Paul Schulte, Advisor, Banking and Financial Services
August 22nd, 2019
Paul Schulte is the Founder and Managing Editor of Shulte Research based in Singapore. Paul's roles[...]
Category Archives: Fintech International
FT Partners Report (Jan 2020): The Rise of Challenger Banks: Are the Apps Taking Over?
FT Partners | Jan 2020
Executive Summary:
The banking sector is experiencing a major shift globally, as Challenger Banks are becoming increasingly formidable competitors to traditional banks and have begun to capture significant market share. Furthermore, the lines between banks and other consumer financial services providers are blurring, with several alternative lenders and robo-advisors beginning to offer banking products to their customers. E-commerce / internet giants are also jumping into the fray with Google and Amazon, among others, beginning to offer banking products. In response to the emergence of Challenger Banks, a number of incumbent banks have launched their own FinTech brands, and traditional financial institutions will likely turn to FinTech solution providers in order to defend their turfs.
Download this Jan 2020 FT Partners Fintech research (216 page PDF) -> Now
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Hong Kong hits major fintech milestone as half the city’s population signs up for HKMA’s Faster Payment System
South China Morning Post | Enoch Yiu | Jan 13, 2020
Hong Kong residents can expect to benefit from cheaper and better banking services with the launch of more virtual banks this year, according to high-profile speakers at the Asian Financial Forum.
Their comments came as it was revealed the Hong Kong Monetary Authority has hit an important milestone in its efforts to promote financial technology (fintech). Half the population of the city has now signed up to its Faster Payment System, which enables the free transfer of money between bank accounts via mobile phone.
The development shows Hong Kong is moving quickly into a new era of branchless banking, a shift that brings up challenges for traditional lenders which must innovate to cope with the competition, said officials at the annual conference held by the Hong Kong government.
“The Faster Payment System is an important move for the city to develop its fintech. The system has been very popular with the Hong Kong public,” said James Lau, Secretary for Financial Services and the Treasury during a panel discussion at the forum on Monday.
See:
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Banks have lost a quarter of the payments franchise to new players
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Hong Kong being pulled into the 21st Century — digital banking licenses finally arrive
The electronic interbank payment system introduced by the HKMA in September 2018 now has half of the local population registered and average daily transaction volumes of between HK$2.4 billion (US$308.82 million) and 38 million yuan, Lau said. The system allows anyone to sign up with their mobile phone number or email address and transfer money between different bank accounts. They can also make payments at shops and restaurants using QR codes on their smartphones.
“The next major development is the launch of more virtual banks in the first quarter of this year in Hong Kong, which will provide more online banking services to the public,” Lau said.
The Hong Kong Monetary Authority has issued eight virtual bank licences since March last year. The first virtual lender, ZA Bank, started operating in December.
“The banking industry will need to innovate and upgrade its technology to cope with the many challenges amid the US-China trade war, geopolitical tension and the global economic slowdown,” said Arthur Yuen, deputy chief executive of HKMA
in another panel discussion at the conference.
Yuen said the launch of virtual banks will benefit the public as a whole because it allows people who have never had a bank account to finally enjoy banking services.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Exclusive: China’s Ant aims for $200 billion price tag in private share sales – sources
Reuters | Julie Zhu, Kane Wu, Zhang Yan | Jan 17, 2020
HONG KONG/BEIJING (Reuters) - Ant Financial [ANTFIN.UL] shares are being offered privately at levels which value the Chinese financial giant at $200 billion, two people with knowledge of the discussions said, lifting it up the ranks of the most valuable unlisted companies.
Alibaba affiliate Ant, which had an implied valuation of $150 billion during a 2018 fundraising, is preparing to step up plans for eventually going public in Hong Kong and mainland China, three other sources told Reuters.
See: Exclusive: Ant Financial shifts focus from finance to tech services: sources
Speculation has grown that Ant, the world’s largest so-called “unicorn” — a newly-formed unlisted tech firm valued at $1 billion or more — is working toward an IPO this year.
Its advisers have recently approached potential buyers of the unlisted shares, the first two people said, as Ant seeks to tidy up its shareholder base ahead of any listing.
An Ant Financial spokesman said the company does not have a plan or timetable for an intial public offering (IPO).
Small holdings of Ant shares were traded in the secondary market at a $200 billion valuation late last year, another person familiar with the situation said. All of the people declined to comment due to confidentiality restrictions.
Investors worldwide are scrutinizing valuations for “unicorns” more closely after last year’s collapse in value of the once-hyped office space provider WeWork.
Some Ant investors packaged their shares into wealth management products so may not technically still hold them all, potentially complicating regulatory approval for an IPO.
Some executives are also selling some of their shares which are held via limited partnership schemes controlled by Alibaba founder Jack Ma, one of the first two sources said.
Under listing rules for domestic IPOs, the controlling shareholder or the actual controller of a company is subject to a three-year lock-up period.
