FINTECH INSIGHTS AUGUST 2018 @burnmark_ IN THE UPDATE, THIS MONTH.. 04 10 14 21 Islamic Fintech Payments Blockchain Around the world 06 11 16 26 Open banking Digital wealth Smart cities PR, blogs and announcements 08 12 19 Lending InsurTech Regulatory changes BURNMARK OUR VIEW
AUGUST 2018 3
OUR VIEW We are very pleased to launch our monthly fintech udpates as a regular offering, as we have had regular requests for a frequent update on all of fintech’s developments and announcements from several members of the fintech and banking world.
One of Burnmark’s biggest strength is its world view - we look closely at emerging fintech startups from Asia, Africa, South America, Middle East and China and we use that global view on all use cases and startup announcements we see in maturing fintech markets. This unique perspective helps us make sense of what actual works in a scalable, global, relevant manner.
We also look at numbers (number of startups, market growth of certain segments) on a monthly basis and we feel this frequency is great for updating our subscribers on major changes in the markets they are interested in.
Combining our world view, analytical skills and an eye for the “hype”, we are pleased to bring you our first monthly report. We hope that most of our readers are able to subscribe for regular monthly updates or custom monthly updates on a topic of their choosing - we will be happy to give you more information on what the future ones look like, if you reach out to us!
- Burnmark Team
[email protected] BURNMARK ISLAMIC FINTECH AUGUST 2018 4 ISLAMIC FINTECH
NEW LAUNCHES such as healthcare, education and to partner with startups to combine London as a leading global centre entrepreneurship through the bank’s the best of both worlds, combining our for Islamic fintech. The panel aims digital crowd-funding partnership regulatory know-how and customer to create momentum in the Islamic DUBAI with Ethis Ventures Sdn Bhd and reach with their innovation and agility. fintech sector by building on London’s GlobalSadaqa.com.Beco Capital. leading position as a global fintech DIFC launches Islamic REGULATORY hub. Wahed’s CEO Junaid Wahedna Fintech initiatives BAHRAIN also joined the UK Islamic fintech APPROVAL panel. Dubai International Financial Centre Bahrain banks launch R&D (DIFC) has signed a Memorandum Crowdfunder is first Islamic of Understanding (MoU) with Dubai firm to drive growth of fintech to win UK approval Islamic Economy Development Centre islamic fintech INSIGHTS (DIEDC). One of the world’s first Sharia- compliant “robo-advisors” Wahed Bahrain Development Bank (BDB), In April 2017, Yielders became the first Islamic fintech gains Invest started operations in the UAE in Kuwait Finance House Bahrain Islamic fintech company to receive full momentum December 2017, as it looks to a US $2 (KFH), and Al Baraka Banking Group accreditation from Britain’s financial million funding boost from the Dubai joined forces to launch a new fintech regulator, the Financial Conduct • Islamic fintech: Financial venture capital firm Beco Capital. consortium for Islamic finance, Authority (FCA). Founded in 2015, technologies that comply with named ALGO Bahrain with a vision and operating out of London, Yielders Islamic law, or Sharia, could help to drive research and development is an equity-based crowdfunding attract 150 million new banking MALAYSIA in the Islamic-compliant fintech platform for property investment. It customers in the next three years sector. Eight more regional banks are allows clients to invest as little as alone, according to EY. Bank Islam Malaysia expected to join and further expand £100 ($128) in shared residential or launches social finance the consortium. commercial real estate. • Malaysia, the UK and Indonesia platform are leading the race, ranking first, second and third respectively BANK Islam Malaysia Bhd recently QATAR FINTECH PANEL by number of Islamic fintech launched its social finance initiative, startups, says Bloomberg Sadaqa House, which is primarily Qatar Islamic Finance Report Uk Islamic fintech panel Intelligence. aimed at providing products and “Expanding Horizons”, was launched launched services to collect sadaqah, waqf and through a joint venture of the Qatar • The Islamic fintech landscape has hibah. Through the Sadaqa House, Financial Centre (QFC), Thomson UK Islamic fintech panel launched gained significant momentum in the public can contribute to realising Reuters and the Islamic Research and with leading Islamic Finance and 2017-18 and now includes over social finance projects for sectors Training Institute (IRTI). QCB is looking fintech practitioners aiming to position 100+ startups globally BURNMARK ISLAMIC FINTECH AUGUST 2018 5
Top 5 countries witnessing an upsurge In Islamic Fintech, segments like crowdfunding, of Islamic Fintech startups. payments and remittances and Alternative lending has witnessed significant number of startups there are new fintechs emerging in the challenger banking and wealth management space. Some notable ones are:
United Kingdom United States 16 11
UAE WahedInvest, the first Ummah Finance got the 12 robo-adviser to cater banking license from to Muslim investors FCA in April 2017 and Malaysia Indonesia 18 through a sharia- became first UK-based 15 compliant platform, has Islamic challenger bank plans to expand to other global markets in 2018
Mature Islamic Fintech Segments Emerging Islamic Fintech Segments
36 Algebra is the first Ovamba, an Islamic sharia-compliant trade finance startup, Asianrobo-advisor has launched a Sharia offered by Malaysia- compliant Initial Coin based Farringdon Offering (ICO) in 2017, 14 Group. It was launched which allows for fees 12 11 5 4 in July 2017. It offers and risk sharing backed 2 sharia-compliant and by halal instruments conventional portfolios using a token Crowdfunding Payments and Alternative Digital wealth Crypto Currency Challeger Banks Insurtech remittances Lending BURNMARK OPEN BANKING AUGUST 2018 6 OPEN BANKING
2018 will be the year of open banking
On January 13th, 2018, after more than two years of planning, the Payment Services Directive 2 (PSD2) arrived in Europe. This directive has for the first time forced European banks to open up their APIs to fintech and other financial companies.In this new world of retail banking, the ability to directly serve and add value to customers will no longer be owned by banks but shared with fintech, retailers, and telecommunications firms. APIs: The great enablers
According to the 2017 World Retail Banking Report, 91 percent of banks and 75 percent of fintechs expect to partner with one another in the future. Some recent win-win partnerships include: Fintech-bank collaboration continues to pick up speed, particularly in instant payments, peer-to-peer • BBVA Compass partnered with Dwolla, an all- lending, and credit scoring. digital payments network, so its customers could instantly send and receive funds.
• JPMorgan Chase collaborated with OnDeck, a leader in online small-business lending, to offer a proprietary credit score based on loans granted to small- and mid-tier corporates.
• DBS, a multinational bank headquartered in Singapore, joined forces with peer-to-peer lending sites, funding societies and MoolahSense, to better serve small businesses. In return, the two lending platforms refer borrowers with good credit to DBS for commercial banking solutions such as cash management. BURNMARK OPEN BANKING AUGUST 2018 7
Open banking APIs enable challenger • Partnering with other digital platforms: Banks banks to graduate from un-bundling looking to be a part of the open banking ecosystem through partnership are building an to re-bundling API layer that enables the fintech partnerships. Examples include CBW Bank, Sutor Bank and INSIGHTS Railsbank.
