There are not many people who can claim a decade of experience in financial services, and saw the rise (and the falls) of what FinTech brought to the world.We...
The Breaking Banks Europe Team
In an exciting episode of Breaking Banks Europe, host Elizabeth Kleinveld engaged in insightful discussions with two prominent figures from the Netherlands’ fintech scene: Angelique Schouten, founder of 10x.team, and Jeroen de Bel, founder of Fincog, a digital banking consultancy.
The episode kicked off with a focus on the latest innovations in banking apps. Notably, Lloyds Bank’s move to offer car rental services through its mobile app caught attention, highlighting how traditional incumbents are embracing digital transformation.
The spotlight then shifted to the remarkable growth of Neobank Bunq. With 9 million customers and €44.5 million in new funding, Bunq stands as a prominent European Neobank. Jeroen praised their customer-centric approach, stating how their ability to respond to user demands and introduce features like cashback programs and CO2 insights has contributed to building a loyal user base.
Furthermore, artificial intelligence emerged as a pivotal theme, with a focus on its transformative potential in financial services and here Angeline discussed how AI is revolutionizing accessibility, making financial literacy more attainable for individuals with diverse learning needs.
The episode also explored the recent Dutch fintech ecosystem report, which highlighted a flourishing fintech landscape in the Netherlands while pointing out talent acquisition and regulatory complexities. As such, the regulatory landscape and its implications for fintech companies were discussed and particularly Binance’s exit from the Netherlands. Here our guests emphasized the need for a level playing field across Europe to foster an environment conducive to innovation and growth in the fintech sector and remarked the importance of EU’s new payments legislation and its role in fraud prevention, such as introducing collaboration among payment service providers and additional verification layers.
Breaking Banks Europe continues to provide an insightful platform for fintech enthusiasts seeking to stay updated on the industry’s latest trends and innovations. The insights shared by Angelique Schouten and Jeroen de Bel offered listeners a deeper understanding of the transformative potential of fintech and its crucial role in shaping the future of financial services.
In episode 184, our host Roberto Capodieci took on the challenge to learn and inform our auditors on this “Blue Carbon Credits Marketplace”. To do that, we invited Jahed Momand (Co-founder of Cerulean Ventures) expert in the carbon credits sector.
In the rapidly evolving world of fintech, where innovation is driving new financial services and solutions, there’s a fascinating concept that’s gaining traction: “blue carbon credits.” Blue carbon credits are a revelation that is reshaping the carbon market and playing a crucial role in protecting our oceans and marine ecosystems. In a recent episode of Breaking Banks Europe, an exceptional guest, Mr. Jahed Momand from Barcelona, Spain, shed light on this exciting and relatively unexplored territory.
Unlike the traditional carbon credits associated with forests and land-based solutions, blue carbon credits are all about the incredible carbon-capturing capacity of our oceans. It turns out that the sea captures more carbon than forests, which has been a revelation to many. While we often think of forests as the primary carbon absorbers, there are other powerful carbon-capturing entities like algae and various marine plants in the ocean.
The primary actions in this field undoubtedly revolve around measuring emissions, understanding the capacity for capture, and, in general, quantifying the impact, which is the most complex aspect. The issue of oceans is highly intricate, with one of the leading financial institutions stating their inability to enter this sector due to a lack of information and legal concerns regarding ocean ownership.
The concept of externalities is pivotal in this field, and artificial intelligence can be immensely helpful as it can measure and balance the ecosystem of participants, in this case, those who contribute to pollution and those who mitigate it. Additionally, integrating IoT (Internet of Things) and AI (Artificial Intelligence) technologies can provide real-time data and analytics on the health and performance of these projects. Through AI-powered solutions like causal AI, it becomes possible to identify and quantify the contributions of each participant in an ecosystem game, such as a nature-based project. This data can then be fed into the blockchain, updating the value of the NFTs and ensuring transparency for investors.
The potential of blue carbon credits and nature-based solutions is immense, and the financial industry must embrace them to drive meaningful environmental impact. By adopting blockchain, AI, and IoT technologies, we can ensure fair valuation, scalability, and liquidity for nature-based projects. Blue carbon credits offer a new frontier for fintech to contribute to a sustainable future, and with continued innovation and collaboration, we can unlock their full potential. So, let’s dive into the world of blue carbon credits and make a lasting impact on our planet’s health.
Breaking Banks Europe is back, today you are going to listen to our Breaking Carbon series, and where showcase and discuss the importance of ethical and sustainable business (and personal) strategies for the making of a better future. We are measuring the weight of impact as an economic driver in this episode, supported by Matteo Rizzi, the executive producer of the show, Càtia Davim (Social Good Summit / Enterprise Value KPMG Australia), Nuno Brito Jorge (Founder and CEO of Goparity) and Rita Casimiro (Partner at Maze).
The great thing about working in the world of sustainability as value creation is that you can combine it with existing work and knowledge, Rita has combined her desire to make a mark with her consulting background. Nuno founded GoParity to democratize the field of impact finance.
How difficult is it to create proper sustainable models? The guests introduce us to the concept of Patient Capital. But what is the right balance between sustainability and impact?
Rita – using her investor hat explains that Patient Capital is very important because environmental problems and solutions are very complex, which takes time; and patient capital allows for this slower rhythm and flexibility to develop ideas. It is a way to do impact investing. Amongst the different ways of doing impact investing, due to the amount of variables – for example, even a regular VC fund can embark on an impact investing model.
Nuno believes that it is difficult to find a balance especially if you juxtapose terms like long term investments and patient capital. Sustainability often takes a long time to implement while society is getting faster and faster and wants everything NOW, it wants to have immediate solutions. Therefore raising funds for sustainable projects is difficult. GoParity tries to combine these two concepts, implementing sustainable solutions with an immediate economic response on their investments.
Catia reminds us that we often have to make a choice between sustainability and profitability. There is a mindset that needs to be changed, not always towards “the more impactful the investment the greater the return”. From a consultant’s perspective, Cátia always invites the following critical reflection: “what can be done with the current business model to create impact?”
There are companies that can find solutions that benefit society, and these are the companies that leverage their business models more efficiently and have greater returns than others.
The last topic discussed was how to measure impact: how exactly do you prove the impact of a startup? How much do you need to standardize the yardsticks? As is often the case when it comes to an investment, there is no magic formula. Impact should not only be measured but managed; it is something that is always evolving.
Article by Giovanni Scandroglio
Money20/20 Europe, the premier financial services conference in Europe, provided a platform for industry leaders, regulators, and startups to converge and share their insights. In this comprehensive coverage, we delve into three podcast episodes – 179, 180 and181 – where prominent figures in the fintech space discussed groundbreaking solutions and innovative ideas. Through the ideas of companies representatives from Rivero, Paymentology, Thunes, PayEd, OpenPaid, and the story of Only Fans’ content creator – Lewis Buchanan, we explored the transformative power of technology in shaping the future of financial services.
In the first episode – live from the MoneyPot Stage, Elizabeth Kleinveld a company that drives efficiency in payment operations, being the first VISA solution in their country: Rivero, a pioneering fintech partner based in Switzerland. Founders Fatemeh Nikayin and Thomas Müller provided an overview of their innovative software-as-a-service products. They simplify scheme license compliance, ensuring banks align with payment networks’ regulations and facilitate the digitalization of fraud recovery and dispute management processes. Rivero’s focus at Money 20/20 Europe was to forge connections and collaborations, aiming to enhance the efficiency of the payment industry.
Abe Smith from Paymentology was interviewed at their impressive booth by Don Ginsel and emphasized the importance of data insights in providing personalized products to customers. By leveraging data analysis, Paymentology aims to drive innovation and enhance customer experiences in the payment space while together with John Ryan, representing PayEd, underlining the significance of payments education. During the discussion with John, he underlined the importance for individuals to be willing to do the hard work and be ready for startup opportunities while suggesting the importance of collaboration. In particular, his business focuses on providing education to graduates entering the industry and executives who want to stay updated on payment developments and they do so by offering online courses that cover various topics related to payments, including regulation, cards and schemes, open banking, and digital innovation.
In the second episode – powered by Thunes, we featured Andrew Stewart, CEO of the global payment solutions provider that offers its client the ability to pay out in approximately 130 countries worldwide, and Ivan Maryasin from Monite, an expert in interoperable ecosystems. Stewart highlighted the company’s commitment to transparency and instant delivery of funds across various payment instruments, not only to bank accounts but also to wallets and other popular payment instruments. Their innovative approach aims to address friction points and enhance the payment experience for businesses and individuals alike. Maryasin shed light on their platform, enabling enterprises to incorporate invoicing, billing, and payment functionalities seamlessly. This approach saves time and resources for businesses while providing a hassle-free experience for clients.
Following up on them, Iana Dimitrova, CEO of OpenPayd, discussed embedded finance solutions. Open Payd’s platform offers virtual IBANs, payment accounts, access to faster payments, SWIFT network integration, and embedded foreign exchange services through APIs. Dimitrova emphasized the importance of regulatory compliance and building trust with customers to safeguard their assets. OpenPayd envisions a future where financial services become embedded in different sectors, expanding the reach of financial products and services.
