Hello Fintech Friends,
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Please enjoy another week of fintech and banking news below.
💬 Quote of the Week
“They are in the old world of Geneva private bankers, and the new world of globalized finance, where they want to be present internationally, they want to grow, they want to present themselves as modern, but not too much. Two worlds that are on a collision course.”
Inside Pictet, the Secretive Swiss Bank for the World’s Richest People (Source)
📖 Read of the Week
In A future with fewer banks, The Economist evaluates what the world will look like if tech companies, public entities, and protocols begin to replace banks as the providers of financial services. Benefits: unlocking traditionally gated financial services for anyone to use. Drawbacks: concentrating power into fewer institutions and exacerbating risk. As Bill Gates quipped in 1997, “Banking is necessary, but banks are not.”
📊 Stat of the Week
Lenders originated a record $3.83 trillion in home loans in 2020. (Source)
As the world moves increasingly online, embedded finance is playing a powerful role in helping consumers and small businesses achieve their goals. It offers cost-effective and more transparent access to financial services by incorporating the offerings into platforms already in use and trusted. Flourish Ventures’ three-part event series on embedded finance brings together fintech founders from around the world to explore the platforms, plumbing, and plugins powering this important technology trend. Learn more and register.
🏦 Financial Services & Banking
🚀 Product Launches
Pacific Western Bank is launching a virtual commercial card, in partnership with Extend and Mastercard.
Italy is launching a blockchain for the development and management of sureties and debt guarantees.
📰 Other News
Hodl onto your seats, Goldman Sachs is forming a cryptocurrency trading team.
JP Morgan, Wells Fargo, US Bank, and others in the US plan to issue credit cards to consumers using data like checking and savings account balances.
Barclays, Lloyds, NatWest, Santander, and HSBC are partnering to share branch locations in smaller UK towns. 30 European banks are partnering to create “a rival to take on PayPal, Mastercard, Visa and Apple.”
Cassava Fintech International and Mastercard partnered to develop a digital vaccine and health certificate in Africa.
Fifth Third Bancorp in the US opened low-cost deposit accounts to help customers avoid overdraft fees. (Too little too late?) Silicon Valley Bank and Modern Treasury, meanwhile, partnered on automated payment workflows.
Silvergate Bank partnered with Facebook’s Diem to become the exclusive issuer of its stablecoin in the US (and Diem broke down its bank-first stablecoin plan). The Bank of Israel opened a public consultation on digital currencies and Swift wants in on the CBDC action.
🚀 Product Launches
Google Pay (disclosure: where I work) launched international remittances in partnership with Wise and Western Union.
Credit Karma launched Instant Karma, a tool that rewards users by randomly refunding purchases.
📰 Other News
The co-founder of Peloton launched an accounting and bookkeeping company, Avise.
BNPL provider Klarna is giving away $4.5 million in payment and media services to 100 small businesses.
In collaboration with Ben White.
The SEC granted approval to blockchain mortgage startup Figure to become a broker-dealer of securities on its own Provenance blockchain.
The U.S. Senate voted to overturn the OCC’s True Lender rule, which had allowed lenders to import out-of-state interest rates via bank partnerships.
Interim head of the OCC Michael Hsu published a letter outlining his priorities, including inequality, the pandemic and climate change.
The Justice Department said it’s probing fintech companies over potential miscalculations as part of the PPP lending effort.
Canada’s government released a bill that would bring fintech payments companies under the regulatory purview of the Bank of Canada.
The Federal Reserve is putting together new rules for card-not-present transactions and direct fintech access to its payment network.
New SEC chief Gary Gensler signaled new rules on Payment for Order Flow.
The Hill published an op-ed on the recent Federal Reserve guidelines for evaluating de novo charter banks access to Fed systems.
The Federal Stability Oversight Committee’s biannual report called out meme stocks as a potential systemic vulnerability.
The UK’s Financial Conduct Authority launched a four-week consultation on SPACs.
China’s government is ordering some of its largest platform companies to unbundle, in a supposed effort to rebalance its financial system dynamics.
Retail companies in North Dakota are suing the Federal Reserve Board of Governors on a claim that it has failed to enforce debit card rules.
German regulator BaFin, which famously protected Wirecard from fraud accusations, ordered N26 to improve its KYC / AML practices.
Plaid published a new white paper on the evolution from data access to data control. You can read it here.
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