Fintech is a wide-ranging, multi-sector, global industry whose growth influences not only the banking world, but society at large. Our deep dives, interviews and coverage examining the evolution of payments, finance and banking are fuelled by constant updates, news and commentary on deals, funding rounds and partnerships.
Over the past fortnight, banks offered advice to start-ups; the UK welcomed a new bank (with restrictions); gamers get safer, financially; and the SME Finance Forum gets a new fintech partner. Meanwhile, one fintech player posts profits as another posts loses.
We could all use some feedback…
Bank of America offers insight to start-ups
On March 1, Bank of America (BofA) hosted a cohort of fintech start-ups in their London headquarters to offer insights into the banking industry and guidance on market fitness. All the start-ups were part of the Accenture FinTech Innovation Lab global programme that supports fintech start-ups to scale their businesses in competitive markets. BofA has been hosting the event since 2013, when Accenture launched the programme in London.
An interview examining the current fintech landscape with Andrew McKibben, the bank’s international head of technology will appear on thebanker.com next week.
New bank alert!
UK Banking-as-a-Service (BaaS) provider Griffin is given banking licence — Griffin
Griffin has received authorisation to operate as a UK bank with restrictions from the Prudential Regulation Authority. The company says it is now mobilising to become the UK’s first full-stack BaaS platform with a banking licence. It considers this announcement “a huge milestone in its journey from fintech start-up to bank”.
“This moment has been years in the making,” David Jarvis, CEO and co-founder of Griffin, said. “Becoming a bank is testament to the determination of our team, who have been tirelessly building a modern core banking system, a resilient operational backbone and a robust compliance framework. This will enable us to deliver an exceptional banking platform for the UK fintech community.”
Griffin is now listed on the Financial Conduct Authority register and is in mobilisation, meaning the company can operate as a bank subject to restrictions. During this period, Griffin can hold a limited number of deposits and carry out a limited amount of payment services.
Looks like a gamer, thinks like a gamer, acts like a bank
Itaú Bank continues its ambition to be the bank of choice for gamers — Itaú Player’s Bank
Itaú Bank has announced a strategic partnership with online protection provider GamerSafer, aimed at strengthening the security of the bank’s games community customers.
As part of the partnership, GamerSafer’s digital identity platform will be integrated with Itaú’s Player’s Bank — a single app where gamers can get cashback for purchasing games, buy accessories, view content streams, access exclusive content from the largest gamer organisations and access other financial services.
GamerSafer’s platform is specifically designed to prevent crime, fraud and toxicity in the gaming community. As part of this partnership, the company will extend its security services to customers who use Discord — one of the most popular communication platforms among gamers, with more than 150 million active users worldwide — to interact with Itaú. With more brands turning to Discord for customer engagement, there is an increasing demand for enhanced security, especially for sensitive information transactions like bank and financial movements.
Meanwhile…
Fintech start-up Uplinq partners with the SME Finance Forum, Managed by the IFC — SME Forum
Uplinq, a global credit assessment and scoring platform for SMB lenders, signed a partnership with the SME Finance Forum, a global network aimed at expanding finance to small and medium businesses (SMEs). The SME Finance Forum was established by the G20 Global Partnership for Financial Inclusion and is managed by the IFC, a part of the World Bank Group.
Following the 2010 G20 Summit in Seoul, the Global Partnership for Financial Inclusion — which includes all G20 countries, interested non-G20 countries, and other relevant stakeholders — launched the SME Finance Forum to expand financial inclusion and accelerate access to finance for the 200 million global businesses that need it to invest to grow and create new jobs. To advance this goal, the SME Finance Forum unites financial institutions, technology companies and international development institutions to share knowledge, foster innovation, spur policy changes and build connections that will promote the growth of SMEs.
Fintech giveth…
Revolut reports its first-ever year of profit — Sifted
Revolut reported its first year of profit on Wednesday, in a long-awaited set of 2021 financial results that showed the neobank increased its customer base and revenues across higher margin products.
Revenues at the neobank nearly tripled from £220m in 2020 to £636m in 2021. That meant the bank swung a £39m profit before tax — its first results in the black.
But unlike its UK-headquartered neobank competitors, Revolut is facing one key roadblock standing in the way of growth: it is yet to obtain a banking licence in its home market, the UK. Although the need to update its internal accounting systems has been touted as a contributing factor towards its delay in obtaining a licence, Mikko Salovaara, chief financial officer at the bank says the UK Financial Reporting Council requirements for the audit were quite separate from the business as a whole.
…and Fintech taketh away.
Klarna posts $1bn annual loss, its largest ever — Sifted
The Swedish buy now, pay later giant says it is making progress towards profitability, despite a bruising 2022.
Klarna has posted its biggest annual loss to date, but claims it has made “clear progress” to return to profitability, according to annual results released Tuesday.
Annual losses swelled by 47% to reach SKr10.4bn ($1bn) in the 12 months to December 31 2022, up from SKr7.1bn in 2021 — it was a tough year for the fintech, which saw its valuation slashed by 85% to $6.7bn.
Klarna, Europe’s most valuable private tech company until its down round last summer, also had two rounds of layoffs last year, cutting more than 700 jobs in total. At the same time, its results show that CEO Sebastian Siemiatkowski’s total remuneration increased by 35% to SKr13.2m.
