Better as a Bank? Three Takeaways from TransferWise’s Rebrand as Wise

One of my favorite quotes from the current U.S. president is “Don’t tell me your values; show me your budget.” Swap out “budget” for “brand” and you’ll learn a lot about where the priorities of Wise, the fintech formerly known as TransferWise, currently lay.

“Our customers now need us for more than money transfers,” company CEO Kristo Kaarmann announced on the Wise blog earlier this week. In the beginning, it was sending money that was “too expensive, slow, and inconvenient,” he noted. Now, he believes that banking services suffer from many of the same problems that money transfers once did and, further, sees his rebranded company as being in an ideal position to do something about it.

Color us convinced. But for the doubters, here are the three, pretty good reasons why the Wise rebrand makes great sense.

First reason: Banking is Beautiful … and Broad

Wise sees itself as a “community of people and businesses with multi-currency lives.” This image, and the company’s origins as a cross-border money transfer innovator, sync well with our bank-in-your-pocket / work-from-anywhere / market-at-your-fingertips world.

In addition to its cross-border money transfer business, Wise offers a multi-currency account that enables users to hold more than 55 different currencies and receive payments in ten. The company also has issued more than one million of its debit cards. In fact, Wise announced a partnership with Visa last month to expand its debit card offering to the Asia Pacific, Europe, MENA, U.K., and U.S. markets.

And while Wise has not secured a banking license – and expressed no plans to do so – the company was granted a license from the Financial Conduct Authority last summer to offer investment services to retail customers.

These are the ways, in Kaarman’s words, that Wise is increasingly “replacing international banking for many” of its customers. And it is this combination of infrastructure and culture that Wise is leveraging in its pivot toward banking.

Second reason: Growing Pains

These new offerings underscore the degree to which the company already has outgrown its old name. Like many fintechs, Wise has been, ahem, smart to note that its road to growth will have to extend beyond cross-border payments. Money might make the world go ’round. But moving money around the world, as a business, has its limitations.

In their 2018 report, A Vision for the Future of Cross-Border Payments, McKinsey highlighted a number of trends that are likely to impact this landscape. These include both emergent technologies such as distributed ledger technology, as well as new Big Tech entrants like Alibaba and Amazon, that will offer challenges to banks, service providers, and fintechs in the cross-border space. The rebrand makes it much easier for Wise to re-define itself beyond money transfers at a time when many people are migrating to digital financial technologies in earnest for the first time.

Additionally, as at least one observer noted, “Wise” fits far better on a stock ticker than any truncated version of “TransferWise”. That leads us to our third pretty good reason below.

Third reason: IPO?

Among all the reasons cited by the company in announcing their rebrand, a potential initial public offering, was not among them. This may be for good reason. Sky News reported earlier this year that then-TransferWise had engaged both Goldman Sachs and Morgan Stanley to lead an IPO. The report cites analysts who believe an offering could give the company a valuation of more than $5 billion.

If the rumors are true and an IPO is imminent, then the rebrand is all the more timely – and further comment unlikely. That said, company co-founder, former CEO, and current Chairman Taavet Hinrikus has expressed openness to a public offering in the not-too-distant past.

“In a few years it will be time to think seriously about becoming a public company like the strongest and most trusted financial institutions are,” Hinrikus wrote. “But when we do that we will explore that through our own lens – how will it help our customers? How will it help us achieve our mission faster.”

With more than $6 million transferred around the world every month – saving its 10 million customers more than $1.5 billion every year, why shift the emphasis toward banking? For now, Wise seems content to enjoy the benefits of being bank-adjacent rather than pursue the final step of being a fully-licensed financial institution.

Photo by Anete Lusina from Pexels

KILDE raises $450,000 in Pre-Seed Funding Round

KILDE, a Singaporean private debt investment platform, has raised $450,000 led by Purple Ventures in pre-seed funding round, supported by Startupbootcamp Dubai.

KILDE has recently been licensed by the Monetary Authority of Singapore to debt capital for digital lending companies from institutional and accredited investors.

Securing a sustainable source of debt funding is a number one challenge for digital lenders. Despite the investment boom in alternatives, digital lending is too opaque and non-transparent for most investors. KILDE offers access to an extensive range of deal-ready private debt investments. For digital lending firms, it provides flexible funding at competitive costs.

“Digital lenders allow underbanked consumers and SMEs to get sustainable loans and build their credit history. Transforming these loans into investable assets provides a unique market opportunity. We are here to streamline this process,” said Radek Jezbera, co-founder of KILDE.

KILDE has already opened credit facilities to 8 digital lenders with the overall credit limit of more than $30m. It will further expand to include more digital lenders from the SEA, MENA, and Eastern Europe.

“We are extremely excited about KILDE, as we see the enormous potential that the undisrupted private debt market has to offer. We believe KILDE has the right team to execute and grow to become a central player between investors and lenders, and we look forward to working with them over the coming years,” said Mohamad Sabouneh, Managing Director of Startupbootcamp Fintech Dubai.

Singapore with its progressive regulatory regime and easy access to liquidity is the preferred headquarters to many Fintech businesses. Fintech investment in Singapore reached $346 million in 2020, representing 6.2% of all that was raised in Asia according to Singapore Fintech Report 2021. Dubai, on the other hand, is the leading financial hub in the MENA and South Asia, with DIFC being the largest fintech hub in the MENA region. Exposure to both markets creates outstanding opportunities for KILDE and its clients.

Royal Bank of Scotland to invest in further automation

Automation investments paid off so well for the Royal Bank of Scotland in 2020 that the U.K. bank plans to invest in additional automation, targeting gross savings of $423.1 million by 2023. Royal Bank of Scotland is owned by the $1.1 trillion NatWest Group. Group CEO Alison Rose said automation and digitalization drove revenue and […]

FDX’s Don Cardinal on how secure, standardized data drives automation
FDX’s Don Cardinal on how secure, standardized data drives automation | Bank Automation NewsFDX’s Don Cardinal on how secure, standardized data drives automation | Bank Automation News

Already subscribed? Log in below.

