Lockdown alters crypto trading habits as consumer confidence falters and rebounds

  • Proprietary Revolut data shows the average amount of cryptocurrency bought by U.K users (-58%) and the per trade amounts (-52%) dropped as lockdown restrictions came into place in mid-March

  • The end of April saw a huge rebound in consumer confidence, with the number of users trading cryptocurrency(+68%), the total amount bought per users (+57%) and the value per trade rapidly (+63%) increasing week commencing 20th April

  • Bitcoin (BTC) remained the most popular cryptocurrency throughout the period, followed by Ripple (XRP), Ethereum (ETH) and Litecoin (LTC)

Today Revolut, the Financial Super App with over 10 million customers in the U.K and Europe, reveals figures outlining how the cryptocurrency market has changed on a week by week basis during the lockdown period. The proprietary Revolut data has been gathered from the 3 million Revolut customers in the U.K who have used Revolut’s cryptocurrency trading service, which allows users to buy and sell Bitcoin (BTC), Bitcoin Cash (BCH), Ripple (XRP), Ethereum (ETH) and Litecoin (LTC).

Crypto trading habits mirror consumer confidence

Revolut’s data shows that from 16th to 30th March a significant drop occurred in both the average amount of crypto bought by UK users per week (-58% from £541.05 to £229.29) and the average amount per crypto trade (-52% from £281.80 to £133.79) as lockdown measures came into place and uncertainty, particularly around finances, increased. As lockdown continued, interest in cryptocurrencies remained relatively stable until the week commencing 20th April when, driven by a BTC surge, interest in the market began to increase and users began to purchase more and at higher values. From 20th April to 4th May, the number of users buying cryptocurrencies rose 68%, the average amount of cryptocurrency bought by users increased by 57% and the amount bought per trade increased 63%.

As the possibility of a ‘return to normal’ began to look more likely, interest in selling cryptocurrencies increased too. From 20th April to 4th May, the number of users selling cryptocurrencies rose 38%, the average amount of cryptocurrency sold by users increased by 36% and the amount sold per trade increased 13%.

Bitcoin domination

Throughout the lockdown period, Bitcoin (BTC) dominated purchasing habits, with a total 51% share of the cryptocurrency trading market through Revolut. This was followed by Ripple (XRP) at 20%, Ethereum (ETH) at 14% and Litecoin (LTC) and Bitcoin Cash (BTC), at 8% respectively.

While Bitcoin consistently remained the most popular cryptocurrency to purchase over the lockdown period, average trade sizes fluctuated wildly between different currencies. Average trade sizes peaked week commencing 4th May at £282, and were lowest at £134 on the 30th March, the week when lockdown restrictions came into place.

(Average amount of crypto, in GBP, bought by Brits per trade)

Age matters

Revolut’s data also shows a significant age split, highlighting how different age groups buy and sell cryptocurrency. Those in the 55-64 age group buy at the highest value of £345 per trade, whereas those in the 18-24 age group trade at the lowest value, at £109 per trade. Bitcoin (BTC) is the most popular cryptocurrency to both buy and sell across all age groups.

UK compared to Europe

While crypto trading trends were replicated broadly across Europe, Revolut’s data highlighted that Brits trade at considerably higher volumes and per-trade amounts compared to their European counterparts. From week commencing 16th March to week commencing 18th May, those in the UK bought an average of £399 per week of cryptocurrency, whereas across Europe as a whole, this sat at £280 – 30% lower. In the UK, the average transaction for buying crypto was £231 during lockdown, a figure which dropped by 27% to £168 across the whole of Europe.


Inclusive Insurtech startup Inclusivity Solutions Secures US$1.3 million in the Second Tranche of its Series A Round, from Goodwell Investments, UW Ventures, and MFS Africa


 Inclusivity Solutions, the company that designs, builds, operates and innovates digital insurance solutions, has secured an additional US$ 1.3 million in its second tranche of its Series A round, bringing the total Series A round to US$2.6m.

  Following on from their first tranche investment, the uMunthu fund, managed by Goodwell Investments, led the round with follow-on investment from UW Ventures (in partnership with Allan Gray). MFS Africa, a leading Pan-African fintech company, joined the round as a new investor. The timely move underscores the commitment by investors to the growth of inclusive digital insurance solutions dedicated to addressing risks, such as COVID-19, faced by the majority underserved consumers in emerging markets.

Inclusivity Solutions has already successfully launched digital insurance initiatives in Cote d’Ivoire, Rwanda and Kenya, in partnership with Orange, Airtel and Equity Bank’s Equitel respectively. Collectively a range of hospital cash and simple life products have provided protection to more than 700,000 people.  The investment will be used to deepen the company’s footprint within its existing markets, support further international expansion as well as accelerate innovation in the backbone technology platform, ASPin, which underpins the three existing products.

Founder and CEO, Jeremy Leach commented: “As the humanitarian and economic disaster that is COVID-19 unfolds, we are reassured that there could not be a more important time for insurance solutions such as ours to play a role in protecting the vulnerable. This investment provides the endorsement and support that we need as an organization to continue our work in designing and scaling products that address the risks that really matter and can play a real role in adding value to consumers, as well as offering a digital-ready solution to insurers during operationally challenging times.”

Wim van der Beek, managing partner Goodwell Investments: “We are excited to lead this second tranche and make this additional investment from our uMunthu fund, especially in these challenging times. Our investment focus is inclusive growth, and we believe that collaborative insurtech solutions like Inclusivity Solutions are best positioned to reach large numbers of underserved consumers. Their model bridges the insurance protection gap for underserved through products that are designed to be simple, affordable and accessible, even on the most basic mobile phone. It is a perfect fit with our mandate, and we look forward to continue to support Inclusivity Solutions in its next stage of growth.”

“We could not think of a more relevant time for this additional support to Inclusivity Solutions to further their mission of designing innovative and inclusive financial products while developing insurance markets to protect and serve vulnerable communities across the developing world. We believe there is a huge opportunity to bring affordable health and life insurance to those communities that may be the most ill-equipped to deal with catastrophes such as COVID-19, and we are excited to partner with Jeremy Leach and his exceptional team to help achieve their ambitions.” Harry Apostoleris, Director, UW Ventures.

Dare Okoudjou, founder and CEO of MFS Africa commented, “I’ve known the Inclusivity team for many years, and as players in the fintech space ourselves, we have had the opportunity to collaborate with them on a few exciting opportunities. We share a passion for impact through technology, and a drive to innovate and implement. We at MFS Africa are very proud to be part of their next stage of growth.” Okoudjou added, “The investment was made through MFS Africa Frontiers, a vehicle dedicated to exploring Frontier opportunities in the greater fintech ecosystem. Through MFS Africa Frontiers, we invest in select ventures with whom we feel we can go further – and faster – together.”

Consumers such as primary school teacher, Peter, are now benefiting from these products. Through Riziki Cover, a product designed and operated by Inclusivity Solutions and delivered through Equitel in Kenya, Peter was able to cover his bills after being hospitalized for five nights.

