The vast majority of organisations are struggling to secure value from their Intelligent Automation (IA) activities, with more than a third (38 per cent) of companies confirming investments of more than £7.7 million. A survey of nearly 600 business leaders across 13 countries - including 42 vice president, director and C-Suite executives in the UK - conducted by KPMG International and HFS Research, found that only around a fifth (22 per cent) of companies have scaled up or industrialised IA technology.
US federal government blockchain spending will grow from $10.7 million in 2017 to $123.5 million in 2022 – an overall compound annual growth rate of 63.1 per cent. This is according to analysis from market intelligence firm IDC, which also predicted state and local government blockchain spending to grow from $4.4 million in 2017 to $48.2 million in 2022.
Imandra has completed a $5 million seed investment round, led by AlbionVC, IQ Capital and LiveOak Venture Partners. The capital will be used towards further growth in financial services and applications of its artificial intelligence (AI) technology for autonomous vehicles, robotics and machine learning. It will also support Imandra’s expansion in both the US and the UK, with significant hiring of AI, engineering and product talent in Austin, London and Edinburgh.
US payments infrastructure company Stripe has acquired a Dublin-based software company Touchtech Payments in preparation for Strong Customer Authentication (SCA) regulations in Europe. Touchtech provides advanced SCA-ready authentication technology for FinTechs and challenger banks like N26, Transferwise and others.
InsurTech startup Cytora, which uses artificial intelligence (AI) to power its commercial insurance underwriting platform, has raised £25 million in a Series B funding round. The investment was led by EQT Ventures, with participation from existing investors Cambridge Innovation Capital and Parkwalk, along with unnamed angel investors.
More than half of small and medium-sized businesses (SMBs) say a data breach or cyber security incident would put their business at risk of closure. A Censuswide survey of 501 IT decisions-makers, commissioned by IT security firm Webroot, also found that more than three quarters of SMBs (78 per cent) believe that their business could be jeopardised by a lack of cyber security knowledge on the part of their employees.
A group of FinTech firms have set up the European Third-Party Provider Association (ETPPA), a new entity that strengthens Third Party Providers’ (TPP) interests around the second Payment Services Directive (PSD2). The ETPPA formalises the existing Future of European Fintech (FoEF) coalition into an official non-profit TPP trade association.
The Financial Conduct Authority (FCA) has published its Business Plan for 2019/20, outlining key priorities for the coming year, including a focus on enhancing the use of technology and data. The UK’s regulator also set out its research agenda for the next 12 months, which included artificial intelligence (AI), quantum computing, distributed ledger technology (DLT) and regulatory technology (RegTech).
Nearly three quarters (71 per cent) of all banking interactions are now digital, with a majority of customers carrying these out on a smartphone, tablet or wearable device, according to FIS. The FinTech provider, which recently purchased Worldpay in a $43 billion merger deal, commissioned a survey of 1,000 banking customers regarding their expectations of digital banking and payments.
Now in their 7th year, the 2019 Payments Awards are open for entries, with an expanded selection of categories to choose from. Celebrating the companies which have demonstrated excellence and innovation in the payments space, this year the awards will be welcoming entries in four new categories: Anti-Fraud Solution of the Year; Security Innovation of the Year; Best Cross-Border Payments Solution; and Blockchain or Cryptocurrency Initiative of the Year.
Facebook has confirmed that it is closing down its peer-to-peer (P2P) payments service on Messenger. The social media giant informed users that the payments service, which launched in the UK in November 2017, two years after it was first rolled out in the US, was being discontinued.
Eight in 10 chief information officers (CIOs) are worried about the need for advanced tech skills, as the workforce struggles to keep up with the pace of technological development, according to Barclaycard. A YouGov survey of 100 CIOs in large UK companies for Barclaycard found that 78 per cent were worried about the need to continually upskill staff in an uncertain market, while a similar percentage (76 per cent) voiced concerns about sourcing the right talent when the competition for employees with the right knowledge, skills and experience is increasingly fierce.
Home finance platform Youtility has been selected as one of four providers to participate in the Citizens Advice product testing programme. The project will see the clients of four Citizens Advice Bureaus - Bassetlaw, Hammersmith and Fulham, Cardiff, and Vale and East End - trial digital tools designed to help users budget, while testing the providers’ switching services for better home finance deals.
Finablr has confirmed its intention to proceed with an initial public offer (IPO) on the London Stock Exchange's main market for listed securities. The offer will be composed of new shares to be issued by the United Arab Emirates-based payments and foreign exchange company, as it aims to raise gross proceeds of $200 million. It intends to use the net proceeds from the issue of the new shares to finance further expansion plans and reduce net debt.
Nearly three quarters (72 per cent) of companies now have a majority of employees accessing cloud services via their mobile devices, according to a new study. A survey of 404 chief information officers (CIOs), chief information security officers (CISOs) and heads of network architecture in the UK, Germany, France and the Benelux region, for network security firm Zscaler, found a growing number of firms are enabling access on mobile devices.
NatWest has announced the launch of a new biometric payment approval feature, which allows business and commercial banking customers to make payments of any size through their Bankline Mobile app using Face ID or Touch ID, without the need for a card reader. The new feature also allows businesses to authorise multiple users to setup payments, which business owners can then subsequently approve on the go through their app.
TSB has announced a fraud guarantee scheme to cover customers who fall victim to any type of transactional fraud.The fraud guarantee, the first such move from a UK bank, is aimed at ensuring that its 5.2 million customers are refunded if they are an innocent victim of fraud, including unauthorised transactions or instances where they are tricked into authorising payments to fraudsters.
Trussle has named veteran banker and FinTech executive Simon Williams as new its new chairman and product technology executive Supriya Uchil as a new advisor to help accelerate its growth. The online mortgage broker also announced three-fold year-on-year revenue growth plans to develop new products.
Lloyds and Halifax have launched Open Banking app functionalities to allow customers to see their account balances with other banks in one place.Customers using their mobile banking apps will be able to view accounts and transactions with RBS, HSBC, Barclays, Santander and Nationwide, without the need for multiple logins, as part of new financial data sharing functionality.
Cyber criminals are targeting financial services firms more than any other sector, with a new report finding that finance accounted for 30 per cent of all attacks in the last year. A global threat intelligence report from NTT Security, based on billions of data points from organisations in 18 industry sectors across its security network, revealed that finance has knocked business and professional services from the top spot in Europe, Middle East and Africa (EMEA) cyber attack rankings for the 12 months between October 2017 and September 2018.
US InsurTech plaform Lemonade has secured $300 million in a Series D funding from SoftBank, taking the firm’s total funding to $480 million. Founded in 2015, the company uses artificial intelligence (AI) and behavioural economics to provide full-stack property and casualty insurance via a digitised policy process, based on predictive data to assist with underwriting and pricing.
Almost 40 per cent of businesses in the financial services industry are currently failing to implement data initiatives due to a lack of employee skills. Analytic database firm Exasol commissioned Vanson Bourne to survey 500 IT and business decision-makers in Germany and the UK, finding that 46 per cent are struggling with poor data quality and 32 complained about it being siloed within their organisation.
Cryptocurrency platform Coinbase has launched a Visa debit card allowing users to use cryptoassets such as Bitcoin to make real-world purchases.The card uses a customer’s cryptocurrency balance in Bitcoin, Ethereum, lite coin or other virtual currencies and converts it into pounds to pay in-store and online.
