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 Services
XTM Announces More Contracts for Today Card Program Including Topper’s Pizza Franchise Company
XTM Inc. | Release | May 19, 2020
TORONTO, May 19, 2020 /CNW/ - XTM, Inc. ("XTM" or the "Company") (CSE:PAID) (FSE:7XT), a Toronto-based Fintech company in the challenger banking space, providing mobile banking and payment solutions around the world is pleased to report that the company signed an additional 80 food delivery stores including Topper's Pizza Franchise Company.
Further to its release on May 13, 2020, XTM continues to sign up a record number of restaurant delivery locations to its Today™ Card and Mobile Wallet program seeking to pay employees, drivers and contractors same day and eliminate cash. XTM has signed 80 more delivery locations including popular pizza chain Topper's Pizza Franchise Company with more than 36 locations across Ontario.
See: Google and Gates Foundation to help spread digital payments in developing countries
XTM designed its backend to allow for easy point of sale (POS) integration, completely automating the process of delivering same day cashless payouts from syndicated restaurant chains to one-off locations. XTM is onboarding stores for same day cashless payouts in days, not weeks.
Further to the Company's release on May 12, 2020 regarding record store and business on-boardings and Gross Dollar Value (GDV) loaded to cards, another key performance metric for challenger and neobanks like XTM is number of users. The Company now has 85K users and with neobanks garnering valuations in excess of $1,000 per user, XTM believes it has the right recipe for success and shareholder value.
"Our technology roadmap includes further expediting onboarding making it as seamless as possible for all companies of all sizes to launch same day pay," commented Marilyn Schaffer, CEO.
"The increasing demand for our solution along with all the recent data demonstrating a paradigm shift away from cash further emphasizes that businesses and their workers are hungry for a cashless solution."
See: How payments can adjust to the coronavirus pandemic—and help the world adapt
"Our goal is to deliver amazingly delicious pizza with safety in mind for our customers and our drivers," said Andrea Roberts, Senior Director, Operations, Topper's Pizza Franchise Company. "XTM's Today Program made the transition easy, efficient and frictionless for our business."
About XTM – www.xtminc.com
XTM is a Toronto-based fintech innovator in the challenger banking space, helping business and their workers expedite earnings payouts and reduce or eliminate banking fees and cash. With a global card issuing and payment platform XTM is providing free technology to business to automate and expedite worker payouts. XTM integrates businesses to a payment ecosystem that is coupled with a free worker mobile app and a Mastercard debit card with banking features. XTM drives enterprise value and delivers a positive user experience.
View release: 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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Canadian Council of Insurance Regulators and Canadian Insurance Services Regulatory Organizations announce Fintech/Insurtech Advisory Hub
McCarthy Tetrault | Ana Badour | May 11, 2020
On May 7, 2020, the Canadian Council of Insurance Regulators (CCIR) and the Canadian Insurance Services Regulatory Organizations (CISRO) announced the launch of the CCIR-CISRO Fintech/Insurtech Advisory Hub (Advisory Hub).
The purpose of the Advisory Hub is to allow interested entities to seek and obtain clarification on what would be required to operate or provide their innovative insurance products or services in Canadian jurisdictions. This means the Advisory Hub will:
- increase regulatory visibility to Fintechs and other businesses wishing to develop innovative products and services;
- provide a common access point for all jurisdictions, giving ease of access to all regulators for Fintechs and other businesses; and
- allow businesses to get clarification and direction about the insurance sector and regulations, prior to launching their products and services in individual jurisdictions.
The Advisory Hub is intended to address businesses which may be subject to insurance legislation and regulations, including concepts such as digital platforms that connect consumers with firms that insure risks; technology and/or data-driven insurance activities or advice, including online advice that leads to the purchase of an insurance policy; or consumer insurance risk-sharing networks and organizations, and the platforms that support them.
See: Tesla Promises up to 30% Lower Insurance Rates with New Car Insurance Play
Entities can use the Advisory Hub to engage with Canadian regulators and obtain the information they need to get started. To do so the inquiring entity will need to provide:
- List of jurisdiction(s) it would like to conduct business in;
- High-level overview of the proposed innovative insurance product, service or technology; and
- Whether it is registered/licensed to conduct insurance business in any jurisdictions (within or outside of Canada).
