The German government has launched a consultation into the potential of blockchain technology. Sources told Reuters that staff and industry groups working with startups developing blockchain and distributed ledger technology (DLT) solutions have been invited to submit recommendations from this week onwards.
Banking software-as-as-service provider Mambu has raised €30 million in a funding round led by US-based Bessemer Venture Partners, with participation also coming from existing investors Acton Capital, CommerzVentures, Point Nine Capital and Runa Capital. Mambu, which launched in 2011, has experienced triple-digit growth for four consecutive years as an increasing number of challenger and established banks sign on to implement the platform.
Small business lending platform iwoca has raised £150 million in equity and debt capital, bringing its total funding to £350 million.The Series D round was led by Augmentum Fintech, along with NIBC Bank and existing investors, including Prime Ventures.
First Direct have topped a poll of the best online and mobile banking services, closely followed by Barclays and Metro Bank. The Competition and Markets Authority surveyed approximately 1,000 customers across the UK for each of the 16 largest current account providers, with 16,023 people surveyed in total.
Researchers at IT security firm ESET have warned of the emerging threat of fake banking apps. Research on the malware landscape for Android operating systems found that that cyber criminals have developed mobile banking malware that impersonates legitimate finance apps to obtain victims’ credentials, before stealing money from their bank accounts.
Banks should fear competition from BigTech firms branching out into financial services more than the threat of FinTech challengers, according to the Financial Stability Board (FSB). A report from the international policy body for financial services tasked with assessing the impact of new technology on global financial stability, said the disruption that could stem from the entry of global tech giants could “materially alter the universe of financial services providers”.
Barclaycard Commercial Payments has announced a strategic partnership with SAP UK, which will see Barclaycard integrate its business-to-business (B2B) payment product, Precisionpay, into SAP’s Ariba solutions marketplace. The integration, to become available later this year, will bring procurement and payment together in one place. The first Barclaycard product to launch within Ariba Network will be Precisionpay Bank Transfer.
Regulatory sandboxes are “neither necessary nor sufficient” to promote financial inclusion, and similar results can be achieved through innovation offices and other tools, according to the United Nations Secretary-General’s Special Advocate for Inclusive Finance for Development (UNSGSA). However, the new report also emphasises the potential for FinTech to accelerate a dramatic rise in financial inclusion for the 1.7 billion people worldwide who do not have a bank account.
J.P. Morgan has become the first US bank to create and test a digital coin representing a fiat currency. The JPM Coin is based on blockchain technology, enabling the instantaneous transfer of payments between institutional accounts. Umar Farooq, the bank’s head of digital treasury services and blockchain, explained that JPM Coin is a digital coin representing US Dollars held in designated accounts at JPMorgan Chase, so when one client sends money to another over the blockchain, JPM Coins are transferred and instantaneously redeemed for the equivalent amount, reducing the typical settlement time.
Ant Financial, the financial arm of Chinese corporation Alibaba, has confirmed it is going ahead with the acquisition of London-based currency exchange firm WorldFirst. A spokesperson for Ant Financial said the deal would allow both companies to “better serve small businesses and promote financial inclusion around the world”. There has been no confirmation of the value of the deal, but previous reports suggested it could be in the region of $500 million.
Zopa, the peer-to-peer lending company, has appointed a former Virgin chief executive to the role of chairman, as it prepares to launch a new banking service in the UK. Gordon McCallum, a former chief executive of Virgin’s UK management company, will take over as non-executive chairman from Giles Andrews, who co-founded Zopa.
Rapyd has announced a $40 million Series B financing round led by General Catalyst and Stripe, with participation from Target Global and IGNIA. With this investment, the UK-based payments FinTech will expand its technology platform that supports any local or cross-border commerce use case requiring local payments, such as bank transfers, e-wallets and cash for local acceptance and payouts.
Open Banking is set to becoming a “global phenomenon”, according to Yolt’s chief business officer, who announced the FinTech was launching its first API-management service to businesses across Europe. In an interview with FStech to mark the launch of Yolt for Business, Leon Muis said the product was now ready to be white-labelled and rolled out across European markets, following six months of beta testing.
IBM Watson has powered new artificial intelligence-driven assistants for two of the UK’s largest financial services firms. Nationwide Building Society announced the launch of Arti, a Watson Assistant virtual agent which will work side-by-side the building society’s employees when dealing with customers.
The Cambridge Centre for Alternative Finance (CCAF) has launched its first survey of regulatory technology (RegTech) and supervisory technology (SupTech) firms, in partnership with EY Japan. Fieldwork is now underway for the survey, whose primary aim is to create an evidence-based taxonomy of RegTech firms, then produce benchmarking data against this. CCAF researchers will also publish a report in the first half of 2019, assessing the outlook for the sector.
First Direct has announced plans to expand its partnership with Open Baking FinTech Bud to enable customers to access third party financial services through its mobile banking app. The online and telephone bank first partnered with Bud in 2017 to explore the use of Open Banking services via its Application Programming Interface (API) technology and launch pilot testing of the experimental mobile banking app, called artha.
Starling Bank has raised £60 million in a Series C funding round led by Merian Global Investors, and a further £15 million from an existing seed investor Harald McPike, bringing the total to £75 million. The funding will support increased investment in its retail and small to medium-sized enterprise (SME) banking products in the UK. It will also enable the digital banking platform to accelerate global expansion, starting in Europe.
Mastercard has teamed up with San Francisco-based FinTech Token.io to expand its Open Banking connectivity to European banks. The card payment services giant will use Token’s open Application Programming Interfaces (APIs) and operating system to connect merchants, retailers and other regulated third parties to financial institutions in Europe, for payments transactions and data flows.
Venture capital and private equity investment in the UK FinTech sector rose to a record $3.3 billion in 2018, up 18 per cent year-on-year, according to a report from Innovate Finance. The industry body’s sector analysis revealed that growth private equity investment rose 57 per cent to $1.6 billion, while venture capital dipped to $1.7 billion.
Which? has called on the government to appoint a regulator to protect access to cash, as a combination of bank branch and cashpoint closures risks leaving people struggling to pay for essential goods and services. Despite the increased popularity of digital and card payments, having access to cash is still a necessity for more than 25 million people across the country.
SWIFT is set to open its Know Your Customer platform, The KYC Registry, to corporates. In a first step, from the fourth quarter of 2019, all 2,000 SWIFT-connected corporate groups will be able to join The KYC Registry, and use it to upload, maintain and share their KYC information with their banks.
More than 40 per cent of banking customers expect to be able to access so-called ‘instant banking’ services as digital banking challengers drive changing consumer expectations. A Censuswide survey of 2,005 consumers for digital banking firm Five Degrees showed that consumer satisfaction with account set up and onboarding was declining among traditional banking customers, with just 37 per cent reporting that their bank offers instant set up.
More than three quarters of banking incumbents (80 per cent) identify digital challengers as a threat to their business, with almost one third (30 per cent) expecting them be the most disruptive force in the industry in the coming year, according to a new study.The survey of banking professionals, commissioned by payments software and card firm Fraedom, also found that other trends sets to disrupt the traditional banking landscape over the next 12 months are digitalisation (36 per cent) and the consumerisation of technology (36 per cent) as banking apps begin to integrate with new technologies such as wearables.
Jumio, an artificial intelligence (AI) driven digital identity startup is launching a video selfie-enabled authentication tool for banks and other businesses. Jumio Authentication allows customers to record a video of themselves to prove they are the account holder and verify high-risk transactions, restore forgotten passwords and unlock rental cars, in a secure method that replaces manual passwords and guards against online fraud.
A panel of experts at the London Blockchain Week conference took aim at regulation yesterday, with one calling the authorities’ understanding of the emerging technology ‘lamentable’. Jonny Fry, chief executive of sector advisory firm Team Blockchain, noted that at industry events he’s attended in other countries, delegates have told him how lucky he is to be regulated by the Financial Conduct Authority (FCA) – “a regulator that actually listens to industry”.
Lloyds Bank has said customers are now able to access their online banking after hundreds reported problems accessing the service throughout the day.The UK’s largest lender said some of its 60 million customers had faced “intermittent issues” trying to log onto their accounts online, with the problems beginning at around 11am. Mobile banking apps were unaffected by the glitch.
Challenger bank Monzo has opened the waiting list for its first business account, designed for small and medium-sized enterprises (SMEs) and sole traders.It will be made available to the first 100 applicants as part of beta testing of its features, with roll-out of the full service envisaged by the end of 2019.
Digital insurance platform CoverHound has raised a $58 million Series D funding round, led by specialist insurer Hiscox, with additional investors including insurers Chubb, Aflac Ventures and Japan-based MS&AD. The latest investment brings the total capital raised since its launch in early 2010 to over $112 million.
Just 51 per cent of UK businesses leaders believe their organisation is well-placed to combat a cyber attack on their systems, while 13 per cent admit that their strategy is poor. A Consumer Intelligence survey of 555 senior executives and managers, commissioned by commercial insurance governance firm Mactavish, also found that 43 per cent said their firm had suffered at least one cyber attack in the last two years, while 30 per cent worried their cyber security strategy was average compared to the best protected businesses.
OakNorth has secured a $440 million investment from the SoftBank Vision Fund and the Clermont Group. This round takes OakNorth’s total primary and secondary funding to over $1 billion, more than any other FinTech in Europe, according to the company. This financing will be used to launch its lending operations in the US, providing North American lenders with the capability to expand business lending opportunities and accelerate their business lending.
Visa has ramped up its bidding war with Mastercard by offering around £247 million to takeover payment company Earthport. The move to outbid its payments rival for the company comes after Mastercard’s subsidiary Bidco dramatically stepped in to gazump Visa’s bid with a £233 million cash offer late last month, prompting Earthport’s directors to call off a shareholder meeting scheduled to discuss Visa’s offer.
The European Central Bank (ECB) is weighing up the prospect of linking national card schemes to instant payment rails, effectively mounting a challenge to the dominance of Visa and Mastercard in the payments market. In a speech to the American European Community Association in Brussels yesterday, Yves Mersch, an ECB board member, outlined the idea for a single Euro payment area (SEPA) arrangement for cards, which has been mooted as a way of injecting competition into a payments market where the so-called ‘Visa/Mastercard duopoly’ conducts more than 80 per cent of all EU card transactions.
Robotic process automation (RPA) firm Blue Prism has integrated with Oracle to help automate the reporting of financial crimes and compliance processes in financial institutions.
The Merseyside-based business announced the tie up with Oracle's Financial Services Global Business Unit to build solutions that enable organisations to investigate and report financial crimes and suspicious activities.
Financial services firms are looking to emerging technologies at a higher rate than organisations in other sectors, with artificial intelligence (36 per cent) and blockchain (24 per cent) are highlighted as the industry’s top priorities. A survey commissioned by Canonical and carried out by 451 Research - with a sample size ranging from 750 to 1,100 across EMEA and North America - found that adopting emerging technologies often leads to increased complexity of IT environments.
Tink has announced an investment round of €56 million, led by Insight Venture Partners. The Swedish personal financial management startup plans to use the funding to push its platform into more European markets via the second Payment Services Directive (PSD2) or Open Banking changes.
Lloyds Banking Group has launched an Open Banking feature allowing customers to sync their financial data from current accounts at different banks within their mobile banking app. The functionality, available to users of the Lloyds Bank and Halifax apps, will present all of their current account balances and transactions in real-time with a single login.
European savings marketplace Raisin has closed a $114 million Series D funding round, with plans to spend it on strategic acquisitions and further international expansion. Existing investors Index Ventures, PayPal, Ribbit Capital and Thrive Ventures all participated in the round, which brought the total raised by the German startup to $200 million since launch in 2012.
The Labour Party has called for a state regulator to fix the “distorted” and dystopian digital market dominated by social media and tech giants which it says are at risk of subverting democracy and causing serious social harm. In a speech in London today, Labour’s deputy leader Tom Watson - who is also shadow secretary of state for digital culture, media and sport - will set out his party’s proposals for a new statutory regulator with powers to prevent market abuse and break up “monopolistic” technology companies which have a stranglehold over the content viewed by billions online.
Two thirds of company leadership bypass their own IT departments when buying new technologies for digital transformation, according to a new survey from the Economist Intelligence Unit (EIU). A study of 303 senior executives from private and public sector organisations across North America, Europe, Asia-Pacific and Latin America, produced by the EIU for software firm BMC, also found that despite the sidestepping of IT departments for purchasing decisions, 43 per cent would still hold them accountable if digital transformation initiatives were to go wrong.
Revolut is partnering with WeWork to offer business customers three month of free hotdesking space, pointing towards the growth of lifestyle services as part of the FinTech’s product offering. Announcing the tie up, Revolut said it had signed over 80,000 businesses to its account services since its launch in June 2017 and that it was planning to launch an end-to-end acquiring solution for businesses in 2019.
Facebook has hired a team of blockchain experts from London startup Chainspace, prompting renewed speculation that the social media giant is drawing up plans for a blockchain-based payments technology. According to the news site Cheddar, the so-called ‘acqui-hire’ of four of the five founding members of Chainspace is the next stage in the development of Facebook’s blockchain unit, led by former PayPal president David Marcus.
FinTech firm Anna has raised £8.5 million from Kinetik to further develop its financial admin app and business account for small businesses. Anna, which stands for ‘absolutely no nonsense admin’, claims to have built a user base of 3,500 customers since launching the app in September last year. It combines a current account, debit card and digital assistant that helps with things like sending and chasing invoices.
FinTech and blockchain startups led the field in attracting investment in 2018, according to a survey which also showed that the overall amount of equity poured into the UK’s startups slowed by 19 per cent last year to £7 billion. A report on equity investment conducted by Beauhurst, a data provider, found that overall investment in startups and small and medium-sized enterprises (SMEs) was down to £7 billion from £8.6 billion in 2017, while the total number of deals dropped to 1,572 from 1,744 in 2017. The average size of investment also fell by 15 per cent across the boards.
A new collaborative project that will support startups and small to medium-sized enterprises (SMEs) in using blockchain technologies has been awarded €5 million funding from the European Union. Blockstart unites the University of Surrey with SETsquared Surrey, and partners across Europe, to drive small business innovation in the areas of health, logistics and agrifood.
Payments technology firm SafeCharge has launched Identity Manager, an automated digital identity validation solution. With identity verification being one of the thorniest challenges for modern online businesses, the product aims to streamline complex background checks in a fast and cost-effective manner.
The Isle of Man has announced the formation of a Blockchain Office and the launch of an Isle of Man Sandbox. These initiatives form part of a new commitment from the self-governing British dependency to become an international hub for blockchain businesses. The island’s authorities stated that they will not regulate blockchain in isolation, giving businesses the flexibility to best use this emerging and transformative technology.
Over 59,000 data breach notifications have been reported across the European Economic Area by public and private organisations since the General Data Protection Regulation (GDPR) came into force last May 2018, according to DLA Piper. The Netherlands, Germany and the UK topped the table in the report, with approximately 15,400, 12,600, and 10,600 reported breaches respectively. The lowest numbers of reported breaches were made in Liechtenstein, Iceland and Cyprus, with just 15, 25 and 35 reported breaches respectively.
An overwhelming majority (90 per cent) of private equity firms believe that artificial intelligence (AI) is the technology most likely to disrupt their industry in the coming years.A study of private equity professionals’ attitudes to technology for client services firm Intertrust found that more than a third (37 per cent) of respondents thought new technologies such as AI and blockchain were already being adopted in the industry and would become more widespread in the next five years.
Curve, a FinTech targeting the Millennial generation, has launched a metal smart card which allows users to combine all their credit and debit cards on a single card.The London-based startup, which began offering its consolidated card and app service last year, said that its new Metal card will allow users to access spending abroad with zero currency conversion fees and a range of cashback and rewards at premium retailers, including Harrods and Selfridges.
Open Banking FinTech Bud has secured more than $20 million of Series A funding in a round co-led by major banks, including HSBC, Goldman Sachs and ANZ. The London-based startup uses Application Programming Interfaces (APIs) to combine a consumer’s financial data from a number of sources and artificial intelligence (AI)-driven automation to enable greater control over personal finances.
Banking customers are increasingly opening multiple accounts, particularly the younger generations, with up to a third of Millennials and Genration Zs having opened at least two new accounts in the past five years. This is according to Crealogix, which commissioned Censuswide in November to interview 2,000 18 to 65 year-olds who currently have a bank account.
TSB was able to put a price on last year’s botched IT migration, reporting pre-tax losses of 105.4 million for 2018. The bank recognised post-migration costs - including customer compensation, additional resources, fraud and foregone income - of £330 million, although this was partially offset by the provisional recovery of £153 million from IT provider Sabis.
Zurich Insurance Group has announced that Chisel AI is the gold winner in the first Zurich Innovation World Championship, for its work to improve processing of unstructured data sources using artificial intelligence technology. Zesty.ai was the silver winner, while LifeNome and Soldier.ly were named shared bronze winners.
Banking Competition Remedies (BCR), the independent body established to implement the £775 million Royal Bank of Scotland (RBS) Alternative Remedies Package, has opened the application window for Pool B of the Capability and Innovation Fund. The fund is designed to support the development of wider competition in the small and medium-sized enterprise (SME) banking markets. The fund comprises of four pools with a total value of £425 million. The process for Pool A and Pool D is currently underway.
Nearly three quarters (72 per cent) of consumers would be prepared to sync their personal finances on their mobile phones, according to Google. The survey of more than 500 mobile users, carried out by Google Consumer Surveys for Webpals Mobile, a customer acquisition company, also found that around a quarter of consumers of all age groups are principally using digital banking services through apps or websites.
