This article has been published in partnership with Nik Milanović (bio at the end of the article) and taken from This Week in Fintech, his weekly newsletter.
Quote of the Week
“Efforts to promote inclusion extend beyond hiring to include dramatic changes in the way meetings are conducted, the diversity metrics gathered and presented to the board, and even the use of software to ensure a gender-neutral language in job descriptions.”
– Miriam Cross, American Banker (Source)
Read of the Week
The Wall Street Journal this week runs an interesting profile of China’s central bank digital currency initiative (with an appropriate tie-in to China’s early move from hard to paper currency).
Apart from the political implications, the article does feature many interesting product aspects of this particular CBDC: it can be accessed and transacted offline. It allows the government to airdrop direct financial assistance to citizens. Spending can be restricted to particular merchants or categories (like EBT in the US); it can be given an expiration date to incentivize consumer spending in an era of negative interest rates. These benefits don’t come without drawbacks: a government digital currency erodes the anonymity of traditional cryptocurrencies and could give the CCP a direct view into users’ wallets. It will be interesting to see how other national experiments unfold.
Stat of the Week
Roughly 38% of teens are turning to YouTube and one-third look to TikTok, Greenlight found. One-quarter go to Instagram for personal finance and investing advice. (Source)
Financial Services & Banking
TSB Bank launched its Smart Agent chatbot in its mobile app.
Barclays launched FX products for its Barx trading platform.
Santander's consumer bank in Norway launched a new PFM app.
Mastercard released a request-to-pay framework.
JP Morgan dedicated a lot of airtime to the risks to banks posed by FinTech in CEO Jamie Dimon’s annual shareholder letter, saying, “FinTech’s ability to merge social media, use data smartly, and integrate with other platforms rapidly (often without the disadvantages of being an actual bank) will help these companies win significant market share.”
- The CFPB is warning banks and mortgage originators to prepare for a ‘tidal wave of distress’ when mortgage forbearance wears off and payments become due.
Credit Suisse and Instinet conducted the first trades on a real-time T+0 settlement system using the Paxos blockchain. Bank holding company State Street will provide tech for a cryptocurrency trading platform.
- Contactless payments are surging in Europe, with “80% of in-store Visa payments now contactless.”
- Visa selected five startups—Brankas, Curlec, DigitSecure, ModusBox, and Open—across APAC for its first accelerator program.
- Sweden’s Riksbank is testing a digital currency. Commerzbank will cut 1,700 jobs across Germany. Refinitiv had a five-hour outage.
(Source – Fintech Inside)
Clubhouse partnered with Stripe to introduce payments for creators.
Dwolla released a real-time payments solution for banks in the US, in partnership with Cross River Bank.
OppFi, a credit provider to underbanked consumers, announced a new credit card in partnership with Mastercard, First Electronic Bank, and Deserve. Instacart is the latest company throwing its hat in the ring alongside Doordash to launch a credit card. Revolut launched a glow-in-the-dark debit card.
Apple Pay launched in South Africa. Payflex launched its buy-now-pay-later services in South Africa. South African FinTechs Ukheshe and Infobip also partnered to launch the country’s first WhatsApp payment gateway.
- Elsewhere, secure messaging app Signal is also testing a payments feature using its currency from MobileCoin, and Facebook is working on in-person QR code payments.
- Digital money provider Privat3 Money debuted its iOS and Android apps. UK currency provider Sokin rolled out its enterprise platform.
- Japanese digital bank SBI Sumishin Net Bank launched a blockchain supply financing solution.
- Business communications platform Podium released a connected card reader.
Zilch is adding a tap-and-pay buy-now-pay-later feature. Payments app Ziglu launched an interest-bearing bitcoin account.
Nubank opened a seed fund for black entrepreneurs and put $70 million into its Mexican subsidiary.
Drivewealth partnered with Plaid to enable frictionless account linking for trading. Canadian credit card issuer Brim partnered with Canadian Western Bank to launch a digital banking platform.
- Crypto exchange Gemini partnered with Alloy to help KYC users of its new credit card. Core banking platform Advapay added KYC/AML functionality from iSpiral to its offering.
- Self-checkout provider MishiPay partnered with Instore Solutions to expand into Germany. European mobile payments provider Settle partnered with Currencycloud to enable cross-border payments. Afterpay and Adyen partnered on British retailer payments.
Walmart filed for a trademark for its FinTech unit, which will be called Hazel by Walmart.
Stripe announced its entry into the Middle East with a UAE launch.
- SIM swap fraud is fast becoming a concern for mobile banking customers in the UK.
Coinbase released annual revenue, and it was through the roof at $1.8 billion. The Financial Data Exchange released the results of its annual strategic survey.
Revolut will allow employees to work abroad 60 days a year. Petal recruited a CFPB vet as general counsel. Acorns for betting. StartNeoBank.Com.
In collaboration with Ben White
- Nigeria’s government shut down a wide swathe of FinTech startups overnight, including Bamboo and Trove, just for making foreign stocks available for Nigerians to invest in.
- The Bank of International Settlements published a paper highlighting regulatory responses to BigTech’s entry into financial services.
- Payments companies formed a new industry group, the Payments Leadership Council, set to focus on e-commerce and small business issues.
Fidelity, Square, and Coinbase launched the Council for Crypto Innovation, a new D.C. trade group lobbying for digital currencies.
- The Bank Policy Institute published a paper warning of the risks of a central bank digital currency, focusing on the impact on fractional reserve banking.
- The Federal Financial Institution Examinations Council published a Request for Information on the use of Artificial Intelligence in financial services.
- Former Financial Crimes Enforcement Network chief Kenneth Blanco departed for a role at Citibank.
- The Internal Revenue Service issued a summons to crypto provider Circle, seeking information on users who made more than $20k in transactions in a single year since 2016.
- The Council of the European Union backed a plan to unify Europe’s payment rails.
Regulators in Latin America are launching FinTech sandboxes, intending to provide pathways for FinTech success in respective countries.
- The Governor of Illinois signed off on a law capping consumer loan rates at 36%.
- Chinese regulators banned microlenders from providing consumer loans to students.