To conclude, with “switched” into the creators’ economy sector and the impressive personal journey of Lewis Buchanan. He discussed his decision to partner with OnlyFans and highlighted the benefits including fostering a closer connection with fans and creating a safer community. The partnership allowed him to be more authentic, unique, and independent while evolving the relationship between creators and brands and his personal financial planning situations.
Money 20/20 Europe showcased cutting-edge solutions and visionary ideas driving the fintech landscape. Our guests’ insights highlighted the transformative power of technology in payments. As the industry evolves, these companies and individuals are revolutionizing payment systems, fostering interoperability, and pioneering embedded finance solutions. With continuous innovation and collaboration, the future of payments looks promising and sets the stage for a seamless and secure financial ecosystem.
Stay tuned for more groundbreaking discussions and interviews.
In this episode, our host is joined by two special guests who bring their expertise and insights to the table: Sandra Miranda, founder of payment consultancy company Paperwork, and Monica Millares, a representative from Big Pay, a Neo Bank focused on helping individuals manage their money and improve their lives.
During our dynamic conversation, we explore the latest news and developments that have been shaping the fintech sector. One notable topic we touch upon is Twitter’s rebranding as x-corp and the appointment of Linda Yakarino as the new CEO. This strategic move reveals Twitter’s ambition to become a super app, sparking intriguing discussions about competition within this space.
We also delve into the performance of venture capital funds, which have experienced negative growth for the third consecutive quarter. This trend prompts us to examine the challenges faced by startups in today’s financial landscape. We emphasize the significance of trust and engagement in financial services, highlighting the need for fintech companies to create seamless experiences and establish trust with their users.
Additionally, we explore the exciting announcement from Goldman Sachs, as they turn Louisa into a fully-fledged, open social media platform to compete with LinkedIn. This development underscores the demand for a social media platform tailored specifically to deal-making and fundraising in the startup ecosystem.
As we conclude our conversation, we reflect on the current state of the fintech ecosystem. While funding may have been abundant in the past, there is now a growing emphasis on reassessing growth and sustainability. We draw insights from the City of London’s perspective with particular attention to the Revolut case, which reinforces the need for responsible due diligence and profitability within the industry.
By Andrea de Caro
Breaking Banks Europe brought you a spin on the trendy BNPL – “buy now, pay later”. In particular, in this episode, the topic was the application of this concept to the educational system, and hence we titled it “Study Now, Pay Later”. To do that, this episode is hosted by Matthias Kroener with incredible guests: Tess Michaels (Stride Funding), Marta Palmeiro (Student Finance), and Bjoern Christian Wolf (Lendorse).
First, the guests start to make a distinction between the European market and the American market, where the demand for funding to study is greater, although it is vastly growing in Europe as well. Another big difference is that the American market tends to focus on undergraduates while the European market put its emphasis on masters/MBAs. Increasingly, education is being seen as a business, and if one talks about the value for money, the ROI in Europe is bigger (and more attractive) than in the United States – despite salaries still being higher in the US. Finally, another important difference is that finding a financing solution is easier for a domestic student compared to an international student in both regions.
It is also important to emphasize that it is difficult to represent an ideal candidate to receive funding. There are too many variables, such as the academic background, duration of studies, employment opportunities, and the student’s motivations. Furthermore, in Europe, there is a lag in terms of data compared to America because it is difficult to evaluate schools through rankings and track how schools provide employment and salary data after graduation. This creates a difference between the data reported by universities and the actual data, making it more difficult to scout for potential funding.
Regarding emerging markets, the process is made more complicated by the issue of visas and the fact that students from these markets have even less money compared to European and American students. Therefore, it is important to develop different products for different needs, taking into account both the current and future economic situations.
On regulation in the field of student funding, often special purpose vehicles are created to collect funds and separate them from individual student financing. In the U.S., there has been a legal gray area for a long time regarding this type of financing. In Europe, on the other hand, there is specific regulation for loans, but the big difference is that in Europe, there is no unconditional forgiveness of the debt. In Europe, if you have a loan and, for example, you fall ill after your studies, you are not obliged to repay the debt immediately. Depending on the specific terms and conditions of the loan, there may be options for deferment, forbearance, or other forms of repayment assistance. However, it’s important to note that the loan is not unconditionally forgiven in the case of illness or other extenuating circumstances, and interest on the loan may continue to accrue during any period of deferment or forbearance. Ultimately, it’s important to carefully read and understand the terms and conditions of any loan before agreeing to it.
In conclusion, when it comes to numbers and products, STEM studies are often funded. As for the percentage of gross income by the platforms, the goal is to stay below 12%, and the average duration is between 2 and 6 years. This was a fascinating deep dive into understanding the platforms and we recommend a listen at your preferred Breaking Banks Europe streaming platform.
The quest for financial literacy amongst younger generations is a growing and relevant subject current players in the field should be aware of – the lack of formal financial education through educational institutions, has left many GenZers struggling to self-navigate the complex world of finance, including understanding basic financial concepts and managing their money effectively. This personal orientation often leads to strong financial concepts, building financial resilience, and exploring income-generating activities (often through non-traditional forms).
This was the motto for the building of the MONEY UNDER 20 mini-series, Episode 166 and Episode 170 for Breaking Banks Europe, where we invited GenZers and Media Creators to explore exactly how these informal tactics are supporting the new generation to build and nurture wealth.
The first episode – 166 was a true brainstorming session, to understand the challenges, structures, and habits of students at Sciences Po Lyon – Charlotte Aimard, Elian Guerrero, Samuele Rizzi, Romane Vitalis – that in four very particular ways – either have money, borrow money, manage money and invest money – using different online banking, schedules, and learning methods – at also varied stages of literacy.
In the second part of the series – episode 170, the guests discussed various strategies for building financial resilience and the importance of financial education in helping young people become financially literate. One guest – Taylor Price – introduced the concept of the “money tree,” which involves building a strong foundation of financial knowledge and skills and then growing and diversifying one’s financial portfolio. This strategy emphasizes the importance of not only saving money but also investing it wisely to generate long-term wealth.
Another guest – Milan Singh – suggested that income-generating activities can be an effective way to create economic prosperity. This idea highlights the importance of diversifying one’s sources of income to increase financial stability and reduce dependence on a single source of income.
These conversations also touched on the role of parents, teachers, and even the government in providing financial education to young people. By learning basic financial concepts like credit cards and savings accounts, these users can better navigate the complex world of finance and avoid making costly mistakes.
Overall, the episodes provided valuable insights into how younger generations are dealing with money and the importance of financial education and empowerment. As the fintech industry continues to evolve and reshape the financial landscape, it is critical to ensure that everyone has the tools and knowledge they need to succeed in this rapidly changing world.
Listen to episode 166: https://bit.ly/BBE166PVK
Listen to episode 170: https://spoti.fi/40GuVV6
This article is based on episodes 167 and 168 of Breaking Banks Europe, which featured
interviews and live event coverage from Finovate Europe, hosted by Francesca Aliverti.
The banking industry is constantly evolving, and several leaders are working tirelessly to
make it more user-friendly, efficient, and sustainable. In this article, we will discuss insights
from four industry leaders about the challenges, opportunities, and innovations in the
Bianca Zwart, Chief of Staff to the CEO at Bunq, emphasized the importance of building
products, experiences, and business models based on customers’ wants and needs. Bunq’s mission is to revolutionize the banking industry by making it more user-friendly and this
approach proved to be essential for banks to stay relevant and attract Gen Z and millennial
Elizabeth Rosiello, the CEO of Aza Finance, started her business in Nairobi, Kenya, in 2013.
Aza Finance is a pan-African fintech company that provides foreign exchange payments,
settlement, and treasury services. Rosiello saw an opportunity to tackle the issue of the
dollarization of the African continent and reduce the significant barrier to trade created by
expensive cross-border payments. Starting a business in Africa is not without its challenges,
with instability, currency volatility, and different legal systems creating structural
differences. However, companies like Aza Finance are innovating and tackling these
challenges to accelerate economic growth in Africa, reducing reliance on the US dollar and
promoting monetary policy sovereignty in African economies.
Saira Khan, Head of Business Model Innovation at First Direct Bank, highlighted the
importance of collaboration between traditional financial services and fintech startups.
Khan leads and supports collaboration efforts at First Direct Bank in areas such as open
banking, emerging technologies like data and AI, and sustainability. One challenge she has
faced is the cultural shift in the way startups and banks communicate. Founders need
to understand how to collaborate with banks and get the best out of their experiences.
Michael Ramsbacher, the Head of Product at Trulioo, discussed the evolution of digital
identity verification solutions for businesses operating in the international market.
Ramsbacher highlighted the problems that customers face, such as fraudulent activities, and
the need for reliable and efficient identity verification solutions. Trulioo is a leading provider
of such solutions and has been at the forefront of digital identity verification innovation.
In conclusion, the banking industry is facing significant challenges, but also significant
opportunities for innovation and growth. Industry leaders are working tirelessly to make
banking more user-friendly, efficient, and sustainable while navigating challenges such as
cultural shifts, regulatory differences, and currency volatility. Collaboration between
traditional financial services and fintech startups is key to driving innovation, serving
customers better, and staying on top of emerging trends and technologies.
The success of these great episodes is attributed mainly to the collaboration with the Informa team. Join the next Finovate Europe (February 27-28, London), Finovate Spring (May 23-25, San Francisco), and Finovate Fall (September 11-13, New York).