N26 has become the latest major FinTech challenger to encounter regulatory scrutiny, following reports that German regulator BaFiN has called for reforms at the the digital challenger bank.Inquiries into operations in the bank, which launched in the UK in November last year, have reportedly highlighted a number of issues.
Overall venture capital (VC) investment dropped from record heights of US$71 billion in the fourth quarter of 2018 to $53 billion in the first quarter of 2019, due to a decline in Chinese investment, among other factors. The latest KPMG market analysis revealed that while US and European investment remained relatively robust quarter over quarter, Chinese VC fell from $10.1 billion in the fourth quarter last year to $5.8 billion in the first quarter of this year, as ‘megadeals’ took a pause.
Nearly half (49 per cent) of financial services decision-makers would prefer to use outsourced technology solutions, rather than building teams to develop them in-house, according to new research. Asset Control commissioned OnePoll to survey 100 senior financial services staff in the US and Europe, finding that outsourcing has gained in popularity in recent years, with 48 per cent saying key benefits included being able to draw on a third party’s industry knowledge.
The business value of artificial intelligence (AI) in banking is projected to reach $300 billion by 2030, but around 500,000 UK bank workers’ jobs could be at risk by that time. IHS Markit analysis estimated AI in banking business last year at $41.1 billion, which includes the cost savings and efficiencies of introducing AI, compared to keeping existing infrastructures and processes.
MoneySuperMarket has launched a new remortgage platform, the first step towards delivering the first digitised ‘comparison-to-completion’ remortgage. The new proposition is a key part of the group’s ‘Reinvent’ strategy and is powered by Podium, the FinTech startup established in July 2018 as a joint venture between MoneySuperMarket and the founders of HD Decisions, Matt Denman and Mark Hawkins, who created the industry standard for cards and loan ‘smart search’ eligibility.
JPMorgan is launching real-time payments across its European banking network.The roll-out of the Single European Payments Area (SEPA) Instant service means the bank now offers real-time payment capabilities in US Dollar, Pound Sterling and Euros.
A new report from SWIFT has highlighted key improvement in banks’ cybersecurity measures, with the average value of attempted fraud transactions falling dramatically in the last 15 months.The latest study of cyber threats facing the global financial community showed that approximately 70 per cent of attempted thefts from bank accounts in the past 15 months were US dollar based.
New research has revealed that 86 per cent of consumers would consider leaving their bank or building society if they couldn’t manage their account easily online. Fiserv commissioned LM Research & Marketing Consultancy to survey 1,000 UK adults in January, finding that 82 per cent expect every digital experience to be equal to or better than what they receive from other technology providers.
Apiax has hired a former Financial Conduct Authority (FCA) expert on regulatory technology and is opening a new office in London. Alan Blanchard, who joined last month, will be put in charge of business development in the UK market. At LexisNexis he implemented a ‘digital first’ strategy within tax and compliance publishing, and was later responsible for digitising the FCA’s Handbook to facilitate RegTech.
Physical attacks on ATMs have risen for the fourth consecutive year, up 27 per cent when compared with 2017, from 3,584 to 4,549 incidents. The European Association for Secure Transactions (EAST) reported that losses due to ATM related physical attacks were €36 million, a 16 per cent increase from the €31 million reported during 2017.
New research has revealed that 42 per cent of financial management platform users have more than one bank account, as they take advantage of technological innovation and data sharing in financial services. Analysis of 3,000 Moneyhub users with multiple bank accounts found that while many more people are joining digital challenger banks, 65 per cent of those challenger bank customers also still have accounts with their previous High Street lender.
Standard Chartered is renewing its focus on Open Banking through partnerships with developers, corporations and FinTechs, as well as through Application Programming Interface (API) enabled financial data sharing. The bank said its aXess platform would offer developers access its source code for banking products and its API libraries. The aXess Labs, based in Bengaluru, India, will host in-house developers, accelerate ideation to service delivery, enable new business models, and share Open Banking best practices across the company.
The Competition & Markets Authority (CMA) has issued directions to five banks relating to delays in delivering certain aspects of the Open Banking programme, in particular with regard to mobile app functionality. Using its powers under the Retail Banking Market Investigation Order 2017, the CMA reprimanded Bank of Ireland, Danske, HSBC, Lloyds Banking Group and Santander for breaching deadlines for app-to-app redirection functionality, forcing users to rely on desktop-only data sharing.
Mortgage investment platform LendInvest has secured funding of up to £200 million from HSBC.The FinTech said the investment would enable the company to enter the regulated home loan market for the first time, marking the company’s next step towards its goal of becoming a whole-of-market mortgage provider.
European fraud experts have called on EU regulators to put on hold the implementation of the European Banking Authority (EBA) Guidelines on Fraud Reporting under the second Payment Services Directive (PSD2) until the revised European Central Bank’s (ECB) Regulation on Payments Statistics come into force. In a note issued today, 18 account-servicing payment service providers (AS-PSPs) from 10 European countries have recommended steps to minimise fragmentation risks and ensure both maximal legal certainty and longer-term viability for the implementation programmes that providers and national authorities are putting in place for fraud reporting.
The gradual shift of BigTech giants into financial services has the potential to be a “game changing development” for the industry, according to a new report from the Bank for International Settlements (BIS). The Basel-based institution, which sets out policy and banking services for the world’s central banks, conducted a study into the entry of big technology companies into financial services, which found that regions with “less stringent” banking regulation - including China and Latin America - are ahead of Europe and the United States when it comes to credit services.
This year, London will be home to just as many FinTech ‘unicorns’ as current global leader San Francisco. A new report from global recruiter Robert Walters and market analysis firm Vacancy Soft has shown that of the 29 FinTech unicorns worldwide - companies worth more than $1 billion - nine are in San Francisco, while seven are based in the UK.
Refinitiv research has revealed that while the overwhelming majority of financial sector executives have deployed machine learning, most also acknowledge that poor-quality data is impeding their ability to fully leverage the technology. The global survey among 450 c-suite leaders and heads of data science departments - including 161 from Europe - found that 43 per cent said data quality the biggest barrier to adoption, followed by a lack of data availability (38 per cent) and a lack of available data scientist staff (33 per cent).
Starling Bank is partnering with accounting software firm FreeAgent in the latest addition to its marketplace for third party apps. The tie up means Starling’s 40,000 business customers will be able to access FreeAgent’s accounting platform and link their account data via Starling’s Application Programming Interface (API) marketplace.
Monzo is set to overtake Revolut as the UK’s second-highest valued FinTech after reportedly securing £100 million in its latest funding round. According to the Sunday Times, the funding, led by a new US investor, will drive the valuation of the digital challenger bank to $2.5 billion, ahead of Revolut’s $1.7 billion, and second only to B2B lending challenger Oaknorth as the UK’s most valuable FinTech.
Financial simulation startup Simudyne has announced a $6 million Series A funding round, led by Barclays.Graphene Ventures, an early investor in Snap and Lyft, and Gauss Ventures, early investors in Revolut and Tandem, also contributed to the round, bringing total capital raised since Simudyne was founded in 2007 in to $10 million.