An open bank shares or consumes data services (i.e. customer data, transaction data, product data etc.) What makes an and business services (payments, accounts, lending open bank? etc.) with business ecosystem partners (banks, fintechs and developers).
There are several approaches adopted by financial institutions to build an open bank: << Risk Appetite
• Building a digital platform: Build an open banking platform with API management capabilities to empower a business ecosystem. Banks who aim to be the pioneers in open banking and have a Partner Build higher degree of control are taking this approach. Examples are Starling Bank, Monzo Bank and Market Influence >> BBVA. Participate Acqire
• Acquiring a digital platform: Banks looking to reduce the time-to-market and mitigate risks are taking the approach of identifying fintechs or challenger banks that have built their own open banking platforms and ecosystem. Examples include Group BPCE and Silicon Valley Bank. BURNMARK LENDING AUGUST 2018 8 LENDING
47 per cent), and peer-to-peer property P2P lending P2P Student P2P residential P2P commercial lending property lending property lending MARKET SIZE lending at £1.15bn (up 88 per cent).
2005 2007 2009 2011 Global peer-to-peer lending Online technology, which paved new 2013 2015 2017 2018 market expected to reach paths for consumer and small business P2P SME P2P Consumer $460 bn by 2022 lending, is creating a new market within lending lending the commercial real estate industry, Overall, the UK’s alternative finance which has remained static for decades market grew by 43 per cent in 2016, to in terms of how loans are processed £4.6bn from £3.2bn in 2015. Peer-to- and originated. Another benefit of INSIGHTS BIG TECHS peer business lending was the single online marketplaces is that they create largest market segment in 2016, a liquid, national marketplace where P2P lenders get ready to Big Techs ready to enter growing by 36 per cent last year to lenders all across the US can bid on a disrupt the commercial small business lending reach £1.23bn, followed by peer-to- borrower’s business. real estate lending peer consumer lending at £1.17bn (up Amazon, Paypal and Square all are PropTech, or real estate technology, making significant inroads into the is one of the fastest growing sub- small business lending space. These segments within Lending. companies have a unique advantage FIGURE 1: AMERICAS ALTERNATIVE FINANCE 400 over other lenders in that they are TOTAL VOLUME, 2014-2016 ($USD) 300 targeting their large existing customer bases so customer acquisition 200 costs are negligible. Right now these 100 $342.1M $11.7B companies are primarily focused on 2014 2015 2016 their own customers but if they start 400 The US continues to be to roll out their offering to all small 300 one of the world’s top business they will become even more $28.7B 200 markets for advanced, formidable competitors.
$334.5M technology-enabled, 100 2014 2015 2016 online alternative $35.2B 400 finance channels and instruments. The 2016 300 5 10 15 20 25 30 35 US market volume of 200 $34.5 billion marked $34.5B 100 a 22% year-on-year USA CANADA LATIN AMERICA 2014 2015 2016 increase from 2015. BURNMARK LENDING AUGUST 2018 9
INCUMBENTS COLLABORATIONS The fastest consumer lenders grow Collaboration among marketplace to $1 billion in originations lenders and banks
INCUMBENTS’ INITIATIVES • In the US, online lenders continue to partner with traditionally chartered banks such as cross river Market will exhibit an exceptional CAGR of 48.2% bank and web bank in order to lend nationally from 2016 to 2024, rising from a valuation of US $26.16 bn in 2015 to US $897.85 bn by the. • Kabbage is offering loans in partnership with ING, Scotiabank and Santander
• JP Morgan has tied up with OnDeck to use the online lender’s underwriting technology and loan Marcus 18 servicing capabilities to serve small business months account holders
• Around 200 community banks have joined hands The fastest consumer lenders to $1 with Lending Club to offer consumer loans billion in originations • Prosper is allowing multiple banks to offer personal loans through its platform
14 28 SoFi months Avant months
Lending 65 Prosper 98 Club months months BURNMARK PAYMENTS AUGUST 2018 10 PAYMENTS
Mookh Africa has developed a MARKET SIZE BIG TECHS social business payment solution SENDER RECEIVER to enable people to buy and sell on Steady growth in mobile Big Techs bet on payments Facebook, Instagram and Twitter. SENDER`S RECEIVER`S payment and cross border Facebook made a fintech move with BANK BANK the UK launch of P2P payments via its payment for next 5 years FX spread, Payment FX spread, Payment Messenger feature in November’2017. INSIGHTS operation cost, compliance operation cost, compliance According to a 2018 payment report, the mobile payment market was PayPal has revealed a chat extension Payment utility as a SENDER BANK`S RECEIVER BANK`S valued at $601 billion in 2016, and is that enables invoicing within Facebook future of cross border CORRESPONDENT CORRESPONDENT projected to reach $4,574 billion by Messenger. This allows sellers to Nostro-Vostro liquidity cost, Nostro-Vostro liquidity cost, 2023, growing at a CAGR of 33.8% create and send a PayPal Invoice payments compliance cost compliance cost from 2017 to 2023. directly within a Messenger chat. Burnmark has published a report The overall value of cross-border Apple & Google brought social on emerging business models payments is expected to rise by 5.6% payments to the masses, driving in cross-border payments, like CORRESPONDENT BANKING NETWORK per year,driven both by retail (C2C, Mobile P2P users to reach 2.5bn in payments utilities, in partnership Improvement by outsourcing to a financial utility C2B, B2C) and corporate payments. 2018. with Saxo Banking Circle. Improvement by replacing to a financial utility According to Accenture, the C2B segment is expected to experience the highest growth rates (at around 25% a year) as a result of strongly USE CASE COLLABORATIONS growing cross-border e-commerce trade. Despite falling prices, the Emerging use cases in Collaboration among payment fintech and banks overall growth in the value of cross- payment tech border payments should translate Flux, a London-based fintech startup, is partnering with Barclays to test the into $100 Bn of global bank’s revenue Temasek International, the company’s digital receipt technology with some 10,000 of the bank’s customers, in 2022. But given the proliferation of management arm of Temasek according to multiple reports. International Payments providers and Holdings, is looking at transnational methods, the majority of this growth business-to-business (B2B) TransferWise has partnered with Groupe BPCE, in a deal that will give the British will not end up with banks. Banks are payments, fraud detection, as well as money transfer startup access to the French banking group’s 15 million retail expected lose around $25 Bn in cross- artificial intelligence as key areas of customers. TransferWise’s existing bank partnerships are with Estonia’s LHV and border revenues to fintech players. investment. German challenger bank N26 BURNMARK DIGITAL WEALTH AUGUST 2018 11 DIGITAL WEALTH