Less than half of Britain’s leading High Street banks are offering customers two-factor authentication to secure their online accounts from hacking attempts, according to a Which? investigation. The consumer watchdog partnered with cyber security firm Sure Cloud to carry out an assessment of online security procedures at 12 leading retail banks. It found that only five have adopted a two-factor authentication (2FA) login, which requires a password and further information in order to gain access to a customer’s account.
Less than half (46 per cent) of small and medium-sized enterprises (SMEs) in the UK feel that they have the upper hand in applying the latest technology, according to American Express.A global study of senior executives at 3,000 SMEs conducted by Oxford Economics for American Express also found that more than two thirds (64 per cent) felt threatened by the burden of changes in the regulatory and political landscape, given rising uncertainty over Brexit.
The Global Financial Innovation Network (GFIN), a network of regulatory bodies building a FinTech ‘sandbox’, has begun calling for applications to use its regulatory testbed. Chaired by the UK’s Financial Conduct Authority (FCA), the initial pilot cross-border test follows a consultation paper published last August.
Autonomous vehicle InsurTech firm Avinew has announced $5 million in seed funding, with investment led by Crosscut and additional participation from American Family Ventures, Draper Frontier and RPM Ventures. Through Avinew’s proposed insurance solutions, consumers and fleets who own vehicles equipped with autonomous and semi-autonomous capabilities will have access to insurance that will reward them for using their vehicle’s safety features. Currently, selected vehicles from Tesla, Mercedes, Ford, GM, Nissan, Audi, Volvo and more will be eligible.
HooYu, a FinTech startup specialising in digital identity confirmation, has been enlisted by e-account provider Suits Me to improve access to banking services for temporary and migrant workers. Launched in 2016, Suits Me’s pre-paid debit card services aims to tackle the problem of financial exclusion for workers who lack the credentials to open traditional High Street Bank accounts for their wages and digital payments.
Substandard customer service is costing financial services firms business worth $10 billion a year, as more than one in three (36 per cent) financial institutions lose customers due to issues with onboarding. A study of 250 decision makers in commercial and financial services institutions by Fenergo, a client lifecycle management software provider, also found that capturing and improving data and documentation was proving a challenge across a range of industries, with 31 per cent ranking it as the most significant pain point.
CYBG has worked with Red Hat to expand and standardise its digital banking efforts. The owner of Clydesdale Bank, Yorkshire Bank, B and Virgin Money has united its digital operations on Red Hat’s OpenShift Container Platform to accelerate application development and deliver services to customers more quickly.
Santander has launched an Open Banking-enabled service which allows its customers in Spain to integrate their financial data with savings app Raisin. Under the tie-up, Santander will integrate its Application Programming Interface (API) with Raisin, enabling customers wishing to register for its digital savings app to tap the ‘Santander Connect’ button and securely share their name, date of birth, or contact details with Raisin.
Challenger banks are enticing increasing numbers of customers to switch to their current accounts, according to the latest figures from the Current Account Switch Service (CASS).Third quarter figures showed incumbent Nationwide recording the most gains, with 40,565 switches and 8,883 losses, followed by HSBC with 38,477 switches and losses of 22,047.
SWIFT has announced a proof of concept (PoC) to trial gpi Link, a gateway to interlink e-commerce and trading platforms, with cross-border payment infrastructure SWIFT gpi. The plans is to connect gpi members to multiple trade platforms, enabling payment initiation, end-to-end payment tracking, payer authentication and credit confirmation. The gateway will enable the continuous monitoring and control of payment flows and the subsequent movement of goods by those trade platforms.
Mimiro, an artificial intelligence (AI) anti-financial crime startup, has raised $30 million to fund the expansion of its machine learning platform aimed at tackling terrorist funding, money laundering and fraud. The Series B funding round for Mimiro - formerly known as ComplyAdvantage - was led by Index Ventures, a London and San Francisco-based venture capital firm, joined in the round by existing investor Balderton Capital.
FinTechs raised a record $39.57 billion from investors globally in 2018, up 120 per cent from the previous year, according to CB Insights. Funding was raised through 1,707 deals - up from 1,480 in 2017 - due in large part to 52 ‘mega-rounds’, or investments larger than $100 million, which were worth $24.88 billion combined.
A global ransomware attack affecting more than 600,000 businesses could inflict up to $193 billion of economic damage worldwide, according to a report which studied a hypothetical cyberattack as part of a risk management model. The report, compiled by a group of leading insurance and risk modelling institutions, including Lloyds of London, Aon and the University of Cambridge, tested the potential impact of a ransomware attack in which malware is sent to a business via an infected phishing email, which is opened by one employee and from there automatically forwarded to all contacts.
Revolut has unveiled plans to build a global licencing team responsible for securing banking, trading and credit licences in new and existing markets, starting with the United Kingdom and the United States. The new team will aim to deliver the entire end-to-end licensing process, from liaison with decision-makers, partners and regulators, through to the execution of specific deliverables required to obtain each licence. This will enable Revolut to move forward with the next phase of its global expansion plans.
Former Virgin Money boss Jayne-Anne Gadhia is reportedly looking to raise millions to fund a new FinTech startup called Snoop that would use Open Banking data to save customers money on their household bills. According to Sky News, Gadhia, who left Virgin Money after it was acquired by CYBG last year, is seeking investors for a £10 million initial raise to get the startup off the ground.
TrueLayer, a provider of Application Programming Interfaces (APIs), is launching a payments-specific API based on the second Payment Services Directive (PSD2). The Payments API, one of the first to be launched in Europe under PSD2 protocols, aims to integrate with client systems to enable seamless and near instantaneous online payments.
First Direct has launched fdpay, a new service letting customers make peer-to-peer payments within social media apps such as WhatsApp and Facebook Messenger. Technology from FinTech firm PayKey lets users tap a payment icon within a conversation and manage a payment without having to open the banking app or login.
Businesses in the UK have hit the pause button on more than £27 billion worth of IT, digital and technology projects as they wait on the outcome of Brexit, according to new research.A survey of 504 business leaders conducted by polling firm Opinium for internet service provider Beaming found that almost a third (31 per cent) of companies in the UK - equivalent to 1.7 million businesses nationwide - have put IT initiatives schedule for 2019 on hold due to Brexit uncertainty.
Featurespace has raised £25 million from a funding round led by venture US venture capital firms Insight Venture Partners and MissionOG. The round also included further funding from existing investors including IP Group, Highland Europe, TTV Capital, Robert Sansom and Invoke Capital.
Digital insurance broker Mylo has raised $28 million in a Series A funding round led by Guggenheim Partners. Guggenheim's long-term investment will help accelerate the startup’s current business strategy, according to a statement. David Embry, Mylo’s chief executive, commented: "Guggenheim's investment will allow us to take Mylo to the next level through new strategic partnerships and innovative product and service offerings that help us reach more customers and offer smarter coverage.”
Mastercard has moved to gazump Visa’s takeover bid for payments business Earthport with a £233 million cash offer. The offer, which comes after Visa made a £198 million bid for Earthport last month, pits two of the world’s payment processing giants in a bidding war. Visa has yet to respond publicly.
Big data is set to shake up the financial services industry, according to a new survey which found that nearly half (45 per cent) of finance professionals regard it as the most influential trend. Onguard, an order-to-cash solutions provider, surveyed 1,004 chief financial officers (CFOs) and staff in related roles, finding that 30 per cent anticipate that analysis of big data - the use of large data sets to suggests trends and patterns in behaviour - will need to become part of their skillset in the near future.
The Treasury Select Committee has launched a new inquiry into the future of the UK’s financial services once the UK has left the EU. The committee will examine what the government’s financial services priorities should be when it negotiates the UK’s future trading relationship with the EU and third countries.
Just over 20 per cent of fines issued by the Information Commissioner’s Office (ICO) between 2015 and 2018 involved insecure payment card data or financial information, according to analysis carried out by Cyberfort Group on all non-marketing related fines. Almost a third of these breaches were down to organisations neglecting simple security procedures, whilst over three quarters were caused by issues at the application layer, often related to out-of-date software, insecure third-party payment systems, or inadequate scanning.
Augmentum Fintech has invested £7.5 million in small business lender iwoca. The venture capital firm, which specialises in backing FinTech challengers, said it was investing in iwoca to help fund the startup’s expansion beyond its core markets of the UK, Germany and Poland.
A quarter of institutional investors believe major listed companies will have to start proactively reporting on their plans and ambitions around blockchain due to investor demand. The Global Blockchain Business Council (GBBC) surveyed 71 institutional investors from around the world over the last two months, finding that 38 per cent anticipate businesses will have to start reporting between three and five years from now, while only 13 per cent think companies will never have to do this.
The Payment Systems Regulator (PSR) has published its final terms of reference for a market review into the supply of card-acquiring services. The review follows concerns that the market may not be working well for merchants and therefore consumers. The regulator published draft terms for this market review in July 2018, with the final terms of reference taking into account feedback the received during the consultation period, which ended in September.
Experian is leveraging Open Banking to give gaming websites better oversight of their users gambling affordability. A total of £5.4 billion was gambled remotely, mostly online, in the UK in the year to March 2018, according to the Gambling Commission. Until now, gaming organisations have been unable to take in to account what people can afford to stake.
Hong Kong FinTech Actelligent is to set up shop in Edinburgh as part of a new inward investment project.In further evidence of the growing popularity of the Scottish capital as a destination for technology firms, Scottish Development International (SDI) said that Actelligent’s arrival marks a milestone for its efforts to encourage Hong Kong-based firms to relocate to the city.
Leadership teams in financial services organisations “do not appreciate the potential impact of technology disruption” according to more than half (52 per cent) of decision-makers surveyed by Vuealta. Research conducted through Censuswide among 500 senior financial services staff across the US and UK - 250 in each - found that cyber security (42 per cent) was the biggest challenge in the next five years. This was followed by political changes (39 per cent), regulation and compliance (36 per cent), data management and privacy (31 per cent) and uncertainty in the market (20 per cent).
IBM has posted its first annual revenue growth since 2011, as the company’s cloud, software and services growth strategy begins to bear fruit. Shares in the US technology services giant rose seven per cent after its fourth quarter earnings estimates were announced, stating it was on track to post above expectations full-year profits.
Companies that operate free-to-use cash machines in rural communities are to receive a cash injection to help slow the decline of ATMs as online banking takes hold. Under the funding plan run by LINK, the UK’s main cash machine network, businesses offering free ATM services at eligible machines will received a “super premium” of up to £2.75 every time a customer withdraws cash.
Santander has announced plans to close 140 branches in response to more and more customers using online services. The number of transactions carried out via Santander branches has fallen by 23 per cent over the past three years, while transactions via digital channels have grown by 99 per cent over the same period.
Business lending platform Growth Street has raised £7.5 million in a scale-up investment round led by the Merian Chrysalis Investment Company. Merian joins individual investors including Rob Rankin, former co-head of corporate banking and securities at Deutsche Bank, and Peter Brodnicki, chief executive of the Mortgage Advice Bureau.
The Financial Conduct Authority (FCA) is consulting on guidance which will set out the cryptoasset activities it regulates. This is aimed at helping firms understand whether their cryptoasset activities fall under FCA regulation and whether they need to be authorised and have appropriate consumer safeguards in place.
Goldman Sachs has invested in digital wealth manager Nutmeg, as part of a £45 million funding round. The investment round also featured existing investor Hong Kong-based financial adviser Convoy, which increased its stake in the Nutmeg in advance of planned expansion into international markets, including Asia, in 2019.
Automated payments hit a record high in 2018, with 6.4 billion transactions processed at a total value of £5 million, according to Pay.UK.The retail payments authority, which is in charge of Bacs Payment Schemes and Faster Payments, stated that in August 2018 alone 580 million payments were processed, surpassing the previous high of 573 million set in December 2015.
French insurance group AXA’s venture capital arm AXA Venture Partners (AVP) has raised $150 million for a second iteration of its FinTech-focused Early Stage Fund. The first Early Stage Fund, a $110 million vehicle raised 2015, has now been fully deployed, with AVP stating that the second launch confirms its ambition and commitment to early stage venture investing.
The European Commission (EC) has fined Mastercard €570 million for limiting the possibility for merchants to benefit from better conditions offered by banks established elsewhere in the Single Market, in breach of EU antitrust rules. Mastercard is the second largest card scheme in the European Economic Area (EEA) in terms of consumer card issuing and value of transactions.
EU-wide regulations, including the second payments services directive (PSD2) and General Data Protection Regulation (GDPR) are reshaping the way European Banks run their operations and communicate with their customers, according to the Economist Intelligence Unit.Its survey of 400 banking executives carried out for banking software firm Temenos found that PSD2, the precursor to Open Banking, and GDPR, which governs data protection, have driven 56 per cent of European lenders to respond to changing customer behaviour and demands.
Zurich has partnered with London-based travel startup Pluto to offer “travel insurance for people who don’t like insurance”. The insurance giant will provide underwriting expertise and claims management capacity to the new mobile-focused offering which aims to give Millennials a quote in around a minute, or around three minutes when a customer builds their own policy.
ING Bank has signed a five-year deal with enterprise software firm R3, entitling the bank to an unlimited number of licenses for R3’s commercial blockchain platform, Corda Enterprise. The deal will allow ING to roll out access to Corda Enterprise throughout the bank globally and deploy production-ready CorDapps across a range of business areas. CorDapps cover a wide variety of financial services activity including trade finance, identity, insurance and capital markets.
Technology has cut the time required for the due diligence process for 64 per cent of merger and acquisition (M&A) practitioners. Due diligence now takes less than three months - from sourcing to deal completion - for a single successful transaction, according to a survey of 539 M&A professionals from Europe, Africa and the Middle East (EMEA) by Merrill Corporation.
The real world applications of Open Banking are beginning to unfold and should be “commonplace” by the end of 2019, according to the regulatory initiative’s policy chief. In a blog post reflecting on the progress made in developing and integrating Open Banking applications throughout the course of 2018, Alan Ainsworth, head of policy at the Open Banking Implementation Entity (OBIE), explained that he expects uptake of the financial data sharing protocol to grow rapidly once the third version of the Open Banking infrastructure is rolled out by the spring of 2019.
The Dutch authorities have called for a national licensing regime for crypto exchange platforms and crypto wallet providers to ensure more effective prevention of money laundering and terrorist financing. A joint statement from De Nederlandsche Bank (DNB) and the Authority for the Financial Markets (AFM) said that the European regulatory framework for corporate funding must be amended to enable blockchain-based development of small-scale corporate funding.
Smart card wallet producer Tangem has raised $15 million from SBI Crypto Investment for a new breakthrough in mass adoption of blockchain technology. The Swiss startup plans to use the investment to accelerate deployment of its ‘smart banknote’ technology in other industries where the secure storage and circulation of blockchain assets have the highest potential.
Startup lender MarketInvoice has raised £26 million in a Series-B funding round led by Barclays and Santander InnoVentures, with significant participation from European venture fund and existing investor Northzone. Technology fund Viola Credit, which also participated in the equity round, will provide a debt facility of up to £30 million to help scale the MarketInvoice business loans solution that sits alongside its core invoice finance solutions.
Digital challenger Tandem Bank claims to have surpassed the milestone of 500,000 customers.The London-based FinTech, which last year secured a banking licence after the purchase of Harrods Bank, this week also raised the prospect of a flotation within the next five years.
The majority of cyber insurance policies on the market are marred by “significant flaws” which could result in firms missing out on compensation if they fall victim to a data breach or hacking attempt, according to a new study. Research conducted by insurance governance firm Mactavish reviewed the cover provided by 30 major cyber insurance policies in the UK and found that as the market is in its infancy, very few claims had been made to date.
RegTech startup Theta Lake has secured $5 million through its latest seed funding round, led by Neotribe Ventures. Founded in 2017, the US-based business provides artificial intelligence-powered products designed to detect regulatory risks, compliance workflow and retention for video marketing, video calls and audio calls.
US payments firm Square is making further inroads into the banking market with the launch of a debit card service for small businesses. Launching the Square Card in the US yesterday, the firm - which until now has been known for its mobile point of sale (MPoS) devices - said the Mastercard service would help businesses manage their cash flow by eliminating the time between making a sale and having the funds available to spend.
NatWest is to offer Esme Loans, its digital lending platform for small to medium-sized enterprises (SMEs) and scale-up businesses, directly to existing SME business customers as part of the mainstream customer proposition. Launched as a pilot in early 2017, Esme Loans offers SMEs and sole traders a simplified, rapid and paperless end-to-end process with rates for businesses looking to borrow between £10,000 and £150,000.
One year after the second payment services directive (PSD2) took effect, startups offering Open Banking solutions dominate the 20 innovative technology companies joining the FinTech Innovation Lab London. The accelerator launched by Accenture, banks and venture capital companies in 2012, has begun its latest three-month programme, which is set to conclude on 28 March. Startups involved will be partnered with executives from banks and insurers to develop their technologies and business models.
Automated banking technology firm Encompass is partnering with data and analytics firm Bisnode in a deal which aims to expand its customer on boarding services to banks and financial institutions in the Nordic region. Announcing the strategic partnership, Encompass Corporation, which uses artificial intelligence to automate Know Your Customer (KYC) solutions, said it would benefit from Bisnode’s comprehensive data coverage across its 130,000 customers in region, including the major Nordic banks.
US FinTech giant Fiserv is to buy payments provider First Data Corp in a $22 billion all-stock deal, marking the biggest acquisition of a digital payments firm to date. In a statement Fiserv said the combined company would be able to offer end-to-end services to financial clients including new methods of handling digital and physical payments.
