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.
The Irish banking playing field is looking ripe for expansion for the challengers. While there are plenty of opportunities in the Irish banking space, major banks can’t seem to capitalize on them: NatWest’s Ulster Bank is shutting down operations, and KBC is preparing for an exit. These exits have caught the attention of Banking and Payments Federation Ireland (BPFI), raising fundamental questions about how the banking sector in Ireland is regulated. The remaining Irish banks, including Bank of Ireland, Allied Irish Banks and Permanent TSB, are currently working on a joint venture payments app called Synch. In the meantime, Revolut has already accumulated 1.3m users in Ireland (more than a quarter of the entire population!), while N26 has 200k users in Ireland.
The rise of teen, tween and family banking apps continues in the states, Step raised $100m in Series C funding and surpassed 1.5m users after just 6 months on the market and Greenlight raised $260m in a16z-led Series D, raising its valuation to $2.3b. These family finance apps are experiencing a real boom on both sides of the Atlantic, offering children their first introduction to financial services, they usually include features like parental control, debit accounts, spending controls, money transfer and allowances, and some even feature chore management and rewards.
Decentralized finance is booming with up to 1m users. It is the corner of the cryptocurrency industry that represents a wide range of lending, trading and betting activities carried out almost entirely on blockchain networks using tokens as proceeds and collateral. Its success may come down to the fact that It represents a much more credible narrative with more substantive businesses because it shows products with genuine returns and provides a way for people to earn impressive yields on deposits rather than making wild bets and hoping.
The recent COVID recession has led to many big changes in consumer behaviour, one major trend is the adoption of cryptocurrency by Gen Z. Young people are now looking to the likes of bitcoin to secure their financial future, and why not? Cryptocurrencies have gone through the roof in recent months and I think it has something to do with terrible interest rates being offered in Europe (with the potential of negative interest rates) and economic stimulus in times of almost total lockdown in many parts of the world. Gen Z 2021 graduates are looking at a difficult year ahead for job prospects, maybe we’ll see a huge wave of crypto traders born instead?
The European Payments Initiative is a group of 30 European banks who are hoping to build a pan-European payments network which would threaten the US monopoly of Visa, Mastercard, Amex and PayPal. The group plans to establish a cross border network for EU citizens to benefit from a fast, efficient and reliable payments solution. I am interested to see how this affects card payments, will new cards have to be issued, will every POS device need to be updated, there are so many questions!
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