a de-centralised, un-regulated system, the blockchain technology that underlies the digital currency is still working.
Visa has announced two new programmes designed to support European FinTech firms, including the launch of a $100 million investment fund. The focus of the investment programme will be on supporting startup firms that are innovating in the Open Banking space and those using emerging technologies to create secure commerce experiences.
Dutch bank ING has announced that it is expanding its mobile money management platform Yolt to France and Italy. Yolt was launched in the UK in June 2017 and currently has over 300,000 registered users. The app is designed to help users actively manage their personal finances with an overview of their accounts with the majority of UK banks.
The financial industry must consolidate omnichannel payments, card payments and direct-from-bank Open Banking payments into new ‘Open Payments’ platforms to meet the demands of connected customers and retailers. This is according to research from payments processor RS2, which examined the trends and technologies that are driving innovation in the commerce space. It found that:
The hardware malfunction that left millions of people across Europe unable to make card payments on Friday evening has now been resolved, according to Visa. What the global payments company described as a systems failure forced people to revert to cash, with many ATMs running out of money and shopping having to be left at checkouts.
NatWest has confirmed the acquisition of FreeAgent, the Edinburgh-based cloud accounting software company. Following an offer in March, FreeAgent will continue to operate as an independent brand and maintain its current Edinburgh location. The move comes in advance of the ‘Making Tax Digital’ initiative from HMRC, due to apply to all VAT registered businesses for their VAT obligations from April 2019.
San Francisco-based mobile bank Chime has secured $70 million in Series C funding, led by Menlo Ventures, with participation from existing investors Forerunner Ventures, Aspect Ventures, Cathay Innovation, Northwestern Mutual, Crosslink Capital, and Omidyar Network. The latest injection of funds brings the total investment in the firm to over $100 million and values the company at around $500 million.
Indian point of sale (PoS) payments firm Pine Labs has secured $125 million in funding from US payments firm PayPal and Temasek, a Singaporean investment company. Pine Labs hopes that the partnership with Temasek will enable use of the firm’s network across multiple Asian geographies to scale efficiently, while partnering with PayPal will help to drive the technological capabilities of its product offering.
Digital challenger bank Revolut has unveiled Connect – a new app store for business customers to connect the tools and apps they use on a daily basis. The Connect store will enable customers to link their accounting software, budget software and other apps for tax, payroll, expense management and more, to streamline operations and process payments instantly.
UK banks will have to develop alerts for customers at risk of slipping into debt, as well as a range of financial management tools to make it easier to keep on top of finances. The proposals may be seen as an opportunity for the various FinTech firms which have developed personal finance apps, as well as those developing similar tools under the recent Open Banking changes.
Blockchain consortium R3 has secured a strategic investment of $5 million from financial market infrastructure group CLS. The two companies will work together to explore how R3’s blockchain platform Corda can be deployed to improve efficiencies for its members, including 70 financial institutions and more than 24,000 third party clients.
A new report into the use of artificial intelligence (AI) in finance has warned that regulators need to reign in the technology or face serious market instability caused by unaccountable algorithms. Risk management consultancy Parker Fitzgerald stated that AI’s power to improve productivity in financial services is undeniable, while predictive analytics and machine learning have opened new possibilities in the detection of fraudulent activity and financial crime.
Officials at the Bank of England said they have made a “material step forward” in addressing one of the major risks preventing central banks issuing their own digital currencies. Recent analysis from Michael Kumhof, a senior research advisor in the BoE’s research hub, and Claire Noone, who works in the bank note operations division, was followed by an official blog post which was at pains to state that the central bank is not currently planning to create its own digital currency.
Deutsche Börse has announced that it will cut 350 jobs - including 50 managers - as part of a restructuring and technology investment plan. The German stock exchange group laid out its Roadmap 2020 strategy, which will focus on organic growth, targeted acquisitions and investments in new technologies.
Car manufacturer Hyundai is working with Xevo to allow customers to find and pay for coffee, petrol and parking using their car’s information screen. Xevo’s Market platform provides data-driven user experiences for the automotive industry. Services could expand to restaurant reservations, order-ahead takeaway food, curbside pick-up and electronic vehicle charging.
Goldman Sachs and PSP Investments have led a $250 million funding round for supply chain payments and marketplaces firm Tradeshift. Tradeshift enables supply chain payments for over 1.5 million businesses around the world, including Air France-KLM, DHL, Fujitsu, HSBC, Siemens, Societe Generale, Unilever and Volvo. The company offers alternatives for trade financing, spend and receivables management, lending and payments and private marketplaces.
Commonwealth Bank, National Australia Bank and Westpac have joined forces to launch a person-to-person mobile payments app. Beem It is designed to make paying, requesting and splitting the bill easier and quicker, as research showed 68 per cent of Australians have lent money to a friend and never got it back.
Digital challenger bank Tandem is working with cloud technology provider Form3 to bring further improvements to the user experience for its customers. Form3 provides Payments-as-a-Service processing for banks and regulated financial services businesses. The managed technology services is designed to keep pace with the rapidly changing payments landscape and enable greater competition.
Digital wealth management firm Moneyfarm has announced an investment round of £40 million, led by Allianz Asset Management. The funding round is the largest round completed by a European digital wealth manager to date, and will fuel growth for the company, including the launch of more personalised and innovative solutions and the expansion of the investment strategy.
The Mayor of London has partnered with iZettle to launch a contactless payments initiative for buskers in London. The Swedish FinTech firm’s new Repeat Payments feature allows street musicians across the capital to set a fixed amount on their iZettle Reader and accept continuous contactless contributions, whilst performing, as passers-by can tap to show their support.
Digital challenger banks in the UK are outperforming their incumbent counterparts when it comes to overall satisfaction, according to new research from FIS. The study, which quizzed over 1,000 UK banking customers, found that 76 per cent of digital-first bank customers say they are ‘very satisfied’ with their banking relationships, compared to 69 per cent of those who bank with one of the top 50 global banks.
A student from Brunel University London has developed a new payment device that enables buskers and street performers to accept contactless and mobile payments. Called Tiptap, the new technology is designed to allow those who rely on cash, such as London’s street performing community, to keep pace and continue to accept crucial tips as the public continues to move towards cashless payments. “For the third year in a row cash has represented less than half of the total volume of payments made in the UK,”
US self-learning data platform Reltio has announced the closure of a $45 million Series D funding round, led by current investors New Enterprise Associates (NEA). The firm will use the new funds to accelerate innovation, fuel international expansion and ramp support for global enterprise customers. The funding round takes the total amount invested in Reltio to $117 million.
Dutch bank ING has opened a developer portal to accelerate innovation by collaborating more closely with external developers. This first version of the portal gives developers access to selected, simulated ING application programming interfaces (APIs) they can use to jointly create new and innovative customer experiences. The bank hopes that by doing this, it will be able to create better end experiences for customers.
US retail giant Walmart has been granted a patent with the US Patent and Trademark Office for a blockchain system that is able to track items that stores sell to a particular customer. The proposed platform would enable a customer to register the item after it is bought for the first time, providing them with the ability to choose a price for its resale – with the system acting as a digital marketplace.
French bank Crédit Mutuel has announced a partnership with IBM to ‘fundamentally change how its customer relationships are developed and maintained’. The bank will deploy IBM Cloud, Watson and advanced cybersecurity technologies across all of its business lines – consumer credit, personal protection, health, payment instruments and risk and compliance. Crédit Mutuel will combine multiple technologies from IBM – IBM Cloud, Security, and Watson – to reconceive partner relationships and operations.
Some 15 months after the launch of the service, 25 per cent of all SWIFT cross-border payment traffic is now being sent over the global payments innovation (gpi). SWIFT gpi increases the speed, transparency and tracking capabilities of cross-border payments, and is on course to be the standard for all SWIFT international payments by the end of 2020. More than 165 banks, representing 80 per cent of SWIFT’s cross-border payments traffic, and including 49 of the world's top 50 banks, have signed up to the service.
Revolut customers can now buy, hold and sell XRP and Bitcoin Cash from within their mobile app, joining other cryptocurrencies Bitcoin, Litecoin and Ethereum. The digital challenger bank last year launched a feature that enabled customers to trade cryptocurrencies from within their app. Users can instantly exchange 25 fiat currencies directly into cryptocurrency, which can be held or sold.
More than three quarters of financial services CIOs believe that the pace of digital innovation is putting customer experience at risk. A new study from software intelligence firm Dynatrace found that on average, financial services organisations release new software updates twice per working hour, as they try to keep up with competitive pressures and soaring customer expectation.
Starbucks is set to remain the most popular proximity mobile payments app in the US, ahead of Apple Pay and other competitors, according to eMarketer’s latest forecast. This year, 23.4 million people ages 14 and over will use the Starbucks app to make a point of sale purchase at least once every six months. That puts it slightly ahead of the 22.0 million people who will use Apple Pay. Google Pay (11.1 million users) and Samsung Pay (9.9 million) will round out the top four payment apps. The report predicts that the ranking will remain unchanged through 2022.
Retail banks are losing 52 per cent of potential customers at the on-boarding stage, an increase of 35 per cent in the last two years. The figures come from a survey commissioned by digital identity provider Signicat and carried out by Sapio Research among 4,000 consumers across the UK, Germany, The Netherlands and Sweden. It follows up on similar research carried out two years ago. Banks must comply with Know Your Customer (KYC) and Anti Money Laundering (AML) requirements when on-boarding new customers.
The Emerging Payments Association (EPA) has called on the Open Banking Implementation Entity (OBIE) to amend the terms of the CMA’s framework so that emerging payments organisations can realise the potential of Open Banking. In an open letter, the EPA shared concerns about the barriers that could inhibit FinTechs from engaging with Open Banking.
Adobe has announced that it will be acquiring Magento Commerce for $1.68 billion, subject to customary purchase price adjustments. Magento’s platform brings together digital commerce, order management and predictive intelligence, enabling shopping experiences across a range of industries. The platform is built on scalable technology supported by a community of more than 300,000 developers.
