We are back with this week’s tech update. We look at Deutsche Bank’s new partnership with a fintech, BaaS acceleration, CBA pausing its crypto trial indefinitely, major banks’ investment into the digital asset platform Elwood, Quontic’s outpost in the metaverse, P2P Payments launch by Whatsapp, Mastercard’s biometric checkout framework, Solidus Labs’ huge series B funding, NatWest’s hefty fine for overcharging credit card fees, AT&T’s Wireless Wan, and the strong smartphone shipments numbers in North America, as opposed to China.
Deutsche Bank and the fintech company FinLync have partnered on real-time corporate treasury. Using the API integrations that have been pre-created by Deutsche Bank, FinLync will enable a real-time connection that will allow for a more detailed forecast, better working capital efficiency, payment tracking in real-time, and improved automated reconciliation.
Although some have voiced their concerns regarding the complex nature of the API integration and how it will play out across regions and banks, the partnership between Deutsche Bank and Finlync addresses these concerns.
Kerstin Montiegel, the global head of client connectivity/digital client access channels at Deutsche Bank, says: “Our integration with FinLync makes it much easier for corporates to adopt our banking APIs and shortcut the road to the automated, real-time treasury. FinLync’s pre-built API integrations and SAP-native applications significantly reduce the complexity of building and maintaining individual API integrations with SAP and other ERPs for our clients.”
Phillip Klein, co-founder, and CEO of FinLync, adds: “We are excited to join forces with Deutsche Bank’s renowned Corporate API Program. We will support its clients by making bank API connectivity a simple plug-and-play experience, enabling corporates to manage liquidity in real-time and ultimately supporting faster, more-informed decision-making. Corporate finance teams have long sought the ability to access all their available bank data and deliver it directly into their existing systems. We are delighted to partner with Deutsche Bank, a global leader in API-based corporate banking, to make this a reality.”
The annual study by CCG, “The Banking Battleground 2022: Finding the opportunities” showed that the popularity of Banking-as-a-Service (BaaS) is gaining momentum among the bank executives in the US. 127 C-level executives have taken part in the survey that explored what are the current trends and priorities in the sector.
The report showed that while the more progressive financial institutions (that have incorporated fintech offerings and are partnering with fintech companies) are likely to be offering BaaS services already, a total of 76% of respondents claimed they would be interested in providing such services, with more than half responding they would be “very interested” in doing that.
“This suggests that BaaS has officially hit the mainstream, and we will continue to see banks jumping in at an accelerated rate,” the report reads.
As the volatility in the crypto markets continues, the Commonwealth Bank of Australia has made the decision to pause its crypto trial. Back in November, CBA entered into a partnership with Chainalysis and a crypto exchange Gemini to start working on a crypto service that could be offered to the customers through CBA’s app.
According to the pilot of the program, the customers were meant to gain access to a maximum of ten of their pre-selected crypto assets. Now, the project is suspended and the CBA has yet not provided any timeline for when it will possibly resume.
In a tech briefing to investors, the CEO Matt Comyn said: “As events of the last week have reinforced, it is clearly a very volatile sector that remains an enormous amount of interest. But alongside that volatility and awareness and I guess the scale, certainly globally, you can see there is a lot of interest from regulators and people thinking about the best way to regulate that.”
“Our intention still, at this stage is to restart the pilot, but there is still a couple of things that we want to work through on a regulatory front to make sure that that is most appropriate,” he added. “We want to continue to play a leading role in providing input into that and shaping the most appropriate regulatory outcome.”
Barclays and Goldman Sachs were both participating in the recently closed funding round in the digital asset platform Elwood Technologies. The $70 million round was co-lead by Dawn Capital and Goldman Sachs, and apart from Barclays, other participants included BlockFi Ventures, Chimera Ventures, CommerzVentures, Digital Currency Group, Flow Traders and Galaxy Digital Ventures.
Elwood’s platform stands out due to its low-latency connectivity to the crypto exchanges around the globe, supported by the extensive analytics and reporting capabilities and customer support team.
James Stickland, CEO of Elwood Technologies, commented: “The rich mix of investors participating in this raise reaffirms the movement of financial institutions working closely with their native digital asset technology providers. Together, we aim to provide broader mass market involvement in digital assets and cryptocurrency. We look forward to working with our investors to further enhance our offerings and broaden their market adoption.”
Although the crypto market is going through turmoil right now, Mathew McDermott, global head of digital assets at Goldman Sachs, said “Our investment in Elwood demonstrates our continued commitment to digital assets. We look forward to partnering to expand our capabilities.”
Quontic, one of the digital banks in the US has launched its outpost in the metaverse as it is trying “to connect with customers, offer education, and eventually – as the virtual world evolves – offer banking services”. For now, visitors can use the Dentraland site to get limited edition NFTs or socialize.
“Quontic was the first bank to offer Bitcoin rewards on checking accounts, the first to offer a wearable payment solution, and now, the first to open an outpost in the metaverse,” says Steve Schnall, CEO of Quontic Bank. “Banking once required consumers to visit a location and rely on printed documents to manage their money with personal support from a teller, today we carry all of that power in our pockets on an app, but the experience is cold. In the not so distant future, our customers will have the best of both worlds and this outpost is the first step towards that level of service.”
