Digital Bank Kroo Receives Full U.K. Banking License
  • Digital banking startup Kroo received a full banking license from the Bank of England.
  • Kroo will use the new authorization to offer personal current accounts in the coming months.
  • The full banking license places Kroo in competition with Monzo, Starling Bank, and Atom Bank.

Digital banking startup Kroo just received a full banking license from the Bank of England. With the new authorization, the U.K.-based bank plans to offer personal current accounts (checking accounts).

Founded in 2016, Kroo offers a prepaid Mastercard with a tandem mobile app that provides spending insights, peer-to-peer money transfers, bill-splitting capabilities, and more. The payment card, which is biodegradable, works in more than 75 countries.

Kroo will add current accounts to its product line “in the coming months.” After launch, the company will offer its 23,000 customers the option to migrate to the new offering for free.

Kroo CEO Andrea De Gottardo said that the banking license represents a “phenomenal milestone” for the company, which has a mission to create a bank that connects people financially. “The bar to be granted a U.K. banking license is exceptionally high, and I am incredibly proud of the team and our work in achieving this,” De Gottardo added.

Having a full banking license helps Kroo differentiate itself from the massive number of competitors in the digital banking space, since the accreditation enables the bank to protect customers’ deposits of up to £85,000 via the Financial Services Compensation Scheme. Along with this, the license allows Kroo to offer a wider range of products, including loans and savings.

Kroo is only the second bank to earn a full banking license with a personal account since 2016. Having the full license places Kroo in competition with major digital banks, including Monzo, Starling Bank, and Atom Bank. Other European-based digital banks RevolutKlarna, and Wise, have yet to receive their full banking licenses.

Today’s news comes weeks after Kroo closed on a $30 million (£26 million) Series B funding round. The investment brought Kroo’s total funding to $71.5 million.

Photo by James Giddins on Unsplash

Array and Alkami Technology Team Up to Help Banks Boost Digital Engagement
  • Two Finovate alums – Alkami Technology and Array – have teamed up to help financial institutions offer credit and identity solutions to their customers.
  • The partnership makes three of Array’s signature solutions: My Credit Manager, ID Protect, and Offers Engine, available to a wider range of bank and credit union customers and members.
  • Alkami made its Finovate debut in 2009 as iThryv. Array won Best of Show at FinovateFall 2021 and again at FinovateSpring 2022.

A new partnership has been forged between digital banking solution provider Alkami Technology and financial enablement platform Array. The collaboration will bring a range of new solutions to Alkami clients that will help their customers and members better monitor their credit, benefit from anti-fraud identity monitoring, and access actionable, credit-based offers.

“Improving the digital-first banking experience is a top priority for banks and credit unions,” Alkami founder, Chief Strategy Officer, and Product Officer Stephen Bohanon said. “Our partnership with Array enables banks and credit unions to provide added-value products to account holders, which increases engagement and potentially revenue as well.”

Among the solutions that will be made available to Alkami’s bank and credit union partners are Array’s My Credit Manager, ID Protect, and Offers Engine. My Credit Manager keeps users updated on changes to their credit score, enables them to explore different credit scenarios with a credit score simulator, allows them to conduct debt analysis, as well as see how different factors impact their credit score. With ID Protect, users can take advantage of a number of anti-fraud protections including identity and Dark Web monitoring, alerts, insurance, and restoration services in the event of identity theft. Array’s Offers Engine empowers banks and credit unions to better market their products and services to customers and members using targeted, actionable offers that are based on the individual’s actual credit circumstances.

“Today’s success formula for personal service includes a mix of in-branch experiences and digital tools that add value to account holders every time they log in,” Array co-founder and CEO Martin Toha explained. “Alkami and Array are making it easier than ever to help banks and credit unions deploy a consistent roadmap of innovative digital products for account holders.”

A Finovate alum since 2009, when it debuted at FinovateSpring as “iThryv,” Alkami has grown into a leading digital banking solution provider. The Plano, Texas-based fintech serves both retail and business customers with onboarding, engagement, and account servicing. Clients can enhance their use of the Alkami platform with upgrades and leverage both Alkami’s product suite, as well as integrated, third-party solutions to enhance and customize their experience. Alkami is a publicly-traded company on the NASDAQ under the ticker “ALKT,” and has a market capitalization of $1.3 billion.

Winning Best of Show honors in its Finovate debut at FinovateFall last September and again in its return to the Finovate stage last month for FinovateSpring, Array is a financial enablement platform that specializes in embeddable and white label solutions. Founded in 2020, the company enables its clients to boost end customer engagement by providing them with innovative credit and identity solutions that enhance the customer experience.

Array raised an undisclosed amount of funding in June 2021 from Operator Partners and the FIS FinTech Accelerator in Partnership with The Venture Center. The company is based in New York City.

Photo by Pixabay

Raisin Bank’s Newest Acquisition Helps it Expand into Bulk Payments and Cash
  • Raisin Bank has agreed to acquire the payment division of Bankhaus August Lenz.
  • The move will help Raisin Bank diversify its revenue sources by adding payment services to its product lineup.
  • Terms of the deal were not disclosed.

Banking-as-a-service player Raisin Bank is adding cash and payment services to its product lineup. This comes as the Germany-based firm has acquired the payment division of Bankhaus August Lenz, a private bank headquartered in Munich. Financial terms of the agreement were not disclosed.

The move will help Raisin Bank diversify its revenue sources by adding payment services. The new capabilities enable Raisin Bank to offer customers electronic payment transactions and cash solutions. Bankhaus August Lenz’s Mirko Siepmann will head up the new division, which aims to help retailers, restaurant, gas stations, and non-bank operators of ATMs, facilitate the operation of more than 4,500 ATMs in Germany. 

“As a service bank, we will act much more independently and powerfully with the expansion of our payment solutions and continue our growth in the banking-as-a-service market throughout Europe advance,” said Raisin Bank Chief Commercial Officer Dr. Andreas Wolf. “With the new business area, we can position ourselves even better as a provider for bulk payments.”

Raisin Bank, previously MHB-Bank, was founded in 1973. The bank acquired European fintech Raisin in 2019 and has since been working toward its goal to become the leading banking-as-a-service provider in Europe. The bank offers digital solutions to help startups, institutional investors, and financial service providers seeking banking licenses to enhance customer and account management, payment transactions, and lending. Raisin Bank stated in today’s press release that adding payment services represents an “important strategic step on the way to becoming a powerful full-service provider.”

Photo by Anete Lusina

Who is responsible? The English court comments on duties owed to cryptoasset owners

The judgment in Tulip Trading Ltd v Bitcoin Association for BSV and Others sheds light on the legal relationship between the software developers behind various bitcoin networks and their participants. Notably, the court found that there was no case to be made that the developers had a duty to take action to undo the effects of an alleged theft. At the same time, the possibility of other legal duties falling on developers in the future was left open. Players in the crypto markets should be cognisant of this position, amid ongoing market turmoil. 

