Almost every Challenger Bank gets compared to another. The comparisons, for the most part, are about their transaction fees, whether they offer costly international card transactions or not, or their interest rates on their savings accounts.
And for the most part, customers are used to making decisions on who their primary bank is going to be based on such criteria. Or the trust that they have for each financial institution.
Listen to this though, younger generations are more prone to trying out new banking apps and challenger banks in general, in order to find the one that will make banking accessible, understandable and most importantly easy to use! Challenger banking apps often look like the social media platforms, which younger generations are so used to interacting with on a daily basis.
So, based on this, I decided to run another comparison, like the one I had made for Revolut vs N26, but focusing on the Features and UX one is able to find in Starling and Monzo.
Find out more here.
Fintech Alliance will be bringing together four leading Fintech Investors to debate the path forward for challenger banks across the globe in a Webinar, next week. Collectively, the panelists represent geographies spanning the UK, US, Europe, India and Southeast Asia. Outward, Naspers and Clocktower are known for their investments in challenger banks such as Monese and Chime, whilst Atomico will bring a different view given they are yet to make a bet in this space. Isabel Woodford, Sifted’s Fintech journalist, will be moderating.
Sign up here.
For many CEOs, launching on the cusp of a pandemic and in the wake of Brexit would be a daunting prospect, but CEO of Stake, Matthew Leibowitz is up for the challenge. Australian investment platform Stake has only been in the UK since February 2020, but since then has amassed a sizeable customer base, most of whom are much more bullish than their friends down under.
Read more here.
Unpacking Neobanks for SMEs is an article series by Arival Bank analyzing the SME neobanking landscape from the lens of the user experience and journey. Over the last few years, a sub-segment of neobanks have arisen out of a mission to better serve small businesses who are historically underbanked. What are SME neobanks doing well in terms of providing a good user experience? What can be improved? What are the future trends of the space? To attempt to answer these questions, Arival Bank decided to undertake a research study.
Learn more here
NOW, ON TO THE SUMMARY OF LAST WEEK'S DIGITAL BANKING SPACE
JPMorgan Chase & Co, the largest American bank by assets, and Lloyds Banking Group plc, a London-based UK's largest retail bank, have expressed interest in buying Starling Bank. The potential transaction, which will be the first major acquisition of a neo bank by an established lender, would allow its buyers to capture Starling's over 1.8 million customer accounts with more than GBP 3.6bn in deposits. Link here.
Angel Investors Syndicate. Join now! Link here.
Monzo quietly adds £60m to its last funding round, and Revolut launches early salary feature.
Starling Bank has added another fintech to its marketplace. The bank has joined forces with digital wealth manager Nutmeg to offer the latter’s services to personal and sole trader account holders. Nutmeg’s integration lets customers track their pension and investment balances all within Starling’s app. Link here.
Digital bank Monzo has quietly topped up its earlier fundraising round with a cool £60m according to TechCrunch. The challenger bank raised the money at the same reduced valuation as it did back in June 2020, which was much closer to its 2018 valuation of £1.25bn. Link here.
Revolut has launched an early salary payment feature, much like Monzo’s ‘get paid early’ feature. The new feature will allow three million Revolut customers, who meet the minimum requirements, to receive their pay cheque one day early each month. Revolut’s new addition to its ‘financial super app’ is one step closer to the digital banking service becoming a one-stop-shop for all of its customers’ needs. Link here.
Stripe launches Stripe Treasury, Teen banking app Step reaches for the stars to raise $50 million, and Point72-backed Productfy Raises $2.35M For Fintech Apps.
Stripe now enables platforms to embed financial services, enabling their business customers to easily send, receive and store funds. Furthermore, Stripe is enabling standardized access to banking capabilities via APIs by expanding its bank partner network to include Goldman Sachs Bank USA and Evolve Bank & Trust as US partners. Finally, the company is also developing its bank partner network with Citibank N.A. and Barclays as global expansion partners. Link here.
Teen banking app Step has raised $50 million (37.4 million pounds) from investors led by Coatue Management alongside celebrities such as singer Justin Timberlake, influencer Charli D’Amelio and former quarterback Eli Manning. Step, which offers teenagers a bank account connected to a secured spending card and peer-to-peer payments, also said it had secured funding from existing backers including Stripe, Will Smith’s Dreamers VC, CrossLink Capital and Collaborative Fund. Link here.
A new Seattle startup called Secure is launching to help employers offer a financial wellness benefit to workers beyond their paycheck in the form of an emergency savings account (ESA). The company, which just spun out of Pioneer Square Labs, provides software that lets employees make automatic, post-tax payroll deferrals into a customized savings account. Link here.
Productfy brought in a $2.35 million seed round to create a platform that enables non-bank companies to develop and launch their own fintech applications. Point72 Ventures led the round and was joined by Envestnet Yodlee Incubator. It gives Santa Clara-based Productfy total funds raised of approximately $2.4 million since the company was founded in 2018, according to Duy Vo, founder and CEO of Productfy. Link here.
One of Europe's largest fintechs, TransferWise, will be able to connect directly into Australia's real-time payments system and further reduce foreign exchange fees, after the prudential regulator awarded it a restricted banking licence on Monday. The Australian Prudential Regulation Authority said the London-based foreign exchange disrupter had been granted a licence to provide a purchased payment facility as a limited "authorised deposit taking institution". Link here.
Indian neobank Finwego is attempting to be the first bank built for the education sector in the country. Founded in 2018 and based in Chennai, the challenger claims to work with more than 700 institutional partners. The neobank offers loans of up to $7,000 to individuals and $34,000 for institutions. The funds are secured by bank and non-bank partners holding Reserve Bank of India (RBI) licences. Link here.
This ends my weekly digest. Let me know if there are any questions or news/insights worth mentioning in next week's digest. Until the next!