The Advisory Hub will connect the entity with the appropriate regulators so it may begin receiving direct guidance on Canadian registration/licensing and regulatory requirements. However, the Advisory Hub will not offer pre-market testing, exemptive relief from regulatory/licensing requirements, financial support, or binding advice. This is an important distinction from the Canadian Securities Administrators regulatory sandbox, which allows innovative Fintech businesses to be granted relief from certain securities law regulatory requirements to permit them to test their products and services throughout the Canadian market. (See our blog post on the regulatory sandbox here) In essence, the Advisory Hub will serve as an information portal and guide directing the entity to the appropriate regulators after which it can chart its own course.
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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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No going back: New imperatives for European banking
McKinsey & Company | By Matthieu L, Debasish P, Ildiko R, Hiro S, and Marcus S | May 18, 2020
Now is the time for Europe’s banking leaders to reimagine how their institutions operate and their role in society.
COVID-19 remains an unresolved health challenge that has resulted in tragic loss of life. The economic contraction emerging in its wake will likely be the deepest since World War II and the road to recovery will be long and challenging.
Over the past few months, banking leaders have displayed resolve and resilience, moving swiftly to protect the health of employees and customers, ensure the continuity of basic banking services, and build up capital, liquidity, and cost buffers to strengthen their institutions. In the coming months, banks will start to return to something resembling normal service, reopening offices and branches. But so much has changed over the past few weeks: customers’ financial needs, the way they engage, how employees work, and even society’s expectations of banks.
See: Dealing with a crisis: FinTech versus Bank
The industry will likely face a prolonged period of economic pressure and banks’ actions in the coming months will set their performance trajectory for the years ahead. Banks have shown during the lockdown what is possible in terms of speed and innovation. There is no going back. Now is the time for banking executives to reimagine how their institutions operate. Bold vision and disciplined execution on a set of key imperatives will ultimately differentiate the leaders from the laggards as this crisis abates.
The crisis will put banks under prolonged
It is too early to predict the full impact of the pandemic. The outcome will depend on the length of lockdowns, the drop in demand, and the shape of the recovery. The scale of government support will also be critical—in the last month, some European governments have rolled out packages worth up to 30 percent of GDP and this level of intervention might continue.
All companies must think through possible scenarios to plan their next steps. Based on a recent survey of nine scenarios developed by the McKinsey Global Institute, more than a third of European executives expect a muted recovery. This is the basis of the analysis that follows, but we must keep in mind that other scenarios, both more optimistic and pessimistic, are also plausible.
See: Visa’s digital dollar concept opens a door to central bank currencies
The muted-recovery scenario translates into a drop in GDP of 11 percent across the Eurozone in 2020, and recovery in late 2023. 1 For banks, this would lead to sharp drops in revenue, a squeeze on capital and a hit on return on equity.
No going back - 6 imperatives to win
The crisis has upended the world in which banks operate in terms of customer behavior, ways of working, and government actions.
McKinsey’s European customer survey shows how customer behavior and needs have changed over the past month: digital engagement levels have climbed up to 20 percent, the use of cash has halved, 30 to 40 percent of customers have expressed a greater need for advice, while 20 to 40 percent want products to help them through the crisis. 4 Pension shortfalls are a particular challenge with those close to retirement facing a very immediate problem. Banks will need to reflect on the propositions and channels through which they can best meet these evolving needs.
See: Open banking review faces ‘worrying’ delay as pandemic drives Canadians to fintech
- Innovate new products and propositions. COVID-19 has triggered a range of new financial needs that are waiting to be addressed.
- Lock in the shift to digital sales and service, and reshape physical distribution. In just a couple of months, customers’ adoption of digital banking has leapt forward by a couple of years.
- Create a structurally leaner and scalable cost base. To offset the effect of spiking risk costs and sluggish income, and to free up resources for building digital capabilities, banks need to aim for a cost improvement of 25 to 35 percent (or 20 to 30 percent net increase after reinvestments) over the next two to three years.