The decision 

Earlier this year, the High Court denied a prominent bitcoin holder, whose private keys to substantial holdings were allegedly taken in a cyber-attack, the right to serve a legal claim on a group of developers for failing to take action to restore the lost value into the claimant’s hands.

The case was brought by Tulip Trading Ltd (“Tulip”), which claimed that the defendants were the core developers behind various bitcoin networks and/or otherwise controlled the relevant software, and that they owed the claimant fiduciary and/or tortious duties to rectify the “theft” of private keys by writing and implementing a software “patch” that would restore Tulip’s access to the bitcoin assets. In setting aside permission to serve the claim out of the jurisdiction, Mrs Justice Falk held that there was no serious issue to be tried on the merits of the claim. Last month, Falk J also declined Tulip leave to appeal.

No fiduciary and tortious duties – for now

Falk J rejected the argument that the software developers owed the claimant a fiduciary duty. In particular, she noted that the defining characteristic of a fiduciary relationship is the obligation of undivided loyalty, and if the claimant’s argument were accepted, the steps that the defendants would have to take would be for the claimant’s benefit alone, to the exclusion of other users, to whom the defendants would also owe the same duty and who would have a legitimate complaint against the defendants.

Falk J also refused to find a tortious duty of care in this situation. She concluded that it would not merely be an incremental extension of the law to impose a duty concerning “failures to make changes to how the networks work, and were intended to work, rather than to address a known defect”. This was particularly true given that the alleged loss was an economic loss arising out of an omission. 

Underlying both strands of Falk J’s reasoning is a recognition of the “core values of bitcoin as a concept” (in the defendants’ words): digital assets are transferred through the use of private keys and what the claimant was seeking was effectively to bypass that.

Bitcoin networks are not financial institutions 

Tulip argued that bitcoin networks “could be equated with financial institutions”, in the sense that “[f]unds were being entrusted to controllers of the Networks, who profited from their activities, and public policy required the imposition of a corresponding duty of care”, and therefore a duty of care similar to the duty of care on banks established in Barclays Bank v Quincecare [1992] 4 All ER 363 should be imposed on bitcoin networks. Falk J was not persuaded by the argument: in particular, she noted that the starting point for the Quincecare duty of care is the relationship of contract and agency between the bank and its customer. It is interesting that such arguments seen in the more traditional financial sphere were being deployed in the context of a decentralised network with no contractual framework, and the court’s rejection of the direct analogy should be welcomed. 

Room for future claims? 

Without deciding the point, Falk J in obiter commentary left open the prospect of the developers or controllers of digital asset networks owing some other form of duty to owners of digital assets in other situations. For instance, she suggested that it was conceivable that some form of duty could arise if the developers “introduc[ed] for their own advantage a bug or feature that compromised owners’ security but served their own purposes.” Falk J hinted that there may be other circumstances where the developers or controllers could owe a duty.

This is only a first instance decision following a summary procedure and therefore its precedent value will be limited. But, in practice, this decision is likely to be influential given the novel issues raised. The recent turmoil in the cryptoasset market may provide fertile ground for litigation on this topic as the significance of these potential duties takes centre stage.

Bitcoin crash: A new beginning

In January 2000, global financial markets were on the verge of a meltdown that was expected to destroy both the reputations of investors and the riches of day traders, that invested in companies and tech stocks that weren’t generating any revenue.

The “dotcom” crash caused a stock market meltdown.

Between 1995 and 2000, Nasdaq climbed 400% as internet companies sought to profit from the new technology. It peaked in 2000, and by October 2002, Nasdaq had lost 78% of its value, around $5 trillion.

Big advertising budgets and poor business models were the main reasons why companies like, Webvan, eToys,, Kozmo, and many others failed to deliver on their promises and support their high share prices and ended up shutting down or being acquired.

However, a few technology companies got it right, demonstrating remarkable growth and earnings. When you look at companies like Google and Amazon they thrived and turned out to be the dominant players in the sectors.

Looking back at the past two decades only proves to us that early internet entrepreneurs and investors were right about the internet and how it would revolutionize the way we live and work.

While most of the world’s technology companies are not 1 trillion dollar companies like Google ($1.56T) and Amazon ($1.18T), the aggregate earnings of tech companies are 2.5 times higher than they were in 2000.

MSCI World Technology Index vs. MSCI World

This incredible growth tells the story of tech over the past two decades and I think tells us what we should expect from crypto.

Yet, the drop in cryptocurrency and NFT prices has raised concerns, finger-pointing, and calls for regulation.

The entire crypto market is feeling the pain.

Bitcoin has lost about 70% of its value since hitting an all-time high of roughly $69,000 in November 2021. The total market cap of crypto assets has dropped to less than $1 trillion from its November 2021 peak of $3 trillion.

Today 95% of the crypto market is worthless.

There are more than 19,000 cryptocurrencies and dozens of blockchains that exist. Most of what’s out there today doesn’t add any value and some are even scams, just like many of the early internet companies. Eventually, like the dotcom crash, they will go belly up what will be left will be valuable coins and legitimate businesses. In 10 years from now, there’ll be a couple of clear winners for different kinds of applications.

While some things seem similar between this crypto and the dotcom crash, they are very different. The dotcom crash impacted the global economy, while the global economy impacted crypto. Crypto has a long way to go before it becomes the cause of an economic downturn like the dotcom or housing bubbles were. Crypto is simply a volatile new tech market trying to find its way, also victimized by a global recession.

But the crypto crash is teaching us some valuable lessons about crypto and NFTs and how they work in the economy. Similar to how the dotcom crash clarified for internet companies what products and business models are viable, this recent crypto crash is removing our rose-colored glasses about Web3 and the metaverse, and those that survive the crypto crash could become the tech giants of the future.

Crypto has created products that could not have been imagined before, including digital playthings that are often of little practical value, such as nonfungible tokens and meme cryptocurrencies. But there are also some useful ones such as smart contracts that allow financial assets to be bought and sold directly without the intervention of traditional intermediaries. This should, at a minimum, lower costs and improve efficiency by creating competition for entrenched institutions.

Rather than seeing this as the end of bitcoin, we can see it as the next step in the evolution of the market transitioning from a speculative asset to one that creates value by providing useful services to the economy.

by Ilias Louis Hatzis is the founder and CEO of Kryptonio wallet.

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ISO 20022: What it Means For The Payments Industry

There’s five months to go until the adoption of ISO 20022 in Europe – the international standard for exchanging electronic messages between financial institutions, covering cards, payments, securities, FX and trade. Here’s a reminder of what it is and the progress so far.

The International Organisation for Standardisation (ISO) first published ISO 20022 – a global standard for payments messaging – in 2004. The new standard creates a common language for payments data across the globe, enabling faster processing and improved reconciliation.

Benefits of ISO 20022 include increased transparency, automation and digitisation of payments. It provides richer and higher quality data which means much more detailed information about the payment is available.

