Finovate Global

Oh Canada! OneVest Secures $3.9 Million; Square Loans Arrives; CBDCs Garner Political Opposition

Oh Canada! OneVest Secures $3.9 Million; Square Loans Arrives; CBDCs Garner Political Opposition
By David Penn Posted on
Categories: Finovate Global

This week on Finovate Global we’re taking a look at some recent fintech developments in Canada.

On the fundraising front, embedded wealth management platform OneVest announced a $3.9 million (CAD $5 million) seed funding round this week. The investment was led by Luge Capital and takes the Canadian fintech’s total funding to $5.5 million (CAD $7.1 million).

The funding will help OneVest, which was founded in 2021 and is headquartered in Calgary, Alberta, to grow its team, expand sales, and support product development. The company offers digital wealth management services that can be embedded into consumer-facing products via APIs. The technology integrates well with multiple fintechs and financial institutions, empowering them to combine wealth management and investment functionality into their own financial solutions.

“People are increasingly demanding a more seamless and simple experience where financial products are integrated into their everyday lives,” OneVest co-founder and CEO Amar Ahluwalia said. “Our mission is to make investing more accessible to everyone, and available anytime, anywhere and through any channel.”

The first company to take advantage of the new offering is Neo Financial, which leveraged OneVest’s platform to launch its new actively managed wealth platform, Neo Invest.

Square announced this week that it is bringing its financing solution to business borrowers in Canada. Square Loans leverages transaction data to create and bring customized offers to eligible sellers, giving them a straightforward, paperwork-free application process. Funds are available the next business day and businesses are charged a single, upfront loan fee that is paid back automatically as a set percentage of daily card sales with Square. This arrangement enables borrowers to make larger repayments when sales are strong and smaller repayments when sales are weaker.

“From our earliest days, Square has focused on building easy-to-use tools and services to empower entrepreneurs to succeed on their own terms,” Head of Square Alyssa Henry said. Since Square Loans launched in the U.S. and Australia, the company has provided more than $9 billion in financing to more than 460,000 businesses with an average loan size of $6,750.

For all the interest – an even enthusiasm in some quarters – over CBDCs, not everyone is on board. This week we learned that Pierre Poilievre, leadership candidate for Canada’s Conservative Party is not only unimpressed by the opportunities provided by CBDCs, he also wants to enact a ban on the technology.

But don’t mistake Poilievre for a Luddite. The man considers himself a blockchain backer and has, in fact, pledged to make Canada “the blockchain capital of the world.”

“A Poilievre government would welcome this new, decentralized, bottom-up economy and allow people to take control of their money from bankers and politicians,” the Conservative Party politician said in March. He added that an embrace of blockchain would “expand choice” and “lower the costs of financial products” as well as providing a wealth of tech-oriented jobs and opportunities for entrepreneurs in Canada.

As such, Poilievre’s CBDC skepticism seems to be more related to his attitude toward central banks than his opinion on blockchain technology. He has promised that, in addition to a CBDC ban, he would support an audit of the central bank’s balance sheet – a common commitment from conservative politicians in the post-Global Financial Crisis era. This would include a review of the central bank’s bond buying program during the pandemic. Poilievre has blamed the central bank economic response to COVID for the country’s currently high inflation rate.

Both a Canadian CBDC and a Poilievre mandate are some ways away, if that. The Canadian central bank has been working on a CBDC for year, with the project still in development stage. Poilievre, while the front runner to become the leader of the opposition Conservative Party, would nevertheless have to wait until 2025 at the earliest to challenge Canadian Prime Minister Justin Trudeau.

Here is our look at fintech innovation around the world.

Central and Eastern Europe

Middle East and Northern Africa

Central and Southern Asia

Latin America and the Caribbean

Asia-Pacific

Sub-Saharan Africa

Photo by Brett Sayles

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Scalable Capital Enters Italy, Moojo Secures Pre-Seed Funding; Commerzbank Seeks Crypto Custody License

Scalable Capital Enters Italy, Moojo Secures Pre-Seed Funding; Commerzbank Seeks Crypto Custody License
By David Penn Posted on
Categories: Avaloq, Finovate Global

This week on Finovate Global we’re highlighting some of the fintech news from Germany.

Scalable Capital, a digital investment platform based in Germany, announced the launch of its neo-broker and new cryptocurrency offering Scalable Crypto in the Italian market. The new solution, introduced in December, will enable Italian investors to buy stock, exchange-traded funds (ETFs), popular cryptocurrencies, as well as set up savings plans for free. The company’s Scalable Broker offering will give investors access to more than 6,000 international stocks, with all trades routed through regulated European exchanges to avoid FX fees. Scalable Broker also provides access to more than 1,500 ETFs and more than 1,700 mutual funds. Additionally, Scalable Broker is available in different price configurations: a free version with commission-free savings plans and trading for stocks and ETFs that charges a fee of EUR 0.99 for transactions in other instruments, and a “Prime” version with an additional trading flat rate enabling unlimited trades for a monthly fee of EUR 2.99.

Scalable Crypto enables investors to buy and sell common cryptocurrencies, which are held as securities in the client’s brokerage account. Bitcoin, Ethereum, Litecoin, and XRP are among the cryptocurrencies available for trading, each of which is based on exchange-traded crypto products (ETPs) for easy and secure transactions on regulated exchanges.

“The online broker with savings plans and crypto is just the beginning,” Scalable Capital founder and co-CEO Erik Podzuweit said. “Our goal is to introduce our complete investment platform to the Italian market. We will make even more services available to our Italian clients, such as our leading robo-advisor.”

Scalable Capital made its Finovate debut at FinovateEurope 2016 in London.

