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The Fintech History Book Vol. 5: Back to the Future: Vol. 1 – GAFA




The past is over. Its race is run. Vol. 5 averts its eyes from the ugly form of yesteryear, and looks to the aesthetic future. A future of digital first finance, mobile apps and flying cars (possibly). But why change a winning formula just because talk of the past is turning to talk of the future? No. Continuity is king. To provide balance and contrast, the future must be dealt with in precisely the same way as the past.

You’re reading The Fintech History Book Vol. 5: Back to the Future: Vol. 1 – GAFA.

In Vol. 14 we spooled through the archives of history as fintech germinated from seed to stem. From nervous creature stalking the wings, to noble beast howling war cries at dogged and entrenched incumbents. Fintech has hit the present with a bang. But from here on out, the path is uncharted.

Vol. 5 takes a peak at what big tech has in store for the future of fintech. Or techfin, if you will. Or GAFA (if you’re a fan of acronyms).

Let’s start at the beginning. Or the beginning of the acronym. Google.

Founded in 1998 by Larry Page and Sergrey Brin while they were Ph.D. students, the pair have carved out relatively successful careers for themselves on the back of their first venture. A misspelling of “googol”, the name represents the idea that you don’t need to be able to spell to be a billionaire. This is something that Donald Trump also represents.

Recently, alongside its arsenal of others offerings (browser, cloud storage, YouTube) Google has announced it will offer checking accounts as part of a project code-named Cache. It’s a bold move in the big tech’s bid to be your bank, and the tech giant has partnered with prominent financial institutions such as Citigroup along the way. Cache could come into play as early as next year.

Google has made it clear that it plans to put its financial institution partners much more front and centre than previous techfin forays into banking. So without the branding, what does Google stand to gain? Insight. Alongside the quite humungous amount of data Google already commands, insight into behavioural patterns around spending would paint a pretty clear picture of consumer’s financial day to day. Knowledge is power, it would seem.

A is for Amazon. Well, the first A is.

Beginning life as a humble book shop, Amazon has now broadened its remit somewhat. You can get almost anything on Amazon. Except, maybe, abstract concepts like hope and jealousy, but they may have plans to introduce those lines in the New Year. Time will tell.

Amazon stepping into the world of finance is no new thing. In 2007 Amazon launched Amazon Pay. Earlier this year in June, the online marketplace introduced a credit card for underbanked shoppers. Like Google, Amazon has partnered with a pre-existing financial institution, Synchrony Financial. The big tech message is this: collaboration is key.

2020 will be a telling year as it becomes clearer how much uptake the credit card has had. Will it cement Amazon’s place in the financial market, or signal another attempt by big tech to penetrate the financial market that just misses the mark? You can get almost anything on Amazon, why not financial products?

The F word. Facebook.

Facebook have had a busy year in fintech. In June, they launched their much mooted cryptocurrency, Libra. The potential was massive, with noises being made that Facebook could become the biggest central bank in the world. The red tape however was bigger. Concerns over Facebook’s use of data have been at the forefront of mind since it emerged that Cambridge Analytica had disseminated personal data from millions without their consent.

In November, Facebook announced it would launch a new payment service called, you guessed it, Facebook Pay. I know what you’re thinking and yes, you can already send money through Facebook. What you couldn’t do was send money through other Facebook apps like WhatsApp or Instagram. Well now you can.

Separate from Calibra – the company’s digital wallet – Facebook Pay could make a real impact in the P2P payments market. I don’t know anyone who doesn’t use at least one of Facebook’s platforms. Providing there isn’t the sort of data protection backlash that saw Mark Zuckerberg turn whipping boy for an afternoon on Capitol Hill, Facebook Pay could be the company’s first genuine success in fintech.

A, number two. Apple. And that’s sequential, not preferential.

Apple for their part, moved into fintech in 2014 with Apple Pay. And in 2019 they moved further into financial offerings with the Apple card. Backed by JP Morgan, Apple Card has been well received by users. It signals to big tech becoming more successful in its financial offerings.

