Marcus Plans to Build Full Digital Bank Offering

Digital banking has taken off … and Marcus by Goldman Sachs is looking to capitalize on this momentum; the firm is looking to expand their offering with an AI-powered digital assistant and a checking account… 

[Marcus:] “Our goal is to deliver a mobile and web experience that allows the consumer to do anything they would otherwise wish to do around their money.”

… the company is not looking to launch a typical checking about, but one that has not yet been seen… “Imagine if there was an AI-powered digital assistant that had all the financial expertise of Goldman Sachs in their brain, and it was, in real time, helping you think about how to optimize your savings account, your checking account, manage your expenses, manage your income, manage your investments.” 

… one of the biggest advantages Goldman has is they do not have legacy technology associated with their consumer business, this allows them to operate on a clean slate when approaching new products.

Ant Group Plans Dual IPOs in Shanghai and Hong Kong

Ant Group, formerly known as Ant Financial, the creator of Alipay, has said that it is planning to do dual IPOs in Hong Kong and Shanghai; this means the world’s most valuable fintech company will not seek to raise money in New York instead going with China’s one-year-old Nasdaq competitor STAR market as well as the Hong Kong stock exchange…

Alipay now has more than 900 million active users in China who use the app for everything from online investing to paying for groceries and utility bills.

Money manager for freelancers Flow lands Dutch PSD2 licence

Flow manages users’ money-flows using an autopilot feature which acts a lot like a “pre-accounting method”… It can also recognise invoices, before automatically saving or depositing money into an assigned account, and sets aside VAT.

Whilst the offering is geared towards freelancers, companies and consumers can also use the service to save and manage cash flows.

[Co-founder:] “Other apps look in the rear-view mirror and only show what you’ve spent, while your bank account shows a different balance. With Flow, you can look ahead and determine what you can spend on groceries or eating out next month.”

Flow says it is “already talking to banks from all over Europe” which are interested in the start-up’s technology… its app “will soon after be available for all of Europe”.

Triodos Bank UK CEO: “We’re no ‘challenger bank’, we exist to challenge the way banking is done”

[CEO describes]  Triodos as a “sustainable bank”, indeed the bank started life in the 1980s as the brainchild of four Dutch friends who sought to create a financial services group with the aim of promoting human quality of life and a more fair and sustainable society… “We exist to challenge the way banking is done. And that’s not really why most challengers exist, most exist really just for competition’s sake.”

A sustainable bank? For a start, the bank publishes the details of every loan and investment it makes, with money only offered “for things that can demonstrate positive environmental, social or cultural good”. 

In the world of ethical investing, the bank has found itself in a booming market, with interest in ESG (Environmental, social and corporate governance) and SRI (sustainable, responsible and ethical investments)… 

Instead of selling off-the-shelf funds, Triodos formed its own investment management team in the Netherlands to create unique ethical investment funds for its customers… Finally, in 2018 Triodos decided to launch its own platform in the unlisted equities investment space, led by the demand for an ethical crowdfunding alternative. 

Again, rather than partnering with one of the larger players, the Crowdcubes and Seedrs of the world, Triodos left an earlier partnership with Ethex and took things in-house. It now offers its own direct investments via a bespoke crowdfunding platform with every listing vetted by the bank… “We have to protect the brand properly and to really own what’s being put on this platform and what we’re promoting to people.” 

All these above offerings come together to, as Watts puts it, “both to finance change, and change finance”.

Disposable card issuer lands $10.2m

In the last three years, the start-up has issued around five million virtual card numbers. The idea is that users keep their real credit card numbers offline and safe.

…it allows corporate customers to issue virtual cards and manage expenses for employees in their own back-end systems.

[CEO:] “We’re the first company that allows developers to see upfront, transparent revenue sharing and sign up and create cards programmatically the same day… It’s an underserved market, because most incumbents focus on the larger enterprise with monthly minimums and long-time frames.”

Inside Betterment’s move into banking with President of Retail, Mike Reust

Betterment was headed in the direction of added banking functionality… Now, the challenger bank is emphasizing cashflow management as a central tenet of its platform.