Jeremy Leach: “Our obsession is to build products that directly meet the needs of consumers, consumers like Peter, and to make them simple to understand and easy to use.  With insurance penetration at only 5.5 per cent of the adult population in Kenya, Peter would likely be without insurance today were it not for our innovative products.  We are grateful and excited to have the support of these leading investors and partners who share our vision for a world with better protection.”

Inclusivity Solutions designs, builds and operates inclusive digital insurance solutions.  Inclusivity Solutions partners with banks, mobile operators, insurance companies and other distribution partners to deliver insurance solutions through digital channels, that meet the needs of emerging consumers and achieve long-term social and financial impact.

Goodwell Investments is a pioneering impact investment firm focused on inclusive growth in sectors providing basic goods and services and income generation opportunities to underserved communities in Africa and India. The firm provides early-stage equity to high growth, high impact businesses. With teams in Kenya, Nigeria, South Africa and Amsterdam and a track record of over ten years, Goodwell demonstrates the ability to simultaneously deliver significant social impact and strong financial returns.

UW Ventures is a multi-stage investor that provides growth and replacement capital across the equity cycle, with the aim of building sustainable value over the long-term. Its activities span from high-growth venture to mid-market private equity opportunities. UW Ventures makes the investment with the support of Allan Gray, an investor-partner to UW on its venture mandate.

MFS Africa built and operates Africa’s largest digital payments hub. Connected to over 200 million mobile wallets in Sub-Saharan Africa, MFS Africa offers its partners unparalleled reach and scale across the continent. We enable merchants, banks, mobile operators and money transfer companies to leverage the ubiquity of mobile wallets as a safe, convenient, and cost-effective transaction channel. In close partnership with players across the ecosystem, we bring simple and relevant mobile financial services to un- and under-banked customers. For millions of customers in Africa and beyond, we make borders matter less.


80% of teenagers want to be self-employed in the future and are more inclined to be freelancers


Electroneum reduces the age restriction to 14 to enable the most tech savvy generations a way to earn an income on AnyTask

Remember when phones moved on from disc dial-ups to touchtone and then to those fancy wireless devices and when video calls were something you would read about in a futuristic novel? Today, the world has changed dramatically. The younger generations can’t imagine a world without a touchscreen smartphone. They may not appreciate how powerful it is to have a hand-held computer that instantly connects them to the world at a push of a button.

Children grow up with iPads, iPhones, and Laptops, and know no borders. So, it is logical to believe this demographic, more than any other, will be increasingly inclined to work independently, remotely, reliant only on technology and innovation.

Younger generations prefer freelancing

survey by US-based freelancing firm Upwork is a clear indication that the younger generations are more likely to do online remote freelance works. The statement is supported by the fact that 80% of 13 to 18-year-olds responded they wanted to be self-employed. Also, the number of freelancers who do it because they want to is higher among the Gen Z population with 73%, compared with 66% of Baby Boomers and 64% of Millennials. Another indication is the age restriction freelancer platforms have, such as Fiverr and AnyTask, which allow for 14 years and over to sign up and use their websites.

The statement also makes it very clear that because the younger generations are born into a world where mobile devices and Internet connectivity are a central part of their lives, they will be more inclined to work remotely within the global digital economy. In fact, by 2025, the worldwide freelance community is expected to grow from about 150 million currently to over 520 million.

According to the Organisation of Economic Co-operation and Development (OECD), the working-age population is defined as those aged 15 to 64. People between 15 and 24 makeup, almost 20% of the world’s population and account for over 15% of the world’s labour force.

Freelance digital work, the best option

It could be said that in light of the International Labour Standards – as set forth by the International Labour Organisation (ILO) – the best labour sector for children between the ages of 14 and 18 is the freelance market. That is because it is considered light work, highly compatible with education, and helps them gain experience in a growing sector. That gives them an improved alternative over other informal jobs that do not require skills, are menial, and rarely lead to better employment.

The Minimum Age Convention of 1973 sets the general minimum age for admission to employment or work at 15 years or 13 for light work, including digital tasks as long as they are within the time limits of two hours a day or 12 hours a week. During their holidays, children are allowed to work up to 35 hours as long it is light work.

A 2014 survey by UK’s British telecommunications regulator, Ofcom, revealed that 14 and 15-year-olds are the most tech-savvy age group. The research also found that children aged six had a better understanding of communications technology than those aged over 45. The study added that 94% of children between 12 and 15 base their communication around text, and only 3% still do voice calls.

Children, teenagers are the most digitally-savvy

“Our research shows that a ‘millennium generation’ is shaping communications habits for the future,” said Ofcom CEO Ed Richards in a press release. “While children and teenagers are the most digitally-savvy, all age groups are benefitting from new technology. The convenience and simplicity of smartphones and tablets are helping us cram more activities into our daily lives.”

In a world where 26% of the population is under 15 years of age, and where the younger generations are more inclined to be part of the global digital economy workforce, award-winning crypto startup Electroneum has seen the benefit of providing easy access to people 14 and over onto AnyTask. That is the only global freelance platform that does not charge sellers of tasks any fees or commissions.

The global freelance website offers freelancers a way to earn an income with even just a smartphone. In the coming months, Electroneum is expected to launch TaskSchool, the free online platform where people can learn the essential skills they need to start earning ETN on AnyTask.


Tips for Choosing the Best VPN


Virtual Private Networks (VPNs) are becoming a common choice to many individuals who need to conceal browsing activities and bypass geographic censorship as well as all sorts of restrictions associated with one’s actual location.

The internet is no longer safe and it worsens with the evolving technology. However, with more industries migrating to the internet world, it is almost impossible to avoid using it altogether. In 2017, the Federal Communications Commission raised many eyebrows by reversing a law which enforced Internet Service Providers (ISPs) to first acquire permission before retrieving user personal information.

With that put into consideration, most people now opt for VPNs in an attempt to cloak their
activities online such as who they chat with, where they are, and what they say. Sounds like the
issue is solved, right? Hold your horses before taking off. There is a catch when it comes to
VPNs. Remember, VPN providers are as good as ISPs. Therefore, it’s just a matter of forking
your data from one company to another when you opt for VPNs to shield you against ISPs. So,
with the VPN providers having access to your browsing history covert, it becomes indispensable
that you select a service judiciously. You shouldn’t be alarmed though, because this guide is
specifically designed to teach you prominent tips on how to select the best VPN. Before diving
in too deep, let’s first touch base on the basic knowledge concerning VPNs.

What is a VPN?
In layman’s terms, the use of a VPN is to connect your device (PC, mobile phone or tablet) to
another device that is connected to the internet but located in another region. This feature allows
you to surf the internet using the other device’s actual location. For instance, if the server you are
connected to via a VPN is located in Sweden and you’re physically located in Thailand, your
activities online will appear as someone located in Sweden.

