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 biggest IPO of all time: Chinese technology company Ant Group, parent company of Alipay, is going public very soon, the fintech giant has set its initial public offering price and is expected to raise around $34 billion, and is now more valuable than its parent company Alibaba, which was was spun out from in 2011. This is the largest valuation in history and the first time a valuation of its size was priced outside of New York City. Ant Group now has a similar valuation to J.P. Morgan Bank. Alipay is a third party mobile and online payments provider with nearly 1 Billion users in China, and operates with partners in Asia, North America and Europe.
- A classic tale of SibStarling rivalry: Anne Boden announced her new book Banking on it last week, and finally revealed details of her years old rivalry with former mentee and Monzo President Tom Blomfield. In the book, Anne shares the details of her epic fallout with Tom and various Monzo executives who worked for Anne at Starling, before they went their separate ways, and Tom went on to launch Monzo a year later. I, like everyone else, love a bit of fintech gossip/shade/tea, and I patiently await the release of the book, and details of the other side of the story… Tom, are you there?
- “If you tighten your belt any more, you’ll cut yourself in half!” European banks continue cost-cutting/culling swathes of their operations over recent weeks. In the UK, Barclays are looking to reduce their office footprint despite reporting decent Q3 results. Bank of Ireland have pulled out of their Post Office ATM partnership, leading Post Office to close 600 out of 2,000 of the machines in the UK. Deutsche Bank is in talks to sell its Postbank IT systems unit and transfer 1,400 staff members. Finally, HSBC and Santander have also signalled efforts to accelerate cost-cutting, specifically around job losses, (thousands of jobs) despite both banks, like Barclays reporting better-than-expected or returning to profitability results in Q3. I can’t help but think that in the end, the pandemic-justified cost-cutting has an incredibly disproportionate effect on those cutting the costs and those being the cost. While it’s likely that the former will recover, the same cannot be said about the latter.
- Lots of fintech partnership announcements: Visa announced they are investing in GPS, the payment processor behind a host of challenger bank startups, including Revolut and Starling. They are also to acquire YellowPepper, a payments technology company to extend their influence in LATAM and the Caribbean. Mastercard and Monese, the European banking service provider, announced a new strategic partnership to further enhance local banking services for the underserved across Europe. Mastercard, Idemia, and MatchMove are to pilot contactless card with biometric reader in Asia that would eliminate the need for customers to use a PIN number or signature to authorise payments. Card consolidation company Curve has partnered with core banking vendor Thought Machine to power a new credit card and loan/buy now pay later offering.
- System is a down! TARGET2, the real-time gross settlement system for the Eurozone, experienced a complete failure of all payments transactions for 11 hours last Friday 23 October. The failure, which the ECB blamed on a third party network defect, left central banks and financial institutions across the Eurozone unable to process transactions, transfer liquidity or settle securities transactions. The issue has now been resolved, and the ECB have made assurances the specific problem will not repeat itself.
10 top news and interesting reading you might have missed over the last couple of weeks...
- Paypal goes Crypto! PayPal to let you buy and sell cryptocurrencies in the US
- Here comes the JPM Coin: JPMorgan Chase has created a new unit to house its blockchain and crypto efforts
- SoFi wins preliminary approval for US national bank charter: Online lender has also launched its first credit card
- Paid consumer data: Amazon launches a program to pay consumers for their data on non-Amazon purchases
- Hold up! Visa’s planned purchase of Plaid faces antitrust scrutiny at DOJ
- The UX of payments: A study on the UX of POS payment services
- True name cards for Citi: They’ve teamed with Mastercard to offer transgender and non-binary people the ability to use their chosen name on eligible credit cards
- Rebundling financial services: How fintech startups broke the sector
- +€40m for Lunar: Nordic challenger has raised funding to extend products into the buy now, pay later and account aggregation and payment initiation space
- +$7.5m for Gig Wage: Green Dot is investing in and partnering with the startup to bring banking and financial tools to gig workers
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