The credit card gives Apple an opportunity to further inextricably link its customers with the Apple brand, by making it more difficult to gravitate towards Android. Apple Card is only available to iPhone users, and who wants to deal with the inconvenience of changing credit cards just to change phones?

On top of this, Apple have just released a new payment plan that allows Apple Card holders to purchase an iPhone in 24 monthly instalments without any interest. The messaging is this, stay with Apple, get more Apple stuff.

It’s the carrot and stick, but the key is, whichever one snares you, it’s just more convenient to stay with Apple.

Big tech is looking to carve itself a larger sphere of influence in all of our lives. Offering convenience and threatening inconvenience is the mantra. Fintech is the latest market segment the tech titans are targeting and with the right partnerships, financial offerings could become a very important part of their product line. The data insights financial products can provide is like a crystal ball to GAFA. Know your customer, predict the future. Kind of.

And that’s it for Vol. 5. Look out for The Fintech History Book Vol. 6: Back to the Future: Vol. 2 – BAT, and get the scoop on the Asian tech challenging GAFA for primacy in the financial services. When Qui-Gon Jinn said “there’s always a bigger fish” in the much lampooned The Phantom Menace, this is what he was probably talking about.



Co-Founders of UK Challenger Bank Monzo Back Startup Fronted’s £1M Raise




Fronted, the rental deposit lending company, has reportedly secured more than £1 million as part of a debt and equity deal, which increased the firm’s total funds raised to £2 million.

Co-founders of UK-based banking challenger Monzo, Paul Rippon and Gary Dolman, who were serving as the Co-CEO and CFO at Monzo, have also invested in Fronted’s operations. Other notable investors include Baroness Kingsmill–former Chairperson at Monzo, Ville Vesterinen and Ling Lin.

The capital acquired should help Fronted with growing its deposit loan business while also forming partnerships for the renter-focused lender.

Company Co-founder Jamie Campbell stated:

“We are delighted to get the backing of over 20 remarkable investors, to grow the business. This investment is the result of a year of huge effort from the whole team. We will use the money to create greater access to Fronted; partnering with platforms that will offer Fronted as a deposit payment option.”

Gary Dolman, formerly at Monzo Bank, and presently a venture investor at Antler VC, has taken a seat of Fronted’s advisory board.

Dolman remarked:

“Fronted’s offering is highly differentiated and equally attractive to their customers and to me as an investor. Their focus, business model and prospects are exciting and I am delighted to join Fronted’s advisory board.”

Paul Rippon, previously at Monzo Bank, and currently Chairperson at GBB, noted:

“Home is where the heart is and I know as a landlord and former tenant that deposits can be difficult to pull together. That real problem needs solving and the Fronted team are doing that in a caring way using interesting modern technology. I’m delighted to be an investor and be part of their journey.”

Fronted will be competing with the deposit alternatives which typically make use of an insurance-based model to completely remove the cash deposit, which means clients do not hold a deposit protected in a Deposit Protection Scheme.

Fronted says it intends to address the same problem, but will let clients  pay their deposit over a 1-year or 12 month period (and not all up front).

Jamie added:

“A lot of renters don’t move because they don’t have money saved up. The alternatives in the market have shown that there is a market for deposit help, but we believe the insurance model doesn’t protect tenants and is prone to miss-selling. It is also expensive. For customers bridging between deposits and moving multiple times the fees stack up.”

Fronted is regulated by the UK’s Financial Conduct Authority (FCA). The firm has reportedly obtained a consumer lending authorization.

Established in February 2021, the company says it does not have any early repayment fees for clients who intend to settle the deposit loan early and no hard credit checks are performed for applications submitted to the platform.

The firm claims its offering is more cost-effective than the rental-deposit alternatives being provided by competitors.