Online investment community TradingView has raised $37 million in Series B funding, led by Insight Venture Partners, with participation from Jump Capital and DRW Venture Capital. Founded in 2011, TradingView combines web-based charting, analytics and a trading platform with social features for users to communicate with peers. The company will use the injection of funds to expand its software product suite and to support its rapid international growth.
Marc O’Brien, former chief executive of Visa UK and key advisor to Revolut, has been appointed as chief executive of mobile cryptocurrency startup Crypterium. O’Brien has more than 25 years’ experience in the financial services, FinTech and RegTech space. He was a long-term advisor to Mastercard before joining Visa, where he held various positions including six years as chief executive of Visa UK and Ireland.
Japan’s Mitsubishi UFJ has collaborated with Akamai Technologies to develop a new blockchain payment network, with the capacity to process more than a million transactions per second. MUFG has combined its payments business expertise with blockchain technology implemented on Akamai’s cloud delivery platform, launching the new payment network service from fiscal year 2019, compatible with Internet of Things and other new technologies.
London-based information and analytics firm IHS Markit has signed a definitive agreement to acquire Ipreo, a financial services solutions provider, for $1.855 billion. The acquisition is expected to close in the second half of 2018, subject to customary closing conditions and regulatory filings and approvals, including with the UK Financial Conduct Authority and under the US Hart-Scott-Rodino Antitrust Improvements Act of 1976.
The speed and scale of digital transformation within the financial services industry is contributing to the emergence of new non-financial risks, according to a new report from UK Finance and Parker Fitzgerald. The report outlined how adopting new technologies, including artificial intelligence and machine learning, cloud computing and blockchain, will allow the financial services sector to develop new services and platforms to significantly reduce operational costs.
Mastercard has announced the formation of Accelerate, a new initiative to support FinTech companies with their growth strategies. The programme is designed to support the firms through tailored support arrangements including access to insight, tools, technology and investment to support innovation. Operating alongside Mastercard’s Start Path programme, Accelerate aims to deepen engagement with the payment FinTech community.
PayPal has agreed to buy iZettle for around $2.2 billion, in a move to take its digital payments into brick-and-mortar retailers. The acquisition is set to be the largest in PayPal's history, and is seen as a move to rival fellow US payments firm Square, which has built up a business catering to coffee shops, street vendors and other small businesses which PayPal has historically overlooked.
The government has appointed FinTech envoys for Wales and Northern Ireland, in an effort to ensure that the UK maintains its leading position post-Brexit. Wales’ envoy will be Richard Theo, chief executive and co-founder of Wealthify, while his counterpart in Northern Ireland will be Georgina O’Leary, director of innovation, research and development at Allstate Northern Ireland.
E-commerce platform Nuggets has opened up its mobile app Alpha to Apple iOS users. The company uses blockchain technology to let customers make e-commerce payments, log in to services and verify their identities without having to share or store their personal data with anyone, not even Nuggets.
The Securities and Exchange Commission has set up a mock Initial Coin Offering (ICO) website to help educate potential investors about the risks inherent in such opportunities. The American regulator’s Office of Investor Education and Advocacy’s site - HoweyCoins.com - touts a too good to be true investment opportunity, mimicking a bogus coin offering. Anyone who clicks on ‘Buy Coins Now’ will be led to investor education tools and tips.
Digital transactions in Europe have experienced a 30 per cent rise in the volume of cyber attacks in the first quarter of 2018. This is according to a new report published by ThreatMetrix, which discovered 80 million fraud attacks on European digital businesses and 210 million bot attacks originating from Europe in the first quarter of 2018. This is based on analysis of 1.9 billion digital transactions on the ThreatMetrix Digital Identity Network in Europe.
Application programming interface (API) provider TrueLayer has partnered with independent insurance adviser Anorak to enable the first application of PSD2 into the life insurance market. Traditionally, an insurance provider would sell products and consumers would usually choose the cheapest. However, by using Open Banking to gain access to an individual’s data and predict the level of life insurance cover they will need, Anorak is opening up a new market.
Deutsche Bank has acquired Indian startup Quantiguous Solutions to help build an Open Banking platform connecting its corporate clients to third party partners. All Quantiguous employees will join Deutsche Bank’s core team responsible for the development and roll-out of the global API programme.
European payments firm Worldline is set to acquire SIX Payment Services for €2.3 billion. The payment services division of Switzerland’s SIX Group has around 1,600 staff in six countries, servicing more than 200,000 merchants both off and online. Last November, as part of a strategic redirection, SIX announced that the cards business would be carved-out with the aim to enter a strategic partnership, as the European payments industry is consolidating.
FinTech solutions developer OPAL IS has launched a fully digital platform for HSBC’s new income protection product. The new proposition, aimed at advisers and comparison websites, is currently being trialled on a small number of intermediary firms ahead of a wider market roll-out later in the year.
TPG Growth’s impact investing vehicle The Rise Fund has signed an agreement to acquire a stake in Cellulant, a digital payments provider that reaches 40 million people across 11 African countries. The deal is the largest of its kind dedicated solely to Africa’s FinTech and payments space, with Rise investing alongside Endeavor Catalyst, Satya Capital, Velocity Capital, and Progression Africa.
One in four consumers would be willing to open a bank account with a smart digital assistance such as Alexa and Siri. In a survey looking into consumers’ attitudes towards new technologies in the banking industry, Genpact found that nearly a third of consumers (31 per cent) would switch banks if their current bank had a poor digital service.
FinTech is the most popular sector among high net worth and professional investors, according to Capitama. Preference analysis of registered investors on the firm’s platform - which includes more than 300 individuals, family offices, private equity firms and investment offices - showed that FinTech and technology investment opportunities are the two most popular sectors.
Santander has moved a step closer to launching a standalone digital bank, by bringing its Openbank product to the UK. The Openbank digital service already operates in Spain, where it had amassed more than 1.35 million accounts by the end of 2016, according to Spanish Banking Association figures. A UK version is expected to be built over the next few months, focusing on small and medium-sized enterprises (SMEs) with a suite of different lending options and advice.
Blockchain specialist Ripple has announced positive results for several xRapid pilots, which send cross-border payments using blockchain technology. According to the results, participating financial institutions saw savings of 40-70 per cent when compared with what they normally pay when transferring money oversea through foreign exchange providers. In addition, an average xRapid payment took just over two minutes, compared to today’s average of 2-3 days when sending cross-border payments.
Spending on European commercial cards has experienced strong growth in the last year, driven by an increasing use of virtual cards for travel-related and business-to-business (B2B) payments. This is according to RBR’s Commercial Cards in Europe 2018 study, which revealed that there were 58 million commercial cards in Europe in 2016 – up six per cent on the previous year. In total, commercial cards represent just four per cent of all cards, highlighting the opportunity for expansion.
Almost two-thirds of consumers (62 per cent) say confidence about sharing data with businesses is improved by the incoming General Data Protection Regulation (GDPR) which governs the collection, storage and use of personal data. The figure comes from a report commissioned jointly by one-to-one marketing industry body DMA and data marketing firm Acxiom, which surveyed a representative sample of over 1,000 UK adults.
The UK is at risk of falling behind overseas competitors in the financial technology space, as schools and universities are not providing students with the necessary tools for success in the future. This is according to a panel discussion at the Westminster Business Forum’s keynote seminar on priorities for growing the FinTech industry in the UK. “There is a worrying number of Millennials that do not even know what FinTech is,” said Helene Panzarino, a teaching fellow in the School of Management at University College London, highlighting that there remains a huge gap in what is being taught at universities and actual industry practice.
Islamic financial institutions are focusing on FinTech and digital transformation, with more than 70 per cent viewing these as being highly or extremely important in strategic decisions. The findings are from a survey of 103 managers by the General Council for Islamic Banks and Financial Institutions (CIBAFI). Many banks in the Middle East and Africa are launching technology departments and forming joint ventures with FinTech firms, with almost 45 per cent of respondents planning to increase or launch digital branches in the future.
The Australian Government has agreed to the recommendations of the Farrell review into Open Banking, sticking with the implementation timetable that was criticised by banks and industry bodies. A statement confirmed that the government will phase in Open Banking with all major banks making data available on credit and debit card, deposit and transaction accounts by 1 July 2019 and mortgages by 1 February 2020.
Nordic bank Nordea has launched a new payment solution called Nordea Connect to improve the online buying experience for both consumers and merchants. Nordea Connect has been designed to provide a simple user-friendly way to complete and host payments. Consumers are able to choose the payment method they desire: Swish, Siirto, ePayments (Finland), while all major bankcards are also accepted.
Adoption of blockchain technology within the financial services industry could be significantly delayed by the damaging PR currently associated with cryptocurrencies, according to new research. A report from law firm Gowling WLG stated that an estimated $2.1 billion will be spent on blockchain solutions during 2018, and by 2021 levels are expected to reach $9.2 billion.
UK consumers’ trust in their banks is at the highest level since 2012, but the decision of some banks to increase digital-only interactions risks alienating customers of all ages, according to new research by Accenture. A survey of approximately 4,600 adults found consumer trust in banks over the past two years jumped 11 percentage points to 40 per cent – on par with the level of consumer trust of High Street retailers. At the same time, customer satisfaction with banks increased five percentage points to 70 per cent – well ahead of the 57 per cent satisfaction level in 2012.
The total value of cash advances issued to small businesses by PayPal in the UK has reached £625 million, up 56 per cent from June 2017. More than 30,000 UK businesses have now benefitted from a share of the $5 billion that PayPal Working Capital has provided globally since 2014. The recent growth demonstrates the need for alternative financing that bridges the gap left by traditional funding providers. Some 70 per cent of PayPal Working Capital advances issued in the past year, all of which are made online, were completed outside of traditional bank branch hours.
HSBC UK has launched Connected Money, the first app from a UK bank that allows customers to see not only their UK current account, but online savings accounts, mortgages, loans and cards held across up to 21 different banks. The new app includes a spend analysis feature, allowing users to see their spend across categories and keep a track on habits. There’s ‘Balance After Bills’, where users can find out how much they have left in their HSBC current account until payday, once Standing Orders and Direct Debits have been taken into account. Users will also get regular insights and tips about their transactions and spending behaviour via in-app messaging.