Why Should you use a VPN?
The answer lies within the VPN name: surf the internet in apocryphal mode by connecting to a
private network. The chain goes this way, instead of directly connecting to the internet through
your ISP, you go via a VPN. So, what are the benefits of this? Well, you can utilize a Virtual
Private Network to:

  • Access geographically restricted web content
  • Stream media that is not available in your region such as Netflix and HBO Now
  • Avoid being a victim of untrustworthy hotspot connections
  • Surf the internet in anonymous mode by masking your real location
  • Prevent logs while torrenting

The main use of VPNs is for remote corporate members to access the business’s private network
without having to go to the office. This increases the level of security as it encrypts PC traffic
that goes to and fro.

How does a VPN Work?
When installed on your device, be it a computer or smartphone, the VPN software creates
encrypted, secure, as well as a trusted connection to the VPN provider’s servers. It then relays
what you need to the web via its servers. However, although it may be difficult for a third-party
to intersect the connection between you and your VPN provider, the VPN company is capable of
keeping the history of your activity just like the way an ISP does. Despite most of them
promising not to keep logs since it is conspicuously the logic why you would want to use them;
you should be vigilant in probing the fine print for in-depth info.

One important thing to note before jumping into the wagon is that VPNs cannot entirely hide
your location. Platforms, such as Facebook and Google, will always track your sign-in activities,
regardless of the VPN service you are on. Moreover, websites can also plant cookies into your
device to track your browsing activities in a particular browser. Considering that VPN services
log data of your activities, law enforcers can propel a VPN provider to hand over records related
to your data or directly monitor your device.

Another downside related to using a VPN connection is a slowed down internet speed. The
download and upload speeds are reduced since you will be appending an intermediate phase to
your internet connection. However, some VPNs provide faster servers, hence adding another
logic why you should be selective.

Choose the Best VPN
There is no beating around the bush when it comes to selecting a VPN; it can be stressful. The
idea of placing trust in a company with the hope of it being upstanding when it comes to security
and privacy is scary. To make matters worse, there isn’t clear regulation on who can set up and
offer VPN services.

Theoretically, VPNs are supposed to serve your needs and interests. However, when reality sets,
it gets more complicated than anticipated. Many negative factors indicate a bad VPN service, but
if you come across any of these three listed below, run for your life!

1. A VPN service with complicated fine print
2. A VPN service with kindreds to regions that have regulations that don’t support privacy
3. A VPN service with traits similar to scam platforms designed to obtain data and sell it

Taking these into consideration, you can find excellent VPN services just by implementing some
detective work. Now, here is what you should consider when choosing the best VPN service:

In most cases, you need a VPN connection to access content that is accessible from the specified
location. Thus, it is important for the VPN service you select to have servers in a country that
will let you unlock the content you wish to view. Moreover, take note of the number of servers as
well as IPs provided in a country. The more, the better.

Internet Speed
Internet speed is everything when it comes to obtaining quality experience while surfing the internet. A good VPN service should be able to pass the three basic internet speed metrics which are upload and download speed, and ping time. Download and upload speed determines how fast an internet connection can send data to and from your device when connected via a VPN. So, if you are looking to stream high-quality videos or download big files, high download speed is what you need. If you want to send large files, then your concern should be about getting high upload speed.

For online games, VoIP, Skype, etc., ping time is what matters the most. This metric measures
the time taken by a packet (lone unit of data) while travelling from your device via the VPN
connection to its final destination before coming back to your device.

Therefore, you should identify your priority reasons to connect to a VPN service to understand
which metric matters the most. Once figured out, it will be feasible to pick out the best VPN
service that best suits your needs.

Logging & Privacy Policy
Internet privacy is a major concern to many. Thus, if this is the primary reason you are
connecting to a VPN service, you need to find out whether or not it keeps logs. These can be
identified by a standout tagline ‘zero logs’ or ‘logless service.’ Moreover, you should pay
attention to the information needed by a VPN service when registering an account with them.
The more personal it gets, the better it becomes for you to walk away.

Technical Aspects
Most of the people couldn’t care less to worry about this, however, there is still a significant
chunk out there that values a particular VPN protocol, such as OpenVPN, PPTP or L2TP. If that
is something beyond your worries, then opting for an OpenVPN protocol is advisable. Also, you
should check for the encryption level applied by the VPN service.

Another important feature that you should consider is a kill-switch. This is an important feature
that avoids your activities being exposed in case your VPN connection suddenly drops. With a
kill-switch, whenever your VPN connection malfunctions or runs into problems, this feature
barricades internet traffic ensuring that your system does not track back to utilizing its default
internet connection.

Customer Features
Depending on the device you are on, ensure that you are getting the best VPN service version
dedicated to the platform. In most cases, VPN services tend to tone down their features when
jumping to other platforms. Therefore, don’t be quick to assume that what they say is best or
available on your PC will also be the same when used on a smartphone.

In most cases, VPN service limitations come in the number of devices that can be concurrently
connected to the servers. Consider the number of devices that you may reasonably need to stay
connected simultaneously, and then see if the VPN service you are considering can
accommodate it. Usually, the average limitation when it comes to the number of devices lingers
around 5.

Costs & Payment Methods
A good VPN will cost you money – whether you like it or not. However, your budget can be limited leading to the elimination of some amazing options. That doesn’t mean you will end up digging in a well of VPN services. Therefore, you should consider going in for long-term plans as they tend to bring down the price compared to month-to-month subscriptions. If you are not sure of the service you want to go with, check their refund policy first before committing.

Final Thoughts
As you can see, it's not a skill demanding task to find a good VPN service but you need to be circumspect to come up with the best results. Not all VPNs give what they promise. Apply these tips carefully before committing your money and time to the wrong guy; jeopardizing your sensitive data.


Bank of America’s in-house AI bolsters investment platform


Share Bank of America is the latest financial institution to enhance its self-directed investment platform with artificial intelligence. The a move is designed to deliver more timely analysis and personalized content to customers, according to Cory Triolo, a consumer investments digital solutions and experience executive at the bank. The new capabilities, called “Dynamic Insights,” are …Read More

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Marqeta eyes credit products on the heels of $150M funding


Share Fresh off a $150 million funding round announced Thursday, Marqeta is developing a credit card product. The Oakland, Calif.-based startup raised the funds as an extension of its Series E from an undisclosed investor, more than doubling its valuation to $4.3 billion, up from $1.9 billion last year. “We took $150 million from an …Read More

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Chess, Jeopardy, Stocks: HSBC uses IBM’s Watson as a stock picker 


Share IBM made headlines for beating Garry Kasparov at chess in 1997, and Ken Jennings at Jeopardy in 2011. Now, HSBC is turning IBM’s Watson into a stock picker.  “Some of [our clients] might not be overly familiar with artificial intelligence or machine learning technology. It might be the first time they have encountered it, …Read More

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Weekly Wrap: Wells Fargo fights B2B fraud and Green Dot has a busy week


Share Green Dot’s banking-as-a-service business made headlines this week, including expanded products for both Walmart and Remitly customers. The company, which has long made money from prepaid reloadable cards, is finding new ways to connect with consumers through its platform business. Wells Fargo, meanwhile, is developing educational resources for business clients experiencing a wave of …Read More

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The strategic alliance between Minsait and Auriga will provide an innovative omnichannel platform for a superior banking experience


Minsait, an Indra company, and Auriga have reached a strategic agreement that will strengthen their position in the digital transformation of bank branches in Spain, Portugal, Brazil, Colombia, Mexico and Peru.

