Every Monday, we review the most important headlines in the tech world, focusing on fintech, biotech, and telecom news. This week, we will talk about the existing digital retail bank launch in the UK, Microsoft and Google winning a new major Cloud deal, Bank of England criticizing banks and their reporting failures, big techs pledging funds to the UK’s anti-fraud campaign, huge credit card debt increase for the US consumers, Silicon Valley Bank and Plaid partnering on tokenized payment solutions, FTTH’s expected growth over the next five years, FDA clearing the clinical trials for the first CRISPR-based HIV therapy, and the EU Commission president announcing a new Cybersecurity initiative.
This is something the UK customers have been waiting for, JP Morgan is opening its UK digital retail bank this week. The digital-only branch will start with offering current accounts connected to a rewards program. In the long run, JP Morgan plans to expand their offerings to personal lendings, mortgages, and investment.
Sanoke Viswanathan, head of JPMorgan’s international consumer division, said that the UK will be a big investment for the company as they want to develop their services in Great Britain before expanding to other countries in Europe or South America. “This is a very big strategic commitment from the firm’s standpoint,” he said. “We will spend hundreds of millions before we get to break even and get to a place where this is a sustainable business, and we’re not in a rush.”
JP Morgan’s Chase has some strong competition in the British market, as there are several well-established institutions in the UK marking their territory in digital retail banking. There is also a number of startups such as Revolut, Starling, Monzo, and Atom. Thus, it will be interesting to see how Chase will do as compared to the home-grown competitors.
Last week, it was revealed that Wells Fargo has chosen Microsoft and Google to provide public Cloud services, and major Cloud deals were signed with both tech giants. According to the reports, Microsoft Azure will be the primary public cloud provider for Wells Fargo. Google will be supplying additional business-critical cloud services. Additionally, Wells Fargo will also use several third-party-owned data centers.
“Launching our new digital infrastructure strategy is a critical step in our multiyear journey to transform Wells Fargo, making it easier for customers to do business with us and creating a better working experience for our employees,” says Saul Van Beurden, Wells Fargo’s head of technology. “The Wells Fargo of tomorrow will be digital-first and offer easier-to-use products and services, and all of that starts with driving speed, scalability, and enhanced user experience through the next generation digital infrastructure strategy we’re announcing today.”
The Bank of England has publicly voiced concerns regarding banks and building societies failing to supply accurate data that the regulators could use to assess the risks to the financial systems. Per the legislation, PRA-authorised firms are obliged to submit “complete, timely, and accurate” regulatory returns on assets, capital, and regulations. Already back in 2019, The Bank of England has issued a letter addressed to banks and building societies pointing out they need to fulfill their legal duties. Now, the bank has issued yet another letter where it voices its concerns.
“Overall, we were disappointed to find significant deficiencies in a number of firms’ processes used to deliver accurate and reliable regulatory returns,” the letter reads. “It was clear that multiple firms did not treat the preparation of their regulatory returns with the same care and diligence that they apply to financial reporting shared with the market and counterparties. For some firms, there had been a historic lack of focus, prioritization, and investment in this area.”
The Bank of England points out the banks and building societies have put too much focus
on “tactical fixes” and criticizes relying on “significant manual intervention to fill data and system gaps,” which can often be a source of less-accurate reporting and errors. It was advised for the companies to proactively work to solve the issue as soon as possible, with The Bank of England warning that “where individual firms fall short of our expectations, we will consider the full range of supervisory responses and enforcement powers at our disposal”.
Big tech companies such as Google, Facebook, Instagram, Twitter, Microsoft, or Amazon have all pledged £1 million to an anti-fraud campaign in the UK, the so-called “Take Five to Stop Fraud”. The campaign is run by UK Finance and the funds raised are meant to be spent on an extensive ad campaign that discusses financial frauds and educates the customers about the many sophisticated ways financial criminals are utilizing nowadays. It is one of the steps taken by the UK Government to deal with the issue of online financial fraud.