Which sounds promising when the cost of failed payments – due to inaccurate or incomplete information, or poor reference data and validation tools – is estimated to cost the global economy $118.5billion in fees, labour and lost business a year, according to Accuity data.

There is a global ISO 20022 programme underway to assist all banks to adopt ISO 20022 for all payments and reporting exchanges, which will complete in 2025. The standard has already been adopted in 70 countries to replace domestic or legacy formats, including Switzerland, China, India and Japan.

SWIFT, the global provider of secure financial messaging services, will enable ISO 20022 messages for cross-border payments and cash reporting businesses, starting from August 2022, on opt-in basis, and November 2022 for general availability. MT messages supporting cross-border payments and reporting transactions will be decommissioned in November 2025.

Bank of England and Pay.UK will implement ISO 20022 in the CHAPS and NPA (New Payments Architecture) in April 2023. In the US, The Clearing House (TCH) – operator of CHIPS, the largest private sector USD clearing and settlement system in the world –  plans to implement the ISO 20022 message format by November 2023.

ISO 20022 is ‘good news’

According to financial services consultancy Projective Group, the new framework will alter the way in which payments are received forever, unlocking the speed and transparency associated with low-value domestic payments, and connecting the financial world with far less friction.

Jacob Rider, head of payments for Projective Group, said: “The transition to ISO 20022 needs to happen – and fast – if the industry wants to reap the many benefits it provides. Payments have already become faster, more transparent and more trackable thanks to the widespread adoption of SWIFT gpi, but the current MT standard does not offer the quality of data needed in today’s digital world.

“With better customer experience, better compliance and better efficiency, ISO 20022 is good news for financial institutions, provided they manage this transition quickly and carefully.”

In the latest chapter of Mastercard‘s payment system modernisation insights series, publishd this month, it describes ISO 20022 as enabling several key pain points that exist for both banks and their end users to be addressed.

It says: “In an increasingly competitive landscape, ISO 20022 message standards can smooth the process of innovation, which is critical to long-term success. ISO 20022 delivers operational efficiencies while promoting and supporting the development of value-add products and services for banks, businesses
and consumers alike. As the shift to ISO 20022 rapidly picks up pace, those financial institutions that stay wedded to older standards risk being left behind.”

ISO 20022 adoption

A recent Mastercard review of 61 real-time payment systems around the world found almost two-thirds were based on ISO 20022 data standards.

Banking Circle says it has already adopted the ISO 20022 messaging standard, three years ahead of the 2025 deadline for completion.

Laust Bertelsen, CEO of Banking Circle, said: “To conduct business, financial institutions exchange massive amounts of information with their customers and other institutions. Such exchanges only work if the sender and receiver of a message have a common understanding of how to interpret this information. Rather than managing multiple market systems that speak different languages, ISO20022 offers a universal messaging language. Many real-time, low-value and high-value clearing systems around the world have begun their migration and are using ISO20022, with many more to follow by the end of this year.

“We are delighted to be part of the early wave of businesses that have adopted the new standard. It is perfectly aligned with our mission of simplifying cross-border payments, breaking down barriers to international trade by removing unnecessary delays and challenges with reconciliation and by being ready ahead of the deadline our clients can benefit immediately.”

What’s next for fintechs?

According to BrightBridge, a Midlands-based technology consultancy, banks who fail to initiate moving to the messaging standards of ISO 20022 sooner rather than later risk further setbacks down the line.

In a blog, it said: “With much change yet to pass in the coming years, 2025 may seem a long while off. Yet the institutions able to act now stand a greater chance of making the transition on time – before their existing products and services become obsolete.

“Compared to legacy formats, bank systems will need to process larger data volumes at higher speeds to allow for the real-time payments, daily liquidity management, and compliance checks of the modern world; and not forgetting sophisticated fraud detection and prevention.

“In an ideal world, testing should begin to take place from 2022 onwards – from ensuring the syntax and formatting information is accurate, to data within associated payment and clearing systems being mapped correctly.”

Are you ready for ISO 20022?

SMEs Enjoy Post-Pandemic Profit High Bolstered by International Trade

Two in five SMEs in EEMEA are earning more money than before the pandemic, driven by digital growth and international sales opportunities, according to the latest Mastercard report.

Data from the company’s ‘Borderless Payments‘ report has brought to light how 46 per cent of small and medium-sized businesses (SMEs) in Eastern Europe, the Middle East and Africa (EEMEA) are now enjoying more revenue and profit than they did before the economic crash of the pandemic.

Its report identifies online business and international sales as key drivers of this, with 71 per cent recording above-global-average growth in online sales, while 77 per cent are planning to do more business internationally going forward.

The research, which covered 3,000 SMEs, highlighted that three-quarters had to make changes to their business model to survive the pandemic, while 64 per cent globally believe it has changed how they will do business forever.

The pandemic has accelerated digital transformation to tap into cross-border opportunities, with nearly half of SMEs in EEMEA saying they now do more business internationally.

Sixty-four per cent of respondents credit cross-border payments with enabling their business to grow, making it clear that cross-border payments will be a key focus for business growth across the EEMEA region, and therefore economic recovery, moving forward.

Fifty-nine per cent are now making and receiving more cross-border payments than they were prior to the pandemic, while 72 per cent say the pandemic has allowed them to source more competitive quotes from suppliers across borders and 46 per cent say using international suppliers reduces risk.

Speaking on the findings of the report, Stephen Grainger, executive vice president of Mastercard, describes how the impact of the pandemic and the unprecedented disruption it caused “realigned regional and global economics”, causing many SMEs to start exploring new markets.

“With small businesses in EEMEA and across the world growing their international customer and supplier networks at pace, especially online, it’s crucial that financial institutions have the right cross-border solutions in place to support them,” Grainger comments.

  • Tyler is a Fintech Junior Journalist with specific interests in Online Banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

China’s Fintech and Internet Sectors Readjust to Macro Risks as Regulatory Environment Eases

As the country continues its lockdown well into 2023 while consumer consumption slows, China’s economic challenges have become important drivers for internet companies’ credit profiles; dampening industry profitability and cash generation in the short term.

According to the findings of Fitch Ratings, China’s internet companies, including its fintech community, now face a diminishing threat of regulatory risk, bolstered by the attention of the country’s policymakers trying to support the economy. Yet in the aftermath of last year’s policy tightening, some companies may continue to encounter difficulties.

The American credit agency has predicted that China’s economic growth will fall to just 3.7 per cent this year, down from an 8.1 per cent expansion in 2021; a prediction that reflects the impact of lockdowns.

The recovery in activity is likely to be restrained and subject to setbacks, given that the government’s zero-Covid policy is set to remain in place well into 2023, with a high risk of new lockdowns if outbreaks re-emerge.

Although lockdowns can lead to some spending shifting to online firms, weaker economic growth will weigh on overall market growth.

Thus, even though the credit agency expects the market share of online retail to rise to 29 per cent of total retail in 2022, it only predicts a single-figure rise in revenue; slower than both years previous.