The partnership integrates Auriga’s omnichannel banking solution, WinWebServer (WWS), into Onesait Banking Branches – Minsait’s end-to-end solution that merges physical and digital channels to offer a personalised user experience throughout the service cycle.

Minsait’s market presence and experience, combined with the advanced software technology solution provided by Auriga, will help organisations in the banking and financial market of the countries indicated to offer greater operational efficiency, better cost-effectiveness ratio and  improve the customer experience through specific and bespoke customer journeys.

This alliance also coincides with Auriga’s expansion into the Spanish market, a key territory for both companies due to the relevance of its financial industry. Thanks to the combination of the capabilities and technological specialisation of Minsait and Auriga, banking entities operating in Spain will be able to benefit from personalised solutions for the digital transformation of branches, plus leverage  new financial services adapted to today’s consumers and companies.

“Minsait is the best partnership choice for Auriga’s entry into the Spanish market. It has deep experience and knowledge in the digital transformation of financial institutions and will be key to driving innovation in omnichannel banking,” said Vincenzo Fiore, CEO of Auriga.

“The integration of Auriga’s WWS platform into the Onesait Banking Branch ecosystem of Minsait will allow access to all the information collected during the service cycle and convert the merely transactional visit into a valuable one; to facilitate the continuous improvement of the customer experience , decision-making and the development of commercial actions, ” affirms Antonio Bolaños, Head of Technology and International Alliances for Financial Services at Minsait.

Auriga’s WWS application offers an efficient omnichannel banking experience, with 24/7 access to personalised, contextualised and real-time services. It is a unique cloud-based concept for managing all channels consistently and with minimal effort, regardless of the manufacturer of the ATM or self-service device. More than 70% of ATMs in Italy have the WWS solution installed.

Onesait Banking Branches, from Minsait, represents a comprehensive vision of the merging process of physical and digital channels through the creation of an ecosystem that covers all the phases of service around three main stages of the customer journey: Activa, which includes biometric recognition and identification solutions; Conecta, which facilitates operations with different devices and levels of assistan


The Not-So-Secret Secret to Getting Innovation Right


In the midst of the myriad challenges COVID-19 has thrown up for financial institutions and the people and businesses they serve, the crisis is also propeling innovation forward, proving the worth of past technological investments, and shifting the view of digital initiatives from a ‘nice-to-have’ to a ‘need-to-have’, particularly in a time of social distancing.

Against this backdrop of crisis-galvanized change, senior content producer Laura Maxwell-Bernier caught up with Sunayna Tuteja, Head of Digital Assets and Blockchain at TD Ameritrade, to talk about how she is seeing this play out, and how financial institutions should approach digital transformation to ensure relevance in the ‘new normal’.

We are also delighted to announce that Sunayna will be expanding on the themes covered in our conversation at FinovateFall in September, where she will look at the next phase of this trajectory, how changed consumer behaviors will drive further change, and what role technology will have as the dust settles.

Laura Maxwell-Bernier: Crises like COVID-19 have historically shown us how quickly technology can go from a nice-to-have to a real necessity for consumers. How are you seeing this play out in the context of COVID-19?

Sunayna Tuteja: Innovation often gains traction in times of turbulence. We are certainly witnessing that play out at massive and magnified levels in the context of COVID-19. Technologies and trends that were already in motion reached escape velocity – in scale and speed of both investment and adoption accelerating in the span of weeks vs. years. Examples include tele-medicine, online learning, and omni-channel commerce. The necessity of solving a pain point combined with a sense of urgency is activating laser-focused action that otherwise might be slowed down by inertia. In short, digital transformation is now a matter of business resiliency, representing an ultimate shift from “nice-to-have” to “need-to-have”. 

Perhaps my favorite example is the Supreme Court of the United Sates (SCOTUS), an institution steeped in tradition which until recently conducted all oral arguments in person, behind closed doors and without cameras present. They too have had to adapt and transform. Last week the SCOTUS moved to hearing arguments via tele-conference, and also opened it to the public to listen in real time. While the new format may lack the usual pomp & circumstance, it ushers in an era of transparency & inclusivity. It’s a joy to witness this epic transition. Necessity is the mother of invention, or in this case adoption!  

LMB: What similarities are you seeing in the way financial services organizations are responding to COVID to how they responded after the 2008 financial crisis? What lessons should we be drawing from this in our planning for the longer-term repercussions of COVID?

Tuteja: An imperative for institutions (private and public) to innovate is the rapidly closing delta between novelty and necessity. It wasn’t that long ago that the notion of banking and trading on your mobile device was unfathomable – mobile phones were for playing Candy Crush and Angry Birds!  But within a matter of years, driven by a shift in consumer behaviors and expectations plus the rise of Fintech, incumbents have had to evolve and for many, the nice-to-have digital venues are now need-to-have primary on-ramps to attract, engage and retain consumers. Ergo, shocks like the global financial crisis and COVID-19 further reinforce and validate that tapping into the power of nascent yet powerful technologies to break down barriers and create next generation products/client experiences must be an evergreen endeavor. You need to maintain a persistent and pervasive focus on client-centric innovation to keep up with and surpass the evolving expectations and norms. 

At TD Ameritrade, we saw this thesis come to fruition as we embarked on transitioning our employees to work from home in a matter of 10 days whilst serving millions of clients during tumultuous market conditions. The firm’s steady investments over the years in capabilities like cloud, Artificial Intelligence, messaging, mobile etc. enabled a speedy and smart transition.

The confluence of these developments combined with the current macro environment garner an important inflection point in the proliferation of this nascent technology & asset class. It is therefore incumbent on the institutions that consumers know and trust, to lead with prudence and pragmatism in addressing this growing demand from consumers for education and access to digital assets, and continue the journey of bringing Wall Street to Main Street.

LMB: What implications do you see this crisis having for the rate of adoption of digital assets – stablecoins, CBDCs and the like?

Tuteja: Digital assets are uniquely qualified for these present times. Be it as an investment vehicle akin to bitcoin’s value proposition of ‘digital gold’ or the prospect of modernizing payments, remittances, money movement or banking the unbanked/underbanked driven via stablecoins, digital wallets and CBDCs, the opportunities abound. It’s fertile ground for projects in the digital assets space, including DeFi efforts currently focused on solving these important problems. Again, this momentum is driven by heightened need as we reimagine and reconfigure our day-to-day norms in the time of/after COVID. For example: In my role leading emerging tech and partnerships, I had the opportunity to work with several Asia Tech firms in China. As someone who needs her daily dose of Starbucks, it was always amusing when I tried to pay for my drink with cash or credit card. In a society that has adopted end-to-end digital payments driven by digital wallets embedded within messaging apps like WeChat, the notion of a cash or physical credit card interaction could not be more antiquated. While the proliferation of digital wallets and QR codes have been slow to gain momentum in the U.S., current circumstances may mark a significant shift as consumers are more conscious and concerned about what they touch and who touches their card.

