FINTECH & BANKING WEEKLY NEWSLETTER 21/09/2020 - 27/09/2020 CAPI N TA N L N 2 02 0 Produced by NNN Capital Ltd powered by EDGE CHARTERED CERTIFIED ACCOUNTANTS / 3 9 Content Atom bank launches Instant Saver 4 Profitability of Starling Bank 5 Marcus Bank slashes its easy-access account rate to 0.7% 7 Lawsuit against Revolut in Romania 8 Samsung Pay in Germany 9 Metro joins Berlin fintech Optiopay 12 Thought Machine’s new chairman Andy Maguire 14 HSBC’s shares dive to lowest level 15 FinCEN Files: HSBC 16 Close of accounts in EU 17 NatWest tracking carbon footprint 18 Metro Bank relaunches 90% LTV mortgages. 20 Metro Bank partners with Enterprise Nation for its corporate customers 21 The FinCEN Files: How Criminals Moved Trillions of Money 22 The true cost of saving with a High Street Bank 23 What is fscs protection? 24 www.edgeaccountants.co.uk W E E K L Y N E W S L E T T E R Atom bank launches Instant Saver Atom, the first mobile bank in the and secured business lending for UK, has launched Instant Saver with a small and medium-sized enterprises 0.75% AER interest rate. The highlight (SMEs). of Atom’s Instant Saver is that it is free to deposit and withdraw from Atom launched its first mobile 1p to £100k 24 hours a day, 7 days a mortgage product in December 2016 week. and has taken £1.8bn in deposits and lent over £2.4bn to small businesses New customers can open an Instant and homeowners to date. Saver by downloading the Atom app to apply for an account in minutes. (Atombank – 21/09/2020) After securing its banking license in June 2015, Atom bank launched operations in April 2016, offering market-leading Fixed Saver accounts N N N C A P I T 4 A L W E E K L Y N E W S L E T T E R Profitability of Starling Bank The Prudential Regulation Authority (PRA) announced that many new banks had “underestimated the development required” to become successful and now needed to concentrate on making a profit. This announcement came after huge losses at Revolut (more than tripled to £106.5m in 2019); Monzo (rose from £47.1m to £113.8m) and Starling (doubled to £52m). Anne Boden said that “If you look at why we’re going to make a profit [before others], there’s a couple of things going on. A lot of the others make a lot of money on international travel and we’re far more domestic payment based. We’re less impacted by international travel. Secondly, our customers are not necessarily spending on Starbucks or Pret; they’re much more likely to be spending at Sainsbury’s or Instead of challenging the high street Tesco. Our customers are banks, Britain’s important financial older and tend to use us as a real account. technology companies Monzo, Starling and What we’ve done is build a customer base Revolut haven’t earned a penny. However, that is far more profitable. We have just Starling CEO Anne Boden declared that “In launched kids cards, and our customers December, we will be monthly profitable”. have kids. It’s paying off.” On the other hand, it is uncertain when the bank might turn an annual profit. She added Coronavirus has increased the shift away from that “We’ve always had a business model branches and towards online banking and that was going to be profitable. Some of Boden says this could create opportunities. these other banks that launched from 2014 She mentioned that “The banks need to get thought they could be Amazon and make together to share branches. You don’t need losses for the foreseeable future. But the a branch from every bank in every town. Bank of England really wants banks to be People are not using debit cards; they’re using mobile wallets. We did really well on profitable within five years.” A L I T P A C N N 5 N W E E K L Y N E W S L E T T E R new account opening during lockdown as loans. Everybody is concerned about the people didn’t go into a branch”. reputational damage on this sector when we have to start collecting these loans, Coronavirus cases are increasing and but everybody realizes this has to be although no job cuts are on the cards done carefully.” (and no staff have been furloughed) Anne Boden claimed that working from Anne Boden is now on the board of home for such a long time could impact UK Finance and was appointed to the employees’ mental health. Due to this Government’s new post-Brexit board of fact, they have launched a program called trade earlier this month. She said that “Never Home Alone”, where staff can “You’ve got a situation where they weren’t socialize with each other through online at the sharp end during the financial events such as cooking classes. crisis, but they were cleaning up the mess afterwards. Those women are not going Starling is among the banks that have been to let it happen again. I have a lot of offering Government-backed coronavirus confidence in a whole cadre of women loans to small businesses, including who will be leading British banks over the Bounce Back Loan Scheme. However, the next couple of years and I’m proud to be sector will be tasked with chasing these one of them.” debts. Boden said that “Collecting [the money] is going to be difficult and we’re (Telegraph – 21/09/2020) expecting a substantial amount of defaults. At the moment UK Finance is working with the Treasury and the British Business Bank on all the processes to collect those N N N C A P I T 6 A L W E E K L Y N E W S L E T T E R Marcus Bank slashes its easy-access account rate to 0.7% Goldman Sachs’ easy-access account continues to lower Marcus rates. It entered the market by making a great success in 2018. When it entered the market, the interest rate was 1.5%. Then it became 1.3%, then it saw 1.2% and lastly 1.05%. Now the point is a complete misery for customers: 0.7%. Marcus stated that the reason for these rates is the market conditions. It added there are ‘many factors’ it has to consider when setting its pricing structure with the Bank of England’s base rate remaining at 0.10%, the lowest on record, causing problems. Marcus said in order to build a sustainable savings business in the long term, it needs to adjust its pricing to current market conditions. (Dailymail -25/09/2020) A L I T P A C N N 7 N W E E K L Y N E W S L E T T E R Lawsuit against Revolut in Romania Digital bank Revolut is unaware that his account has he says. “Upon a search on accused of failing to provide been blocked because no Google, I noticed that such information about blocking reason is given. “Due to soft bad things happen regularly one of its customers account blocking, documents should with Revolut and there is no in Romania. be flagged immediately way for affected customers until they are provided, or to contact other company Florin Hrituliac, a the review is complete” through the chat window in Revolut personal account says Revolut spokesperson. the Revolut application” he client in Romania, He adds that depending adds. attempted to transfer on the case, the internal RON 20,000 ($ 4,832.68) review can take minutes or “Basically, they don’t care from his company’s bank hours. However, the firm about our money. This was account to his Revolut did not finish the review when I decided to sue Revolut account on September until it became aware of in my local court.” Hrituliac’s 9, 2020, but was unable Hrituliac’s account issues on account was finally unblocked to access this money. 10 September. “without any documents, just Hrituliac said his account based on my explanations” was blocked for five days “If Revolut has blocked the he adds. “Which again shows “without any explanation account since May, it means many flaws in their anti- from chat agents”. Revolut the account has been blocked money laundering (AML) unblocked the customer’s for five months - there is procedures.” account on September 15. still no notification about Following days, client sued it,” says Hrituliac. “I had full Revolut claims that the Revolut. confidence in transferring the freezing of accounts “could 20,000 RON to my Revolut be due to either a breach of Revolut claims that the account; If I had found out our terms and conditions or customer’s account was that it was blocked, I would as part of our security checks actually “locked” on May have resolved the problem which continuously monitor 21, 2020. A spokesperson first and then transferred the to keep our customers safe. at the company said money. “ This measure is a regulatory the customer’s account requirement.” The fintech’s was rarely used and Hrituliac claims that this new money laundering went through a review, information was not covered officer will have to tackle this resulting in the account in chat discussions with case and more, as Hrituliac’s being locked. According the first representative. situation has garnered a to the spokesperson, they “This transfer has only lot of interest since his explain that the client was been flagged for further post about it in a Revolut unable to access these verification, not the account Romania group on Facebook.