Use case 2: CAPITAL GAINS DEUTSCHE BANK debuts robo- MARKET SIZE HARVESTING COLLABORATION advisor for its retail customers. PAYPAL + ACORNS Robo-advisory market to ETMFmatic has launched a capital JPMORGAN CHASE in August grow to 2 trillion in AUM by gains harvesting feature to help its PayPal, the huge online payment 2018, enabled free trades with You 2020 clients optimise their investments and company, is partnering with the auto- Invest on a minimum of 100 stocks reduce the need for aggressive asset saving and -investing platform Acorns or ETF trades. Assets under Management in the allocation rebalancing. Grow. PayPal users will now be able to robo-advisory segment amounts to invest directly from the app or their online MORGAN STANLEY launches a US $401,926mn in 2018.Assets under PORTFOLIO PRESENTATION TOOL account into Acorns. robo-advisor after a 16 month pilot. Management are expected to show an TO COMPARE AND CONTRAST annual growth rate (CAGR 2018-2022) BROADRIDGE + WEALTHSIMPLE ABN AMRO launches digital wealth of 37.5% resulting in the total amount Kwanti, a San Francisco-based management unit, Prospery, in of US$ 1,437,299 mn by 2022. portfolio analytics and presentation Working with Wealthsimple, Broadridge Germany. platform, has recently integrated will offer sophisticated, user-friendly, with Schwab, Fidelity, Riskalyze and automated investment management to USE CASE Orion Advisor Services, expanding its support both advisor-investor and direct- potential user base of advisors looking to-investor models. DIRECT INDEXING to compare and contrast different portfolios with clients and prospects. SWANEST + FINANCIAL MEDIA After ETFs, the next revolution in investment management may be ELLEVEST NOW OFFERS Swanest is partnering with financial direct indexing, a kind of separately TRADITIONAL, HIGH-TOUCH media companies to give readers access managed account for the masses. WEALTH MANAGEMENT to instant online investment opportunities. Many see it as an industry game changer. direct indexing—makes it Ellevest Premium, which has a $50,000 possible to replicate the best of both account minimum, allows access NEW LAUNCHES separately managed accounts and to high touch wealth management indexed-based funds. Advisors can as well as a career coaching service RBS, in November 2017, became the build cheap, customisable portfolios through a partnership with For-shay. first bank in the UK to go live with for clients based on indexes or model Ellevest is a popular women-centric an investment robo-advisor through portfolios, using fractional shares of robo-advisory service. NatWest Invests. stocks, automatically rebalanced, with lower transaction costs. BURNMARK INSURTECH AUGUST 2018 12 INSURTECH
products from BigTech is expected to be a money- owners a policy tailored AI PLATFORM FOR MARKET companies such as Amazon spinning market for digital to their business needs INSURANCE EMPLOYEES and Google, spurring a insurance platform providers with a focus on customer SIZE greater need for traditional during the forecast period, experience. Cogito is a startup that providers to develop future- considering the untapped combines AI and behavioural Insurance technology or ready operating models to opportunities and the RENTAL CAR INSURANCE science to provide an always- insurtech is an increasingly satisfy evolving customer increasing commercial on AI-powered assistant popular space, with huge preferences. investment in different SURE, a personal insurance to support an insurance growth in the US and in industry verticals in the region. distribution platform, has employee or broker in Europe. The technological The growth in the adoption launched an app-based car engaging with a customer. advancements in the of IoT products, rise in the rental insurance product for The technology is expected insurance space have shift of insurers’ focus from U.S. customers. The new to improve empathetic revamped the industry product-based strategies to USE CASE car insurance option has communication. to connect with a wider customer-centric ones, and connections to all car rental customer base with better increased awareness among RENTER INSURANCE companies and costs $10 or ROBOTIC PROCESS customer experience. It has insurers to digitalize channels Madison-based insurtech less, and can be purchased in AUTOMATION WITH AI also helped large insurance are expected to drive the startup SafetyNet launches less than a minute. AND CHATBOTS firms move from legacy back- growth of the digital insurance new insurance program end systems to more efficient, platform market. The major targetted at landlords. ‘Renter TELEMATICS FOR AUTO Pypestream is a new nimble offerings from factor that is expected to SafetyNet’ is a program INSURANCE startup that offers ready- technology startups. restrict the growth of the launched in Wisconsin to offer to-use business process digital insurance platform landlords coverage against Octo offers a telematics automation with chatbots The digital insurance market is the difficulty to loss of income. platform that can enable an and artificial intelligence. Its integrate digital insurance insurer to work with dynamic secure messaging platform platform market is platforms with legacy COMMERCIAL data in how it serves its integrates with insurance expected to grow at a systems. INSURANCE customers. In its motor claims processes and existing CAGR of 13.7% from insurance mode, Octo’s legacy systems. North America is estimated Insurtech startup Ripe ability to stream data from 2018 to 2023. to account for the largest Insurance has launched a a customer’s car means market share in 2018 while new commercial insurance an insurer can know an Almost 30 percent of APAC is expected to grow product targeting small accident has occurred almost customers globally are at the highest CAGR during business owners. The product immediately; they can reach willing to buy insurance the forecast period. APAC aims to offer small business out proactively. BURNMARK INSURTECH AUGUST 2018 13
who will provide capacity to support Zeguro’s cyber GETSAFE LAUNCHES DIGITAL AI-BASED COLLABORATIONS insurance offering. COMPREHENSIVE PRODUCT ATLAS FINANCIAL HOLDINGS AND NAUTO Getsafe Insurance started operating in Germany Atlas Financial Holdings, a passenger fleet insurance NEW LAUNCHES to offer a fully digital product covering property/ company, is working with Nauto, and its auto safety casualty, life and health risks in a single product. POLICYPAL LAUNCHES BLOCKCHAIN- and data platform. The collaboration is expected to make driving safer and fleets smarter and will deploy POWERED FLIGHT DELAY INSURANCE Insurtech MGA Wrisk Gets UK Regulatory Nauto’s dual-facing cameras, telematics and data In July 2018, PolicyPal Network unveiled a Authorization platform across multiple fleets. blockchain-powered automated flight delay insurance, underwritten by ERGO and presented by On the back of its crowdfunding raise, the app-based ZEGURO AND HARTFORD STEAM BOILER PolicyPal Singapore. insurtech Managing General Agent (MGA) Wrisk has received full authorization from the UK’s Financial Zeguro, part of the Startupbootcamp InsurTech COYA RAISES $30 MILLION Conduct Authority. London 2018 program, is focused on assessing and managing enterprise cyber risk. It plugs into Berlin-based startup Coya has been granted an the client’s cloud platforms, web assets and third- insurance license by the BaFin in June 2018. Coya party business tools to provide risk mitigation offers scalable protection at the point of need with and employee training. Zeguro has partnered with an AI risk guardian and a simple, transparent, and Hartford Steam Boiler (HSB), part of Munich Re, personalized insurance cover. BURNMARK BLOCKCHAIN AUGUST 2018 14 BLOCKCHAIN