Moojo, a new startup that helps freelancers, creators, and gig economy workers improve their invoicing process and get paid faster, announced $2 million in seed funding this week. The round included participation from APX, Helvetia Venture Fund, MS&AD, neoteq Ventures, and Red Swan Ventures

In addition to its instant payments and invoicing solutions, Moojo plans to introduce insurance and lending products in the future. The company has partnered with Hiscox to facilitate the development of insurance products.

“The team and their approach to embed insurance into their offering has convinced us,” Markus Niederreiner, CEO of Hiscox Germany, said. “We are delighted to be Moojo’s insurance partner and co-create the next-gen of solutions for the creator and the freelancer economy. We strongly believe in the way Moojo tailors and builds solutions for the community: integrated into their customers’ lives.”

Moojo was founded in 2021 by Amir Djouadi, Christian Engnath, and Utena Treves. The company is headquartered in Berlin, Germany.

Germany’s second largest listed bank Commerzbank announced late this week that it is looking to enter the cryptocurrency space. The company is the country’s first major financial institution to seek a license that would enable it to offer cryptocurrency safekeeping services, as well as create its own cryptocurrency custody solution.

Germany’s new licensing policy for cryptocurrency services went into effect in 2020 and is designed to encourage more regulated financial firms to enter the cryptocurrency market. Commerzbank’s license application appears a year after the institution formed a partnership with Deutsche Börse and Fintech 360X to develop a digital asset trading platform.

Acknowledging the role of the partnership, Commerzbank spokesperson Bernd Reh added that the bank is “pursuing our own digital asset strategy and are also planning our own offerings for our customers in the coming years.” Reh noted that the planned offering is geared initially toward institutional customers.

BaFin, the Germany’s Federal Financial Supervisory Authority, has so far approved four of the 25 applications it has received from institutions seeking crypto custodian status.

Here is our look at fintech innovation around the world.

Sub-Saharan Africa

Central and Eastern Europe

Middle East and Northern Africa

Central and Southern Asia

Latin America and the Caribbean

Asia-Pacific

Photo by Ingo Joseph

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Berlin’s Solarisbank Launches Women’s Network; Hamburg’s Express Group Secures $27 Million Investment

Berlin’s Solarisbank Launches Women’s Network; Hamburg’s Express Group Secures $27 Million Investment
By David Penn Posted on
Categories: Finovate Global, ThetaRay, Zeta

Solarisbank Launches Women’s Network to Fight Fintech’s Gender Gap

As part of an effort to close the gender gap in the fintech industry, Berlin, Germany-based banking-as-a-service platform Solarisbank has launched a new “women’s network” called Futura. Part of the company’s holistic Nature, People, Business (NPB) framework, Futura is currently organizing events such as discussion panels and training sessions for women looking to enter the fintech industry.

Futura also has a “heal thyself” component. The company has overhauled its recruitment process to be more inclusive, changing language and encouraging recruitment agencies to reach out to more female applicants. Solarisbank has pledged to reach at least 30% female representation by 2024.

“At Solarisbank, we decided to take a deliberate stand to improve gender equity in our industry,” Futura initiator and VP of Onboarding and Integration, Alex Gessner said. “We launched Futura to make fintech more inclusive for everyone – women, men, and non-binary people. It’s encouraging to see so much support for our initiative, and the market response to our first activities has shown the need for such a network.”

German fintech Express Group raises €25m in Series A funding

Express Group, a Hamburg, Germany-based startup dedicated to making tax preparation easier for working and middle class families, has secured $27 million (€25 million) in Series A funding. The investment round was led by Insight Partners and Project A Ventures. The funds will be used to help grow Express Group’s business internationally as well as to fuel future product launches.

ExpressSteur, the initial product from Express Group, leverages AI to enable accounting companies, tax consultants, and lawyers to process tax cases in minutes. The solution brings machine learning and automation to a process that is typically manually-dominated, making the tax preparation process easier, faster, and more accurate. The product helped the company grow to a Gross Merchandise Value (GMV) run rate of more than $49 million (€45 million) in less than 12 months.

Express Group was founded in 2019 by Maximilian Lambsdorff, Dennis Konrad, Konstantin Loebner, Mehdi Afridi, and Andreas Santoro.

New partnership marries recurring payments and subscription management

Dutch payment processor Mollie has announced a collaboration with U.S.-based subscription management platform Recharge that will offer an end-to-end, one-stop solution for managing recurring payments and subscriptions. The partnership will make it easy for users to leverage Recharge’s APIs to integrate recurring payments into Magento, WooCommerce, or other standalone webshop. The integration will also support deploying and managing subscriptions, as well as offer a retention suite to automatically retry payments in the event of failure, an enhanced self-serve customer experience with personalized transactional notifications, and real-time insights into revenues, customers, and subscriptions.

“We’re really excited to be able to offer merchants the opportunity to implement fully powered subscriptions with Recharge easily,” Mollie CCO Ken Serdons said. “Seamless effortless payments brought to recurring ecommerce means an increase in lifetime value and average order value, and at a time of unprecedented ecommerce growth and ambition, we’re able to meet and surpass customer expectations.”

Headquartered in Amsterdam, Mollie is one of Europe’s fastest-growing payment service providers (PSPs). Founded in 2004, the company this year has forged partnerships with WooCommerce and carmaker Mazda. Mollie launched its SaaS payment platform in March.

Recharge was founded in 2014 by Oisin O’Connor (CEO) and Mike Flynn (CTO). Today, the company powers subscriptions for more than 15,000 merchants serving 50 million subscribers, and has processed more than $10 billion in transactions. In May of last year, the Santa Monica, California-based firm secured a Series B investment of $277 million in growth capital, giving the company a valuation of $2.1 billion.

Here is our look at fintech innovation around the world.