Cross River tech leader Jesse Honigberg to speak at BA Ignite

Jesse Honigberg, technology chief of staff at Cross River Bank, is among the experts who will discuss automated personalized engagement at scale at the Bank Automation Ignite virtual conference on April 13-14. Honigberg will be part of a live panel discussion on Wednesday, April 14, at 12:30 p.m. ET.

View the BA Ignite agenda.

Jesse Honigberg of Cross River Bank

At the Fort Lee, NJ-based Cross River, Honigberg partners closely with clients and the community to build, deliver and evolve the bank’s portfolio of payments, and banking as a service and lending products, he told Bank Automation News. Additionally, he focuses on financial inclusion and enterprise enablement.

Honigberg led the $9.7 million bank’s Paycheck Protection Program (PPP) efforts to become the third-largest PPP lender in the United States, supporting more than 200,000 small businesses. He currently works with bank teams to ensure client and business alignment as Cross River develops a proprietary API core banking platform.

In 2019, Honigberg led Cross River to take its place as the 19th bank on the Real-Time Payments Network (RTP), making it the first financial institution on the network with less than $100 billion in assets. Prior to joining Cross River, Honigberg held various roles at the $3.2 billion Sterling National Bank, including as chief information officer and chief digital officer.

Register for the upcoming BA Ignite conference to learn how financial institutions are investing in automation amid the changing landscape of the banking industry.

Fed restores some services after outage on ‘operational error’

The Federal Reserve began restoring some services Wednesday afternoon following widespread outages across several key payment systems operated by the U.S. central bank.

Photo by Bloomberg Mercury

“A Federal Reserve operational error resulted in disruption of service in several business lines,” Jim Strader, a spokesman for the Richmond Fed, said in an e-mailed statement. “We are restoring services and are communicating with all Federal Reserve Financial Services customers about the status of operations.”

The Fed has restored the automated clearinghouse system known as FedACH as well as its Fedwire Funds, Fedwire Securities, Central Bank, National Settlement and FedCash services, according to a website operated by the central bank. Other services including Account Services, Check 21 and Check Adjustments were still suffering outages as of 3:01 p.m. New York time.

The Fed website noted the disruptions were discovered around 11:15 a.m.

ACH is a national system that processes batches of electronic funds transfers such as payroll, social security benefits, tax refunds, corporate payments to vendors and utility payments, according to the Fed’s website. The commercial service handled 62.1 million transactions a day on average in 2019 with an average value of $1,802, the latest year for which data are available.

The Fed suffered two significant disruptions to the payment system services in 2019.

In a posting on its website at 2:46 p.m. the Fed said it was taking steps to ensure the resilience of its services but urged customers to double check that any messages they had sent or received had been reconciled.

— Matthew Boesler (Bloomberg Mercury)

ScienceLogic Raises $105 Million in Funding to Aid its Growth in the AIOps Market

ScienceLogic, a provider of AI-driven monitoring solutions for hybrid cloud management, has announced that it has raised $105 million in growth financing. Silver Lake Waterman led the company’s Series E round with participation from existing investors Goldman Sachs, Intel Capital and NewView Capital. The investment will support the company’s continued innovation in the AIOps market and further broaden ScienceLogic’s position within the $30+ billion IT Operations Management software market.

Companies across the globe are adopting cloud strategies and tools more than ever amid the COVID-19 pandemic, with massive demand for digital services and scalability. ScienceLogic is poised to meet that demand as organisations look for hybrid-cloud toolsets from trusted partners to securely harness business agility, cost savings and innovation.

“More than ever, IT Operations Management has taken root as a front-office priority supporting mission-critical digital experiences that define the way we live, work and play. As large enterprises shift workloads to the cloud while managing on-prem resources, new tools are paramount to deliver service visibility and faster incident resolutions made better by advanced AI/ML technologies,” said Dave Link, Founder & CEO of ScienceLogic. “What we’re witnessing is a major investment cycle away from legacy monitoring tools and toward AIOps platforms.”

The funding is intended to accelerate ScienceLogic’s product development and engineering leadership, supporting the company’s broader expansion plans and the reach of its flagship SL1 digital infrastructure monitoring platform. Funds are expected to be allocated toward recruitment efforts and product investments aimed at cloud-native technologies including microservices and container solutions, AI/machine learning, and hybrid cloud operations that transforms digital experiences and enhance security.

“The ScienceLogic team has built a leading platform to monitor mission-critical infrastructure and applications and is at the centre of some of the largest, most complex IT environments at the forefront of digital transformation,” said Shawn O’Neill, Managing Director and Group Head of Silver Lake Waterman. “Dave Link and the leadership team have a long track record of building value and trust with customers and we look forward to partnering with the team and helping drive further adoption”.

The funding news comes after a recent announcement from the company to expand its product development, engineering and sales and marketing staff. ScienceLogic’s AIOps market leadership also was recently highlighted by the Forrester Wave, which included ScienceLogic as one of only three firms highlighted as AIOps Leaders – honours that further cement the company’s forward momentum.

Earnix to Provide Personalised Insurance Rate Breakdown to Consumers

Earnix, a global provider of advanced rating, pricing, and product personalisation solutions for insurers and banks, announced a newly enhanced capability that enables insurers to provide comprehensive rate breakdowns to consumers instantaneously.