See: A $7 Credit Limit: Jack Ma’s Ant Lures Hundreds of Millions of Borrowers
Hangzhou-based Ant runs Alibaba’s payment business Alipay and offers savings and credit products to Alipay users. Last year Alibaba switched its rights to 37.5% of Ant’s pre-tax profits for a one-third shareholding.
Alibaba says Alipay and its local e-wallet partners have about 1.2 billion annual active users, of which 900 million were in China.
FLUID PLANS
Ant has quietly brought back together many of its corporate finance team, some of whom had moved to other roles in recent years. The moves are seen as a sign it wants to progress with preparations for a float, two people close to the company said.
And during a recent meeting with the China Securities Regulatory Commission (CSRC), China’s market regulator, Ant discussed its IPO prospects along with other matters, two people with knowledge of the matter said.
But any plans are still extremely fluid, seven sources with knowledge of the process said.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Goldman Sachs, the 150-year-old investment bank, is staking its future on a mobile app
CNBC | Hugh Son | Jan 13, 2020
Key Points- When Goldman Sachs released a long-awaited app for customers of its Marcus consumer bank last week, it did so with little fanfare or hype.
- But the app will one day serve as the bank’s storefront and one-stop shop for an array of digital banking services, according to Adam Dell, a Goldman Sachs partner and head of product at Marcus.
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“There are two kinds of incumbent banks,” Dell told the audience at a financial conference in June. “There are banks that are screwed, and there are banks that don’t know they’re screwed.”
When Goldman Sachs released a long-awaited app for customers of its Marcus consumer bank last week, it did so with little fanfare or hype.
Unlike the intense attention on its last retail product, the Apple Card, the launch of the bank’s Marcus app was heralded by little more than a smattering of user reviews.
See: JPMorgan has a plan to help Amazon and Airbnb look more like banks
But the app may prove to be far more important to Goldman than its credit card partnership with Apple. That’s because the portal, which today lets customers check balances and set up recurring transactions, will one day serve as the bank’s storefront and one-stop shop for an array of digital banking services, according to Adam Dell, a Goldman Sachs partner and head of product at Marcus.
“Over time, our ambition is to extend the capabilities of the Marcus app and have that be the centerpiece of our consumer-facing experience,” Dell said in an exclusive interview.
The app comes at a crucial time for Goldman. Ahead of the bank’s first-ever investor day later this month and earnings report this week, shareholders are eager to hear about how 3-year-old Marcus will drive revenue growth. Last week, Goldman, which has served corporations, heads of state and rich individuals for most of its 150-year history, changed its reporting lines to give its retail operations a stand-alone division for the first time.
Goldman executives like Dell – an entrepreneur and brother of billionaire Michael Dell who joined Goldman in 2018 after selling his start-up to the bank for $100 million – have made no secret of their intention to beat big retail banks at their own game. That means expanding Marcus from its two products – savings and personal loans – to potentially include wealth management, mortgages, car loans, insurance and cards beyond the Apple Card.
See: JP Morgan is rolling out the first US bank-backed cryptocurrency to transform payments business
Dell, who is a part of a recent wave of outsiders to join Goldman at the senior-most partner level, said the firm spent much of last year planning, building and testing the app with hundreds of employees. The development team was led by Dell and former employees of Clarity Money, the personal finance start-up that Goldman acquired.
“Our aspiration is very clear: We want to build the best digital banking experience that any customer can have,” Dell said. “As I think about the competitive landscape of the incumbent consumer banks, I think there’s enormous opportunity for us to differentiate ourselves with great digital products.”
Perhaps more than at any time in decades, bank customers are up for grabs as consumer preferences evolve, driven by slick apps from tech firms like Uber. And unlike tech giants like Google and fintech competitors like Chime, Goldman doesn’t have to partner with a bank to offer services – it became a bank holding company in 2008.
But as last week’s disclosure showed, Goldman’s retail business is tiny compared with rivals. High expenses as the company ramped up investments in Marcus and the Apple Card meant the business generated a fraction of the profit of the bank’s other, mature lines. Marcus has collected about $55 billion in deposits and made $5 billion in loans, a pittance compared with the more than $1 trillion in deposits and $900 billion in loans J.P. Morgan Chase and Bank of America each have.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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With Plaid Acquisition, Visa Makes a Big Play for the ‘Plumbing’ That Connects the Fintech World
Fortune | Rey Mashayekhi | Jan 14, 2020
In late 2018, payments giants Visa and Mastercard both invested in fintech startup Plaid through a $250 million funding round that valued San Francisco-based firm at an impressive $2.65 billion.
Described as “strategic investments,” the two financial services heavyweights sought not only to provide Plaid with financial backing, but also to leverage the fintech firm’s sprawling technological capabilities to improve their own services.
See: Visa R&D Arm Develops a Blockchain System That Could Replace Financial Data Aggregators
“We’re really excited about working with [Plaid] to enhance payment experiences globally,”
Bill Sheedy, executive vice president of Visa’s strategy group, told Fortune at the time.
