Open banking has long been pedalled as the future of fintech, but which companies are the leading providers of the service in the UK?
Forget fancy apps and metal cards. A new breed of "messenger banks" are breaking onto the scene.
Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Personal Finance
Rebank Podcast: How to Build a Profitable Digital Bank with Tinkoff
Rebank Podcast - Banking the Future| June 19, 2020
Oliver Hughes is the CEO of Tinkoff Group, one of the world’s most successful digital banking groups with over ten million customers.
Tinkoff is publicly listed, which brings clarity to its operating model in a time when many noteworthy consumer digital banks are pursuing customer acquisition at the expense of profitability.
Oliver has led Tinkoff through three financial crises, so brings experience and perspective to the current COVID crisis.
Listen to this podcast --> 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
 |  |  |
|---|---|---|
 |  |  |
Cambridge launches the Global Alternative Finance Industry Benchmark & Covid-19 Rapid Assessment Survey in Partnership with World Bank Group and World Economic Forum
Cambridge Centre for Alternative Finance | Tania Zielgar | Jun 17, 2020
NCFA Intro: NCFA is please to provide continued support as a National industry partner of the Cambridge Centre for Alternative Finance research initiatives in Canada. It's absolutely essential that data and research be collected and anlayzed to help identify trends, inform policy and understand the state of industry during these times of global risk and innovative change. We strongly advise all fintech firms, research partners and anyone who is able to help this important survey collection initiative by completing the survey and sharing it widely among your network.
Overview of the Global Alternative Finance Industry Benchmark & Covid-19 Rapid Assessment Survey
For the past several years, the CCAF has produced comprehensive industry-focused research on the evolution of alternative finance; documenting and analysing the development of Crowdfunding, P2P/Marketplace Lending and other FinTech markets from across 190 countries.
This year’s benchmarking survey will also include the recently launched The Global Covid-19 Fintech Market Rapid Assessment Study, in partnership with the World Bank Group and the World Economic Forum. The empirical data collected will be used to understand Covid-19’s impact on the FinTech markets, how the global FinTech industry has responded and some of the immediate regulatory and policy implications. This research program has resulted in 20 reports, which are disseminated freely to inform policy and raise public awareness of alternative finance. This research has provided unique detail and insight into the changing FinTech landscape, creating a valuable evidence-base for policymakers, regulators, and industry stakeholders to utilize when evaluating the FinTech ecosystem within their local context or from a globally comparative perspective.
The Fintech landscape is changing rapidly as a result of Covid-19. This report, and the historical data on this industry more broadly, provide signposts as to the general development trajectories of firms when faced with this pandemic, and where strengths and weakness may lie.
The survey will hence include two key components:
1. Time-series data required to continue the CCAF long-standing tradition of benchmarking and scoping the industry (referring to your 2019 activities), and
2. Covid-19 focused time-sensitive data on a) market performance, b) regulatory needs & policy asks, and c) operational changes & implications.
The long-term impact of Covid-19 is yet to be known. By coupling longitudinal data with this research initiative, we can begin to test the resiliency of this market and provide clear, evidence-based assessments on how the sector will continue to develop.
As with all our reports, the Global Covid-19 Fintech Market Rapid Assessment (anticipated publication Q3) and the Annual Global Alternative Finance Industry Report (Q4) will be made available to the public and actively disseminated to provide key insights to regulators, policymakers and key industry stakeholders.
Thanks in advance for your contribution to the study: Take the Survey Now
https://jbs.eu.qualtrics.com/jfe/form/SV_7PRyNSA3B5IKIrX
The Covid-19 pandemic presents both serious challenges and potential opportunities for the global FinTech industry to grow and scale, with the long-term effects yet unknown. By coupling the CCAF’s longitudinal data with this exciting research initiative, we can begin to test the resiliency of this market and provide clear, evidence-based assessments on how the sector will continue to develop.