Integrated within Earnix’s end-to-end Rating Engine, this capability allows insurers to quickly and easily provide the consumer with personalised prices and insight into how these were determined in alignment with their needs. This enhancement increases transparency, strengthens consumer trust, and ensures full governance and compliance without sacrificing the speed of rate and product bundle delivery.

“With Earnix’s solution, consumers no longer have to question the price they pay for insurance. We created this capability to enhance the consumer experience and make it easier for insurers to provide transparent, highly relevant offerings. At Earnix, we are continuously developing new ways to instil confidence in the insurer’s ability to provide consumers with the right product, at the right price, at the right time,” said Udi Ziv, CEO at Earnix.

“Before today, insurers had to manually construct price breakdowns for consumers, a process that is resource-intensive, time-consuming, and prone to errors. Now, insurance companies can produce a rate breakdown instantaneously providing consumers with an understanding of how their rate was determined. This feature is a win-win for insurers and consumers alike,” said Yaron Lavie, Vice President of Products at Earnix.

Earnix’s Rating Engine offers smarter analytics, combining artificial intelligence, machine learning and traditional analytics, in a single fully automated delivery system. By leveraging these capabilities, consumers are better equipped to evaluate both the insurance rate and product they are receiving in a fully agile and transparent manner. This not only saves insurance companies time and resources while enhancing the consumer experience, but it also sets a new industry standard for consumer expectations.

Cloud Banking Technology Innovator Alkami Eyes IPO in 2021

Who needs a SPAC to go public? According to Reuters, cloud-based digital banking technology provider Alkami is looking to enter the public markets the old-fashioned way: with an IPO.

The Reuters report cites sources who requested anonymity, and neither Alkami nor Goldman Sachs – who has been reportedly engaged to lead IPO preparations – have commented on any specific IPO plans Alkami might have. Sources say that an initial public offering could earn the company a valuation of $3 billion and give the state of Texas its next fintech unicorn.

Alkami has raised more than $385 million in funding from investors including D1 Capital Partners, General Atlantic, and MissionOG. The company secured $140 million in its last round in September, and acquired fellow Finovate alum ACH Alert a month later.

“Alkami continues to be the go-to partner for FIs wanting to accelerate their digital strategies, plans and results,” company CEO Mike Hansen said when the acquisition was announced. “Together with ACH Alert, we expect to continue to create and deliver winning digital solutions to our clients and their consumer and business digital users.”

Founded as iThryv and making its Finovate debut under that name in 2009, Alkami has grown into a digital banking technology innovator with more than 160 clients, 10+ million users, and $130 million in annually recurring revenue. The company’s platform provides a complete digital banking solution with user onboarding, engagement, and account servicing functionality for both retail and business customers. Users can take advantage of both Alkami’s products as well as third-party services and solutions courtesy of more than 230 integrations.

Named to the 2020 CB Insights Fintech 250 last fall, Alkami recently added a number of women to leadership positions within and around the company. This included inviting financial services veterans Merline Saintil (formerly of Intuit) and Barbara Yastine (formerly of Ally Bank) to join its Board of Directors and hiring former Hewlett Packard Enterprise executive Allison Cerra as Alkami’s new Chief Marketing Officer.

Achievement Unlocked: Gaming FinTech

The global gaming industry is expected to grow to more than $200 billion by 2021. This is the statistic put forward by Juniper Research, a statistic that captures the full impact of the video game industry’s continued focus on in-game transactions and long-term subscriptions.

Currently, cloud gaming and video game subscriptions account for around 9% of growth, PC gaming will become the most profitable sector with an anticipated $32 billion growth, while smartphone in-app revenue will see around 8% growth. While microtransactions remain the bane of most gamer’s lives, their steady growth underscores one very important fact – the gaming industry has been paying attention to the systems and technologies that make these microtransactions easy, seamless and accessible.

Glenn Gillis, CEO of Sea Monster believes that the evolution of FinTech has made payments within the gaming space faster and more secure. “Games have found amazing new ways to monetise what they do – the freemium concept was invented by gaming companies – and so much can be learned from their innovative business models. Fortnite, for example, is a free-to-play (F2P) game that earns its revenue almost exclusively from monetising avatar customisation.”

Paying to customise an avatar? It may sound like money for crazy, but the reality is that monetising individuality is next level clever. It shows how important it is to recognise individuality, how important it is to put the user at the centre of their experience. And it is why the monetisation of gaming has had to evolve, and why FinTech has become key to its survival. As Indranil Chatterjee, Chief Customer Officer at Enea, points out: “Gamers are loyal to the game – they will follow the game rather than the console manufacturer or mobile operator. Once games are ‘cloudified’ users are free to abandon specific gaming devices.’ The money will move with the gamer, so the connections have to adapt and evolve to meet gamer requirements.

Another factor that has, of course, shifted the gaming dialogue is the global pandemic. Gaming was already ahead of the curve when it came to leveraging technology to achieve functionality and gamer engagement, but the 2020 lockdowns kicked platforms and digital entertainment into touch. For Rob Chalmers, Chief Experience Officer at ENGINE Creative, “2020 was the year that firmly shifted gaming from just another activity to a lifestyle for the masses with millions choosing to work, play and socialise in the metaverse, all be it on their favourite platforms.”

FinTech has been a snug part of gaming for years, but it was 2020 that really transformed the scale of adoption and innovation within the sector. It can be seen in the monetisation choices of platforms like Fortnite which leverage individuality for monetary gain. Epic Games obsesses over gamers’ needs and continually iterates Fortnite to respond to market trends and behaviours. And the company is not alone – gaming platforms are constantly experimenting with new monetisation models that wouldn’t be possible in other sectors and without FinTech. “Twitch, one of the world’s leading game streaming companies, encouraged users to pay using cryptocurrencies such as Bitcoin,” says Paul Marcantonia, Executive Director at ECOMMPAY. Adam Lee, Chief Product Officer at Boku adds: “Fintech has given game developers new payment types that have greater distribution than credit cards as well as the ways to accept them. The tokenisation of digital payments has ensured that payments support new and creative business models for gamer monetisation.”