It puts forward that the strength of the recovery in consumption, expected in the second half of this year, will be affected by various structural changes, including price sensitivity among consumers amid macro-economic uncertainties and decreasing demand for specific non-essential goods and services.

Many Chinese internet companies have now realigned their strategic focus towards optimising costs, rationalising non-core businesses and pursuing more prudent mergers, acquisitions and investments.

According to the company, these adjustments should help reduce pressure on profitability and cash generation and preserve liquidity and financial flexibility.

There is also a risk that some Chinese internet firms could respond to the difficult demand environment by expanding into new business areas to drive sales. For example, the apparel brand JD has considered launching online food deliveries, which would pitch it against the sector’s dominant players such as Meituan and Alibaba Group, which both have a rating of BBB-/negative and A+/stable respectively.

Increased competition could put downward pressure on ratings for a number of internet companies, but some, such as Meituan, have less headroom than others at their current rating level.

The agency recommends that it would be premature to say whether or not the more conciliatory comments of the government to feature over the past few months mark a sustained alleviation of regulatory pressure on China’s large internet companies.

However, it also emphasises how recent developments, including the resumption of issuing monetisation licences for specific online games, the potential conclusion of an investigation into rideshare firm Didi and the government’s approval of a plan for ‘healthy’ development of the payment and fintech sectors, might mark the loosening of its grip.

Still, the agency retains its belief that regulatory risk will recede as a sector credit concern relative to macroeconomic factors.

Risks to the creditworthiness of specific companies will decrease as they are released from or deal with regulatory challenges, allowing them to focus more on core business challenges and growth.

However, the repercussions of previous regulatory actions will continue to be felt and regulatory risk will remain an important consideration for Chinese internet businesses’ ratings, regardless of potentially positive developments over the next few months.

  • Tyler is a Fintech Junior Journalist with specific interests in Online Banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

Backbase Supports Fintech Innovation in Bahrain; Compass Plus Boosts Digital Payments in Nigeria

This week’s edition of Finovate Global takes a look at two Finovate alums that are helping support fintech innovation in the Middle East and Africa.

First up is engagement banking platform provider Backbase. The four-time Finovate Best of Show award-winning company announced this week that it has forged a new partnership with Bahrain FinTech Bay (BFB). The partnership comes under the auspices of BFB’s Venture Acceleration Platform, which seeks to boost the adoption of digital banking technology in the MENA region.

Head of Partners at Backbase Middle East Mehmet Cakal said, “This new collaboration with Bahrain FinTech Bay aligns with our continuous efforts to help banks in the region with a long-term digital strategy and support them with a holistic approach towards digital transformation, to be able to meet the demands and expectations of their customers in today’s age.”

Backbase is no stranger to the MENA fintech and financial services industry. The company, founded in 2003 and headquartered in Amsterdam, the Netherlands, has established partnerships with a number of key players in the region. This includes the National Bank of Bahrain, Banque Saudi Fransi, and the Kuwait International Bank. In fact, Backbase Middle East was awarded “Digital Banking Provider Of the Year” honors at the MEA Finance Banking Technology Summit and Awards last month.

Bahrain FinTech Bay, a leading finech hub in the region, promotes fintech innovation by incubating fintech initiatives via innovation labs, acceleration programs, curated activities, and educational opportunities. Founded in 2017, BFB launched its Venture Acceleration Platform in order to give emerging fintechs “a launch pad and bespoke go-to-market strategies” to help them scale their businesses and take advantage of opportunities in the MENA region. The platform provides those companies selected to participate in the accelerator with market intelligence, exposure to partners, as well as assistance in implementation and regional expansion.

“Our new partnership with Backbase will strengthen our mandate to bring cutting-edge technology offerings to banks and financial institutions in MENA,” Bahrain FinTech Bay CEO Bader Sater said. “Bahrain FinTech Bay is committed to providing curated opportunities for enterprises and supporting startups in the sector to accelerate their growth and expansion efforts across the region.”

Meanwhile, several hundred miles to the south and west, fellow Europe-based fintech Compass Plus is engaged in its own outreach to markets in developing economies. The U.K.-based company, a Finovate alum since 2012, announced this week that it is teaming up with Nigerian fintech Interswitch to help it enhance its payment processing capability.

Interswitch will leverage Compass Plus’ token-based, cloud-native, API-first open development payments platform, TranzAxis, to process Verve, Visa, and Mastercard credit card transactions. Six African banks already have been onboarded onto the new platform, which has enabled Sterling Bank of Nigeria to launch the country’s first Verve credit card.

“We are delighted to partner with Interswitch, one of the biggest processors in Africa,” Compass Plus MEA VP and Deputy Managing Director Adil Ahmed said. “Interswitch has always strived to drive positive change in the region, and now that they have TranzAxis to support their ambitions, they will continue to revolutionize Africa’s payment space in the region, further strengthen the Verve payments network, and manage their Visa and Mastercard credit card business more efficiently.”

Founded in 1989, Compass Plus offers banks and financial services companies retail banking software and services to enable them to better respond to their customers’ banking needs. The company’s solutions address issues from card, account, and merchant management to card personalization, payment processing, and terminal driving to self-service channel management and both mobile and e-commerce. Compass Plus’ TranzAxis technology helps financial services companies develop and support cards, payments, transaction switching, and other retail banking activities.

Headquartered in Lagos, Nigeria, Interswitch began as a nationally-focused, transaction switching and processing firm. In the 20 years since then, the firm has grown into Africa’s leading integrated payments and digital commerce platform company with more than 900 full-time workers across Africa – 40% of whom are women. Named “Fintech of the Year” at the 2022 African Banker Awards last month, Interswitch also last month secured a strategic investment from LeapFrog Investments and Tana Africa Capital. The amount of the funding was not disclosed.

“The evolution of fintech in Nigeria and the broader sub-Saharan region has been driven by the need to solve challenges and barriers that exist within the traditional financial system,” Interswitch founder and Group Chief Executive Mitchell Elegbe said. “Interswitch was born from the need to develop solutions that match the unique needs of local customers and merchants.”

Here is our look at fintech innovation around the world.

Central and Eastern Europe

Middle East and Northern Africa

Central and Southern Asia

Latin America and the Caribbean


Sub-Saharan Africa

Photo by Satheesh Cholakkal

Only 14% Of BNPL Users in the US Haven’t Had to Pay a Late Fee Finds ConsumerAffairs

Buy Now Pay Later (BNPL) has established itself as one of the primary ways for people to make payments in 2022. The pandemic caused many to become much more financially aware, leading to a massive uptake in alternative payment methods as people looked to stretch their available finances. For better and for worse, this saw a rise in BNPL.

Research from ConsumerAffairs, an American customer review and consumer news platform, looked to uncover how Americans felt about the payment method. It surveyed 1,000 Americans about their experience or lack thereof with buy now, pay later services. 700 respondents were BNPL users, and 300 had never used these services. Among its respondents, 21 per cent were Generation Z, 32 per cent were millennials, 27 per cent were Generation X and 20 per cent were baby boomers.