In this new world order, businesses will have to strike a balance between efficiency and resiliency, and as business leaders we must deliver a compounding and comparative advantage to our constituents – customers, employees, and the communities we serve. All of which will enable a good deal of change management and digital transformation to ensure long-lasting relevance. Yet in these times of hyper-change, innovation guided by the voice of the customer is always in vogue.

LMB: What does the path forward for digital transformation look like as a whole, and what do you anticipate the long-term effects on technology adoption being?

Tuteja: I’ve long maintained that anything that can be digitized will be digitized, it’s a matter of timing and led by the consumer, with technology as the enabler vs. the driver of change. An evergreen approach is key because the timing and pace of adoption is often influenced by external factors as we are witnessing at the moment. I’m reminded of examples like Webvan and Pets.com, which are often cited as failures of the dot.com bubble. Yet their contemporaries, Instacart and Chewy.com, are gaining tremendous adoption today. As an organization, you don’t want be caught off guard and unprepared, hence a persistent evaluation of the evolving consumer needs combined with a “perpetual beta” mindset in deploying new technologies is critical.

While starting with the technology can be alluring, it can lead to “shiny object syndrome” and innovation theater without much value for the end constituents. The not-so-secret secret sauce is an obsession with customer-focused innovation. A myopic focus on solving gnarly problems to deliver meaningful value by breaking down barriers that enable consumers to take charge of their financial future with confidence. If that’s powered by blockchain and AI, great, but the tech ought be secondary to the problem statement. The litmus test we apply is: What is the problem we are solving? Why is this problem worth solving? And why are we or is this tech uniquely qualified to solve this problem? It’s always better to be solving the hard problems and shipping pain-killers vs. vitamins. A strong anchor to the problem statement is also useful in maintaining focus on investing in, experimenting with and operationalizing new capabilities while averting the trappings of fads or fear of missing out.

In this new world order, businesses will have to strike a balance between efficiency and resiliency, which will enable a good deal of change management and digital transformation to ensure long-lasting relevance. Yet in these times of hyper-change, innovation guided by the voice of the customer is always in vogue.


Mastercard provides insights to cities, countries on COVID-19 economic data


Mastercard is providing a series of tools, called Recovery Insights, to businesses and local governments worldwide to provide unique insights about payment trends as they look to reopen.

Mastercard developed the data and research based on its analytical tools and said the information can help local officials gain information about the local economic impact of COVID-19, according to a press release.

“Enabling smarter decisions with better outcomes is our goal,” Raj Seshadri, president of data services at Mastercard, said in the release. “And it’s what airlines, restaurants, CPG Brands, banks, governments and countless others areas are seeking right now.”

He said the insights are being used by a range of companies, from grocers extending hours to apparel firms addressing the rise in e-commerce.

Cities like New York, London, Barcelona, Madrid and Los Angeles have used the tool, as have the state of Arizona and tourism officials in Spain. 

Topics: Trends / Statistics, Card Brands, Mobile Payments, Mobile Banking Companies: MasterCard

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Starling Bank raises additional funds to grow SME lending


Starling Bank raises additional funds to grow SME lending

Anne Boden, founder and CEO of Starling Bank

Starling Bank, a U.K.-based mobile bank for small and medium sized businesses, has raised 40 million pounds ($49 million), led by JTC and Merian Chrysalis Investment Co. 

The new funding round follows a funding round of 60 million pounds ($74 million) in February, bringing the total amount of funding raised this year to 100 million pounds ($123.7 million).

“This additional funding from our existing investors demonstrates their commitment both to Starling and to our small business and personal customers who need our support more than ever,” Anne Boden, founder and CEO of Starling, said in a company statement. 

Starling has seen a rapid increase in customers, particularly in the SME area, since the COVID-19 pandemic forced businesses to shut their offices due to stay-at-home mandates. 

Starling has worked to boost lending to SMEs under a 300 million pound ($371 million) collaboration with the U.K. government under the Coronavirus Business Interruption Loan Scheme. 

Starling calls itself the fastest growing SME bank in Europe with a 2.6% share of the U.K. SME market. The bank said it has almost 500 million pounds ($619 million) in SME lending on its balance sheet. 

Photo courtesy of Starling Bank.


Topics: Region: EMEA, Mobile Banking, Venture Capital

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Covid-19 crisis calls for an agile approach for Accounts Payable


The Covid-19 crisis has caused ripple effects across all organisational operations – and Accounts Payable (AP) is no different. The global pandemic has seen offices shut down and swathes of the population adapt to a new world of working from home full time.

This change has proved particularly challenging for finance functions, which are used to having access to documents and handling processes both physically and electronically.

One major challenge is the ability to process invoices effectively and efficiently, which is a particularly alarming thought given that right now, the supply-chain is an even more critical factor for safeguarding the financial stability organisations.

With AP teams now working remotely, it is unearthing issues that are leading some to call for the end of paper invoicing altogether, in favour of a complete adoption of electronic invoicing. This is being driven by the sudden realisation by buyers that nobody is on-hand to deal with paper invoices reaching offices, exposing a lack of agility in the process. To put it in to context, of the six million invoices processed through Proactis’ technology each year, 30 per cent of those are paper invoices.

Electronic invoicing (or e-invoicing) is a broadly used term and can mean different things to different people. One could argue that any invoice submitted via an electronic channel is an ‘e-invoice’, including scanned invoices sent by email as PDF images. However, in this instance, that would rely on OCR or manual extraction. A truly electronic invoice is structured invoice data issued in XML format, created using PO flip or directly entered via a portal, meaning the requirement for manual verification and checking is eliminated. And that leads to a second challenge. Although better than paper for remote working, a switch to PDF invoices, be it data layered or just an image, does not solve the problem facing the AP team today. Not least when around 70 per cent of the invoices processed by Proactis each year are in PDF format.

Many who are at home trying to manually process PDF invoices which are received via email, are dealing with two core issues. First, streamlining the process of which a team member handles each invoice and detaches the PDF from the email, storing it centrally ready for processing. Second is not having multiple screens to work on and needing to continually move between a PDF and the finance system, or another system such as important timesheet information from HR, in order to key in and check the data. This not only slows the process down but increases the likelihood of human error.

There are the obvious reasons for going paperless. For many it is simply the right thing to do. Admittedly, it is tempting to try and turn to pure e-invoicing, whether it is XML or portal invoices. It by-passes manual validation and data checking and has the evident benefit of saving on paper, being more socially responsible and beneficial to the environment. But is it realistic to suddenly expect all suppliers with shortages in the necessary skills, capacity, and budget to want, or be able, to switch in both the short and long term? Also, the supplier has the challenge of then changing a common process they have in place for sending invoices to all of their customers, to then going to a specific portal for one customer – which seems unfair especially in these times.