Tandem Bank has revealed plans for a float on the stock market within the next five years, as funding and growth opportunities for the FinTech challenger ramp up. The company, which offers a mobile-controlled credit card, last year obtained a banking licence after the purchase of Harrods Bank.
Korea’s Financial Services Commission (FSC) has outlined its priorities for FinTech, including a new regulatory sandbox and removal of investment restrictions on startups. At a meeting with FinTech entrepreneurs and investors, FSC chairman Choi JongKu said 2019 would see a step forward, as the groundwork for regulatory, budgetary and institutional support has been laid down.
Jaja Finance, a FinTech startup aiming to take on Tandem with a mobile-only credit card product, has raised a total of £5 million to fund the launch of its card. Founded by Norwegian entrepreneurs Kyrre Riksen and Per Elvebakk, the company confirmed in December that it had closed a crowdfunding round on Seedrs with a total of £4.89 million from more than 1,000 backers – breaking through its £3 million target.
SWIFT has published a standard for ‘Pay Later’ Application Programming Interfaces (APIs), moving the industry closer to adoption of a new consumer payment model. Pay Later offers customers the ability to use traditional bank loan financing to pay for goods purchased online. Customers are provided with available loans from their banks; they can then select and initiate a loan, knowing that the funds can immediately be credited to the merchants and items dispatched.
Hampshire Trust Bank (HTB) has selected SnapLogic’s Intelligent Integration Platform to help build its digital proposition. The platform uses machine learning technology to improve the accuracy and speed of data-driven decision making, automating and standardising the many integration requirements of the bank. This technology will enable HTB to roll out digital initiatives faster and will provide self-service access to data for real-time analytics to scale its overall Application Programming Interface (API) architecture.
The Canadian Department of Finance has released a consultation paper to consider the merits of open banking. This follows the appointment of the Advisory Committee on Open Banking in September 2018.
NICE Actimize is launching a financial crime enterprise consulting and advisory practice (eCAP). Leveraging global experience in financial crime risk management, the new practice will work with clients to evaluate all aspects of their financial crime programs, with advisors identifying inefficiencies and providing guidance to help reduce costs and improve the effectiveness.
If you’re a fintech founder or developer, where should you be focusing your energies?
AVORA has raised £5.1 million in a Series A funding round led by Albion VC and existing investor Crane. The machine learning-powered enterprise analytics platform also saw several previous backers reinvest, including former Salesforce chairman Steve Garnett and former Sage Group chief executive Stephen Kelly.
HSBC has revealed it settled more than three million foreign exchange (FX) transactions and made more than 150,000 payments worth $250 billion using distributed ledger technology (DLT). The bank’s solution, called HSBC FX Everywhere, has been used for the past year to orchestrate payments across internal balance sheets.
Spending by financial services companies on improving customer interfaces may be coming at the expense of investment in crucial back office IT systems, according to Pinsent Masons. The law firm found that just two per cent of those firms it surveyed have prioritised investment in back office technology over the last three years, whilst 77 per cent have prioritised investment in enhancing customer experience.
Tide haspartnered with ClearBank to bolster the challenger banking duo’s chances in winning a slice of the 775 million RBS Alternative Remedies Package. With Tide’s support, ClearBank has applied for a grant from Pool A of the Capability and Innovation Fund. The bid blends ClearBank’s payments infrastructure and Tide’s digital banking platform, with the aim of offering small and medium-sized enterprises (SMEs) a genuine alternative to the High Street banks.
Cloud services and artificial intelligence are the most requested technological innovations by UK professionals, at 35 per cent each, according to new research. The Knowledge Academy analysed the latest findings from business software and services firm Advanced, which surveyed over 1,000 UK employees in professional occupations to discover the technology they would most like to see in their daily working life.
Yesterday marked the first anniversary since the implementation of Open Banking in the UK, with industry stakeholders lamenting a lack of consumer understanding and limited progress in terms of new products and services.
Icelandic banking technology firm Meniga has acquired Wrapp, a Swedish rewards platform, in a deal aimed at rivalling Google and Facebook in the digital advertising space. The deal was done for an undisclosed sum, with a view to combining their technologies and operations, according to a statement. Currently headquartered in London, Meniga has raised $34 million in funding since it was founded in Iceland in 2009.
The number of FinTech startups in Scotland has tripled to over eighty in the last 12 months, according to FinTech Scotland. The announcement comes on the first anniversary since the formation of the body – a joint initiative by financial services firms, the University of Edinburgh and Scottish Government.
Professional services giant Aon has become the latest industry partner for SBC’s InsurTech CoLab (CoLab), a theme-based innovation program for mature markets. Aon will be focusing on CoLab’s commercial and specialty lines sector, which will look at specific problems in key customer segments ranging from small to medium-sized enterprises (SMEs) to large industrial insurance.
German challenger bank N26 has surged into the lead of Europe’s FinTech startup league after it closed a $300 million funding round that valued the company at $2.7 billion. The Series D funding round, which saw leading venture capital backers Insight Venture Partners and Singapore’s sovereign wealth fund GIC join as investors, makes N26 Europe’s most valuable non-listed FinTech, ahead of rival “unicorns” Revolut ($1.7bn) and Klarna, the Swedish payments firm ($2.5 bn).
The financial sector is forking out more than £1.34 billion annually to combat the growing threat of data breaches and system outages. Research from AVORD has revealed that 95 per cent of businesses in the financial sector have seen an increase in the number of data breaches over the last five years. And as a result of the growing threat to mobile devices, more than half (52 per cent) are now investing more in identifying and protecting against app-based threats.
TSB is investing £200,000 in a partnership with the Metropolitan Police to boost its cybersecurity efforts, after it revealed it had been one of several banks to be targeted by “complex” and “sophisticated” cyber attacks last year.Challenger bank TSB was hit by a series of IT meltdowns starting in April last year, leaving thousands customers unable to access their mobile and online banking services and leading to the exit of chief executive Paul Pester.
Almost 40 per cent of bank customers preferred to do their banking via apps in 2018, up from 30 per cent in 2017, according to data from Smart Money People. The financial services review website and research company’s analysis showed that customer preference for digital channels - mobile app and online combined - has risen to 78 per cent, up from 75 per cent in 2017.
The EU’s banking watchdog has said regulation may be needed to ensure a Europe-wide approach to regulation of cryptocurrencies and digital assets. In a report published yesterday, the European Banking Authority (EBA) said a year-long investigation into the regulation of cryptoassets such as Bitcoin and Ethereum found that there may be a need to “level the playing field” after finding increasing divergence in different countries’ approach to regulation.
Around 70 per cent of central banks are researching the potential of issuing a central bank digital currencies (CBDC) to complement or replace traditional money, according to a report by the Bank for International Settlements (BIS).The Swiss institution for the 63 central banks worldwide said the survey showed that central banks are “proceeding with caution” towards the idea of centralised digital currency for general use - as opposed to wholesale use - but most institutions remain at a conceptual stage of development.
Bluestone Mortgages has launched the pilot phase of its Open Banking solution, becoming the first specialist mortgage lender in the UK to incorporate the service as part of its core underwriting process. The pilot will be rolled out to a select group of advisors on Bluestone’s panel, with a national launch expected to follow shortly thereafter.
The Investment Association (IA) has opened applications for the second cohort of Velocity, its FinTech accelerator and innovation hub for the asset management industry. Since the launch of Velocity last July, and the creation of the IA’s FinTech membership category, the trade body has seen more than 70 FinTech firms join its ranks in the past six months.
London led the way for tech investment and startup IPOs yet again in 2018, attracting £1.8 billion in venture capital (VC) – almost double the amount raised by second placed Berlin, according to an annual survey of Europe’s FinTech and startup scene. Data compiled by PitchBook for London & Partner showed that the UK capital attracted 72 per cent of the total £2.49 billion raised by British tech firms in the last 12 months, with London’s £1.8 billion figure down from the record £2.53 billion raised in 2017.
Two thirds (66 per cent) of financial decision-makers think that technology giants such as Google and Amazon will offer retail banking services in five years in the UK. This is according to research commissioned by Pepper - the mobile bank created by Israeli bank Leumi - which involved in-depth telephone interviews with 50 UK c-suite and director level decision-makers in retail banking.
Robotic Process Automation (RPA) revenues in banking will reach $1.2 billion by 2023, according to analysis from Juniper Research. With an estimated revenue above $200 million in 2018, this represents a growth of over 400 per cent over the period. The research firm’s report suggested that when combined with artificial intelligence (AI), RPA can considerably lower compliance costs, raise productivity, and improve customer experience.
More than three quarters (84 per cent) of banking professionals fear the regulatory and liability issues that could arise as artificial intelligence (AI) becomes increasingly mainstream in the financial services industry. A survey of more than 600 banking professionals carried out by MoneyLIVE also found that three quarters believe that banks will struggle to recruit staff with the necessary expertise as use of AI usage intensifies.
Bó has invested £2 million in the digital current account Loot. This follows an initial investment of £3 million in July 2018 and takes the total shareholding to around 25 per cent. Loot launched in 2014 to help students and young people better manage their finances and now has more than 175,000 sign-ups. All verified customers are provided with a pre-paid debit card and offered personal insights into spending patterns, allowing users to set daily or weekly budgets or even put aside money for larger goals.
The lack of standard terminology in cyber insurance policies causes confusion for brokers and customers, and is ultimately stifling market growth, according to cyber insurance comparison engine Cyber|Decider. While demand for cyber insurance is growing, there is much confusion about the policies available and the terms of cover because insurers fail to use standard wordings. For instance, what one firm calls ‘network expenditure’, another terms ‘data restoration costs’, while in some policies the definition of 'computer' also includes ‘industrial control systems’ and in others it does not.
Starling Bank is to launch a credit card service and a new euro account for UK customers in 2019. In a new year’s message, the challenger bank’s chief executive Anne Boden also said she expects the lender to hit one million customers in the course of the next 12 months.
Seedrs, the online equity crowdfunding platform, saw 60 per cent growth in startup investment over the course of 2018, with a record £195 million capital funnelled into new ventures. The digital investment platform, backed by fund manager Neil Woodford, recorded 186 successful pitches from 12 countries across Europe, including 28 raises in excess of £1 million.
Chetwood Financial, a digital lender specialising in ‘dynamic’ loans, has secured a full banking licence and is now using tech to reward consumers for good financial behaviour. Following its recognition from the Prudential Regulation Authority last year, the Wrexham-based challenger bank is extending its range of digital financial products through the roll-out of the LiveLend Reward Loan.
A FinTech startup is using the combative slogan ‘Move over, Monzo’ to promote its pre-paid debit card app. Viola Black is targeting the hype around challenger bank Monzo in an advertising campaign posted on billboards and buses in London, which declares: 'Move over Monzo. Download Viola Black: the new modern money management tool.’
The shortlist for the 19th annual FStech Awards has been announced, with FinTech startups coming up against established banks for the top prizes. Celebrating excellence and innovation within financial technology, this year’s ceremony will be held on 21 March at the London Marriot Hotel in Grosvenor Square.
Customers tend to “shy away from” the term robo-advisor when it comes to accessing online wealth management services, according to HSBC UK’s head of wealth and advice. In an interview with FStech to mark the launch of HSBC’s MyInvestment service, James Hewitson spoke of the need to ensure that customers feel secure and in control when using financial services powered by new technologies such as robotics, artificial intelligence (AI) and machine learning.
Goode Intelligence forecasts that over $1.67 trillion of mobile biometric payments will be made annually by 2023 and over $8.7 billion revenue will be generated for suppliers of mobile biometric technology by 2023. Mobile biometrics have transformed how financial firms identify and authenticate customers, enabling them to dispense with inconvenient technologies that have been shoehorned to work on smart mobile devices.
Spanish banking group BBVA has claimed to have reached the milestone of having half of its customers now using digital channels. In November, 26.4 million digital customers interacted with the bank through mobile devices, PCs and tablets, up from 22.2 million a year earlier. This means the number of people using digital channels as a way to understand their finances and secure new products and services has grown by around 19 per cent year-on-year.
Elavon has become the first dedicated payments provider and e-commerce business to directly connect to the Faster Payments service. The global payments provider and subsidiary of US institution Bancorp is the latest of a new generation of payment services providers (PSPs), challenger banks and FinTechs connecting to the UK payment system.
Alibaba financial services arm Ant Financial is in advanced talks to buy UK currency exchange startup WorldFirst. According to Sky News, the deal is worth around $500 million and is the result of several months of discussions.
Visa is set to pay £198 million for UK payments provider Earthport. The London-headquartered FinTech said the proposal last week of 30 pence per share was “fair and reasonable” and recommended its shareholders accept the all-cash offer.
More than a quarter of UK consumers would rather make donations via their mobile phones, over traditional methods such as cash and cheques, as the instant payments trend enters the world of charitable giving. After nearly 70 per cent of UK charities reported a fall in cash donations, Barclay’s mobile payments app Pingit polled 2,061 people and found that 28 per cent would now prefer to donate via charity or banking apps on their mobile or tablet devices.
More than half of UK consumers say High Street banks aren’t doing enough to provide customers with a personalised, digital experience, according to a new survey. A study of 2,500 adults by Kantar on behalf of software company Liferay, found that while 54 per cent say their expectations of digital experiences have risen in the past few years, just 12 per cent of these say they have found their expectations have been met all the time.
It’s been a busy year for financial services technology, but what were our most read stories over the last 12 months? Read on to find out which topics and trends proved most popular across the website.
FinTech services provider Avaloq has launched a new series of core banking technology solutions to help financial institutions adopt Open Banking as they gear up to comply with the second Payment Services Directive (PSD2) by the September 2019 deadline.Financial services firms operating in EU countries have until then to ensure their businesses are fully compliant with legislation and are ready to offer Application Programming Interfaces (APIs) to third-part testing after the legislation initially came into force in January 2018.
The UK is at risk of becoming complacent in its fight against financial crime, according to new research. Information solutions provider LexisNexis Risk Solutions interviewed money laundering representatives from some of the UK’s major banks, including RBS and Barclays, as well as the National Crime Agency and former regulators.
Mastercard is partnering with Elavon, a digital payments provider, to enable merchants to offer their customers the option of paying for goods and services directly through their banking app.The ‘Pay by Bank’ app, which will be offered to UK merchants from 2019, aims to improve the convenience and security of digital payments for customers.
Digital Asset has announced that Blythe Masters, the company’s chief executive since 2015, has requested to step down for personal reasons. AG Gangadhar, who joined the distributed ledger technology (DLT) company’s board of directors in April, has been appointed chairman and will serve as the acting chief executive until a permanent replacement is named. Masters will remain involved in the company as a board member, strategic advisor and shareholder.
The Board of Banking Competition Remedies (BCR) has announced the 11 organisations which meet the eligibility criteria for the Incentivised Switching Scheme. BCR is the independent body established to implement the £775 million Royal Bank of Scotland (RBS) State Aid Alternative Remedies Package.
Millions of consumers across the UK face being left behind if the government does not plan properly for an increasingly cashless society, according to an interim report from the Access to Cash Review. The research revealed that despite the increasing use of cards and electronic payments, approximately eight million (17 per cent of the population) people say cash is an economic necessity.
Tech giants could disrupt UK High Street banks’ ability to offer free accounts, according to the Financial Conduct Authority (FCA). The regulator yesterday published the final report into its long-running study of retail banking business models, concluding that new payments services could open the path to global tech giants such as Amazon entering the banking market, Reuters news agency reported.
The Financial Conduct Authority (FCA) has announced proposals to fundamentally reform the way banks charge for overdrafts, which could play into the hands of FinTech challengers. In 2017, firms made over £2.4 billion from overdrafts alone, with around 30 per cent from unarranged overdrafts. More than half of banks’ unarranged overdraft fees came from just 1.5 per cent of customers in 2016, with the FCA stating that people living in deprived areas are more likely to be impacted by these fees and in some cases unarranged overdraft fees can be more than 10 times as high as fees for payday loans.
Finance professionals expect that within the next 10 years, 43 per cent of financial institutions will be transformed into IT businesses. Onguard's FinTech Barometer, a survey of over 1,000 finance professionals, also revealed that 59 per cent are convinced that the way in which we pay will have fundamentally changed within five years.
An overwhelming majority (85 per cent) of financial services professionals predict that demand for RegTech solutions will continue to grow until at least 2020, as the wave of new regulation a decade after the financial crisis shows no sign of abating. Intertrust surveyed over 500 executives covering the asset management, corporate, capital markets and private wealth sectors, finding that 40 per cent said their company struggled with a skill shortage in RegTech and compliance.
Credit provider TotallyMoney has agreed £29 million of funding from Elliott Advisors and existing investors Scottish Equity Partners. The investment will be used to accelerate customer acquisition, build out the technology platform and to provide better credit for UK consumers.
Barclays Bank has recruited Megan Caywood, chief platform officer at challenger bank Starling, as its head of consumer strategy.The High Street bank confirmed that Caywood, who has played a leading role in the roll out of Starling’s mobile-only platform and third party partnerships marketplace, will be joining in the new year.
CivilisedBank has changed its name to Allica ahead of a launch early next year. A statement from the startup explained that the switch reflects its “repositioned digital and relationship offering”, with Allica aiming to be a digital bank for small to medium-sized enterprises (SMEs) which also offers client relationship managers.
US stock trading app Robinhood has rolled back its recently-announced current account after a stern warning from regulators. Launched last week, the Checking & Savings account was due to start mailing out it first debit cards - issued by Sutton Bank - in January. The firm promised users no minimum balance, no monthly, overdraft or foreign transaction fees, with a three per cent interest rate on deposits.