Blockchain is one of the hottest topics investigation involving the use of CIRCLE in technology. Despite its relative blockchain technology including Blockchain payments startup Circle USE CASE infancy, blockchain technology is transactions tracking. is now offering no-fees cross-border quickly proving its worth. Banks and transactions to its users, the firm said Trade finance with fintechs are increasingly embracing KYC CHAIN today. blockchain blockchain’s native capabilities as the basis for innovation. This startup uses blockchain and Customers based in the US, much of FLUENT smart contracts technologies for Europe and the UK won’t have to pay consumer identity management. fees or mark-ups on foreign currency Fluent is a blockchain-based financial They offer an online account opening exchanges as part of the roll-out of the network and payments platform USE CASE platform with API connectivity to startup’s service upgrade. startup aimed at providing an other third-party identify services. The easy operating network for large Digital identity with consumer owns the private key to their PAYMENT RAILS enterprises’ global supply chains. The blockchain encrypted data and chooses which Fluent Network, launched in March part of their information to share and Canadian startup Payment Rails, 2016, provides a real-time, low-cost, OBJECTTECH with whom. which uses APIs, blockchain and simple invoicing and payments artificial intelligence to try and find system for global supply chains This startup is piloting programs efficient routes for cross-border based on blockchain technology and to drive an important area of focus payments, has closed a seed round, is targeted for use by banks, financial for most banks and governments USE CASE bringing funding for its concept to $1.1 institutions and their global enterprise - the right to identity. This project million. customers. is currently being piloted in Dubai, Cross border payments where participants would get a one with blockchain AMERICAN EXPRESS, TALLYSTICKS hashed identity, which they could use SANTANDER AND RIPPLE to move across borders or open bank OWYRE Tallysticks is a software that accounts. This collaborative blockchain project leverages distributed ledger This San Francisco-based blockchain will initially allow customers in the technology to make invoicing, invoice COINFIRM startup is a cross-border payments US to make instant, traceable cross- financing and invoice securitisation firm that claims to be the industry’s border payments with UK Santander more efficient. The software does this This startup maintains a database fastest money transfer platform. bank accounts. by integrating with ERP/accounting of verified digital currency and They enable businesses to move systems to create a shared (yet blockchain users. They enable money across borders from country permissioned) ledger of immutable full KYC/AML reports including to country at a competitive foreign invoice records and related payment risk ratings and can provide fraud exchange rate. confirmations. BURNMARK BLOCKCHAIN AUGUST 2018 15
WAVE USE CASE INSURETH Wave completed Barclays Bank’s This insurtech disruptor is also based accelerator late last year, and has been Insurtech with blockchain on Ethereum and provides blockchain- working with the bank to eradicate based travel delay insurance. Bills of Lading. Wave uses electronic DYNAMIS Founded in 2015, the disruptor offers documents stored in blockchain automatically to users that it detects metadata, and lets information travel Basing their platform on Ethereum, has flight delays, by using a blockchain between two parties through the Dynamis provides peer-to-peer algorithm. blockchain. supplemental unemployment insurance and severance coverage for TEAMBRELLA BLOCKFREIGHT small businesses in case of layoffs or resignations. Leveraging both the blockchain and a Blockfreight is a startup being peer-to-peer concept, Russian startup incubated at the Bitcoin Technology LEMONADE Teambrella lets users form “teams” Center in Melbourne, Australia. The that effectively insure each other. The company Blockfreight is trying to build Lemonade launched in the US in late teams pre-agree the insurance policy’s a blockchain for global freight allowing 2016, claiming to be the first peer-to- terms and conditions and, in case of applications to be built for the supply peer insurance company. Specialising claims, members vote on whether it is chain and support improvements in property and casualty insurance, to be paid and on what level. in innovation and efficiency in the their business model takes a fixed container freight, logistics, and fee from monthly payments and uses trade space. an algorithm to pay out claims as soon as possible, when conditions in blockchain-based smart contracts are met. BURNMARK SMART CITIES AUGUST 2018 16 SMART CITIES
management and innovation, tool to help eliminate the problem by SMART particularly in the areas of solid waste, anticipating risks. According to data GREEN BONDS TECHNOLOGIES public lighting and mobility. projections made in the context of GREEN CITY BONDS USE OF climate change point to 21 days of PROCEEDS AND ADOPTION extreme heat in 2050 and 94 in 2090. LONDON, UK The SFDPH claims that 69 percent of vulnerabilities to extreme heat can be 5% NEW YORK, USA CONTACTLESS PAYMENTS FOR 2% 10% TRAVEL predicted and hence prevented. 5% DATA ANALYTICS FOR CRIME For daily commuters, the Oyster MANAGEMENT MOSCOW, RUSSIA smart ticketing system is easy and 18% New York City uses CompStat, a convenient to use. Commuters BLOCKCHAIN FOR E-VOTING service that compiles data collected can pre-purchase a weekly, annual from city monitoring systems like or monthly pass in stations, retail Moscow is extending its use of a 30% cameras, cell phones, police cars, etc. outlets and online. The passes mean blockchain-based voting platform The information collected is analysed commuters can travel within the to the city block level. The municipal and made available to police officers specified area for the relevant period government of Russia’s national on duty, besides being accessible without the need to re-load their cards. capital has launched Digital Home, 30% at any time from smartphones and And, they can pay as they go, with a service allows neighbours in high tablets installed in cars. the option to authorise automatic rises to electronically vote and replenishment when their credit communicate on issues like whether SANTANDER, SPAIN balance approaches zero. to replace the building entrance door Sustainable Waste Management or hire a new management company. Sustainable Waste Management The service uses Active Citizen, an USE OF SENSORS IN URBAN SAN FRANCISCO, Sustainable Land Use and Foresty TRAFFIC MANAGEMENT electronic voting platform that runs on USA a private version of Ethereum. Adaptation Santander stands out for its large Renewable Energy monitoring capacity with thousands of OPEN DATA AND ANALYTICS EE/Low carbon buildings sensors and an innovative governance PREVENT DEATHS DURING HEAT structure for the coordination of WAVES Clean Transport actions. Alliances built between the university, the municipality, and The San Francisco Department of the private sector make Santander Public Health has invested in the an exemplary case of intelligent open data concept and developed a BURNMARK SMART CITIES AUGUST 2018 17
in December 2016, with a MXP 1bn Most of the solutions revolve around US $3.5 trillion by the mid-2020s. The GREEN BONDS (USD 50mn) bond allocated to water payments for transport services, civic report also highlights six entry points treatment, energy efficiency and public services and utilities and cashless for investors wishing to access the EUROPE transport projects. payments. theme: (1) Smart infrastructure (2) Smart buildings; (3) Smart homes; Sweden’s Gothenburg sold a $76 (4) Smart safety & security (5) Smart million green bond in 2013. A second Goldman Sachs energy and (6) Smart mobility. The issue of Green Bonds followed in June NEW LAUNCHES GOLDMAN SACHS PURCHASES report ranks Singapore, London, New 2014, generating more than three $300 MILLION IN LOANS York, Paris and Tokyo as the world’s times as much Banks’ smart city initiatives smartest cities. FOR RESIDENTIAL SOLAR HSBC INSTALLATIONS CANADA Goldman Sachs announced a Wells Fargo CHINA TEAMS UP WITH HSBC, purchase commitment of $300 million SMART CITIES IS BACK WITH ARUP TO LAUNCH SMART CITIES Toronto has issued an ‘Atmospheric from Mosaic, a leading American ANOTHER $100K OPPORTUNITY Fund’ which is financing a heat, power HUB provider of affordable home solar and cooling plant as