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Big Data

Wealth Dynamix named a WealthTech100 company for Client Lifecycle Management Innovation




Wealth Dynamix named a WealthTech100 company for Client Lifecycle Management Innovation

Wealth Dynamix, a global leader in Client Lifecycle Management (CLM) solutions, has been ranked as one of the world’s leading 100 WealthTech companies for the third consecutive year, in a list compiled by specialist financial technology research firm, FinTech Global.

Launched in 2019, the WealthTech100 list showcases companies that are playing a pioneering role in transforming the global investment and banking industries. The WealthTech industry has grown dramatically over the last four years, making the process of identifying the leading 100 companies in the WealthTech space more competitive than ever.

Wealth Dynamix was awarded its place on the WealthTech100 list by a panel of analysts and industry experts who voted from a list of over 1,000 businesses. The list recognises finalists for their innovative use of technology to solve a significant industry problem, or to generate cost savings or efficiency improvements across the investment value chain.

Wealth Dynamix solves key CLM challenges with intelligent technology. Our two award-winning CLM platforms – WDX1 and CLMi – eliminate friction and inefficiency throughout the client lifecycle, ensure compliance and digitise client journeys. Our solutions orchestrate journeys throughout the client lifecycle and significantly enrich client experience.

FinTech Global director Richard Sachar said: “Established banks and investment firms need to be aware of the latest innovations to remain competitive in the current market, which is heavily focused on digital distribution and increased use of customer data, and even more so post Covid-19. The WealthTech100 list helps senior management filter through all the vendors in the market by highlighting the leading companies in sectors such as client acquisition, financial planning, portfolio management and digital brokerage.”

Gary Linieres, CEO and co-founder at Wealth Dynamix, commented: “We have worked closely with our wealth management clients to help solve the many challenges they have faced in the past year. We are proud of the contribution we have made in helping to mobilise their businesses during the pandemic and sustain their client acquisition and retention rates. We are also proud that our efforts have, once again, been recognised through the WealthTech100 list. Clients tell us that Wealth Dynamix has been instrumental in empowering the front office to engage and add more value to client interactions, throughout the client lifecycle. In 2021, the winners will be those who focus on connecting both internal and external stakeholders who touch every stage of the client journey.”

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Big Data

How digital banking is changing in 2021




Looking ahead to 2021, here are five of our predictions for the future of this sector.

1. Challenger banks won’t need to be everything to everyone to win

With more than 250 digital banks now launched globally, the obvious question is whether they will all be able to scale successfully. The banks likely to come out on top are those that solve for significant pain points, many of which might not be widely obvious. Take for example Daylight, which addresses significant service gaps in financial services for transgendered people.

Prior to Daylight, the transgender community was generally forced to use their birth name on their cards instead of their preferred name, and the Know Your Customer (KYC) process, which assesses the identity of a new user, often produced false alerts due to its rigidity in reviewing a new user’s documentation. Daylight is aiming to ease these processes and provide a host of additional features specifically targeted to the unmet needs of the LGBT+ community. More banks that are focused on smaller segments and serving them well will likely succeed.

2. Traditional players’ partnerships with big tech will provide another source of competition and innovation in the space

With big tech dipping its toes into digital banking via partnerships, legacy banks may have found a way to level the playing field against challenger banks. Legacy financial institutions will be able to continue to remain relevant by partnering with digital-savvy, data-savvy players to future-proof their businesses.

The Google Plex initiative is a great example of how partnerships between traditional banks and big tech can benefit both sides. The 11 banks that will partner with Google to launch checking accounts will have a gateway to a larger set of consumers, pairing their banking infrastructure with Google’s powerhouse analytical capabilities.

And like many fintechs, Google can build its presence in financial services while avoiding the compliance and regulatory complexities of becoming an actual bank. Expect to see more partnerships in the future that give traditional players access to far reaching, digital acquisition channels.

3. Digital banks could help make plastic disappear

This prediction will last well beyond just 2021, but COVID-19 has certainly accelerated its trajectory. Due to health risks, COVID-19 persuaded millions of consumers to adopt digital payment methods that minimized physical contact, adopting contactless payments en masse and moving away from cash and plastic.