FinTech and gaming are a marriage of minds, the connecting of two perfect worlds, and a ceaseless evolution of tech and innovation to create better experiences and engagements. Instead of struggling to catch up in 2020, the gaming industry simply shot ahead. It set benchmarks for how to do digital engagement, and it built foundations that allow it to thrive while many other industries face an uphill struggle. As Cyril Chemla, VP of Commercial Development, concludes: “Revenue from gaming shows no signs of slowing down with in-game consumer spending rising to record levels. This would not be possible without a strong payment infrastructure in place. Payments enable everything from revenue collection to customer loyalty, and fraud prevention to effective expansion for progressive players in the video game industry.”

  • Tamsin Oxford is an experienced generalist who has written for finance and tech for more than 20 years. She’s written for multiple publications and markets and continues to find the topics both fascinating and brilliant.

5 Key Fintech Trends for 2021

This is a sponsored post by Accusoft.

While 2020 made its mark on the financial industry by causing tremendous disruption, 2021 is shaping up to be a year remembered for transformation and adaptation. Companies are hard at work building new digital strategies that will help them to thrive in an increasingly volatile economy.

Fintech developers are taking up the challenge to meet the functionality and performance demands of the financial industry as firms embrace true digital transformation. Their ability to build applications that deliver new features and integrate new capabilities into legacy solutions will be critical for helping firms reshape existing technology infrastructures.

Top 5 Fintech Trends to Watch in 2021

1. Customer-First Solutions

With so many fintech applications to choose from, financial organizations must take the time to consider which solutions are best suited for the needs of their customers. Banks and investment firms once put their own needs at the center of their processes, but in an increasingly competitive marketplace, they have realized that providing a high-quality user experience is paramount to success. They can begin transforming processes by eliminating friction to allow customers to access the services and products they need more quickly.

Fintech developers can help them to eliminate manual processes, reduce external dependencies, and automate common tasks by designing unified digital solutions that address multiple challenges and streamline workflows. By integrating features like document viewing, file conversion, and form data capture into their applications, innovative developers are finding ways to strengthen the connection between firms and their customers.

2. Enhancing Digital Collaboration

In response to the COVID-19 pandemic, much of the financial industry has embraced remote work arrangements for the foreseeable future. The transition has created significant demand for digital tools that can facilitate effective and secure collaboration. Not only must physical documents be converted into digital form, but firms also need ways to make those files available to remote employees without threatening data security or causing version confusion.

Organizations frequently turn to a variety of incompatible software solutions and improvised workarounds to meet their viewing, editing, and document management needs rather than implementing a dedicated, all-in-one solution. Unfortunately, these ad hoc measures create inefficient third-party dependencies, expose data to unnecessary risk, and make human error more likely. Fintech developers can integrate these features into a single application through the use of SDKs and web-based APIs.

3. Managing Big Data

Financial services firms gather massive quantities of data on a regular basis. Although much of that data is unstructured and needs to be filtered through sophisticated algorithms to bring notable trends and risks to the forefront, the industry also collects a great deal of data from structured forms. Structured documents such as loan applications, tax filings, and financial statements all provide valuable data insights that organizations can use to make more informed strategic decisions.

Fintech applications with the ability to extract and process data from structured forms accurately is essential for improving the performance of powerful analytics tools deployed by today’s financial firms. Software integrations can further enhance fintech solutions with image cleanup, document alignment, and form recognition features that make the data collection process more efficient and accurate.

Data as Oxygen for Your Business_FinovateFallFinancial services firms gather massive quantities of data on a regular basis, and businesses need to improve their data management in order the reap the rewards.

4. Disaster Mitigation

After seeing how the COVID-19 pandemic caused massive disruption to global markets and supply chains, financial organizations are reviewing the way they do business to reduce the impact of similar disasters in the future. One of the key steps in this process will be the rapid transition to paperless workflows and an expansion of electronic data capture capabilities to reduce the reliance upon manual processes.

Solutions that incorporate streamlined document viewing, file conversion capabilities, and data extraction tools will be essential to these “disaster proofing” efforts. By automating previously manual tasks, such as data entry, document assembly, and signature authentication, Fintech solutions can help financial companies protect their business processes from future disruptions.

5. Expanded Partnership Opportunities

Although traditional financial institutions like banks have been skeptical of many fintech solutions, the rapidly-changing market has caused them to reassess their technology in order to reach a new generation of customers. Collaboration between banks and innovative fintech startups was already on the rise before the pandemic reduced longstanding barriers to digital transformation. The challenge they now face is how to integrate their operations and data while also launching innovative services across multiple channels.

Fintech developers can streamline this process by building flexible software applications capable of handling a variety of file formats without the need for any burdensome third-party dependencies. In some cases, that may mean building entirely new solutions, while in others it might call for integrating additional features into firmly entrenched legacy applications. The fintech companies with the ability to get innovative software platforms to market more quickly will be able to make the most of their partnership opportunities.

Building Better FinTech Solutions with Accusoft

Accusoft’s diverse library of SDKs and APIs allows developers to easily integrate robust content processing, conversion, and automation capabilities into their solutions. Whether they’re using PrizmDoc Suite to give their web applications the ability to natively view, edit, and convert documents, extracting data from multiple form types with FormSuite for Structured Forms, or building image cleanup, OCR, and PDF annotation features into their on-prem applications with ImageGear, FinTech companies can trust Accusoft to help them overcome the challenges of 2021 and the years to come.