The Swiss Blockchain Federation has welcomed a report published today by the Federal Blockchain/ICO Working Group and has urged authorities to adopt a binding agenda, so that blockchain companies can get legal certainty. The report picks up on several of the points raised in the white paper published by the Blockchain Taskforce - the predecessor to the Swiss Blockchain Federation - in April.
Monobank, Ukraine’s first digital-only bank, has revealed plans to launch a new digital banking app in the UK in 2019. Fuelled by growth on home soil, three of the company’s co-founders - Dima Dubilet, Misha Rogalskiy and Oleg Gorokhovskyi - announced plans to go cross-border.
A quarter of financial services firms struggle to keep up with digital disruption, but just under 40 per cent still feel the trend provides them with new opportunities to grow. This is according to research commissioned by Savoy Stewart and carried out by Futurum, surveying over 1,000 North American and Western European companies ranging from 50 to 50,000 employees.
The head of a cryptocurrency exchange has criticised the The Commodity Futures Trading Commission (CFTC) over its latest regulatory move over virtual currencies. The CFTC released a request for information (RFI) earlier this week, seeking feedback in order to better inform its understanding of the technology, mechanics and markets for virtual currencies beyond Bitcoin – namely Ether and its use on the Ethereum network.
Banking software company Temenos has rounded off its 2018 spending spree by acquiring Avoka, a US-based digital customer onboarding platform, for $245 million. The deal, which is subject to regulatory approvals, follows the £1.4 billion takeover of Fidessa, a UK-based technology supplier, in February this year.
The prime minister’s FinTech ambassador has predicted the “Amazonification” of banking, as global tech giants leverage their personal data dominance to branch out into financial services. In an exclusive interview with FStech on the fringes of the Finastra Universe conference in London this week, Alastair Lukies, the founder of mobile banking firm Monitise, who has served as the UK government’s FinTech ambassador under two prime ministers, said tech giants could use Open Banking to challenge incumbent banks.
Revolut has unveiled plans for full current accounts, consumer lending and commission-free stock trading, following the granting of a European banking licence. Revolut will begin implementing the licence next year, initially focusing on smaller European countries, before eventually passporting the banking licence to key markets including the UK, France, Germany and Poland.
The slower than expected negotiating progress between the United Kingdom and the European Union, and the ongoing uncertainty of the outcome, has positioned Brexit as a top systemic risk concern for 2019. This is according to the latest industry barometer survey from The Depository Trust & Clearing Corporation (DTCC), which revealed that 49 per cent of respondents put Brexit as one of the top five risks for industry in the coming year.
Digital small business lender iwoca has connected to Barclays and HSBC banks under Open Banking. This expands the number of Open Banking connections offered by iwoca to three, including Lloyds Bank, and enables more than 60 per cent of the lender’s customers to take advantage of the new regulations, which allows customers to give verified third-parties access to their bank data via a secure application programming interface (API).
FinTech challengers are poised to eat banks’ lunch if incumbents fail to provide a technologically-driven customer experience, HSBC’s global head of payments has said. Speaking on a panel at the Finastra Universe conference in London, Andrew Pearce said that the greatest threat to the business models of established banks is the risk of disintermediation, as customers increasingly rely on technology companies and apps to carry out their online transactions, thereby losing touch with the banking brands that support them.
Ascent RegTech has formalised an ongoing collaboration with the Financial Conduct Authority (FCA) with the purpose of componentising the FCA Handbook. The plan is to make the well over 10,000 page rulebook easier to understand and use for all financial firms that are subject to it, thereby increasing their ability to comply.
There is a growing tension between data sharing - the basic tenet of Open Banking - and high profile data breaches, as customers grow increasingly aware of and sensitive to data security issues. This is according to a new report from TLT, which surveyed 130 senior decision makers in UK banks, building societies, challenger banks, payment service providers and FinTech firms – including board members, heads of department and transformation programme managers.
Citi has taken a minority stake in Privitar, a UK-based data privacy software firm. Citi’s investment of an undisclosed sum in Privitar, established in 2014, follows $16 million in Series A funding raised in 2017. The financial services group will join existing shareholders Partech, Salesforce Ventures, CME Ventures, Illuminate Financial Management and IQ Capital.
The prospect of a Brexit-driven election and Labour coming into power could impede the progress made by the UK FinTech sector under the current Conservative government. This is according to Ian Anderson, executive chairman at the Cicero Group, chairman of the FinTech Strategy Group and non-executive director at Innovate Finance, who was speaking at the China/UK FinTech Bridge conference today.
An overwhelming majority (80 per cent) of wealth managers are concerned that their firm’s technology not good enough to keep up with the demands of the next generation of investors, according to a new report. A survey of 47 UK investment businesses, and 1,019 investors, by digital financial platform provider InvestCloud, found that 68 per cent of wealth managers said they knew that improvements to their digital technology would be necessary for survival.
The Co-operative Bank is to submit a bid for a share of the £775 million Royal Bank of Scotland Alternative Remedies Fund, targeted at driving competition amongst challenger banks to improve SME lending. The High Street lender is to apply for a share of the package, founded as part of the government’s agreement to bailout the bank during the 2009 financial crisis and the failed divestment of RBS’ Williams & Glyn business. One of the conditions imposed was to reduce its share of the SME banking market, with a view to bringing more challengers and FinTechs into the sector.
Pay.UK’s Faster Payments team has launched the anti-fraud Mule Insights Tactical Solution (MITS), following a successful pilot by participants of the UK’s real-time payment service. The technology, developed by Vocalink, a Mastercard company, enables suspicious payments to be tracked as they move between bank and building society accounts, regardless of whether the payment amount is split between multiple accounts, or those accounts belong to the same or different financial institutions.
Tide has secured one per cent of the UK small to medium-sized enterprise (SME) banking market, two years since it first started operations. According to figures from the Federation of Small Businesses, by the end of 2018, 56,000 of a total of 5.6 million UK SMEs will have chosen Tide as their preferred banking partner, more than doubling its members in the last 12 months.
Three quarters (73 per cent) of senior financial services industry decision-makers predict a big jump in demand for board-level chief technology officers (CTOs) in the sector over the next five years, as the challenge to find senior talent to leverage disruptive technology increases. Administrative services provider Intertrust surveyed over 500 executives covering the asset management, corporate, capital markets and private wealth sectors, finding that 40 per cent believe that by 2023 most firms in their sector will have hired CTOs with a mandate to drive strategic change, particularly by harnessing artificial intelligence (AI), blockchain and robotics.
Squirro has launched a new suite of applications aimed at transforming elements of insurance, from underwriting and submission-handling, to improved lead generation and deeper customer insight. Squirro for Insurance contains three apps - Squirro Commercial Insurance, Squirro Reinsurance and Squirro Commercial Underwriting - which use its Augmented Intelligence platform to leverage siloed structured and unstructured data to improve the submission handling as well as the underwriting process.
The Bank of England (BoE) has turned to automated technology in order to keep up with the growing threat of cyber attacks from rogue states, its heads of technology and infrastructure have told FStech. In an exclusive interview, Neal Semikin, head of technology infrastructure and security, and David Ferguson, a technology management principal, highlighted the critical role of new technologies and automated threat detection as they warned that the BoE is under regular attack from malicious actors and cyber criminals attempting to hack their systems.
Metro Bank has launched international payments for personal and business customers via its app. The new service enables customers to make same day SWIFT and next day SEPA (Single Euro Payments Area) payments in euros, US dollars and sterling to more than 38 countries.
Barclays has chosen Indian technology giant HCL to lead its investment in artificial intelligence (AI) and automated digital workplace systems for 80,000 employees worldwide, as it announced plans to wind down its operations centre in Lithuania.HCL Technologies, headquartered in Noida, India, will also be providing banking mainframe services to Barclays as part of the plan to expand their existing IT infrastructure services deal.
The term Open Banking has become overused in the industry and customers don’t know or care about it, according to Nationwide’s head of transformation. Speaking as part of a panel at the FinTech Connect conference, Matt Perks argued that the problem is not about educating people about the changes which force banks to share personal data, “but developing the compelling products and services that convince them of the value of giving over their data”.
The UK is now the third largest market in Europe for financial app downloads - with a 19 per cent growth since 2017 - yet Brits currently show significant ‘app-athy’ for technology that can help them save and invest. This is according to Wealthify, which revealed that 11.2 million downloaded money management apps remain unused on mobiles and tablets.
Established financial institutions should stop seeing FinTech startups as an “annoying mosquito” circling their business and strike up partnerships with their more nimble digital rivals, according to a panel of experts. Speaking at the FinTech Connect conference yesterday, a group of startup funding experts agreed that the only way for established players to adapt to the pace of digital disruption was to reach out to innovative challengers.
Mobile payments systems provider Ondot Systems has launched a range of digital solutions aimed at enabling the UK and Europe’s largest incumbent banks to compete with and disrupt emerging FinTech challengers. The firm uses a machine learning driven platform to offer control over card usage, digital card issuance, secure online and autonomous payments, and location tracking services to over 4,000 financial institutions worldwide.
R3 has launched Corda Settler, an application built to allow for payment obligations raised on the Corda blockchain platform to be made through any of the world’s payment systems, both traditional and blockchain-based. XRP is the first cryptocurrency to be supported by the Settler, bringing the Corda and XRP ecosystems into closer alignment.
Voice authentication firm Pindrop has closed a $90 million Series D funding round led by Vitruvian Partners. Other new strategic investors include Allegion Ventures, Cross Creek, Dimension Data, Singapore-based EDBI, and Goldman Sachs. Existing investors CapitalG, IVP, Andreessen Horowitz, GV - formerly Google Ventures - and Citi Ventures also invested in the round.
New research from LINE Corporation has revealed that when it comes to using mobile apps to access financial services, people in the UK are more negative than the global average. A survey of 5,000 smartphone users in seven key markets found that only 40 per cent of Brits would be willing to wire money on a mobile app (versus 57 per cent overall), with 53 per cent willing to open a savings account (versus 65 per cent overall) and just 28 per cent willing to make investments (compared to 45 per cent overall).
Digital transformation is driving turmoil among financial services organisations and leaving sensitive data at risk, according to the 2018 Thales Data Threat Report. The security firm’s analysis suggested that the industry has hastily entered the digital transformation era, but this is not balanced with appropriate security measures. Almost two thirds (65 per cent) of financial services firms have now suffered a data breach, with 28 per cent having suffered a breach in the past year.
One in four people under the age of 37 - those in so-called Millennial and Generation Z demographic groups - are using digital-only challenger banks and 14 per cent of UK bank customers across all age groups have at least one mobile-only digital banking provider – with up to a third of under 37s having two or more accounts with challenger banks. This is according to an independent study undertaken by Censuswide on behalf of Crealogix in November, interviewing 2,000 18-65 year olds who currently have a bank account.
Big data giants like Amazon and Alipay pose an “existential” threat to traditional banks, the head of the Bank for International Settlements has said. In an interview with Reuters on the sidelines of an international banking conference, Agustín Carstens said that the volumes of data which tech companies gather on customers potentially gives them an advantage over established retail banks in terms of assessing risk for lending purposes.
Allied Irish Banks (AIB) has adopted Nuance Communications biometrics technology to let customers access their accounts over the phone without using passwords. AIB deployed the Nuance Security Suite within its contact centre, so customers simply speak to verify their identity when calling. Those who opt in for this service are authenticated by saying “My voice is my password” as a unique voiceprint.
IBM Services will be the global preferred implementation partner for UK-based software company Thought Machine’s cloud-native core banking platform, Vault. Thought Machine created Vault to give traditional banks with legacy systems a solution to be able to fight back not only against new players, but to also adapt to meet the new demands of customers and regulators.
The second Payment Service Directive (PSD2) and Open Banking reforms are levelling the playfield for new entrants, with 55 per cent of digital-first challenger banks and 61 per cent of FinTechs feeling more confident that they can compete with existing banks. This is according to research from Cognizant, with also found that incumbent banks seem oblivious to the trend, with only 36 per cent seeing the threats of the new landscape.
Zopa has received its banking licence, making it the world’s first combined peer-to-peer (P2P) lender and digital bank, paving the way for the launch of a new selection of personal finance products. Back in April, the UK FinTech announced a restructure to establish separate boards for the Zopa P2P business, proposed bank and group, with the appointment of two new board chairs and two new independent non-executive directors – Christine Farnish became chair of the P2P board and Peter Herbert chair of the proposed bank.
Nearly a quarter (24 per cent) of consumers would refuse to convert to a completely cashless society and will continue use traditional methods of payment for as long as possible, according to a new study. A survey of 1,000 consumers in the UK, Australia, Brazil and South Africa by foreign exchange firm Travelex also found that the popularity of cashless methods of payments such as credit and debit cards, digital wallets and wearable technology, is highest amongst 36-45 year olds, rather than young Millennials.
Microsoft and Mastercard are partnering for a new digital identity solution which offers internet users the option to dispense with multiple passwords and verify themselves instantly online. The software giant announced it was joining forces with the payments provider to develop a decentralised identity product that will alleviate the burden on individuals when it comes to providing digital or physical proof of identity as part of the online verification process.
Calastone has announced that its entire global network of more than 1,700 financial organisations, across 40 global markets, will be migrated to blockchain in May 2019 via its new Distributed Market Infrastructure (DMI). The global fund transaction network stated that it believes the overall global cost of fund distribution could be reduced by as much as £3.4 billion, achieved through the technological mutualisation of the trading and settlement processes.
Certua has launched its Enterprise Insurance platform, allowing companies to access the full service via Application Programming Interface (API). The FinTech’s offering is designed to allow companies looking to distribute new insurance products to get to market quickly, and to enable insurers and re-insurers to access digital markets by removing technological barriers to entry.
United Nations secretary general António Guterres has launched a global task force charged with recommending strategies to harness the potential of financial technology to advance the Sustainable Development Goals (SDGs). The Task Force on Digital Financing consists of leaders from a range of sectors from both developed and developing countries. It is co-chaired by Maria Ramos, chief executive of the South African Absa Group and Achim Steiner, administrator of the United Nations Development Programme.
Following discussions during the summer, the founders of Insurtech UK held its inaugural meeting this week. The group’s intention is to develop into a formal association in 2019, with an initial five-year mandate. As well as supporting InsurTechs with some of their day-to-day challenges, Insurtech UK will seek to drive forward conversations with government, industry and regulators, as well as working alongside incumbents and established trade associations to address many of the issues facing the UK’s insurance industry.
The European Central Bank (ECB) has launched a pan-European service for settling electronic payments instantly. TARGET instant payment settlement (TIPS) uses central bank money to settle payments individually in less than 10 seconds. TIPS went live this morning, with the first transaction taking place when a client of the Spanish bank, CaixaBank, used TIPS to make an instant payment to a client of the French bank, Natixis.
OpenLegacy has closed a funding round of $30 million, led by Silverhorn Investment Advisors and joined by CommerzVentures, C. Entrepreneurs, Leumi Partners; O.G. Tech Ventures, Prytek-GFS Group and RDC. The microservices-based API integration provider’s chief financial and operations officer Ron Rabinowitz explained that the funding will support worldwide expansion and enables the platform to increase its market share.
A new Open Banking platform, providing consumer bank account data free-of-charge to mortgage finance providers, is set to launch next week. LendingMetrics’ OpenBankVision will allow users access to 90 days of bank statements with no minimum or maximum cap on the number of requests, when it goes live on 3 December.
The Bank of England (BoE) has published the responses to a consultation on the adoption of the ISO 20022 common global messaging standard for payments in the UK, with broad industry support for the plan. The consultation - in conjunction with Pay.UK and the Payment Systems Regulator (PSR) - received over 70 responses from a range of stakeholders, from established banks to FinTechs and corporates, as well as a number of payments industry trade associations.
More than 70 per cent of businesses are planning to transfer their business functions to the cloud, despite rising fears over cybersecurity risks amongst IT professionals. A study of 1,200 senior IT decision makers from across the Europe, Middle East and Africa (EMEA) region, commissioned by data centre provider Equinix, found that 71 per cent were gearing up to shift operations to the cloud in the coming years.
Revolut has been granted a Remittance License by the Monetary Authority of Singapore, as well as Stored Value Facility approval, which will allow the digital-only bank to operate in Singapore. The London-based FinTech is also working with Singapore’s financial regulator to shape the upcoming Payment Service Bill. Meanwhile, in Japan, Revolut has been fully authorised by the Japanese Financial Services Agency (JFSA) under the Fund Transfer License to operate throughout the country.
Challenger payments company MuchBetter has released its ‘bank-in-a-box’ fully managed solution. This enables organisations to launch branded production wallets quickly and easily, letting them take control of users’ payments experience and get to market faster with a compliant and low-cost financial product. The white-labelled payments service is designed to be secure, while offering a frictionless experience for the end-user, letting them make online and offline payments with just their phone and fingerprint.
More than three quarters (77 per cent) of financial services decision-makers think artificial intelligence (AI) will play the biggest role in revolutionising the industry in the next five years, according to new research. A survey of more than 500 financial services executives in the EMEA region for Intertrust, an administrative services provider, revealed that 65 per cent think that so-called disruptive technologies such as AI, blockchain and robotics will have a positive impact on their business operations, particularly in driving back-end efficiencies in areas such as Know Your Customer (KYC) reporting, due diligence and compliance.
Established banking giants are ripping customers off with hidden fees and a lack of transparency, driving Millennials to embrace a new generation of digital banking services, according to N26’s head of international markets. Speaking after the German digital bank launched its current account service in the UK last week, Alexander Weber told FStech that bank fees and account charges were partly to blame for pushing young people towards mobile-only banking, with 1,000 UK customers signing up to N26 every day in the past week.