The question invites debate on the issue, because many do not think it is realistic to assume that paper and PDF invoices will disappear in the short to medium term. Experience shows us that some smaller suppliers simply don’t all have the skill or time to produce an XML or portal invoice and still rely on paper or a PDF – and they tend to spend most of their energy on delivering their core goods and services.

This means the argument for 100 per cent e-invoicing deteriorates under closer scrutiny.  Paperless invoicing should be encouraged where possible, and it might be the answer for us all one day, but that time is certainly not now. The lockdown may well have forced many businesses to recognise inadequacies in their own AP systems, but these will need to be addressed once life according to the new norm has settled down. Right now, their focus is not on adopting a new processing system but on ensuring they have the capacity, technology and resources to safely navigate their way through the unfamiliar method of working that Covid 19 has thrust upon them.

Perhaps the goal should not be to make all invoicing electronic from its source, but rather make all invoices, regardless of source, into one efficient and accurate file of invoices that they buyers’ system can process and pay.

It does not mean that finance departments need to immediately replace everything they do – the last thing smaller businesses need right now is to feel pressured in to implementing electronic processes at a time when their energy and focus is needed on its core business. Instead, if the objective is to pay suppliers on time or early, capture solutions that enable paper and PDF invoices to be processed with the upmost efficiency should be adopted.

We have already seen an agile approach already reap tangible rewards for several companies. Screwfix, for example, now save over £100,000 annually, P&O Ferrymasters has reduced invoice processing costs by over 35 per cent, while Bauer Media reduced AP costs by 66 per cent.

In 1988, the UK postal workers strike proved to be pivotal in the way procurement and finance teams operated. With paper requisitions grinding to a halt, a new way of operating was born as the age of the fax machine began. Over thirty years on, the UK (and indeed the entire world) is faced with a new challenge. It might be different in nature, but once again it is accelerating the quick adoption of a new approach and with it, the full ignition of remote working.

If organisations can help willing suppliers make the transition to e-invoicing, then it is a great goal to have. But Covid-19 hasn’t exposed the need to end paper invoicing, rather the need for an agile and flexible model – one which can efficiently handle paper, data-layer and image-based pdfs, XML and portal invoices, regardless of how the team is set up. Suppliers large and small alike can then focus on delivering the best – and most efficient – service they can.


How the Coronavirus Impacts the Appetite for Cryptocurrency


Photo by Sander Dalhuisen on Unsplash

We’ve heard a lot about how the coronavirus has made an impact across the fintech realm, but what about in the crypto space? With an unstable stock market, why weren’t investors fleeing to alternative, blockchain-based assets?

To get an inside view on these questions and more, Finovate’s Adela Knox spoke with Max Lautenschläger, managing partner and co-founder of Iconic Holding, a Germany-based company that manages and sells crypto asset investment vehicles and invests in blockchain and crypto-focused companies via its in-house accelerator.

How has the coronavirus pandemic disrupted traditional investments?

Max Lautenschläger: Personally, as a supervisory member of the biggest independent financial advisory company in Germany, I am monitoring the German financial market closely. I was surprised how good the day-to-day business is going in this very special time, which is forecasted to be one of the biggest economical depressions in modern history. Moreover, it’s positively surprising how much this pandemic is pushing us towards a more digital financial ecosystem. Consumers are adapting to the “new normal” and are suddenly forced, but also willing to make decisions online. Investment advisors and financial consultants on the other hand are realizing the potential of using online tools for signing documents, online identifications or video calls for customer acquisition and retention. Financial institutions seem to finally understand how important digitization is for the daily operations with millennials, which have a very different expectation of financial services. Even though the whole financial industry is suffering, it will also have a positive impact long-term.
By looking at the best performing stocks since corona started, you can also see that more and more money is getting invested into themes like data, remote working, online education, and sustainability. In this pandemic people are realizing the shift the world has already made and want to be exposed to the increasingly important topics.

How has this impacted the appetite for digital currency?

Lautenschläger: It’s very important to understand what was going on when corona hit us out of the sudden. We’re not in an economic crisis yet, but the initial shock led to a so-called liquidity crisis, which makes investors liquidate their holdings -if possible- to cash. All asset classes suffered severely, even “safe havens” like gold decreased by more than 10 percent. Cryptoassets crashed in those extraordinary times, as well, even though they’re said to be non-correlating to other asset classes. Nonetheless, this crisis just confirms what we already know: central banks can print money and are increasing the circulating supply constantly. The beauty about crypto is that code is law, which means that the supply-demand-relationship is predefined. Crypto asset managers like Grayscale are now receiving huge commitments for their crypto.

Secondly, the discussion of introducing a blockchain-based Euro or US Dollar is one of the top priorities for central banks all over the globe. Libra, despite its weaknesses, seems to be a solid backbone infrastructure for those digitized currencies.

What is the biggest myth about cryptocurrency?

Lautenschläger: Most people I talk to think that crypto assets don’t have any intrinsic value and research from big financial institutions are trying to support this hypothesis. But this is entirely wrong! Let’s take Bitcoin as an example. Digital gold, safe haven, store of value — a lot of phrases have been used to describe Bitcoin, and to a certain extent, I agree with all of them. For me, Bitcoin is a commodity like gold, other rare metals or rare earth, which can be modeled by the stock-to-flow ratio. On the other hand, there are blockchain protocols which are the infrastructure for decentralized applications. The value of those protocols is derived from the number of deployed applications and the level of engagement. Users will use the infrastructure that offers them the applications they need and developers will go where the users are.

How is cryptocurrency performing in the current pandemic climate?

Lautenschläger: First it crashed like all the other asset classes. The reason for this is that corona -at first- didn’t cause an economic crisis, but primarily a liquidity crisis. Studies in behavioral finance suggest that people tend to convert all liquid assets to cash to be prepared for an upcoming crisis. But even though crypto tanked even more than the stock and commodity markets it is still the best-performing asset class of 2020. With the monetary policy of the ECB, FED, and BoJ you can clearly see the vulnerability of our system, which makes more and more people lose trust in central bank policies and money in its current design. This is why crypto was born in 2009 as a reaction to the financial crisis.

What are the biggest benefits and reward of investing in digital cryptocurrency?

Lautenschläger: First of all, crypto has a low correlation to traditional and alternative asset classes, which makes it a perfect portfolio diversifier. Recently, we conducted a study in collaboration with the Frankfurt School of Finance and Management, which clearly shows that an allocation of 1% to 5% of crypto to a traditional portfolio not only generated additional returns, but also increased the sharpe-ratio severely, which is the most well-known risk-to-return measure.