Article by Andrea De Caro
Breaking Banks Europe is back, and today we’re here in a very special episode with one of the most promising companies in the payments space – Zotapay. Our two guests Valerie Standret and Alex B. will talk about alternative payments method, Zotapay‘s core business.
Zotapay focuses on connecting #merchants with emerging markets. Alternative #payment methods are critical and very important in emerging markets, data shows that credit cards, for example, struggle to spread in emerging markets. What is special about alternative payment methods is the fact that they are safe to make payments, they are fast, and they avoid fraud. Another special feature is that they allow payments and transactions to be made without going through a bank.
Zotapay was born with its focus on emerging markets, to date, it is their largest market thanks to the knowledge developed over the years, especially compared to competitors. Zotapay strives to cover the needs of people in emerging countries by trying to integrate as many methods as possible, in addition to that they try to understand the specific needs of each country. For example, in Africa there are two problems: trust and volatility, so they have started using alternative payment methods. For many Americans and Europeans credit card is the most common tool, paradoxically in India, they use digital methods to pay. Credit cards in some countries have problems spreading for various reasons. The first is security, alternative methods then are more convenient and faster, credit cards require a lot of data to pay and to get bills or receipts, but alternative methods do not.
One thing to consider is also the mentality and legacy of different countries; in developing countries, there is much openness to technology and new solutions, while Europeans and Americans are more attached to what they already have. An example is the electric car, which has struggled to gain popularity in these countries. Additionally, in emerging countries, the youth population is much larger than the elderly population. Young people prefer to have everything on their phones and don’t want to carry anything else around. Zotapay has a mobile-friendly interface precisely for this reason, in order to have everything at your fingertips is crucial in today’s world. Young people from all countries often make purchases through mobile and social media. Many brands, in fact, sell on Instagram and TikTok. Payment infrastructure must adapt quickly to this change, and security must always come first. The #CVV code and #PIN were invented precisely to adapt to new behaviors. The problem with security, however, is that it also raises costs, and often customers end up paying.
Zotapay tries to increase efficiency by reducing the number of clicks to make a purchase and, using mobile phones, allows for more flexibility in terms of security. This way, it achieves faster speed, and more user-friendliness, and still maintains security through the use of mobile phones. There are a lot of digital natives in emerging countries; that’s why alternative payment methods will continue to spread rapidly. Zotapay, therefore, wants to listen to the needs of these countries and create an easy and cross-functional tool that can be used by anyone, young or old, without any effort.
Even sellers can benefit from alternative payment methods. Firstly, Zotapay allows sellers and merchants to have an additional way of receiving payments and therefore making sales. Additionally, alternative methods are very flexible, the seller has full control over how to collect money, and disable/enable features, which is not possible with traditional methods. Zotapay, therefore, offers a stable, secure system, with a higher approval ratio thanks to the better experience of those who buy. In China, Zotapay has managed to spread thanks to the fact that it makes life easier for sellers. The difference between Zotapay is not only the integration but also the customer support and money management functionality offered to sellers.
Those who use Zotapay get more clicks, a higher approval ratio, and a better consumer experience. The money management functionality is something unique that Zotapay is rapidly developing because it meets a widespread need of merchants who want to manage money in various countries. It’s a win-win for merchants, consumers, and Zotapay. Alternative payment methods are capable of reducing costs for merchants as well, and this is one of the main drivers of growth for both Zotapay and alternative payment methods.
Technology has evolved a lot in recent years, first serving only credit cards, now it’s more open, and this has certainly been possible thanks to the rapid growth of crypto, which has opened people’s minds. The more payment methods are integrated, the more alternative payment methods will grow and develop. Zotapay uses stablecoins, which is a system that allows reducing costs compared to a traditional bank, these new technologies are being developed and are making possible the digitalization of payments in a very secure and fast way. In addition, providers in the future will have to embrace this change because the world is heading in that direction, we want more stable, easier, and more accessible finance for everyone.
Alternative payment methods also manage to lower and make transactions of smaller amounts more accessible. The future of a cashless society is based on security, stability, and the needs of young people who increasingly prefer to buy online. If society changes its needs, payment methods will adapt to these new needs.
Breaking Banks Europe is back, today going deep into the complexity of building fintech ecosystems.
The article is based on the episode BBE 138, hosted by Francesca Aliverti with three exceptional guests: Matthew Gamser (SME Global Finance Forum – IFC), Rodrigo Garcia de la Cruz (Finnovating) and Isio Nelson (BAI)
We asked our guests what the role of the fintech in the financial ecosystem is, what its relationship with the incumbent is, what are the still needed steps that must take place, and the main implications of open banking for the consumers.
Hence, they unmuted their mic to discuss exactly their perception of the key elements, KPIs, and collaboration models between all parties that build this big financial services and technology industry. It started by having them share their organization’s role and what makes them ecosystem builders while explaining the importance of creating global space to accelerate and improve access to finance bringing together connections: and giving the financial leader the confidence to make smart decisions every day.
Everyone seems to agree on the importance of collaboration in different but always crucial steps of the ecosystem itself. When looking at the larger framework, our guest underlines three primary participants: financial providers, enablers, and non-financial distributors. All of them work together, instead of competing, and enable each other throughout the ecosystem to provide more efficient services. Again, the guests and the host agree on Singapore and India being the more advanced open banking systems with investment in infrastructure that lower the cost of innovation. Unfortunately, this is not regular around the world and policymakers are not in one mind in enabling that.
The conversation then moved specifically in the role of the fintech and its relationship with the incumbent by taking advantage of the banking background of one of our guests. Listen up to our podcast to obtain our guests ‘suggestions and insightful information regarding their organization and news that are coming up soon!
By Andrea de Caro
Breaking Banks Europe is back, today going deep on the incredible travel fintech momentum.
The article is based on episode BBE 139, hosted by Meaghan Johnson with two exceptional guests: Tania Ziegler (Senior Partnership Manager at Booking.com), Thomas Negrit (CEO and founder of Flywallet).
We asked our guest Tania what the role of tech is in Booking.com, and what emerged is that the firm invested in a Fintech department, for the payment solutions to offer a better offer. Thomas, on the other side, works in a start-up in which the main goal is to make travel more sustainable and accessible through a save-money mechanism.
Fintech is helping to make several sectors more accessible, including travel. In particular, due to the ease of use, it is possible to remove some financial frictions in this sector. It is a solution that can help, for example, Booking.com to become something more like e-commerce, to reach customers and service providers globally. Flywallet wants to enable everyone to travel with the right amount of money. Travel preparation is the most important time, especially from a financial point of view.
The travel industry can be considered a resident industry. It is an area where fintech can help a lot. More options can be offered when making a payment, thus facilitating the process for the customer. The sector is in a strong recovery after Covid, so it is important to reach as many customers as possible and offer them the best customer experience.
One example is the ‘buy now and pay later” option, which allows people to be more flexible. It is a credit option that is becoming more and more popular. The step Flywallet wants to take is “Save now, Pay Later”.
The travel industry will become increasingly important, fintech has proven to be useful in any sector that offers services such as travel. The implementation of fintech technologies in Booking.com is an example. Furthermore, fintech solutions can implement security and trust in the industry. Lastly, loyalty programs were mentioned; these too can benefit from the technology and increased security that fintech solutions can offer the travel industry.
Listen up to our podcast to obtain our guests ‘suggestions and insightful information regarding their organization and news that are coming up soon!
Breaking Banks Europe is back, today going deep on Metaverse.
The article is based on episode BBE 144, hosted by Matthias Kroener with two exceptional guests: Matthew Gardiner (founder ofA1 Al) and Martha Boekenfeld (dean and partner at Metaverse Academy).
We asked our guests what’s their definition of the metaverse, what are the main sectors and trends and what are the ethical principal that needs to be at the foundation of it.
Going deep into the metaverse is important nowadays to really understand the evolution of a world which is definitely going to define the future of the internet and here comes in help our guests who underlined the vision that the metaverse represents, despite the many definitions that can be associated with it.
Everyone agrees it is going to be a game changer and that will have a defining impact on our life, way beyond the immediate association that comes with the gaming industry. Indeed, our guests highlighted the importance of this sector, which cannot be considered childish only anymore, as abridge into the metaverse.
The challenge now is understanding the impact and the role the banks need to be playing in this evolution. Consumers are shifting towards the metaverse and banks need to actively follow and back them. There has been and we will keep seeing a lot of onboarding into the metaverse by big companies through important partnerships (coin base and black rock, as mentioned in the podcast) and this makes it much simpler for banking to get into this world as well.
For the metaverse to be incorporated into our life, education needs to be properly done. Listen up to our podcast to obtain our guests ‘suggestions on the best websites people should visit to get a fist hand experience of the future of the internet.
By Andrea De Caro
Breaking Payments is back, today going deep on the growth and M&A process for SMBs.
This article is based on the episode BBE 150, hosted by Matteo Rizzi (executive producer of the podcast) with an exceptional guestJean Christian Mies (general manager of Americas, PPRO).
This episode is powered by PPRO, globalizes payment platforms for businesses so they can offer more choices at the checkout and boost sales. Payment service providers, enterprises, and banks that run on their infrastructure are able to launch payment methods faster, optimize checkout conversions, and reduce the complexities of managing multiple fund flows.