Clydesdale Bank Yorkshire Bank (CBYG) has made a preliminary approach for Virgin Money, which values the challenger bank at £1.6 billion. Under the terms of the proposal, CYBG would acquire all the issued and to be issued ordinary share capital of Virgin Money on the basis of an exchange ratio of 1.1297 new CYBG shares for each Virgin Money share. Virgin Money shareholders would own approximately 36.5 per cent of the combined group.
The Monetary Authority of Singapore (MAS) is collaborating with a number of industry bodies to accelerate the adoption of artificial intelligence (AI) in Singapore’s financial sector. Partnerships with the Economic Development Board (EDB), Infocomm Media Development Authority (IMDA) and the Institute of Banking and Finance (IBF) aim to foster a thriving AI ecosystem comprising financial institutions, research institutions and AI solution providers.
Deutsche Bank is partnering with the International Air Transport Association (IATA) to launch an electronic real-time payment system for plane tickets. The system will charge a fixed fee, with money taken direct from customer bank accounts, rather than via a credit or debit card. This is made possible by the EU’s payment regulation PSD2 which forces banks to give third parties access to customer data and initiate payments.
Saxo Bank has appointed Steve Weller its new chief executive for the Middle East and North Africa (MENA) region. He will be based in the Dubai office and report directly to chief channel officer Damian Bunce. Weller will assume the overall responsibility to develop the business and grow the base of trader, investor and wholesale clients. He has more than 25 years of international experience in the global foreign exchange market, having most recently been managing director and global head of Sberbank of Russia’s (CIB) foreign exchange business.
The Financial Conduct Authority (FCA) has published a report on the mortgage market, which has identified a number of ways in which the market could be more innovative. The FCA’s proposals are particularly aimed at helping customers find the best-priced suitable mortgage deal, and also help borrowers who are currently unable to switch to a better deal – often referred to as ‘mortgage prisoners’.
Esme Loans, the digital lending platform for SMEs launched by NatWest last year, has announced growth plans following the success of its pilot. The digital offshoot offers a simplified, paperless end-to-end process with competitive rates for businesses looking to borrow up to £150,000. During the pilot period Esme Loans received nearly 3,800 applications, representing over £200m of loan opportunities, and between 75-85 per cent of SME customers said they would recommend the product and/or use it again.
Many organisations will be inundated with requests for personal information from UK consumers, with 40 per cent already planning to take advantage of their data privacy rights within six months of the General Data Protection Regulation (GDPR) coming into force on 25 May. European Union residents will be able to request companies delete their data - the so-called ‘right to be forgotten’ - with businesses required to sufficiently respond within one month of receiving the request.
Blockchain technology was dismissed as a fad and compared to “pixie dust” at the Treasury Committee’s digital currencies inquiry. Giving evidence yesterday, Martin Walker, director at non-profit group the Center for Evidence-Based Management, said the emerging digital currency had little to offer financial services.
Enterprise Ireland has launched a census which aims to accurately map Ireland’s FinTech sector for the first time. The initiative is a key action of the Department of Finance’s IFS 2020 Action Plan for 2018, launched by minister of state for financial services and insurance Michael D’Arcy in January.
The new Open Banking regime will help break the monopoly around customer account information, according to Alipay’s business development director for EMEA. Speaking in a panel discussion at the Retail Business Technology Expo (RBTE) today, Tao Tao told the audience that he was optimistic about the developments in UK banking, with his part of the Alibaba ecosystem ready to offer mobile alternatives to existing institutions.
Starling Bank has signed a partnership with Samsung to makes its mobile payments service Samsung Pay available to customers. Customers of the digital-only bank with Samsung devices will now be able to use Samsung Pay as a secure way to pay anywhere that contactless payments are accepted. Users simply swipe up from the bottom of their smartphone screen, use their iris, fingerprint or PIN to authenticate their identity and tap their phone on the payment terminal.
Mastercard has developed a solution for consumers to register their fingerprint onto a biometric card from their home, saving them from a trip to a bank branch. The payments giant wants to eliminate the use of passwords, driving use of biometrics such as fingerprints, facial recognition and iris scans. Mastercard’s new technology, a battery-powered sleeve, will let people self-enrol their contact or contactless biometric card. Their fingerprint is scanned by the sensor on the card and an encrypted digital template is created and securely stored.
New research among a nationally representative sample of 1,500 adults has found that seven in 10 are open to trying new brands, with a third willing to consider a disruptor in finance. The Network Research survey showed the segment most attracted to financial disruptors is 18-24 year olds, closely followed by 25-44 year olds. Given a quarter of this group earns over £55,000 a year and is more likely to be single and without children, they have more disposable income and are an ideal target for FinTech firms.
Following a review of its branch network, Royal Bank of Scotland has announced that it will be closing 162 branches, making 792 employee roles redundant. The bank revealed that plans to divest RBS in England and Wales and NatWest in Scotland and launch a separate challenger bank - under the brand name Williams & Glyn - have been cancelled. The business, including its branch network, is now being reintegrated back into the core bank.
The UK’s leading cryptocurrency platforms have called on the Treasury Select Committee to support proposals to regulate the industry. CryptoUK, the self-regulatory body set up to represent the sector, has set out new plans for HM Treasury to make cryptocurrency investment a regulated activity under the Financial Conduct Authority (FCA). The plans are part of a written response to the Treasury Select Committee’s inquiry into digital currencies, which is currently underway in Parliament.
On-street donations are declining according to 74 per cent of charities, with 44 per cent of voluntary organisations now exploring new technologies and alternative donation options to avoid missing out. A Barclays Corporate Banking survey of over 2,000 UK consumers and 301 large charities found that seven in 10 charities reported an increase in online donations over the past three years, and an even bigger proportion expect it to rise further over the next three years.
The New Payment System Operator (NPSO) has assumed responsibility for the Bacs and Faster Payments systems, which process a combined £6.3 trillion worth of payments annually. The move ensures the continuity of operations of the UK’s main payment systems, which are relied on every day for thousands of salaries, benefits, bills, mortgage and other internet and mobile banking payments. Users of these payment systems will not have to do anything differently, with all payments being processed as usual.
The Treasury Committee will take evidence from TSB and its parent company Banco Sabadell on 2 May, following the widespread reports of IT problems and access to its online banking services. TSB chief executive Paul Pester and chairman Richard Meddings, along with a representative from Sabadell, have been called as witnesses.
ANZ and IBM, in conjunction with Suncorp New Zealand, are working to develop a blockchain solution for the insurance industry that will help make the data transfer and payment reconciliation process faster and more transparent.
Blockchain, a distributed ledger technology, is a secure and decentralised way of sharing data and transactions.
The Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) has published a consultation paper setting out its proposed framework to regulate spot crypto asset activities, including exchanges, custodians and other intermediaries. For crypto asset exchanges, the new regulatory framework will entail proper regulation as market infrastructures addressing key risks including anti-money-laundering and counter-terrorist financing (AML/CTF), consumer protection, technology governance and safe custody.
Given more powers over how their personal data is collected and used, nearly half (47 per cent) of UK adults would like some aspects of their digital history to be deleted forever, according to new research from Accenture. The management consultancy surveyed 2,000 UK adults in March, in order to understand how people feel about the personal information that is collected about them online, and what aspects of their data they would most like to be forgotten under the General Data Protection Regulation (GDPR), due to be implemented on 25 May.
The UK’s immigration policy and commitment to Brexit is potentially damaging its place in the centre of FinTech innovation, according to a new report.
Innovate Finance, in conjunction with WPI Economics, undertook the research following a call for input from the Migration Advisory Committee on the economic and social impacts of the UK’s exit from the European Union.
Monzo has invited customers to a new ‘Labs’ feature, which gives early access to new features in exchange for feedback. This approach is based on digital-only bank’s testing phase for its Alpha card in 2015, followed by crowdsourcing of the company name and customer analysis of its marketplace.
US FinTech firm Dosh has completed a $44 million Series A financing round which saw participation from Goodwater Capital, PayPal and other institutional investors. The consumer cashback app, which was launched a year ago, will use the money to help accelerate product innovation and technical capabilities.
The Financial Conduct Authority’s chief executive has revealed it will be scrutinising financial firms’ ability to effectively oversee distributed ledger technology (DLT), straight-through deal processing (STP) and other technology-related outsourcing arrangements. Speaking yesterday at the London Business School’s annual asset management conference, Andrew Bailey said that the advent of DLT opens the potential for STP to become even more efficient – with better management of counterparty risk, enhanced reconciliation and lower collateral requirements.
More than 200,000 of DBS’ corporate and SME clients will now be able to benefit from better cashflow visibility through real-time cross-border payment tracking. The service enables customers to track the status of their cross-border payments instantly, online without the need to call the DBS call centre. Clients will be able to find out whether funds have been received by the beneficiary, or where the funds are in the cross-border payment chain.
Deutsche Bank Research has launched a new interactive web tool that uses big data and Natural Language Processing (NLP) to quantify the importance of environmental, social and governance issues, as well as other intangibles such as stock market information, human capital, innovation, brand value and management quality. The new tool, labelled a-DIG, is the first product from a broader data initiative within Deutsche Bank Research called dbDIG, which looks to leverage alternative data and artificial intelligence (AI) to provide data-driven investment solutions.
Cryptocurrency trading by financial firms could increase this year, with approximately 20 per cent indicating they are considering trading cryptocurrency over the next 3-12 months. The figure came from a Thomson Reuters survey conducted among more than 400 clients across its Eikon, REDI and FX trading platforms.
Blockchain settlement platform Ripple has expanded its global payments network, signing five new customers to its xVia platform to power payments over RippleNet. FairFX (UK), RationalFX (UK), Exchange4Free (UK), UniPAY (Georgia), and MoneyMatch (Malaysia), will integrate the xVia API solution, enabling them to send a payment on behalf of their customers, but not actually processing and paying it out. This enables the firms to benefit from faster entry into new markets, lower operational costs, increased speed and end-to-end visibility over a payment’s journey.