Aggregate use of BNPL

To begin the study, ConsumerAffairs first asked respondents about their preferred usage of BNPL, comparing the different generations’ responses. They shared their favorite apps, frequency of use and overall sentiments regarding the payment option.

It’s no wonder BNPL is raking in hundreds of billions of dollars and expected to pull in even more; 80 per cent of those surveyed had used it for the first time within the last year alone. People also habitualised paying later with gusto: 44 per cent used BNPL weekly or more frequently. Only 10 per cent said they employed the payment option once a year or less.

Despite BNPL being a relatively new offering, baby boomers were enthusiastic adopters from the beginning. Unlike millennials or Gen Zers, one in four of those between 57 and 75 years old had already been using BNPL for a year or longer.

Interestingly, those using BNPL the most frequently didn’t have the poorest financial health, on average. It was actually those who used BNPL sporadically — just every few months — that had the worst situations. Perhaps holding on to cash for longer is financially advantageous in this particular economy of high inflation and market-dip buying opportunities.

What people are buying now and paying for later

This next piece of research digs into the specifics behind BNPL. Respondents shared what they’re purchasing, how much they’re spending and what types of late fees they owe. Once again, responses were further compared by generation.

Gen Z respondents were the most likely to agree with the statement that inflation has directly contributed to their use of BNPL — and well over half of respondents of all ages agreed. With deferred payments, increasing inflation can lower the amount you ultimately owe. Then there’s the fact that wages have not kept up with inflation — more than one in 10 respondents said they wouldn’t have made a specific purchase without BNPL.

It might be concerning to see Gen Z adapting to this phenomenon the most. It’s reminiscent of the circumstances around the CARD Act of 2010, when college students were preyed upon by credit card companies offering swag, gifts and other inducements on college campuses. Since then, there’s been a steep drop in the number of young adults signing up for credit cards. Instead, it appears they’re opting for BNPL, which mirrors the concept of a credit card.

Currently, Gen Z is racking up the most in late fees, with an average of $483 during their tenure using BNPL.

Future estimations of BNPL

The study wraps up with a look at future approximations of BNPL. Respondents were asked to share what they felt were the pros and cons of the service and which types of products and services they’d like to see BNPL options for.

BNPL ultimately offered more upsides than downsides, according to respondents. They liked the option for its convenience (70 per cent) and low interest rates (33 per cent) — and also because it doesn’t require a high credit score (31 per cent). The perceived downsides were unknown fees (54 per cent), difficult payment tracking (47 per cent) and a lack of rewards or cash-back incentives (46 per cent).

Most respondents wanted BNPL options to extend even further. Nearly half (48 per cent) said the option is particularly helpful during a recession, and more than a third wanted the payment plans to be extended to health care.

With consistent proof that more money actually can lead to more happiness (or at least a life with less stress), this study suggests that having the actual money on hand might not be as important as having access to it through financing options. People who rated their financial health, mental health and quality of life as good or amazing in this study reported higher median fees, on average, suggesting the later (higher) payments could ultimately be worth it.

Using BNPL to your advantage

BNPL offers a trove of possibilities for your financial well-being — if used correctly. Respondents who took advantage of the option with regularity were actually more likely to be happier and financially healthier, even if they were paying higher fees. Particularly during a recession, this option provides access to items people need the most. Of course, those who benefited most probably didn’t do much frivolous spending.

  • Francis is a junior journalist with a BA in Classical Civilization, he has a specialist interest in North and South America.

FDITECH Sprint addressed bank identity fraud

Banks are being challenged by deciphering between their customers and cybercriminals amid a push to provide robust digital experiences. A collaborative effort is required to verify identities, according to solutions presented at the recent Federal Deposit Insurance Corp. (FDIC) FDITECH Sprint, which sought solutions on modernizing digital identity proofing or verification for remote customers. The […]

Fintech Funding: Crypto platform FalconX secures $150M, clears $8B valuation

Are happy days here again for cryptocurrency? Crypto platforms and coins have taken severe hits in what can only be described as a pessimistic market: Crypto giant Coinbase reduced its workforce by 1,100 in the second quarter, while executives from exchange platform Gemini noted the onset of market instability as cause for a 10% staff […]

Phos Launches Off-The-Shelf SoftPoS for Payment Service Resellers

Phos is to launch a white label SoftPoS app for payment service resellers through its partnership with payment solution and infrastructure provider Paynt.

Once resold, the off-the-shelf solution will enable small and medium-sized enterprises (SMEs), sole traders and specialist merchants to turn any smartphone or tablet device into a contactless payments terminal.

One of the benefits of this approach is that it requires no additional hardware, enabling merchants to make use of the mobile devices they already have – rather than investing in costly physical terminals.

The solution aims to remedy key issues for resellers, improving merchant acquiring and day-to-day management by automating the onboarding process and merchant account setup.

It will also provide data and customisable reporting capabilities that will be able to be accessed via API or a web-based interface.

Sam Kohli, CEO of Paynt, explains how its latest white-label solution is in response to the rising demand for payment acceptance capabilities, and that the company is “delighted” with its latest partnership with phos, which will bring its new product into fruition.

Brad Hyett, CEO, PhosBrad Hyett, CEO, Phos
Brad Hyett

Phos CEO Brad Hyett added that the new app will allow payment service resellers to deliver a solution for a “historically underserved audience…by removing the complicated, expensive and time-consuming app development and certification process,” identifying how the solution will allow resellers to expand their offering.

The collaboration with Paynt is the latest in a string of partnerships for phos, including collaborations with UK-based payment solution provider UTP, cashless fundraising firm Givestar, and AZUL – part of Grupo Popular – in the Dominican Republic.

  • Tyler is a Fintech Junior Journalist with specific interests in Online Banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

Shariyah Review Bureau to Supervise Tribal Credit’s Sharia Compliance For New Corporate Cards

To review, certify and supervise Shari’a compliance for its new corporate cards and working capital products in Islamic markets, Tribal Credit, a global company from Silicon Valley that provides integrated financial solutions for startups across the Middle East and emerging markets, has partnered with Shariyah Review Bureau (SRB), a GCC based Shari’a advisory firm.

With this announcement, Tribal Credit has become one of the first standalone credit and expense management solutions to offer Shari’a compliant products in MENA.

SRB has been at the forefront of Shari’a advisory for more than seventeen years and leads in providing Shari’a certification, Islamic product structuring and Shari’a Audit services to international financial institutions, asset management houses, fintech, insurance firms, and alternative wealth management organisations.

Amr Shady, CEO and co-founder of Tribal Credit said: “As a result of the partnership with Shariyah Review Bureau, we will also maintain a dedicated Shari’a supervisory resource to ensure that our products remain Shari’a compliant”.