David Postings, chief executive of UK Finance, says: “Tackling fraud is an absolute priority for the banking and finance industry, but it’s one that requires work across different sectors of the economy. We are delighted that these major technology companies have agreed to support the work of Take Five as part of our collaborative approach to tackling fraud. The advertising that is being provided will enable Take Five to reach a wider audience and is an important step in our efforts to help consumers stay protected from fraud and scams.”
Back in May, the UK Government has approved an Online Safety Bill. However, the experts believe that the provisions in the Bill are too limited to effectively tackle the issue.
Tim Fassam, director of government relations and policy at Pimfa said back in May, “While the Bill attempts to tackle fraud via user-generated content on social media sites and dating apps, paid for online adverts from fraudsters and cloned – and therefore fake – investment firm websites appear conspicuous by their absence from it.”
According to the newest Credit Card Debt Study conducted by the WalletHub, the US consumers are going for a record debt on their credit card, with the projection stating a total of $100 billion will be added as a credit card debt until the end of 2021. The increase in debt is not equal across the US, with some areas being especially quick to raise their debt. While Calofornia, Texas, and Florida saw their debt grow the fastest, the citizens from Vermont, Wyoming, and North Dakota seem to be more resilient to the trend. Following the study, WalletHub has organized a Q&A with its analyst who has provided insights on some of the most pressing questions about the debt increase. One of the key questions is obviously why the credit card debt level is increasing after some period with no noticeable growth.
“Credit card debt levels are rising again because the economic uncertainty caused by the coronavirus pandemic has subsided. People are reengaging with society, and they’re making up for a lost time by living life to the fullest, even if they can’t quite afford it,” said Jill Gonzalez, WalletHub analyst. “The fact that credit card debt has increased significantly isn’t too much of a surprise, though it is unclear whether this will be a momentary reaction to the unique conditions caused by covid or the restart of consumers’ long-term slide toward financial instability.”
Another big question was how the rising credit card debt relates to the state of the US economy and whether it should be linked to the weakening economy or a stronger one.
“Rising credit card debt can be a sign of a strengthening economy because it indicates increased consumer spending. Credit card debt that rises too fast, however, is worrisome because it indicates cracks in the economy’s foundation that could send it toppling down,” Jill Gonzalez, WalletHub analyst continues. “It really depends on how quickly and for how long credit card debt levels rise.
When asked what we can expect from credit card debt levels during the remaining part of 2021, Gonzales said, “We can expect credit card debt to continue to rise through the end of 2021, as consumers are on a trajectory similar to what we saw in 2018 and 2019. Ultimately, WalletHub projects a $100billion net increase in credit card debt for the year. After a first-quarter paydown of $55.6billion, that would mean we’re on track to rack up more than $155billion in new debt from April through December.”
Silicon Valley Bank (SVB) and Plaid, a data network behind the digital financial ecosystem have announced their strategic partnership. The two companies will cooperate on solutions that allow customers to automatically authenticate bank account information and generate payments via a tokenized payment solution. The solution will leverage Plaid’s instant account verification and SVB’s automated clearing house (ACH) API functionality using a tokenized system.
“This integration will enable innovation economy clients to leverage a best-in-class solution that is a result of a solid partnership between two of the most forward-leaning firms in the financial ecosystem,” said Shaleen Prakash, Head of Digital Channels and Segment Operating Solutions at Silicon Valley Bank. “We are proud to expand our relationship with Plaid, which so many of our clients already value and use, and facilitate clients’ compliance with growing industry demands around information security.”
“The historical infrastructure for opening new accounts and moving money has been cumbersome for both developers building the experiences and the individuals using them. Digital finance is the ‘new normal’ and clients are increasingly looking for secure, integrated solutions with a fast speed to market from trusted service providers, versus having to stitch together a solution from multiple providers,” said Paul Williamson, Head of Revenue and Partnerships at Plaid. “With Silicon Valley Bank, thousands of fintech innovators now have access to an integrated payment processing solution that combines the power of SVB and Plaid to deliver seamless, convenient digital finance experiences.”
