Monzo doubled pre-tax losses, Revolut added Stellar lumens (XLM), Tide announces new partnership

Did you know most founders of digital banks don’t have professional tech backgrounds? According to an analysis by Sifted and CFTE, most founders of digital banking apps start either in banking or consulting.

Find out more here.

PODCAST

This week we highly recommend Breaking Bank’s latest episode. Check out Episode 347: Identify Infrastructure Goes Global.

Join Brett King and Dave Birch as they bring in the leading identity specialists Jumio and Metro Bank as they talk about their journey to digital.

Listen here.

Also, be sure to check out The Twenty Minute VC latest episode with Clay Wilkes, Founder & CEO at Galileo. It’s a must hear. Listening in as they answer the following questions:

  • Why the unbundling of fintech will continue?
  • How VCs are propping up the neo-banking industry?
  • Why we need a new framework to value businesses today?

Listen here.

REPORT

Many Australian banks miss the mark when it comes to money management, alerts, and self-service features on their mobile apps, and the absence of these services hurts the customer experience. That’s a key finding in a new report from Forrester Research into Australian mobile banking apps called Mobile Banking Apps Take Center Stage As Australians Embrace Digital Banking.

Read more here.

UK

Monzo more than doubled its pre-tax losses, Revolut added Stellar lumens (XLM), and Tide announced a new partnership.

Monzo has more than doubled its pre-tax losses in the last year, according to the company’s annual report for 2019–2020. The fintech saw losses grow to £115.4 million; 2x the previous year, where it logged pre-tax losses of £50.7 million. This is partly fuelled by heavy investment last year — including an expansion to the US and application for a bank licence there. Link here.

Revolut has added Stellar lumens (XLM) in its cryptocurrency offerings, allowing its users to buy and sell the token. The new listing happened due to “overwhelming demand” for XLM among Revolut users. It has become the sixth token in the challenger bank’s offering list, including Bitcoin, Ether, Bitcoin Cash, and XRP. Revolut customers can buy, sell, and hold these digital currencies using their regular accounts. Link here.

Also, Revolut has called in Moneysupermarket's white-label technology business to help launch a price comparison service. Moneysupermarket's Decision Tech is powering Essentials, a service that allows Revolut’s UK customers to switch and save on their bills for gas, electricity, broadband, mobile, and TV. Link here.

Flex, a new money management service, has launched with the aim of “using technology to solve problems for everyone.” The money management service promises customers can open an account in minutes and offers both a free and subscription service. FlexPRO costs £5 per month and gives customers access to a virtual card and the use of Apple and Google Pay, features that non-fee-paying customers can’t get. Link here.

Beanstalk, a savings and investment app focused on children’s savings, has launched today after a successful beta trial. Promises to “revolutionise the way families put money aside for their children’s future,” through ISA accounts that can be opened in minutes. Beanstalk was founded by two city veterans, Julian Robson and Cem Eyi, who saw a gap in the kid-focused savings market and want to “drag children's savings kicking and screaming into the 21st century.” Link here.

A London-based startup called ComplyAdvantage, which has built an AI platform and wider database of some 10 million entities to help identify and track those involved in financial crime, is announcing a growth round of funding of $50 million to expand its reach and operations. Specifically, the plan will be to use the funding for hiring, to invest in the tools it uses to detect entities and map the relationships between them and to bring on more clients. Link here.

Tide announced a new partnership with London-based FinTech DueDil to further improve their account opening experience. The partnership will see Tide using DueDil’s company intelligence platform, providing insights on over 50 million companies worldwide, to speed up mandatory Know Your Customer (KYC) checks and provide a quicker and more seamless process for small businesses to open a Tide account. Link here.

EUROPE

Bunq has become one of the first digital banks to enter the mortgage market, announcing a plan to start lending €100m in its native Holland. It marks Bunq’s debut into lending — having never ventured into other mediums like overdrafts or personal loans — and raises questions about whether rivals such as N26 or Monzo will follow suit. The Dutch fintech will not offer mortgages directly to its customers; instead, it will use a third-party broker, who will tap into Bunq’s capital behind-the-scenes. Link here.

USA

Chime is launching its first branding campaign that focuses on the diversity of its client base. The emotion-driven spot aims to celebrate Chime’s mission to make banking better for everyone, because financial peace of mind should be available to everyone. Link here.