well as a solar financing solutions. After the new NextEnergy, in partnership with Wells power plant. A partnership including HSBC purchase commitment from GS, Fargo, DENSO and DTE Energy, is launched a UK-China development and Mosaic now holds $800 million of seeking to accelerate the development investment hub focused on fostering funds that it can invest in future home of hardware and/or software solutions AFRICA smart cities. The banking giant solar installations that will address real-world challenges teamed up with the China Centre for facing urban areas. With a total of In July 2017, Cape Town issued its Urban Development and engineering $100K up for grabs to demonstrate first green city bond, amounting to firm Arup Group for the initiative. Bank of America smart city solution, the selection R1bn (USD77.2m). The Certified Merrill Lynch focuses on Smart Parking, Smart Climate Bond will re-finance projects in Mobility, Smart Buildings, Smart water treatment and low carbon public Yes Bank SMART CITY MARKET Infrastructure. transport. YES BANK BULLISH ON SMART PROJECTIONS CITIES, SIGNS 3 PROJECTS A 2017 report from Bank of America LATIN AMERICA Mid-sized private sector Indian bank, Merrill Lynch estimates the global Yes Bank, is looking at smart cities as Smart Cities market growth from an Mexico City became the first city in a lucrative business opportunity and estimated US $1 trillion in 2017 to US Latin America to issue a green bond has signed three projects in the space. $1.6 trillion by 2020, and as much as BURNMARK SMART CITIES AUGUST 2018 18
INSIGHTS happens to be on land registry, smart How banks can participate in energy and smart healthcare. Several blockchain-powered smart city governments across the world are Smart tech adoption in leveraging the capabilities of IoT and initiatives smart cities blockchain to run smart city initiatives. Several banks are setting up smart city Wallet Providers: Most of the smart initiatives that According to a survey by Statista, departments to fund these projects, leverage a blockchain will need a licensed bank to the global spending on smart city and to be the logistical owner tying convert the ‘tokens’ to fiat money and vice versa. initiatives as of 2015 was USD 14bn together technology, finances and Banks may look to start working with energy giants in and this is expected to grow to USD capabilities. creating this mechanism. 35bn by 2020.The largest spend IoT Economy: With the number of connected things constantly increasing, there will be need for cars and Role of blockchain in Smart City initiatives homes to have bank accounts. Banks that are able to look ahead and provide customers with linked machine accounts and enable this tech-centred ecosystem Blockchain Use case Initiatives Participants would be a leader in capturing the Smart Cities market.
Smart Blockchain allows goverments Blockchain Sweden Smart Identity: Banks may join efforts with Registries to create digital records of land for Land The Netherlands governments on digital identity projects to be able to registries, and provide education Registries India leverage this for their KYC process. Banks could even certificates to improve transparency contribute to this process using years of data and experience in the space.
Smart Goverments are leveraging blockchain ID2020 Accenture Identity to create digital identity for citizens Alliance Gavi Financing: Smart initiatives need funding just like any that don't have any identity today and Microsoft other initiatives. Since blockchain offers traceability, find it difficult to seek benefits and Rockefeller Foundation new modes of funding can be enabled that can be welfare Hyperledger faster and more secure.
Smart Energy giants are coming together EnergyWeb 100s of energy Welfare Disbursement: Joining the government Energy to build a decentralized and resilient companies initiatives targeted at smart welfare disbursement will energy network using blockchain go a long way in helping to regain public trust and also add to corporate social responsibility objectives. BURNMARK THE REGULATORY ENVIRONMENT AUGUST 2018 19 THE REGULATORY ENVIRONMENT
regulatory compliance and increase evident in online spending, faced by firms in conducting their REGULATORY - supervisory effectiveness where average weekly online tests within the sandbox. These shopping in the UK was include accessing banking services EUROPE • Network effects and scalability £1.1 billion in August 2017, and smaller firms struggling to acquire FSB CONSIDERS FINANCIAL of new technologies may in the an increase of 16 percent customers to take part in their tests. STABILITY IMPLICATIONS OF future give rise to third-party compared with August 2016. ARTIFICIAL INTELLIGENCE AND dependencies. This could in turn Such developments have lead to the emergence of new led many commentators to REGULATORY - MACHINE LEARNING systemically important players that predict the demise of cash.” The Financial Stability Board (FSB) has could fall outside the regulatory AMERICAS published a report that considers the perimeter -- Victoria Cleland, Chief financial stability implications of the Cashier, Bank of England Congress to turn growing use of artificial intelligence Bank Of England (AI) and machine learning in financial FCA up heat on fintech services. The FSB’s analysis reveals BANK OF ENGLAND CONSIDERS a number of potential benefits and ISSUING CRYPTOCURRENCY FCA REVEALS NEXT ROUND OF regulation in the US risks for financial stability that should SUCCESSFUL FIRMS be monitored as the technology is The Bank of England is reportedly in 2018 IN ITS REGULATORY SANDBOX adopted in the coming years and as exploring the possibility of developing more data becomes available. and issuing its own digital currency. The FCA has unveiled the firms that We absolutely need to have The Bank of England has created a were successful in their applications representatives from fintech • Applications of AI and machine research unit designed to investigate to begin testing in the third cohort before the Financial Services learning could result in new the development of a digital currency. of the regulatory sandbox. The FCA Committee. We have to have and unexpected forms of Reports said the bank would aim to received 61 submissions for the third a good idea about fintech and interconnectedness between allow individuals to keep their money phase of the regulatory sandbox. 18 online banking … before we financial markets and institutions, in the form of a cryptocurrency stored applications met the sandbox eligibility start thinking about where with the Bank of England itself. criteria and were accepted to develop they fit or will they be a new • The lack of interpretability or towards testing. category altogether, separate “auditability” of AI and machine Very notable in the UK is the and distinct from the big banks, learning methods could become a rise in the use of contactless The FCA has also published a report from the community banks.” macro-level risk cards, which tripled in 2016, outlining how the regulatory sandbox accounting for 7 percent has met its objectives over the first -- Emanuel Cleaver, Member • The applications of AI and of payments. The shift in year of operation. The report also of the US House of machine learning can help improve consumer preferences is also highlights some of the challenges Representatives BURNMARK THE REGULATORY ENVIRONMENT AUGUST 2018 20