New research has revealed that 95 per cent of chief information and chief information security officers in the UK admit they make compromises in how they protect the business against cyber threats and other disruptions. Endpoint security specialist Tanium surveyed 500 people in those positions, finding that 35 per cent cited pressure to keep the lights on, while 31 per cent suggested they were restricted by legacy IT commitments.
RBS and Barclays have participated in a global trial of blockchain technology which claims to be able to cut the buy-sell period from three months to less than three weeks.The lenders joined 40 global financial and professional services firms, including Swiss Re, AXA and Clifford Chance, to test the application of distributed ledger technology (DLT) developed by Instant Property Network (IPN), a property transaction network.
The Competition and Markets Authority (CMA) is considering an investigation into Visa’s £247 million takeover of cross-border payments firm Earthport. The competition watchdog said a potential inquiry into the merger would result in a “substantial lessening of competition” in the market.
Big Tech companies such as Amazon and Google are more trusted by the public than traditional banks, according to a new survey, suggesting that new financial products such as the Apple Card could pose a challenge to incumbents.Following the announcement that Apple is launching a credit card service to the US market last month, a Harris 24 survey of 542 consumers revealed that 39 per cent had ‘a lot or a great deal of confidence’ in tech firms, compared with the 31 per cent who said they trusted credit card companies.
InsurTech-focused venture capital firm IA Capital Group has raised $150 million across three funds. The Inter-Atlantic Stonybrook Insurtech Ventures fund will focus on property and casualty InsurTech, the Inter-Atlantic G fund will focus on life, annuity and retirement InsurTech, and the Inter-Atlantic Ivy fund will focus on later-stage opportunities in InsurTech and FinTech.
Santander has announced that its European divisions, which includes Santander UK, will shoulder a reported €1.2 billion of cost cutting in the next four years, as the Spanish banking giant steps up plans to invest more than €20 billion in digitisation and technology. Santander UK could face further cuts as its parent company looks to “simplify, digitalise and automate” the group.
Ministers have called on businesses to take further action to protect themselves against cyber crime despite a government survey showing that the percentage of UK businesses experiencing cyber security breaches fell to just under a third (32 per cent) from 43 per cent last year.The results of the Department for Culture Media and Sport’s annual cyber crime survey revealed that moves from UK businesses and charities to upgrade their defences following the introduction of tough new laws have driven down the overall number of reported breaches in 2019.
More than half of retail banks are looking to collaborate with FinTechs to advance their own digital banking offerings, with 56 per cent expecting that incumbent/FinTech sandboxes will become mainstream by 2025. An Economist Intelligence Unit survey of 405 global banking executives on behalf of banking software firm Temenos revealed that retail banks now rank adoption of new technologies as a more pressing priority than regulation and changing customer demands.
More than half of all UK consumers have at least one bank account they no longer use, but have not yet closed, as many open new accounts with challenger banks because they offer enticing personalised features. The research, commissioned by Crealogix and undertaken by Censuswide among 2,000 people aged 18 to 65 who currently have a bank account, found that 57 per cent of respondents admitted to having at least one bank account they have not accessed in the last three months, while a quarter of Generation Z and Millennial-aged people have two or more accounts that are currently not in use.
Barclays, BBVA, Deutsche Boerse and SWIFT are among those from the financial services sector to join the newly-founded International Association for Trusted Blockchain Applications (IATBA). More than 100 organisations from a variety of industries have signed up to the organisation, which grew out of a series of meetings held by the European Commission.
Derivatives analytics firm OpenGamma has raised $10 million in a funding round led by FinTech and B2B software backer Dawn Capital.The funding round includes participation from existing investors Accel, CME Ventures and ex-SunGuard chief executive Cristóbal Conde.
The European Commission (EC) has launched a new cross-border initiative encouraging collaboration between national regulators and governments on to grow the FinTech economy. The European Forum for Innovation Facilitators (EFIF) is aimed at supporting regulators to share information and work together on plans for innovation hubs and regulatory sandboxes.
New research has revealed that 83 per cent of mobile financial applications store data insecurely, with 97 per cent failing to include binary protection which stops hackers from reverse-engineering the software. Application security provider Arxan commissioned advisory firm Aite Group to analyse the market, finding that 90 per cent of apps unintentionally leaked data to other apps, while 80 per cent used weak encryption and 70 per cent used weak random-number generation.
Israeli startup FinCom.Co has launched its anti-money laundering (AML) fingerprint technology in the UK, gaining market access through the London Stock Exchange’s Issuer Services Marketplace. Developed for highly regulated sectors, the AML platform utilises advanced mathematics with phonetic fingerprint recognition to aid customer verification and compliance in real time.
Financial services compliance departments should accelerate their uptake of new technologies such as artificial intelligence (AI), Natural Language Processing (NLP) and RegTech solutions to cut costs, according to Accenture. A survey of 151 compliance executives at financial services institutions found that over two-thirds (68 per cent) of their compliance departments are facing a cost reduction target, while 69 percent of these looking to make savings of between 10 and 20 per cent over the next three years.
Biometric payments company FingoPay has announced that Manchester will be the first city in the UK to trial finger vein payments.The FinTech, owned by Sthaler, has developed a Hitachi-backed payment systems which allows shoppers to pay with a scan of the vein signatures in their finger, removing the need for cards, apps or pin numbers. The advanced security offering also removes the need for transaction limits.
Blockchain-based mortgage platform Acre has secured £5 million in funding from insurance giant Aviva and financial advisor Sesame Bankhall Group (SBG).The FinTech, which uses blockchain to build a “record of transaction” of the elements of the mortgage application process, says it will use the investment to grow the platform.
In 2019, the majority of banks have made significant progress in digitalising their retail product line, with 65 per cent of digitally active large banks reaching the ‘digital promised land’, according to Temenos. This represents a significant shift from 2017, when the banking software company ranked the majority of banks as ‘legacy lovers’ or ‘under achievers’.
The European Banking Authority (EBA) has published a series of clarifications to issues raised by its joint working group on Application Programming Interfaces (APIs) under the second Payment Services Directive (PSD2). The issues raised in today’s update relate to the performance and support of APIs, which enable financial data sharing, as well as the provision of a list of Third Party Providers (TPPs) that are interested in testing, and the testing by TPPs that is not authorised.
Fourteen global financial institutions - including HSBC, Lloyds, Deutsche Bank and Standard Chartered - have joined together to launch an initiative which aims to use technology to open up trade finance as an asset class for the institutional investors.The Trade Finance Distribution Initiative (TFD) will initially focus on creating common data standards and definitions to enhance operational efficiency and improve risk management associated with establishing trade finance as an asset class.
TSB is to end IT outsourcing projects and bring control of its banking platform and technology back in house, after a series of IT meltdowns left millions of customers locked out of their online banking last year. In a statement, the bank said it was discontinuing arrangements with with Sabis, a tech subsidiary of parent company Banco Sabadell and other technology partners.
NatWest is trialling a new companion to the NatWest app called Mimo, designed to help customers enjoy financial peace of mind. Mimo will help customers budget, remind them of the financial tasks they need to do, and provide proactive and personal insights into their money, looking at their bills or day-to-day spending – as well as insurance, subscriptions and utilities.