The Competition and Markets Authority’s (CMA) Phase 2 investigation has provisionally found that Experian’s takeover of ClearScore is likely to result in less intense competition, potentially harming the development of digital personal finance products. The CMA referred the proposed merger between the credit score checking firms for a more in-depth investigation in July, following initial concerns that the deal could have a negative impact on the services provided to customers.
RegTech startup Alyne has raised €3 million in a Series A financing round led by Alstin Capital, with participation from Hannover Digital Investments. The investment bring Alyne’s total funding to a total of €4.2 million and will be used to scale its operations and expand its customer base. The startup already counts among its customers the likes of Barclays, Deloitte, Allianz and Solarisbank.
Over half of customers would not mind if their local bank branch closed, while 56 per cent felt that the level of customer service on personal finance apps is the same as in-person. This is according to research conducted in September by Google Consumer Surveys and Webpals Finance, based on a representative sample of more than 500 US adults.
The Financial Conduct Authority (FCA) sees “no end in sight” to the rapid rise in the number of IT failures and cyber attacks on the financial services sector, the regulator’s head of supervision has warned. In a speech given at Bloomberg’s London headquarters, Megan Butler, executive director of supervision over investment, wholesale and specialists at the regulator warned that she sees “no immediate end in sight” to the disruption caused by inadequate cyber defences.
Businesses in Ohio are now able to pay their taxes in Bitcoin — making it the first US state to officially accept cryptocurrency. Companies that want to take part in the new program visit an official website and register to pay anything from cigarette sales taxes to employee withholding taxes with the virtual currency of their choice.
Mobile bank Atom has partnered with cloud platform Thought Machine for the next stage of its business banking and mortgage lending services. The digital bank has signed a multi-year partnership with the banking software FinTech to put its next generation of personal and business banking products onto the Thought Machine Vault platform.
Monzo has announced a new £20 million crowdfund campaign to back up a Series E funding that has seen it raise £85 million. The raise, which will be run on Crowdcube’s funding platform, is set to be the largest crowdfunding offer to date for a UK FinTech. Customers will be able to invest up to £2,000 directly through their app.
New research into Open Banking implementation has found that financial institutions have struggled to recruit engineering talent for projects, with many lacking enough personnel and the necessary skillsets to stay or become compliant. LM Research & Marketing Consultancy conducted an online survey on behalf of Fiserv between August and September among 400 respondents in the UK, Poland, France and Australia, with 100 respondents from each country. Respondents represented retail banks of asset values from less than $250 million to more than $300 billion.
Mobile banking customers at Lloyds Bank, Halifax and Bank of Scotland will now be able to track their spending on Google Maps thanks to a new app integration. The introduction of an in-app Google Maps feature will allow customers to pinpoint the exact location and details of debit card transactions. Additional card controls will allow customers freeze cards to protect against fraud, whilst nudges will help users to manage spending.
PayPal’s $2.2 billion takeover of Swedish mobile payments company iZettle could drive up prices for customers and lead to a more limited range of services, according to an investigation by the Competition and Markets Authority (CMA). The UK’s competition watchdog will now refer the merger - completed in September - for a Phase 2 investigation after it found that the deal - which brings together the two largest suppliers of mobile point of sale (MPoS) devices in the UK - could lead to a “substantial lessening” of competition within UK markets.
In the six months since the General Data Protection Regulation came in, there has been an exponential increase in the number of consumers wary of how their personal data is being protected. Since the 25 May deadline, more than 1,100 reports of data breaches involving people’s personal information were received by the Data Protection Commission in just the first two months – a number that has gone up exponentially since then.
The Payment Systems Regulator (PSR) has published its consultation for Confirmation of Payee (CoP) rules to protect people from Authorised Push Payment (APP) scams. Together with the new, voluntary code, designed by the industry and consumer groups, CoP will see consumers better protected from APP scams and have a greater chance of being reimbursed if they do fall victim.
Chip has completed a Series A funding round on Crowdcube, raising more than £4 million and attracting a record-breaking 7,000 investors on the equity crowdfunding site. The savings app has already grown to 75,000 accounts, processed £58 million of savings and received £36 million of deposits since receiving Crowdcube's third biggest raise last year (£2.4 million).
HSBC has apologised after UK customers reported issues logging into its mobile banking app today. The lender has said its app is now back up and running after customers flagged problems viewing their accounts and moving money this afternoon. The bank said online banking services were unaffected by the glitch.
The UK online alternative finance market volume grew by 35 per cent in 2017, to £6.2 billion from £4.6 billion in 2016, as peer-to-peer (P2P) business lending became an increasingly important part of overall financing of smaller British businesses. This is according to the 5th UK Alternative Finance Industry Report by the Cambridge Centre for Alternative Finance (CCAF).
RegTech startup SteelEye has raised £5.7 million in its latest funding round, led by Illuminate Financial. The London-based startup, launched in October last year, uses cloud-based technology to help clients solve compliance challenges created by EU and UK regulation, including MiFID II, MAR, EMIR, Dodd Frank and other international regulatory obligations.
The Treasury Select Committee is to launch an inquiry into IT failures in the financial services sector after a series of meltdowns at High Street banks left millions of customers facing disruption to their online banking services. MPs on the influential parliamentary committee said they will examine the operational resilience of IT systems at banks and financial institutions, and their ability to get services back up and running if a failure occurs.
Aviva has agreed to acquire a majority stake in Neos Ventures, the smart technology insurance provider which helps customers monitor and protect their homes with connected devices. The agreement builds on Aviva’s existing relationship with Neos. The insurer, through its corporate capital venture fund, Aviva Ventures, announced a strategic investment in Neos in 2017.
More than half of financial services firms are experiencing a drop in performance due to key digital services and applications at least once a week, according to a new report from Riverbed that found the industry is not moving fast enough to address digital change. A survey of 1,000 decision makers in a range of industries, based in nine countries, found that 79 per cent of teams are held back by poor performance of digital systems at least a few times per month.
The emergence of international co-ordination on blockchain technologies is paving the way for the “decentralised economy" of the future, according the BBVA’s head of research and development.The Spanish banking group has become of the first five banks invited by the European Commission (EC) to join its forum event on blockchain technology.
In-app payments are the next priority for Yolt, as it looks to expand its offering and avoid ‘app apathy’. The money management app’s chief executive Frank Jan Risseeuw told FStech that his team is working hard on payments functionality. “We’re currently in alpha testing on this and as always, we’re working closely with our community to make sure our end product answers user’s needs.”
Starling Bank has appointed Helen Bierton, a former Olympic archer and Santander executive, as its new head of retail banking. Bierton, who represented Great Britain in the Athens Olympics in 2004, will join the digital challenger bank from Santander, where she has worked since 2007, rising to her current role as director of products at Santander Business UK.
Global fundraising for InsurTech startups during 2018 has already reached an all-time high in volume, with 204 deals and transaction values of $2.6 billion, close to the 2015 peak of $2.7 billion. The report from mergers and acquisitions advisors Hampleton Partners showed that since 2016 the InsurTech sector has reported 151 transactions, with 22 buyers making more than one acquisition.
Open Banking is one of the most radical changes in the recent history of financial services and has already dramatically impacted investment decisions within the industry, according to TLT. The UK law firm’s new research, based on survey responses from 130 senior decision makers representing a range of financial firms across the UK, found that a vast majority (84 per cent) are investing in Open Banking products and services.
The Financial Conduct Authority (FCA) is looking for a new director of innovation, tasked with driving “engagement with technological innovation within the financial services industry while developing, new, innovative and data-led ways of regulating”. The job advert - posted earlier this month, with a deadline at the end of November - states that the newly-created role will have a large impact on the FCA and the achievement of its objectives through helping build approaches in innovation, FinTech, RegTech, advanced analytics and data.
Data infrastructure firm Equinix is pumping £90 million into an upgrade of its data centre in London to keep up with demand from the UK’s digital economy. The new International Business Exchange Centre will be built at Equinix’s existing London Slough campus. Equinix said the new centre will provide the increasing data infrastructure needed by City firms to support IT transformation initiatives and increasing adoption of cloud-based technologies.
Payments technology startup Form3 has raised £10.1 million in Series B funding led by Barclays, Angel CoFund and FinTech backer Draper Esprit. The payments-as-a-service (PaaS) firm, started in London in 2016, provides cloud-based payments processing for banks and regulated FinTechs including Tandem Bank, Starling and N26.
Plastiq has raised $27 million in Series C financing, led by Kleiner Perkins with participation from DST Global. The US startup which aims to let users pay for anything via credit card will use the money to accelerate growth and roll out new services. Kleiner Perkins general partner Ilya Fushman, will join the board of directors as part of the deal.
German digital challenger bank N26 has launched to British customers after its banking services were opened up to 70,000 people on an early access waiting list.The UK-wide roll-out of the mobile bank follows launches in Denmark, Norway, Poland and Sweden earlier this month, taking its number of operating markets to 22 since the company started in 2015.
European digital lenders are growing quickly, but digital share is still low relative to the market opportunity, according to a whitepaper from Mitek and FinTech research practice Autonomous NEXT. “The digital lending sector has grown dramatically in the last few years and is a great example of how technology can democratise access to financial services – but banks still dominate lending, and digital-first lenders are struggling to provide loans on better terms than their traditional rivals given high cost of capital,” said Lex Sokolin, global director for FinTech strategy at Autonomous NEXT.
Financial data startup Banked has secured £1.5 million in seed funding to help develop its first data integration product using Open Banking protocols.The FinTech will close its latest seed raise for the UK market with the contribution from lead investor Backed VC, a €50 million London-based seed stage fund.
TSB Bank is set to appoint Clydesdale Yorkshire Bank Group (CYBG) chief operating officer Debbie Crosbie as its new chief executive.She will replace Paul Pester, who stood down in September after the bank suffered a series of major IT failures.
Dutch banking software firm Five Degrees and British digital engagement company ieDigital have launched a digital banking portfolio for financial institutions.It consists of a cost effective method to build end-to-end banking products that help to identify and generate revenue opportunities, combining ieDigital’s ‘Interact’ digital engagement platform, with Five Degrees’ ‘Matrix’ core banking platform.
The banking and payments industries have been warned to strengthen security controls by new analysis of the cyber threat to the financial markets.A report from BAE Systems and SWIFT has revealed that the financial securities market is particularly vulnerable to cyber attack.
Digital challenger bank Tandem has invited its existing app users to help test a new Autosavings proposition. During the beta phase, users will be encouraged to feedback suggestions for improvement, report bugs and discuss their savings habits to help build a product that is relevant for them.
The next financial crisis may be triggered by a cyber attack, according to a senior executive at the European Central Bank (ECB). Whilst giving the opening remarks at the CPMI academic conference in Basel, ECB board member Benoît Cœuré said that hackers are increasingly targeting wholesale payment systems and the large money flows they handle, citing the lapses in security that led to the $81 billion heist at the Bank of Bangladesh in 2016.
Robotic processing company Automation Anywhere has raised $300 million in Series A funding from SoftBank’s Vision Fund. The California-based firm’s software makes use of artificial intelligence (AI) enabled bots to automate repetitive manual and administrative tasks to drive efficiencies and scale business processes.
Financial services providers can expect free movement of capital and payments along with alignment in data flows after Brexit under an outline deal put forward by Theresa May, which has prompted a cautiously optimistic response from The City. The details of the government’s proposed Brexit withdrawal agreement include a ‘political declaration’ highlighting the importance of the financial sector to the UK economy and outlining an ambition for close alignment and equivalence arrangements when it comes to regulation and data flows between the UK and EU after Brexit.
Monzo is partnering with the UK Financial Capability Lab to develop new technologies to help customers regain control of their finances. The collaboration will see the digital challenger bank work alongside the Money Advice Service and the Behavioural Insights Team to make use of financial data on spending and saving that can help customers limit their outgoings.
Digital challenger banks enjoyed success at last night’s Payments Awards, with Starling Bank and ClearBank both picking up two awards each. The sixth annual industry event was held at the Grosvenor Square Marriott hotel in London, with a record number of entries across the 24 categories.
The Monetary Authority of Singapore (MAS) has released a consultation paper on the creation of a ‘Sandbox Express’ to let firms conduct experiments more quickly. These pre-defined sandboxes would complement the existing FinTech Regulatory Sandbox that was launched in 2016, but would let firms work on projects without needing to go through the existing bespoke application and approval process.
CivilisedBank has resubmitted its banking licence application to the Bank of England.The FinTech startup, which offers digital business banking services and advice from banking experts to SMEs has also announced further funding from main shareholder Warwick Capital Partners along with investment from a FTSE100 pension fund.
The head of the International Monetary Fund Christine Lagarde has raised the prospect of central banks around the world issuing their own digital currencies. Speaking at an event in Singapore this morning, the BBC reported that Ms Lagarde addressed concerns raised by regulators over the growth of digital currencies such as Bitcoin, which allows for unregulated and anonymous transfers of value between digital wallets, leaving the door open to criminal uses.
Tandem Bank is partnering with Stripe to offer an automatic savings functionality to customers, enabled by Open Banking. The digital challenger bank announced its tie up with the global payments platform as part of its plans to offer users a range of new in-app and data-driven savings tools.
Nationwide is taking a minority stake in Moneyhub, the platform that consolidates accounts from different providers to help consumers manage their money. The investment is the building society’s third deal as part of a £50 million Venturing Fund launched in September. Nationwide is making strategic investments in and partnering with early stage startups exploring innovative products and services that could provide real benefits for its members in the future.
Starling, Tide, TransferWise, Revolut and Soldo have announced a global in-app integration with accounting platform Xero. The digital accounting platform is using its new Open Banking API (Application Programming Interface) to feed bank data in real-time to its data management system.
Pay.UK has invited interested parties to help develop an ‘Enhanced Data’ capability as part of the New Payments Architecture (NPA) programme. Enhanced Data offers the capability to add additional information to payments, as standardised, structured data creating both a larger capacity and wider range capable of transmission.
New research has revealed that 94 per cent of banks and financial institutions are planning two or more FinTech acquisitions in the next 12 months. Reed Smith and Mergermarket interviewed 100 corporate senior executives globally, finding that key drivers for FinTech investment included the need for enhanced compliance and reporting functionality, upgrading legacy IT systems, and improved customer outreach through digital channels.
Revolut has developed a new machine learning technology for tackling card fraud and money laundering. The challenger bank says its automated customer profiling technology detects patterns in financial behaviour and can spot fraud and money laundering in real-time, leading to a fourfold reduction in card fraud since it was launched in August.
Swiss software as a service (SaaS) and wealth management solutions firm Avaloq has launched a new venture capital fund focused on startups and fast-growing FinTech firms. The new subsidiary, Avaloq Ventures, will fund for FinTechs partnering with Avaloq, by offering their solutions on Avaloq’s Software Exchange.
UK customers are more willing to embrace Open Banking apps offered by traditional High Street banks than the offerings of digital challenger banks, according to new research. A survey of 2,000 UK consumers by YouGov for a software analytics firm New Relic assessed appetite amongst consumers for a consolidated banking app which uses Open Banking APIs to allow customers to manage multiple financial accounts in one app.
Comparison site Moneybrain has today announced the launch of a new asset-backed utility token.The BiPS Token, created in collaboration with JustUs, Moneybrain’s peer-to-peer sister company, is understood to be the first asset-backed token created and minted by an Financial Conduct Authority-regulated authority.
Revolut is opening up its data and machine learning tools to employees across the business, following the roll-out of a new analytics dashboard. Following a six-month trial, UK-based digital banking platform signed a deal with Exasol to provide a cloud-based central data repository and data management platform, available to all employees - from data scientists to frontline service and HR staff - with gradations of access depending on the sensitivity of customer and commercial data.
Allianz Global Investors will be hosting its first hackathon in London later this week. The investment manager’s in-house specialists and artificial intelligence (AI) experts from selected global startups will work together to develop optimisation approaches.
Starling Bank is partnering with the Post Office to provide digital banking services to its customers across the UK, including rural communities which have been left with no access to a local bank branch. The mobile-only challenger bank will provide everyday banking services to its personal and business customers at 11,500 branches across the Post Office’s network.
Brexit uncertainty has so far barely dented the UK’s ability to attract high-skilled technology professionals from abroad, according to new analysis by Indeed. The job site’s data showed that one in 10 enquiries about currently available British tech jobs comes from jobseekers outside the UK. Tech-related roles are especially popular among non-EU jobseekers, and three of the four most in-demand UK jobs among high-skilled global jobseekers are in technology.
TransferWise has completed a £65 million syndicated debt facility with NatWest, JPMorgan and LHV Bank to support the increasing requirements of its growing international customer base. Launched in 2011, the London-based FinTech offers customers an easier and quicker option to manage money across borders, and now counts four million customers and moving £3 billion of money each month.
The Bank of England (BoE) is conducting a cyber security ‘war gaming’ exercise with banks and financial institutions today to test the UK’s resilience in the face of a major cyber attack. Around 40 firms, including the UK’s biggest banks, are to take part in the one-day drill, which will simulate the impact of a major cyberattack.
New data has shown that the uptake of mobile payments such as Apple, Google and Android Pay in the UK has quadrupled over the last two years. The Cardlytics figures are based on 190 million transactions made by 6.4 million bank customers in the UK who actively use their cards once per week, looking at all transactions during the last two years.