The UK government is collaborating with more than 50 businesses and organisations to develop a £1 billion deal to put the UK at the forefront of the artificial intelligence (AI) industry. Announced by business secretary Greg Clark and digital secretary Matt Hancock, the new deal features almost £300 million of new private sector investment and more than £300 of newly allocated government funding for research into the technology.
Revolut has raised an additional $250 million in funding that will see the London-based FinTech increase its valuation by five times in less than a year to $1.7 billion. The new Series C round was led by Hong Kong-based DST Global, alongside a portfolio of new and existing investors, including Index Ventures and Ribbit Capital. The latest cash injection brings the total amount raised by Revolut to $340 million since the company launched three years ago.
Barclays has signed a strategic partnership with PayPal which will make it easier for customers to manage their accounts together. The partnership is initially focused on consumers and small businesses in the UK and the US. Customers will be able to add Barclays credit and debit cards to their PayPal wallet, to update these cards automatically in PayPal when they reach their expiry date, and to display their Barclays card image in the PayPal wallet to allow consumers to easily select their preferred way to pay.
Over 40 per cent of businesses experienced a cyber security breach or attack in the last 12 months, according to a new report from the Department for Digital, Culture, Media and Sport. The Cyber Security Breaches Survey 2018 was carried out among 1,519 UK businesses, with 50 in-depth follow-up interviews, finding that three quarters of businesses have made cyber security a high priority for their senior management.
Areal Bank, BNP Paribas, Deutsche Bank, DZ Bank and Nets Group have become the first five corporate partners to join the FinTech Europe Innovation Platform, established by Plug and Play and TechQuartier. The partnership, known as FinTech Europe, is based in Frankfurt and will be home to disruptive and innovative startups who will be piloting their solutions alongside leading financial institutions. The goal of Fintech Europe is to have 10-15 banks and financial service providers as partners in Frankfurt.
TSB’s CEO stated on Twitter this morning that the TSB mobile banking app and website were up and running again, following five days of technical problems which saw customers being locked out of their accounts, vanishing payments and mortgages, and some users being able to see others’ details. Despite the statement, many customers remain unable to access the bank’s services, receiving the message: “We’ve restricted the number of customers who can log in at once to ensure a good service once you’re in. So please bear with us and keep trying.”
With only a month to go until the General Data Protection Regulation (GDPR) comes into force across the UK, experts have warned that many companies still have work to do. Under the GDPR, all companies that collect and process data from European Union citizens face fines of up to €20 million, or 4 per cent of global revenues; whichever is greater.
Saxo Bank is aiming to run its entire technology stack on the Microsoft Cloud, as part of a new partnership. As part of Saxo’s ‘banking-as-a-service model, which allows other banks and brokers to leverage its technology and global capital markets access, the decision was made to use the Microsoft Cloud to ensure scalability, flexibility and security in digital infrastructure.
Digital payments specialist Nets has started testing finger vein payments with students and visitors at Copenhagen Business School (CBS). The FinTech firm said that scanning the structure of veins in customers’ fingers makes for faster and safer payments.
Yolt has completed Open Banking integration with the RBS Group, becoming the first mobile app to do so with one of the big nine UK banks. Last month, the ING-owned app stated it was onboarding up to 100 users per day from RBS, Natwest and Ulster Bank under the new regulations.
Two thirds of online banking systems still contain at least one critical vulnerability, according to Positive Technologies’ Financial Application Vulnerabilities report. Drawn from audits performed by the company, the data showed that each e-banking system analysed in 2017 contained, on average, seven vulnerabilities – up from six in 2016.
Britain’s financial firms must work in collaboration with law enforcement and government agencies in order to tackle the threat of cyber crime, according to UK Finance and KPMG. A new report argued that the threat of cyber crime cannot be mitigated just by spending more money, but rather by increased collaboration to render cyber criminals’ markets, tools and systems ineffective.
Swedbank is strengthening its partnership with software firm Meniga by making a €3 million equity investment, as part of a latest strategic financing round. The companies started working together last year to improve Swedbank’s digital customer experience through a personal finance activity feed and data aggregation platform.
Research from Intrinsic Insights has found that 87 per cent of technology professionals believe blockchain will be as transformative for business as the internet has been. Commissioned by BTL Group, the study asked 279 IT professionals in the UK and US about the impact of blockchain. It found the main benefits of the technology are greater data security and protection against cyber threats.
The Central Bank of Ireland will launch an innovation hub and industry engagement programme to keep up with the evolving FinTech and regulatory landscapes. In a speech this morning, the director general for financial conduct Derville Rowland announced that the unit will focus on engagement, sharing and listening.
The shadow chancellor John McDonnell has welcomed the “substantial” impact of big data and artificial intelligence (AI), but warned that effective regulation would be needed to realise the benefits. Speaking at Bloomberg’s new European headquarters yesterday, he cited the Bank of England’s last stress tests, which estimated that existing banks could take a £1 billion hit to their profits as a result of FinTech innovation.
Cash remains the most widely used form of payment in all regions of the world, while the amount of cash in circulation is growing, according to a report from G4S. The World Cash report surveyed 47 countries covering three quarters of the global population and over 90 per cent of the world’s GDP, with results revealing a growing global demand for cash – despite the increase in electronic payment options in recent years. Cash in circulation relative to GDP has increased to 9.6 per cent across all continents, up from 8.1 per cent in 2011.
A rise in the trend of ‘fake data’ could make global banks vulnerable to false business insights and bad decisions, according to a new report from Accenture. The study found that many banks have not invested in the capabilities to verify the validity and accuracy of their data. A survey of more than 6,300 business and IT executives across 27 countries found that only 11 per cent trust their data is reliable, but do not validate it. A further 16 per cent try to validate their data but are not sure of the quality, while 24 per cent validate the data, but recognise that they should do a lot more to ensure the quality.
Financial inclusion is on the rise globally, accelerated by mobile phones and the internet, but gains have been uneven across countries, according to a World Bank report. Globally, 69 per cent of adults – 3.8 billion people – now have an account at a bank or mobile money provider, up from 62 per cent in 2014 and just 51 per cent in 2011.
Swedish FinTech firm Tink has launched an application programming interface (API) platform, granting developers in companies of all sizes, across any sector, access to its technology. This will allow developers to use Tink’s account aggregation and categorisation products via a self-serving platform, with access to financial data from more than 300 banks in a single API, once the end user has given their consent for this data to be accessed.
Mastercard has called on merchants, acquirers, issuers and other technology players to support the new EMVCo Secure Remote Commerce (SRC) framework, which aims to create a ubiquitous online payments experience for global shoppers. Mastercard believes that SRC can be implemented as one, common checkout button – delivering a more consistent checkout experience by reducing the multiple steps that consumers face at different sites.
The use of artificial intelligence (AI) and machine learning in financial services is on the rise, with 83 per cent of banks having evaluated such solutions, and 67 per cent having actively deployed them. Capital market research firm TABB Group surveyed 200 global tier one and tier two banks on behalf of augmented intelligence solutions provider Squirro, also revealing that 87 per cent of bankers said it would be highly impactful if an AI engine could spot relevant events that led to engaging with a client and closing a deal.
Japanese payments firm JCB will conduct a trial of its new biometric card which features fingerprint authentication. Enabled by IDEMIA, the new payment solution requires users to first register one or more fingerprints for authentication purposes. When they want to buy something, they need only touch the fingerprint sensor on the card's lower right corner with their finger so as to authenticate payment.
The Open Banking Implementation Entity (OBIE) has confirmed its Managed Roll Out programme has successfully proven the account data access functionality of the Open Banking system, so FCA-authorised third parties are now able to offer products based on it to customers. However, as regulated companies have focused on the data capabilities of Open Banking, a statement explained that it has not been possible to test the payments functionality to the same degree, so new payments-focused services will still be put through extensive proving as they engage with the system.
The Bank of England (BoE) has announced that the first non-bank payment service provider (PSP) has joined a UK payment system settling in central bank money. TransferWise, a Financial Conduct Authority-regulated PSP facilitating the international transfer of payments, is now a direct participant in the UK’s Faster Payments system.
Brazilian lending platform Creditas has secured $55 million in a Series C funding round, led by Vostok Emerging Finance, with participation from current investors and Santander InnoVentures, the FinTech venture capital fund of Santander Group. Creditas has grown seven-fold in the past 12 months, and plans to use the news funds to support the company’s rapid expansion – with significant investment in technology and the expansion of its client base.
Lloyds Banking Group has confirmed cuts to 305 staff and closures of 49 branches as part of its ongoing digitalisation plan. The latest staff and branch reductions are part of a three year plan to shut and shrink its physical outposts in favour of a more digital, online approach.
The 6th annual Payments Awards have launched today, with entries open to companies demonstrating excellence and innovation in the payments space. Organised by FStech and Retail Systems - in association with Bandwidth, Card & Payments Jobs and PIF - the awards ceremony will return to the London Marriott in Grosvenor Square on 14 November.
Spanish bank BBVA has invested $50 million in an investment fund specialising in artificial intelligence (AI), established by Kai-Fu Lee, former president of Google China. As a result of the investment, the bank hopes to gain key insights and access into the growing Chinese innovation market, particularly around usage of AI. Likewise, from a financial perspective, it will also give BBVA the opportunity to understand and potentially co-invest into Chinese AI technological startups.
FinTech Australia has responded to calls from banks and industry bodies to phase the implementation of Open Banking legislation by urging the government to resist such delaying tactics. The consultation period for Australia’s review into Open Banking concluded last month, with the Australian Banking Association stating the Treasury should adopt a “phased approach” to including different banking products and calling into question the 12-month time frame for reforms.
Digital challenger bank Revolut has announced the launch of Vaults – a new feature enabling users to round up and save spare change from everyday purchases. Users will be able to save money in any of their 25 supported currencies, as well as Bitcoin, Litecoin and Ether. One-off or regular payments can also be added to a Vault at any time through the Revolut mobile app.