This Study will provide a global assessment of the FinTech ecosystem’s responses to the Covid-19 pandemic, with particular attention to the industry’s response to challenges and their regulatory and policy concerns. This survey will result in a jointly published report between the CCAF, World Bank and World Economic Forum, and will be made available online. You can find further information on the Study in the accompanying press-release.
The survey will close on July 31st. If you have any questions or comments, please feel free to contact the CCAF research team directly: Tania Ziegler (t.ziegler@jbs.cam.ac.uk).
Take the survey now --> here
Other links you may like:
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
| | |
|---|---|---|
| | |
Here are the UK’s 5 leading open banking providers
AltFi | Aisling Finn | Jun 10, 2020
Open banking has long been pedalled as the future of fintech, but which companies are the leading providers of the service in the UK?
Open banking has become one of the most popular adaptations for both fintechs and big finance alike.
Open banking was first introduced as a concept when the EU decided the banking industry needed greater competition and wanted to expand the opportunities offered to fintechs.
Since the introduction of the EU's Second Payment Services Directive (PSD2) in January 2018, open banking has revolutionised the way millions of people manage their finances and use their data.
Following the introduction of PSD2, the Competition and Markets Authority (CMA) ordered the biggest banks in the UK to share their APIs with other banks and third-party providers which helped the fintechs on this list to thrive.
The ability to access all your accounts and integrate non-banking financial services too has proved increasingly popular over the last few years, with the likes of fintech giants Monzo, Revolut and Starling all offering some form of the technology.
Open banking’s main goal is to increase the transparency of the banking industry, so without further ado, and full transparency, here are the UK’s leading open banking providers.
See: Plaid celebrates 12 months in Europe with an eye towards Open Finance
Bud
Who started it?
Bud was founded in 2015 by Ed Maslaveckas and George Dunning, initially beginning its life as a financial wellbeing platform.
The platform recently appointed hedgefund heavyweight, Lord Stanley Fink, the former CEO of the hedge fund firm the Man Group, as the Chair of its board of directors.
How is it funded?
Bud counts Goldman Sachs, 9 Yards Capital, HSBC and Investec as investors and also won a slice of the UK government’s £2m rental recognition prize back in 2018.
In February 2019, the fintech bagged $20m from HSBC and Goldman Sachs to help it double in size and expand into new markets.
Who are the customers?
One of Bud’s primary customers is HSBC, who also happens to have invested a significant amount in the fintech.
In December 2019, Bud extended its partnership with HSBC and signed a three-year global deal with the bank to give access to Bud’s open banking, API and data.
Last October, Bud shifted away from larger firms to focus more on transactional data for smaller firms and introduced a developer portal for SMEs to access Bud’s sandbox environment.
See: Open banking review faces ‘worrying’ delay as pandemic drives Canadians to fintech
Plaid
Who started it?
Plaid was founded in 2012 by Zach Perret, who recently spoke at the AltFi Digital Summit 2020, and William Hockey, who has since left his role as chief technology officer and now sits on Plaid’s board of directors.
The San Francisco-based startup recently celebrated its first anniversary of being in Europe following its surprise launch of financial management app Emma.
How is it funded?
In January 2020, it was revealed that Visa would shell out $5.3bn for the Silicon Valley startup, although the deal is yet to be completed.
Prior to the sale, Plaid had previously received several strategic investments from Visa and Mastercard.
Who are the customers?
Plaid connects to over 15,000 financial institutions across the US, Canada and Europe and 80 per cent of the biggest fintechs rely upon Plaid’s API infrastructure to operate.
The open banking powerhouse has helped the likes of financial management app Emma, Venmo, trading platform Robinhood, Monzo and TransferWise.
See: Is this the new face of Generation Z banking?
Tink
Who started it?
Tink was founded in Stockholm, Sweden in 2012 by Daniel Kjellén and Fredrik Hedberg and is now offered in 17 markets across Europe and Latin America.
How is it funded?
In January 2020, it was revealed that Tink had just closed its largest funding round to date, totalling €90m.