IBM is partnering with data storage firm Seagate Technologies to develop a blockchain solution to product counterfeiting.The joint project is focussed on using distributed ledger technology (DLT) to prevent the growing use of counterfeit hard drives. Global trade in counterfeit and pirated electronic products has reached more than $1.7 trillion in value, according to the figures from the International Anti-Counterfeiting Coalition.
Virtusa Corporation will lead a global effort in creating the API Exchange (APIX), the world's first cross-border, open-architecture platform to improve financial inclusion. The platform will include an online global FinTech marketplace and sandbox platform, aimed at accelerating financial services innovation by enabling collaboration between financial institutions and FinTech innovators.
Peer-to-peer lending platform Zopa has closed its latest fundraising round at £60m, making it the largest raise for the company yet. Zopa, one of the UK’s so-called ‘big three’ peer-to-peer lenders, said it will put the funds towards planning for the launch of a full 'next generation' banking operation.
Barclays has launched an app-based invoicing platform for its small business customers.The free service will enable users of the Barclays Mobile Banking app to create, send, track and manage invoices.
InsurTech startup yulife has raised £3 million in a funding round led by LocalGlobe, the UK investor behind LoveFilm and TransferWise. Fintech investor Anthemis and Israeli venture investor OurCrowd also joined the round, which bolsters the company’s coffers ahead of its launch this week. In June, yulife confirmed that all its policies will be underwritten by AIG Life, the UK life insurance arm of US insurer AIG.
Lloyds Banking Group has announced a strategic partnership with Thought Machine, as part of its plans to accelerate digital transformation. In conjunction with this partnership, Lloyds has made an £11 million investment in Thought Machine, representing a 10 per cent stake, as part of its Series A £18 million investment round.
Accenture is investing in data analytics software firm Quantexa as part of plans to accelerate the development of its artificial intelligence (AI) and financial crime fighting capabilities.Accenture Ventures, the financial consultancy's investment arm, has made a minority investment in UK-based Quantexa. The deal will enable Accenture to combine its Applied Intelligence technology with Quantexa’s network analytics platform to help banking clients better identify fraud and financial crime.
Business improvement company BSI and the government-backed Fintech Delivery Panel have launched new guidance to improve engagement between FinTech companies and financial institutions. The guidelines have been jointly created by the Royal Bank of Scotland, Barclays, HSBC UK, Lloyds Banking Group, and Santander, which sit on the Fintech Delivery Panel. FinTechs such as MarketInvoice, The ID Co. and iwoca also contributed, with all parties identifying the issues that prevent startups and established firms becoming allies.
Dubai-based bank Emirates NBD has launched an Application Programming Interface (API) sandbox, as part of an AED1 billion investment in digital transformation. Abdulla Qassem, group chief operating officer at Emirates NBD, called the open banking sandbox environment “a game-changer” that will simplify and accelerate innovation for the bank’s employees, partnerships with FinTechs, startups, developers, academia and small businesses.
Oracle and B-Hive have jointly launch a fast-tracked monetisation ecosystem program for mature startup and scale-up FinTechs, called Fintech ScaleUp, following their Fintech Innovation Program collaboration in July. Registration opens today and the program will start in January, when Oracle and B-Hive select 15 startup or scale-up FinTechs in two program sessions taking place in Brussels and London.
NatWest has launched a standalone digital banking platform for small and medium businesses (SMEs) called Mettle.The mobile-app based bank, developed in partnership with 11:FS and Capco, is currently in pilot mode and has been rolled out to between 100 and 150 existing and new customers, who will provide feedback on its features before a general roll-out to the public.
Icelandic state bank Íslandsbanki has invested €3 million in digital banking solutions provider Meniga. This brings the total investment in the company from banks this year to €9.1m, following Swedbank´s investment in April and the strategic partnership announced with UniCredit in June.
The UK is leading the boom in European funding for tech firms, with a total of €829.9 million injected into early stage companies in the last three years. Figures released jointly by Stripe, Tech.eu and Techstars at Lisbon’s Web Summit show that investment in early stage technology (EST) startups in Europe has increased four-fold since 2015, up from €875 million in the first six months of 2015 to more than €3.6 billion in 2018.
Financial services firms in Europe are turning to artificial intelligence (AI) as they battle to make sense of their data and deliver more relevant, personalised customer service, while staying on the right side of the General Data Protection Regulation (GDPR). This is according to Adobe, which commissioned research company Coleman Parkes to interview 600 senior business decision-makers, comprising 100 respondents from the UK, Benelux, France, Germany, the Nordics and Switzerland during August and September.
Lloyds Banking Group is creating 2,000 new roles as part of an 8,000 job restructure aimed at focussing its operations on digital technology. The High Street lender is set to cut 6,000 jobs but create a total of 8,000 new roles over the course of the next two years as part of a £3 billion digital transformation plan announced in February.
Atom Bank is partnering with researchers from Newcastle University to research issues of security and data and create a toolkit to help businesses design appropriate interactions with customers. One of the first applications of the research will be in the development of blockchain to build better mortgages, drawing on blockchain expertise from Newcastle University’s Computer Science department and crypto-statisticians at the Durham University’s Department of Mathematical Sciences.
Deutsche Bank is moving its global cheque processing operations to the cloud after signing a strategic partnership with HCL Technologies. The German investment bank announced that the Indian technology firm is to build a cloud-based, fully-scalable digital cheque processing platform which is expected to go live in 2019.
Experian is launching a new range of services to help lenders evolve their approach to making consumer credit decisions, via a ‘multi-dimensional’ view of a borrower’s financial health. Experian Credit 3D uses trended and alternative data sources so banks and businesses can access a new set of insights, enabling faster decisions based on a more rounded picture of affordability.
Deutsche Bank’s asset management arm DWS Group is expanding into Dubai’s FinTech scene with an agreement to purchase a 15 per cent stake in Neo Technologies, a digital asset technology and consultancy firm. DWS announced the strategic partnership with Neo Technologies as the FinTech, based in Dubai’s International Financial Centre, looks to expand its digital investment platform services across the Gulf region.
UK software startup Vizolution has landed a total of £10 million funding from HSBC, RBS and Santander to grow its customer experience technology business. The UK-based Software-as-a-service (SaaS) firm secured the funding from three of the largest European banks following a period as clients of Vizolution's software solution.
Financial consulting firm deVere has launched a range of cryptocurrency investment solutions.In a further sign that the asset management and investment industries are embracing the trend for cryptocurrency such as BitCoin, deVere has announced that its Digital Asset Funds will now be available for experienced investors.
FStech is today launching a new one-day conference focussed on regulatory technology within financial services. RegTech Live will bring together experts and industry leaders for a day of debate, networking and panel discussions on 28 February 2019 at the Hilton Tower Bridge.
Bank branches are set to disappear from UK High Streets by 2041 according to a new study which also predicts that ATMs will be a distant memory within 20 years. Expert Market, a card payment comparison site, conducted an analysis of data compiled by the House of Commons library, consumer watchdog Which? And link.co.uk, concluding that the rise in digital and mobile banking being led by the millennial generation makes the decline of physical stores “inevitable.”
Regulatory action on operational resilience within financial services firms is likely to increase the urgency with which IT and data security work is considered at board level, according to experts.In July, the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) published a joint discussion paper on an approach to improve the operational resilience of firms and financial market infrastructure, in the wake of scandals involving the likes of TSB and Visa.
A new report from Microsoft on the future of artificial intelligence (AI) has revealed that two out of five industry leaders believe their current business models will disappear in the next five years due to the pace of digital disruption. A study of more than 1,000 business leaders and 4,000 employees conducted by YouGov and Goldsmiths University of London collected data on AI-adoption from across a range of British industries.
FinTech iwoca has become the first startup lender to release Open Banking services to small businesses after it announced a successful integration with Lloyds Bank. Under the Open Banking Initiative, Iwoca, which offers credit facilities to small businesses in the UK, Germany and Poland, will enable users with a Lloyds Bank account to securely link their account data and upload up to five years of transaction history to Iwoca via the Open Banking API.
Monzo has secured £85 million in a series E funding round with a valuation of £1billion, propelling the challenger bank into the ranks of the UK’s FinTech ‘unicorns’. The funding round was led by US investors General Catalysts and Accel, joined by existing backers Passion Capital, Goodwater, Thrive Capital, Orange Digital Ventures and Stripe.
The market for API-driven financial services such as Open Banking is still in the “immature” stages of development, according to Nationwide’s head of digital and mobile. Speaking to FStech at an event organised by cloud platform service Amazon Web Services, James Smith, director of mobile and digital at Nationwide building society, said his organisation was currently at the iterative, testing phase for a number of API integrated products as part of a £4.1 billion technology transformation planned for the next five years.
The overwhelming majority of financial services chief investment officers (82 per cent) believe there is a risk their organisation could roll-out Internet of Things (IoT) strategies without having a plan in place to manage performance. Research from software intelligence company Dynatrace suggested this would be extremely damaging, with 69 per cent of CIOs predicting IoT will become a major performance burden, as they struggle to overcome the complexity that the technology introduces.
Coinbase has raised $300 million in a Series E funding round, giving the cryptocurrency exchange a valuation of more than $8 billion – up from $1.6 billion at its last financing in April 2017. The investment was led by Tiger Global Management, along with Y Combinator Continuity, Wellington Management, Andreessen Horowitz, Polychain and others.
Despite the hype, research by IDEX Biometrics has revealed that mobile payments are almost as unpopular as cheques, with payment cards still being the number one method when it comes to in-store purchases for UK consumers. The fingerprint identification technology firm carried out 1,000 interviews in the UK using an online methodology amongst a nationally representative sample of adult consumers. It found that three quarters of respondents use cards - including contactless - most often, compared to cash (21 per cent), mobile payments (three per cent) and cheques (one per cent).
Eight out of ten UK banking customers would opt for biometric payment cards for increased security, according to a new study. A survey of 821 UK cardholders for digital security firm Gemalto revealed that more that half (54 per cent) would be ready to use biometric fingerprint scan cards if they were available from their bank, and 83 per cent said it would become their preferred payment card. Earlier this month, Societe Generale became the first French bank to announce the roll out of biometric-enabled cards which let users authorise payments with a touch of their finger on a sensor as an alternative to the PIN code. The sensor is powered by mobile point of sales (MPoS) devices.
Startupbootcamp has launched a FinTech Accelerator program in Dubai to support the city in its bid to become a world leader in financial services innovation and technology. Over the next three years - in partnership with Dubai International Financial Centre (DIFC), Visa and HSBC - Startupbootcamp will accelerate 40 startups working in a range of fields impacting financial services innovation, such as artificial and machine intelligence, distributed ledger technologies and digital banking.
The UK government has announced plans for a two per cent digital services tax on the revenues of global tech giants, aimed at raising £400 million a year.Setting out his 2018 Budget, the chancellor Philip Hammond announced that a narrowly targeted group of “established tech giants” will be taxed in the UK from 2020 to ensure that multi-billion dollar companies pay their “fair share”.
The UK’s financial authorities have published their joint report on cryptoassets, proposing and new regulatory framework and further consultation on specific risks and opportunities. HM Treasury, the Financial Conduct Authority and the Bank of England were tasked with reporting on this emerging part of the industry by the chancellor back in March.
Equifax has launched a new solution which can match identity information - such as the consumer’s name, address and date of birth - with transaction data provided through Open Banking in real time. The latest development in its partnership with consents.online integrates the Equifax Bank Account Verifier with open Application Programming Interfaces (APIs) to reduce fraud by allowing credit providers to confirm that account information belongs to the person applying for credit, and not a potential fraudster.
The head of the Emerging Payments Association has railed against collaboration in the industry, stating that it is “intrinsically impossible” for most companies. In a newsletter, the EPA director general Tony Craddock said collaboration has become this year’s buzzword and questioned why companies should be expected to share with competitors.
More than three-quarters of financial firms will become irrelevant or go out of business altogether by 2030, according to a new survey from Gartner. The research firm suggested 80 per cent of ‘heritage’ financial firms face a bleak future and will struggle for relevance as digital platforms, FinTechs and other non-traditional players expand their market share and use technology to disrupt business models.
Robo-advisor Wealthfront has announced a ‘freemium’ model of its financial planning services. Co-founder Dan Carroll explained that by year end, anyone will be able to download the Wealthfront app, connect all of their financial accounts, build a personalised financial plan and receive recommendations powered by the firm’s automated financial advice engine, Path.
IBM has agreed to buy open source cloud software provider Red Hat for a record tech acquisition price of approximately $34 billion. A statement explained that the deal - approved by both boards, but still subject to shareholder and regulatory approval - will accelerate IBM’s revenue growth, gross margin and free cash flow within 12 months of closing, estimated during the latter half of next year.
The Conference of State Bank Supervisors (CSBS) has filed a complaint in the US District Court for the District of Columbia against the Office of the Comptroller of the Currency (OCC) over its plan to issue bank charters to FinTech firms. “Common sense and the law tell us that a non-bank is not a bank,” commented CSBS president and chief executive John Ryan. “Thus, CSBS is calling on the courts to stop the unlawful, unwarranted expansion of powers by the OCC.”
Digital insurance distributor BGL Group has done a deal to buy Saverd, the company behind personal finance app Bean, subject to regulatory approvals. Following the acquisition, BGL plans to develop the Bean proposition with a new capability to support a group-wide digital transformation.
Sweden’s central bank has announced the next steps in its plans to phase out physical currency in favour of electronic money. The Riksbank stated that as the use of cash continues to decline in the country, in the future, cash may be used to such a limited extent that it is difficult to pay with it.
The chancellor is reportedly set to unveil plans to back the UK’s fastest-growing tech startups though new use of savers’ pensions pots in next week’s Budget. Philip Hammond is preparing to offer a funding boost for ‘scale-ups’ by channelling funds from a so-called ‘patient capital investment trust’ linked to billions of pounds of savers’ retirement pots, according to Sky News.
The Financial Conduct Authority’s chief executive has given a comprehensive update on his approach to Brexit, calling on the EU to engage on important practical arrangements. Speaking at the City Banquet at Mansion House last night, Andrew Bailey said the regulator is on course with its preparations for a range of outcomes, including an implementation period that smooths transition and a hard and sudden exit.
Yolt has added the first investment provider to its money management marketplace – Wealthify. The integration will enable Wealthify customers to view their accounts within the Yolt money app, making it the first in the UK to show users’ live investments alongside their bank account, credit card and savings accounts and even pensions.
Wahed Invest, the UK’s first halal online investment platform, has raised an additional £6 million from existing investors to expand into new territories. Boston-based Cue Ball Capital and Middle Eastern venture capital fund BECO Capital invested the money, which brings total funding to nearly £12 million since inception and raised Wahed Invest’s valuation to over £75 million.
A new report suggests that cyber-attacks on website domain name system (DNS) are costing financial organisations $924,390 a year. A survey of 1,000 large businesses across nine countries conducted by EfficientIP, revealed that that cost of tackling DNS attacks has surged by 57 per cent in the last year, up from $588,200, with 19 per cent of financial companies surveyed saying they had been the target of 10 or more attacks in the last 12 months.
Japan’s Financial Services Agency (FSA) has granted the country’s cryptocurrency industry self-regulatory status, which will permit Japan Currency Exchange Association (JCEA) to police and sanction violations against a new rule book.
Deutsche Bank has hired the Bank of England’s former IT chief to lead its cloud platform operations. The investment bank yesterday confirmed that Deeptastree Mitra would join the Global Transaction Banking (GTB) chief digital office as its head of cloud platforms for data solutions.
The latest current account switching data has shown TSB to be the biggest loser over the second quarter, with a net loss of 16,641 customers, as it battled with continuing problems from a botched IT upgrade. Meanwhile, app-based challenger banks Monzo - which sees data published for the first time this quarter - and Starling showed “noteworthy net gains” for new players in the market, according to the figures from Bacs.
The governor of the Bank of England has called for protections for workers from the pace of technological changes such as artificial intelligence (AI) and machine learning. In a lecture given to a conference on machine learning and the global economy at the University of Toronto yesterday, Mark Carney outlined the role businesses and governments will need to take to ensure that workers do not fall victim to social divisions created by technological disruption.
Despite coming into effect in January, less than a third of Brits have heard of Open Banking, a system that provides a user with a network of financial institutions’ data through the use of Application Programming Interfaces (APIs). Three quarters of respondents to the 2018 Unisys Security Index which had heard of Open Banking said they want to know how their information is being protected by third parties before agreeing to use Open Banking services.
HSBC, ING, NatWest, Standard Chartered, BNP Paribas, SEB, Bangkok Bank and CTBC Holding have joined an open platform for document distribution over the blockchain. The Voltron initiative is set to launch on R3’s Corda Enterprise blockchain platform in 2019, aiming to make transacting letters of credit significantly more efficient.
IBM has announced a financial services-focused platform designed to address increased regulatory requirements and the creation of innovative solutions for digital-savvy consumers. Powered by IBM Watson and Cloud, the IBM Open Banking Platform provides banks with a technology layer on top of their existing systems to let banks choose from a range of IBM and third-party FinTech Application Programming Interfaces (APIs) to add capabilities such as financial risk, payments, artificial intelligence and blockchain to their solutions.
The Banking Industry Architecture Network (BIAN) has announced the launch of its API Exchange, an online digital library containing over 65 standardised Application Programming Interface definitions. The definitions should help to reduce the complexity of building and delivering Open Banking capabilities, providing clear guidance on how to implement, innovative and intuitive digital services across both back-end and customer facing functions.
Two-thirds of banks believe their payments infrastructure will need significant upgrade in the next three years, while almost three-quarters fully expect to replace or renew their payments systems in the same timeframe. This is according to a new report from consulting firm Ovum and released by banking software company Temenos, which highlights that those delaying or deferring required investments risk falling behind the rest of the market.