- Reset the organization and technology for speed. During the lockdown, many bank teams turned agile overnight and delivered the impossible—such as enabling thousands of employees to work from home, or deploying new digital journeys in record time.
- Double down on risk and capital management. Credit losses will be the defining differentiator of performance over the next year. Early detection and proactive intervention are critical to manage non-performing loans.
- Rebalance the business mix and seek targeted M&A deals. Industry landscapes are often redrawn after crises.
See: COVID-19: A Test Of The Stakeholder Approach
The role of banks in society: A time for purpose-driven choices
Crises often prompt self-reflection and change and this may be a perfect time to reset what has been, at times, a challenging relationship with society. Banks have already been involved in economic support measures, but some may want to be even more proactive, as in Switzerland for example, where banks supported the government-initiated COVID-19 small-business loan program. This could also be a time for banks to rethink their culture. Moving from a control-based culture to one based on strong values supported by smart controls might prove far more effective in steering European banks towards recovery in the volatile future.
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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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Visa’s digital dollar concept opens a door to central bank currencies
American Banker | John Adams | May 18, 2020
The coronavirus recovery is accelerating government involvement in payments, providing Visa a chance to turn a developing currency concept into a route for federal transactions.
The U.S. Patent office on Friday published a Visa patent application to create a technology gateway that could allow central bank currencies for any nation to be digitized. Visa filed the application in November, predating the coronavirus crisis that has generated more interest in digital money.
The application details a centralized computing system that receives information and denomination of a traditional currency, which is then converted to a digital form and recorded on a distributed ledger. This could work with any traditional currency, placing Visa in the middle of the process.
See: Visa’s Fast Track Program Propels Growth of the Fintech Industry Worldwide
The coronavirus recovery is accelerating government involvement in payments, providing Visa a chance to turn a developing currency concept into a route for federal transactions.
The U.S. Patent office on Friday published a Visa patent application to create a technology gateway that could allow central bank currencies for any nation to be digitized. Visa filed the application in November, predating the coronavirus crisis that has generated more interest in digital money.
The application details a centralized computing system that receives information and denomination of a traditional currency, which is then converted to a digital form and recorded on a distributed ledger. This could work with any traditional currency, placing Visa in the middle of the process.
It’s also a way for Visa to respond to changes in money movement that could potentially compete with the card network. Visa was initially part of Facebook’s Libra project, but left the initiative along with several other high-profile payment companies when regulators and politicians pressured Libra — mostly over Facebook’s role and the potential to circumvent government monetary policy.
“Widespread adoption of digital currencies would be bad for Visa’s traditional retail payments franchise,” said Eric Grover, a principal at Intrepid Ventures, adding this may be a case of Visa hedging against central bank or Libra-style digital currencies. “A digital currency supported by Visa and issued by banks could fit nicely with Visa’s business model of delivering payment products through license banks, albeit with thinner transaction economics.”
The European Union has considered a “digital euro” to spur coronavirus recovery, and dozens of other countries are working on similar projects, giving Visa plenty of opportunities to partner with governments.
See: Cryptocurrency Payments Processor CoinPayments Appoints Jason Butcher as New CEO
In this way Visa’s patent, which does not propose a cryptocurrency, is also a nod toward working with governments that may be anxious about how blockchain and cryptocurrency could impact traditional monetary policy, particularly in a time of quantitative easing and potential effects on currency values.
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Blockonomi | | May 18 ,2020
Exploring Visa’s Digital Currency Patent Application: Toward a New Era of Finance?
The U.S. Patent and Trademark Office (USPTO) published the patent application in question, which is simply titled "DIGITAL FIAT CURRENCY."
Visa is one of the most successful and consequential payments companies in the world. Where the powerhouse enterprise places its efforts is thus no small matter.
That’s why a newly published patent application for a blockchain-powered “digital fiat currency” system by the payments giant is not only legitimizing for blockchain tech in general but also indicates what may be coming to the mainstream payments arena amid increasing hyperdigitalization.