Barclays UK has established a new unit, Barclays UK Ventures, to focus on developing new business lines and promoting innovation. Led by Ben Davey, formerly Barclays’ group head of strategy, it will have the mandate and space to find and develop opportunities both within and outside the bank. Those will then be captured through a combination of organic build-out, commercial partnerships and venture investments.
Metro Bank is planning to launch an artificial intelligence (AI) powered money management service, Insights, this summer via its app. Developed with Personetics, it uses predictive analytics capabilities, alongside AI, to continuously monitor transaction data and patterns in real-time, identifying relevant trends and events in users’ spending habits. These are then translated into tailored prompts, providing customers with more control over their finances.
Eight in 10 UK Millennials trust that the personal information they provide online is kept private, according to new research from Satsuma. The study of 1,000 people aged between 18 and 24 found that banks are the most trusted institution, with 85 per cent of Millennials having faith that their bank keeps their information private and safe.
CybSafe has been selected by the Financial Conduct Authority (FCA) to help shape guidance on tackling the human aspect of cyber security in the financial services sector. The cyber security awareness platform has been adopted by the UK regulator to determine how it can measure and improve personnel security and culture within financial services organisations as part of its 2018/2019 Business Plan.
Financial management platform Moneyhub has integrated with Monzo and Starling’s application programming interfaces (APIs) to offer the digital-only banks’ customers a holistic overview of all their assets. Users of the two UK challenger banks will now have access to Moneyhub’s proprietary categorisation engine and can link up current and savings accounts alongside any credit cards, pensions, loans, mortgages, properties, ISAs or investments.
The House of Lords has called on the UK industry to lead the way in the development of artificial intelligence (AI) solutions, providing the economy with a major boost for years to come. The House of Lords Select Committee on Artificial Intelligence published its AI in the UK: Ready, Willing and Able? report today, with chairman of the Committee, Lord Clement-Jones, noting that the UK has a unique opportunity to shape AI positively for the public’s benefit. “The UK contains leading AI companies, a dynamic academic research culture, and a vigorous start-up ecosystem as well as a host of legal, ethical, financial and linguistic strengths.”
UK-based savings platform Oval Money has raised £1.3 million in its latest funding round, with more than 60 per cent generated through the Crowdcude platform. The FCA-authorised firm plans to use the funds to help launch a feature within the platform that will allow people to invest their money in the industry’s first multi-sided marketplace for savings and investments products.
Global payments provider Paysafe has reached an agreement to acquire iPayment – a US-based provider of payment and processing solutions for small and medium-sized enterprises (SMEs). The acquisition forms part of Paysafe’s investment strategy to expand its presence in North America in response to significant growth opportunities, particularly in the fast-growing SME sector.
Half of UK Millennials would like to have all their bills, accounts, investments and other financial information on one mobile app - a figure which rises to 60 per cent of under-24s - according to Crealogix UK research. The digital banking solutions provider surveyed 2,000 UK consumers in February, finding that 51 per cent of Millennials (defined as those aged 18-34) think Open Banking is a good idea as it will help them budget better, compared to just 12 per cent of over-55s.
The European Commission has announced that 22 European countries have signed a declaration on the establishment of a European Blockchain Partnership. Signatories will exchange experience and expertise in technical and regulatory fields in preparation for the launch of EU-wide blockchain applications across the Digital Single Market.
Bank of America has launched the Digital Mortgage Experience to guide clients through the mortgage process via its mobile app or website. With advanced application prefill capabilities, clients can have many aspects of their mortgage application auto-populated, significantly reducing time and effort.
Peer-to-peer lender Zopa has undergone a governance restructure in advance of launching its next generation bank. This will establish separate boards for the Zopa P2P business, proposed bank - subject to banking licence approval - and group, in order to facilitate the increasing scale, ensure good corporate governance and protect the interests of its customers.
Mastercard has announced it will expand its presence in Ireland, hiring 175 new employees in Dublin focused on driving innovation in payments. Roles include software engineers, blockchain specialists, data scientists, project managers, analysts, product designers, cloud infrastructure specialists and information security experts.
Santander has launched the first blockchain-based international money transfer service across four countries. Santander One Pay FX will make it possible for customers to complete international transfers on the same day in many cases or by the next day.
The co-founder and chief technology officer at challenger bank Revolut has suggested that the rise of blockchain technology, contactless and mobile payments, will lead the UK to be fully cashless within the next 10 years. Vlad Yatsenko opined that financial institutions must adapt to this rapidly changing landscape, with Revolut aiming to be at the forefront of a cashless society.
Three quarters of Brits would be willing to choose a digital-only bank for a financial product, yet only one in 10 would prefer to use a digital-only bank over a traditional High Street bank, according to MoneySuperMarket research. The comparison website surveyed 1,021 UK homeowners during February, finding that 37 per cent did not trust these new banks enough to allow them to share their financial data with other providers under the new Open Banking rules.
Two-thirds of senior IT decision-makers believe failure to adopt artificial intelligence (AI) will lead to a loss of competitiveness, according to Feefo research. The survey of 100 senior IT decision-makers in the UK also found that 96 per cent think AI will have a positive effect on customer-engagement in their organisation, with 61 per cent stating they are using, or will use, AI for customer-service analysis and intervention.
Ransomware attacks are a key cyber security threat for global organisations, according to Verizon’s 2018 Data Breach Investigations Report. It is the most common type of malware, found in 39 per cent of malware-related data breaches - double that of last year’s report - accounting for over 700 incidents.
A total of 192 ATM malware and logical attacks were reported across Europe in 2017, an increase of 231 per cent from 2016, new research from the European Association for Secure Transactions (EAST) has found. Some 189 of the attacks were logical attacks where equipment typically referred to as a ‘black box’ is used to send dispense commands directly to the ATM cash dispenser in order to cash-out the ATM.
Lebara has made WorldRemit its exclusive global money transfer partner, enabling more than three million Lebara Mobile and Lebara Money users to use WorldRemit’s service directly from the Lebara app and website. Lebara customers in the UK, Germany, France, Spain, the Netherlands and Denmark will benefit from WorldRemit’s payout network in over 145 countries and its low cost digital money transfer service.
HSBC has selected big data specialists Quantexa to support the bank in combatting money laundering, following a successful pilot. The bank will integrate Quantexa’s technology into its systems later this year, enabling HSBC to spot potential money laundering activity through analysing internal, publicly available, and transactional data within a customer’s wider network. The deployment of the technology follows a pilot of the software with HSBC in 2017.
Francisco Partners, a technology-focused private equity firm, has entered into a definitive agreement for the purchase of payments firm Verifone for a total consideration of approximately $3.4 billion. Under the terms of the agreement, Verifone stockholders will receive $23.04 in cash for each share of Verifone common stock held, representing a premium of approximately 54 per cent to the Company’s closing share price of $15.00 on April 9, 2018.
FinTech in Scotland has attracted nearly £37 million investment over the last 10 years, with an ‘ecosystem’ of startups, large firms, universities and the public sector. Firms such as HSBC, Morgan Stanley, NCR, Ingenico and Avaloq all have headquarters in Scotland, while JPMorgan’s European Technology Centre in Glasgow is a key hub, with 1,300 employees.
Cryptocurrency exchange Coinbase has announced the launch of Coinbase Ventures – a new venture capital arm that will be investing in “the best and brightest minds in the crypto space”. With the new fund, Coinbase will be providing financing to early-stage startups that are exploring new technologies and ideas within the cryptocurrency market. The goal of the fund is to enable these companies to scale successfully, forge strong relationships within the industry and spur development.
The Financial Conduct Authority (FCA) has published its Business Plan for 2018/19, setting out several pieces of regulatory work in the FinTech sector. The regulator stated that it intends to respond to the Treasury Committee’s enquiry into cryptocurrencies, although it noted they are not currently within the FCA’s regulatory perimeter.
Three quarters of UK businesses are confident they will comply with General Data Protection Regulation (GDPR), due to come into force across the European Union on 25 May 2018, according to EfficientIP. The network security technology provider commissioned a survey of 1,000 senior IT officials at businesses across the EU, North America, Asia and Australasia. It found that 86 per cent of UK firms believe GDPR compliance will increase customer loyalty.
DriveWealth has announced the closure of a $21 million (£15 million) Series B investment, led by Raptor Group Holdings, SBI Holdings and Point72 Ventures. The company offers a range of APIs to modernise financial services for online brokers, digital advisors and mobile online financial services companies, helping them access the US securities market. “We are thrilled to partner with SBI Group, Japan’s leading provider of internet financial services and two leading venture investing firms
The Reserve Bank of India (RBI) has banned the banks it regulates from dealing or settling cryptocurrencies. In a statement yesterday, the regulator noted that technological innovations, including those underlying virtual currencies, have the potential to improve the efficiency and inclusiveness of the financial system.
An updated, voluntary Code of Conduct for Indirect Access Providers (IAPs) has been published following a consultation with stakeholders. The code is aimed at improving the experience of Indirect Payment Service Providers (IPSPs) by clearly setting out the responsibilities of IAPs that subscribe to it.
The South African Reserve Bank (SARB) has set up a FinTech programme to consider innovation facilitators and carry out a proof of concept (PoC) on using distributed ledger technology (DLT) for interbank clearing and settlement.
The main goal is to track and analyse new developments and to assist policymakers in formulating suitable frameworks.
Businesses must get smarter in how they handle money laundering or face some hefty financial fines from HM Revenue & Customs, according to Gordon Dadds. The legal and professional services firm blamed the digitalisation of cash for exposing many companies to criminal money being inadvertently laundered through banks and regulated businesses.
The first digital mortgage deed has been entered into the Land Register, under a new service to speed up the signature process. Coventry Building Society and Enact Conveyancing lodged the first digitally signed mortgage for a house in Rotherhithe, London.
Digital-only challenger bank Monzo has reported that 94 per cent - or 362,000 - of its beta customers have upgraded to current accounts. After launching in beta in March 2016, Monzo received its banking licence last year and started asking its prepaid users to make the free upgrade.
Payment card data remains the primary source of cyber fraud, representing 40 per cent of total incidents in 2017, according to the latest Trustwave Global Security report. Of that 40 per cent, card-track (magnetic stripe) data made up 22 per cent and card-not-present, which is mostly used in e-commerce transactions, accounted for 18 per cent. This is a significant decline from 2016, when attackers targeted card data in almost two thirds of incidents.