Asia-Pacific

Sub-Saharan Africa

Central and Eastern Europe

Middle East and Northern Africa

Central and Southern Asia

Latin America and the Caribbean

Photo by Pixabay

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EU Toughens Crypto AML Rules; ADGM Academy and Singapore University Promote Fintech Literacy

EU Toughens Crypto AML Rules; ADGM Academy and Singapore University Promote Fintech Literacy
By David Penn Posted on
Categories: Finastra, Finovate Global, Mambu, ThetaRay

One of the many fascinating conversations I enjoyed at FinovateEurope last week was my chat with Trulioo Chief Technology Officer Hal Lonas. Among the topics we discussed was the way evolving regulations were impacting the business of keeping financial services companies compliant with regard to KYC and AML requirements.

This week we learned that the European parliament is moving closer to embracing another measure to tighten rules with regard to financial services – in this case, cryptocurrency transactions. Members of two parliamentary committees this week approved new rules to ban anonymous cryptocurrency transactions as part of an overall European Union-wide anti-money laundering campaign.

The new regulations will require all transfers of cryptocurrencies, regardless of size, to include information on the source and the beneficiary of the assets involved. This information, which will be made available to regulators, would cover transactions from wallet addresses that are held by private users (“unhosted wallets”). The new requirements, however, would not apply to P2P transfers made without an intervening provider.

“Illicit flows in crypto assets move largely undetected across Europe and the world,” Committee on Economic and Monetary Affairs co-rapporteur Ernest Urtasun explained. “(This) makes them an ideal instrument for ensuring anonymity.”

The new policy has its critics. Supporters such as Urtasun have pointed to the disclosures of the Panama and Pandora Papers as good reasons for bringing additional scrutiny to cryptocurrency transactions. But critics such as Paul Grewal, Chief Legal Officer with Coinbase, suggest that the new regulations are based on a false premise: that cryptocurrencies represent a significant vehicle for illegal activity.

“The truth is that digital assets are in generally a markedly inferior way for criminals to hide their illicit financial activity,” Grewal wrote in a blog post earlier this week. “That’s why, according to the best research available, by far the most popular way to hide illicit financial activity remains cash.”

By contrast, Grewal noted “digital assets and the immutable nature of their blockchain technology actually enhances the ability to detect and deter illicit activity.”

The proposed legislation will now be voted on by the full parliament and national ministers.

April is Financial Literacy Month. Be sure to check out our themed coverage of financial literacy both on the Finovate blog in general and here in Finovate Global in specific all month long.

To this end, we found news of the Memorandum of Understanding recently signed by the Abu Dhabi Global Market Academy (ADGMA) and the National University of Singapore’s Asian Institute of Digital Finance (AIDF) to be especially noteworthy.

The goal of the pact is to help bring thought leadership to the fintech community and bolster the fintech ecosystem in Abu Dhabi “and beyond.” There are three main pillars to the agreement: research and publication, technology development, and knowledge dissemination – each of which contributes differently toward the goal of facilitating knowledge exchange across regions and encouraging research collaboration.

What’s interesting about this initiative is the way it supports financial literacy and education among professionals already in the field of financial services. “We, at AIDF, look forward to the close collaborations with ADGMA in research advancements, the education of skilled professionals, and nurturing of FinTech entrepreneurs,” Duan Jin-Chuan, Executive Director of the Asian Institute of Digital Finance at the National University of Singapore, said. “We see these activities as a vital component in pursing a better future for our countries.”

The ADGM Academy, headquartered in Abu Dhabi, UAE, was established in 2018 to build expertise, financial education, and literacy in the region. The Academy is part of the Abu Dhabi Global Market (ADGM), an international financial center, and features coursework areas including banking and finance, digital and fintech, and entrepreneurship, as well as national, personal, and professional development.

FinovateEurope ended just a few days ago. Of all our events, our London conference often provides the best showcase for international fintech innovation – especially from developing economies and parts of the world not always considered to be fintech hubs in spite of their economies.

Below is a quick run-down of companies in this category that demoed their latest solutions at FinovateEurope last month.

Here is our look at fintech innovation around the world.

Latin America and the Caribbean

Asia-Pacific

Sub-Saharan Africa

Central and Eastern Europe

Middle East and Northern Africa

Central and Southern Asia

Photo by ArtHouse Studio

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Ukraine Legalizes Crypto; Nordigen and Efigence Announce New Partnerships

Ukraine Legalizes Crypto; Nordigen and Efigence Announce New Partnerships
By David Penn Posted on
Categories: Efigence, Finovate Global, Nordigen, Revolut, Scalable Capital

As more and more fintechs add their support to the people of Ukraine and create new pathways for individuals and organizations to contribute financially, the Ukrainian government has had to adapt in order to make some of these contributions not just possible, but legal.

This week, Ukrainian president Volodymyr Zelenskyy, signed month-old legislation to provide a legal framework for the buying and selling of cryptocurrencies in the country. Per the new legislation, cryptocurrency exchanges and other companies dealing in digital assets will be able to register with the Ukrainian government in order to operate in the country. Additionally, the new law will allow banks to open accounts for cryptocurrency companies.

Going forward, Ukraine’s National Securities and Stock Market Commission will set the country’s policies on cryptocurrencies and other digital assets, issue licenses, and serve as a regulatory watchdog over the fledgling industry. The law is the second bite of the apple for Ukraine’s cryptocurrency advocates; the Ukrainian parliament voted to legalize cryptocurrencies last fall, but the legislation was vetoed by Zelenskyy, who cited the cost of creating a new regulatory entity to govern cryptocurrencies.