Is the demand for crypto assets limited to professional investors or is it something that everyday investors are looking into as well?
Crypto assets were originally completely retail driven by individuals who believed in the potential and the idea of an intermediary-free world, in which everyone is financially included. Nowadays, we see more and more high net worth individuals and family offices investing into the space. The lack of professional, enterprise-grade financial vehicles is still an issue and makes it hard for institutions to enter the space. But recent developments like the European AML directive and the German crypto custody license are first indicators that crypto assets are becoming “bankable”. This is also what we have been working on for years: make crypto accessible through traditional, regulated vehicles.


Fraud specialist Vesta secures $125M from Goldfinch Partners


Vesta Corp., a fintech specializing in e-commerce fraud protection, has secured a $125 million investment from private equity firm Goldfinch Partners. 

The funding will be used to grow the Vesta platform, which uses machine learning to analyze e-commerce payments, according to a press release on the funding effort.

“Since taking over as CEO in July of last year, I have refocused the company on product development, market expansion and technology enhancements,” Ron Hynes, CEO of Vesta, said in the release. “This capital infusion from Goldfinch Partners provides us the fuel to accelerate our efforts.”

The company, founded in 1995 as a specialist in card-not-present transactions in the telecommunications industry, has expanded its operations into Singapore, which will function as a hub for the company’s Asia operations. 


Topics: Security, Mobile Payments, Venture Capital

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Stackin raises $12.6M to grow text-based financial marketplace


Stackin Inc., a text message-based mobile financial platform, has raised $12.6 million in Series B funding led by Octopus Ventures. 

Stackin uses personalized text messages to help young consumers manage their finances, including save money, reduce debt and invest, according to a press release on the funding effort.

The company will use the financing to deepen its relationship with subscribers through enhanced personalization, simplify product onboarding and broaden its marketplace of products and services. The company also plans to expand overseas to the U.K. later this year.

“This funding allows us to provide our current users a more personalized and connected experience, expand and enhance our partnerships and continue our rapid growth,” Scott Grimes, Stackin co-founder and CEO, said in the release. “We’re thrilled to partner with Octopus Ventures to support our vision to create an entirely new type of financial relationship with the next generation of consumers.”

The company currently offers savings, checking and investing products through its marketplace and will expand that product listing to include credit cards, loans and insurance.


Topics: Mobile Banking, Mobile Apps, Venture Capital

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Payments Innovator, Contis, hires Businesswoman of the Year as General Counsel & Chief Risk Officer


Spearheading growth in the fintech sector, payments innovator Contis is delighted to announce the appointment of Lara Oyesanya FRSA as its first General Counsel and Chief Risk Officer. Lara joins the Executive Team with responsibility for legal, risk, compliance & fraud, and human resources.

This important strategic appointment delivers for Contis’ ambitious growth plans. By bringing legal functions in-house, Contis can react to the market with agility and speed, improve client acquisition and reduce onboarding times. Lara’s appointment also brings experience in leadership and corporate culture from across the fintech space.

Lara joins from Klarna Bank AB, the successful Swedish ‘buy now pay later’ fintech where, as UK Counsel and Legal Director, she led the acquisition of Close Brothers Retail Finance.

Lara is a highly regarded member of the in-house legal practice and has advised FTSE listed companies including Barclays Bank plc, BAE Systems plc, HBOS plc, RAC plc and Lex Autolease. She was named Businesswoman and Corporate Leader of the Year 2018 by Forward Ladies.

Lara is a Non-Executive Director, Plan International UK, a Contributing Editor, Lexis Nexis Encyclopaedia of Banking Law, an External Member of the Committee on Benefactions, External and Legal Affairs, University of Cambridge and a Member of the Consulting Editorial Board, LexisPSL©. Lara regularly speaks at conferences on legal, diversity and inclusion issues.

Lara Oyesanya, General Counsel & Chief Risk Officer at Contis said: “Contis is doing business the right way, supporting future-leaning clients and addressing the big issues in payments and fintech. I am very excited to join the brilliant team taking Contis to the next level. We’ll continue delivering great outcomes and driving growth for our clients. It’s a privilege to have the opportunity to combine my legal skills with my passion for business – and I can’t wait to get stuck in.”

Peter Cox, Founder and CEO at Contis said:We are dedicated to improvement, especially in meeting future regulation and business demands post Covid-19We are delighted to welcome Lara. Her legal experience, commercial understanding, and expertise in fintech make her fantastic addition to our senior leadership. Lara is deeply connected and well respected in the business, fintech, legal and academic worlds, and we look forward to everything she will bring to the team.” 


ZUBR granted Gibraltar’s in-principle DLT approval 


The digital assets derivatives exchange becomes one of the first such exchanges outside of the US to get to this stage  

ZUBR, the arbitrage hub for digital asset derivatives, has received today an in-principle decision from the Gibraltar Financial Services Commission (GFSC) to grant the firm authorisation as a Distributed Ledger Technology (DLT) provider, one of the first European digital derivatives exchanges that will become regulated.

ZUBR is an instant, low-cost and transparent digital derivatives arbitrage hub for traders seeking a fair and reliable gateway to crypto markets. 

The in-principle approval is the beginning of the final stage of the licence authorization process, and ensures that ZUBR shall be, by the time the licence is issued, compliant with the nine regulatory principles set out in Gibraltar’s DLT regulations, designed to protect consumers and businesses using digital assets stored or transmitted on distributed ledgers.  

These regulatory principles include setting up robust risk management processes, effective corporate governance, high standards of customer care, systems and security controls preventing criminal activity, and abiding by the paramount standard of honesty and integrity.

Introduced in January 2018, Gibraltar’s DLT legislation was the world’s first purpose-built regulatory framework for businesses using blockchain or another DLT. 

ZUBR will continue to fulfil the in-principle conditions requested by GFSC and work with the GFSC closely to complete this process, upon which ZUBR will receive its licence. 

ZUBR’s client-base includes proprietary trading firms and individuals that trade in a wide range of cryptocurrency markets, using arbitrage and other latency-sensitive strategies across multiple trading venues. 

Since ZUBR’s launch, amid unprecedented volatility, the platform has helped its clients to access price data and execute market orders with the best possible speed, while also reducing the risks associated with failures and connectivity outages.

The firm shall be based in Gibraltar, with its infrastructure based in London. It has already seen a cumulative trading volume, as a self-regulated entity, of close to US$100million since it commenced its activity in March, outside of Gibraltar. 

Ilgar Alekperov, CEO of ZUBR said: “This is a great step for ZUBR. A lot of time and resource has been invested to ensure our product goes above and beyond client expectation, from being the first live digital derivatives platform to have been successfully tested by ex-LSE Group testing firm Exactpro, to this licence process that will position us as one of the first regulated digital derivatives exchanges outside of the US.

“Since inception, we have always conducted our business as if we were a traditional financial services offering, but having a licence in a robust European jurisdiction was always the next step.

“Gibraltar’s DLT framework provides us with regulatory certainty when dealing with new asset classes, providing our clients with assurance that ZUBR is the go-to digital assets derivatives exchange.”