Faced with the growing threats of cyber fraud, cryptocurrency, quantum computing and open banking, financial institutions are planning to increase their compliance investment, according to a new report from Accenture. A global survey of 150 compliance executives at financial services institutions found that 89 per cent expect to increase their compliance investments over the next two years.
Over two billion consumers worldwide will use a mobile wallet to make a payment or send money in 2019, according to Juniper Research, up by almost 30 per cent on the 1.6 billion recorded in 2017. The study found that contactless card payments remain far more prevalent than mobile payments in most markets, but leading wallets are seeking to redress the balance by enabling both online and offline payment options.
The majority of chatbot owners and developers are not satisfied with the performance of their artificial intelligence assistants, suggesting human validation is still key. Text analytics specialists Warwick Analytics surveyed 551 professionals involved in the development or management of chatbots, finding 59 per cent of businesses who have a chatbot are unsatisfied.
Saxo Bank has launched SaxoTraderPRO, a new trading platform for private traders and institutional clients. This will replace the current SaxoTrader platform, while SaxoTraderGO continues to cater to a wider range of retail traders and investors. The FinTech specialist connects users with more than 100 global liquidity providers and exchanges to offer access to more than 35,000 financial instruments across stocks, bonds, ETFs, CFDs, foreign exchange, futures and options that are cross margined from a single account.
Only a third of businesses have a financial plan in place in the event of a cyber attack, but over a third would pay a ransom to get their systems and data back, according to Lloyds Bank. Only half of companies discuss the risk of cyber at board level, while only a quarter of firms have dedicated cyber insurance.
NatWest has strengthened its fraud protection systems with the adoption of a machine learning solution - Corporate Fraud Insights from Vocalink Analytics. The system is designed to detect and prevent invoice redirection fraud, which is where businesses are duped into paying money into a fraudster’s account rather than to their intended supplier.
The Bank of England has started a proof of concept project to understand how the renewed Real Time Gross Settlement (RTGS) service could be capable of interacting with distributed ledger technology (DLT). A statement explained that although the BoE concluded that DLT is not yet sufficiently mature to provide the core for the next generation of RTGS, it places a high priority on ensuring that the new service is capable of interfacing with DLT as and when it is developed in the wider sterling markets.
Brightside Group has partnered with Data Capture Solutions to introduce robotics for the first time into its back office. DCS helped identify the most suitable parts of the operation for Robotic Process Automation (RPA), like compiling document packs where the insurance documents are coming from third parties portals, reconciling invoices and posting credits received from debt cases.
CME Group will acquire NEX Group for $5.5 billion (£3.9 billion) in a transaction valued at £10 per share, consisting of 500 pence in cash and 0.0444 CME shares. The proposed transaction has been approved unanimously by the board of directors of both companies and is expected to close, pending approvals by regulators and NEX shareholders, in the second half of 2018.
Global investment in the insurance technology industry surged in 2017, with Europe emerging as a new InsurTech hub outside the US, according to Accenture research. The number of InsurTech deals increased 39 per cent globally last year, with the total value of deals up 32 per cent, to $2.3 billion.
TSB has unveiled plans to create a lending marketplace to help small UK businesses attract the funding they need to scale effectively. The challenger bank will be partnering with Funding Options to launch the marketplace in May, enabling SMEs to compare financing options in one place, opening up the range of loans and types of finance on offer to them. TSB’s new commercial banking director, Richard Davies, will also head up a multi-million pound investment programme to build new banking services for small businesses across the UK.
Eli Rosner has joined Finastra as chief product and technology officer, and will lead a team of strategy and product managers, architects, data scientists and software engineers. Rosner joins with more than 25 years of industry experience, joining from NCR Corporation where he served as chief technology officer and head of product management. Prior to this, he was chief business delivery officer at Solera Holding Company, where he optimised the portfolio and led projects to modernise products and converge to a common platform.
Royal Bank of Scotland has had a takeover bid for accounting software firm FreeAgent accepted, valuing the company at £53 million. RBS will acquire the entire issued and to be issued ordinary share capital of FreeAgent. Shareholders will be entitled to receive 120 pence in cash for each FreeAgent Share held. The £53 million valuation represents an 86 per cent premium on yesterday’s share price and a 43 per cent premium to the IPO price of 84p.
Belgium’s KBC bank has announced plans to convert 66 of its Flanders-based locations into unmanned branches where customers can complete banking transactions at self-service terminals. Forming part of the bank’s omnichannel strategy, the changes will also see eight existing branches close and fully merge with another nearby branch, while the number of existing full-service branches that are open for longer will be doubled to 145 – spread evenly across all provinces.
Belgium’s KBC bank has announced plans to convert 66 of its Flanders-based locations into unmanned branches where customers can complete banking transactions at self-service terminals. Forming part of the bank’s omnichannel strategy, the changes will also see eight existing branches close and fully merge with another nearby branch, while the number of existing full-service branches that are open for longer will be doubled to 145 – spread evenly across all provinces.
London-based multi-asset execution firm FlexTrade has partnered with Kensho Technologies to integrate its pre-trade analytics solution into its trading platform. Kensho captures events to surface company-specific key developments, such as product launches, mergers and acquisitions or corporate announcements. These events come from reputable news outlets and other sources, and cover an assortment of categories, including regulatory events, partnerships, investments and corporate actions.
Vacancies for roles requiring FinTech skills have risen by 73 per cent year-on-year, over the last six months, according to analysis of the jobs market on ITJobsWatch. As of 15 March 2018, roles requiring skills in API development (70 per cent), API integration (107 per cent) and API testing (83 per cent) have seen significant year-on-year increases, as non-traditional financial services companies get to grips with the Second Payments Services Directive.
Qatar Airways has expanded its collaboration with Wirecard to offer Alipay as a method of payment from April 2018 in selected Qatar Duty Free stores at Doha’s Hamad International Airport. Qatar Duty Free, a wholly-owned subsidiary of Qatar Airways, operates more than 90 retail stores with over 185 points of sale. The world’s largest mobile payment network, Alipay has more than 600 million active users in China,
Denizen, a banking platform backed by BBVA’s New Digital Businesses unit, has launched a new borderless bank account for expat banking, enabling customers to receive money in one country and pay it out in another immediately – avoiding transfer and currency exchange fees. Denizen notes that country-specific regulations, currencies and settlement times are halting the free flow of money around the world, which in turn results in additional time, stress and fees for consumers.
New Zealand’s payments system governance organisation Payments NZ has launched an industry application programming interface (API) pilot, potentially opening the door to easier digital payments for Kiwis. The pilot will be conducted by six development partners - ASB, BNZ, Datacom, Paymark, Trade Me and Westpac - which will build and test two payment-related API standards designed to simplify partnering and system interfaces.
Schroders is launching a global in-residence programme for tech startups.
Via the Cobalt programme, Schroders will support and collaborate with financial services-focused startups - specifically those which have progressed beyond the conceptual or early-growth stage and offer solutions relevant to investment management.
Deutsche Börse Group has formed a strategic partnership with HQLAx for the creation of a new securities lending solution using the R3 Corda blockchain platform. Using blockchain technology, the two firms will build a fully-integrated operating model to facilitate more efficient collateral management of high quality liquid assets. Due to the implementation of new bank regulations for liquidity, mandatory clearing and margin requirements for OTC derivatives, liquid assets are growing in demand.
Global cross-border B2B transactions are expected to exceed $218 trillion by 2022, up from $150 trillion this year, new research from Juniper has suggested. This is being driven by the money transfer market being ripe for disruption, according to the study, as new technologies and regulatory changes are beginning to refine traditional banking practices. The FinTech sector is also helping to drive the increase, having a profound effect on traditional cross-border transactions.
New functionality added to Google Assistant means people can send money to friends and family via Google Pay using only their voice. It is now possible to send or request cash from contacts for free using the Assistant on Android and iOS phones in the US, with plans to extend this to voice-activated speakers like Google Home.
Investment firm Motive Partners have announced the opening of a new European Innovation and Investment Centre in London, with firms such as Mastercard and RBS taking residence there. The 14,000 square foot space will focus on building the next generation of financial technology and boosting industry growth through building and partnering with market-leading technologies. The centre will be home to collaborative projects between institutions and emerging technology firms, seeking new solutions for the financial services industry.
A FinTech alliance between the UK and China was launched this week by BGTA during the Innovate Finance Global Summit. It is aimed at fostering the development of the global tech and investment ecosystem with a fund that benefits the UK via inward investment and acts as a catalyst for exports to China.
Barclays, HSBC, Deutsche Bank, Bank of Ireland, Wayra and Starling Bank were among the companies to scoop a coveted trophy at the 18th annual FStech Awards last night. Celebrating excellence and innovation within the UK and EMEA financial services sector, this year’s awards saw a record number of entries, with the winners revealed at a prestigious gala dinner and awards ceremony at the London Marriott Hotel in Mayfair, hosted by comedian Lucy Porter.
The Bank of England is setting up its own FinTech hub to explore ways emerging technology such as digital currencies can be used to benefit the UK’s economy. Speaking at HM Treasury’s International Fintech Conference yesterday, the deputy governor for markets and banking Dave Ramsden said the hub will be a central point of contact for the FinTech sector to engage with the BoE, and will play an active role in the new regulatory taskforce.
Revolut has launched disposable virtual cards to help improve the security of online transactions. Each time a Premium customer makes an online payment with a Disposable Virtual Card, systems will instantly detect the transaction and automatically destroy those card details, generating new ones that will appear directly in the Revolut app.
The Payment Systems Regulator (PSR) has published its Annual Plan and Budget for 2018/19, stating it will not shy away from direct intervention and using its competition powers. Hannah Nixon, managing director of the PSR, said it has succeeded in shaking up a sector that was dominated by major players.
Trading and investment platform eToro has raised $100 million in a Series E funding round, led by China Minsheng Financial with participation from SBI Group, Korea Investment Partners, World Wide Invest and others. The funding round, which brings the total capital raised to $162 million, follows a period of significant growth for the company, which now boasts more than nine million users worldwide.