Canada’s VersaBank to Issue its Own Digital Currency

VersaBank is getting in on the digital currency game. The Canada-based bank announced plans to launch VCAD, its own cryptocurrency backed one-to-one by the bank’s Canadian dollar bank deposits.

Key to the launch is a partnership with Stablecorp, a joint venture between crypto asset manager 3iQ and blockchain development company Mavennet. Stablecorp will aid in the commercial launch of VCAD.

VersaBank plans to manage the digital issuance process using VersaVault. The issuance tool is a digital bank vault designed by Versabank subsidiary DRT Cyber to secure digital assets.

“VCAD provides consumers with not only the security afforded by an underlying deposit with a Canadian chartered bank but also the comfort of knowing that each VCAD issued or redeemed will always have one-to-one value with the Canadian dollar,” said Stablecorp CEO Jean Desgagne. “With such clear benefits, we are highly confident in the demand for VCAD as digital currencies increasingly become part of mainstream financial transactions.”

According to CoinTelegraph, VCAD is not the only stablecoin pegged to the Canadian dollar. Other Canadian dollar stablecoins available include Coinsquare’s eCAD and TrustToken’s TrueCAD token.

VersaBank aims to make VCAD publicly available “in the coming months.” In the future, VersaBank and Stablecorp plan to launch VUS and VEuro, which will be U.S. dollar and Euro versions, respectively, of the VersaBank digital currency.

Photo by Ketut Subiyanto from Pexels

The Saudi Central Bank Launches New Instant Payment System

The Saudi Central Bank (SAMA) launched the instant payment system sarie, under the patronage of His Excellency Governor of the Central Bank Dr. Fahad bin Abdullah Al-Mubarak, through a virtual event organised by Saudi Payments, and attended by a number of financial and banking sectors experts and observers.

Commenting on the achievement, the Central Bank Governor highlighted the utility of the new instant payment system in empowering the national infrastructure for digital payments, tracking the growth the Kingdom’s payment sector has been undergoing for over thirty years.

Dr. Fahad bin Abdullah Al-Mubarak said: “The launching of sarie system comes as part of a series of SAMA-led initiatives to promote the national payments’ ecosystem and to enhance its infrastructure, aiming to achieve financial inclusion. National payment systems are fundamental in strengthening the Kingdom’s pioneering position in the financial sector. They offer secure and innovative payment solutions, meet the needs of various segments of the economy, and increase the effectiveness of the liquidity circulation in the financial system, through reducing the operational costs of cash handling, facilitating sending and receiving payments, and driving the digital transformation in the Kingdom by increasing the volume of digital financial transactions.”

In his statement, Saudi Payments’ Managing Director Mr. Fahd Al-Akeel said, “The launching of the sarie system is the result of several months of meticulous efforts with all the partners. Despite the challenges posed by the COVID-19 pandemic, the speed of the instant payment system’s deployment across all the local banks is the fastest of its kind worldwide.

“sarie services will allow the banking sector’s clients to send and receive low-value local transactions around the clock and for a low fee, not exceeding one Saudi Riyal. Additionally, the system provides beneficiaries with other services and transfer options, including using the mobile number as an identifier instead of the IBAN for transactions between banks, and the ability to verify the validity of the recipient’s bank account before completing the transaction.”

Further, Al-Akeel indicated that any financial transaction of less than SAR 20,000 will be instantly credited to the recipient account by the sarie system. The system also offers the quick transfer service, which, upon activation by the account holder, allows the banking sector’s clients to send payments of amounts less than SAR 2,500 without adding and activating the beneficiary.

Saudi Payments’ Managing Director declared that the system serves as an essential milestone in the process of developing payment systems in the Kingdom, and as one of the most significant indicators of the Kingdom’s advanced digital infrastructure, and reveals its outstanding operational capacity, especially with respect to digital payment systems. Likewise, the system will enable banks and fintech companies, in particular, to develop innovative financial services that align with the requirements of the digital economy goal adopted by the Kingdom as part of its nationwide digital transformation strategy.

FinTechs Targeting Underserved Communities

Globally, financial inclusion and equal access to financial services have been addressed for the most part. This can be attributed to a financial system that has evolved over the years, powered by technological advances in the areas of telecommunication, artificial intelligence (AI), machine learning (ML), and data management solutions, as well as the relaxation of stringent banking regulations and increasing financial education and awareness. Only a few countries lack fairly stable financial access. 

Even though technology has democratized financial access to a great extent, some disparity continues to exist because of diversity in cultural backgrounds, race, religion, and gender. This disparity is further fueled by societal factors such as income inequality that has dictated for centuries. In the US, for example, migrant workers are paid much less than their counterparts who are US citizens. According to some

Mastercards Girls4Tech Launches in MEA Educating Girls in Morocco

Mastercard’s signature science, technology, engineering and mathematics (STEM) program, Girls4Tech, has officially reached its initial goal of educating one million girls worldwide. The program has a new and inspiring ambition to reach five million girls by 2025. In the Middle East and Africa, Mastercard will be rolling out the signature program to new markets, including Morocco and Saudi Arabia.

In Morocco, and for the first time ever in the Middle East and Africa region, the Girls4Tech program was launched during a digital session with Jeanne d’Arc International School Casablanca. The COVID-19 pandemic has resulted in a shift away from the traditional classroom, causing a global surge in online learning as teaching is undertaken through digital platforms.

Launched in 2014, Girls4Tech offers activities and a curriculum built on global science and math standards. It incorporates Mastercard’s deep expertise in technology and innovation, enabling students to discover a range of STEM careers such as fraud detective, data scientist and software engineer.