Banking incumbents which are slow to upgrade their infrastructure could take a 30 per cent hit in revenue, as challengers gobble up more of the market for innovative digital banking services, according to Citibank. A new report from the US-based bank has demonstrated a growing need for established banking players to develop their own standalone digital-first brands in order to fend off the growing number of FinTech challengers, such as Monzo, Starling and Revolut.
The Information Commissioner’s Office (ICO) has opened the beta phase of its regulatory sandbox, designed to support organisations using personal data to develop innovative products and services. Participants will be able to work with the ICO’s specialist staff to help ensure they comply with data protection rules, providing some comfort from enforcement action and, where feasible, increased public reassurance that products and services are not in breach of data protection legislation.
Over one third of IT decision-makers (ITDMs) in the UK’s largest financial services firms believe that artificial intelligence (AI) will transform the industry in the next decade – but the same percentage admitted that their infrastructure is not prepared for the transformation. A Censuswide survey of 200 ITDMs for data centre firm Digital Realty also found that they thought the potential for AI to transform their business functions outweighs the disruptive potential of other technologies.
Challenger bank TSB would need a three-year turnaround and cost-cutting plan before it could be a candidate for sale or consolidation, according to the chairman of parent group Banco Sabadell. The High Street lender last year saw chief executive Paul Pester stand down after a series of IT outages left 1.9 million customers locked out of online banking, costing the company £330 million.
Klarna has launched its own Open Banking Platform, giving access to more than 4,300 European banks through a single Access to Account (XS2A) Application Programming Interface (API). The XS2A API has been developed at scale across markets for almost 15 years through the Klarna Group company Sofort. It has transferred over €10 billion in volumes and completed over 100 million transactions for 2018 alone.
The European Insurance and Occupational Pensions Authority (EIOPA) published its report on best practice among authorities licensing InsurTechs across Europe. As part of the European Commission's Fintech Action Plan, the document presents a mapping of current authorising and licencing approaches to financial innovation, including an assessment of how the principle of proportionality is applied in practice. It also includes an analysis of the approach to InsurTech startups operating as peer-to-peer (P2P) insurers.
The Hong Kong Monetary Authority (HKMA) has granted its first tranche of virtual banking licences.The first Hong Kong-based institutions to have received licences to operate under the Banking Ordinance are Livi VB, SC Digital Solutions and ZhongAn Virtual Finance. The licences will enable them to operate in the form of a virtual bank from today.
FinTech challengers Starling, Monzo and Revolut have led the list of tech firms joining the government’s Future 50 startup programme. The mobile-only banks are among 24 new entrants for this year’s programme, which backs 50 of the UK’s fastest-growing late-stage tech startups in their efforts to scale-up by enabling contact with senior government decision-makers and a peer-to-peer network.
Adobe and Microsoft are teaming up to launch an integration with LinkedIn for their marketing solutions, as the software giants look to rival Salesforce.The collaboration is the latest joint initiative from Microsoft and Adobe as they combine sales and marketing offerings. It will let users of Adobe’s marketing software improve targeting of potential customers in LinkedIn, which is owned by Microsoft.
Nutmeg has announced plans to democratise its company ownership with a crowdfund later this year. Working in conjunction with Crowdcube, the digital wealth manager will give eligible customers the opportunity to invest alongside existing institutional shareholders such as Convoy, Taipei Fubon Bank, Goldman Sachs and Balderton Capital.
The Payment Systems Regulator (PSR) has published its Annual Plan and Budget for 2019/20, announcing a more direct focus on consumers’ experience of payments, having spent its first few years on access to payment systems and the way infrastructure works. It explained that an agile approach and willingness to adapt will help the people and businesses that rely on payments.
Citigroup has announced it is developing a digital consumer payments service for financial institutions.The move will offer institutional merchants the ability to collect from a range of payment methods, including cards, e-wallets and new bank transfers such as Request to Pay and Open Banking.
Payments startup Wi5 has raised £8 million in a seed round to drive growth of its platform. The investment was led by West Hill Capital. The London-based FinTech, which counts telecoms provider Telefonica amongst its backers, said it would use the money to expand its mobile engagement platform, which allows customers to place orders and payments on-site without the need to download an app.
New research has revealed that 87 per cent of IT decision-makers believe that technologies powered by artificial intelligence (AI) should be subject to regulation. A study of 300 ITDMs from the UK and US commissioned by integration platform SnapLogic found a growing need for firms to focus on corporate responsibility and ethics it the development of AI solutions, with 94 per cent saying more attention needs to be paid to this area.
More than a third of financial services jobs in The City of London are at risk of automation, according to a study by the Office for National Statistics (ONS). The analysis concluded that 1.5 million jobs in England were at high risk of having some of their tasks automated, with 710,000 jobs located in The City’s financial services hub being under threat.
International payments startup Airwallex has raised a $100 million investment, led by DST Global, tipping it into a $1 billion ‘unicorn’ valuation. The Australian-based cross-border payments specialist also counted Sequoia Capital China, Tencent, Hillhouse Capital, Gobi Partners, Horizons Ventures and Square Peg Capital as investors.
Apple is launching a credit card that will be integrated into its mobile wallet and promises to help customers lead a "healthier financial life". Available in the US this summer, the titanium Apple Card is a built into the Apple Wallet app on iPhones and offers a simple application process, no fees, financial management tools and privacy controls.
Monzo is putting a halt to its plans to join the UK’s Cheque Image Clearing System, for a focus on building its business banking.The FinTech unicorn announced it had started developing plans to join the image clearing system in June last year.
Digital challenger bank Tandem Bank has partnered with Open Banking platform provider, Token.io to comply with the second Payment Services Directive (PSD2). Having hit the 14 March deadline for technical specifications, support and a testing facility, Tandem is now looking to look beyond core compliance, developing new services that make use of new opportunities around payments Application Programme Interfaces (APIs).
Three quarters (74 per cent) of consumers aged over 55, and 57 per cent of low-income earners, never use mobile banking apps, according to Accenture. The consultancy’s UK survey of 3,000 consumers also found that a quarter (26 per cent) of over 55 and low-income earning consumers said they never use online banking.
Italian payments group SIA is considering an Initial Public Offering (IPO) and further acquisitions, as part of an ambitious three-year strategic plan. Shareholders have agreed on growth ambitions, with a decision due this summer on whether or not to float the company.
Monzo is partnering with OakNorth to launch a range of savings account products to customers in the UK. The tie-up between the two digital banking challengers will allow Monzo’s 1.6 million customers to open a Cash ISA and other services via OakNorth’s savings platform. OakNorth has 40,000 savings customers on its digital platform.
The finance industry prevented £1.66 billion of unauthorised fraud during 2018, according to UK Finance. During the same period, a total of £1.2 billion was stolen by criminals committing both authorised and unauthorised fraud.
Incumbent institution J.P.Morgan and growing startup Curve both came away with two awards each at last night’s FStech Awards. The 19th annual industry gathering, celebrating the best of financial services technology, took place at London’s Marriott Grosvenor Square.
Worldpay is teaming up with Amazon Pay, making it the first acquirer to enable the e-commerce giant’s payment services for merchants.The agreement, which is launching initially in the US, will enable Worldpay merchants to accept payments through Amazon Pay using information already stored in a customer’s Amazon account to make purchases online.