A new cryptoassets task force, the next steps in ‘robo-regulation’ and a UK-Australia ‘FinTech bridge’ to help UK firms expand internationally, have been announced by the government. Speaking at its second International Fintech Conference, chancellor of the exchequer Philip Hammond said he was committed to helping the sector grow and flourish.
Two thirds of global FinTech companies see government controlled factors, such as regulation, as their largest barriers to growth. A survey carried out by YouGov among more than 400 FinTech companies across Australia, Germany, Hong Kong, Israel, Singapore, Turkey, UK & USA – all of which have had at least Series A funding rounds or above – also found that access to skilled staff and costs to business, including tax, further impeded their expansion.
Dutch bank ABN AMRO has signed a partnership with SIA to connect with the EBA Clearing pan-European instant payments infrastructure RT1. Clients of the bank are now able to complete instant payments of up to €15,000 to other banks that are also participating in the instant payments scheme. ABN AMRO will connect through the SIAnet platform – a fibre optic network with high speed and low latency stretching over 170,000 kilometres.
Bank of America customers can now add multiple credit and debit cards to their PayPal account directly from the bank’s mobile banking app. This marks the initial integration from the partnership that was announced in July 2017. Later this year, customers will also be able to add their cards within PayPal.
Royal Bank of Canada (RBC) has become the first Canadian bank to launch an Application Programming Interface (API) developer portal. Once registered and approved to use the RBC Developers portal, external parties will be able to browse and learn about the APIs before building, testing and deploying applications using them.
Some 94 per cent of UK FinTech companies see Open Banking as a major area of opportunity for 2018, new research from EY has found. The survey asked 31 UK-based FinTechs on their views of the Open Banking initiative, finding that 59 per cent of firms view Open Banking as an opportunity to review their collaboration strategies. Three quarters of participants believe that new competitors such as technology firms will become increasingly important over time.
Royal Bank of Scotland (RBS) is in the early stages of creating a standalone digital bank, according to Sky News, which reported that former chief operating officer Mark Bailie is leading the project. RBS has already signed agreements with several FinTech firms such as Funding Circle – which it works with to direct customers to peer-to-peer and other alternative finance providers – but this move would be in direct competition with challenger banks like Monzo, Revolut and Atom.
Atom bank has joined the Faster Payments Scheme as a direct participant and migrated all traffic across its retail deposit book to the real-time payment scheme. Chief executive Mark Mullen stated that as its customers expect real-time services, joining Faster Payments enables them to send or receive money knowing that it will be instantaneous, safe and simple.
Japan Post Bank has significantly expanded its relationship with international payments firm Earthport, to deliver cross-border payment services across a number of additional regions including North America and Europe. The expansion aids the bank’s mission to become “the most accessible and trustworthy bank in Japan”, offering clients greater capabilities in high volumes of low-value cross-border payments.
Artificial intelligence (AI) specialist Digital Reasoning has closed a $30 million funding round, led by BNP Paribas with participation from Barclays and Square Capital. Digital Reasoning uses AI technology to understand human intentions and behaviours, enabling financial institutions to improve their return on interest. The new injection of funding will enable the company to expand its product portfolio for capital markets and wealth management use cases, accelerate AI innovations across speech analytics, natural language understanding, and machine education and expand its go-to-market capacity.
Using a debit or credit card with a PIN number is still the preferred method of payment for 42 per cent of people in the UK. Contactless methods followed at 34 per cent, with the majority of these respondents (31 per cent) preferring a contactless card to using their phone or wearable technology (3 per cent).
The Financial Conduct Authority (FCA) will begin to work with interested regulators from around the world on a blueprint for a global FinTech sandbox. The aim of the global sandbox is to enable institutions and companies to conduct FinTech tests in different jurisdictions and to allow regulators to collaborate on solving common cross-border issues. The FCA sought feedback from interested parties about the viability of such proposals, and found that there was much interest in the idea of cross-border testing and the benefits this could bring
Since launching the service in October last year, digital challenger bank Monzo has onboarded 500,000 users to its upgraded current account service. The current account offers instant payment notifications, built-in budgeting, the ability to freeze your card, and P2P payments. After securing a banking licence in April last year, Monzo customers are also now able to make bank transfers, set up Direct Debits and standing orders, and have their salary paid straight in.
Spanish bank BBVA is currently trialling new facial biometric technology to make payments ‘invisible’ at its headquarters’ in-house cafés and restaurants. Developed alongside Sodexo Iberia, the new payment system forms part of BBVA’s strategy to transform in-store purchases for customers. BBVA employees are currently able to order a coffee through a mobile app, pick it up without having to wait in line, and pay for it without their wallets.
Barclays has signed partnerships with seven watch brands, including Guess, Mondaine, Timex and Krobaby, to embed contactless bPay technology into traditional watches and fitness trackers. Building on the Timex Fairfield Contactless watch last year, bPay and Timex will launch an expanded range of contactless-enabled watches in May. Guess Watches will also work with bPay to launch a range of six contactless watches.
Metro Bank has launched a new ‘walk out trading’ service – enabling businesses to accept debit and credit card payments as soon as they open their account. Customers will now be able to set up business current accounts instantly in store, receiving their card and PIN on the spot, as well as being automatically registered for internet and mobile banking. Existing customers can also choose to add the service to their business account at any time.
FinTech group ayondo has announced that it will be the first FinTech company to be listed on the Singapore Exchange (SGX), acting as an agent on behalf of the Monetary Authority of Singapore. ayondo is a global financial technology group with subsidiaries authorised and regulated in the UK (FCA) and Germany (BaFin) and additional offices in Singapore, Spain and Switzerland, offering innovative trading and investment solutions for retail and institutional customers.
Credit Suisse has announced a new CHF 30 million venture capital fund to invest in Swiss FinTech firms, with the aim of promoting the country as a centre for business and employment. SVC was created by Credit Suisse eight years ago with a total venture capital of CHF 100 million with the aim of supporting Swiss SMEs, providing funding to a total of 44 companies to date. The institution has now decided to provide an additional CHF 30 million in venture capital, to be used specifically for investing in Swiss FinTechs.
Business regulations and rising financial literacy among consumers are boosting card usage globally, while merchant card acceptance is also set to surge by 40 per cent to 85 million outlets worldwide by 2022. This is according to new research from RBR, which found that the number of card-accepting merchant outlets rose by seven million in 2016 to 61 million. Double-digit growth was recorded across Asia-Pacific, central and eastern Europe and the Middle East and Africa, with growth expected to continue over the coming years.
The European Banking Authority has outlined plans to create a FinTech Knowledge Hub, designed to enhance engagement between incumbent institutions and new FinTech entrants. The Hub will contribute to the monitoring of the continuing impact of FinTech, including on business models and interconnectedness in the financial system. The EBA will draw on the experience and knowledge of European authorities, the ESAs and will interact with similar EU and national institutions.
Money management FinTech firm Yolt has announced that it has connected with three banks since the Open Banking initiative launched two months ago. Customers of RBS, NatWest and Ulster Bank will now be able to benefit from the services provided by Yolt. The FinTech firm will introduce customers in phases, connecting up to 100 users per bank per day. During the coming months, Yolt will continue to add 100 users per day for each bank, before increasing the daily connections for each bank.
Canada’s Bank of Montreal (BMO) has rolled out two personal chatbots for Facebook Messenger and Twitter, providing instant responses to customer enquiries. Developed in partnership with Finn AI, the new Facebook Messenger chatbot is a first-of-its-kind capability for a major Canadian bank. The chatbot, named BMO Bolt, has been fed with 250 of the top customer questions received by BMO call centres and online. AI and natural language processing capabilities allow BMO Bolt to interpret customer intentions and provide the most relevant answers.
UK banks and card companies prevented £1.4 billion in unauthorised financial fraud last year, representing two thirds of total attempted fraud, the latest data from UK Finance has revealed. In 2017, fraud losses on payment cards dropped eight per cent year-on-year to £566 million, while card spending increased by seven per cent – meaning card fraud represents to 7p for every £100 spent, the lowest level since 2012.
One of Europe’s largest private equity firms Nordic Capital Fund IX will acquire a majority share in European online payments provider Trustly, with the deal rumoured to value Trustly at around €700 million. Trustly’s largest shareholder Bridgepoint Development Capital will dispose of its full equity interest in Trustly but management, founders and investment company Alfvén & Didrikson will remain significant shareholders in the company.
J.P. Morgan has announced that it has added Mosaic Smart Data to its strategic investments portfolio, taking a minority stake in the company. Mosaic uses state-of-the-art technology to address the challenges faced by financial institutions trading in FICC markets, including change management, productivity, efficiency, restructuring and the growing automation of trading processes. It’s platform provides a visualisation of market activity in real-time.
The Treasury has released a report on the future of cash and digital payments in the UK, questioning the continuing importance of the 1p and 2p coins in the UK economy. The report noted that 60 per cent of 1p and 2p coins are used once in a transaction before leaving the cash cycle. They are either saved, or in eight per cent of cases are thrown away. In the past, the Royal Mint has needed to produce and issue more than 500 million 1p and 2p coins each year to replace those falling out of circulation.
Coinbase has become the first crypto-exchange to support the UK’s Faster Payments Scheme, and has also been granted an e-money licence by the UK’s Financial Conduct Authority (FCA). The e-money licence from the FCA will enable the company to issue e-money and provide payment services in the UK. The licence also requires Coinbase’s e-money operations to meet the strict rules enforced by the FCA and the Payment Services Directive. The licence will extend beyond the UK to 23 countries within the EU.
Behavioural biometrics specialists Biocatch has announced that it has closed a $30 million funding round, led by Maverick Ventures. The company collects and analyses more than 2,000 parameters to generate user profiles and model different types of genuine and malicious behaviour. The platform is able to recognise malware, robotic activity, social engineering, phishing and other cyber threats.