Without physical branches, digital banks are heavily investing in seamless onboarding experiences, and many will embed these types of experiences across their overall offering including payment cards. Think virtual card numbers and digital wallet options such as Apple Pay and Google Pay that can be used just as securely and issued instantly versus plastic cards that can take days to arrive.

However, digital banks won’t make plastic disappear on their own. Merchants need to participate as well, and more retailers are adopting digital and contactless payment methods at the point of sale and online to accommodate customers. With multiple advancements in payment technology and the changing expectations of consumers, physical wallets may soon become a thing of the past. 

4. Credit cards will become the focus of many product roadmaps

Most challenger banks have focused their initial offerings on innovation around the bank account and debit card, but with a need to expand their product portfolio and diversify revenue, credit products will start to dominate many fintech product launches.

Credit cards serve as a cornerstone of daily spending habits, making up 55% of purchase volume in the U.S. And there’s also more opportunity to differentiate with credit card features such as rewards when compared to debit cards that tend to earn a lower interchange rate. The key for fintechs will be having the right technology partner that enables them to create customized credit products for their user base.

5. Cryptocurrencies will become more accessible via digital banking

Cryptocurrencies have typically been thought of as an investment play for a very niche audience. But more fintechs are starting to look at how they can incorporate cryptocurrency into day-to-day banking offerings.

Square now allows its users to easily buy and sell bitcoin via Cash App and earn bitcoin on purchases. PayPal also announced plans to add crypto to its Venmo app. And Coinbase introduced a debit card allowing users to spend their crypto by converting their balance to dollars when their card is swiped. More fintechs will start to innovate around crypto currencies and incorporate them into everyday digital banking, bringing them to a mainstream audience. 

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Australian BNPL Firm Zip Receives Strategic Investment in TendoPay, a Pay Over Time Fintech in the Philippines




Australia-based Buy Now, Pay Later (BNPL) Fintech firm Zip Co has reportedly decided to expand its global operations. Zip has received a strategic investment in TendoPay, a BNPL service provider operating in the Philippines.

This latest investment marks Zip’s initial steps into Southeast Asia, which will also be serving as a gateway for the BNPL firm’s business expansion into the region.

Recently, Zip launched central operations and commercial teams in Singapore, in order to support its expansion efforts in Southeast Asia.

Launched in 2018, TendoPay provides digital or online installment plan solutions, with a special focus on promoting responsible lending. The TendoPay platform gives consumers the flexibility of making easy installment loans for online purchases and a choice of repayment terms (anywhere from 15 days to 24 months).

TendoPay is also provided as a worker engagement benefit, with the Fintech firm teaming up with major employers in the Philippines to offer financial wellness to staff members.

The digital commerce market in the country is expected to expand to around $12 billion (30% CAGR until 2025) along with a fast-growing digital economy, which is projected to grow to about $28 billion by 2025.

Zip’s latest investment will offer TendoPay access to the expertise, finance and global network required to further accelerate growth and introduce international best practices to the Southeast Asia region. This should lead to  consumers being able to gain access to a wide range of “fair” and flexible digital payment options at checkout.

 Larry Diamond, Co-founder and CEO at Zip, stated:

“The e-commerce market in the Philippines is growing significantly, and consumers are looking for fairer, more flexible and accessible ways to pay. We recognise and align with TendoPay’s focus on building responsible lending products for consumers and its risk analysis systems. We will work together to drive growth and market leadership, helping deliver the best experiences for merchants and consumers in the Philippines.”

Kacper Marcinkowski, TendoPay, Co-Founder and CEO, remarked:

“Our partnership with Zip will support the Philippines’ rapidly evolving e-commerce sector. As market leaders, Zip will provide us with increased expertise, technical know-how and access to a global merchant network. It will also enable TendoPay to accelerate its growth and bring international BNPL best practices to the Philippines. The acquisition will give Tendo’s merchants access to new geographic opportunities.”

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