See:
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Central Bank Digital Currency and Fintech in Asia
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Bank of Canada Speech: Money and Payments in the Digital Age
Indeed, Visa’s patent mentioned the reigning smart contract platform Ethereum and the Hyperledger Fabric blockchain nearly a dozen times each. Will the future of finance be built on top public blockchains, then?
That’s the grand question for now, and Visa’s new patent application is an interesting new wrinkle accordingly. To be sure, Visa may have simply kept its options open with a defensive application. Yet if the firm ever does proceed with a system like the one planned in the filing, the implications will be manifold and major. Let’s dive deeper to better understand the stakes.
How the Digital Currency Would Work
Per the application, Visa’s envisioned digital currency entails a central operator, i.e. Visa or beyond, facilitating token issuances atop a blockchain. To this end, the document repeatedly identifies Ethereum as potential infrastructure of choice.
On the Decentralization Spectrum
Public blockchains like Ethereum can be used in many ways. They can give rise to totally decentralized projects like Augur and Uniswap, or they can help power centralized third-party enterprises like the Tether (USDT) stablecoin operation.
See: Could Bitcoin on DeFi displace banks? Yes
Obviously then, Visa’s digital currency system — at least as initially outlined — would be near the “completely centralized” end of the decentralization spectrum. With that said, though, what would be interesting to see is if and how Visa’s digital currency would permeate into more decentralized areas of the cryptoeconomy, e.g. like USDT trading on Uniswap.
Visa could employ a smart contract whitelisting system to mitigate its tokens running amok in DeFi, though the company wouldn’t necessarily have to.
News Comes as Stablecoins Are Booming
There’s no indication just yet that Visa’s digital currency will actually come to fruition. But the mere prospect of its arrival comes at a time when both centralized and decentralized fiat-pegged stablecoins have been becoming increasingly popular.
For instance, this month the combined market capitalization of all active stablecoins reached $10 billion USD for the first time ever. The new milestone shows that demand for fiat-pegged or value-stable tokens is already strong and on the rise.
If a major firm like Visa jumped into the rising sector in a big way, then stablecoins in general will have officially hit the prime time. The possibility is closer than ever.
The CBDC Specter
As outlined, Visa’s envisioned digital currency system leaves the door open for central banking institutions to work with the payments company on actualizing central bank digital currency (CBDC) issuances.
See: China’s digital currency app looks like Alipay and WeChat Pay
What’s interesting here is that in Visa central banks would certainly find a reliable and promising partner. In many cases, these banks would naturally be more comfortable using an Ethereum-powered Visa system rather than building their own Ethereum solutions themselves.
As such, Visa would be ideal for central banks wanting to issue CBDCs for retail rather than wholesale use, as the company’s consumer base is vast.
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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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Cryptocurrency Payments Processor CoinPayments Appoints Jason Butcher as New CEO
Crowdfund Insider | | May 14, 2020
Cryptocurrency payments processor CoinPayments announced on Wednesday it has appointed Jason Butcher as its new CEO. CoinPayment reported that Butcher has been its Chief Operating Officer since 2017, and previously as an advisor starting in 2015, helped boost CoinPayments’ monthly transactions to more than $100 million.
According to CoinPayments, Butcher brings nearly three decades of experience building businesses globally in diverse industries and markets. He founded HODLTech and DIGISURE in 2018, Parallel Payments in 2011, and is actively involved in a number of global FinTech, Crowdfunding, and Blockchain technology projects. He also serves as an advisor with the Blockchain Association of Canada and is the Fintech advisor for the National Crowdfunding and Fintech Association.
“Crypto-payment accessibility allows businesses to be more agile with customers and partners by offering improved security and faster transactions without red tape. Our aim is to further enable more businesses globally with custom tools and services, as well as a superior customer service experience.”
