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The Fintech highFIVE! - 22 December 2020

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By Gary Dempsey, Content Leader Money20/20 Europe

Welcome to the Fintech highFIVE! 🖐 Every day, I’m amazed by the sheer amount of news and innovation happening in the fintech industry. 🤯 Fintech truly has not stopped, even during these crazy times. I can’t help but notice common themes in this huge sea of news — so I’m trying something new to bring these headlines together. Bi-weekly, I’ll be hitting you with the biggest themes seen in the news — all counted down on just one hand. 👊 So gimme 5 🙏 as we celebrate 🙌 the best of fintech each week.

*We’re socially distant here. Virtual high-fives only 👏 Please don’t hit your screen.

A (cautiously optimistic statement) positive end to the year? I’ve read recently that Europe has been having a very slow Q4 but the last week has seen a number of announcements to make sure it closes the year on a high and positive note. This week, GoCardless secured their billion dollar valuation after a $95m funding round, becoming the latest European unicorn. They plan to use the funds to bulk up their open banking strategy to allow more businesses to accept Open Banking payments.

Also edging closer to a billion dollar valuation are Swedish Open Banking platform Tink, who raised €95 last week. Tink will be using the top-up to develop their payment initiation technology.

In France, mobile payments startup Lydia raisd $86m, making it the largest round ever raised by a French fintech.

In the UK, challenger banks are sticking it to negative economic predictions about a disastrous year. Starling recently announced that they have broken even thanks to a surge in business banking. Revolut also quietly broke even in November, and are now offering ‘plus’ accounts to compliment their move into profit. Monzo, who were having a difficult time this year, also announced they’d closed a £60m funding down round.

All in all, a very positive end to a difficult year, I am cautiously hopeful that next year will continue these positive developments for our resilient industry.

Will ‘modest fees’ for BNPL transactions be the scourge of today’s youth? Over the last couple of months there have been huge funding raises and announcements for buy now pay later fintechs and financial institutions looking to move into this market. BNPL does exactly what it says on the tin, it allows you to pay in instalments when shopping online instead of paying the full amount up front, for a fee, of course. In many examples you don’t even have to make a payment on purchase!

Retailers have jumped on this offering, it offers an alternative payment method with ‘easy’ repayment options in a year where stores are closed and the tightening of belts. It also promises to boost conversions and remove that last moment of hesitation for the cluster of customers sensitive to large spending sprees. European regulators have turned their attention on BNPL this year, by pushing these payment options to the bottom of the list of available payment options in Sweden, while the FCA has begun a crackdown on unsecured credit in the UK. I have to wonder if this is the right time to embrace such a product, which is predominantly aimed at millennials and Gen Z. I remember (I was about to say “back in my day”) the credit products that got me into financial trouble when I was a young millennial were payday loans and zero/no interest credit cards. Among BNPL solutions, the right balance between making it easier to spend money and making sure the money is spent responsibly is yet to be found.

One giant leap for diversity in financial services. The London Stock Exchange has named Julia Hoggett their new CEO. Julia is the first openly gay leader of the stock exchange and has been a pioneer for women and LGBTQIA+ in financial services for years. Her stellar career includes roles at J.P. Morgan, Bank of America Merrill Lynch and more recently as the director of market oversight at the Financial Conduct Authority. Julia will begin her new role in spring 2021. You can read more about Julia’s background and career in her recent interview with Financial News.

It seems Santa Claus isn’t the only one with a naughty list! This month has seen some controversial stories hit the press! In the UK, The FCA accused Lanistar, a hyped new London fintech of offering unauthorised financial services, even warning that it could be a scam. Also, in the UK, the Supreme Court has cleared the way for a £14 billion class action lawsuit brought against Mastercard over interchange fee charges. Finally, in the Netherlands, a court ordered a criminal investigation into the role UBS Chief Executive Ralph Hamers played in ING Group’s failure to crack down on money laundering when he was head of the Dutch bank.

Recruitment drive! While there have been plenty of job cuts in the industry this year, it was wonderful to learn that there has recently been announcements by fintechs about recruitment drives. TransferWise is to make 750 job hires, with 175 jobs in their headquarters in London, while Bitpanda, an Austrian-based cryptocurrency investment platform, have announced 300 jobs at their Polish tech hub.

x5 big news

x5 interesting articles

x5 funding announcements

If you are sharing on Twitter, please use the hashtag #fintechhighfive and mention me, @gary20203, or @money2020.

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