Zopa Group posts £18.1m loss, Metro Bank sells a third of its mortgage book, and Wirex become Visa principal member

To kickstart our weekly news we cover Sifted’s Fintech Analysis on what the data tells us of the global boom in digital banks.

There may be hundreds of neobanks, but a small handful lead the pack. The graph below shows the 12 most downloaded neobanks worldwide, as of December 2020.

Read more here. 

PODCAST

This week's podcast recommendation belongs to Wharton Fintech and their episode. Miguel Armaza sits down with Santiago Suarez, Co-Founder & CEO of Addi, the leading POS financing platform in Latin America, backed by Andreessen Horowitz, Foundation, Monashees, Quona, and Village Global. Prior to returning to his native Colombia to launch Addi, Santiago started his career in finance in New York City at JP Morgan, and later moved to Silicon Valley for a leadership role at Lending Club. Listen here.

INTERVIEW

Mark Mullen starts our interview with a contradiction — 2020 has been good for his bank but he wishes it had never happened.

“We’ve had a pretty successful year as a business, in terms of the progress we’ve made in the service we deliver customers, the growth of earnings, the implementation of our strategic projects,” the Atom bank chief executive says.

Atom’s success has come in part because of a quick pivot to business lending early in the crisis.

Read more here.

REPORT

Have you checked the third chapter of Arival's Unpacking Neobanks for SMEs? This chapter focuses on Costumer Support.

A major factor in how applicants rate the onboarding process is the timely availability of customer support. Whilst having a world-class customer service may not make the entire user experience, a negative one will leave a bad impression, no matter the flawless UI design or the extensiveness of its integrations. It would be a shame to not invest in a reliable customer support infrastructure by including Live Chat, auditing the CS agent reply quality, and stressing the importance of minimizing reply times, if the other core parts of the user experience are sound.

Read more here.

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

NEWS HIGHLIGHTS:

Hussein Ahmed is the founder and CEO of San Francisco-based challenger bank, Oxygen. He’s not a stranger to startup chaos — he founded two other companies before starting Oxygen. There are challenges that come with starting a challenger bank. And as the founder and CEO of one, you’re faced with the task of managing all of them. Read this piece that covers a day in the life of Hussein Ahmed, founder & CEO of Oxygen. Link here.

INDUSTRY HIGHLIGHTS:

Chime offers the most sought-after mobile banking tools in 2020 among the four largest US Neobanks, according to the inaugural Insider Intelligence US Neobank Competitive Edge Report. Link here.

Angel Investors Syndicate. Join now! Link here.

UNITED KINGDOM

Zopa Group posts £18.1m loss, Metro Bank sells a third of its mortgage book, and Wirex become Visa principal member.

Zopa Group reported broadly flat pre-tax losses of £18.1m for 2019, as increased earnings from its peer-to-peer lending platform were offset by heavy investment into its new bank. Zopa’s P2P platform saw its profits tick up to £575,000 for the year ended 31 December 2018, compared to £145,000 the previous year. Link here.

Metro Bank has sold a third of its residential, owner-occupier mortgages to NatWest, impacting 13,000 homeowners. The portfolio mostly consists of repayment mortgages with an average of £238,000 outstanding, a weighted average loan to value (LTV) ratio of around 60% and an average remaining fixed-rate term of two and a half years. Link here.

Wirex, has become a principal member of Visa in Europe, a highly respected achievement for the London-based business with ambitious plans for 2021. Having successfully completed Visa’s FinTech Fast Track Programme, Wirex have secured the sought-after principal membership from the payments company. Link here.

Global tech company Vacuumlabs has announced a partnership with payment processing firm Global Processing Services (GPS). With this collaboration, GPS – which is certified by Mastercard and Visa to process credit, debit, or prepaid card transactions globally – aims to “bring fintech innovation within reach of new market entrants and ensure it is more efficient for experienced players,” it said in the statement. Link here.

Zumo, the digital wallet and payments platform, has launched Zumo Smartfolio, the latest of the app’s innovative features enabling users to view and manage their overall crypto assets and track the relative position of each of their exchanges in a simple and intuitive way. Link here.

EUROPE

Bunq grows mortgage portfolio by 400% in less than 6 months, and online sales up 55% during second lockdown, according to N26.

bunq has grown its mortgage portfolio fourfold in less than six months. The digital bank first announced that it would be offering its customers mortgages, in partnership with third party broker, asset manager NN IP, back in July of this year. NN IP would offer the loans through bunq’s app, with bunq diverting around €100m worth of customer deposits to help fund the venture. Link here.

Tymebank said on Tuesday that it was tracking slightly behind its projections to attract clients, largely due to the national lockdown and sustained financial pressure on consumers even though it managed to grow its customer base to 2.5 million by the end of November. Link here.