The Swedish fintech has raised over €200m to date and has secured several strategic investments from PayPal, including most recently when PayPal injected an undisclosed amount to help the fintech conquer Europe.
Who are the customers?
Tink recently revealed a strategic investment from payment giant PayPal that would see it’s technology available to some customers across all countries in the European Economic Area (EEA)
Tink integrates with more than 2,500 financial institutions, reaches over 250m customers and processes more than 10bn transactions a year.
See: Explore Canadian Fintechs in Canada on FintechCanada.io
Yapily
Who started it?
Yapily was founded by former Goldman Sachs investment banker, Stefano Vaccino in 2017.
Vaccino was fascinated by the social impact of open banking and the ability it holds to bring financial wellbeing and knowledge to the masses.
How is it funded?
To date, Yapily has raised $18.4m, including a $13m Series A round primarily led by investment firm Lakestar, which has invested in the likes of Spotify, Skype and Revolut.
The firm also completed a $5.4m seed round in May 2019 which was led by HV Holtzbrinck Ventures, which has invested in fellow fintechs SumUp and Penta, and LocalGlobe, an investor in the likes of Tide, Cleo, Robinhood and Transferwise.
Who are the customers?
Yapily counts Intuit QuickBooks and GoCardless as customers, as well as several other fintechs and firms and has recently been selected as an open banking provider for IBM.
The fintech currently has 80 per cent account coverage across Europe and 99 per cent coverage here in the UK, with the hopes to expand even further across Europe in the coming months.
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, artificial intelligence, 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
| | |
|---|---|---|
| | |
Is this the new face of Generation Z banking?
Sifted | Isabel Woodford | Jun 10, 2020
Forget fancy apps and metal cards. A new breed of "messenger banks" are breaking onto the scene.
We’ve seen challenger banks for teens; we’ve seen pocket money apps for tweens; and now, Europe’s youngsters are getting a “messenger bank” — an encrypted chatbot that manages users’ finances and sends money via Facebook, WhatsApp, Telegram and Viber.
The fintech behind the venture is called Zelf and is on the cusp of launching, having signed up 350,000 users to its waiting list across France and Spain since April.
Unlike its fellow neobanks, Zelf has no app and no physical card. It also has no “offboarding” — meaning users can’t withdraw funds once inside. Instead, users will be able to transfer money to other ‘Zelfers’ or shop via a virtual Mastercard, which integrates with Apple Pay and Google Pay (allowing both online and offline shopping).
See: Fintech Firms Fight Friction To Disrupt Banks
Unorthodox as this many sound, the company’s executives are no amateurs. Founded by an alumnus of Deutsche Bank, Barclays Capital and BNP Paribas, its team understands traditional finance — they simply want to rewrite the rules to meet the needs of a generation it reportedly ‘gets’.
So is this the new future of banking? Or is this a long-shot, that’s overly reliant on the goodwill of Big Tech and security short-cuts?
Friction-free banking
There’s no doubting Zelf’s speed.
It takes seconds — literally — to open an account. After clicking on a launch link, a new conversation with Zelf pop opens on WhatsApp or Facebook and promptly issues users their own IBAN account number and virtual card, which they can transfer money to and ‘top up’.
Users don’t even need to prove their identities until they’ve spent or received over £150, in what the company calls a “light KYC [know you customer]” approach. Zelfers can, therefore, get up and running almost immediately — even if they aren’t over 18 — without leaving their favoured app.
In comparison, setting up a new bank account requires a visit to the app store, an average of three days, and at least 24 clicks to onboard and receive a working card.
Zelf is not only speedy to sign up to, however. It also fixes the burden of having to jump across multiple financial apps to send money.
“These [social media] apps are where people spend 65%-84% of their screen time… so we haven’t built our own app by design. We want to make it more frictionless, just like sending a message,” Zelf founder Elliot Goykhman told Sifted in an interview, speaking from his native Russia.