“We’re delighted to bring our flagship STEM program to Morocco for the first time in a unique digital format. Our goal is to help young girls develop STEM knowledge and learn crucial life skills that are pertinent to their future studies and careers. This is why Girls4Tech aims to ignite their curiosity and teach them how to apply these subject skills in the real world,” said Mohamed Benomar, Country Manager, North Africa, Mastercard.
“We look forward to enabling more girls to pursue careers in STEM fields, as we strive towards improved gender parity across the country,” he added.

Starting as a hands-on, in-person session run by employee volunteers, the program has expanded into new topics such as artificial intelligence and cybersecurity and enhanced access to its STEM curriculum through a digital learning experience, Girls4Tech Connect, which has been translated into eight languages including Arabic and French.

“At Jeanne d’Arc International School Casablanca, we place a huge importance on technology and STEM subjects. The Girls4Tech program allows students to learn about these subjects through interactive and engaging digital tools that are easily accessed and simple to use. We look forward to encouraging more of our female students to learn about the diverse range of future careers they can follow through STEM subjects,” said Ahmed Guessous, School Principal at Jeanne d’Arc International School, Casablanca.

Skrill Launches New Fiat-To-Crypto Withdrawal Service on Digital Wallet Solution

Digital payments provider Skrill, part of the integrated payments platform Paysafe, has announced a new feature for its digital wallet that enables users to withdraw funds directly to a cryptocurrency address of their choice.

For the first time, Skrill customers are able to instantly convert and withdraw their fiat balance to an external cryptocurrency wallet by entering an address. The feature can be accessed when a customer goes to withdraw funds in their account and selects ‘Crypto Wallet’. The user then enters the balance amount and wallet address of either a Bitcoin or Ethereum wallet.

The withdrawal feature is now live in European Economic Area (EEA) countries, with plans to launch in the UK and elsewhere in the near future, as well as to add additional cryptocurrencies for withdrawal.

Using Skrill’s cryptocurrency service, first launched in 2018, customers can instantly convert 40 fiat currencies, including the Euro, US dollar, and British pound sterling, into interests in Bitcoin (BTC), Bitcoin Cash (BCH), Dash, EOS, Ethereum (ETH), Ethereum Classic (ETC), Kyber, Litecoin (LTC), Tezos, Stellar, XLM. and 0x (ZRX).

 “More people than ever are buying cryptocurrency as a long-term investment, particularly in light of recent institutional backing from the likes of Tesla, which has driven Bitcoin to fresh all-time highs,” said Lorenzo Pellegrino, CEO of Skrill, NETELLER, and Income Access at Paysafe.

“Our customers have been enjoying the ability to interact with both fiat currencies and digital assets through Skrill for some time. Expanding a crypto portfolio is incredibly simple with Skrill, thanks to our fiat on-ramp. The new withdraw feature further enhances our service by enabling users to quickly and conveniently move their existing fiat balance to a crypto address of their choosing, saving them both time and money on fees. ”

New solution from Astra promises faster automated ACH transactions

A new development platform launched Tuesday claims to help banks and fintechs offer faster automated ACH transactions at less cost than building. The company, Astra, has an ACH API platform that targets fintechs and banks in the market to replace their legacy systems, CEO Gil Akos told Bank Automation News. ACH transactions are the electronic […]

UK Fintech News: The Latest Stories This Week 24/02

Each week, The Fintech Times takes a look at the top stories in British fintech. Today we look at UK Cybersecurity firms have reached almost £9bn in revenue, how the UK tech sector has grown dramatically during the pandemic, and whether the UK could become a cashless society by 2030. 

Experian report finds business appetite for data increased significantly during pandemic

New research from Experian reveals how the acceleration of digital transformation, through the Covid-19 pandemic, has led to greater demand for data insights to inform decision making and strategy.

The annual Global Data Management report found that changing customer behaviour has intensified businesses’ need for high-quality data. 84% have seen more demand for data insights in their organisations due to Covid-19. In fact, 72% say that the rapid push to digital transformation is making their businesses more reliant on data.

Beyond underscoring its business value, the pandemic has also exposed data’s potential to be used for societal good – and business leaders are keen to explore this further. 78% see COVID-19 as a defining moment for organisations to set-up and use data for societal good where they can, while 86% would like to be able to use their data in some way to benefit society.

Andrew Abraham, Global Managing Director, Data Quality, at Experian, said “The pandemic has been a catalyst for long-awaited digital transformation. Businesses need to move fast to serve customers’ changing needs, and leaders know that data-based decision-making is key to evolving the right way. It’s also heartening to see organisations looking beyond the business applications of data, to how they can use it for societal good. However, if businesses are to succeed in either area, they must

Brits least keen to share health and mood data with companies

Despite the increase in data value, OnBuy’s Home Automation Department found that clearing cache/search history (53%) is the principle precaution taken by Brits to safeguard their personal data when online. 51% of Brits actively opt for their personal details not to be passed onto any third parties when online. 48% will always aim to give the bare minimum when prompted for their personal details online, with 20% of Brits take drastic action to cover or tape their webcam or phone camera when not in use.

Additionally, OnBuy’s Home Automation Department also sought to discover the personal data Brits would be most comfortable sharing with companies, finding that Brits take the least issue with providing their email address to companies, with 44% happy to do so. 31% of Brits do not mind companies having data about their purchase history, and 24% are fine with companies knowing their location data.

UK Tech Sector Reports Huge Growth

The technology sector has grown significantly over the last five years, as have levels of investment within it. 1 in 10 job roles advertised in the UK were tech-related during the pandemic – and by summer 2021 will reach 100,000 job vacancies per month.

Despite the destabilising effects of Brexit and the pandemic, Britain remains the leading country in Europe in receipt of venture capital (VC) funding. In addition, more British tech scaleups – companies with annual growth of 20% in the past three years – broke through the £10m+ turnover mark, up 37% year-on-year.