With Plaid’s APIs (application programming interfaces), Visa could potentially improve the customer experience via everything from fraud detection to real-time account balance verification—services that “reduce the friction around financial transactions,” as Sheedy put it.
A little over a year later, Visa has decided to come back for the whole thing.
Whether it beat its great rival Mastercard to the punch, or saw a deal that its East Coast rival did not see, is as yet unclear. But on Monday, Visa announced that it has agreed to acquire a 100% stake in Plaid in a deal valued at a whopping $5.3 billion (twice the firm’s late-2018 private valuation).
The transaction sees Visa snap up one of the more impressive growth stories in the ever-expanding realm of financial technology. Since launching in 2013, Plaid has made itself an indispensable piece of the fintech ecosystem—a company with the technological capabilities to connect one in four people with a U.S. bank account to thousands of apps and services, from Venmo to Robinhood, from Chime to Acorns.
Plaid likes to describe itself as the “plumbing” that makes the increasingly tech-enabled financial services world go round, a claim justified by the company’s already sizable reach. Given the eye-watering sum that Visa is prepared to fork over—not to mention the bullish noises coming out of the company’s C-suite on Monday afternoon—
it’s clear that the payments behemoth believes it is picking up an asset that will help it “capitalize on the fintech-driven evolution,” as Visa CEO Al Kelly put it.
“Fintechs are clearly reshaping financial services, and Plaid is unquestionably the leader in this space,” Visa president Ryan McInerney told Fortune on Monday.
The deal is about expanding Visa’s services beyond its bread-and-butter, debit and credit card solutions and into a “broader set of money-movement services,” as McInerney described it.
See: Visa Makes Its Second Investment Into a Crypto Startup
While Visa may have 3.4 billion debit card holders globally, the acquisition of Plaid—a company that holds the keys to countless fintech services that promise to increasingly shift online the way that people move and spend their money—provides the credit card giant with access to “new products and services in a higher-growth market than we are in today,” McInerney said.
According to EY, 75% of the global consumers accessed a fintech application for money transfers and payments last year, compared to only 18% in 2015. “It’s something that positions Visa for the next decade and beyond,” McInerney added.
Continue to the full article --> here
View presentation summary deck of Visa's acquisition of Plaid --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Cyber security world first as unique guide is launched
National Cyber Security Centre UK | Jan 9, 2020
The Cyber Security Body of Knowledge (CyBOK) has been launched at London's Science Museum.
A guide which for the first time brings together knowledge from the world’s leading cyber security experts has been launched.
The Cyber Security Body of Knowledge (CyBOK) provides a foundation for cyber security education, training and professional practice. It will be invaluable for academia, industry and Government.
The 828-page resource has the potential to help organisations to better protect themselves. It covers the foundations of cyber security, ranging from the human element through to issues in computer hardware security.
See:
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Cyberattacks now cost small companies $200,000 on average, putting many out of business
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Cybercrime FinTech, Flare Systems, Raises $1M, Led by Luge Capital
Launched at a special event at London’s Science Museum, CyBOK was sponsored by the National Cyber Security Centre (NCSC), which is a part of GCHQ, and funded by the National Cyber Security Programme with support from DCMS. The development of CyBOK was led by the University of Bristol.
Chris Ensor, the NCSC’s Deputy Director for Growth, said:
“This guide will act as a real enabler for developing cyber security as a profession. It’s been developed by the community, for the community and will play a major role in education, training and professional practice.”
The next stage of the CyBOK project will see the guide being used by those designing university education and professional training courses in the UK and globally.
Download 854 page PDF v1 CyBOK --> Now
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Grab launches first cloud kitchen in Singapore amid GrabFood expansion
Tech In Asia | Miguel Cordon | Jan 8, 2020
Southeast Asian ride-hailing giant Grab has opened its first cloud kitchen in Singapore as part of the company’s 2020 expansion strategy for its food delivery service GrabFood.
GrabKitchen offers merchant-partners a platform to introduce new food concepts and brands. In addition to offering a space to operate in, GrabFood takes care of utility management within the facility and marketing support within the app, helping reduce onset business challenges.
The GrabKitchen in Hillview brings over 10 F&B brands, including three new virtual restaurants, to northwest Singapore, according to a statement. Grab is also planning to launch more cloud kitchens in the city-state within the first half of the year.
See: Social equity must be central to urban tech innovations
Along with this, the company unveiled a GrabFood merchant platform designed to provide tools for merchant-partners. It seeks to cater to their end-to-end business needs that span procurement, marketing, finance, and business management to help them expand their businesses.
The platform will include features such as a unified merchant app and a dashboard with access to GrabFood, Grab Financial Group, and GrabAds services. It will also help merchant-partners procure discounted kitchen supplies and ingredients through Grab’s agent network and offer tailored solutions to improve merchants’ existing processes. According to the company, it will roll out the features in phases during the year.
GrabFood regional head Lim Kell Jay said that the announcement comes on the back of a 5.2x growth in gross merchandise value and a 173% increase in active users for the business last year.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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