Jean Mies has a cultural diversity background, with European roots. He was born and raised in Brazil. It is in the payments industry for 20 years. He worked in WU, Adyen, and now in P PRO for a year and a half.
The sour episode with the guest’s thoughts on the topic of embedded finance. Payment companies are increasingly focusing on financial and embedded services for consumers and businesses. In the past, companies sought funding to grow quickly; now funding is closely tied to the path to profitability.
Jean then reports on her past experience at Western Union, which was one of the first players in cross-border payments. Now micropayments can potentially be profitable, and Jean has seen these two phases: WU is very traditional, today cross-border payments and wire transfers are very cheap, and the scenario has completely changed. Emerging markets play a crucial role in this transaction because they are big markets with great potential. Also, e-commerce has driven the growth of wire transfers because now people want to pay abroad easily.A combination of digitalization and migration is another key to the development of the cross payments system and start-ups that do that. Now, travel is cheaper, and more and more people change their countries to find new opportunities. In addition, with the level of technology that we have, people can work wherever they want.
Europe and Latin America:
The guest then tells us about the growth of Latin America thanks to Covid19. Latin America is a conglomerate market where people pay in cash and local currency. In recent decades, e-commerce has grown faster than in other major markets such as Asia, and this has changed people’s mindset. They have been forced to use electronic payments, and this has also led to inclusion in countries like Brazil. Now many people are connected to a bank account, whereas a few years ago this was not possible. Brazil and Mexico are leading the adoption of electronic payments and innovation in this segment.
The new payment methods are possible because of high banking concentration and the involvement of regulators who ensure the competitiveness of the industry.
Finally, a zoom on orchestration, which becomes increasingly relevant in a situation where companies have to choose between partners and external vendors. PPRO already has a large ecosystem of partners in the orchestration ecosystem and can provide solutions globally.
The episode is concluded by a prediction: Jean believe that technology is more important than big data for the grow of the company and also the financial inclusion is necessary to grow.
By Giovanni Scandroglio
May is over and this means that’s time for News From The FinTech Front, our format that recaps the top fintech stories selected every month by the team of FTS group
Let’s see some of the top news from the last weeks
Klarna lays off 10% of its staff
Klarna, the buy-now, pay-later startup, plans to lay off around 10% of its global workforce, making it the latest large digital company to announce employment cuts.
Klarna’s CEO and co-founder, Sebastian Siemiatkowski, made the announcement to his workers in a pre-recorded video message on Monday. The changes will not affect the “great majority” of Klarna staff, he said, but others will be notified that they will be laid off.
“When we set our business plans for 2022 in the autumn of last year, it was a very different world than the one we are in today,” Siemiatkowski said.
“Since then, we have seen a tragic and unnecessary war in Ukraine unfold, a shift in consumer sentiment, a steep increase in inflation, a highly volatile stock market and a likely recession.”
Bolt, the paytech startup, to layoff one third of its staff
Bolt, a check-out payments business, has become the latest fintech unicorn to succumb to the raging tech stock market, announcing intentions to lay off a third of its employees, or 250 people.
The layoffs came only a few months after Bolt secured $355 million at a $11 billion value.
Mondu raises $43M confirming growth of B2B BNPL
Mondu, a Berlin-based B2B purchase now, pay later firm, has raised $43 million in a Series A round led by Valar Ventures, and plans to grow across Europe.
Mondu’s Series A funding has been sustained by previous investors Cherry Ventures, FinTech Collective, and digital entrepreneurs and senior executives from Klarna, Zalando, and SumUp. The firm has raised $57 million to date.
Mondu’s BNPL solution now provides for customizable payment arrangements through direct integration into online businesses’ checkout processes. Mondu supervises the processing of payments as well as associated services if a business client chooses to utilize one of the payment options available.
Last month, the company announced a Banking-as-a-Service partnership with Raisin Bank, which would provide a new option for future installment payments, as well as the ability to specify delayed payment dates via the merchant checkout.
JPMorgan makes further steps in the Metaverse
JPMorgan has created a metaverse library to house its annual Summer Reading List.
The list’s first trip into the metaverse will be in the Onyx by JPMorgan nightclub in Decentraland in 2022, which has been a summer ritual for more than two decades.
Visitors may visit a curated virtual library display on the lounge’s first level, which was produced in collaboration with metaverse real estate developer Everyrealm, for a limited time.
Visitors may make an avatar, learn about the books, and watch exclusive interviews with chosen authors, all while a scholarly owl sits nearby, ready to congratulate them on properly answering trivia questions about the novels.
Welcome to another Breaking Banks Europe article, in this piece, we explore the fascinating world of green blockchain with two distinguished guests: Francisco Benedito, CEO and founder of Climate Trade, and Yves Carnazzola, CEO of Access Impact – where they discuss the transformative power of blockchain technology in addressing environmental challenges and promoting sustainability.
Francisco Benedito, with a background in finance and technology, shares his journey into the climate tech space and the motivation behind creating Climate Trade. He passionately explains how blockchain can revolutionize the carbon credit marketplace, combating issues such as double counting and lack of transparency. By introducing a blockchain-based marketplace, Climate Trade enables companies to directly purchase carbon credits from projects, ensuring funds are allocated efficiently and transparently.
Yves Carnazzola, coming from a finance background, highlights the need for a mindset shift in addressing sustainability challenges. With Access Impact, he aims to connect project developers, investors, and emitters through a collective action approach while creating a transparent and accountable ecosystem.
The conversation deepens as Francisco discusses how blockchain enhances transparency and efficiency in the carbon credit marketplace. His vision extends beyond carbon credits, encompassing environmental assets like biodiversity and plastics and he underlined his main aim to create a marketplace that empowers companies to support impactful projects and embrace sustainability.
The topic elaborated on the mental shift required to adopt new governance models and understand regulations poses significant hurdles, whose solution can be found in blockchain’s ability to reduce asymmetric information and enhance transparency. Yves so stresses the importance of understanding data connectivity, harnessing IoT and machine learning, and effective communication to facilitate positive change.
It becomes evident that blockchain technology is driving the sustainability revolution. Francisco and Yves passionately advocate for a future where blockchain plays a central role in promoting transparency, efficiency, and trust in sustainable finance. Their shared vision for a greener planet inspires listeners to embrace innovative solutions and contribute to the ongoing transformation.
Through their visionary insights, listeners gain a deeper understanding of the challenges and opportunities associated with harnessing blockchain for environmental good. Join us on Breaking Banks Europe to explore the intersection of blockchain and sustainability, and discover how these pioneers are shaping a more sustainable future for us all.
April is over and this means that’s time for News From The FinTech Front, our format that recaps the top fintech stories selected every month by the team of FTS group
This article is based on the episode Breaking Banks Europe 125, hosted by Matthias Kroener with two guests: Giada Gambadoro (Fintech Driver at PwC) and Xavier Gomez (CEO and Co-Founder at INVYO)
Let’s see some of the top news and trends from the last weeks
Russia-Ukraine war impact on fintech
What’s happening was unexpected for most of us and has an ambiguous impact on fintech. It can foster some kinds of innovations, such as cryptocurrencies, it is changing some technological supply chains, for example in cybersecurity, with the replacement of solutions developed by Kaspersky Labs. The ESG topic may see some promotion thanks to the need to replace fossil fuels from Russia, but, according to Giada, it is too early to make a balance.
What will happen to startup valuations or sectors like the BNPL?
Current crisis is making the path to normalization of monetary policies steeper than expected and this tends to reduce the valuations. According to Xavier, the impact will be limited and the macro scenario can’t stop the cycle of innovation in many sectors like AI, life sciences and fintech.
Klarna, Scalapay and other BNPL unicorns may not be much affected by the macro scenario but our guests fear a debt bubble that can burst if recession leads more people not to pay installments.
An interesting development is the response of legacy players that are working not to lose customers. VISA installment APIs that enable issuers and merchants to offer installment solutions in-store and online for purchases made with existing Visa cards.
New developments in climate fintech
Climate fintech is growing, driven by consumer and corporate demand. 100+ countries are committed to net-zero emissions and this supports the market demand. Investors are acting and looking for sustainable investors.
According to Giada, the topic is hard to expand but there are good signals and authorities both at country level and local level are reacting and pushing green initiatives.
The current crisis reminded us that reducing
New crypto regulations in the US
The US is adopting new regulation on cryptocurrencies showing a proactive approach to protect consumers and give this sector a national regulatory framework.
The executive order is not very technical itself and According to Giada, it is more interesting to follow this topic and read the new, more detailed documentation that will come.
Xavier pointed out that signing an executive order on digital assets is significant because it qualifies them as an asset class and unlock the potential of good uses of them.
Article by: Elias Secchi
Breaking Payments is back, today going deep on the growth and M&A process for SMBs.
This article is based on the episode BBE 150, hosted by Matteo Rizzi (executive producer of the podcast) with two exceptional guestsOlympian TosinOke (Head of SMB sales, Payoneer) and Louis Clement(CFO, TapNation).
This episode is powered by Payoneer, the #PayTech company that allows global commerce by connecting businesses, professionals, countries, and currencies with its cross-border payment platform.