Nordea Bank has launched a wearable payment solution through Fitbit and Garmin wearable devices, providing customers with a new way to pay. The service is available to all customers with a private Nordea Mastercard or Visa debit or credit card in Sweden, Denmark and Finland – becoming the first bank in the region to launch such technology. A new wallet solution from Nordea provides improved navigation, a new overview page and support for card enrolment for wearable payment services.
Global business spend on cyber security solutions will grow by 33 per cent over the next four years, reaching $134 billion annually by 2022. This is according to new research from Juniper, which found that almost 70 per cent of 2022 spend on cybersecurity would originate from medium-sized businesses, as cyber criminals target smaller entities. For financial services, mobile operators, enterprise and Internet of Things (IoT) service providers, digital transformation and IoT endeavours were key catalysts for increasing spend to defend assets from threats.
FCA-authorised FinTech firm TrueLayer has integrated with UK digital challenger Starling Bank, enabling the bank’s customers to access TrueLayer’s services through an open API. Customers who grant TrueLayer access to their data will be able to benefit from various new services – including income verification, lending products and collated financial dashboards. Account information will only be accessible when a customer chooses to use a new product and actively agrees to share their information.
Money transfer services firm Azimo has launched an enhanced service for transfers to China, enabling delivery to Chinese bank accounts and halves the sending costs. Customers of Azimo will now be able to send money from 24 countries in Europe to individual bank accounts in China, delivered in local currency. The expansion follows Azimo’s recent launch of fast weekend transfers to a number of countries including Nigeria, the Philippines, Bangladesh and Colombia.
Addleshaw Goddard has announced the six FinTech firms who have been selected for its 2018 ‘AG Elevate’ accelerator programme. The successful applicants have been assigned a mentor from the AG Elevate FinTech team, and will receive advice and guidance on legal and commercial challenges, receiving up to 30 hours of free legal advice. The cohort will also gain access to briefings, seminars and regulatory developments, as well as networking opportunities.
TransferWise has selected Wirecard to issue a debit card to serve alongside its ‘borderless’ digital bank account for customers. Previously available only to businesses, the new banking platform is now available to the company’s wider customer base. Users can hold and convert 28 currencies at the real exchange rate, with local bank details for the UK, US, Australia and Europe.
Augmentum, a newly established FinTech investment company, has raised a total of £94 million in its Initial Public Offering (IPO), with shares to commence trading on the London Stock Exchange this week. Founded by Augmentum Capital, the new company will be a closed-ended investment firm that will invest in private financial services technology businesses based in the UK and Europe.
Some 53 per cent of consumers would like their bank to provide them with more opportunity and better quality services as the Open Banking initiative rolls out. This is according to new research from the Emerging Payments Association (EPA), which surveyed more than 2,000 UK consumers on fairer banking. It found that just seven per cent of consumers would choose not to have greater control over their finances through FinTech, yet only one fifth have been informed of Open Banking by their bank.
Belgium’s BNP Paribas Fortis has signed an agreement with Swedish FinTech firm Tink for use of its aggregation, personal finance management and payment initiation technology in its mobile banking applications. The first step of the partnership will be the release of the new multi-banking app for Hello Bank! later this year.
Egyptian bank Banque du Caire has selected a new core banking platform from Temenos, alongside solutions for channels, financial crime mitigation, front office, payments, and risk and compliance. By upgrading its systems, Banque du Caire will be able to accelerate its growth strategy in a cost effective manner, as well as bring cutting edge banking services to its 2.7 million retail and corporate customers in Egypt.
Finovate Europe returned to London for the seventh year running this week, this year moving from Old Billingsgate to the ExCel Arena and switching from a two-day to a four-day format. More than 70 companies were given seven minutes each to demo their latest FinTech products and innovations to a crowd of executives, venture capitalists, product managers, entrepreneurs and press.
The European Commission has unveiled a new FinTech ‘Action Plan’ on how the financial services industry can harness the opportunities presented by technology-enabled innovation. The Action Plan outlines proposals to enable the European financial sector to make use of the rapid advances in new technologies, such as blockchain, artificial intelligence and cloud services. At the same time, it seeks to make markets safer and easier to access for new players, in order to benefit consumers, investors, banks and new market entrants.
BABB (Bank Account Based Blockchain) has secured $20 million to help build and launch its blockchain banking platform by the end of the year. Located at the Level39 FinTech accelerator in London, BABB is developing a decentralised banking platform to provide anyone in the world with a bank account, payment card, and access to its global peer-to-peer network.
London-based Emma Technologies has successfully integrated with digital challenger Starling Bank, to provide customers with an enhanced view of their finances. Emma, which recently gained approval from the Financial Conduct Authority, is building an app for Millennials to help users avoid overdrafts, find and cancel subscriptions, track debt and save money. The aim of the product is to provide a consumer-focused banking experience, designed to improve the financial situation of its users.
Mastercard has announced that it will be integrating its physical and digital payments teams under one organisation from 2 April 2018. The new integrated team will accelerate efforts to create the best solutions for consumers and businesses by securing each transaction and simplifying access to the company’s digital assets. The change comes as Garry Lyons, chief innovation officer at Mastercard, departs the company to launch an outside venture
The Japan Bank Consortium, which comprises of 61 banks, is set to release a new mobile payments app, powered by Ripple’s blockchain technology, to enable instant transaction settlements for their customers. Named MoneyTap, the new app is the first solution in Japan to be developed and used by multiple banks. Three banks, SBI Net Sumishin Bank, Suruga Bank and Resona Bank, will be the first to go live with the platform in autumn 2018 – followed by a staggered roll-out by the rest of the consortium.
German FinTech banking platform solarisBank has closed a €56.5 million Series B funding round, with BBVA, Visa, Lakestar and ABN AMRO joining as strategic investors. solarisBank became the first FinTech banking platform in Germany to gain a full banking licence in March 2016, and is now available in seven countries. The bank has nearly 60 corporate clients currently using its system, and expects that number to increase to over 100 by the end of this year.
The World Economic Forum (WEF) has announced the creation of a new international consortium to strengthen cyber security for FinTech companies and data aggregators. The move is in response to the findings of a group of cyber security experts bought together by the WEF, which identified the growing threat of cyber attacks on technology providers to the finance sector as the number one risk to the whole industry. The consortium’s founding members include Citigroup, Zurich, Kabbage, Hewlett Packard Enterprise and The Depository Trust & Clearing Corporation.
Mastercard has completed its acquisition of mobile payments technology company Oltio from South Africa’s Standard Bank Group. Mastercard said that the move built on its longstanding relationship with Oltio, a startup that has patented several mobile payments and banking solutions, including a new authentication technology. That particular technology enables consumers in South Africa to authenticate purchases in Mastercard’s digital wallet Masterpass, using their bank PIN and mobile phone.
UK digital challenger bank Atom has landed £149 million in its latest wave of financing, led by investors BBVA and Toscafund, who will both increase their shareholdings. Spanish banking group BBVA will invest a further £85.4 million in Durham-based Atom, raising its ownership to around 39 per cent, subject to regulatory and shareholder approval. Toscafund will also contribute £54.4 million and up its stake in the bank.
Banks and credit card providers are the most trusted holders of personal data, according to a new consumer survey. The financial sector out-ranked social media networks and tech firms such as Amazon in the poll of 2,000 Britons, conducted by ComRes Global on behalf of ForgeRock. The research found that 82 per cent of consumers trusted banks and credit card companies to store and use their personal data responsibly, compared to 63 per cent who said the same of social platforms.
Not-for-profit financial cooperative Clockwise has partnered with API provider TrueLayer on a new Open Banking initiative, FStech has learnt. The credit union is using TrueLayer’s technology to retrieve member information made available by Open Banking in order to make credit decisions. This significantly increases the speed at which loan decisions can be assessed, improving access to finance for Clockwise’s 10,000 members. Furthermore, TrueLayer has committed to providing its financial API to Clockwise for free, as part of its wider offer to not-for-profit and charitable organisations.
Big Data analytics (73 per cent) and cyber security (72 per cent) are the two digital technologies being utilised most commonly by banks today, according to new research. Enterprise cloud (65 per cent) was the next most popular technology cited by the 113 banks surveyed by Vanson Bourne for the latest Infosys report. Some 109 insurers was also asked the same question, and indicated that cyber security (66 per cent), Big Data analytics (65 per cent), enterprise cloud (58 per cent), and artificial intelligence (AI) (45 per cent) were the four digital technologies currently being used the most by insurance companies.
Dubai-based Maliyya, a FinTech P2P lending and borrowing platform, has secured its first seed investment of €1.3 million from UK private investment firm Ground1 Ventures. Maliyya is working on launching its product across the Middle East, North American and Asian regions. The company successfully graduated from the first cohort of DIFC FinTech Hive accelerator programme, and is now part of the Cloud10 Scalerator programme based in Bahrain.
Bradford-based Yorkshire Building Society has successfully deployed a new cloud-based bank operating system from nCino. The building society recognised the need for a digital solution that would allow its commercial lending team to improve value for customers through better service and greater efficiency. The nCino platform combines customer relationship management, loan origination, account opening, workflow, enterprise content management, business process management, digital engagement and instant reporting.
International digital P2P remittances conducted via mobile and online platforms will exceed $300 billion globally by 2021, a new study from Juniper has found. The research estimates that total international remittances via formal channels will exceed $600 billion in 2018, meaning that remittances conducted via mobile and online services will account for 36 per cent of total value in 2018 – growing to 44 per cent by the end of 2021.
BBVA has launched its Open Talent FinTech competition for the tenth year, and is seeking to work with a record number of startups to help shape the future of banking. The bank is looking for innovative ideas and solutions to help customers make the most of their money and data, as well as reduce the stress of money management and financial decision-making for consumers. The bank is also seeking out those solutions that will make financial institutions and businesses operate more effectively.
Oman’s Bank Muscat has gone live with a fund and investment management platform from Tata Consultancy Services, providing extensive capabilities for multiple asset classes such as funds, equities, fixed income and money markets. Business growth and the underlying complexity of current systems were the key drivers for Bank Muscat to seek a system upgrade. The TCS BaNCS platform positions the bank for higher growth in the future and operational efficiency.