Tom Chambers – Associate Director of Technology & Growth at Robert Walters comments: “There are concerns however for the parts of the country without such levels of funding. And while the British government made commitments around tech investment in its November spending review, it focused more on skills and infrastructure instead of grants and loans for start-ups.

“With Britain now out of the EU, the government’s Shared Prosperity Fund is due to step in this year – but to what degree is still unclear.”

Is the UK set to be cashless by 2030?

New research from 888 Casino predicts that the UK will become a cashless society over the next decade, with 46% of Brits cash may be irrelevant as soon as the 2030s.

COVID-19 seems to have had a huge impact on the public’s relationship with physical cash, as almost half (49%) of people surveyed said they have been put off using cash forever because of the pandemic.

Cash has seen a steady decline in use for personal expenditure over the last ten years, but the research does suggest that the move towards a solely digital future has sped up a quarter (25%) of Brits only use cash once a month.

Katharine Wooler, MD of digital asset exchange, Dacxi said: “Coronavirus has already massively accelerated cashless transactions – retailers and consumers understandably want the fewest possible points of infection. Now, the public is used to very rarely spending physical cash, and it is likely that soon the limit for touchless payments will rise to £100. Society is therefore almost cashless already, and I can only see this continuing as the technologies that facilitate this become dominant.”

Bots boom during the pandemic

Automated bot attacks soared 44% in the UK between July and December 2020 according to the latest Cybercrime Report from global data and analytics provider, LexisNexis Risk Solutions. This sharp increase in the UK bucks the global trend, which saw bot attacks decrease 2% in the second half of 2020.

The Digital Identity Network revealed that fraudsters are mainly focussing these credential-testing bot attacks on media and e-commerce accounts, likely due to their lower barriers of entry, identifying legitimate illegally-obtained personal details and passwords that they can use to commit further fraud elsewhere.

Rebekah Moody, director of fraud and identity for LexisNexis Risk Solutions, comments: “Automated bot attacks offer fraudsters the opportunity to mass-test stolen credentials at scale, deploying armies of computers controlled by a general who can minimize his effort while maximizing his gains. Validated credentials offer the chance for the fraudster to make more money, either by selling the credentials for a higher price on the dark web, or using them in a more lucrative attack elsewhere.

“Building a multi-layered defence is key to protecting businesses, and their customers, from the sometimes devastating effects of fraud. This when coupled with consumer education will allow us to stay on the front foot when fighting fraud.”

London to remain a key financial centre

London is set to remain a key financial centre in Europe as almost 1,500 EU firms set up in the City. A Freedom of Information request filed by Bovill, a financial regulation consultancy, found 1,476 firms applied for authorisation from the Financial Conduct Authority under its temporary permissions regime.

In response, Ian Bradbury, CTO, Financial Services at Fujitsu UK & Ireland said: “The UK, particularly London, benefits from a vibrant and competitive financial services industry. It’s a validation of the way the country has adopted technology quickly while transforming the capital into a global financial hub. But it’s fintechs that have pioneered a new business model and put pressure on traditional financial services providers to change the way they operate; this has only been accelerated by the coronavirus pandemic with digital services such as contactless payments and apps allowing businesses to operate as close to normal as possible.

“We’ve seen banks digitally transform for the past decade. However, as the sector looks for fresh ways to innovate and cultivate London’s leading position, it will be vital that financial services organisations differentiate themselves. According to a recent survey, digital fintechs including Monzo, First Direct and Starling are leading the way on customer service over traditional banks. It’s a recognition of consumers’ evolving habits and the wider adoption of technology.

“Ultimately, London is home to a financial services market that is flourishing, but in an increasingly crowded market and uncertain time, it will be the financial services organisations using technology to deliver innovative, new services that will gain the support of the public.”

UK Cybersecurity firms hit almost £9bn in revenue

Atlas VPN research team found that in the 2020 financial year, online security companies in the UK raked in nearly £8.88 billion, which is equivalent to $12.51 billion, a 7% increase from last year’s £8.3 billion ($11.69 billion).

Rachel Welch, COO of Atlas VPN, said: “We project that cybersecurity firm earnings in the United Kingdom in the year 2021 will surge past the 10 billion GBP (14.08 billion USD) mark without much trouble, as the digital threats online are projected to thrive amid home working and improving hacking strategies.
Therefore, cybersecurity firms will potentially sign a significant amount of new contracts as companies will shift to seek proper digital security solutions for their businesses.”

Payments Disruptor Bottlepay Raises £11 Million in Seed Funding Round

Bottlepay, a payments disruptor that facilitates real-time global payments, has announced it has secured £11m ($15m) in a seed funding round.

Bottlepay’s new payment system is paving the way for a new digital economy and eradicating the barriers to effective instant payments. It aims to give everyone access to an open payment network that allows people to send, spend and receive money anywhere in the world, in real-time.

Bottlepay allows people to be part of a growing cashless society in a way that suits them. It facilitates instant payments, including micropayments, in conventional currencies and Bitcoin, meaning users can pay, donate and tip with as little as a penny.

Funding round participants include a range of global investors including British fund manager Alan Howard, present and former Goldman Sachs partners, venture capital firm FinTech Collective, and financial services firm NYDIG and tech entrepreneur Phil Doye.

Bottlepay will use the funding to expand its team, improve functionality and increase the geographical reach of the service over the coming year.

Mark Webster, Chief Executive Officer of Bottlepay, said: “Raising £11 million and reaching a post-money valuation of £51 million is a testament to the scale of Bottlepay’s ambition, and an illustration of the effort and resources invested to build and design a revolutionary payments infrastructure of this magnitude.

“The payments ecosystem is undergoing monumental changes as we move towards a cashless society. Today’s consumer wants to be able to transact freely and easily, without the restrictions of a traditional bank. We believe that with this cash injection, we can build a leading company in this rapidly growing space which will allow people to send, spend and receive payments in a way that works best for them.”