JPMorgan Chase partners with fintech start-up Marqeta to launch 'virtual' credit cards. Instead of receiving a plastic version in the mail, JPMorgan Chase commercial cardholders will be able to spend immediately in mobile wallets such as Apple Pay, or Samsung Pay. Marqeta provides that same technology to DoorDash and Instacart, whose gig-economy workers use these "virtual" cards in the delivery process. Link here.

Galileo announced its integration with Plaid, giving Galileo clients a streamlined experience in the bank authentication process for its customers. With this integration, joint clients of Galileo and Plaid may offer their customers an easy way to connect their bank accounts and initiate ACH transfers. Link here.

Point, a new challenger bank in the U.S., is launching publicly with an invite system. While Point is technically providing a bank account, the company focuses on rewards associated with a debit card. Link here.

Varo Money Inc. Chief Executive Officer Colin Walsh encountered skepticism when his technology startup set out five years ago to become a full-service digital bank. Now Varo is the first consumer fintech to receive a new national bank charter from the U.S. government -- joining only a handful of recipients since the 2008 financial crisis. The feat, announced by the San Francisco-based firm Friday, lets the company offer a full range of services backed by the Federal Deposit Insurance Corp. Link here.

Australia

Kong Inc., the leading cloud connectivity company, today announced that Xinja Bank, Australia’s fully digital neobank, has deployed Kong Enterprise to power its modern, microservices-driven mobile banking platform. With Kong’s service connectivity platform, Xinja can now more effectively connect, secure and manage all of its APIs and services, while ensuring architectural flexibility and scalability as the company continues to innovate and grow. Link here.

Furthermore, prior to COVID-19, Australian neobank Xinja was on top of the world, having sealed a $433 million investment from Dubai World Investors. However, with the pandemic putting that deal on ice. Xinja has been forced to shore up local equity as it rides out one of the most uncertain economic periods in Australia’s history. Meanwhile, it’s set to launch a share trading platform before conventional products like mortgages or personal loans. Link here.

Up Bank announces the beta release of "Up API", enabling people (with a bit of technical knowledge) to access their account data programmatically, outside of their smartphone app. Their API gives client’s the power to develop their own software that can retrieve balances (spending and saving) and transactions. It also notifies in real time about new activity. Link here.

ASIA

Thought Machine, the cloud native core banking technology firm, with its APAC headquarters in Singapore, today marks its entrance into the Asia Pacific market by announcing the signing of an additional $42m in funding for its series B round. This round extension will close in early August and is led by Eurazeo Growth, with British Patient Capital and SEB also coming in as new investors. Link here.

The valuation of TransferWise, a fintech firm focused on foreign-exchange transactions, has risen to US$5 billion following a secondary share sale worth US$319 million. The valuation has risen 43 per cent since the startup raised US$292 million in May 2019. The UK-based company, which has its Asia-Pacific base in Singapore, now counts US hedge fund D1 Capital Partners and Microsoft co-founder Paul Allen's Vulcan Capital as new investors. Link here.

NayaPay has joined the Visa Fintech Fast Track program, speeding up the payment company’s integration process with Visa and enabling NayaPay to leverage the reach, capabilities, and security of the Visa global payments network. Through the Fast Track program, NayaPay has access to Visa’s growing partner network, technology and resources to accelerate innovation in digital payments in Pakistan. Link here.

FamPay is India's first neo-bank or payment app that offers cashless facilities for teenagers. It has launched its first numberless card, called FamCard. Teenagers can use this card to make online payments like Unified Payments Interface (UPI) and Peer-to-Peer (P2P) transactions. It can also be used offline. Link here.

Niyo, India's leading and fastest growing neo-bank has acquired Goalwise, a new-age mutual funds investment platform. Niyo Co-founders Vinay Bagri (CEO) and Virender Bisht (CTO) have picked up majority stakes in the start-up, along with Niyo, in a cash-and-stock deal for an undisclosed amount. Link here.

DBS is working with Singapore's government to pilot the use of the SingPass face verification technology to sign up customers to digital banking services. Managed by the Government Technology Agency of Singapore (GovTech), SingPass is national identity system that lets people on the island interact with government agencies and private firms online. With Covid-19 accelerating take-up of digital banking, DBS is piloting the use of SingPass face verification technology as a way to simplify the online signup process. Link here.

NOTE: This article was featured in my weekly newsletter on August 4, 2020. Do you want to be the first to read the next weekly overview? Sign up for my Weekly Digital Banking Newsletter here.
 
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