He also adds, “through our deep knowledge of the corporate cards and financing market in the startup and SME eco-system, we expect to unlock new potential for businesses and investors with this new partnership.”

Tribal Credit is strengthening its network and strategically managing the Islamic financial ecosystem in order to adapt fast to constantly changing business needs and deliver innovative credit card and financing solutions to startups and SMEs in the coming years.

Speaking about the engagement of SRB’s services to oversee its Shari’a compliant side of the business, Duane Good, Tribal Credit’s, co-founder, and president, said: “SRB’s experience in Islamic financial markets and deep understanding of the evolving needs of credit and expense management will enable us to develop secure, 360° and powerful Shari’a compliant finance solutions that provides startups in emerging markets with flexibility and financial control.”

Yasser S. Dahlawi, CEO at SRB, said: “Our establishment is a trusted partner to clients worldwide seeking to attain Shari’a compliance in their products and investments. Our multi-sector product certification and development consultancies all under a single roof have become quite a hit with our existing client base.” Commenting on the partnership, Dahlawi added, “We are pleased to have formed this relationship with Tribal Credit. We will bring a seasoned team of experts with unique scholarly expertise to ensure ongoing Shari’a compliance.”

  • Francis is a junior journalist with a BA in Classical Civilization, he has a specialist interest in North and South America.

Revolut Launches BNPL Offering in Europe: ‘Pay Later’ to Be First Used in Ireland

Revolut, the financial super app with more than 18 million customers worldwide, is rolling out its pay later product, ‘Pay Later’ in Europe as it continues to expand its suite of products to help people get more from their money. Revolut Pay Later is the first pay later product in Ireland that uses an approved credit limit, designed to focus on affordability, putting the customer in control of when they want to use Pay Later rather than being restricted to certain merchant partnerships.

Beginning this week, some Revolut customers in Ireland will be eligible for early access to Pay Later, which will gradually roll out to all users in Ireland – where 1.9 million adults have a Revolut account. Pending the sign-ups for Pay Later, Revolut will look to offer the product in additional markets from the end of 2022 and beyond, with Poland and Romania to be the next markets gaining access to the product later this year.

Qualified customers can use Pay Later for purchases up to a maximum of €499, with any of their Revolut cards, including when paying with a Revolut Disposable Virtual Card which provides an extra layer of security for online transactions.

Customers can spread the cost of a purchase across three monthly instalments with the first instalment paid upfront by the customer at the time of purchase followed by two monthly instalments. The fee of 1.65 per cent per purchase is repaid as part of the final two instalments. Fully integrated within the app, once approved, customers can activate Pay Later on-the-go with one tap. Customers can view their Pay Later balance in the Cards section and in the Pay Later hub. If a customer would like to repay the instalments early, there are no additional fees to do so.

Whether it’s a new washing machine, hotel booking, or a birthday gift, customers can use Pay Later at any merchant that accepts Revolut online or in store. Unlike other pay later products, merchants do not sign up to Revolut Pay Later, and Revolut does not charge them for Pay Later transactions. It also offers a more robust assessment as it approves the credit limit before the transaction rather than offering an instalments payment method at the point of sale.

The fintech checks customer affordability by linking to customers’ existing bank accounts through open banking. Revolut will assess customer suitability and affordability for ‘Pay Later’ through an underwriting process.

Pay Later is another tool to help customers manage their spending all from one app. The Buy Now Pay Later market in Europe is set to grow to £680billion over the next five years. Revolut’s ‘Pay Later’ offering meets the growing consumer demand for this personal finance tool, while offering it in a responsible way, with a heavy emphasis on customer affordability and suitability.

Joe Heneghan, CEO Revolut Europe, commented “Pay Later is an exciting and fast-growing area of personal finance and consumer spending, and we are excited to add Revolut Pay Later to our financial super app.

“Revolut Pay Later gives our customers more control and flexibility over their personal finances, in a responsible way, by enabling them to spread the cost of purchases over three instalments. This encourages people to pay within two months, rather than calling on overdrafts and credit cards which don’t carry the same emphasis on quickly paying back the amount borrowed.”

  • Francis is a junior journalist with a BA in Classical Civilization, he has a specialist interest in North and South America.

Visa Expands She’s Next Initiative To Egypt Following CIB and USAID Partnerships

Visa, the digital payments company, has launched its global She’s Next initiative in Egypt to economically empower local women entrepreneurs and SMB owners. The initiative is launched in partnership with Commercial International Bank (CIB), a bank in the Egyptian private sector, and the United States Agency for International Development (USAID), the international development agency and a catalytic player driving development results.

She’s Next, empowered by Visa, is a global advocacy program that brings practical insights and tools to women-led small businesses, including networking, mentoring, and funding opportunities.

Since 2020, Visa has invested +$2.2million in over 200 grants and coaching for women SME owners through the She’s Next grant program globally including US, Canada, India and Ireland.

Women business owners across Egypt can join She’s Next and apply for funding and access peer networks and educational resources that help to address the challenges revealed in a recent Visa study of women entrepreneurs. Key findings include:

  • A majority of women – 69 per cent – said getting funding for their ventures had been a challenge, with 77 per cent using their personal savings to start their businesses. Fifty-three (53 per cent) also cited finding a business partner as a key challenge, with four in six women concerned about the long-term success of their startups.
  • Three in 10 women (32 per cent) admitted that gender stereotypes have negatively affected their work as an entrepreneur, with 80 per cent saying they felt that societal approval or disapproval played a role in their choice of career or business.
  • Two in three women said they currently accept both cash and cashless payments from their customers. More than half (53 per cent) of women said they would use the additional funding to invest in advertising and marketing.
  • Being financially independent ranked as the top motivation when starting a business, followed by the desire to realise a dream, to achieve a balance between ‘home and work’, and to be a leader and responsible for the results of their business.

The areas women entrepreneurs said they wanted to learn more about were how to better set goals for profitability of their businesses, how to develop stronger strategies, and ways to survive the continuing impact of covid-19. The She’s Next initiative includes a series of mentoring programs that provide women entrepreneurs with access to practical insights from women leaders in the public and private sectors, as well as valuable tools and educational resources they need to grow and develop their businesses.

She’s Next, powered by Visa, will also deliver significant networking and capacity building opportunities in partnership with USAID.s. She’s Next is one part of a new partnership agreement between USAID and Visa to empower Micro, Small, and Medium Enterprises (MSMEs), with a special focus on women-led small businesses. This partnership will facilitate the use of electronic payment platforms to promote financial inclusion and foster inclusive economic growth. Through this collaboration, hundreds of MSMEs will receive capacity building training, and opportunities to join online markets, digitalise their supply chains, and introduce digital payment systems to their customers. E-commerce opportunities will also be expanded to enable further economic opportunities, especially for women-led small businesses.