The Prudential Regulation Authority and the Financial Conduct Authority have embarked on a joint pilot project to establish how distributed ledger technology (DLT) and Application Programming Interfaces (APIs) could be applied to regulatory functions.In a keynote address to the RegTech Live conference last month, Sholthana Begum, a technical specialist in regulatory technology at the Prudential Regulation Authority and Bank of England, told the audience that both regulators were collaborating to research how new technologies could be integrated into the compliance landscape of the future.
The potential for bias in the use of algorithms in financial services is set to be investigated by the Cabinet Office’s Centre for Data Ethics and Innovation (CDEI). The government body stated that algorithms have huge potential for preventing crime, protecting the public and improving the way services are delivered, but decisions made in these areas are likely to have a significant impact on people’s lives, so public trust is essential.
More than £6 billion is spent every year on cyber security testing by UK firms responding to a rise in the number of data breaches, according to figures from Avord. A survey of businesses by the cyber security testing firm found that 93 per cent had seen an overall increase data breaches in the last five years, with a third of companies experiencing a breach in the past year.
Millennials are increasingly using WeChat and WhatsApp to discuss their investments with wealth managers, according to GlobalData. The data and analytics company’s latest investor survey revealed that almost 40 per cent of Millennials in Asia Pacific were contacting their wealth managers via a chat application in the second quarter of 2018, a 10 percentage point increase on the same period in 2017.
European firms are lagging behind their Asian and US peers in the race to comply with data-privacy regulation, according to a report from Ant Financial and The Economist Intelligence Unit. The joint study surveyed by 250 chief executives in China, the US, Western Europe and South-East Asia to asses levels of preparedness amongst firms for data regulation, such as the EU’s General Data Protection Regulation (GDPR).
Curve has announced plans to expand internationally by opening six offices across Italy, Germany, France, Spain, Portugal and Poland. The FinTech startup, which lets users combine their credit and debit cards into one card and smart app, has also appointed Alaister Mortlock as its head of talent. Previously at LinkedIn and Centrica, he will manage the talent acquisition for Curve.
Chatbots, artificial intelligence advice services, wearables and biometrics will transform the way consumers manage their money in the future, according to a report from CYBG. The banking group commissioned a Censuswide survey of more than 2,000 UK consumers, which found that 78 per cent of 16-34 year olds and 81 per cent of those aged 35 and over, said they valued being able to talk to a human as part of their banking experience.
Three quarters (73 per cent) of UK businesses believe that fraudsters who carry out payments fraud are now ‘ahead of the industry’, according to a report from Vocalink, a Mastercard company.The Populus survey of more than 500 senior decision makers of UK businesses found that despite one in five (22 per cent) firms reporting someone had previously attempted payments fraud on their business, plus a further one in ten (12 per cent) falling victim to this type of scam, many still lack the systems needed to deal with these intrusions.
IBM has announced Blockchain World Wire, a new real-time global payments network for regulated financial institutions. Designed to accelerate foreign exchange, cross-border payments and remittances, World Wire is the first blockchain network of its kind to integrate payment messaging, clearing and settlement on a single unified network, while allowing participants to choose from a variety of digital assets for settlement.
Cross-border payments firm InstaReM has closed a $41 million Series C funding round, aimed at supporting expansion of its teams in London and Latin America. The round was led by Singapore’s Vertex Growth Fund and supported by new investor Atinum, a South Korean venture capital fund.
NatWest plans to offer its small businesses and corporate customers a new virtual account platform in partnership with Nordic software company Tieto. The platform will support regulated professions - such as legal, accountancy and insurance firms - which need a safe and simple way of segregating their clients’ monies to comply with regulatory standards.
The European Banking Authority (EBA) has launched its central electronic register under the second Payments Services Directive (PSD2). The register will provide information on several thousand payment and electronic money institutions and 150,000 agents within the EU, with the objective of increasing transparency and ensuring a high level of consumer protection within the European Single Market.
A third of the UK’s small business are without any cyber security strategy, according to a new report that warns that a lack of preparedness for a cyber attack could cost firms and their users thousands of pounds. A study from corporate responsibility body Business in the Community found that 42 per cent of small business reported at least one attack or data breach incident over the course of 2018. In 17 per cent of cyber security incidents it took the business and its systems at least a day to recover from the breach.
SC Ventures, the FinTech investment unit of Standard Chartered, is launching a market-first platform to connect startups, investors and accelerators with the bank.The FinTech Bridge is aimed at combining its own innovation drives with the best solutions from the wider FinTech ecosystem.
Digital identity provider ForgeRock today has launched an Open Banking Sandbox-as-a-Service platform.The firm said the cloud-based testing environment for Application Programming Interfaces (APIs) is aimed at helping firms ahead of the 14 September deadline for financial services firms to achieve compliance with the next phase of the second Payment Services Directive (PSD2) regulation.
FIS and Worldpay have entered into a definitive merger agreement. Upon closing, FIS shareholders will own approximately 53 per cent and Worldpay shareholders will own approximately 47 per cent of the combined company, with the combination of stock and cash valuing Worldpay at an enterprise value of approximately $43 billion, including the assumption of its debt, which FIS expects to refinance.
Challenger banks One Savings Bank and Charter Court have announced the terms of a £1.75 billion merger set to create one of the UK’s largest specialist lenders. The deal will hand 55 per cent of shares in the combined company to One Savings Bank shareholders, while One Savings Bank’s chief executive Andy Goulding and chief financial officer April Talintyre will retain their roles in the new company.
German challenger bank N26 has appointed a general manager to boost its plans for further expansion in the UK, ramping up the competition with the likes of Starling and Monzo. Will Sorby has been appointed UK general manager with a brief to lead the next stage of N26’s expansion following the launch of its mobile banking app in the UK in November last year. The company claims to have seen more than 1,000 new customers register on a daily basis since the roll out began.
First Direct is giving customers a co-creation platform within its app, enabling direct involvement in developing new products and services. The new feature, called fdesign Mobile, means first direct can share updates with ‘fdesigners’, who can feedback on any proposed changes.
Incumbent players in the financial services industry must commit to open data protocols and collaboration with challengers if they are to survive, according to experts at the HPS Powercard Users Meeting in Marrakesh. Speaking on a panel assessing new trends in the payments space, HPS chief executive Abdeslam Alaoui Smaili commented: “Proper industry architecture is crucial – it has to be fully open or it will fail.”
Cryptocurrencies could pose a risk to financial stability and increase the number of risks faced by banks, according to the Bank for International Settlements (BIS). In a statement, the BIS’ Basel Committee, which develops regulatory standards for central banks around the world, said that the increasing in bank exposure to the spread of crypto asset trading platforms and crypto currencies such as Bitcoin is heightening the level of risk for financial institutions.
Network International, the digital payments company operating across over 50 countries in the Middle East and Africa, has announced that it is considering proceeding with an Initial Public Offering (IPO) on the London Stock Exchange’s (LSE) main market. The company has also appointed former Worldpay chief executive Ron Kalifa as its new chairman.
Barclaycard has announced a new agreement with Alipay, which will allow retailers to accept Alipay transactions in stores across the UK. Retailers will now be able to accept in-store Alipay payments without replacing their existing point of sale systems. Building on a pilot over the past two years, the new deal will enable UK retailers to take advantage of the growing volume and buying power of Chinese visitors.
