Revolut and Lune experience dramatic surge in demand; the first agricultural bank to open its doors in nearly 100 years is set to launch

What's the status of the digital divide between traditional banks and neo-banks? Mark O'Keefe, Founding Director at Optima Consultancy published an extract of one of their analysis on LinkedIn. It's worth the read:

"In a recent survey, nearly 40% of respondents said that since the COVID outbreak, they had discovered digital channels to be more useful than they previously thought and 44% of said they used their mobile banking apps more frequently after the COVID-19 outbreak began[1]...

User experience and digital design have never been so important and whilst consumers are attracted to brands for different reasons, they will only stay if experiences continuously meet their rising expectations. With this in mind, we have seen the traditional players up their game, finally closing what had been a growing disparity in feature support compared to their fintech rivals."

Read more here.

REPORT

Check out WhiteSight's three minute read on the Top 20 Neo-Banks of 2020. Their research aims to highlight the exponential momentum in the neo-banking space. The study ranks the neo-banks on the basis of valuation and compares them across various parameters such as user base, funding, investors, among others. Read more here.

NOW, ON TO THE SUMMARY OF LAST WEEK'S DIGITAL BANKING SPACE 

NEWS HIGHLIGHTS:

Online finance start-up SoFi is set to go public by merging with a blank-check company run by venture capital investor Chamath Palihapitiya. The merger with Palihapitiya's SPAC, Social Capital Hedosophia Corp V, will value SoFi at $8.65 billion. SoFi was last valued at $5.7 billion in private markets and has raised cash from venture capital giants such as SoftBank and Peter Thiel. Link here.

INDUSTRY HIGHLIGHTS:

The Monetary Authority of Singapore (MAS) announced the first four digital banks approved by the regulator. Link here.

Angel Investors Syndicate. Join now! Link here.

UNITED KINGDOM

Revolut and Lune experience dramatic surge in demand and the first agricultural bank to open its doors in nearly 100 years is set to launch.

Fintech companies such as Revolut and Luno are experiencing a dramatic surge in demand from customers who are rushing to invest in Bitcoin (BTC) and other digital currencies amid record-breaking and unprecedented cryptocurrency price increases. Fintech app providers that offer crypto trading, like Revolut, eToro, and Luno, are witnessing a sharp rise in demand for virtual currencies on their platforms, following a rise in the Bitcoin and Ethereum (ETH) price (along with other altcoins). Link here.

Revolut had more app downloads in 2020 than Monzo Bank and Starling Bank combined. Revolut’s app was downloaded 5.8 million times last year, according to data provided by Sensor Tower. This is reportedly more than two times the number of total downloads of competing banking challenger apps. Link here.

Also, as part of a complete overhaul of its paid plans, Revolut now offers its customers an innovative embedded insurance solution provided by Qover all over Europe, supporting them in their daily lives. On track to building the world’ first truly global financial super-app, Revolut was looking to integrate a range of innovative digital insurance products that deliver added value to the daily life of their customers. Link here.

B-North, an upcoming Manchester-based challenger bank for small and medium enterprises (SMEs), has raised £250,000 in funding. It also inked a deal with Channel 4 Ventures. The Greater Manchester Combined Authority (GCMA), a seed investor in B-North, provided the investment. Channel 4 signed an advertising-for-equity deal. B-North, which has yet to receive a banking license, is hoping the latter will help it raise awareness. Link here.

Cashplus signed a definitive agreement to acquire the current account portfolio of icount for an undisclosed sum. The deal will see five thousand accounts and £2 million in monthly transactions migrated from icount to Cashplus and is expected to close in early 2021 as the first UK fintech acquisition of the year. The consolidation deal comes with Cashplus in the final stages of its application to become a full UK bank. Link here.

Oxbury Bank Plc, the specialist lender for farmers, says it will be the first new agricultural bank to open its doors in nearly 100 years. Wheatsheaf’s investment in Oxbury, first reported by The Telegraph, means that the Duke of Westminster, Hugh Grosvenor, is indirectly a shareholder in the venture. Oxbury’s launch comes just under 12 months after Oxbury, led by CEO and ClearBank® co-founder James Farrar, received its banking license from the Bank of England’s Prudential Regulation Authority and the Financial Conduct Authority. Link here.

EUROPE

Unicorn Alert (Mambu), Orange Bank acquires Anytime, and TagPay raises €25 million.

Mambu, the market-leading SaaS banking platform, announced its latest funding round of €110 million in new capital. This round was led by TCV, whose investments include Netflix, RELEX, Spotify, and WorldRemit. Additional investment was received by Tiger Global Management and Arena Holdings, as well as existing investors Bessemer Venture Partners, Runa Capital and Acton Capital Partners. Link here.

Orange Bank has acquired French neo bank Anytime, extending its app-based services to the freelance and SME market. The acquisition gives the telco a foothold in the small business banking market, having launched three years ago as a pure-play consumer bank. Profitable since 2018, Anytime has grown by offering business accounts, payments and expense management tools that make life easier for small businesses, including automated accounting and invoice management. Link here.