Malak El-Baba, Visa Egypt’s country manager, commented: “Women who own and manage businesses face a unique set of challenges including access to capital and peer networks as well as societal pressures. That’s why we are excited to help women business-owners across Egypt today through the first She’s Next grant program and offer access to coaching and support through IFundWomen as well as that injection of $10,000 in capital. We are also honoured to be partnering with CIB and USAID, who will help us in our mission to not only empower women entrepreneurs, but also create for them a supportive environment in which they can grow and thrive.”

“We are proud of this partnership, which falls in line with CIB’s strategy to support small- and medium-sized enterprises and empower women led-business. Through ‘She’s Next,’ we plan to harness the power of Visa’s global brand and network to build awareness of women entrepreneurs, invest in them, and provide them with the tools and funds to build their businesses in Egypt,” said Hany El-Dieb, head of business banking segments, products and credit relations management at CIB.

USAID acting mission director Mark Driver said, “The US Government reaffirms our commitment to empowering women through this new partnership. Through USAID and Visa’s collaboration, five Egyptian women-led businesses will have the chance to win a $10,000 grant to grow their business Hundreds more women entrepreneurs will acquire new skills through training, and have access to learning resources to take their careers and businesses to the next level.”

This new grant program builds on Visa’s commitment to digitally enable 50 million small businesses around the world to kickstart recovery from the covid-19 pandemic.

As the trusted engine of commerce, Visa is also providing access to entrepreneurial knowledge and tools to unleash businesses in the digital era via Visa’s Practical Business Skills platform. The Visa She’s Next Grant Program will further support small businesses, with a particular focus on unlocking the potential of the most promising women entrepreneurs.

Women entrepreneurs in Egypt from all industries and sectors are invited to participate in the Visa She’s Next Grant Program. The winner will receive one of five $10,000 grants, a one-year IFundWomen coaching membership, and access to resources such as the workshop library and community of entrepreneurs.

  • Francis is a junior journalist with a BA in Classical Civilization, he has a specialist interest in North and South America.

Regulatory Reporting Remains Highest Priority for Finance Firms Despite Some Costs Doubling

As pressure on the compliance function grows in a fast-moving and increasingly complicated regulatory and operational landscape, almost 90 per cent of financial services firms have reported increased compliance expenditure over the past five years, with one in 10 saying costs have doubled.

In this light, 44 per cent of firms are planning to invest more in regtech solutions in the next 12 months to cope with the growing pressure on the compliance function, while a further 41 per cent expect to continue investing the same amount as they did in the 12 months prior.

However, the cost of compliance is rising with demand, with almost all financial firms encountering increased compliance costs over the past five years, while costs have doubled for one in 10.

This insight was brought to light by SteelEye in its ‘Compliance Health Checkreport, which was largely based on the compliance technology and data analytics firm’s survey of 170 senior compliance and risk professionals working within the UK and US financial service sectors.

Regulatory change and data fragmentation continue to be a challenge

Of the 170 professionals surveyed, 44 per cent states that they struggle with challenges related to data management. This included overlaying communications and trades to mitigate market abuse risk, using management information (MI) efficiently to demonstrate the risk and the consolidation and normalisation of structured and unstructured data.

A fifth of firms identified having to keep pace with regulatory changes as the biggest challenge in meeting regulatory obligations.

Opinions were split on dealing with regulators. While 42 per cent said that regulators are now more challenging to deal with, 48 per cent said they now find it easier to deal with the regulator, which could be down to technology making compliance processes more streamlined and straightforward.

When asked if they think firms are well equipped to handle more stringent regulatory rules over the next five years, encouragingly, three-quarters of respondents believe financial services firms are in a good position.

Compliance teams burdened with fragmented and manual processes

Administrative and repetitive tasks dominate compliance professionals’ work, pointing to the need for greater automation and digitalisation within the sector. In light of this half of the respondents reported that at least half of their firm’s compliance staff engage in administrative or repetitive tasks.

The survey demonstrated a clear trend toward centralised compliance management, with 56 per cent of respondents working within one team that oversees compliance for all branches and regions in which the company operates.

Meanwhile, a mere 12 per cent reportedly deploy a decentralised model where compliance is managed directly within individual jurisdictions, while it’s understandably more common for large organisations at 18 per cent.

In contrast, 88 per cent of small firms’ compliance management is fully centralised. Centralisation of the compliance function can enable businesses to be more strategic and allow for richer learning across multiple jurisdictions. However, this hinges on a strong data foundation for the business as a whole.

Regulation, surveillance and data management top of the priority list

When asked about their top two investment priorities for the year ahead, regulatory reporting ranked first overall.

However, when breaking this down by region it becomes clear that regulatory reporting is a leading investment area in the UK, whereas communication surveillance is the top priority in the US, particularly among banks.

This is unsurprising given the fact that US regulators are clamping down hard on communications rules. Last year’s $200million fine for J.P. Morgan by the Securities and Exchange Commission (SEC) demonstrated the importance of adequate monitoring of employee communications.

Firms are reaping the rewards of machine learning in compliance

Thirty-one per cent of firms said they have fully implemented a degree of AI or machine learning (ML) in their compliance processes. A further quarter are investing in the technology but are still in the implementation stage.

The subsections of larger firms and US-based respondents are even further along in that journey, with 75 per cent and 95 per cent respectively having partly or fully implemented AI and ML in compliance. And those that have implemented AI are reaping the benefits, including a marked improvement in the quality of their MI.

However, many firms are yet to take advantage of the potential of AI. Forty-four per cent have not started looking at AI’s possibilities for compliance. One cause of slow adoption might be the need for a strong data foundation which is necessary for successful AI deployments.

Speaking on the challenges that today’s compliance professionals find themselves currently facing, SteelEye CEO Matt Smith describes “keeping abreast with regulatory change, improving data quality and managing risks and controls within the business” as some of the main contenders.

SteelEye CEO Matt SmithSteelEye CEO Matt Smith
Matt Smith

However, the good news is that the benefits of using technology to remedy complex compliance challenges are now being fully realised, with Smith adding that “85 per cent expect to invest the same amount or more in regtech in the next 12 months.”

“Technology and data are key to establishing future-proofed compliance processes and procedures,” he comments. “It is great to see that a large proportion of firms view the enhancement of data quality as a top priority and that most firms are actively investing in technology.”

Smith adds that by prioritising how disparate datasets are consolidated and making better use of data firms can “more easily address regulatory change and other compliance challenges that will emerge down the line.”

The company remains “hopeful” that compliance programmes and compliance teams will be made more efficient by the influx of these investments.

“Doing so can enable the compliance function to pivot from reactive investigations and firefighting to a more proactive model for compliance management and risk detection.”

  • Tyler is a Fintech Junior Journalist with specific interests in Online Banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

Real Estate Secondary Market Platform Launched by Shojin

Shojin, an FCA-regulated online real estate investment platform, has launched its secondary market offering to accommodate bespoke deals as the fintech scaleup continues to lower barriers to entry to the online property investment market.