European financial institutions bet big on open banking, as investment ramps up in anticipation of strong returns [REPORT]


New research from Tink shows spend rising as financial executives in Europe look to open banking to enhance customer experience and generate new revenue streams 

  • Median open banking spending lies between €50-€100 million
  • 63% of financial institutions say spending has increased from last year
  • Financial institutions project a payback period of approximately four years
  • Barriers persist — with legacy IT, regulatory restrictions and a lack of urgency holding back investments

New research published today from open banking platform Tink reveals that financial institutions are ramping up their investments in open banking, as the industry mindset moves from compliance to value creation.

According to the data, median open banking investment budgets for European financial institutions are typically between €50-€100 million, with spend exceeding €100 million for nearly half (45%) of financial institutions surveyed.

Two-thirds of financial institutions (63%) say open banking budgets have grown since last year, with annual spending rising by between 20%-29%. Just 10% of institutions have slowed their investments in this area.

The benefits and barriers to open banking investment 

The opportunity to improve customer experience was the biggest driver for these open banking investments — cited by 44% of the financial institutions surveyed. This was followed by IT modernisation (39%) and process optimisation (34%).

Yet barriers persist — with legacy IT seen as the top inhibitor of investment by one in three (33%) respondents. Meanwhile, 32% cited more important business priorities as a blocker and 31% believed regulatory restrictions stifled spending.

Payback time: reaping the rewards of open banking 

Nonetheless, financial institutions are optimistic about open banking ROI, with 50% projecting a payback period of less than four years and more than two-thirds (69%) expecting the benefits to outweigh the costs in less than five years. Just 1 % of those surveyed felt there was no payback at all.

Financial institutions clearly recognise the huge commercial opportunity that open banking offers in the near term. Revenue growth from new customers emerged as the most important success metric for open banking investments amongst 44% of respondents. This was followed by revenue growth from new products and services (39%) and the monetisation of data by offering developer services or APIs (37%).

Daniel Kjellén, co-founder and CEO, Tink, said: “The size of these investments prove that open banking has moved firmly from compliance challenge to commercial opportunity in the minds of financial institutions. Not only has it become integral to the digital transformation of financial institutions and been embedded across all parts of the organisation — it has also emerged as a key driver of revenue growth and an important differentiator when it comes to customer engagement and experience. 

“Today, as we wrestle with the new social and economic realities of life with Covid-19, it is vital that financial institutions continue to prioritise the development of innovative open banking use cases that support their customers in new ways and provide financial services seamlessly over digital channels.”

Tink survey report – The investments and returns of open banking


Banking Circle study of online SME merchants reveals banking gaps that Payments businesses can fill


Europe-wide research commissioned by innovative financial infrastructure provider Banking Circle has found that nearly two thirds (64.6%) of online merchants have needed extra finance in the past two years (excluding borrowing due to the current COVID-19 crisis).

Nearly a quarter (23%) needed the additional funding to cover payroll, and a further 26.5% to cover regular business costs. Whilst needing to access extra funds is a fact of life for many businesses, the Banking Circle research highlights the serious gap in how easily and quickly funding can be accessed – which will be all the more crucial in the current climate.

Just under a quarter of respondents had to wait between three and four weeks to receive the cash they needed to cover essential costs, yet 26.4% felt that without access to new cash they would be forced to let employees go. And almost a quarter (24.4%) believe their business would ultimately fail if they were unable to access new finance.

With a whole new set of pressures on businesses of all sizes, but small businesses in particular, Banking Circle’s latest white paper, ‘Mind the Gap: How payments providers can fill a banking gap for online merchants’ highlights the continued issue of financial exclusion for SMEs – and the opportunities for payments providers.  These organisations are already connected to online merchants – and can play a crucial role in providing wider banking services, as well as access to funding.

Key findings:

Cross border banking is a challenge

  • Across EMEA an average of 19.2% of online merchants have separate banking relationships in every country in which they operate – adding to their costs and resources to manage
  • 17.2% of UK merchants have separate banking relationships in every country in which their business trades
  • 44% of UK merchants work with just one bank for all the countries in which the business trades
  • 26.2% of businesses in the Nordics are the most likely to work with separate banks in each jurisdiction
  • 13.9% of French merchants work with multiple banks
  • 20.3% of Netherlands firms work with multiple banks

Banking services used by online merchants

  • Around half of online merchants surveyed said they use short-term loans (47.8%), overdrafts (49.1%), and finance agreements for specific purposes (48.8%)
  • 43.2% access settlement accounts for cross border payments (43.2%) from their main bank
  • 35% use their bank for foreign exchange (FX) services (35%)
  • German merchants are least likely to access solutions to help with cross border trade, with the lowest proportion of all respondents accessing settlement accounts (38.8%) and FX (16.8%)

Accessing finance – how long does it take?

  • Online merchants reported that accessing business finance had taken them as much as 6 months:
    • 18.8% said it took 1-2 weeks
    • 24.6% – 3-4 weeks
    • 21.7% – 1-2 months
    • 16% – 3-4 months
    • 6% – 5-6 months

The Opportunities for FinTechs and Payments businesses

  • 87.3% feel their business is well served by their current banking partners; German merchants are the least satisfied at 82.9%
  • 42.6% of the dissatisfied businesses felt their business is not a priority for their bank, and 41.5% gave high fees as a reason
  • Approximately one in four respondents dissatisfied with their bank gave each of the following reasons for their dissatisfaction:
    – poor quality and inconsistent service (28.7%)
    – slow response times (28.7%)
    – poor FX rates (24.5%)

Commenting on the findings of the study, Anders la Cour, Co-founder and Chief Executive Officer of Banking Circle said: “The world of digital commerce is a rapidly growing sector; but it is also a sector where entrants face multiple barriers to operate because established financial institutions have a fear of the unknown.

“Opening a bank account – fundamental for most enterprises – can feel like taking an exam. And access to short-term funding, whether to fill a cashflow gap or to underpin growth plans, can involve multiple hurdles often just too steep to get over. However, payments providers already supporting the online merchant space can deliver a genuine added value by providing their merchant customers with banking services including access to funding. And in the current climate that support is going to be more valued than ever – indeed, for payments providers that demonstrate a real understanding of SME needs there could be a significant long-term gain.”

Anders continued: “Banking Circle has always been committed to improving financial inclusion for smaller businesses, and this study helps us and the wider industry to identify – and therefore help to fill – gaps in the current offering.”

The full white paper, ‘Mind the Gap: How payments providers can fill a banking gap for online merchants’, is available to download for free at https://www.bankingcircle.com/whitepapers/how-payments-providers-fill-finance-gap-online-merchants

The research was conducted by Censuswide between 30th March 2020 and 7th April 2020, amongst 1,514 respondents from merchants that trade online and respondents who work in the finance department in companies that sell digitally. The SME merchants surveyed were based in the UK, Germany, France, the Netherlands and the Nordics.

For further information, please click on the link below:
Mind the Gap white paper for media review only.