a single legislation, expand the scope of regulated UNITED KINGDOM FINTECH payment activities to include virtual currency CONSULTATIONS services and other innovations, and calibrate FCA FEEDBACK STATEMENT ON DISTRIBUTED regulation according to the risks posed by these LEDGER TECHNOLOGY activities. CANADA The FCA has now published a report called “Distributed Ledger Technology: Feedback Statement COMPETITION BUREAU INVITES FEEDBACK AUSTRALIA on DP17/03”. The FCA notes that the respondents to ON DRAFT FINTECH REPORT RETAINING ASIC’S FINTECH LICENSING DP17/03 were supportive of the FCA’s technology- EXEMPTION neutral approach to regulation and welcomes its On 6 November, 2017, the federal Competition open and proactive approach to new technology, Bureau released a draft report on its market study ASIC launched a consultation paper in December including the sandbox and RegTech initiatives. The into technology-led innovation in the Canadian 2017. This consultation paper sought feedback on its feedback received also suggested that the FCA’s financial services sector. The report is intended financial technology licensing exemption, introduced current rules are flexible enough to accommodate as guidance for financial services regulators and through their Innovation Hub in December 2016.They the application of various technologies, including the policymakers with the key message that, while sought feedback from fintech businesses, financial use of DLT by regulated firms. fintech regulation is necessary to protect the services providers, consumers and consumer safety, soundness, and security of the financial representatives, and other parties in the ecosystem. system, regulation should not unnecessarily impede competition and innovation in financial services. The final report was issued on 14 December, 2017. EUROPE EBA ISSUES GUIDANCE FOR THE USE OF SINGAPORE CLOUD SERVICE PROVIDERS BY FINANCIAL INSTITUTIONS MAS LAUNCHES SECOND CONSULTATION ON NEW REGULATORY FRAMEWORK FOR The European Banking Authority (EBA) published final guidance for the use of cloud service providers PAYMENTS by EU financial institutions. The guidance becomes The Monetary Authority of Singapore (MAS) applicable as of 1 July 2018 and is addressed to launched a second consultation on its proposed credit institutions, investment firms and member payments regulatory framework, known as the state competent authorities. The guidance clarifies Payment Services Bill (the “Bill”). The Bill will EU supervisory expectations if institutions intend to streamline the regulation of payment services under adopt cloud computing. BURNMARK AROUND THE WORLD AUGUST 2018 21 AROUND THE WORLD
ASIA Digital finance is key ICO TRENDS: SINGAPORE AND HONG KONG ARE LEADING to increasing financial More than US$4.5 billion was raised through ICOs in 2017, or nearly 20 times Fintech Accelerators in Asia inclusion in Asia Pacific more than in 2016 with US$236 million. In October and November 2017 alone, 3 FINTECH STARTUPS -TO US$1.838 billion was raised through ICOs, according to a report by PwC. WATCH- FROM SUPERCHARGER Several Asian countries have established national strategies for 1 KUALA LUMPUR’S DEMO DAY Number of ICO globally (per month) Global ICO volume (USDmn) financial inclusion (NFIS) that include Jan 15 YTD 17 4596 digital finance. India, Indonesia, Feb 15 Y 16 236 • Capnovum: Capnovum is a Mongolia, Myanmar, Pakistan, and Mar 15 1838 USDmn Apr 15 Y 15 10.54 in Oct&Nov Regulatory Technology provider the Philippines are promoting digital May 15 alone Y 14 31.25 that aims to help financial financial services in the broader context Jun 15 institutions sort through complex of access to finance for the poor. Jul 15 Y 13 0.76 Aug 15 0 1000 2000 3000 4000 5000 and ever-changing regulatory Sep 15 requirements. McKinsey & Co. reports that over 700 Oct 15 Nov 15 1) Calculations based on currency exchange rates on million consumers now use digital Dec 15 ebd date of ICO. As Ether and Bitcoin exchange rates are Jan 16 highly volatile, actual and current market capitalization of • MyFinB: MyFinB is a big data and banking regularly in Asia. The Asian the companies today may differ significantly from figures Feb 16 analytics startup that uses artificial Development Bank (ADB) signed show in the table. ICO funding amount until 29.11.2017 Mar 16 considered. intelligence to help businesses a memorandum of understanding Apr 16 Source: PwC make more accurate and timely (MOU) with AFI (Alliance for Financial May 16 Jun 16 decisions. Inclusion)to promote greater financial Jul 16 In Asia, Hong Kong and Singapore are the inclusion in the Asia and Pacific Aug 16 leaders in the field, thanks to government Sep 16 support and local associations such as the • Neosurance aims to change the region. Under the MOU, ADB and AFI Oct 16 Fintech Association of Hong Kong and the status quo of the insurance industry will work together to develop and Nov 16 Singapore Fintech Association. by offering simplified hassle-free implement programs and projects, Dec 16 Jan 17 For instance, the Best Practices for Token insurance solutions to customers including technical cooperation Feb 17 Sales report released in December 2017 by the as and when they need it. for capacity building, that promote Mar 17 Fintech Association of Hong Kong provides Apr 17 insights and suggested general practices for digital financial services; scale up May 17 the Hong Kong fintech community on issuing innovations; advance policy peer Jun 17 digital tokens. learning; reduce gender gap in lending; Jul 17 Aug 17 In Singapore, the Monetary Authority of develop climate-sensitive financial Sep 17 Singapore released clarification on ICOs and inclusion, etc. policies; and increase Oct 17 token sales in August 2017 followed by a ICO Nov 17 guidance in November explaining when ICOs cooperation between the public and Upcoming are and aren’t considered securities. private sectors. 0 10 20 30 40 50 60 70 80 BURNMARK AROUND THE WORLD AUGUST 2018 22
THE TESA FINTECH COLLECTIVE EQUIPS Key Highlights FINTECH FESTIVAL SINGAPOREANS WITH TOP-NOTCH INFOCOMM SKILLS IN SINGAPORE Year that non-bank players can 36% of financial service start managing accounts help companies deploying As a collaboration between MAS, the Infocomm by banks inthe EU 2018 Blockchain solutions4 (NOV ‘ 17) Media Development Authority (IMDA), Skills Future Singapore (SSG), six local universities While we are waiting for the The Linux foudasion has 15 40% of employers worldwide and five financial associations, the TechSkills years of open-source projects face talent shortages in experience: bamks are only technology5 next Fintech Festival to land in Accelerator (TeSA) Fintech Collective is an caching up Singapore (and India) in 2018, we initiative to develop industry-ready professionals in the Infocomm industry. 280 billion of payment 40% of companies hiring tech transaction annualy are now talent are not tech tallent are cover some of the most insightful non-cash4 not tech companies3 events from last year’s events. THE RELEASE OF THREE SUCCESSFUL OPEN-SOURCE PROTOTYPES FOR INTER- Target date ASEAN Third-party payment MAS GIVES AN SGD 27 MILLION GRANT BANK PAYMENTS integration 202514 accounts in China, 201615 FOR ARTIFICIAL INTELLIGENCE AND 3.4 billion DATA ANALYTICS RESEARCH Project Ubin was revealed in Singapore Fintech Festival 2016, and at that point, the collaboration Share of India`s population Fintech companies As part of its more prominent SGD 225 million between the MAS and the Association of Banks withbiometric data in file 99% operating in LATAM Financial Sector Technology & Innovation in Singapore (ABS) started work in creating a 700+ Scheme, this new grant is aimed at financial and digital representation of the Singaporean Dollar research institutions to promote the adoption of tailored toward inter-bank settlements and Credit gap among SMEa in the Nirth American banking Africa region transactions that are mobile Artificial Intelligence and Data Analytics. testing connectivity between banks. US$2-2,5 trillion 30% MAS AND MIT MEDIA LAB TO THE ASEAN FINANCIAL INNOVATION COLLABORATE IN FINTECH R&D NETWORK INTRODUCES THE FINTECH Workers in Asia, Africa and 248% year-on-year Increase in LATAM exclouded from formal InsureTech Funding reaching SANDBOX pension programmers almost US$1billion Q1 2017 1.2 billion MAS is teaming up with the Massachusetts Institute of Technology (MIT) Media Lab to In a collaboration between the International Regulatory sandbowes Estimed time to a cash-free strengthen Singapore’s talent by working Finance Corporation (IFC), MAS and the ASEAN worldwide 20+ economy in Sweden alongside MIT researchers and experimenting Bankers Association, the launch of the fintech 5 to 7 years with financial projects together. One of their first sandbox means microfinance institutions, areas of work is the use of Distributed Ledged non-banking financial institutions and regional SMEs`chare of financial Reduction in the cost of opening services loan bock in Abu a back account after India Technology (DLT) for interbank payments, fintechs gain a platform to experiment and Dtabi 4% inproducted a KYC biometrics security settlements, trade and trading finances. develop new financial products and services. system 93% BURNMARK AROUND THE WORLD AUGUST 2018 23