UK companies that deploy business intelligence and data visualisation software get an average of 24 per cent more sales than those that don’t, new research has revealed. IQBlade analysed the UK’s fastest growing companies and the technologies behind their growth, finding that the average sales for those using business intelligence platforms in 2018 was £39 million, compared to £24 million for those that don’t.
The Bank of England’s failure to enforce compliance and modernise its IT systems risks undermining its credibility, according to MPs. A report into working culture and modernisation programmes at the central bank by the Commons Public Accounts Select Committee found that the 325-year-old institution is “years out of date”, dealing a blow to its ability to demand compliance from the industry.
The speed of bank and ATM closures is leaving society’s most vulnerable people and communities at risk of financial exclusion, the chairman of the Financial Conduct Authority (FCA), has warned.In an address to the Retail Banking Conference in London, Charles Randell, who heads the UK’s banking authority, said the government and regulators must take joint action to ensure millions of people living on low incomes, the elderly and individuals and businesses in rural communities are not left ‘unbanked’ as consumers switch to digital banking.
The UK Insurtech Board - an initiative facilitated by Tech Nation as part of the Fintech Delivery Panel (FDP) convened by HM Treasury - has launched a new toolkit of legal documents, designed to make it easier for insurance technology startups to forge commercial relationships with corporate partners.Having identified that early stage InsurTech ventures frequently lack legal support or consistent requirements when entering discussions with potential corporate partners, the Insurtech Board has created a suite of startup-friendly legal documents, which can be downloaded at no cost from the Tech Nation website.
Mastercard has entered into an agreement to acquire Ethoca. The Ethoca suite of products - that help merchants and card issuers collaborate in real-time to identify and resolve digital commerce fraud - will integrate with Mastercard’s existing fraud management and security products.
CreditDigital, a business-to-business (B2B) lending platform, has secured £2 million to fund its expansion from early stage venture capital fund Fuel Ventures. The London-based startup, founded by Daniel Lipinkski in 2017, has capitalised on the growing trend for instalment- based payment by offering businesses the opportunity to spread the cost of a purchase over 12 months, while paying suppliers and vendors up front.
The majority of banks felt that the implementation of an institutional FinTech solution had contributed towards achieving business goals by lowering operational costs (87 per cent) as well as improving regulatory compliance (67 per cent). This is according to a survey carried out among 10 banks and 142 FinTechs by ING UK and Illuminate Financial between December and January 2019, which found that 40 per cent of FinTechs agreed that reducing operational costs was the primary driver for banks adopting tech solutions, followed by improving regulatory compliance (21 per cent).
Lloyds, NatWest and Barclays are teaming up to pilot the UK’s first shared business banking hubs, helping support businesses hit by branch closures to make local cash and cheque deposits.The initial hub in Birmingham is the first of six scheduled to open in UK towns in the coming weeks as part of a joint initiative to enable small businesses and sole traders to pay in large volume of coins, notes and cheques in their local area.
Santander Asset Management (SAM) has reached an agreement with BlackRock to adopt its Aladdin platform as part of a wider technological transformation. The Aladdin platform will allow greater consistency and standardisation of risk management across all of SAM’s markets, providing clients with more transparent risk/return analysis, as well as more complete and timely reporting.
Mergers and acquisitions (M&A) activity amongst enterprise software and IT and business services surged to a five year high of $182 billion in 2018, driven by deals from Microsoft, Oracle, Adobe and SAP. Hampleton Partners, an international technology M&A advisory firm, found consistent growth in transaction volume, multiples and valuations of enterprise software deals.
Nationwide has enlisted SAS to analyse customer interactions more effectively so it can solve members’ problems earlier. A proof of concept was able to establish significant inefficiencies as more than half of all email enquiries could be resolved instead by guiding members towards digital channels.
Digital challenger bank duo Tide and ClearBank have announced plans to co-invest at least £120 million in the UK over the next five years, with the aim of increasing business banking market share. Tide is planning Series B and C investment rounds in the next two years to raise £60 million, stating that it has received expressions of investment interest from around 70 venture capital firms across the globe.
The UK has risen one place, to third, in a global ranking of most promising countries in the world for innovation, disruption and technology, according to a report from KPMG.The UK came in behind the USA and China in the accounting firm’s 2019 assessment of the countries expected to produce the most disruptive technologies, but managed to break away from closest rival Japan, which nearly tied the UK for fourth place in 2018.
As part of a national trial, NatWest is due to begin piloting biometric fingerprint technology with 200 customers in the coming weeks. Customers will use their fingerprint to verify transactions over £30, increasing security and making it easier for customers when paying for goods or services at the tills, as no PIN is required.
The Bank of England (BoE) is taking supervisory action against Visa over a major outage which halted payments for millions of consumers last June. The central bank said that it was using its statutory powers to ensure that Visa fully implements the recommendations of an independent review into the disruption to its card authorisations system.
RegTech firm Heliocor has raised $2.5 million using a novel funding technique used for the first time in the UK. The process includes investors participating in 20 per cent of Heliocor’s future profits after tax and their investments being represented as a digital token, using blockchain technology, rather than just a paper certificate, potentially providing significant liquidity should that token be listed.
The European Payments Council Board (ECPB) has approved UK Finance’s application for the continued participation of UK payment service providers in the Single Euro Payment Area (SEPA) schemes, including in a no-deal Brexit scenario. The decision will come as a relief to the UK’s payment provision firms, which had raised concerns that a no-deal Brexit could lead to UK businesses and consumers experiencing issues and higher charges when attempting to make and receive payments in Euros and maintain their Euro bank accounts.
The Treasury Committee has published a unanimously-agreed report on economic crime, including anti-money laundering supervision and sanctions implementation. It concluded that the official response must be more precise, with reform of several departments to create a more joined-up response to a variety of emerging threats.
Currencies Direct has launched a suite of Application Programming Interface (API) services. The UK-based payments provider’s platform is targeted at large corporates, startups and service providers which want to offer a complementary service for international payments.
Software provider Goldensource is tapping into Brexit uncertainty with the release of new data sets aimed at helping banks prepare for changed regulatory demands and compliance requirements in the event of a no-deal exit from the EU.With the UK’s planned departure scheduled for 29 March, the software firm says its Brexit-specific data platform will enable banks and financial institutions to report to the Financial Conduct Authority (FCA) and the European Securities and Markets Authority (ESMA) at the same time in the event that the UK leaves without a transitional deal in place.
IPC has made a strategic investment in GreenKey Technologies which will enable it to integrate artificial intelligence (AI) and natural language processing (NLP) technologies into its offering for financial services workflows. The investment gives the financial communications provider exclusive rights to GreenKey’s machine learning voice technologies, enabling IPC to deploy these alongside their trading communications and cloud financial ecosystem of over 6,400 market participants.
The Investment Association’s FinTech innovation hub Velocity has partnered with B-Hive, a Brussels-based FinTech network, to promote FinTech applications in Europe’s asset management industry. The joint working project will promote pan-European collaboration and closer relationships between the two organisations, with the goal of building a stronger international FinTech ecosystem via greater partnership between London and Brussels.