Once the investment opportunity in a Shojin product has closed, the investor will then have the ability to list their investment on the secondary market, setting the number of units they are looking to sell and the price per unit. This market will function in a peer-to-peer format, like eBay, where a buyer and seller negotiate directly through offers and counter-offers to come to an agreeable price.

Shojin’s current investment threshold is £5,000, but the introduction of a secondary market will lower the minimum investment ticket size to £100, enabling more people around the world to create wealth by investing a fractional amount in real estate projects.

Sellers will have the ability to exit projects early releasing capital for upcoming or unexpected expenses, rather than staying in projects for the entire duration. Buyers will be able to participate in projects they may have missed on Shojin’s primary market and invest at different stages of project risk.

Both parties can be opportunistic and look to strike a mutually beneficial deal based on their risk and return appetites, along with real estate market sentiment. The negotiation capability of Shojin’s secondary market facilitates all these benefits which will ultimately increase investor confidence.

Jatin Ondhia, CEO of Shojin, said, “As a business, we are always looking for new ways to lower the barriers to entry to property investment. The introduction of a secondary market not only brings a larger number of prospective investors into the fold, but it means they can access the market with a lower initial investment, while simultaneously increasing liquidity for existing investors.

“Adding new investment opportunities to our platform is extremely exciting for us. As a business, we’re at an important inflection point within the real estate investment space. Having made our first investment outside of the UK and with substantial resources in place, we’re ready to continue with our global expansion plans.”

The launch of the secondary market follows Shojin’s Series A first tranche raise of £3million via a global pool of investors at a company valuation of £49million. Earlier in the year, Shojin secured a £5million underwriting facility provided by a London-based family office with a provision to increase it to £10million as the pipeline grows. Having focused exclusively on the UK property market until recently, closing its first non-UK real estate investment in Malaysia, the launch of the secondary market will help create liquidity to draw in new investors as Shojin sets its sights on new investment opportunities across the globe.

  • Francis is a junior journalist with a BA in Classical Civilization, he has a specialist interest in North and South America.

Alt Lending week ended 24th June 2022

ECB Calls Crisis Meeting on Yield divergence

Last week the ECB convened an emergency meeting in order to discuss the widening yield gap between the weaker and stronger members of the Eurozone. There is nothing new about this. By all accounts they kicked the subject about and then did very little.  In particular however they were looking at the increasing differential between German and Italian yields. The problem is that bond holders are once more getting jittery about Italy’s ability to repay its debts. The same goes for Greece, Spain, Portugal, Cyprus etc. for the life of me I cannot understand why they are worried now. None of these countries are ever going to repay their debts. The best you can hope for is for it all to be rolled over at somewhat increased rates in perpetuity. Or you could try and sell the worthless paper to the ECB before the yields make the economies concerned completely unviable overwhelming their ability to pay. Until all this debt can be mutualized this will keep coming back. Mind you don’t think the Germans will like where mutualization would lead them. They have long memories where inflation is concerned.

Deutsche checks up on its Bankers

The compulsory  requirement is intended as a response to the news that some bank employees were using encrypted software to have a chat. JP Morgan was fined $ 200 million by regulators last year  for failing to keep records of their employees conversations on private mobile devices. I find it astonishing that regulators can insist on this type of thing. Don’t employees have a right to privacy of any kind. Moves like this are the kind of thing that I would expect Putin to use. If regulators are indeed this paranoid then I suggest that they subject themselves to a mental health check up. As for the employers. They should be ashamed of themselves and should have pushed back on draconian interventions like this. Regulators are not the Stasi? Or perhaps they are. I am glad to be clear of people like this.

Global Central Banks Everything Bubble turning to Everything Bust.

Further to the ECB’s travails mentioned above today’s Telegraph points out the rating agency S&P is warning that higher rates may lead to the Italy entering a downward debt spiral. At the same time both Equities and Fixed Income  are falling like stones perhaps putting an end to the 60/40 so called risk averse strategy favoured by so many investment houses. For lenders higher rates will be a nightmare as creditors have to make a judgement on pulling the rug from borrowers that are overwhelmed by higher rates. The tide is going out rapidly and we are about to see who has been skinny dipping. Innovative strategies are going to come to the forefront shorting overvaliued equities might become more commonplace. Does the market have the expertise to deal with this in the least painful manner? We’ll soon see.

Howard Tolman is a well-known banker, technologist and entrepreneur in London,  We have a self imposed constraint of 3 news stories per week because we serve busy senior  Fintech leaders who just want succinct and important information. For context on Alt Lending please read the Interview with Howard Tolman about the future of Alt Lending and read articles tagged Alt Lending in our archives. Daily Fintech’s original insight is made available to you for US$143 a year (which equates to $2.75 per week). $2.75 buys you a coffee (maybe), or the cost of a week’s subscription to the global Fintech blog – caffeine for the mind that could be worth $ millions.

The Key to Compliance: A Conversation with Justin Beals, CEO of Strike Graph

Innovation and regulation are the ying and yang of financial technology in many respects. To this end, we caught up with Justin Beals, co-founder and CEO of Strike Graph, to talk about the relationship between fintech innovation and fintech regulation, and why compliance is something that successful fintechs are taking seriously.

Founded in 2020 and headquartered in Seattle, Washington, Strike Graph specializes in helping companies secure critical security compliance certifications. These are the certifications that can both impact revenue and reduce the time to close, as well as demonstrate the maturity of an organization.

Why banks and financial services companies need a compliance partner.

The challenge (for banks) is that the standards that you’re trying to meet can be complex. It’s important to not only have technology, but (also) a provider of that technology with intelligence about how to meet the standard so that you don’t essentially spin your wheels trying to do things that don’t necessarily make you more secure and don’t necessarily impact compliance.

So when revenue is on the line – and that’s what the challenge is here – being unable to represent a security posture that meets certain standards (means) you might not get that partnership, you might not get that contract … You really need to do it efficiently and effectively and be able to maintain it for a long period of time.

On the role an effective compliance partner can play to help financial services companies

I think one of the secrets about compliance practices is that if there’s some aspect of your business that isn’t applicable to the standard, you’re actually not required to be assessed to it. And so what’s really important is to customize your security posture according to the types of risk that your business is meeting in the marketplace, and then respond to those risks. Then, (you are) able to talk to the assessor and say, “hey, look, you know we don’t necessarily have this particular risk. It’s not something we solve for and therefore it’s not something we need to be assessed for.” That way you get through the compliance process as efficiently as possible.

On Strike Graph’s approach to helping financial services companies meet compliance obligations

The secret sauce at Strike Graph is that we have a very intelligent SaaS platform that helps our customers customize that particular security posture based upon the risks that are impacting their business.

This is impacting any B2B company that’s sharing data. And that’s really how we describe our marketplace. And, of course, fintech handles some of the most precious transactions and pieces of data, and they have a long history of things like PCI DSS where compliance is really important. So they really do understand the value of having a good compliance practice.

Check out the rest of our interview on FinovateTV.

Photo by Pixabay