Paypal has made a strategic investment in Tala, an emerging markets FinTech which lends to undeserved populations through a smartphone app. The online payment services giant has partnered with Tala as part of its commitment to building financial health amongst disadvantaged communities and opening up access to the digital economy.
Fiserv has expanded its agreement with The Co-operative Bank to support its integration of services under the European Union’s Second Payment Services Directive (PSD2). The bank will implement FinKit for Open Banking from Fiserv to enable continuous innovation, customer engagement and easier access to services.
Banks and payments organisations will carry out co-ordinated cybersecurity drills to test their response to major incidents which could cripple sectors critical to the UK's infrastructure.
Last week it was revealed that 20 of the UK’s largest banks, insurers and security exchanges are set to launch the Financial Services Cyber Collaboration Centre (FSCCC) to enable a co-ordinated response to the “clear and present danger” posed by hack attempts and large scale cyber attacks.
Visa has announced new digital identity product details in preparation for a first quarter 2019 launch of Visa B2B Connect. This distributed ledger-based platform is designed to give financial institutions a simple, fast and secure way to process cross border business-to-business payments globally.
UK-based asset intelligence firm Bridgeweave has announced the launch of an artificial intelligence (AI) powered trading insights product for individual investors. The Investment Insights proprietary platform has been built using CognitiveScale’s Augmented Intelligence software to process large amounts of historical, transactional and real-time data.
Security giant G4S is entering the cryptocurrency market with a new service offering high security offline storage that aims to keep digital assets out of the clutches of hackers. The firm, best known for its cash storage and prison services, is launching a secure storage vault to help financial services firms and crypto traders guard their holdings in Bitcoin, Ethereum, Litecoin and other cryptocurrencies from the “wild west” of currency exchanges.
Britain’s leading banks and insurers will join forces to fortify the financial system against cyber attacks with the launch of a dedicated cyber security body. More than 20 of the UK’s largest banks, insurers and securities exchanges are planning the launch of the Financial Sector Cyber Collaboration Centre (FSCC) early next year, in a bid to counter the growing threat to private sector institutions from cyber criminals, the Times has reported.
PayPal has announced new partnerships with American Express and Walmart, as its third quarter results reveal revenue growth of 14 per cent to $3.68 billion. The global payments platform’s statement also showed that 2.5 billion payment transactions were made during the three months to the end of September - up 27 per cent - while 9.1 million active accounts were added - up 15 per cent.
Société Générale (SocGen) is trialling a bank card with a fingerprint sensor, becoming the first French bank to experiment with biometric-enabled cards. It launched the technology following the successful roll out of a new generation card equipped with a dynamic card verification code to 400,000 clients, which the bank suggests is proof of growing appetite for additional card security features.
For FinTech to truly be transformative, a global regulatory approach which accepts the ‘new realities’ created by emerging solutions is needed. This is according to a new white paper from Deutsche Bank, which argues that the emergence of new technology relating to Open APIs, the cloud, blockchain and artificial intelligence (AI) has driven increasing volumes of digital data, new market players, business models and evolving client expectations.
Pay.UK, the retail payments authority formerly known as the New Payment System Operator (NPSO), has today published a procurement prospectus with the aim of finding a strategic partner to help deliver retail payment infrastructure. The publication marks the starting point of a competitive process to appoint an organisation to define, deliver and operate the New Payments Architecture (NPA), which will safely and securely process trillions of pounds worth of payments every year.
Blockchain will enter the mainstream as a leading supply chain technology in 2025, according to a new study by the Capgemini, which found that investment in the distributed ledger technology (DLT) is likely to grow by 30 per cent in the next three years.A survey of 450 financial services organisations worldwide found that far from taking the slow-start approach to the DLT, early adopters of blockchain are doubling down on their investments, with 60 per cent saying that blockchain has transformed the way they collaborate with partners.
NatWest has integrated with a new blockchain-based platform that aims to streamline the global syndicated loans market – worth over £3.5 trillion in loan deals last year. The Fusion LenderComm platform - due to go live in November - aims to revolutionise communication between lenders and agents using blockchain to ensure messages are secure and confidential.
All banks will have to adopt artificial intelligence (AI) within the next five years to keep up with the demands of the next generation of customers, according to a former Barclays wealth manager. Akshaya Bhargava, who today launched AI FinTech platform Bridgeweave, also told City AM that banks will need to deploy new technologies in order to meet the expectations of the Millennials who will soon take over from the Baby Boomer generation as part of the $30 trillion “great wealth transfer”.
BBVA has partnered with FinTech venture capital firm Anthemis Group to build a venture creation studio in London. This will deploy capital and resources to businesses that address untapped user needs and attract the best entrepreneurs.
Challenger bank Monese is launching an account for businesses across the UK and Europe. The banking and money transfer service, which prides itself on serving ‘globally connected’ customers, is today offering accounts for UK-registered businesses in 11 languages, and is expected to roll out the service in Europe in the coming months.
Visa is expanding its Token Service for credential-on-file (COF) token requestors, helping to increase security for consumer payments in digital channels. Acquirer gateway and technology partners Adyen, AsiaPay, Braintree, Checkout.com, Cherri Tech, CyberSource, Elavon, Ezidebit, eWAY, Fit-Pay, Giesecke & Devrient, PayPal, Payscout, Rambus, SafeCharge, SecureCo, Square, Stripe, Worldpay and YellowPepper will now be able to tokenise COF digital payments on behalf of their merchant and payment clients.
New research has shown that UK-based small to medium-sized enterprises (SMEs) encounter regular problems with digital services at the traditional banks they use and are considering moving to mobile-only challengers. A survey of over 450 SME owners by Unisys Corporation also found that Open Banking has the potential to shake up the market and facilitate innovative new propositions SMEs are looking for.
The New Payment System Operator (NPSO) has rebranded to become Pay.UK. The payments industry regulator stated that this new identity helps better promote its core purpose, transforming the UK’s payment infrastructure to enable a vibrant economy, as well as being a logical progression from consolidating the UK’s three retail payment schemes – Bacs, Faster Payments and the Cheque and Credit Clearing Company.
AXA Investment Managers has changed the names of its AXA Framlington Financial Fund to the AXA Framlington FinTech Fund, with a new focus on FinTech investment. The UK-domiciled fund will change on 20 November, with a new policy branching out from just traditional banks and insurers into companies providing technological applications throughout the financial services supply chain.
Up to one third of new revenue in the banking sector is being amassed by digital challengers, putting unprecedented pressure on established banks to compete for customer loyalty, according to Accenture. A study of more than 20,000 banking and payments institutions conducted by the consultancy revealed that the UK has seen the most profound disruption in overall market structure, with a 63 per cent rise in new players in 2017.
Standard Chartered and Huawei are developing an Internet of Things (IoT) powered solution that they claim could revolutionise the way corporations communicate with banks for financing or payments. Rather than companies having to manually initiate these transactions through paper-based or emailed instructions, businesses and banks systems will be able to ‘speak’ to each other in real-time, triggering financing or payment instructions through Application Programming Interfaces (APIs).
Coinbase has expanded its European presence with new Dublin office and is going on a hiring spree for various new business-related functions. The digital currency platform stated that its customer base in the European Union (EU) grew faster than any other market in 2017 - and continues to in 2018 - so it began looking for a new base in the region.
Fidelity Investments has become the latest asset manager to embrace the cryptocurrency trend by setting up a standalone company to support Bitcoin and Ethereum trading for hedge funds, endowments and family offices. The US-based spin-off, called Fidelity Digital Assets, will provide an enterprise-grade platform for executing trades in digital assets on a 24-7 basis, mirroring the blockchain’s ‘always on’ trading cycle.
Atos and Google Cloud have launched an artificial intelligence (AI) lab in London, aiming to bring together private and public sector expertise and organisational capabilities to collaborate and unlock cross-enterprise opportunities. The lab will be available to businesses and public sector organisations across Europe to utilise AI technologies, defining and designing use cases relevant to their needs.
A digital payments boom is being driven by developing markets, but the innovation landscape in payments is uncertain as BigTech entrants make their presence felt and incumbents face technical and regulatory complexity in developing collaborative payments ecosystems with FinTechs. This is according to the World Payments Report 2018 from Capgemini and BNP Paribas, which also found that it will take more than bank-led initiatives to grow the new payments landscape.
Berlin-based challenger bank Penta has raised €7 million in its latest funding round.
Penta, which offers bank account services to businesses, has grown rapidly since it launched in December last year.The latest raise by existing investors Inception Capital, brings Penta’s total fundraising to €10M.
UK cybersecurity firm Garrison, which has developed safe web browsing technology, has secured £30 million (£22.7 million) in its latest round of funding. The investment round, led by Dawn Capital, is the company's largest raise from wholly UK-based backers and will be used to accelerate development of national security grade technology for commercial use.
Nationwide is pumping £3million into a competition to encourage FinTech startups to develop Open Banking apps for consumers facing financial challenges.Launching today, the Open Banking for Good (OB4G) challenge is a government-backed scheme aimed at using Open Banking technology and financial data sharing between financial services companies to develop solutions for the one in four financially squeezed households in the UK - equivalent to 12.7 million people.
BABB, a blockchain-based FinTech targeted at ‘the unbanked’, has raised £1.4million in its latest funding round on Crowdcube.The startup, which is hoping to acquire banking licences in UK and Lithuania, raised the money to support its applications following donations from 1,232 investors.
Challenger bank CYBG has announced it has been given the green light from the Prudential Regulatory Authority to use its own risk modelling to establish the levels of capital it should hold.The regulator has granted the bank internal ratings-based (IRB) accreditation, meaning that it could opt to hold less capital as a result of new risk modelling requirements.
The financial services industry should brace for the emergence of a globally dominant digital challenger bank in the coming decade, experts have suggested. Speaking at a panel event at London’s PayExpo, Matt Ford, head of product at challenger bank Tandem suggested that the rapid adoption of digital and mobile banking, as well as the scalability of platforms across borders would usher in an era of digital ‘goliaths’ in the financial services sector which could prove just as disruptive as social media giant Facebook.
Metro Bank has gone live with Insights, its in-app money management tool which uses artificial intelligence (AI) to generate tips and alerts. Developed with Personetics, the opt-in tool applies predictive analytics to users’ spending patterns, which is then translated into tailored prompts.
Facebook is planning to extend its social messaging platforms WhatsApp and Facebook Messenger to become a leading channel of digital payments services, its Northern Europe finance chief has said. Laura McCraken, Facebook’s head of financial services and payments partnerships for Northern Europe told audiences at a panel event at London’s PayExpo that the social media giant is already seeing WhatsApp -which has 1.5 billion users worldwide- used for buying and sharing payment credentials, and explained that Facebook has already started rolling out digital wallet services in emerging markets such as the Philippines.
Digital challenger bank Tandem is launching a new credit card service as part of its plan to help users build a strong credit history. The bank, which regained its banking licence in January this year, has expanded its product offering rapidly to keep up with fellow digital-only players Monzo and Starling.
Mastercard has launched Bill Pay Exchange, a new digital solution to help consumers view, manage and pay bills without having to set up accounts with different billers or remember multiple passwords and dates for payments each month. Offered through banks and credit unions, the technology lets consumers use their mobile banking app to set up all billers, receive notifications when a bill is due, see bill details, and manage multiple bills in one place, including specifying when and how much to pay.
Payment service sharing among banks and FinTechs is a sector “ripe for disruption”, Starling Bank’s chief platform officer has said, as a panel of payments experts made their predictions for the year ahead. Speaking at the PayExpo in London yesterday, Megan Caywood noted that application programming interfaces (APIs) which allow banks and financial institutions to securely share data, are “fundamentally changing” the way that software is created and brought to market, with quick transmission of data allowing banks to access payments at lower cost.
The financial services sector needs a fresh regulatory and tax approach to deal with the challenges and opportunities presented by a rapidly changing technological landscape, according to a new report by the Confederation of British Industry (CBI). The report is a result of conversations with financial services firms across the UK, which states that while firms have welcomed the government’s support for FinTech developments such as the regulatory sandbox, they need regulations that are fit-for-purpose in a new technological age.
Lloyds Bank, Halifax and Bank of Scotland customers can now choose to use their voice to verify themselves when accessing their banking over the phone, following the launch of Voice ID by Lloyds Banking Group. Once a customer registers for the service, they will be asked for their card or account number and verified, then they will be asked to say ‘my voice is my password’ to create a unique voiceprint.
Starling is expanding its banking-as-a-service and payment services offer, bringing white label banking to the UK. Access to the digital challenger banks’ proprietary, cloud-based technology via Application Programming Interfaces (APIs) will allow companies to launch their own bank accounts and provide customers with payment services such as debit cards.
The Royal Bank of Scotland’s head of operations for digital propositions has claimed the company is “catching up” with digital banking challengers, but has been slowed by having to upgrade legacy systems. Speaking at the PayExpo conference in London yesterday afternoon, Benjamin Morgan praised digital-only entrants to the sector, stating they are “doing a good job”, especially from a customer satisfaction standpoint.
Passporting into the European Union can continue after Brexit, but one expert has warned that it will “become a lot more complicated”. Paul Anning, a partner in the financial institutions group at law firm Osbourne Clarke, told delegates at the PayExpo conference in London that companies must start considering exactly which European countries are most crucial to their business.
The Financial Conduct Authority’s (FCA) regulatory sandbox process has brought benefits but has highlighted various challenges for FinTech firms in testing their models, according to a study by Deloitte. The consultancy firm collaborated with Innovate Finance to survey a number of companies participating in the FCA’s sandbox, which allows business to try out innovative products, services and delivery method on real consumers in a regulatory ‘safe space’ before going to market.
New research has found that 83 per cent of European business decision makers expect blockchain to have an important or very important impact on their industry, but only two per cent of businesses are interested in collaborating with other firms for wider industry advancements as part of their blockchain strategy. Technology consultancy firm Cognizant surveyed over 1,500 senior executives across banking and financial services, manufacturing, retail, healthcare and insurance, finding that Europe is potentially quite conservative when assessing the significance of blockchain.
Schroders has taken a minority stake in Qwil Messenger, the first FinTech startup to have joined its global in-residence programme. The chat platform, which enables firms and clients to communicate directly through one app, joined the investment manager’s Cobalt programme earlier this year. This undisclosed investment formalises Schroders’ relationship with Qwil.
Starling is partnering with InsurTech startup So-sure to offer customers mobile insurance directly from their phones. In the latest third party-partnership to feature on its app-based marketplace, the digital challenger bank will enable customers to apply for an insurance policy in minutes.
The Competition and Markets Authority (CMA) has published the results of a study into pricing algorithms and whether they could be used to support illegal practices. Whilst there was little evidence of companies using algorithms to show personalised prices, it did find that they were sometimes used to change the order in which products are shown to shoppers.
Payment processing, machine learning and data solutions firms have fuelled a $40 billion boom in UK FinTech mergers and acquisitions (M&A) in the first half of 2018, according to a new report. A study of M&A activity in the sector by advisory firm Hampleton Partners recorded 141 transactions in the first six months of the year, with a total value of $39.3 billion - up 26 per cent on the previous half year.
The Luxembourg Commission de Surveillance du Secteur Financier (CSSF) and the Australian Securities and Investments Commission (ASIC) have signed a cooperation agreement for cooperation over financial innovation in each jurisdiction. The agreement provides a framework for information sharing between the two regulators on FinTech and RegTech, formalising the previously close relationship between the ASIC and the CSSF.
The differing approaches to data breaches of British Airways and Equifax have been cited as best practice and a cautionary tale, respectively, under the General Data Protection Regulation (GDPR). Speaking at the IP Expo conference in London yesterday, OneTrust’s vice president of sales and business development Kevin Kiley said that while Equifax drip fed information which it turned out had been known for months - while senior executives sold company stock - British Airways immediately contacted affected customers and went public with the breach.
Companies will see an upsurge in personal data requests under General Data Protection Regulation (GDPR) rules as high profile cyber security breaches become more commonplace, a data privacy expert has warned. Speaking at a panel discussion at London's IP Expo 2018, Kevin Kiley, vice president of sales and business development at OneTrust, said “I think we will see organisations struggle with data subject rights”.
A new report from PA Consulting has revealed that financial services firms expect to lose business and revenue if regulators do not embrace innovation and evolve with technology trends. The consultancy questioned 500 directors with responsibility for compliance and regulation issues in UK organisations, along with 2,002 consumers.
Pelican, the only mobile first, multi-broker network regulated by the Financial Conduct Authority (FCA), has announced its latest Seedrs funding round.Founded by ex-City brothers Peter and Mike Read after seven years of building financial exchange platforms for companies such as Gain Capital and LCG, the platform is designed to allow retail traders and investors to chat, share and compare live trades in customised social groups.
Companies should prepare for the inevitability of a cyberattack as criminals develop increasingly efficient ways to infiltrate networks, according to experts.Speaking at a panel discussion at London’s IP Expo 2018, Claire Albois-Galcoix, marketing director at Yubico, a password security provider, warned the audience that ransomware attacks such as the Wannacry outage in 2017 should now be considered part of the everyday threat landscape as criminals widen the scope and scale of their operations.
N26, a German digital bank which has 1.5 million customers across Europe, is launching its current account to UK customers today. The app-based bank, which was launched in Berlin in 2015, is backed by Tencent, the Chinese internet giant, Paypal co- founder Peter Thiel, and Hong Kong business magnate Li Ka-shing. It has raised £165 million in funding so far.