The Financial Conduct Authority (FCA) has today published two pieces of research looking at UK consumer attitudes to cryptoassets - such as Bitcoin or Ether - indicating potential harms, including the fact that many consumers may not fully understand what they are purchasing. The research includes qualitative interviews with UK consumers and a national survey, which found that several of those interviewed talked of wanting to buy a ‘whole’ coin, suggesting they did not realise they could buy part of a cryptoasset.
Insurtech UK, the industry’s new association, has revealed its latest associate members and partners. This body’s core membership now stands at more than 40 InsurTech industry stakeholders, with Lloyd’s of London, Hiscox, Holloway Friendly and Bascule all named as associate members ahead of a formal launch in the coming months.
Nationwide has invested £15 million in 10x Future Technologies as part of a Series B funding round, giving the building society a minority shareholding aimed at designing and building an innovative digital platform for new current accounts. Last year the society announced that it would launch a business current account in support of the UK’s 5.7 million small businesses. This partnership provides the digital platform, which will be launched towards the end of the year.
Rapyd has announced three new hires in an attempt to scale up and penetrate the FinTech market. The payment platform has appointed Helcio Nobre to chief product officer, Marc Winitz to chief of marketing, and Eran Nachshon to vice president of operations.
Barclays will introduce wearable payment devices to its mobile payment brand Pingit in May. New features will also be coming to Pingit to enhance the wearable experience, with users soon able to segment their account into ‘jars’ to set aside money for specific uses.
The Access to Cash Review has published its final recommendations, calling on the government, regulators and banks to act now or risk leaving millions behind. The review concluded that digital payments don’t yet work for everyone and around eight million adults - or 17 per cent of the population - would struggle to cope in a cashless society.
Financial services firms are lagging behind in digital transformation compared to other industry sectors, with new research revealing falling confidence in digital capabilities and a shortage of the skills, leadership and collective vision needed to shape the digital future. The Capgemini Research Institute examined sentiment on digital and leadership capabilities among bank and insurance executives, comparing it to an equivalent study from 2012. Over 360 executives were surveyed from 213 companies, whose combined 2017 revenue represented approximately $1.67 trillion.
Esme Loans has enlisted Microsoft to build a new cloud based data warehouse, enabling faster and better targeted lending decisions and automated service assisted by artificial intelligence (AI). Microsoft has entered into partnership with the digital lender to build a bespoke data warehouse - a centralised data repository held on an online server - which will help improve the customer journey, simplify integration with third parties and provide a faster application process.
A government report has found that some of the UK’s leading companies are struggling to understand the potential impact of a cyberattack on their business, with less than a fifth (16 per cent) of boards having a full grasp of the threat. A joint survey of the cyber security threat landscape compiled by the National Cyber Security Centre (NCSC) and the Department for Culture, Media and Sport (DCMS) analysed the approach to cybersecurity among the UK’s FTSE 350 companies.
Cyber attacks on mobile banking apps rose by more than 100 per cent in the last six months of 2018, according to a new report from ThreatMetrix. An analysis of 17 billion digital transactions processed through the ThreatMetrix Digital Identity Network during the second half of 2018, found that 61 per cent of all digital transactions now originate from a mobile device.
Innovate Finance, the independent industry body for UK FinTech, has launched the FinTech for Schools Initiative, with the aim of inspiring young people’s ambitions for innovation in financial services. The campaign is designed to encourage young people to understand the increasing importance of digital skills in the workplace, with an emphasis on ensuring the sector is appealing to girls.
Almost 70 per cent of customers would be more comfortable using an Open Banking app provided by a traditional High Street bank over the same consolidated banking app provided by a challenger bank, a new study has found.A survey of 2,000 UK banking customers commissioned by software analytics firm New Relic found that a majority would trust incumbent banks to combine their account information from multiple bank accounts in one mobile app, with 69 per cent saying they would be more willing to use consolidated banking services from traditional banks, compared to just 19 per cent who said they would prefer to use a challenger.
Barclaycard has signed a new card acceptance partnership with UnionPay International, a subsidiary of China UnionPay. The deal will enable its 110,000 UK merchants to accept UnionPay through a phased roll-out that will begin this summer.
Consumer finance FinTech Quint Group has secured a £16.5 million in a financing deal from NatWest. Founded in 2009, the UK-based startup now has operations in the US, Australia, Poland, China and South Africa.
UK banks are being hit by at least one major IT or security failure that disrupts customer payments on a daily basis, according to an investigation by Which? Money. The consumer watchdog also found that the UK’s six largest lenders suffered at least one IT outage or security error every two weeks, with a total of 302 incidents that prevented customers from making payments in between March and December 2018.
The rapid pace of change in FinTech is leading to heightened fears among regulators of harm to consumers and risks to the wider financial system, according to KPMG. The auditing firm’s research into the steps being taken to ensure FinTech firms are safely implementing technology found that regulators and risk experts are finding it difficult to keep up with the pace of technological development.
The operational cost savings from using chatbots in banking will reach $7.3 billion globally by 2023, up from an estimated $209 million in 2019. According to the latest analysis from Juniper Research, this represents time saved for banks in 2023 of 862 million hours, equivalent to nearly half a million working years.
NatWest has become the latest High Street bank to launch service which allows customers to see all their bank accounts in a mobile app. The service enables customers to view current accounts from 15 different UK banks, with account information, balances and transactions available.
The Co-operative Bank has returned to operating profit for the first time since 2013, despite IT upgrades and PPI payouts resulting in an overall loss before tax. A statement of full year profits for 2018 showed group losses before tax were £140.7 million, up slightly from £140.3 million in 2017. However, operating costs were down by 13 per cent to £374 million.
The Payment Systems Regulator (PSR) has welcomed a new voluntary industry code of good practice to protect people from Authorised Push Payment (APP) scams which will take effect from 28 May. At the beginning of 2018, the PSR set up a dedicated steering group, made up of consumer representatives and the industry, to design and implement a code that would work for everyone.
Revolut has denied media reports that the departure of its chief financial officer earlier this year was linked to questions around business practices at the challenger bank. According to a report in the Daily Telegraph last night, Peter O’Higgins resignation from the FinTech challenger in January coincided with the emergence of reports that Revolut’s board has launched an internal investigation in 2018 over an alleged failing in its screening system.
London continues to top the tables for investment in FinTech companies, with the capital having the highest number of tech ‘unicorns’ in Europe. Data comped by technology and investment advisory firm GP Bullhound for London & Partners found that London’s tech companies attracted £1.8 billion in venture capital (VC) funding, more than any other European City.
Mastercard has signed a global Memorandum of Understanding (MoU) with Angaza which will see the two companies partner to roll-out a digital payment solution that increases access to affordable necessities - like solar home systems and water pumps - for people and businesses in emerging markets across the globe. Leveraging Angaza's pay-as-you-go (PAYG) embedded metering and monitoring technology and Mastercard's digital payment infrastructure, including QR technology, this partnership will not only unlock access to the basic necessities, but will also help people without access to credit or traditional banking services start on a path to financial inclusion.
Research from SAS and the Global Association of Risk Professionals (GARP) has revealed that 81 per cent of risk professionals in the financial services industry have already seen benefits from artificial intelligence (AI) based technology. In December, SAS and GARP surveyed more than 2,000 representatives from across the financial services industry - including banking, investment banking and asset management - specifically targeted at those with a risk-related role.