Last week, the FTTH Council Europe shared some new analytics forecasting that full-fiber will cover roughly 200 million European homes in the next five years. “Germany, UK, and Italy confirm their huge growth potential and are joined by the Netherlands,” the FTTH Council said in a statement released together with the forecasts. FTTH Council points out the increased demand due to Covid-19 is one of the major reasons why the large increase in FTTH is expected. There is also a growing number of government initiatives that focus on expanding the infrastructure and digitalization, as well as the European digital targets for 2025 and 2030 that are also predicting significant growth.
“This trend will be intensified by new usage patterns which are encouraging operators to migrate to FTTH solutions, capable of delivering new services while contributing to the sustainability challenge,” said Vincent Garnier, Director General of the FTTH Council Europe.
“The report shows there is still massive growth potential in terms of connectivity in many EU countries, but overall deployment is progressing at a rapid pace. However, even with the infrastructure in place, the FTTH Council Europe considers that there is still a long way to go to reach a fully digitized society,” he added. “We strongly believe that to embrace the next digital decade and shape Europe’s digital transformation by 2030, take-up is the next challenge, and we call on policy-makers to take the necessary measures for end-users to benefit from the world of new possibilities offered by full-fiber connectivity.”
The FDA has given Excision a clearance to start clinical trials for the biotech’s first-in-human CRISPR gene therapy. The EBT-101 will be evaluated in HIV patients and the clinical trials are set to start at the end of this year.
“The clearance of our IND application for EBT-101 represents an important milestone for Excision and is the result of years of commitment to developing a functional cure for individuals living with HIV,” said Daniel Dornbusch, Chief Executive Officer of Excision. “Although antiviral treatments can manage HIV infection, they require life-long treatment, cause side effects, and do not provide the possibility of a functional cure. We are grateful for the FDA’s engaged review and acceptance of the IND for EBT-101 and look forward to initiating the Phase 1/2 clinical trial later this year.”
EBT-101 is the first cure of its kind, leveraging CRISPR to excise HIV proviral DNA. EBT-101 uses an adeno-associated virus (AAV) to deliver a one-time treatment intended to cure HIV infections.
Lisa Danzig, MD, Excision’s Chief Medical Officer, stated “EBT-101 has demonstrated removal of proviral DNA in multiple animal models and offers an opportunity for individuals living with HIV to potentially cease life-long therapies. The Excision team looks forward to this important collaboration with our principal investigators, scientific advisors and regulators, to conduct a safe and informative trial with this first-in-class approach to a viral disease target previously considered to be incurable.”
European Commission President Ursula von der Leyen announced last week a new cybersecurity law for connected devices, aiming at unifying the standards across the member states. The Cyber Resilience Act is meant to tackle the growing threat of cybersecurity risks and attacks by cybercriminals or rogue states.
“We cannot talk about defense, without talking about cyber,” von der Leyen said in her annual State of the Union speech in Parliament. “If everything is connected, everything can be hacked.”
“And given that resources are scarce, we have to bundle our forces. And we should not just be satisfied to address the cyber threat, we should also strive to become a leader in cyber security,” she added.
This is not the first initiative by the EU Commission regarding cybersecurity. There is already an existing proposal for a Directive on Security of Network and Information Systems, commonly known as the NIS2 Directive. Bart Groothuis, the lawmaker leading on the NIS2 file in the European Parliament has highlighted that the two initiatives are complimenting each other.
“The internet of things will bring about a lot of unsecured products because security is often not on top of the mind of the producers of such machines. And there is no European standard yet to be upheld. It’s nice to have a pulled pork machine in your kitchen, or a smart coffee machine, but it is also a way hackers can enter your home IT systems,” Groothuis told EURACTIV.
“We’ve been long advocating for this to ensure consumers’ safety across the EU,” said Els Bruggeman, head of policy and enforcement at Euro consumers. “If the Commission wants to become a leader in Cybersecurity, it must work on a common EU approach to cyber threats that enables consumers trust in the IoT,” Bruggeman added.