In this episode, the topic is M&A starting from the basics and moving on to more specific topics. M&A is seen as one of the best final stages for a start-up. M&A and IPO are the endpoints for the most promising start-ups.
Going deep into the M&Aworld it is important to underline that is a very wide field. Many times, when people talk about M&A they think of cases like Elon Musk and Twitter but, there are various shades of this process. It depends a lot on the intermediaries and companies involved.
In a traditional world, we see involved financial players such as banks and start-ups that have already reached mature stages. As of today, things have changed a bit and thanks to more and more SMB realities we are seeing different M&As. SMBs have different stages of growth and different ways to grow (marketing, products, brands, and consumers). M&A deals today have to take this into account, plus we are in an increasingly digital and fast-paced world, so the new approach to these processes is entrepreneurial to better suit these start-ups.
This new approach requires expertise in various areas and requires being able to understand and read the needs of start-ups. Having a third party, such as, for example, Payoneer can be helpful in filling skills gaps and having a double check on the start-up you want to buy.Transactions can use the asset or share to conclude the transaction. The first is used for ease of use and is often used in smaller transactions. Transactions using shares are more common and usually employed in large transactions.
In this episode, we have a very specific reality related to gaming and an unconventional financial operator. Just these two guests make us realize how much M&A has changed and how for niche, specific, and new sectors like gaming it takes unconventional financial operators. Payoneer is a financial operator that provides trust that replaces banks because of its security, speed, and ability to act where more traditional banks struggle (emerging markets).
In conclusion, this episode highlighted how even a solid and structured world like M&A is permeable to fintech realities through new start-ups that banks struggle to follow.
By Giovanni Scandroglio
Breaking Banks Europe is back, today going deep on the personal finance management and green services.
The article is based on the episode BBE 146, hosted by Don Ginsel with two exceptional guests: Jean-Louis Warnholz (Co-founder and CEO ofFuture) and David Lais (Co-founder and Managing director of Ecolytiq).
We asked our guests what’s the impact of the choice we make, what is the role of the financial industry and of the regulation entity and what decisions they are taking to improve the green sector.
Going deep into the global green financing is important nowadays to really understand the individual influence that each one of us have on the planet and here comes “Future” which aims to disrupt the current financial rewarding system by redirecting the attention and rewarding low carbon footprint activities. It’s all about understanding the financial impact of our choice and this perfectly combines with Ecolytiq’s technology and data analytics software that help people as consumers to understand what can be done better by analyzing the consumer behavior.
The above-mentioned solutions have an impact on people but it’s crucial to realize that sustainability is complex is and that’s why even if the problem is acknowledged by some,clear guidance is necessary. As defined by our speaker, it’s a journey and people need the right tools to make the right conscious decisions.
The challenge now is on the collaboration with the industry. If people as consumers do conscious choices the industry will follow and find alternatives that suit them.Our guests finally highlighted the goal of building transparency, with always updated regulations, education and ultimately a sustainable economy that empowers the consumer to drive the change.
All the above need to be done with the help of financial industry that should help in financing and allowing for investment opportunities to be directed in the right way, while largely personally benefiting from them.
By Andrea de Caro
This article is based on episode BBE 126 powered by PPRO, industry-trusted provider for payments infrastructure that powers global growth for payment companies
The first Breaking Payments episode is here! PPRO is powering this incredible overview of some of the “Keys to success in hyper-growth companies” – basically how to ensure growth through the voices of some of the most dynamic companies in the industry. How to generate growth for your clients? Which are the operational challenges that payment providers have to resolve? Which are the key differences amongst markets that need to be resolved when scaling from local operations to a global presence? Which is the winning culture – how inorganic growth can foster competitive advantages to succeed especially when targeting distant markets?
Paolo Sironi as anchor moderated a discussion with Javier Villaure de la Paz (COO at PPRO), Sendi Young (Managing Director at Ripple Europe) and Dora Zambra (COO at Azimo).
As pointed by Javier Villaure de la Paz (PPRO) Payment providers can create value through the introduction of new payment methods (Stripe) or can also help businesses providing a technological ecosystem that allows fast onboarding processes
Innovation in Payment can also make the market more efficient. According to Sandi Young (Ripple), blockchain-based payments can overcome the limits that legacy payment infrastructure shows when asked to support today’s world that requires global and instant payments.
Dora Zambra (Azimo) agrees on the pains that innovation can solve: cost and speed of international transfers, solving them is also the challenge that Azimo accepted to solve shaking the money-transfer sector.
One of the challenges in this market is fragmentation as the number of payment methods is increasing and, at the end, end users just want to pay and it’s necessary to serve them with a payment method that they like.
Focusing on the challenges that a payment company has to face when scaling up globally, the first is regulations that are different in different jurisdictions, and this can’t be solved, expanding internationally requires being fully compliant with multiple jurisdictions and it adds complexity. The other issue is represented by customer habits, for example in some countries people are more used to use mobile wallets, and in other countries bank accounts are more common.
The third problem, pointed out by Dora and confirmed by Javier, is related to the complexity of infrastructure. Suppliers are not the same and going global creates complexity. In some countries, for example, are common prepaid methods that don’t work well as payment methods where it is necessary to have confirmation tokens or in some countries there is still a high prevalence of cash.
Breaking Payments is back, today going deep on Open Banking evolution and the role that crypto will play in this development of the financial sector.
This article is based on the episode BBE 129, hosted by Ajit Triparthi with two exceptional guests: Liam Gray (Growth Account Manager at Plaid) and Elena Alicea (Head of Product EU/UK at Gemini)
The discussants proceeded discussing about cryptos also thanks to the last Gemini’s report about cryptos’ adoption
According to the report, the crypto industry hit numerous milestones in 2021. Bitcoin reached all-time highs at over $65,000 USD, and venture capital investment in crypto businesses soared beyond $30 billion USD. Last year was also transformative for crypto adoption, with 41% of existing crypto owners globally making their first investment in 2021, according to our report.
The report also found that nearly half of all current crypto owners in the United States (44%), Latin America (46%), and Asia Pacific (45%) first bought crypto in 2021. Inflation concerns were also highlighted as a primary driver of adoption. Further, the gender gap in crypto is potentially narrowing. Among those who plan to purchase crypto for the first time this year, 47% were women globally. With regard to barriers to entry, education remains the greatest obstacle to investing in crypto.
Developing countries Brazil and Indonesia led the way in crypto adoption with more than two in five (41%) respondents in each country reporting owning crypto, compared to just 17% across developed countries and regions including the U.S. (20%), Europe (17%), and Australia (18%).
The concept of accessibility is evolving and makes User Experience more central than ever. One of the goals in payment today is removing barriers to the access to crypto space, according to Elena.
Where is Open banking in this scenario? We asked it to Liam that says it can’t yet be used in the crypto space but it’s a soon-future development.
Article by: Elias Secchi
March is over and this means that’s time for News From The FinTech Front, our format that recaps the top fintech stories selected every month by the team of FTS group
Let’s see some of the top news and trends from the last weeks
Egypt’s Largest Banks Join Forces to Launch New $85M Fintech Fund
Three of Egypt’s largest national banks – Banque Misr, National Bank of Egypt, and Banque du Caire – and Global Ventures, a leading MEA-focused venture capital firm – have announced the launch of Nclude by Global Ventures, a new fund focused on the acceleration of fintech innovation and financial inclusion in the North African country. This follows the approval by the Central Bank of Egypt (CBE).
Currently, an equivalent of $85-million has been invested into the Nclude fund. The investments were led by Banque Misr as an Anchor Investor and National Bank of Egypt and Banque du Caire as Strategic Investors.
The Nclude fintech fund has already made its first investments in four Egyptian companies. These are:
- Khazna: A financial Super App that offers convenient, technology-driven financial solutions to underserved consumers
- Lucky: Egypt’s leading consumer fintech app, offering installments, offers, cashback rewards, and credit.
- Mozare3: Meaning farmer in Arabic, is an Agri-fintech platform that provides smallholder farmers with direct access to inputs financing, markets, and hands-on technical support.
- Paymob: A leading digital payment service provider.
Home renovation and energy efficiency, a new opportunity for Fintech and Embedded finance
The raise in energy prices, public incentives and the reduction of the expenditure on travel and other categories due to COVID-19 pandemic contributed to fuel a surge in the demand for home renovation services both in the US and in Europe.
According to data that comes from the fintech company Hearth demand for home renovation increased by 82% in 2021 compared to 2019 pre-pandemic.
This trend creates new opportunities for fintech companies and embedded finance as home renovations need to be funded.
Giving access to credit targeted to fund effective home renovations is a challenge but opens the opportunity to make them affordable for a wider range of customers. In this way customers may have access to lower-rate loans compared to alternatives and credit cards.
And some renovations can repay themselves. An example of embedded finance in renovations is Otovo’s solar loan, which makes it possible to fund the installation of a solar rooftop eliminating the upfront investment. Especially with high energy prices, the savings in energy bills can be even larger than the loan’s installments.
The list of financial players interested in NFTs continues to grow and VISA is now on board.
According to Visa there are some 50 million artists, musicians, designers, filmmakers and other creators publishing content as a full- or part-time source of income, contributing to a $100 billion economy.
The new one year Visa Creator programme promises to help some of these artists who want to incorporate NFTs into their business model.