The firm’s open payment network aims to transform the digital economy by making digital micropayments and cross border transactions viable by vastly reducing the excessive fees usually encountered with the incumbent payment rails. Using Bottlepay’s system, any purchase that is immediately fulfilled – from coffees to digital content – can be made from anywhere in the world with instant payments using conventional currencies or Bitcoin.

Bottlepay’s new app also enables seamless social payments with a single tweet, message or social media post on platforms such as Twitter, Reddit and Discord.

Sean Lippel, Principal and Head of Digital Assets at FinTech Collective, said: “While nearly 65 million people own Bitcoin globally, only a small fraction of that number actually transact daily, meaning we’ve only just begun to scratch the surface on the broader payment use cases for Bitcoin as an open-source money network. We believe Bottlepay’s elegant and intuitive consumer interface, built strategically on top of the power of the Lightning Network, will unlock social, streaming, and micropayments for digital assets. We were attracted to the team’s unique combination of technical and design talent, bound together with a laser-focus on privacy and regulatory compliance”

Keeping Up or Leading? How Building Societies Can Embrace Digital Transformation

From international payments to managing direct-debits, money transfers to mobile wallets, and online paperless bank account applications to the heights of complex wealth management, there are multiple full-functionality apps, mobile and online solutions all vying for the custom of increasingly digitally-savvy UK consumers.

Jerry Young, CEO of ieDigital, believes some members of the UK’s army of traditional, long-established building societies and smaller banks need to urgently re-evaluate how they interact with customers, otherwise they risk being left at the starting blocks amid this digital whirlwind.

ieDigital, a solution provider for financial institutions and other financial services providers, is owned by Parabellum Investments, a family office operating as a global private equity firm, led by Rami Cassis, Founder and Chief Executive.

Even during a global pandemic, the UK’s ever-evolving digital banking sector refuses to stand still. Indeed, if anything, Covid has detonated a bomb right at the very heart of the UK banks’ digital offerings. According to a study by Salesforce, some 68 per cent of customers say that Covid has elevated expectations of their bank’s digital capabilities. Similarly, an Accenture study of more than 47,000 consumers reveals that more of us are being driven towards digital services because of the pandemic.

The global fintech market was worth $127.66 billion in 2018 and is expected to rapidly grow. Wall Street giant, JP Morgan, has announced it is to launch a new digital bank in the UK, operating under its consumer brand, Chase. It will be the second major US lender to enter the UK retail banking market, since Goldman Sachs started offering Marcus-branded digital savings accounts in 2018, and joins the British digital upstarts including Monzo, Starling and Revolut, which are also disrupting the market away from the six largest lenders.

Compare these changes with the substantial army of traditional UK building societies, some of which can trace their heritage back for hundreds of years – a fact they are, quite rightly, proud about. After all, trusted brands with a long heritage will command a level of respect that newer entrants are often missing. However, while some have made significant investment in consumer technology, some remain app-less, and some only have a limited online functionality. Their application processes can also leave a lot to be desired in comparison with new digital banks, with some insisting that prospective customers travel to a branch, clutching paper documents, to open a new account and make a deposit. And that’s why branches were even kept open during recent lockdowns.

Compare this to the new digital banks, offering a seamless online-only application process taking just
a few minutes. The cold fact of the matter remains that some building societies risk being left behind in the race to secure a slice of this lucrative digital banking revolution. And, with 24 new banks currently going
through the regulatory process, pressure on these traditional players will be intensified still further.

When it comes to attracting Generation Z, digital natives born between the mid-to-late 1990s and the next generation of savers and homeowners, the rewards have fallen to those with strong digital products and services. They are the ones that develop profitable journeys, giving Generation Z a reason to remain as a long-term, even lifetime, customer. These are the likes of Etsy, Amazon, Nike and Asos, and Starling Bank, Monzo and Revolut.

Digital investment will provide traditional players with a valuable, extra way to reach new customers. We are likely to see a new generation of re-invigorated savers, eager to open savings accounts to put aside money for near, mid, and long-term savings goals. Increased digital functionality will allow these traditional providers to reach-out to this brand-new demographic and to elevate their “local” offering to a national, much larger, potential customer-base.

For those traditional UK building societies and banks who know they have a long way to go to finesse their digital offering, it is not too late. It is essential to the very core of their business to understand that like it or loathe it, the mighty fintech wagon continues to blaze a trail through financial services. They may like it because its disruptive, challenging the status quo as it rolls through the dusty plains of established financial services. On the other hand, they may loathe it for the very same reasons – and because they are a member of that very status quo. Whatever angle they take, it is a given that 2021 and beyond will see more change.

For those concerned they are only starting their digital transformation today, it is still better than starting it tomorrow. With digital solutions being seen within the building society sector as offering a competitive advantage, now really is the time to act. Deploying digital banking services is not the vast and expensive undertaking it once was. Bespoke solutions can be created in as little as four months, resulting in a level of service that will propel the UK’s traditional players into the digital stratosphere.

The market has never been more competitive, and consumers expect to able to save online and access their money online, whether through an app, a website or mobile banking. Dudley Building Society, itself 160-years-old, provides a useful reference-point, recently introducing online tools to help members manage savings and mortgage accounts. This includes functionality around online applications and account management, and personalised features such as savings goals and budget planning.

The financial services sector was already undergoing substantial change before the advent of the Covid pandemic. However, Covid has injected a surge of energy into the fintech effect. If the traditional UK financial players act now, there is no reason they can graduate from simply keeping up with digital changes to actually leading them.

  • Gina is a fintech journalist (BA, MA) who works across broadcast and print. She has written for most national newspapers and started her career in BBC local radio.