Friend of the Financial Services Club and journalist with Financial News Anna Irrera has recently started producing a weekly roundup of FinTech news. She’s kindly agreed to let me republish this summary here on The Finanser, so here goes:
Fintech things you should know: UBS appointed a new head of tech, London-based Revolut raised £12 million on Crowdcube (it was aiming for £1 million) and SETL said it closed its first round of funding.
In other news, FN’s annual Fintech 40 list will be published on Monday. We’ve delayed it a bit because of Brexit, but it’s now ready to go.
A very senior digital-related job change at Santander…
Former J.P. Morgan Chase & Co. executive Blythe Masters resigned as nonexecutive chairwoman of Santander Consumer USA Holdings Inc., the subprime auto-lending unit of the Spanish banking giant, after less than a year. Ms. Masters, who was appointed as Santander Consumer’s nonexecutive chairwoman in July 2015, will move into a broader role with parent company Banco Santander SA with a focus on its global digital banking efforts.
We’ve been consistently hearing good things from Revolut users for a while, so seems fitting that their crowdfunding campaign went nuts…
The startup opened pre-registrations for the campaign on Monday, with the aim of raising £1 million once the campaign went live. Would-be investors have smashed that target, pledging £10 million in just 10 hours. By Tuesday evening Revolut had £12.9 million pledged from over 6,600 investors. (and its round from VCs: Revolut looks to Brexit ‘opportunity’.)
To leave or not to leave?
London-based online money transfer business Azimo is considering switching its headquarters to mainland Europe because of Brexit, which it says could threaten Britain’s position as a global hub for the financial technology – fintech – industry. (I’m told from Azimo the headline was a bit too sensationalist…)
“I’m an American who started a fintech firm in London. I have no plans to move home” (Efinancial Careers)
There are a few factors that have fuelled London’s rise as a centre for fintech startups, not least of which are the UK government’s favourable regulatory regime and the free movement of talent from Europe. Brexit just made the whole thing a lot more complicated for these companies in London, particularly when it comes to staffing up in a tight labour market. (Might have been helpful to mention that Credits is headquartered in the Isle of Man!!!)
I shared some of my views on the impact Brexit could have on UK fintech sector on the first episode of the new podcast series FinTech Insider. Thanks to 11FS for inviting me on the show!
We discussed Brexit, what it means for us all and whether or not it impacts the UK’s place at the top of the FinTech tree.
Are financial services finally moving to the public cloud?
The Depository Trust & Clearing Corporation (DTCC) is shifting more of its applications to Amazon Web Services in a progressive effort to cut costs by migrating to the cloud and eliminating the need to buy, build and maintain internal servers, storage and security structures.
FCA offers cloud support (Finextra)
UK’s Financial Conduct Authority (FCA) says there is “no fundamental reason” why FS firms cannot use public cloud services. In new guidelines, the FCA says: “We see no fundamental reason why cloud services (including public cloud services) cannot be implemented, with appropriate consideration, in a manner that complies with our rules.”
Your weekly dose of blockchain updates…
Chi-X founder’s startup recruits ex-Bank of England deputy (Financial News)
Ex-central banker Rachel Lomax and former Ofcom chief executive Ed Richards have joined the board of SETL, the company said on July 15. They follow the arrival of the former Barclays and Morgan Stanley International chairman Sir David Walker, who joined SETL’s board as chairman in December.
The central bank of the Netherlands is preparing an ambitious experiment aimed at discerning if an entire financial market can be built on a blockchain. While many so-called smart contract applications of blockchains can be replicated using existing technology, the man in charge of a series of experiments conducted by De Nederlandsche Bank says the distributed nature of blockchains could lead to entirely re-imagined financial market infrastructures (FMIs), ones that are much more difficult to hack.
The R3 blockchain consortium is spearheading efforts to understand and address the challenges of developing master templates for smart contracts. The self-executing contractual agreements are used to trade, record and manage assets on distributed and shared ledger platforms.
UBS appointed a replacement for Oliver Bussmann…
Meet UBS’s new IT boss (Financial News)
As a former consultant and banking technology expert, UBS’s new head of information technology Michael Dargan will turn his extensive expertise in operations to the advantage of the Swiss banking group’s technology transformation and push towards greater efficiency.
On the ethics of insurtech…
Disruptive insurance (Reuters)
The insurance industry is ripe for technological disruption, but the results may be dicey. Some seem to rely on intrusive Big Brother-like methods. A handful of health insurers, for instance, now offer wearers of fitness trackers lower-cost policies if their data is up to scratch. (Is it actually dicey if users fully consent to it and are getting a more affordable service?)
A famous VC dissed corporate venture investors…
Union Square Ventures Managing Partner Fred Wilson fired a shot across the bow of corporate venture capital on stage at the CB Insights Future of Fintech Conference: “[Corporate investing] is dumb. I think corporations should BUY companies. Investing in companies makes no sense. Don’t waste your money being a minority investor in something you don’t control. You’re a corporation! You want the asset? Buy it.” (Not sure his argument makes sense for all types of investments by corporates. Think of how the strategic investment teams at banks have been successfully backing market structure companies for many years…)
On the continuing travails of marketplace lenders…
Mike Cagney, the boss at online lender Social Finance Inc., said in August that the traditional finance industry is “the second biggest waste of human capital outside the IRS” and full of “significantly overpaid people who do very little in terms of value to society.” Now he might become more like a bank to have a better chance at beating them.
Lending Club Underwriting Questioned As Chargeoffs Climb (Bank Innovation)
Scandals aside, Lending Club has been doing well in the area that mattered — borrowers were paying back their loans. But a new report from the Wall Street Journal indicates that chargeoff rates at Lending Club are up 38% since 2013. This is troubling because credit card default rates decreased over the same period. They now stand at 3.2%, down from 3.8% in 2013.
Ending on a viral note…
Lessons Pokémon Go Can Teach the Banking Industry (The Financial Brand)
Pokémon GO is a phenomenon that is capturing the attention of Millennial gamers and digital baby boomers alike. What lessons about technology adoption, gamification, data analytics and engagement can banking learn from this mobile app?