“Let’s say you were talking to your sister on Facebook, you can send the money you owe her straight on there… She can even sign up directly on Facebook,” he notes. Even modern banking apps like France’s Lydia create new pain-points by prompting a download and a lengthy signup process, he argues.
See: Neobanks Can’t Fight the COVID-19 “Flight to Quality”
Indeed, as long as users can convince all their peers to sign up to Zelf, there’s no doubt it could make peer-to-peer money transfer in Europe far easier – inspired by China’s ‘messenger bank’, WeChat. It also possibly speaks to Gen Zs and millennials’ short attention spans — an average of 8 seconds and 12 seconds respectively (apparently).
Fintech consultant Aman Kohli argues there’s likely a winning banking model lying within.
“From a ‘go to where your customers are’ perspective, this is right, and allows simple and direct interaction with customers. The more powerful [social media] platforms can give interaction as good as an app… [So] it will free up banks and others from doing half-hearted, limited functionality app,” he told Sifted. “I would consider [using] it.”
A fully virtual experience could certainly hold appeal for digital innate millennials — especially in the gaming world.
Zelf also acknowledges the fact that not everyone uses Facebook and our contacts are spread across different platforms, says Oxford University professor Pinar Ozcan, who teaches on fintech innovation at the Said Business School.
“This is probably a good attempt. It takes advantage of the fact social media are owned by different entities. So if it works seamlessly without opening different accounts, that would be interesting,” she tells Sifted.
See: Fidelity-backed crypto security startup Fireblocks launches ‘Secure Asset Transfer Network’
Notably, India’s Kotak Mahindra Bank and ICICI have already introduced a basic WhatsApp chatbot so clients can check their balance. Meanwhile, Zelf also began as a white-label provider for Russia’s MTS bank before branching out itself — suggesting this space is proving popular even among big institutions.
Trusting a faceless bank
Zelf’s enviably low cost-base is a badge of honour for the company.
“[We have] no delivery costs, no app support, no branches,” Zelf noted in an email to Sifted, adding it is was “built with profitability in mind”.
Still, it’s unclear if this extraordinarily ‘light touch’ will prove too light for its users. Gen Z — classified as those born after 1996 — are no fools and still require companies to win their trust, says next-generation fintech specialist and investor Yann Ranchere.
“You still need to convince them that you can be trusted. We’ve seen that across some apps, users do still have a genuine care for ‘is it safe,” he tells Sifted.
To guarantee users’ privacy, Zelf also put its faith in social media platforms’ claims to encryption — despite none being independently regulated or validated.
Nonetheless, Zelf — which is currently based in Latvia — has tried to establish its credentials by partnering with external banking platform Treezor, which is connected to Societe Generale. All users’ funds will be housed there, providing a layer of familiarity for those who read the fine print.
See: BNY Mellon Report: Global Payments 2020: Transformation and Convergence
Zelf has also focused on implementing a high level of security, offering two-factor-authorisation and SMS-messaging confirmation for payments.
Additionally, although it’s a grey area, it’s within European legislation to do light KYC up to £150. Beyond that, users must text a photo of their ID and proof of address, which Treezor will process on Zelf’s behalf within 24 hours (“We would not be a good tool for illicit activity”). The company, therefore, won’t yet be able to provide full services to under 18s, who need their parents’ permission to complete KYC.
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
| | |
|---|---|---|
| | |
Women In Fintech Will Play A Crucial Part In The Covid-19 Recovery Plan
Forbes | | June 1, 2020
The coronavirus has prompted the U.K.’s biggest government bailout of all time. The bill for subsidies and tax breaks for businesses impacted by Covid-19 has already reached more than £100 billion and will continue to increase.
This has prompted concern among some that rescue money is being wasted or exploited by companies that can withstand the pressure of the unprecedented crisis – while the most vulnerable entrepreneurs across the country, especially in highly innovative sectors such as fintech, are not getting an equal level of support.