New data from mobile bank, N26 reveals a major online Christmas spending boom, with a 44% increase in ecommerce volumes among Irish consumers during the second lockdown, versus the six weeks prior. The bank also compared its data against the previous lockdown period from March to May, which showed that e-commerce volumes were 55% higher during the second lockdown. Link here.

Also, N26, valued at $3.6 billion in its May fundraising, is targeting breaking even on an operating level by end-2021 and is eying at least one more financing round before going public in 2023 at the earliest, its founder and Chief Executive said. Link here.

UNITED STATES

Robinhood agrees to pay $65 million to settle SEC charges, and PayPal gets into Bitcoin but draws mixed response.

Per a press release, the FV Bank announced that it had been given permission by the Puerto Rico regulatory Office of the Commissioner of Financial Institutions to start offering bitcoin (BTC) and ethereum (ETH) custodial services to both retail and institutional investors – with other tokens and crypto-to-fiat exchange services also in the pipelines. Link here.

PayPal account holders in the US will be able to buy, hold, and sell cryptocurrencies, including Bitcoin, Ethereum, Bitcoin Cash, and Litecoin, within the PayPal digital wallet. PayPal will also expand the features to its P2P payment platform Venmo and select international markets in the first half of 2021 through a partnership with Paxos Trust Company, a regulated provider of cryptocurrency services. Link here.

Robinhood Financial agreed to pay $65 million to settle government charges that it failed to disclose the full details of its dealings with high-speed traders and didn’t get the best prices for customers trading on its app, the Securities and Exchange Commission said Thursday. Robinhood and other retail brokerage firms can bring in revenue by routing customers’ orders to high-speed traders and other big investors, which in turn pay for the right to execute many of the trades in hopes of making a profit. Link here.

Radius Bank, a forward-thinking digital bank, announced the recent launch of its enhanced online business banking platform and mobile app for small business clients. The overhauled user experience was the result of the bank’s continued partnership with NYC-based financial technology company Narmi, which also powers Radius’ consumer online banking and companion mobile app. Link here.

Frost, accessible via your smartphone, will use intelligent functionality to allow users to set up an account and manage transactions, including bills, direct debits and balance transfers, all from one application, thereby saving them time and money. The mobile account is due to launch in the first half of 2021. Link here.

CANADA

Mogo, a FinTech company offering customers solutions to manage and control their finances through its mobile app, has announced its plan to make an initial corporate investment of up to $1.5 mn in bitcoin and will consider additional investments in 2021 as it monetizes its $17 mn investment portfolio. The financial investment is built on Mogo’s product development related investments in bitcoin over the last several years. Link here.

AUSTRALIA

In a Series D funding round, Aussie Challenger Bank Judo has raised $280 million in capital. The capital raise comes 7 months after the bank raised $230 million in Series C funding. After the Series D funding, Judo Bank’s valuation is at $1.6 million, 60% up as compared to its May numbers. The neobank did not reveal the name(s) of its investors. Link here.

ASIA

South Korea’s internet-only Kakao Bank under chat operator Kakao Corp. came under scrutiny for the first time since launch in 2017 on concerns over risk management amid fast expansion. The FSS said Thursday it issued an administrative warning to Kakao Bank related to its risk management work on Dec. 7. Link here.

Indonesian ride-hailing app Gojek has bought a 22.1% stake in local bank Jago, with the aim of providing digital banking services on its GoPay mobile platform. Bank Jago is one off the smallest banks in Indonesia, ranking just 45th in terms of total assets. Gojjek paid close to $200 million for its stake in the business. Link here.

MIDDLE EAST

SadaPay has announced that it has been granted the in-principal approval by the State Bank of Pakistan (SBP) for an Electronic Money Institution (EMI) license. This approval allows SadaPay to ready its operations for the pilot phase, during which the digital wallet will be available on a limited scale, under supervision of the regulator. Link here.

MOVERS AND SHAKERS:

Rizq is delighted to announce Mushtaq Hussain as our new CEO, effective immediately. Mushtaq is a very talented and innovative professional, who is well positioned to lead Rizq into the next phase of expansion and development. His extensive fintech and management consulting experience will be of huge value, as we keep driving innovation and growth at Rizq. Link here.

The Swedish neobank, Northmill Bank, which has the vision of improving people's financial life, has recruited Tobias Palmborg as new Chief Technology Officer, CTO. Most recently, Tobias comes from a role as CTO at the online gambling provider Netent. He also has a background as Development Manager at Unibet and Engineering Manager at Klarna. His mission at Northmill Bank will be to scale up and accelerate the technology and product organization, strengthen the connection to the core business, and prepare for continued expansion. Tobias also takes a seat in the neobank's Management Team. 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 December 28th, 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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