WhatsApp has started offering P2P payments in their app across Brazil and India. The users in those countries can utilize the pay button and send the money directly through the app.
Stephane Kasriel, head of commerce and financial technologies at Meta, said: “We’re always working on new ways to unlock the potential of payments on WhatsApp. By adding a Pay button to the contact card on WhatsApp, we hope to make sending payments even more intuitive.
“With payments on WhatsApp, people can send money to friends and family right where they chat, securely and with no fees,” she added.
Mastercard has revealed its new technology framework that aims at supporting the minimum standards for biometric payments. With the support of several partners such as NEC, Payface, Aurus, PaybyFace, PopID, and Fujitsu Limited, Mastercard wants to establish guidelines and standards foundation for biometric payments at checkout.
“The way we pay needs to keep pace with the way we live, work and do business, offering choice to consumers with the highest levels of security,” says Ajay Bhalla, president, cyber & intelligence at Mastercard. “Our goal with this new program is to make shopping a great experience for consumers and merchants alike, providing the best of both security and convenience.”
The first trial will happen this week in Brazil, with the following pilots expected in the Middle East and Asia.
The digital asset risk surveillance company Solidus Labs has just completed its series B round which was led by Liberty City Ventures, with participation from Evolution Equity Partners, Declaration Partners, and several “big” angel investors such as former US Acting Comptroller of the Currency Brian Brooks and former CFTC Chairman Christopher Giancarlo.
The scope of the $45 million funding round clearly shows interest in the financial risk monitoring that Solidus Labs specializes in. As digital asset markets present a whole new set of threats and challenges, financial institutions and regulatory agencies alike are looking for options to mitigate risk. Solidus Labs offers a one-stop-shop risk monitoring suite that safeguards crypto businesses and shields investors.
“For Web3 and the DeFi economy to truly fulfill their massive potential, there’s a need to mitigate new risks – both in terms of liquidity enablement and on the consumer and investor protection side. This is where Solidus’ crypto-native solutions come into play, and the reason we’ve been experiencing a 560% year-over-year revenue increase,” says Asaf Meir, Solidus’ founder and chief executive. “The additional funds will allow us to support the growing cohort of financial institutions looking to expand into the DeFi space, accelerate the deployment of our threat intelligence capabilities, and expand our R&D to solve a fast-growing array of DeFi specific use-cases and needs.”
After four years of investigation by The Payment Systems Regulator (PSR), NatWest – National Westminster Bank, Royal Bank of Scotland, Ulster Bank, and Coutts & Company – have been fined £1.82 million due to the overcharge of credit card interchange fees.
The PSR concluded that NetWest has repeatedly treated cards that should be “consumer” as “commercial”, leading to higher fees. This resulted in a wrongful profit of nearly £1.2m between 2016 and 2018.
Chris Hemsley, managing director of the PSR, commented: “The interchange fee caps were put in place to reduce the cost of accepting customer card payments for shops and other merchants’ businesses. The banks broke the rules by failing to bring themselves in line with the caps.
“Not only have the banks reimbursed the fees to acquirers which they were not entitled to collect, but we have also fined them for their failings,” he added.
AT&T is getting ready to launch its wireless WAN offering, referred to as the AT&T Managed Wireless WAN. The service is plug-and-play with a monthly subscription plan.
“The workforce is continuing to evolve, and having the right tools is essential to a business – no matter where the business is getting done,” said Will Eborall, assistant vice president of product marketing management, AT&T. “AT&T Managed Wireless WAN provides flexible connectivity using the latest LTE and 5G technology devices to deliver a consistent and reliable network experience that’s fully managed, helping to transform how organizations can generate revenue, streamline operations and serve customers.”
AT&T’s offering is supported by Cradlepoint’s NetCloud and edge devices.
“Now business can get all the agility, security and reliability advantages of cellular WAN technology – wherever they need it – without any of the challenges that go along with deploying and managing a new infrastructure,” said Cradlepoint’s chief marketing officer Tom Krautkremer.
Based on the recent figures published by Canalys, the smartphone shipments in the US are significantly stronger than those in China. In Q1, the North American numbers hit 39 million units and keep growing, whereas the Chinese numbers are decreasing. Since February, China has experienced a stedy decline in smartphone shipments. Although a part of the reason can be attributed to the Covid measures introduced in China during the Winter Olympics, the numbers are seen to decline further in March, closing at a 30% decline in Q1 2022.
“The North American smartphone market has been buoyed by Apple’s strong growth,” said Canalys Analyst Brian Lynch. “This quarter, the iPhone 13’s high popularity was the key driver. With global demand more uncertain, Apple has shifted more devices back into North America after prioritizing other regions in Q4 2021, allowing it to greater fulfill demand and deliver on backorders from the previous quarter. In addition, the launch of the latest edition of the iPhone SE offers an affordable option for many of North America’s fiercely loyal iOS users. Despite not being mmWave-enabled, carriers’ increasing investments in C-band and sub-6GHz spectrums will open the door for the iPhone SE’s market growth in the coming quarters.”