Of particular concern is the impact on female-led fintech businesses. Women consistently find it harder to access finance than their male peers when trying to scale their companies, encouraging them to become inherently more resilient. However, the coronavirus crisis could also make matters worse, especially for female founders in this predominantly male fintech space.
According to Innovate Finance’s 2019 Venture Capital Investment Report, female founders make up just 17 percent of fintech companies and women receive only three percent of VC fintech funding.
See: Why venture capital firms need more women partners and entrepreneurs
This discrimination is counterproductive. Companies with diverse staff need to be valued even more during times of uncertainty when adjusting processes and implementing a recovery plan and especially when women are known to excel in creativity around change.
According to Harvard Business Review, women are resilient, results driven and better prepared leaders in the face of adversity - so why aren’t we doing more to support them?
How groundbreaking is the fintech industry?
Dr. Ruth Wandhöfer, Partner, Gauss Ventures, recently stated in a Business Cloud article that: “Paradoxically, there is currently a $300 billion annual credit deficit in funding for small businesses owned by women, which is expected to grow due to the economic fallout caused by Covid-19.”
She goes on to say that the fintech industry, “famed for adjective overkill like ‘disruptive’, ‘innovative’ and ‘groundbreaking’, trails behind when it comes to “a) delivering gender equality within the workforce; and b) identifying the business value of female-led entrepreneurship.” Is the fintech industry delivering gender equality and identifying the value of women?
As Dr. Wandhöfer points out, a LendIt survey found that only 37 percent of fintech workers are women, and just 19 percent are at C-suite level. Alongside this, All Raise reported that just seven percent of all VC deals in fintech during 2019 had a female CEO.
See: Fintech is Driving Financial Inclusion
In conversation, Dr. Wandhöfer explores how fintech funding has been challenged since the outbreak with fintech deals having the worst Q1 since 2016 and the worst funding Q1 since 2017.
“Not only has it been difficult to close planned rounds, but also initially established valuations have seen, sometimes significant, downward adjustments. Female-led fintechs are already a rarity that needs protecting. This crisis shows that there is still no equality when it comes to treatment around financing and it is now more urgent than ever to ensure that entrepreneurs in general are treated equally.”
Reiterating that women are underrepresented in the VC community, a significant part of the fintech ecosystem, she adds that “diversity certainly makes this business more creative and versatile, bringing a different perspective to assessing opportunities, including identifying female fintech leadership in the market. It is a virtuous cycle."
Angelica Krystle Donati –an advisory partner at Concrete, a London-based VC firm, also believes that more diversity within the VC community can bring new perspective and understanding about the challenges that women led businesses face, such as juggling family life, especially during a time of crisis.
“Women and minority-led firms are often smaller in size and therefore have less established banking relationships and are therefore less creditworthy. Women, who bear the brunt of childcare responsibilities, have had to compromise.”
Donati remains optimistic and believes that technology has provided the blueprint for how we can promote greater flexibility and support for female entrepreneurs running fintech businesses. Forcing everyone to work from home -and seeing that people can continue to work effectively, is changing perspectives that can be beneficial to founders that would otherwise be overlooked for funding.
See: 4 Digital Transformation Lessons that Banks Need to Learn from Covid-19
“Tech is the clear winner in this pandemic. The pandemic will engender long-term changes to the ways we live and work. Technology is playing an important role in our lives, given that if we didn’t have the option to log in and work remotely, we would be in serious trouble right now. More importantly, it’s allowing us to rethink and digitalize entire processes.”
Women in fintech and the Covid-19 recovery plan
Catherine Wines, Co-Founder of WorldRemit, believes that “there is no doubt that women have had to develop resilience in order to achieve their goals. They generally have to work twice as hard to obtain recognition and often face numerous rejections when trying to get funding for their business. This resilience gives them the added edge needed in time of crisis.”
Whether women excel over men in creativity may be challenged, but a more balanced view is an advantage to business. “Fintech has led the technology revolution and it is certainly true that many businesses have shown resilience in the current climate from moving overnight to working remotely to offering online solutions to both business customers and consumers,” Wines continues.