Those picked to join the cohort will get technical and product mentorship from Visa’s crypto experts; access to their fellow members as well as industry thought leaders and Visa clients and partners; and a stipend.
Cuy Sheffield, head of crypto, Visa, says: “NFTs have the potential to become a powerful accelerator for the creator economy. We’ve been studying the NFT ecosystem and its potential impacts on the future of commerce, retail and social media.
“Through the Visa Creator Program, we want to help this new breed of small and micro businesses tap into new mediums for digital commerce.”
News From The FinTech Front: February Edition
Europe is in war and historically war is a technological and financial challenge. Today’s issue of News From The Fintech Front can’t forget what is happening in Ukraine and in Russia but is also an opportunity to introduce some good news from fintech companies in Europe.
Let’s see some of the top news from the last weeks
Scalapay has raised a 497M$ Series B round
Fintech company Scalapay has raised $497 million in a Series B funding round led by Tencent and Willoughby Capital, and featuring Tiger Global, Gangwal, Moore Capital, Deimos and Fasanara Capital. This enabled it to surpass a valuation of $1 billion, achieving unicorn status. Scalapay is active in the “buy now, pay later” sector: this is a market that is growing very fast and is becoming part of the customers’ habits.
“Using Buy-Now-Pay-Later at checkout is a new habit in Europe but in Australia, where I have lived for a long time, it has reached an important market share among payment methods and many people abandoned credit cards, so there’s much space to grow” said Simone Mancini, Co-founder and CEO of Scalapay.
“Following international standards allowed us to make this deal very easy as we closed in less than two months even with Christmas holidays in the middle” said Attilio Mazzili, Partner of the legal firm Orrick that advised Scalapay both in Series A and Series B round
The war between Ukraine and Russia is becoming a payment war
Digital payments are a key battleground in the current conflict between Ukraine and Russia. Not only tanks, drones and planes, but switching off a country from an international payment system like SWIFT and the actions taken by companies like Google, Apple and Samsung that decided to make their payment services unavailable in Russia are showing to be a powerful way to hit a country’s population.
Queues in Moscow’s underground are only some of the examples of the inconveniences that can happen when people don’t have access to quick payment services.
Cryptocurrencies also play a role in this conflict and are seen as a way to avoid limitations by more traditional providers. For example, some crowdfunding platforms decided to refuse donation campaigns targeted to support military funding of Ukraine. The country has raised more than 15M$ in bitcoins and other cryptocurrencies and will continue to get more. It’s far less than what they’ll receive from partner countries but it’s a support too.
German’s challenger bank N26 ready for IPO by end of 2022
“N26 will be structurally ready for an IPO by the end of the year” Maximilian Tayenthal, Co-CEO of the bank, told CNBC. N26 recently raised 900M$ achieving a total funding of 1.7B$ since the company was founded in 2013.
N26 is still not profitable as of 2020 with a loss of 150M$, -30% compared to 2019. But 2021 results may be better and show a path to profitability.
According to the CEO the year of IPO may be 2024, but it is not necessary as “the company can now sustain itself”
N26’s management is also comfortable with news about the rises in interest rate. This monetary policy’s decision is for most industries a risk as rising interest rates cause a raise in interest expenditures (and a shrinking in profits) but also a general reduction in market multiples.
For a bank like N26 the situation is different as banking business is generally more profitable with positive interest rates than with zero or negative interest rates.
As the first month of 2022 is over it’s now time to analyze the top news in fintech of the beginning of the year
We have done it in our last episode of Breaking Banks Europe hosted by Francesca Aliverti with two exceptional guests:
- Gustavo Vinacua, Partner & Co-Founder at Net Positive Labs after 11 years working on innovation programs at BBVA and
- Chris Gledhill – FinTech Futurist, Speaker, Writer, and Advisor
Let’s see the main news discussed in the last episode
New funding rounds for digital banks
Digital banks are continuing achieving great funding rounds. The last example is Qonto’s 486 million euros’ series D with a valuation of 4.4 billion euros. This round follows the rounds of Q4 2021 achieved by N26, Revolut and others.
As these digital banks are not profitable yet it seems investors are trading profitability for growth.
According to our guest Gustavo Vinacua, analyzing success cases of challenger banks that are profitable, a success key factor can be the high frequency of interaction, as proven by cases like WeBank (a WeChat company) and Rakuten.
Can inflation become an opportunity for fintech companies?
The inflationary environment is known to be a risk for customers’ pockets. To fight it the traditional personal finance strategy includes an increase of investments to get returns higher than the inflation rate. Can it be an opportunity for fintech companies?
Our guest Chris Gledhill does not see a direct link between inflation and fintech space even if inflation can stimulate investments. Gustavo Vinacua sees instead this environment as an opportunity for circular economy business models as inflation is not only about investments but also about reducing the need for resources that become more expensive.
Buy now, pay later (BNPL) has redefined the relationship consumers have with credit
The growth of “Buy now, pay later” services are growing as proven by the success of fintech startups with this business model like Klarna and Afterpay. Banks and traditional lending companies have to change their perspective.
According to our guests we have to wait and see what will happen in the “later” part of the business model as BNPL companies have to face a credit risk with less robust credit score checks. B2B BNPL making credit more accessible especially for SMEs.
Visa acquisition strategy: Plaid, Tink and the last one CurrencyCloud.
Visa recently acquired Plaid, Tink and CurrencyCloud making a shift towards paytech. Visa and Mastercard play the role of incumbent in the payment ecosystem. This puts on them a new challenge as trends like account-to-account payment are reducing transaction fees. Sustainability and carbon footprint will also be a key topic in paytech.
Is the crypto world crashing?
While Central banks are considering to introduce CBDC (Central Bank Digital Currency), cryptocurrencies had a significant drop in the last week and regulators are getting more strict.
According to Chris individual investors risk to be misled by the massive advertising into cryptocurrencies. Gustavo preferred to talk about some opportunities coming from this technology as stablecoins can help, for example, farmers’ access to finance or make more efficient carbon-credits trading systems.
Keep reading our monthly “News From The FinTech Front” articles in the Breaking Banks Europe pages and listen to the podcast in your favourite streaming platform:
Apple Podcasts: https://bit.ly/BBEApple
Google Podcasts: http://bit.ly/BBEGoo
On episode 23 of Breaking Banks Europe, Matteo and Matthias are joined by Balazs Barna, Engineering Lead for TransferWise European Expansion Team, and Paolo Zaccardi, Co-Founder and CEO of Fabrick to discuss Platform Economy. Platform Economy sounds like an imperious buzzword, but simply put it’s an opportunity for non-financial players to build new services cross leveraging their distribution channels, their customer base and open banking.
But the idea is by no means, new. According to a 2014 MIT Sloan article titled ‘The ups and downs of dynamic pricing,’ “in 2013, 14 of the top 30 global brands by market capitalization were platform-oriented companies — companies that created and now dominate arenas in which buyers, sellers, and a variety of third parties are connected in real-time.” This has been and continues to be an upward trend. By 2018 seven of the 10 most valuable companies globally were based on a platform business model.
Despite the commonality of the platform economy, everybody has their own definition for it. Why don’t we take a look at how the hosts and guests define it.
Matteo: To me is the opportunity for an infrastructure to go way beyond the purpose for which the platform was built for and actually, through an open series of APIs, connect an ecosystem. If we look at a platform like Uber, Booking.com or Netflix, they were all born to do one thing but potentially their business could be extended way farther than the initial scope. That’s to me the opportunity given by the platform economy.
Balazs: It’s hard to add anything. I think, in general, these platforms don’t control the production, they control the means of connection. They are about connecting the supply and demand in a given market. As you said, the difference between a regular taxi company and Uber is that the regular taxi company is responsible for the production (buying the cars, employing the drivers, etc.) and Uber provides a platform that allows drivers to sign up and do the work while they subsidize their service for the users to reach the drivers.
Matthias: I like what you said about not controlling production but the connection. And, out of my perspective, this describes the major aim of a platform very well. In particular, once you talk about various stakeholders and ecosystems. However, pouring some water into the wine willingly, and provokingly, significantly changes the nature of what would define to be a bank as of today. Doesn’t it? Or maybe that’s pouring the wine into the water, actually.
Paolo: In general, we consider the platform model and open banking to be concretely the way to bring open innovation into banking. In the last decade, we have seen the rise of the platform economy in many industries and I think that now, more than before, the platform economy is essentially cross-industries. So if we combine non-banking and banking services we can really create a superior customer experience.
Everyone adds their own spice and their own idea of what a platform can achieve. And so do the platforms themselves. TransferWise and Fabrick are both financial services-oriented platforms. TransferWise is an international technology platform whose primary goal is to move money across borders in the most efficient and cost-effective way possible. Fabrick’s mission was to create an open banking ecosystem, so more than a platform. A combination of an ecosystem of FinTechs and a platform to connect fintechs with banks and incumbents in general. Matteo believes “Fabrick is where open banking, platform economy and the API world are really coming together.”