Lloyds Banking Group announced EUROPE BREXIT it would be seeking a new Brussels- THE WINNERS OF TECH CITY UK’S ‘FINTECH FOR ALL’ STARK REDUCTION IN JOBS based subsidiary. COMPETITION The first Morgan McKinley London Microsoft is contemplating expanding Pockit, won the established fintech category and the special Experian employment monitor of 2018 has its operations elsewhere in Europe Spotlight Award. The mobile banking app targets those who find it revealed a 37 percent decrease in jobs because of Brexit. difficult to get a mainstream current account. It now has approximately available year-on-year while there are 230,000 customers. 30 percent fewer people seeking jobs LONDON WAS TOP DESTINATION in London. FOR TECH FUNDING Mespo, the winner in the newcomer category, is a robo money saver, which analyses a customer’s bank accounts and spots ways to save In both 2015 and 2016, the December Pitchbook for London & Partners show money, for example by switching to a cheaper energy supplier. Japan, in month-on-month decrease in jobs that the UK’s fintech sector led the way April, became the first country in the world to proclaim it as legal tender. available hovered around the 30 for VC investment in 2017, attracting As many as 10,000 businesses in Japan are thought to accept bitcoin percent mark, while in 2017 month-on- a record £1.34 billion in funding. and bitFlyer, the country’s main bitcoin exchange, saw its user base month decrease was a dramatic 52 pass the one-million mark in November. percent. In 2017 jobs to market were The UK outperformed several down 37 percent from 2016. countries in terms of the amount of 20 OF EUROPE’S HOTTEST FINTECH STARTUPS FOR 2018 venture capital funding raised last MANY BANKS AND TECH FIRMS year, attracting nearly four times the ADVANON (Zurich) PAYFIT (Paris) ARE MOVING OUT amount than the £694 million that was KLARNA (Stockholm) ONFIDO (London) raised by firms in Germany and more Deutsche Bank could move 4,000 jobs than tech firms in Sweden, France and ID FINANCE (Barcelona) PLYNK (Dublin) out of the UK, nearly half of its UK Ireland combined. CAPITAL.COM (Limassol, Cyprus) RECEIPT BANK (London) workforce. CIRCLE (Dublin and London) TRANSFERMATE (Dublin) Money transfer service TransferWise, Barclays has chosen the Irish capital peer-to-peer lending marketplace GAN INTEGRITY (Copenhagen) WEFOX (Berlin and Zurich) Dublin as its post-Brexit European hub. Funding Circle and challenger bank CURRENCYFAIR (Dublin) TRANSFERWISE (London) Monzo were amongst the London- COINIFY (Copenhagen) REVOLUT (London) In February 2017 Goldman Sachs based fintech firms that completed decided to close some of its hedge major funding rounds in 2017, raising FENERGO (Dublin) YOUNITED CREDIT (Paris) fund operations in London and move £211 million, £81.9 million and £71 MONZO (London) TIDE (London) the staff to New York. million respectively. BURNMARK AROUND THE WORLD AUGUST 2018 24
AMERICAS CREDIBLE RAISES US$50 The most well-funded (> $ 100 Mn) fintech MILLION IN AN IPO IN startups in the US ANT FINANCIAL AND QCASH AUSTRALIA SCOOP FT FINTECH AWARDS The San Francisco based online A big Chinese group and a US not-for- marketplace for consumer loans STATE COMPANY TOTAL EQUITY profit have triumphed in the second has gone public down under in the FUNDING ($mn) annual Financial Times fintech biggest tech IPO of the year on the awards, with Ant Financial taking the Australian Exchange. California SoFi $2,040.5 impact prize and QCash winning for FIRST GLOBAL HAS SECURED 16 innovation. Georgia Kabbage $490.0 NEW US MONEY TRANSMITTER USA FINTECHS ALL ABOUT LICENSES IN THE PAST YEAR Illinois Avant $655.0 LENDING First Global Money Inc, has been Massachusetts Toast $138.0 Monevo, a lending marketplace part granted two additional Money of Macclesfield-based Quint Group, Transmitter licenses in the USA. The New Jersey Billtrust $104.5 is on track to exceed one billion Company has received approvals pounds in loan originations in 2017. for new licenses from the states of New York Oscar Insurance $727.5 Fifteen US lenders, including Lending Oklahoma and Oregon. This means Corporation Club, Sofi, and Prosper have joined that the Company now has 36 state the market. Monevo’s roster of over money transmitter licenses having North Carolina AvidXchange $558.2 150 personal loan lenders across the obtained 16 new licenses since world. Monevo, part of international January 2017. Rhode Island Upserve $191.5 fintech group Quint, enables over 150 lenders to access over £6bn worth of Washington Avalara $253.0 credit applications annually. BURNMARK AROUNDOPEN THE BANKING WORLD AUGUST 2018 25
AFLORE: Aflore is a fintech startup that provides platform, Branch International with offices in Nairobi, LATIN AMERICA loans through informal financial advisors to Latin Nigeria, and the U.S attracting US$20 million. FINTECH LAWS IN MEXICO Americans that are not yet connected to the banking system. The company is based in Colombia, but CRYPTOCURRENCY IN AFRICA On 1 March 2018, in Mexico City a bill was approved serves consumers throughout the continent. by Congress to regulate the fast growing industry Africa is becoming an interesting market for crypto- of Financial Technology Institutions (FTI), which ALEGRA: Based in Medellin, Colombia, Alegra is currencies and next-generation peerto-peer buying includes electronic payment firms, crowdfunding one of the most global fintech startups to come and selling of crypto-currencies is becoming a rapidly firms and also cryptocurrency firms. With the out of Latin America, serving clients around Latin expanding market. A unique characteristic of Africa’s regulation now in place, Mexico, along with the UK America as well as in the United States and Spain. relationship with the crypto-currency technology lies and the USA, is one of very few countries that have They provide cloud-based accounting and invoicing in its use. Many people in Africa do not have access passed Fintech Laws. Chile is also following Mexico’s software for SMEs and recently reached over 50,000 to the traditional banking system. Some Africans lead in drafting Fintech laws as well as creating registered users. are buying crypto-currencies as a hedge against sandbox rules for developers. constantly fluctuating local currencies in countries like Nigeria and Zimbabwe. There is an emerging FINTECH INVESTMENT ON A HIGH generation of Africans who are buying crypto- AFRICA currencies as investment vehicles into promising According to TechCrunch, VC tech investment in the blockchain start-ups. region had an all time high of $1.1 billion in 2017, and FINTECH INVESTMENT TRENDS a further $600 million invested in the first quarter of The startup scene in Africa has been on a high note One example of a leading African startup in this 2018. This is a major breakthrough when compared with the first half of 2018. Since January 2018, up to field is BitPesa. BitPesa leverages Bitcoin and the with the five previous years, which had remained 120 deals have been closed amounting to US$168.6 blockchain technology to facilitate secure and low steady at around $500 million per year. million outstripping the 2017 annual funding mark of cost transfers between businesses. The company US$167.7 million. supports B2B payments to and from Kenya, Nigeria, TOP FINTECH STARTUPS Uganda and Tanzania. BitPesa recently closed a $2.5 IN LATAM Fintech remains the most attractive and highest million investment which will fund expansion into funded sector for investors with 4 of the 10 largest Western markets. BLINKING: Based in Chile, Blinking is a financial app deals made are from this sector. Cellulant, a digital that helps SMEs control their cash flow. The app’s payment solutions company operating across 11 features include monitoring invoices, managing countries with headquarters in Kenya attracted finances, and communicating with clients. US$47.5 million followed by online micro-lending BURNMARK SUBSCRIBE TO MONTHLY FINTECH UPDATES