Ukrainian interest in cryptocurrencies certainly predates the Russian invasion of the country; a New York Times feature in November 2021 ran the headline “The Crypto Capital of the World” with the subhead “It has to be somewhere. Why not Ukraine?” But that interest has spiked since then as the country reportedly has received “tens of millions of dollars” in cryptocurrency donations to help Ukrainians cope with the devastation of their country at the hands of the Russian military.

Nordigen partners with French fintech Saveengs, U.K. lender Mallard Finance

Latvian open banking platform Nordigen has announced a pair of new partnerships this week. Saveengs, a French startup that specializes in helping people with little or no savings build a strong financial foundation, will work with Nordigen to help users find ways to save better. Nordigen’s technology will enable the Saveengs app to analyze the user’s finances to find opportunities to save in small amount, typically in increments of 20 euros.

“While the amount of money saved seems small at first, it definitely adds up,” Saveengs CEO Mourad Ketir said. “Open banking enables the app to perform financial analysis on our users’ existing funds and transactions quickly and easily, allowing the process of saving to start as soon as possible.”

Meanwhile across the channel, U.K.-based independent lender Mallard Finance has chosen Nordigen as its Account Information Service Provider (AISP). A specialist in providing financing for automobile purchases, Mallard Finance will leverage its new partnership with Nordigen to access financial data directly from borrower bank accounts during the application process. This will give the lender, which serves both individuals and businesses across the credit risk spectrum, a more exacting and accurate view of the applicant’s financial status.

“We are thrilled to be partnering with Mallard Finance,” Nordigen CEO and co-founder Rolands Mesters said. He praised both the company’s professional team and its success in serving its customers since 1995. “We are happy to see companies continuing to choose open banking to further enhance their already existing services and internal assessment procedures,” Mesters added.

Nordigen most recently demonstrated its technology on the Finovate stage at FinovateEurope 2019 in London. At the conference, the company demoed its Nordigen Report, which enables banks and lenders to access loan applicant account histories and verify income and other important insights.

Efigence teams up with Polish bank Getin Noble

Getin Noble, a Warsaw, Poland-based banking and financial services company, has partnered with Polish digital banking solutions provider Efigence to help it launch new online banking services. The enhancements, to be introduced modularly, include new functionalities as well as modernization of its online presence.

“Today’s online banking is much more than a financial tool,” Director of Getin Noble Bank’s Electronic Banking Department Marta Dałkiewicz said. “Customers often have contact with it many times a day, so the solutions we propose must be affordable and easy to use.”

Efigence President and CTO Marek Lesiak said that increasing the accessibility of online banking was a major goal for the collaboration. This included design elements for both the web and mobile apps to make banking more convenient for the customer regardless of which channel they used. “Today, finance is connected with almost every sphere of our life,” Lesiak said, “and the use of online banking should be as easy, intuitive and pleasant as if it were part of our DNA.”

A two-time Best of Show winner, earning the honor in both its Finovate debut as well as at our second Dubai-based event in 2019, FinovateMiddle East, Efigence demonstrated the latest improvements to its digital banking platform at FinovateEurope 2020 in Berlin.

Here is our look at fintech innovation around the world.

Central and Southern Asia

Latin America and the Caribbean

Asia-Pacific

Sub-Saharan Africa

Central and Eastern Europe

Middle East and Northern Africa

Photo by Kostiantyn Stupak from Pexels

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Have Cryptocurrency Firms Reached a Moral Crossroads Over Ukraine?

Have Cryptocurrency Firms Reached a Moral Crossroads Over Ukraine?
By David Penn Posted on
Categories: Finovate Global, MasterCard, VISA

While much of the financial world is united in its efforts to distance itself from Russia as the country’s leader, Vladimir Putin, orders his forces continue their invasion of neighboring Ukraine, many of those in the cryptocurrency world are decidedly more ambivalent.

Is this a function of the underlying libertarian spirit that powers much of the enthusiasm for digital assets? Or is this just a reflection of a relatively young industry that is not yet ready to take on the responsibilities that its growing role in the financial world will eventually demand?

First, the ask. At the beginning of the week, Ukrainian Vice Prime Minister and Minister for Digital Transformation Mykhailo Fedorov took to social media to ask cryptocurrency exchanges to block transactions from Russia. Federov’s request was not just directed at the Russian government, or the country’s notorious oligarchs, but for everyday Russian users of cryptocurrencies, as well.

“It’s crucial to freeze not only the addresses linked to Russian and Belarusian politicians,” Federov wrote on Twitter, “but also to sabotage ordinary users.”

In the same way that some people have criticized the international sanctions regime against Russia for allowing a loophole when it comes to energy – specifically banning oil and gas exports from Russia – Federov and others have warned that not restricting, if not outright eliminating, Russian access to cryptocurrencies is a critical flaw in the effort to financially squeeze the Russian economy.

In response to this request, many nations have taken action. France’s Finance Minister, Bruno le Maire, said that the EU would include cryptocurrencies in its sanctions. The Financial Conduct Authority in the U.K. has reminded its U.K.-based and regulated cryptocurrency companies of their obligations to respect the sanctions policy against Russia. Even those cryptocurrency firms that are not regulated have been encouraged to support the sanctions regime. “We would urge unregulated member(s) to take action to ensure your platforms do not become a loophole for sanctioned Russians,” U.K. cryptocurrency organization Crypto UK said in a statement.

In the U.S., while some lawmakers have encouraged the government to help ensure that Russians are not using cryptocurrencies to skirt sanctions, the Biden Administration appears less concerned about that threat – at least on the large scale. Carol House, director of cybersecurity for the National Security Council said this week that “the scale that the Russian state would need to successfully circumvent all U.S. and partners’ financial sanctions would almost certainly render cryptocurrency as an ineffective primary tool for the state.” If anything, it seems that U.S. authorities are somewhat more concerned about potential theft and cybersecurity issues surrounding cryptocurrency companies than they are of Russians using these firms and exchanges for what would otherwise be legitimate purposes.