A lot of monoline financial firms look a lot like banks nowadays. Rebundling, as we like to call it in the industry, is happening. You don’t need to look further than Betterment, a fintech firm whose roots were as a robo-adviser. The firm has been rolling out more banking functionality… 

… Betterment is a customer-driven organization. We don’t like to work backwards from a business model or other motives. We talk to customers, to understand their needs and problems. We also like to observe their behavior — to see what they do and what they don’t do. Then, it helps us to think about the right products to build.

… we launched Cash Flow Analysis and Two-Way Sweep. These monitor the spending behavior in external checking accounts. We make sure that you have enough money in that account to pay bills, but also sweep out as much money as possible to get a higher rate. It was a simple, but powerful product. We saw how much more powerful it could be if we brought it in-house — if we controlled the checking account.

What customers want… They are generally grumpy with their existing financial provider. It isn’t personalized, and sometimes, they feel they’re being taken advantage of. It’s this feedback that went into building our checking account and Cash Reserve, our high yield savings product…

Our move into banking is about pulling all the pieces together, starting with customers and their problems. People would like to have more peace of mind… Giving people peace of mind, so they know they are on track and don’t have to do tons of work to manage their finances.

Our vision is to blur the lines between checking, savings and investing. We want to pull all these facets together so you can ask people human questions and automate the rest. It’s really powerful. You don’t want to ask a person what type of account they want, but it’s the question most incumbent financial institutions ask. Instead, you tell them, here is where you save for the medium term. I want a customer to come to Betterment, set up an account, tell us what he wants to achieve and it’s mostly taken care of.

Mastercard Expands Crypto Card Partner Program

The Accelerate program works to provide a streamlined entry point to the Mastercard range of cryptocurrency programs, offering quick onboarding for crypto firms onto Mastercard, and support and assistance for their growth and transformation… Participants can make use of Mastercard’s insights and cybersecurity services.

… the Accelerate program allows for connections with other companies and new application programming interface (API) options for payment, security and analytics needs… [Customers] … can convert funds between fiat and cryptocurrency and use Wirex’s Cryptoback program to get 1.5 percent back in bitcoin for every purchase made in-store.

[Pavel Matveev, CEO and co-founder of Wirex]  said … that the development “represents a growing interest and recognition in the acceptance of cryptocurrency by leading bodies and regulators and will help us to realize our vision of empowering everyone to experience a world where all currencies, traditional and crypto, are equal.”

AML startups Lucinity and Hummingbird raise funds

Iceland-based Lucinity uses ‘Human AI’ to help financial services firms detect suspicious behaviour and ‘Make Money Good’ with more automation and self-learning.

[Founder: ] “Banks have been fighting a good fight, but with outdated technology. Now it’s time to step up and empower banks to reach beyond the 1% of laundered money that they currently capture.”

Launched in 2017, US outfit Hummingbird has signed big financial institutions, as well as upstarts Brex, Upgrade and Etsy, to its technology, consisting of a case management, investigation, and reporting platform; and an API for validating and filing regulatory reports.

[CEO:] “The new funding will allow us to move forward with technologies that could improve the quality and speed of communication among institutions and leverage structured datasets, with ethical care, for machine learning,” 

Moneybox raises £30m

Launched in 2016, Moneybox began life as a way for users to invest the spare change from daily card purchases into a Stocks & Shares ISA.

It has since added a range of saving and investment products and ways to set money aside, recently hitting £1 billion in assets from more than 450,000 customers.

[Co-founder:] “Securing this funding enables us to continue to build the products, tools and technology to help people achieve their goals easily – whether it’s buying a house, saving for retirement or just a rainy day.”

UBS invests in home ownership startup Houzy

As part of its platform business model for property owners, UBS has invested in Houzy, a Swiss startup that offers users tips and tools to handle renovations and likely costs.

The interest in Houzy follows the recent launch by UBS of key4, an open online platform for financing and maintaining owner-occupied homes and housing.

Houzy offers homeowners individual recommendations for managing their property, tapping an expert resource base of 500 professionals from ten sectors. For example, it tells subscribers when their heating system should be renovated and how much money they should set aside for the purpose. The firm currently claims 15,000 registered users.