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WHAT WENT RIGHT LAST MONTH 2018 is already a record year iZettle: From Sweden to to Regulators collaborate for a for global fintech investment Europe’s biggest fintech IPO ‘Global Fintech Sandbox’
The global fintech sector raised $41.7bn in Swedish fintech iZettle announced last The UK’s Financial Conduct Authority (FCA) the first half of 2018, surpassing last year’s week that they intend on selling shares and announced the Global Financial Innovation record total. It increased steadily between launching an IPO in order to raise SKr2bn Network (GFIN) initiative alongside 11 2014 and 2017 from $19.9bn to $39.4bn by listing on Nasdaq Stockholm. With plans other regulators from Hong Kong, the US, HOPE at a CAGR of 18.5%. This trend accelerated to increase revenue by 40 per cent a year, Australia, theUAE, etc. in the first half of 2018 when $41.7bn was iZettle aims to also break even by 2020. invested across 789 deals. be held and sold directly within the app in GFIN will primarily serve as a network of seconds, and even allows customers to set regulators to discuss policies regarding up alerts. financial technologies, and to trial cross- country technology solutions.
WHAT DIDN'T GO SO WELL LAST MONTH ‘Beyond Fintech: A Pragmatic India’s finance ministry calls Assessment of Disruptive cryptocurrencies a ponzi Potential in Financial Services’ scheme This report from WeForum quotes “Fintechs Cryptocurrency is not legal tender in India have changed the basis of competition in and the ministry went on record to ask financial services, but not the competitive investors to stay away from trading in it. landscape”, which we also agree with at They said cryptocurrency is likely to be HYPE Burnmark. It goes on to say that fintech used to carry out illegal and subversive startups have driven innovation but failed to activities such as, terror-funding, capture large market share and are reliant smuggling, drug trafficking and money- on partnerships with banks to achieve scale. laundering. BURNMARK BLOGS AUGUST 2018 28 BLOGS
Commonwealth Why this ambitious RegTech and The innovator’s nations beating startup isn’t going digital finance view of Open America on fintech public--yet supervision: A leap Banking regulations into the future
There’s a global Kabbage, which Petralia An array of cutting-edge The general consensus competition between and Rob Frohwein co- technologies for regulatory around the table is that governments for who founded with Marc Gorlin compliance (RegTech) and Open Banking is all about can best accommodate in 2009, has spent the last for improving supervisory customer focus first and emerging financial three years on the Inc. 500 processes (SupTech) foremost. For example, technologies, and the list of America’s fastest- promises to relieve the the customer onboarding United States is losing. growing private companies. costs of compliance and experience is horrendous Just last week, Australia It reported $172 million the pain of exercising today, involving forcing and the United Kingdom in 2016 revenue, some of supervisory control. These the customer into the announced that they will which it’s reinvesting into technologies are already branch with all of their strengthen their “Fintech buying other startups, and supporting authorities in identification documents. If Bridge,” a collaborative some of which it’s using countries such as Austria. we could simplify and take program between the two to develop other financial But what about emerging the pain out of that process nations that will facilitate products. markets and developing through APIs, that would be the entry of fintech startups economies (EMDEs), where amazing. The question then into each jurisdiction’s – By Maria Aspan the capacity of supervisors comes down to: how do regulatory sandbox. The is often limited? you commercialise this? agreement will also include an initiative to reduce – By Denise Dias & – By Chris Skinner barriers to licensing for Stefan Staschen firms that are already licensed in the other country.
– By Daniel Press BURNMARK ANNOUNCEMENTS AUGUST 2018 29 ANNOUNCEMENTS
Fintech startup Volt services in the US with a banking by integrating the personal finance app competition with the help of card lands first “restricted” partner. Clarity Money with its Marcus offerings. reader technology firm, iZettle. banking license in EBA publishes its roadmap JPMorgan Chase Alior to launch pan- Australia on fintech launches smartphone app European digital bank with Volt became the first company to be The European Banking Authority ‘Finn’ solarisBank and Raisin offered a banking license under the (EBA) has published a fintech Australian prudential regulator’s new roadmap setting out its priorities JPMorgan Chase has launched a Poland’s Alior Bank is going pan- scheme that lets banks accept up to for 2018/2019. The roadmap sets millennial-centric app called ‘Finn’ to European in partnership with $2mn in deposits. out the establishment of a Fintech obtain new customers from around solarisBank, Raisin and Mastercard, Knowledge Hub for knowledge sharing the US who dislike using branches. starting with multi-currency accounts Danske Bank signs in supervisory approaches. in Germany. partnership with Swedish Santander InnoVentures YES Bank in India hosts 7 TransferWise announces fintech startup Minna makes its first investment fintech startups at its YES partnership with Technologies in Brazil via digital lending Fintech Accelerator platform Creditas France’s Groupe BPCE Danske Bank will use Minna for its “subscription manager” solution that 7 startups, including startups from The fintech venture capital arm of Transferwise is partnering with helps customers view and manage Poland and Spain, graduated from Santander Group has made its first France’s second largest banking group subscriptions through the bank’s India’s first banking fintech accelerator investment in Brazil (its second in by integrating its APIs into the group’s mobile app. programme. The startups were Latin America) through Creditas, a mobile banking apps. selected from over 600 applicants secured lending platform. Revolut to seek US from around the world. banking license PayPal buys Swedish Goldman Sachs buys Revolut, which is in the process of startup iZettle for $2.2 securing a European banking licence personal finance startup billion and currently offers its nearly two Clarity Money million users a pre-paid card, app and Paypal hopes to bolster its in-store foreign exchange, plans to launch Goldman Sachs’ GS Bank is expected presence in a time of heavy payments to add up to 1 million new customers BURNMARK FROM TWITTER
AUGUST 2018 30
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