The response from cryptocurrency companies – including some of the largest firms like Binance and Kraken – have suggested that while they are comfortable blocking the accounts of sanctioned Russians, banning all Russians from their platforms is, for these companies, a bridge too far. At least for now.

“We are not political, we are against war, but we are here to help the people,” Binance founder and CEO Changpeng Zhao said, explaining his company’s position. “There are a few hundred individuals that are on the international sanctions list in Russia, mostly politicians, and we follow that very, very strictly.” But Zhao added that Binance draws a line “between the Russian politicians who start wars and the normal people, many normal Russians do not agree with war.”

Similarly, Kraken CEO Jesse Powell tweeted, “I understand the rationale for this request (to block Russians from Kraken’s platform) but, despite my deep respect for the Ukrainian people, Kraken cannot freeze the accounts of our Russian clients without a legal requirement to do so.”

That said, Powell noted, “Russians should be aware that such a requirement could be imminent.”

Additionally, it should be added many cryptocurrency companies are not agnostic to the conflict in the Ukraine and have lent their support to the Ukrainian cause. Federov expressed his, and his country’s, appreciation for the efforts of firms like Polkadot, which donated $5 million, as well as Solana and Everstake, which have created a joint effort called Aid for Ukraine in partnership with the country’s Ministry of Digital Transformation.

“This will certainly contribute to the Ukrainian victory as well as support civil people,” Federov said on Twitter earlier this week. “We will win – the best people (are) with us.”

FinovateEurope 2022 is only a few weeks away. Register today to save your spot at our annual European fintech conference: March 15 digitally and live in London on March 22 and 23.

Here is our look at fintech innovation around the world.

Middle East and Northern Africa

Central and Southern Asia

Latin America and the Caribbean

Asia-Pacific

Sub-Saharan Africa

Central and Eastern Europe

Photo by Artem Beliaikin from Pexels

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Innovation in the Face of Invasion: Flying the Flag of Ukrainian Fintech

Innovation in the Face of Invasion: Flying the Flag of Ukrainian Fintech
By David Penn Posted on
Categories: David's column, Finovate Global

Russia’s invasion of Ukraine has sent shockwaves around the world – and the fintech industry has not been immune to the reverberations. As Axios noted last week, fintechs such as money transfer giant Wise and financial services company Brex have limited or halted fund transfers altogether to Russia and Ukraine. The reasons given for the service changes have varied, with some organizations emphasizing solidarity with Ukraine and others citing operational challenges. But the fact remains that the Russian invasion of Ukraine has forced many fintechs, in Europe especially, into scramble mode is impossible to deny.

The crisis in Ukraine also has brought renewed interest in the role of cryptocurrencies. As economic sanctions – including the expulsion of a number of Russian banks from global financial messaging service SWIFT – take their toll on the Russian economy, the idea that Russia and the country’s elites could turn to cryptocurrencies to limit the financial damage may be edging from possibility to probability. The Ukrainian government has asked cryptocurrency exchanges to freeze the accounts of Russians and Belarusians and, at this point, it appears that some of the world’s biggest cryptocurrency exchanges are moving in that direction.

Ukrainian fintechs are also committing their technology and talent to the cause of defending their country from Russian aggression. For one, the country’s leading neobank Monobank is accepting SEPA transfers to help fund the Ukrainian army, and announced that it has raised more than 11 million Ukrainian hryvnia ($395,830) to date.

That said, one of the biggest concerns from Ukrainian tech companies in general and fintech companies in specific is panic from these companies’ customers. TechUkraine’s Nataly Veremeeva urged clients of Ukrainian firms to maintain their relationships, noting that the income from these partnerships helps support both the Ukrainian economy and the Ukrainian military. Importantly, the fact that Ukraine has been under threat from Russia for nearly a decade has helped Ukrainian companies develop a resiliency that is being brought to bear today, Veremeeva explained.

This point was underscored by Senka Hadzimuratovic, spokesperson for one of the more famous Ukraine-founded tech companies, Grammarly. Backup communications and temporarily transferring certain critical business responsibilities to Grammarly team members living outside of the country have been among the precautions taken by the company.

Ivan Kaunov, Head of Growth and co-founder of Finmap.online, a Ukraine-based financial management app for SMEs, spoke for many of his fellow Ukrainians late last week. “Today Russia (has) invaded Ukraine. All our teammates (are) in safe places, We, as a nation, unite(d) and ready to resist.”

A brief primer on fintech in Ukraine

There is a wide variety of fintech companies in the Ukraine. These firms range from neobanks like Monobank, a five year old financial institution with more than four million customers, to payments companies like IBox and EasyPay, to financial services technology companies like Neofin and Wallet Factory, to cryptocurrency exchanges like Kuna. One way to get a broad cross-section of the country’s fintech sector is via the Ukrainian Association of Fintech and Innovation Companies (UAFIC). The organization, founded in 2018, is a membership-based NGO designed to support the development of Ukraine’s fintech industry. Approximately 66% of the association’s members are fintechs, with another 14% representing IT companies and MFOs, and banks making up 6%.

Last fall, the UAFIC announced a collaboration with leading financial sector associations in Ukraine- including the Independent Association of Banks of Ukraine (NABU), the Association of Financial Institutions, the All-Ukrainian Association of Credit Unions, and the Insurance Business Association. The goal of the alliance is to help design legislation to support the development of open banking and payment services in the country.

“Recently, fintech companies and banks have realized that working on the basis of OpenBanking technologies is much more profitable than competing with each other,” UAFIC Board Chairman Rostislav Duke said. “The financial ecosystemn is receiving new signals of openness and willingness to cooperate and partner in the market. Our work will promote greater access to information for all financial market participants.”