Digital technologies - namely the Internet of Things (IoT), artificial intelligence (AI), 3D printing and blockchain - will increase trade growth by up to 34 per cent by 2030 thanks to lower costs and higher productivity. However, they could also create a challenging environment for those seeking to keep up with the latest innovations, according to the 2018 edition of the World Trade Organisation’s flagship World Trade Report.
The current hype around artificial intelligence (AI) is getting to proportions where it risks overtaking common sense in terms of business decision-making, according to several experts. Speaking at the IP Expo 2018 conference yesterday afternoon, Sophos senior security advisor Paul Ducklin told the audience that senior executives should avoid “letting AI hype take over your common sense”.
The number of cyber security breaches to hit financial services firms trebled in the first eight months of 2018 compared to the previous two years, according to a new report. Bitglass, a cloud access security broker (CASB), analysed the incidence of security threats and breaches across the financial services sector worldwide and compared the results for 2016 and 2018.
Britain’s departure from the European Union should not unleash a “race to the bottom” in regulation, the chairman of the Financial Conduct Authority (FCA) has said. Speaking at a conference run by the Association for Financial Markets in Europe (AFME), Charles Randell warned against a move towards ‘light touch’ standards as the UK seeks to compete as a global financial centre after Brexit.
A majority of the UK’s chief information officers (CIOs) believe IT holds the key to improved customer experience, according to a new study which found that 45 per cent of purchasing managers plan to invest more in artificial intelligence (AI) and other new technologies in the coming year.A survey of 1,200 CIOs from the UK conducted by KPMG and management consultancy Harvey Nash found that 60 per cent of those asked said that management in their firm was looking to IT to boost customer experience and engagement, which was the priority for 62 per cent of those asked.
Dashly, the UK’s first ‘always-on’ mortgage switching platform, has launched today, claiming to have the potential to kill comparison sites. The LendTech startup gives consumers free, automatic alerts when it pays to switch to another mortgage, without having to manually update their mortgage data.
A group of 14 Italian banks working on a blockchain trial has successfully passed the first phase of technical procedural verification, with work now being done on a substantive test of the processes in the field. Two months’ worth of data - or 1.2 million movements - was uploaded to the infrastructure that corresponds to the banks working on the ‘Spunta Project’. A statement noted the performance was good, so the next test will involve participating banks working on a daily basis with the new application based on distributed databases.
Monzo is looking to reach 10 million customers and has long-term plans to expand internationally, according to one of its lead engineers.Matt Heath, who has helped design the challenger bank’s infrastructure since its launch in 2015, predicted that the lender’s rapid growth will far outstrip the one million current account customer mark it passed last month.
Despite UK families owning an average of five smart home devices, only 15 per cent utilise software or apps to protect the Internet of Things (IoT) devices in their home. A survey conducted by Open-Xchange in collaboration with Censuswide among 2,005 parents also found 17 per cent do not use any protection at all, while 67 per cent use anti-virus and anti-spam software to protect only their desktop devices from malware, adware and phishing tactics.
The insurance technology (InsurTech) sector is booming, but traditional insurers are increasingly concerned about the entrance of BigTechs into the sector , according to the inaugural edition of the World InsurTech Report from Capgemini and Efma. A combination of surveys and interviews with traditional insurance firms and InsurTech firms, covering over 140 executives across 33 markets, showed that the industry expects disruption and new competition to come from companies and manufacturers like Amazon, Facebook and Google in the US and Alibaba and Tencent in China.
The government of Canada has put together an advisory committee to investigate the possibility of introducing Open Banking. Minister of finance Bill Morneau announced the appointment of its four members: TD Bank technology head Colleen Johnston, Montréal-based entrepreneur François Lafortune, Dentons law firm partner Kirsten Thompson, and tech hub MaRS Discovery District chief executive Ilse Treurnicht.
The Financial Conduct Authority (FCA) has fined Tesco Bank £16.4 million for failings related to a massive cyber attack in 2016 which left customer data vulnerable. The financial watchdog issued the penalty to Tesco’s banking arm over its “foreseeable” failure to exercise “due skills, care and diligence” in protecting customers from the cyber-attack.
Softomotive, a robotics startup specialising in the automation of business processes has landed $25 million and will relocate to the UK as part of its global expansion strategy. The startup, which was founded in Athens in 2005, develops Robotic Process Automation (RPA) software to automate repetitive tasks.
HSBC has become the latest bank to apologise to customers after it was hit by a glitch in its online banking services early this morning. A spokesman for the bank said the issue had now been resolved and the mobile app was now operating “business as usual.”
TSB bank has again apologised after customers reported fresh disruption to their mobile app and internet banking services this morning.A spokesman for TSB said that the services were "recovering back to normal levels" this afternoon and advised customers to retry their apps and online banking if they have had issues. He added that cards, branch and telephone services continue to operate as normal.
Royal Bank of Scotland (RBS) is exploring the launch of a standalone digital bank which will operate under the brand name Bo.The lender’s plans for an app-based consumer bank to take on FinTech challengers like Monzo and Atom bank, as well as the proposed name, are understood to have been briefed to around 100 staff yesterday.
Alibaba, the Chinese eCommerce group, is partnering with Banking Circle to facilitate its digital payments around the globe. Reflecting Alibaba’s ambitions to grow the reach of its online marketplace and technology business, the tie up is intended to facilitate online cross-border payments, and is likely to see increased business activity in Europe.
New research has found that 42 per cent of people in the UK think the government should regulate artificial intelligence (AI) and 11 per cent consider the government responsible if something goes wrong with AI.London-headquartered law firm Bristows commissioned Censuswide to survey a representative sample of 2,103 people, finding that half do not trust AI with their personal data.
Openbank, the Santander Group's digital bank, has launched automated investment and micro-investing services. Customers are offered five risk alternatives with an estimated forecast of the profitability that they can achieve with each of them. The options consist of a diversified portfolio of up to 15 investment funds indexed to equities, fixed income, monetary assets, real assets and assets that are uncorrelated with the financial markets, such as property or infrastructure.
UK cybersecurity firm Darktrace, which uses AI technology to boost the cyber defence systems of airports, financial institutions and major corporates, has raised $50 million in Series 3 funding, valuing the company at $1.65 billion. The company has grown rapidly since it was founded by intelligence cyber operations experts and Cambridge mathematicians in 2014. Its Enterprise Immune System, an autonomous response technology branded Darktrace Antigena, uses AI-driven machine learning to identify and respond to in-progress cyber-threats in real time.
Stripe, the payments technology firm, has been valued at $20 billion after its latest funding round raised $245 million.The US FinTech rival of PayPal which was founded in 2010, announced that it would use the money, raised by Tiger Global along with DST Global and Sequoia, to fuel rapid expansion of the business and its engineering talent base internationally, particularly in Asian markets.
VoxSmart, a RegTech firm specialising in mobile communication is enabling staff at Singaporean energy and commodity firms to trade on WeChat and WhatsApp.The UK-based company, founded in 2006, launched the cloud-based mobile communications surveillance service built on their proprietary VSmart technology in Singapore two years ago.
Citi has launched a virtual account allowing institutional clients to segregate out their balances in a single physical account. The lender says the new Virtual Accounts use proprietary technology to offer corporate treasury clients enhanced visibility, control and efficiencies through centralised payments, receivables and liquidity management.
JPMorgan has expanded its Interbank Information Network (IIN) - the first live blockchain service offered by the firm - to more than 75 banks, the largest number of banks to join a live application of blockchain technology. “We’ve been actively exploring how emerging technologies such as blockchain, AI and an enhanced digital experience can be deployed in our treasury services business to better serve our clients’ ever changing needs,” said Takis Georgakopoulos, global head of treasury services. “We will lead the market with the rollout of a robust pipeline of innovations over the coming months, beginning with the launch of IIN.”
Deployments of real-time payment systems are surging worldwide, with 40 active real-time payment programs around the world, up from 25 in 2017 and nearly three times as many as were in FIS’ inaugural 2014 study. The financial services technology firm’s fifth annual report found five payments programs under development, with another 16 expected to be live in the next 12-18 months – double the number of programs on the radar in 2017.
Financial regulators have issued more than $26 billion of fines for non-compliance with sanctions, Anti-Money Laundering (AML) rules and Know Your Customer (KYC) in the past ten years, according to a new study which ranks the UK’s Financial Conduct Authority as the toughest regulator in Europe. A data study compiled for Fenergo, a client lifecycle services provider for financial institutions, found that the FCA accounted for the majority of fines issued by European regulators, which issued a collective $1.7 billion of penalties over the past decade.
Concirrus, an EY-backed InsurTech startup supplying the marine and motor analytics market, has landed £5million in investment, taking its total funding to £12million so far.
The London-based startup founded in 2012, counts brokers, insurers, major fleets and reinsurers among its clients. In April this year it announced a global agreement with EY, the financial services and consultancy firm, which will sees the two working together to drive adoption of Concirrus’ technology in the market.
Banks that commit quickest to Open Banking practices will win the most market share, according to a panel of experts. MIT Technology Review Insights, in association with Oracle Financial Services, interviewed senior executives directly involved with Open Banking from institutions including Citi, HSBC, ANZ, Standard Chartered Bank, BBVA and Sumitomo Mitsui Financial Group.
Apple and Salesforce have announced a broad strategic partnership aimed at growing software as a service (SaaS) offerings to businesses. The alliance, announced ahead of customer relationship management (CRM) platform Salesforce’s annual Dreamforce developer conference in San Francisco today, comes as consumer technology company Apple looks to expand its enterprise strategy and access more corporate sales through online apps.
A total of £503.4 million was stolen by criminals through authorised and unauthorised fraud in the first six months of 2018, according to data from UK Finance. During the same period, the finance industry prevented £705.7 million of unauthorised fraud, equivalent to £2 in every £3 of attempted unauthorised fraud.
Tesco Bank could reportedly be facing a record £30 million fine from the Financial Conduct Authority (FCA) over an attempted hack in which criminals tried to siphon money from customer accounts.Sky News reported that the regulator is weighing up whether to impose the largest ever fine for a cyber attack-related incident on Tesco’s banking arm, over the attempted hack in November 2016 which forced the lender to suspend all online transactions.
Barclays has launched a digital platform for its corporate banking division in Western Europe to support multi-country banking.The new platform will enable international and institutional clients of Barclays based in Portugal, Spain, France and Ireland to access new digital corporate banking services, with Germany lined up to join next year before expanding to other European countries.
Initial details of a new procurement process for the clearing and settlement layer that will form the backbone of the New Payments Architecture (NPA) have been announced by the New Payment System Operator (NPSO). The NPA is a new conceptual model for payments in the UK, which will take over the processing of more than £6.7 trillion of Bacs, Faster Payments and potentially cheque payments every year, from 2021. Bringing them together will simplify the rules, standards and processes that banks and others need to follow to use the systems.
Santander has announced that Emma Leith is to join the bank’s UK operations as chief information security officer. Leith will join the bank with immediate effect, following a spell as director of cyber strategy and programmes at Barclays International. She previously held the chief information security officer role in corporate functions and commodity trading divisions at BP Oil International for seven years.
Revolut’s annual report has revealed £14.8 million worth of total losses after tax during 2017, as operational costs rose 52 per cent from the previous year. These were largely attributed to costs associated with its card scheme, acquiring and user acquisition, as the mobile-only bank’s app trebled its customer base from 450,000 to 1.3 million. The report also detailed plans for how the FinTech will deal with Brexit, with applications being made for e-money licences in Luxembourg, in addition to a previous application for a full banking licence in Lithuania.
Modulr, a FinTech startup offering digital payments accounts for businesses, has announced plans to open a new office in Edinburgh following its latest investment round. The London-based startup, founded in 2016, is to use the funding to create more than 30 new jobs and grow its software engineering, customer support, risk and compliance and finance teams as it seeks to take advantage of the burgeoning FinTech scene in Scotland’s capital.
A total of 71 InsurTech funding transactions during the second quarter of 2018 marks a record high, although the total of $579 million invested is down 20 per cent against the previous quarter, according to Willis Towers Watson. The consultancy firm’s latest industry report found that the second quarter also set a new record for the volume of incumbent participation in InsurTech investments.
The Royal Bank of Scotland (RBS), FWB Park Brown, Dell Technologies and the Times Scotland have partnered to launch a competition to identify and support the next generation of financial technology pioneers in Scotland. With a prize fund totalling £125,000 on offer, the project aims to encourage and reward world-class ideas in FinTech innovation.
Cleo, a FinTech offering a money management app for Millennials, has landed $10 million in a Series A funding round. The investment round was led by Balderton Capital, which backed Nutmeg and Revolut, and will form part of Cleo’s plans to launch their own range of financial products.
Online banking services across Royal Bank of Scotland Group - including RBS, NatWest and Ulster Banks - went down this morning, with millions of customers unable to access their accounts via online and mobile apps.The group said the issue has now been "resolved" across its network of retail banks.
In addition to traditional challenges, retail banks globally are now facing new forms of competition: the Open Banking ecosystem, emerging technologies and soaring customer expectations. This is according to the 2018 World Retail Banking Report from Capgemini and Efma, which surveyed more than 10,000 retail banking customers in 20 countries.
ING Ventures, a £300 million fund set up by the Dutch banking group, has invested £6.7 million in Cobase, an Open Banking platform which will expand its client network and develop functions such as a robo-assistant to monitor transactions. Cloud-based solution Cobase, which is an arms-length venture of ING Bank, allows users to view balances and transactions from several bank accounts in one place, initiate payments and use cash management services on a single platform.
UK financial services firms expect their use of web chat to grow from 24 per cent today to 89 per cent by the beginning of 2020, according to new research. A survey of over 200 UK contact centres by ContactBabel found that the use of interaction analytics is expected to rise from 33 per cent to 77 per cent in the next two years, while automated speech recognition is expected to increase from 17 per cent to 52 per cent over the same timescale. Much of the latter is being used to reduce fraud and the time required to take phone customers through security.
Equifax has been fined £500,000 by the Information Commissioner’s Office (ICO) after the data of 15 million Britons was left exposed by a massive cyberattack. The data breach occurred between 13 May and 30 July 2017 and affected information belonging to 146 million people worldwide.
Banks and trading firms are to launch the world’s first blockchain platform for commodities trading.The new platform developed by Komgo SA, a Genava-based company, is backed by 15 major investment partners and is expected to launch before the end of 2018.
Spending on RegTech platforms will exceed $115 billion by 2023, up from an estimated $18 billion in 2018. Analysis from Juniper Research found that increased regulatory pressures, as demonstrated by the recent General Data Protection Regulation (GDPR) implementation, are driving businesses towards regulatory technology solutions to meet greater compliance challenges.
Abu Dhabi Global Market (ADGM) has launched a FinTech digital sandbox, allowing financial institutions and FinTechs to experiment on products and solutions in a digital platform environment, supported by regulatory standards developed by the United Arab Emirates’ Financial Services Regulatory Authority (FSRA). The sandbox will let participants source and procure FinTech solutions locally and globally, adopt and orchestrate the best ones that meet their business needs, and tap cross-border market access to grow and scale their business.
RBS is reportedly in the early stages of trialling two standalone digital banks under the NatWest brand as part of plans for a potential line of online-only products. The bank is testing a new business banking platform as well as a separate digital retail bank, the Press Association reported, citing a senior source.
A report from the Treasury Select Committee has urged regulation needed for the ‘Wild West’ crypto-asset market, to tackle problems including volatile prices, hacking vulnerabilities, minimal consumer protection and anonymity aiding money laundering. Crypto-assets, and most Initial Coin Offerings (ICO), are currently not within the scope of Financial Conduct Authority (FCA) regulation, read a statement. Crypto-asset investors are therefore currently afforded very little protection – namely there are no formal mechanisms for consumer redress, or compensation.
Revolut’s head of business development has revealed that as its budget won’t stretch to marketing to older demographics, the mobile-only bank is relying on sons and daughters to educate and convert their parents. As part of a panel at UK Finance’s Digital Innovation Summit yesterday afternoon, Andrius Biceika admitted that the challenger bank still had a way to go before it is regarded as customers’ main banking service.
Santander has announced plans to build a £150million tech hub in Milton Keynes. The bank said its investment in a new office campus would serve as its flagship UK technology centre for the UK’s most innovative industries, and would bolster the government’s plans for a “growth corridor” between Cambridge, Milton Keynes and Oxford.
Academics investigating the impact of automation have found that augmented workplaces are deemed to be ‘more human’ than the traditional office environment. The study by Goldsmiths, University of London showed that companies investing in augmented workplace technology such as Robotic Process Automation (RPA) and artificial intelligence (AI) scored 33 per cent higher on factors deemed to make a workplace feel more human.
Nearly one third of cybersecurity breaches in UK financial services firms go undetected for longer than a week, according to new research from Accenture. The consulting firm surveyed more than 800 enterprise security practitioners, including 75 from the UK, and found that financial services firms successfully stopped 81 per cent of cyber attack attempts in 2017, up from 66 per cent in 2016.
Setoo has closed an €8 million Series A funding round - bringing the total amount raised to date to €10.3 million - with AXA’s InsurTech startup studio Kamet being the main investor in this seed round. The insurance-as-a-service company helps e-businesses create and sell protection tailored to consumer needs. Setoo quickly and easily builds and integrates products that are automatically embedded into the customer journey, with one-click underwriting directly on digital assets and personalised protection with automatic compensation.
NatWest and G4S are working together to pilot the UK’s first intelligent cash management solution for businesses later this year. Business will get access to automated account crediting of cash transactions without having to deposit that day’s takings in their local branch.