On this upcoming episode of Breaking Banks Europe, we have the second episode of our ‘Breaking Impact’ series, where we share stories about entrepreneurs, talents and former and current executives who are changing the world. Not only on the financial inclusion angle which might be actually a closer topic to FinTech but generally speaking, they are changing lives for the better. On this episode, Matteo and Meaghan are joined by Tiago Borges Coelho, Co-Founder of UX Information Technologies, and Andre Van Zyl, Co-Founder of CLIC.World. They shared with us their lives stories, how they came about their idea, how they developed it, the hurdles they had to overcome and their effect in the ecosystem. We’ll give you a short overview of their story, but don’t forget to tune in next Monday to the BBE podcast for the whole story.
Tiago is, first and foremost, a social serial entrepreneur. After spending many of his formative years in Portugal and the rest of the world, he decided to return home to Mozambique and create meaningful and impactful businesses. He Co-Founded UX Information Technologies in 2013, an information technology company with a strong focus on social entrepreneurship. They develop a range of online desktop and mobile applications for companies and institutions while creating their own products and solutions for social empowerment. Their two flagship products are Emprego and Biscate. An online recruitment platform for the formal sector and a mobile recruitment platform for the informal sector, respectively. These flagship products have become the biggest job boards in Mozambique and in addition to seen productivity increase for all users they have experienced some positive unforeseen consequences. “For example, some of the most highly rated workers (a la Uber) have taken to mentor other workers in the same job or formed working groups to be able to meet the demand for their services”. They are also solving pay points for the companies themselves by taking care of the payroll directly through their platform with the collaboration of Vodacom’s M-Pesa.
Andre is, to say the least, a visionary and an early adopter of new technologies (e.g. Andre had the first internet line in South Africa) Something he tells us can be problematic when navigating a regulatory environment. CLIC.World is at the moment something you could call a social financial marketplace, although Andre himself is still looking for the proper way to describe it. Despite that, he believes the end goal of CLIC.World to be that of a “Lifestyle Service Provider.” Andre is a South African expat residing in Uganda. The idea for CLIC.World came to Andre in 2008 while working an economic development consulting project in DRC Congo, where he realised that “if we don’t come up with some sort of banking or financial set of rails, you’re not going to go very far.” But in 2008 the technology was not readily available yet. They tried to get on a saturated Ripple with no success and went then to become one of the first members in the Stellar Blockchain. Founded in 2016, ‘CLIC.World is built on the Stellar blockchain and uses Stellar Lumens (XLM) as the primary mechanism of transferring value during fiat currency-based transactions’. Cryptocurrencies have been met with scepticism in many parts of the world and with its unnecessary share of fake bitcoin scams, Uganda is no exception. Meaghan posed an interesting question for Andre, “How did you educate your consumers about Stellar? How much did you have to tell users about this non-traditional banking platform?” For the sake of time, Andre gave us the short version. “We do not use the C-word. We rarely use the B-word. It’s just technology, OK?” We are all looking forward to the long version.
Tune in next Monday to learn more about how UX is transforming the labour market in Mozambique and how CLIC.World is creating a financial services ecosystem with digital identity at the foreground, as well as their hurdles and achievements.
Innovation and Tech Zoom In: Central Bank Digital Currency
In this article, we will attempt to unpack some of the interesting information shared by the hosts (Ajit Tripathi & Brett King) and guests (Makoto Takemiya from Soramitsu, Aleksi Grym from Bank of Finland, Todd McDonald from R3, and Lynn McConnell from Binance) such as ‘What is CBDC?’, ‘Different types of CBDC’, ‘CBDC Projects moving ahead’ and ‘What is implementable in the current environment?’. For more input on the conversation, please take a listen to Breaking Banks Europe, Episode 20, in your favourite podcast streaming service.
Contrary to popular belief, Central Bank Digital Currency (CBDC) are not cryptocurrencies. CBDC represents the digital form of a fiat currency of a particular nation (or region) and is issued and regulated by the competent monetary authority of said nation (or region). Basically, ‘CBDC will act as a digital representation of a nation’s fiat currency and will be backed by a suitable amount of monetary reserves, such as forex or gold’. Another important differentiating factor from cryptocurrencies is that CBDCs are centralized. Which, as Brett King mentions in this episode, “for a lot of crypto purists, that’s kind of the issue of fiat currencies.”
So, what does this mean? Ajit sets the question in a way most of us living in economies with wide adoption of digital payments can relate to. “What is CBDC? I mean, money is already digital, I can make payments with Venmo, Revolut, you name it. So how is a CBDC different from what we do today in terms of electronic payments?”From an end-user perspective is really not very different. The key difference is that if you use Venmo or Revolut or any of these electronic money type of solutions, as a customer of that service provider you have a claim on that company (i.e. You have put money on that service or account and then you can use that to make payments so in the end, it’s that service provider who owes you the money or it owes you the services that it’s promising to provide). In the case of CBDC, the service is very similar, the difference is that the claim is on the central bank (i.e. the Central Bank takes your money and promises to keep it safe and provide those payments services). As of now, Central Banks don’t do that, they have left it to the private sector.
Now that we have gotten the premise of what CBDC is and what would actually change if implemented, let’s touch open the different types of CBDC. There’s a lot of talk about ‘Wholesale CBDC’ and ‘Retail CBDC’, but what does that mean? In very simple terms, a retail CBDC is one that will be issued for the general public and a wholesale CBDC is for financial institutions that hold reserve deposits with a central bank. A retail CBDC based on DLT has the features of anonymity, traceability, availability 24 hours a day and 365 days a year. This proposal is relatively popular among Central Banks in emerging economies, mainly because of the motivation to take the lead in the rapidly emerging fintech industry, to promote financial inclusion by accelerating the shift to a cashless society, and to reduce costs of cash printing and handling. A wholesale CBDC could be used to improve payments and securities settlement efficiency, as well as to reduce counterparty credit and liquidity risks. The wholesale CBDC is seen as the most popular proposal among Central Banks because of the potential to make existing wholesale financial systems faster, inexpensive and safer. ‘The Bank of International Settlements also shares the view that wholesale CBDC could potentially benefit the payments and settlements systems.’ Decisions on whether to implement retail, wholesale or hybrid CBDC, depends on each specific Central Bank and what is trying to achieve. If you are interested to learn more please visit the WEFs’ ‘CBDC Policy-Maker Toolkit.’
What are some CBDC projects moving ahead? One of the projects touched upon with most detail was ‘Bakong’, a collaboration project between Makoto’s Soramitsu and the Bank of Cambodia. “Bakong is a next-generation Real-Time Gross Payments system already in production, that promotes financial inclusion through a friendly yet powerful app.” If you want to learn more about Bakong, please visit their case study. Other projects mentioned in the podcast where: Bank of England, People’s Bank of China and Riksbank. Others such as Canada, Uruguay, Thailand, Venezuela and Singapore, are looking into the possibility and validity of introducing a Central Bank issued digital currency.
The podcast ended with the guests sharing what they believe to be “implementable in the current environment.” but it would not be right of me to take away the joy of listening to these stellar analysts closing statements.
Finologee: An ecosystem on its own
In the last ‘Ecosystem Zoom-In’ series of Breaking Banks Europe, we had the opportunity to take a deep dive into Luxembourg with Nasir Zubairi and Jonathan Prince, two exceptional individuals of the Luxembourg ecosystem in their own rights. They themselves do not tend to need an introduction, but just in case, Nazir is the CEO of the LHoFT (The Luxembourg House of Financial Technology) and Jonathan is a serial entrepreneur, his latest hat being the Co-Founder and Chairman of Finologee. Luxembourg gives a lot to talk about, from being a major financial hub in Europe to being on the first-mover wave of FinTech adoption at a governmental level to their work in Microfinance and Financial Inclusion. We could go on, and on. For the purpose of this article, we will focus on Finologee, their outstanding journey of the last two and a half years and what lead them there.
Who better to tell the story than the founders themselves:
“we started out in 1999 by building a digital agency from scratch, Nvision; then we launched a telecom messaging, routing and micro-payments specialist company in 2006, Mpulse; the next endeavour was to build the Luxembourg’s retail banks’ mobile payments product and infrastructure as of 2012, with Digicash; and finally we launched our latest venture in 2017 to provide the tools and platforms to digitalise financial industry customer experiences and processes, Finologee.”
As mentioned by the founders, Finologee “provides the tools and platforms to digitalise financial industry customer experience and processes,” from PSD2 for Banks to Digital onboarding to platform operations. After years of providing technology solutions for banks and financial services, they decided to make the move towards a novel space, RegTech. During an interview with InFinance they clearly explained what Finologee offers:
- facilitate digital on-boarding of end-users by aggregating the best international FinTech products
- help banks holding payment accounts to achieve full PSD2 compliance
- create a digital marketplace and a leading-edge technical environment where FinTech companies and traditional financial industry players give access to their services and expose their APIs
- enable customers to identify, fill-in and sign their SDD mandates using their computer or mobile phone
- and finally, develop a system for creating multichannel messaging strategies, e.g. for the optimization of billing procedures, user authentication or digital marketing
Basically, Finologee is operating a one-stop-shop for FinTech building blocks. Since launching their products they have; 30 banks in 9 countries live with their PSD2 for Banks and are delivering their Digital Onboarding product for KYC automation with partners such as IDNow, KYCTech, ARIADNEXT and LuxTrust. They ave also obtained a ‘Support PFS’ License by the Luxembourg Minister of Finance and are regulated by the CSSF.