See: WeChat live Streaming pumps life into local business in China
CoinPayments further reported it is planning to do the following under Butcher’s leadership in 2020:
- A continued focus on delivering easy-to-use solutions and exceptional customer service to merchants
- New advisors including world-renowned payments and cryptocurrency executives
- Global partnerships that will deliver the CoinPayments platform directly to thousands of new merchants
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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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WeChat live Streaming pumps life into local business in China
Techcrunch | Rita Liao | May 8, 2020
China is showing renewed interest in live streaming. As the coronavirus swept through the country and shut down premises in droves, businesses are turning online to drive sales. Many have adopted live streaming, a model that predates the short videos that dominate many of our mobile screens now. Ecommerce titans like Alibaba, JD.com and Pinduoduo have ramped up efforts in live streaming, which sees customers interact with merchants and place orders in real time as many continue to avoid offline shopping.
An unorthodox player, WeChat, has also entered the fray.
The messaging giant, which commands 1.16 monthly active users, announced this week it’s partnering with the southern Chinese city of Guangzhou to host a live stream shopping festival in June. The news arrived not long after president Xi Jinping acknowledged the essential role of live streaming ecommerce in the economy, especially in promoting sales of rural produce.
See: China’s digital currency app looks like Alipay and WeChat Pay
The initiative led by a municipal government to pump up the local economy through live streaming ecommerce is first of its kind in China. It should surprise no one that it’s slated to take place in Guangzhou, a major trade and export center, as the global pandemic depressed China’s outbound shipments, putting pressure on the authority to stimulate domestic demand.
Like most of WeChat’s extended functions beyond messaging, live streaming is built upon the mini program — or lite app — infrastructure. The feature now sees registered merchants in the several tens of thousands and remains free to use during the testing phase, according to WeChat. Retailers in grocery, tourism and fashion are by far the biggest beneficiaries. Nasdaq-listed travel portal Ctrip, for example, has racked up nearly 100 million yuan, or $14 million, in sales by promoting live on WeChat as airlines and tourist attractions are shelling out deep discounts. Homegrown lifestyle brand Heilan Home recorded more than 3 million viewers in one live session.
“In recent months, the demand for online shopping has surged due to the coronavirus pandemic. Selling through live streams is now a key way to help businesses reopen and resume production as well as stimulate consumer demand,” Gerald Hu, general manager of Tencent Guangzhou, said in a statement.
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What is the live stream on WeChat?
Functionalities and channels within WeChat to do a live broadcast
A few industries (graming, e-commerce to name a few) are active in live video broadcasting because:
- the size market is growing (fast)
See: Globalizing Fintech In Action: A Discussion With Harinder Takhar of Paytm
Market size of online live streaming in China from 2016 to 2020 | June 2018 [Statista]
- this distribution channel has proven tangible results.
A few data to support this result:
- Source: iResearch
- 63.2% of users watched live streaming to relax
- 50.5% of live streaming user would make comments, over 40% of them would like it, reward hosts (free-to-play), and share videos to others
- 86% of live streaming users thought positively about live streaming marketing. Among them, those younger than 24 years are more likely to be attracted by new products release and buyer’s sharing.
- Source: Alibaba
- In 2018, Taobao’s live broadcasting platform Taobao Live delivered more than 100 billion yuan sales of products, a year-on-year growth rate of nearly 400%.
- In 2019, Taobao Live brought 20 billion RMB sales during Double 11.
- A total number of 81 live rooms on Taobao Live reached 100 million yuan sales; a total of 5 organizations broke 1 billion yuan sales.
- Taobao Live aims to deliver 500 billion yuan sales in the next three years.
See:
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The 5 Debates That Will Shape Fintech In The 2020s
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Shopify displaces RBC to become Canada’s most valuable company
How does it work?
There are several solutions to enable brands and businesses to do live streaming within WeChat.
Brands can:
- set up their own WeChat-based broadcast channels (more details 👇👇👇👇)
- collaborate with a 3rd party WeChat influencer with a relevant fanbase to host a live streaming session which doesn’t require technical development resource
Live streaming via a branded Mini Program
Live streaming component to integrate into a custom made Mini Program. It’s a templated feature.
Tencent releases a live streaming capability to be integrated into a WeChat Mini Program (MP) in 2020.
This feature can be relevant for eCommerce type Mini Program.
The brands can link from their Mini Program where the live streaming is happening to their branded online shopping channels so that the user is taken directly to the product page to buy.