Credit rating giant Experian has abandoned its £275 million merger with rival firm ClearScore after regulators warned a deal between the sector’s two largest players could damage competition. Experian has backed down after the Competition and Markets Authority (CMA), released the provisional findings of a phase 2 investigation into the takeover in November citing concerns that it was likely to “weaken competition in the sector and have a negative effect on the services offered to customers.”
Nearly 60 per cent of wealth managers report that their clients are increasingly worried about the risk of data breaches and cybercrime as the asset management industry begins to adopt new technology, according to a report from GlobalData. However, despite growing cyber security fears amongst clients, a report compiled by the data analytics firm based on interviews with wealth managers found that just 43 per cent of professionals were concerned about the effect of potential data breaches on their company’s brand.
Nivaura has closed a strategic funding round, raising $20 million in seed and seed extension capital, led by London Stock Exchange Group. The FinTech firm, founded three years ago, is focused on the deployment of digital investment banking platforms for banks, exchanges and other financial institutions, to connect and automate fragmented and manual processes involved in the issuance and administration of instruments such as debt, equity and structured products.
Citi’s Treasury and Trade Solutions has launched and new digital onboarding experience for institutional clients. CitiDirect BE is now available in North America and across six countries in Western Europe, with a full roll-out across the rest of EMEA, Asia Pacific and Latin America in the coming quarters.
M&S Bank has become one of the first mortgage providers to enable Open Banking-assisted mortgage applications. This means most customers will no longer need to source and supply copies of bank statements to support their mortgage application, as this documentation will be immediately and securely provided via the new platform.
New technology is changing the nature of research for fund managers post MiFID II, according to the Financial Conduct Authority’s (FCA) chief executive. Addressing the European Independent Research providers association yesterday, Andrew Bailey stated: “New technology is changing not only the nature of research, but how this is supplied, monitored and valued by the buyside.”
Sixty three InsurTech deals with a total value of $1.59 billion were announced worldwide in the fourth quarter of last year, up 24 per cent on the previous quarter and 155 per cent year-on-year. The total, including all-stage investments in property, casualty, life and health ventures, is the second highest ever, just behind the exceptional second quarter of 2015, according to from advisory firm Willis Towers Watson.
Cloud management provider Sage has partnered with UK payments FinTech Modulr to simplify the task of managing accounts payable and payroll payments. The solution, known as Sage Salary and Supplier Payments, will allow businesses and their accountants to securely manage and process payments from directly within the Sage Accounts and Payroll products.
Mobile payments represented more than 27 per cent of the total social media conversation around payments, with total mentions increasing 20 per cent over the prior year. This is according to the 2019 edition of the Mastercard Digital Payments Study, which analysed more than 3.3 million conversations from the past year across several social media channels, including Twitter, Facebook, Instagram and Weibo.
The board of Banking Competition Remedies (BCR) has announced that the Incentivised Switching Scheme is now accessible to target customers. This follows BCR’s announcement in December of the 11 organisations so far eligible to participate – including: Arbuthnot Latham, Clydesdale Bank, The Co-operative Bank, Hampden & Co, Metro Bank, Santander UK, Starling Bank, Handelsbanken and TSB Bank.
Digital banking FinTech OakNorth is partnering with payments clearing platform ClearBank, enabling the former to offer instant payments and agency banking services. ClearBank will initially provide real-time Faster Payments infrastructure to OakNorth.
Nomura is investing in artificial intelligence (AI) startup venture AIM2, which is aimed at using robotics and machine learning to build automated trading tools for financial markets.The Japanese investment banking group said the venture, established by hedge fund Brevan Howard in 2015, was focussed on using AI and data science to analyse large sets of high-frequency historical and real-time data, including client flows and market data.
Goldman Sachs has reportedly joined forces with Apple to issue a new credit card that will help customers to manage their money. A report in the Wall Street Journal suggested that the joint card will link to the Apple Wallet mobile app, letting customers budget, track reward schemes and have a better oversight of their finances.
The board of Banking Competition Remedies (BCR) has announced the results of the Capability and Innovation Fund Pool A grant process, with Metro Bank, Starling Bank and ClearBank sharing the £280 million pot. Metro Bank has been awarded £120 million, with £100 million for Starling and £60 million for ClearBank.
A new survey from Marqueta has revealed that 41 per cent of UK consumers are considering a switch to digital-only banking, with Millennials leading the way. A Propeller survey of 2,027 banking customers across the UK, US, France, Germany and Spain, commissioned by the payment infrastructure platform, found a general belief that cash as form of currency is set to become obsolete within the next two decades.
The majority of Americans (88 per cent) want technology to complement, not replace, the assistance of a human financial advisor. This is according to a survey of 2,000 US adults commissioned by MDRT and conducted online by The Harris Poll. It also found that only five per cent think financial planning should be managed entirely by technology-based tools.
Revolut’s chief executive has called on the UK government to create specialised visas for technology professionals, as the London-based digital challenger bank announces plans to double its workforce in the UK over the next few months. “Right now, there is no doubt in my mind that London is the best place to build and grow a FinTech startup,” stated Nik Storonsky. “However, there is a serious lack of homegrown technical talent here, which is why around seventy per cent of our software engineers and data scientists are recruited from abroad.”
Despite investment industry excitement around FinTech solutions, just 15 per cent of people in the UK use mobile apps for making investments, while 19 per cent use them to view long-term investments. This is according to ING’s latest international savings survey, which took in 14,695 respondents in 15 countries, including 1,041 in the UK.
Two fifths (40 per cent) of UK businesses consider the risk of cyberattack as their major concern around the adoption of 5G, according to a new report from EY. A survey of 200 UK enterprises’ preparedness for high-speed 5G networks and Internet of Things (IoT) technology by the auditing firm, found that while UK businesses are increasing spending on the technology, there is still uncertainty surrounding the maturity of services.
InsurTech startup VouchForMe has launched in the UK, aiming to disrupt and revolutionise the industry. The blockchain-powered peer-to-peer model is based on social proof endorsements to reduce costs and lower premiums for policyholders.
Payments platform Adyen has launched a new payment service powered by Open Banking. The service is an alternative to card payments and takes advantage of the European Union’s second Payment Service Directive (PSD2) requirement for banks to create Application Programming Interfaces (APIs) for approved third parties to initiate payments on behalf of consumers.
Seven in ten (70 per cent) of all business leaders and finance professionals believe that errors in financial data are leading to significant accounting errors, according to a new report.A survey of more than 1,100 executives commissioned by automated financial software firm Blackline also found that more than half (55 per cent) were not completely confident their firm was capable of catching data-led financial errors before reporting results.
One in five (21 per cent) businesses in the UK believe that decision makers do not place enough value on technology, with a quarter (24 per cent) unsure of how FinTechs could help them, according to research by Centtrip. The intelligent treasury management, payments and foreign exchange firm interviewed more than 500 decision makers from UK medium-sized and large companies about their current use of automation.
According to KPMG’s latest Pulse of Fintech Report, UK InsurTechs saw over $1 billion of investment activity through 2018, up from $792 million in 2017. This performance bucked the global trend, as despite 13 InsurTech deals worth more than $100 million taking place globally, overall investment levels declined year-on-year by almost half, standing at $5.7 billion for 2018.
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.