Be it whether you are a FinTech, a Bank or a payment provider, you are sure to find easy to improve your offerings by visiting Finologee’s website. Read More.
The Largest distributed ledger
project, outside of major crypto’s.
Back in December of 2017, the Italian Banking Associations’ (ABI) Spunta project started, giving way to the largest distributed ledger project outside of major cryptocurrencies. It all started when ABI Lab and NTT Data Italia started working on a blockchain POC for straight-through processing of interbank reconciliations using R3’s Corda platform. Since then, SIA has also come on board as a technical partner. The total collaboration team comprises the following:
- 17 industry-leading banks, including Intesa Sanpaolo and Banca Mediolanum
- ABI Lab: A consortium of 150 banks and 60 ICT providers, focused on research into the use of innovative technologies to manage processes, channels, and security in banking
- NTT Data: A leading global IT innovator, delivering technology-enabled services and solutions to clients around the world
- SIA: European leader in the design, creation and management of technology infrastructures and services for financial institutions, central banks, corporates and the public sector
- R3: The enterprise blockchain software firm, working with a broad ecosystem of more than 200 members and partners across multiple industries from both the private and public sector
Demetrio Migliorati, Head of Blockchain at Banca Mediolanum, tells us the unusual story of how the project came to be. “..18 different banking groups, 50 banks, meeting with the desire of working together in a coopetition constructing something different. This is absolutely singular.” You are right, Demetrio. It is singular as it is unique. These levels of cooperation and coopetion do not usually go any further than conference panels. Yet here we are. This project will make Italy “the first and only entire country banking sector working together with Corda … And it is coming from a country that has not been very well known for being ahead on the technology trends.”
“Spunta” is a word surely familiar to Italians in the Banking sector, and one to probably be the cause of many a headache. Is the current reconciliation system for interbank transactions in Italy, and, as you expected, it is notoriously complex. The aim of the process is to ensure that the banks at each end of a transaction are in complete agreement about every aspect. However, if the banks don’t agree, then resolving the mismatch can be labour-intensive and time-consuming, partly due to the lack of a standardized procedure and communication method.
Now, thanks to this otherworldly collaboration, there is a faster, more efficient and more transparent way of reconciling interbank transactions. ‘This new system is the product of their collaboration; a successful POC for a blockchain-enabled interbank reconciliation system based on R3’s Corda Enterprise. The trial ran for 10 months and concluded in October 2018, with the participating banks processing a total of 1.9 Million transactions. The project confirmed an interbank system underpinned by R3’s Cora Enterprise blockchain platform can help the counterparties on each side quickly identify and address any mismatched transaction, boosting speed and transparency while reducing cost and effort.’
With the POC successfully completed, the group moved onto testing the solution in daily operations in 2019. ABI says that:
“the test simulated the production with the one-year volumes of 200 banks. The loading and the Data reconciliation took place in a geographically distributed environment and connected to a secure network. The applied architecture was robust without having to resort to specific technical solutions. The methodology used allowed to analyse the operation for banking groups and large and small banks. The test also allowed for an initial analysis of the response time process. The test was completely successful.”
The push towards full-scale implementation comes as Spunta successfully cleared “200 million transactions per year. By far the largest project on the blockchain infrastructure if you don’t mention the largest cryptocurrencies.” The new system will provide banks with complete visibility of own and counterparty movements, daily instead of monthly reconciliations and improved communication with counterparties.
Demetrio adds, “this Spunta project is a great move forward for our country.” But more importantly “I think the most fun part is that when you find the right people to work together, you can create fantastic stuff.” Read More.
Fighting Financial Crime with Advanced AI
Founded in Portugal during 2010 by a combination of data scientists and aerospace engineers, Feedzai is a company fighting financial fraud through AI. Since then, it has become one of the leaders in its market, with a remarkable portfolio of clients and results. As of 2019, their outstanding numbers were the following:
- $5 Billion in transactions scored each day
- 10 of the largest 25 global banks are protected by Feedzai
- $82 Million in total funding
- 30 Million transactions go through their systems each day
- 200 Million people protected by Feedzai
- 500+ employees worldwide
As they themselves put it; “Feedzai is coding the future of commerce with today’s most advanced risk management platform powered by big data and machine learning. The world’s largest banks, processors, and retailers use Feedzai’s fraud prevention and anti-money laundering products to manage risk, while improving customer experience.”
Their constant innovation and experienced technological background allow Feedzai to continue to lead the market while making sure their technology keeps its cutting edge. The company receives awards yearly in many different categories, for example, Tech tour Growth Alumni 50-2017, Medici Top 21 RegTech edition, Forbes FinTech 50-2018, Forbes AI 50-2019, Top 15 Machine Learning Companies 2018 by Datamation, between many others.
Feedzai’s founders’ background has certainly proved helpful to lead such a task. Nuno, Pedro and Paulo’s career before Feedzai would reassure any investors. With past positions at Deloitte, Critical Software, European Space Energy, CERN, Microsoft, Carnegie Mellon, Forbes Technology Council, EPCC, and two PhDs, it is clear they are masters of their domains. And their appearances on stages like Money 20/20, where they chatted with pioneers like The Woz and Stephen Hawking tells you everything you need to know about their pitching skills.
On more recent news, a five-year agreement between Feedzai and SafetyPay was announced earlier this year. SafetyPay is one of the leading digital alternative payment platform providing solutions through LatAm and Europe. The objective of the agreement is for SafetyPay to offer an extra layer of security against fraud risk. As Gustavo Ruiz Moya, CEO of SafetyPay, puts it: “Secure payments have been a core focus for us since SafetyPay was founded more than a decade ago. We constantly strive to leverage the latest technology to protect our customers – both consumers and merchants – and offer them the best experience when they buy and sell online. Our partnership with Feedzai further solidifies SafetyPay’s commitment to enabling fraud-free transactions.” As we move forward into digital payments we are more aware and wary of the possibility of fraud, these are two of the companies providing us with a piece of mind as we transact digitally.
At the time of this writing, it becomes more relevant than ever. We are at the epicentre of the COVID-19 crisis, in which most of us are transacting digitally if transacting at all. And where financial fraud is expected to increase substantially. It also comes as we expect the 6AMLD to come into place later this year. 6AMLD is the ‘The Sixth Anti-Money Laundering Directive’ which “ushers in a new, tougher-on-crime era in the EU. Money laundering is directly linked to an increase in bribery, corruption, human trafficking, terrorist financing and countless other heinous acts. Regulations such as 6AMLD, can empower organisations to create more efficient AML programs that help the innocent victims of the money laundering crimes.” Regulated entities within the EU zone must be compliant by December 3rd, 2020, entities outside the EU have an extra 6-month period.
Finally, we all look forward to Feedzai realizing its mission: “To make banking and commerce safe.” Read More.
Payments are cool again. The renewed interest in payment technologies made us launch a new spin-off of Breaking Banks Europe focused on the payment ecosystem, “Breaking Payments”.
Today is on the first edition of Breaking Payments hosted by Matteo Rizzi and four great guests: James Allum (Payoneer), Tamer El-Emary (Thunes), Keith Grose (Plaid) and James Booth (PPRO)
Here’s the key topics developed in today’s episode
Real-time payments are getting real
EBA Clearing will upgrade its Step2 pan-European mass payment system later this year to process Sepa transactions around the clock, seven days a week, and to provide settlement results to participating banks in minutes.
Step2 processes on average 55 million Sepa credit transfers and direct debits per day, connecting more than 4800 payment service providers operating in Europe.
The upgrade, planned for November, will enable Step2 participants to shorten end-to-end processing timelines for retail payments in euro from hours to minutes.
“Real-time payments create more economic opportunities for entrepreneurs within the EU economy. The economic benefit represented by the reduction in uncertainty and the increase in working capital can drive financial inclusion” according to our guest Tamer El-Emary
Digital payments are overtaking cash as the most popular in-store payment method
COVID-19 pandemic has been a catalyst for the growth of in-store digital payments as they’re seen as safer and more hygienic. Even countries like Italy are promoting digital payments by making compulsory to stores to accept them.
Digital wallets will account for >50% of e-commerce payments by 2024, also thanks to agreements like the one between Paypal and Shopify agreement to make more accessible cross-border payments in the Indian Market
Non-Banks lenders will empower SMEs credit demand
40% of SMEs have unmet credit demand for a total value of 5.2B$, 1.4 times the total value of lending to SMEs.
The success of Buy-Now-Pay-Later startups (Klarna, Affirm, Afterpay) in B2C can be followed by innovative solutions in B2B.
Startups in this sector are growing, like the UK-based Tide that expanded into India with the goal to fund 2M SMEs with 10B$.
This creates the opportunity to integrate credit functions into other services: Tel-Aviv based startup PayEm is doing that by automating financial and credit functions in procurement.
The development of this topic will be interesting in the next months and years. It will also have links with topics like open bankings, for example in making easier to BNPL company to have access to customers’ financial information to develop proper but quick credit scoring systems.
Keep reading our monthly “News From The FinTech Front” articles in the Breaking Banks Europe pages and listen to the podcast in your favourite streaming platform:
Apple Podcasts: https://bit.ly/BBEApple
Google Podcasts: http://bit.ly/BBEGoo
Author: Elias Secchi (FTS Group)
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