- Owned WeChat Mini Program shop
- JD shop
- Weidian
Case Study
Continue to the full Wechat live streaming tutorial guide -> 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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Dealing with a crisis: FinTech versus Bank
The Finanser | Chris Skinner | May 15, 2020
The chasm between start-ups and incumbents is massively exposed by coronavirus. I realised this early on, when I saw that FinTech firms who were born on the internet were far more ready for working from home than traditional banks who depend on branches, buildings, office and physicality. A good example is how traditional banks who depend upon physicality completely shutdown in the lockdown, whilst challenger banks who were born digital had planned for this. Monzo and Starling actually trialled a lockdown process in February, and were ready for a government ordered stay at home process … most traditional banks were caught like rabbits in car headlights.
In fact, this pandemic may be a defining moment for those who could cope and those who could not.
This obviously applies at the micro level – some people are blossoming in this crisis whilst others are crumbling – but it also applies at the macro level. At this level, in finance, we see many of the young financial firms creating and innovating whilst the old financial firms are reacting like something out of a Disney film … Frozen.
Case in point: challenger versus traditional bank.
During the crisis, the challenger banks have been working hard to deliver ideas and results, with Starling Bank and Chime being the biggest headline grabbers in this space.
See: NCFA Open Letter: Government should collaborate with Fintechs
The UK challenger bank, Starling Bank, rolled out a connected card, to allow customers to give a payment card to a friend or carer to do their shopping for them; whilst the American digital bank Chime were offering cash advances direct to their app for citizens, ahead of the $1,200 stimulus payments announced by the US Government.
“Funding Options, a UK fintech, technology allows it to link prospective lenders to suitable borrowers quickly. The firm has relationships with over 200 lender partners and some of the largest commercial banks in the UK; many of its partners are implementing the UK government’s coronavirus business interruption loan scheme (CBILS). When a traditional bank is unable to offer a business a loan, it can refer the prospective borrower to Funding Options, which helps search for an alternative lender.”
And they note that Funding Circle, Kabbage, Toborrow and Credible offer similar propositions.
I even joined a Zoom call the other day where a few FinTech firms shared new ideas about how the government could deal with this crisis faster. Railsbank had rolled Lightning Aid, enabling Government departments, NGOs and community groups to distribute financial support directly to those who need it most; Curve were issuing prepaid financial tokens for communities who appreciate their local restaurants and stores to #saveyourlocal; and SETL were generating distributed ledger forms that could use social security numbers to distribute benefits from government to citizen direct.
Fantastic.
Then you come to the traditional banks.
My own experience with one of the major high street banks has been awful, as I blogged about the other day. Their call centre closed with no notice, their internet portal was broken, they were uncontactable by phone of online. When they fixed it, things worked a little but then the government introduced CBILS, Coronavirus Business Interruption Loan Schemes, for small businesses … and the system ground to a halt.
See:
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Lendio Facilitates More $5.5 Billion in Relief Funds to Over 50,000 Small Businesses Through the Paycheck Protection Program
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Bridge to Recovery: The Bank’s COVID-19 Pandemic Response | Open Banking Consultations Delayed in Canada
I tried to get a CBILS loan, and found the bank firstly didn’t respond. When they eventually did, after almost a month, there were several roadblocks in the way such as a demand for 2019 accounts which didn’t exist – they’re not due for filing with Companies House until late summer.
Now, I understand why this might be – the UK government only backed CBILS for 80% of the risk – but, even so … so, thank goodness for the UK government’s bounce back loan scheme.
This was introduced on the 4th May – May the Fourth be with you – and is 100% backed by government. The promise was that this would be in your small business account within 24 hours of application.
Unsurprisingly, thousands of small businesses applied – UK banks approved almost 70,000 loans worth billions on day one – but my bank proved interesting.
Their application form was simple but kept saying there were errors. I didn’t see any errors and tweeted about it. Someone replied: “do not enter your company number and it will go through”. It did, but this was interesting. It’s a form with seven questions and my bank could not even get that right. One of their seven questions was asking for my company number and, if I entered it, the online form would fail (bear in mind, you cannot call this bank – their call centre closed when India closed).
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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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