Another way to learn more about the Ukraine fintech industry is via TechUkraine, a platform dedicated to supporting the country’s technology ecosystem. A spin-off from the Export Strategy of Ukraine for ICT Sector, TechUkraine is geared toward encouraging what Director Veremeeva called “a great story of government and business working together to achieve a truly significant goal – Ukraine (as) an innovation-driven, universally recognized tech destination that delivers high value for the global economy.”

Photo by Katie Godowski from Pexels

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Fintech in India: Neobanks, Crypto Exchanges, and Google Pay Loans

Fintech in India: Neobanks, Crypto Exchanges, and Google Pay Loans
By David Penn Posted on
Categories: ACI Worldwide, Finovate Global, Nordigen, Salt Edge, Temenos

This week’s Finovate Global takes a look at developments in the Indian fintech industry. Leading off is news that Indian neobank Niyo has secured $100 million in Series C funding. The round was led by Accel and Lightrock India and also featured investment from Beams Fintech Fund, Prime Venture Partners, and JS Capital, among others. Niyo, founded in 2015 by Vinay Bagri and Virender Bisht, will use the capital to support product innovation, marketing, and branding, as well as increasing its distribution footprint and adding talent.

“We have always strived to offer tangible value and a delightful experience to our customers,” Bagri said in a statement. “In the process we are transforming the way India banks.” Co-founder Bisht highlighted the impact of the pandemic on the pace of digitization of financial services in the country. “We are seeing massive tailwinds for digital products since COVID,” he noted.

Niyo collaborates with banks to offer digital savings accounts and other banking services. The neobank serves four million customers via its banking and wealth management operations and says that it is adding customers to its platform at a rate of 10,000 new users a day. With more than $3 billion in transactions, Niyo claims it is the biggest consumer-based neo-banking platform in India.

Earlier this month Niyo introduced the country’s first, fully digital salary account. Over the next three months, the company plans to offer additional banking products including personal loans, credit cards, and integrated forex.

The soaring interest in cryptocurrencies is another trend that has accelerated in recent years. To help more institutions take advantage of the opportunities in digital assets, Indian crypto exchange WazirX has unveiled new tools to help institutions build cryptocurrency exchanges.

“We can relate to you when you say – Building a crypto exchange is difficult,” WazirX co-founder and COO Siddharth Menon wrote on the company’s blog earlier this week. “While we have learned it the hard way, we want to simplify it for you.”

WazirX’s BUIDL with WazirX program will enable organizations to build their own crypto exchanges leveraging WazirX. The program includes tools, support, guidance, access to angel and VC investors, and more. The exchanges built via WazirX’s new offering will feature access to 300+ of the highest liquidity markets, and the ability to leverage WazirX’s custody and exchange infrastructure for cryptocurrency withdrawals and deposits.

“To be the world leader, we believe that India should build more for Web3,” Menon added. “This is a billion-dollar opportunity, and that is why we at WazirX are here to support you.”

Founded in 2017, and recognized as India’s leading cryptocurrency exchange, WazirX enables cryptocurrency traders and investors based in India to buy and sell Bitcoin, Ethereum, Ripple, Litecoin, and many other digital assets. The company was acquired by international cryptocurrency exchange and blockchain ecosystem Binance in 2019. Nischal Shetty is CEO.

From neobanks to cryptocurrencies to embedded finance, we now turn to news that Google Pay users in India are now able to apply for and receive personal loans in their bank accounts via the Google Pay app. Loans of up to $1,332 (100,000 rupees) are available and can be repaid over a period of as many as 36 months.

The new service is being offered in partnership with India-based digital finance company DMI Finance, who also will determine eligibility for the financing. The loans will be processed in “near real-time” and are geared toward supporting financial inclusion by helping Indian consumers access short-term credit.

“Our teams have worked closely together to bring transparent and seamless credit to millions of Google Pay users,” DMI Finance co-founder and joint Managing Director Shivashish Chatterjee said. “We look forward to scaling this new partnership in the years to come and make the promise of financial inclusion a reality for many millions more.”

FinovateEurope 2022 is less than one month away. If you are an innovative fintech company with new technology to show, then there’s no better time than now and no better forum than FinovateEurope. To learn more about how to demo your latest innovation at FinovateEurope 2022 in London, March 22 and 23, visit our FinovateEurope hub today!

Here is our look at fintech innovation around the world.

Central and Eastern Europe

Middle East and Northern Africa

Central and Southern Asia

Latin America and the Caribbean

Asia-Pacific

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ThetaRay Forges Historic Partnership with UAE’s Mashreq Bank to Enable Secure Cross-Border Fund Transfers

ThetaRay Forges Historic Partnership with UAE’s Mashreq Bank to Enable Secure Cross-Border Fund Transfers
By David Penn Posted on
Categories: Finovate Global, Nordigen, Nubank, Temenos, ThetaRay

Historic news out of the Middle East leads off our international fintech coverage this week on Finovate Global. Israel’s AI-powered transaction monitoring innovator ThetaRay has been selected by the UAE’s Mashreq Bank to help ensure secure cross-border transfers for its correspondent banking business.

The partnership marks the first time that an Israel-based fintech company has teamed up with a financial institution from the UAE. The collaboration was made possible by the historic Abraham Accords, signed in the fall of 2020, which normalized relations between Israel and the UAE, Bahrain, Sudan, and Morocco.

“Mashreq Bank is our first customer in the UAE,” ThetaRay CEO Mark Gazit said. “We look forward to accelerating collaboration with additional financial institutions in the UAE and the entire Middle East, as part of the continued expansion of ThetaRay’s global reach.”