Resilience was key when shifting from the office to working from home and Liza Russell, CEO of Inbotiqa, says how “as a leader of a small business during Covid-19, I realise how ahead of the curve we were with good remote working practices in place.”
With work-life balance and flexibility now a more outspoken priority, Russell adds that because of the creativity of women “it’s important that we are invited into the board rooms when future strategies are being discussed in the recovery phase.” She goes on to say that the recovery plan will change how we work today, resulting in the commercial property market suffering as companies are able to communicate efficiently remotely.
See: Gender Bias Contributes to Blocking Female Founders Out of Investment & Venture Capital. We Need to Fix This.
“A 9 to 5 working day co-located with several hundred other employees is not necessary to be successful. Women are resilient and more receptive to change, we often multi-skill while managing work, home and families so are well-placed to implement the necessary changes to working practices,” Russell says.
Plumb agrees and says that
“women are key consumers, decision-makers on a majority of household consumption and of course, half the population so they of course are a critical part of the Covid recovery phase.” Carrasco affirms this point further. “Women will play a crucial part during the recovery phase because we make up 50 percent of the U.K. population. That statistic alone should be suffice to understand that women will be part of it.”
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
| | |
|---|---|---|
| | |
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.
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
| | |
|---|---|---|
| | |
Google and Gates Foundation to help spread digital payments in developing countries
Fortune | David Z. Morris | May 6, 2020
For more than a decade, Kenyans from the bustling capital of Nairobi to far-flung farms have had access to a digital payments service that was ahead of its time. M-Pesa, introduced in 2007 by Vodafone and Kenya’s Safaricom mobile provider, lets users send and receive money on their mobile phones, providing bank-like services for millions who had relied on cash and informal networks.
See: Can Fintech Make the World More Inclusive?
By 2012, Kenyans had registered 17 million accounts. And by making saving easier and small businesses more efficient, M-Pesa had helped lift 194,000 Kenyan households out of poverty, a study in 2016 concluded.
Now, a coalition of nonprofits and tech companies including Google and the Bill and Melinda Gates Foundation want to repeat those outcomes worldwide by making it easier for developing countries to build real-time digital payments systems. On Wednesday, they announced the formation of the Mojaloop Foundation, which will develop and promote a free, open-source real-time payments platform intended for nations and central banks. The Mojaloop Foundation’s founding sponsors also include the Rockefeller Foundation, the philanthropy and investing group Omidyar Network, and the financial technology startups Coil and ModusBox.
The initiative would help tie together a growing array of digital financial services. M-Pesa, which has expanded from Kenya to countries including Ghana, Egypt, and India, has inspired hundreds of imitators worldwide. But these largely privately-run systems are fragmented.
“Systems [like M-Pesa] are silos,” says Kosta Peric, deputy director of financial services for the poor for the Gates Foundation. That can mean friction and high fees to transact between systems. “Imagine a mobile phone system where you can only talk to people connected to the same provider. It’s useful, but only so much.”
Mojaloop is modeled on digital fast-payment systems such as the U.K.’s Faster Payments Service and Australia’s New Payments Platform. Building those systems, however, often involves big up-front technology development costs and politically difficult negotiations among a variety of players. Those challenges have slowed or stalled digital banking advances not just in developing countries, but even in the United States.
See: Estonian fintech askRobin scores $1.7M to bring ‘fair credit’ to emerging markets
Mojaloop is meant to reduce such roadblocks by providing a standard digital-payments blueprint. The software, which is publicly available via Microsoft-owned software repository GitHub, includes a directory for identifying account holders, a transfer system for routing payments, and a clearing and settlement layer that transfers funds among users’ financial institutions. The routing system relies partly on a technology called Interledger that was originally developed by Ripple, a company that aims to use Bitcoin-derived blockchain technology to connect banks.
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
| | |
|---|---|---|
| | |