Russia’s Tinkoff Bank has announced the launch of a new 2.0 version of its voice assistant Oleg. The updated voice assistant will enable customers to develop their own mobile concierge along with custom features. Users can also choose the assistant’s name, voice and gender, set up instructions to handle different calls from people on their contact list, as well as calls from unknown numbers, create their own greetings, etc. Link here.

TagPay, a core banking provider in which Société Générale holds a minority shareholding, has secured an investment of €25 million from Long Arc Capital to strengthen its sales, product and technical teams and to fund growth. The investment gives the New York-based private equity firm a majority interest in TagPay, which has previously raised €7 million since launching its first core banking product in 2016. Link here.

UNITED STATES

Green Dot launches mobile bank, BBVA to shut down Simple Finance, and Oxygen raises $17 million in a Series A.

Green Dot Corporation launched a mobile bank, called GO2bank, targeting the two in three Americans "living paycheck to paycheck". GO2bank customers will get up to $200 of overdraft protection, access to their pay or government benefits early, high-interest savings, and the chance of a credit card with no credit check. Link here.

BBVA told users of Simple Finance — the pioneering mobile and online banking app that it acquired for $117 million in 2014 — that it is planning to shut down the service, moving accounts to BBVA’s USA business in the process. The move is part of an ongoing effort at BBVA — which had been an active investor and acquirer of startups — to streamline its business as it works on closing a merger with PNC. Link here.

Debuted last month, Chase's in-app virtual assistant will be rolled out in full throughout 2021. The Digital Assistant allows users to type out inquiries and commands related to balances; account and routing numbers; replacing, locking, and unlocking cards; and paying bills and transferring money, among other functions. The assistant will then provide answers or perform the requested actions. Link here.

US-based digital banking platform Oxygen has raised $17 million in Series A funding from a raft of investors. Among “celebrity” endorsements, its backers include from Runa Capital, S7V, 1984, EFG Hermes, Rucker Park Capital, and Inventures. Oxygen “is designed from the ground up” to provide banking services to consumers and small businesses. Link here.

Chime and Current used their balance sheets to make select clients' stimulus payments available to them on December 29—the day the federal government started sending payments to banks, meaning that those customers got their payments before clients of established incumbent banks. Providing early access to stimulus funds is a reputation-boosting move for neobanks and could be a potent customer retention and acquisition tool. Link here.

Venmo has rolled out a feature that lets some customers cash paper cheques - including government stimulus cheques - within its app. Available to "select" customers, the Cash a Check feature will allow people to cash printed, payroll and government cheques directly from the Venmo app. Customers take a picture of the cheque and send to their account for review using the Venmo app, after which the money is deposited in their account, within minutes. Link here.

Onfido, announced a new version of its award-winning identity verification and authentication service on Salesforce AppExchange, empowering Salesforce customers in financial services, insurance and trusted marketplaces to integrate remote identity verification and authentication into their existing workflows. In today’s climate, it is important for banks and insurers to expand their branchless experiences in order to continue to scale their customer base. Link here.

LATAM

N26, a German digital bank, received authorization from the Central Bank to operate in Brazil. The company, which had announced plans to operate in the country in 2019, has been offering a waiting list on its website for a few months. Almost two years after announcing that it would come to Brazil, the German digital bank finally received the authorization. Link here.

AUSTRALIA

Digital lending and payments provider WLTH has announced its official launch, in an effort to refresh the financial services industry in Australia. The neo-financial services company will launch with high ambitions for the market, with growth projections of $1.23 billion worth of residential and commercial loans by the end of FY22. Link here.

Listed neobank Douugh hopes to tap into the growing Millennial investment space with the proposed acquisition of Australian FinTech Goodments for $1.5 million. Under the all-scrip deal Douugh would purchase the entirety of Goodments and see the fintech’s founder and CEO Tom Culver join the neobank’s management team as head of Douugh Wealth. Link here.

ASIA

Neat, a Hong Kong based FinTech company, announced it has become a member of the Visa network and will issue its own Neat Visa card for businesses incorporated in Hong Kong. Link here.

Citi and Grab expanded their partnership in consumer lending with the launch of the bank’s first API-enabled lending capability with Grab in Asia Pacific. Beginning with Singapore with more markets in the region to follow, existing and eligible Citi credit card customers can apply for a personal instalment loan (or Citi Quick Cash) through the Grab app via API. Link here.

MOVERS AND SHAKERS:

TrueLayer, the leading technology company building financial infrastructure that’s open to everyone, has announced that James Morton has joined the firm as UK Country Manager. A highly experienced commercial manager and payments specialist, James will define and manage commercial strategy in the UK, alongside Truelayer’s Chief Revenue Officer Max Emilson. Link here.

Contis announced the appointment of Andrea Ramoino as Chief Strategy Officer. Andrea joins the executive team with responsibility for corporate strategy and global expansion. Andrea is an expert product and marketing transformational leader, with over 15 years’ experience across many industries including Fintech, Crypto, AI and SaaS. 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!

NOTE: This article was featured in my weekly newsletter on January 11th, 2021. 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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