Making its Finovate debut in 2015, ThetaRay offers banks and financial payment providers the ability to detect anomalies in multiple data sets, regardless of size or source. This makes the company’s cloud-based, SaaS AI analytics platform is especially effective in monitoring cross-border payments, an area that has become increasingly vulnerable to financial crime – including money laundering – in recent years. ThetaRay estimates that the cross-border payments market will grow from $37.15 trillion in 2020 to nearly $40 trillion by 2026, potentially attracting an even greater number of fraudsters and thieves.

“ThetaRay’s technology, underpinned by advanced machine-learning based models complementing rules, sets the foundation for next-generation transaction monitoring,” Mashreq Bank’s Group Head of Compliance and Bank MLRO Scott Ramsay said. “By combining speed and agility with efficiency, it allows banks to effectively thwart financial crime risks in the increasingly complex space of cross-border payments.”

A leading MENA-area financial institution, Mashreq Bank is the oldest privately owned bank in the UAE, founded in 1967 as the Bank of Oman. Last fall, the bank announced a partnership with Visa to develop a new digital reconciliation platform for business expense tracking. Mashreq Bank was also the first regional bank to launch an API developer portal, going live with the platform back in October. A month later, the institution reported a net profit of $72 million (AED 265 million) for the nine months ending September 30th.

“Mashreq’s advanced digital transformation program has continued to deliver outstanding service to customers throughout the nine months ending 30th September 2021,” Group CEO Ahmed Abdelaal said. He highlighted the role of digital platforms in supporting the bank’s growth, and embraced the “development of a diverse, inclusive, and enabling working environment” courtesy of Mashreq’s adoption of a “work from anywhere culture.”

FinovateEurope 2022 is just one month away. If you are an innovative fintech company with new technology to show, then there’s no better time than now and no better forum than FinovateEurope. To learn more about how to demo your latest innovation at FinovateEurope 2022 in London, March 22 and 23, visit our FinovateEurope hub today!

Here is our look at fintech innovation around the world.

Sub-Saharan Africa

Central and Eastern Europe

Middle East and Northern Africa

Central and Southern Asia

Latin America and the Caribbean

Asia-Pacific

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Filipino Neobank Tonik Secures $131 Million; Latin American Payments Company EBANX Turns Ten

Filipino Neobank Tonik Secures $131 Million; Latin American Payments Company EBANX Turns Ten
By David Penn Posted on
Categories: Daon, Entersekt, Finastra, Finovate Global, NICE Systems, Nordigen

Tonik, a digital neobank based in the Philippines, has secured $131 million in a Series B round that will help the institution expand in the Philippines, as well as throughout Asia. The investment was led by Mizuho Bank of Japan, and gives the company $175 million in total funding.

Also participating in this week’s Series B funding round were Prosus Ventures, Sixteenth Street Capital, Nuri Group, and individual investor Rahul Mehta, co-founder of DST Partners. Valuation estimates were not immediately available.

Launched in the Philippines in the spring of 2021, Tonik has been one of of the fastest growing new banks, topping $100 million in consumer deposits in its first eight months of operation. The neobank has partnered with Finovate alums Finastra for its cloud-based core banking proposition, NICE Actimize for its AML technology, and Daon for its biometric authentication solutions. In the Philippines, where more than 70% of the population is unbanked, Tonik sees a $140 billion retail deposit market and an unsecured lending opportunity of $100 billion.

“The partnership with Mizuho will provide Tonik with enhanced access to the international wholesale funding markets and world-class managerial talent, as well as serve as a fantastic platform for our future international expansion,” Krasnov said.

Tonik offers a variety of retail financial products, including deposits, loans, current accounts, payments, and cards. The first licensed, digital-only bank in Southeast Asia, Tonik began this year with a partnership with Google Cloud. The neobank will leverage Google Cloud’s platform as part of its strategic to boost financial inclusion and open banking in the Philippines.

EBANX Emerges from its First Decade

Last month we highlighted Latin American payments company EBANX and its expanded operations in Mexico. This month, we congratulate the Brazil-based fintech on its 10-year anniversary.

“In these 10 years, we have been able to witness important transformations in the digital market, in the payments industry, and in innovation ecosystems around the world,” EBANX co-founder and CEO João Del Valle said in a statement. “We are pleased to have actively participated in these movements in Brazil and Latin America, using cutting-edge technology and local knowledge.”

With nearly a billion total payments processed and offices in ten countries, EBANX notched more than 110 percent in processed volume last year. Also in 2021, EBANX launched its EBANX One payments platform that unites all of its payment solutions via a single integration, acquired a pair of Brazilian fintechs Juno and Remessa Online, and raised $430 million in Series B funding. Already in 2022, EBANX has opened new offices in Mexico City and appointed former Google VP Paula Bellizia as its new president of Global Payments.

“Today is the day to celebrate all the achievements so far,” Del Valle said, “but, above all, to outline the new challenges ahead, always with the clear mission of creating more access between people and companies from all over the world.”

FinovateEurope 2022 is just one month away. If you are an innovative fintech company with new technology to show, then there’s no better time than now and no better forum than FinovateEurope. To learn more about how to demo your latest innovation at FinovateEurope 2022 in London, March 22-23, visit our FinovateEurope hub today!

Here is our look at fintech innovation around the world.

Asia-Pacific

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Central and Eastern Europe

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Kuwait Issues Guidelines for Digital Banks; QR Codes Versus Cash in Argentina

Kuwait Issues Guidelines for Digital Banks; QR Codes Versus Cash in Argentina
By David Penn Posted on
Categories: Finovate Global, Mambu, NCR Corporation, Nordigen

According to a report from Medici, nearly 168 million people in the MENA region (Middle East and Northern Africa) do not have a bank account. In this environment, opportunities for both traditional financial institutions and new entrants are numerous. In some instances, financial services companies have launched their own digital banking portals in order to reach out beyond their current customer bases. In other cases, these firms have teamed up with challenger banks and innovative fintechs to help bridge the gap between the banked and the unbanked.

