Text reading Fintech Fortnightly over an abstract image of a digital net.

Every fortnight, The Banker will showcase interesting insights from the world of ‘fintech’ that caught our eye. Liz Lumley reports.

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 looking at the evolution of payments, finance and banking are fuelled by constant updates, news and commentary on deals, funding rounds, and partnerships.

Every fortnight, The Banker will showcase the interesting insights from the world of ‘fintech’ that caught our eye. 

For this first instalment the UK dominates the fintech news that took our notice, with the death of Tech Nation, and the birth of the CFIT, the ongoing chatter about ‘Britcoin’, an uneasy future for open finance and Lloyds Banking Group investing in the cars and payments sector. Elsewhere, Asia welcomes a new digital asset joint venture and MyBank in Europe continues to grow. 

The Centre for Finance, Innovation and Technology (CFIT) names Ezechi Britton CEO

Mr Britton will work with Charlotte Crosswell (CFIT chair) to deliver on CFIT’s mission to support the next stage of scaling for UK-based firms and to contribute to the UK remaining a global leader for financial innovation.

CFIT will officially launch in March 2023, after which Mr Britton and the newly formed team will engage stakeholders and set out plans for CFIT’s first programmes of work. He will start the role in April 2023.

CFIT will bring together experts in finance and technology from across the UK to come up with solutions to the most challenging issues facing fintech firms, including how to help firms scale, how to foster collaboration within and between growing national and regional fintech hubs, and how financial innovation can promote sustainability and financial inclusion.

CFIT’s establishment was a key recommendation of the 2021 Kalifa Review of UK Fintech. HM Treasury and the City of London Corporation committed a combined £5.5m seed funding for CFIT.


Tech Nation in the UK to close

Tech Nation, the UK industry body created to champion the sector during the height of the ‘Silicon Roundabout’ tech boom in London, has been forced to close down after the government withdrew its funding. The body, set up by the coalition government in 2014, was given responsibility to promote the country’s digital industry, from leading ‘growth programmes’ for tech start-ups to processing visa applications for overseas staff of tech companies.

On Tuesday, Tech Nation said the government’s decision to take away crucial funding that forms the majority of its revenues meant that it could no longer continue. The £12m Digital Growth Grant was this month given to Barclays Bank after a competitive tender. Barclays’ Eagle Labs unit delivers growth programmes, business mentoring and events.

UK fintech giants Monzo and Revolut have been linked to the Tech Nation programme. 

First there was ‘Britpop’; now get ready for ‘Britcoin’

Following talk around the launch of a ‘digital euro’, the UK is making moves to create a digital pound – dubbed ‘Britcoin’ in the press. If introduced, the digital pound would be issued by the Bank of England and could be used to make payments in person or online.

It would be interchangeable with cash and bank deposits, and – as with the current system of notes – be issued in denominations of pounds sterling. No interest would be paid on pounds held in digital form.

The Bank and the Treasury say a digital pound would be subject to rigorous standards of privacy and data protection. “Like current digital payments and bank accounts, the digital pound would not be anonymous because the ability to identify and verify users is necessary to prevent financial crime,” they said. “This is essential for trust and confidence in money and therefore wide use of the digital pound.”

Other major central banks – including the US Federal Reserve and the European Central Bank – are looking at their own official digital currencies, although the UK's plans are at a more advanced stage.

The UK’s lead in open banking is at risk, report claims

The Global Open Finance Index, a report released by Open Banking Excellence, looks at the global state of open banking. The report, which included contributions from Accenture and NatWest and was supported by research from the University of Oxford and data from the World Bank, analysed 23 countries across more than 150 aspects to identify the component parts of a successful open banking ecosystem.

It found that while the UK was still seen as a global leader, countries like Brazil, Singapore, India and Australia were moving faster and are likely to eclipse the UK in the near future.

Another key finding was that while regulatory mandates help nascent ecosystems to establish themselves, it is fundamental that the participants find mutually beneficial arrangements beyond the mandates for the ecosystems to thrive.  

Meanwhile, research from NTT Data UK&I highlights a severe lack of trust among a representative sample of consumers, with lingering doubts over security and agency. Some consumers even believe that the purpose of open banking is for third-party providers to steal financial data without the user’s consent.

The research revealed:

  • Eighty-four per cent of consumers stated that they don’t think open banking is safe.
  • Just 7% thought open banking makes finance more secure.
  • One in 10 consumers believe that it allows third parties to steal their financial data.

Lloyds Banking Group invests £4m in Caura 

Caura brings all driving-related payments together into one place to simplify car admin for UK drivers. This investment will be used to develop new features for iOS and Android apps. This is Lloyds Banking Group’s third fintech investment as part of the group’s latest strategy and led by the new fintech investment team.

Caura for iOS and Android provides a single, highly intuitive interface for all driving-related payments. It aims to serve the 30 million motorists in the UK today who currently find themselves using between eight to 10 apps and websites to manage their vehicles. Forgetting to pay the ever-growing list of charges and payments is costing drivers billions of pounds in unnecessary fines every year. 

Kirsty Rutter, fintech investment director at Lloyds Banking Group, said: “This significant investment represents another important step forward in our plans to work closely with fintechs and technology partners to bring together data-driven insight and technologies to help our customers.”

Over €10bn paid through MyBank in 2022

This represents a growth of 38% compared to the previous year, while transacted volume registered a growth of 23% year on year. More than 1500 new businesses started offering MyBank in the past 12 months.

The payment service claims this growth confirms its value proposition in the online B2B segment and online B2C transactions of high amounts (e.g., travel, luxury goods, spare parts, real estate, furniture).

Throughout 2022, MyBank further enabled the integration of its solution for banks and other payment service providers through its centralised gateway and API connectivity. Last year, around 70 new payment service providers from some 20 European countries joined the MyBank payment network.

“The scheme-based approach of MyBank for account-to-account payments continues to demonstrate its relevance to end users and payment service providers. MyBank will celebrate its 10th anniversary this year and further extend its reach into new countries to answer the increasing demand for cross-border online trade,” says Tarik Zerkti, CEO of Preta, the company that owns and manages MyBank.

Standard Chartered-backed Zodia Custody and SBI establish crypto asset custodian joint venture in Japan

Subject to anti-trust and foreign direct investment clearances, and licences from the Japanese regulator – the Financial Services Agency – the joint venture will act as a Japan-based crypto assets custodian, targeting institutional clients. The joint venture, 51% owned by SBI DAH and 49% by Zodia Custody, will operate in one of the most sophisticated crypto asset regulatory jurisdictions, addressing a bottleneck that has previously held back interested institutions from participating in this space.

It will allow both groups to expand their existing market presence and increase their ability to provide custody services and other ancillary services for crypto assets to institutional clients.

Both SBI and Zodia Custody bring with them, through their respective ecosystems, a wealth of technical expertise in the crypto asset space as well as the operational know-how to ensure the appropriate safeguarding of their institutional clients’ assets.

Alex Manson, who heads SC Ventures at Standard Chartered, says: “This marks our second joint initiative with SBI since signing our MOU to accelerate portfolio expansion efforts as well as ecosystem building in May last year. It’s great to be working in partnership with SBI again; thank you to our partners for their pioneering efforts in ‘rewiring the DNA in banking and financial services’ along with us – and here’s to more exciting endeavours together in the near future.”


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