One of the challenges to reaching more potential customers in the MENA region has been regulatory, which makes this week’s news from the Central Bank of Kuwait (CBK) all the more notable. The CBK issued a set of guidelines for digital banks as part of a campaign to improve financial stability, encourage innovation, and help the country respond to its economic needs.

In drawing up its guidelines, the CBK relied on a study of the regulatory approaches taken by 25 central banks and 40 digital bank business models. The CBK noted that there were three main models for digital banking: as a unit within a traditional bank, a partnership between a bank and a digitally-based institution in which the bank manages core banking operations while the partnering institution manages customer relations and other operations, and as a standalone digital bank.

“The guidelines come in five parts covering the definition of digital banks, their legal framework, and licensed activities, as well as phases and procedures for establishment of digital banks,” CBK Governor Dr. Mohammad Y. Al-Hashel said. The new guidelines pave the way for interested parties to apply from now until June 30th. Initial approvals, according to the CBK governor, will be made by the end of the year.

For more on the digital banking landscape in the Middle East, with a particular focus on neobanks, check out this overview from Medici.

Speaking of central banks, the head of Argentina’s central bank, Miguel Ángel Pesce, recently gave an interview with the Buenos Aires Times. The main focus of the conversation was a preliminary agreement with the International Monetary Fund to deal with the country’s $44.5 billion debt to the organization. The agreement, which includes a pledge to reduce the country’s fiscal deficit as well as other measures, comes after a two-year negotiation process and still requires the approval of both Argentina’s congress as well as the IMF board of directors.

Yet it was Pesce’s separate conversation with Buenos Aires reporter Jorge Fontevecchia – published this week – that may be of greater interest to followers of international fintech. In that interview, Pesce explained some of the more controversial policies of Argentina’s central bank toward fintechs, including deposit insurance requirements for payment service companies. Pesce defended the practice as a way of “making more independent the assets of companies lending out the assets deposited in them” and of assuring that companies that serve as financial intermediaries are regulated as such. Pesce acknowledged that while this policy has engendered “some resentment in the short term,” it is necessary to ensure a “solid system” that banking services customers can rely upon.

In terms of innovation, Pesce spoke positively about the launch and adoption of interoperable QR codes, which were made mandatory in Argentina for all electronic invoices starting in late December 2020. He noted that interoperable QR codes could do to physical cash what electronic checks have done to paper checks (“a very important step in this direction”). And while he offered no timetable on the transition, “it’s going to end up happening,” Pesce insisted.

Read the full interview at Buenos Aires Times

FinovateEurope 2022 is right around the corner. If you are an innovative fintech company with new technology to show, then there’s no better time than now and no better forum than FinovateEurope. To learn more about how to demo your latest innovation at FinovateEurope 2022 in London, March 22-23, visit our FinovateEurope hub today!

Here is our look at fintech innovation around the world.

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Asia-Pacific

Sub-Saharan Africa

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Brazil’s Creditas Earns $4.8 Billion Valuation After Securing $260 Million in New Funding

Brazil’s Creditas Earns $4.8 Billion Valuation After Securing $260 Million in New Funding
By David Penn Posted on
Categories: Finovate Global, Modularbank, TransferWise, Tuum, Wise

A $260 million Series F funding round has given Brazilian secured lending platform Creditas a valuation of $4.8 billion. The new capital will help the company expand its operations and provide a “one-stop solution for those seeking a digital-first experience in everything related to their houses, cars, motorcycles, and salary-based benefits.”

The round was led by Fidelity Management and Research Company and featured participation from a sizable number of investors including Actyus, Greentrail Capital, QED Investors, VEF, SoftBank Vision Fund 1, SoftBank Latin America Fund, Kaszek Ventures, Lightrock, Headline, Wellington Management, and Advent International by way of its affiliate Sunley House Capital.

The Series F brings Creditas’ total capital raised to $854 million, according to Crunchbase.

Founded in 2012 and headquartered in Sao Paulo, Brazil, Creditas announced a significant boost in revenues in the third quarter of 2021 compared to Q3 of 2020 – from $46.8 million to $14 million. Creditas founder and CEO Sergio Furio projects that the company will realize annualized revenues of $200 million for the year that just ended. Creditas also saw its credit portfolio grow from $189.3 million in Q3 2020 to $532 million in Q3 2021.

“We plan to continue growing by nurturing and expanding our ecosystem, such as providing financial solutions to our marketplace customers, launching new products, extending our geographic reach (including our recent successful entry into Mexico and the expansion of our tech hub in Valencia, Spain) and selectively pursuing strategic M&A opportunities,” Furio said in a statement.

Last fall, Creditas announced a partnership with fellow Brazilian fintech – and Finovate alum – Nubank, that will enable Nubank customers to secure loans and other services from the Creditas platform. Months earlier, Creditas acquired used car buying and selling platform Volanty. The move will help buttress Creditas’ automotive division, Creditas Auto. Also last summer, Creditas acquired multi-channel insurance brokerage company Minuto Seguros, which was also part of the company’s project to enhance its auto financing business.

FinovateEurope 2022 is right around the corner. If you are an innovative fintech company with new technology to show, then there’s no better time than now and no better forum than FinovateEurope. To learn more about how to demo your latest innovation at FinovateEurope 2022 in London, March 22-23, visit our FinovateEurope hub today!

Here is our look at fintech innovation around the world.

Central and Southern Asia

Latin America and the Caribbean

Asia-Pacfic

Sub-Saharan Africa

Central and Eastern Europe

Middle East and Northern Africa

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