We finish the week with the latest fintech news. We will talk about the planned stock market debut of Wise, cryptocurrency interest in the UK, Solarisbank completing its in-house core banking system, JPMorgan Chase new acquisition, American Express pushing into traditional banking, former Paypal veterans launching a decentralized payment network, a British startup providing services for traditional banks so they can compete with fintechs, and Opera adding Nervos blockchain to its browser crypto wallet.
One of the leading fintech companies Wise, formerly known as TransferWise, has just announced they plan to go public via a direct listing. The company will make their market debut on the London Stock Exchange. As Wise does not need any fresh capital, they want to seek a direct listing instead of an initial public offering.
Founded back in 2010, Wise now has over 10 million customers that transfer roughly $7 billion each month.
“We’re taking steps to become a public company in a way that’s transparent and fair,” Kristo Kaarmann, CEO and co-founder of Wise, told reporters on a conference call on Thursday.
“We chose a direct listing because everyone has the same opportunity to own a part of Wise, from large institutions to customers. It’s less expensive than an IPO which helps us keep costs down and ultimately helps us on our mission to lower prices.”
According to the reports, Wise would seek a valuation of up to $11 billion, determined by the market.
Based on the newest report from the UK’s Financial Conduct Authority, it appears that customers are increasingly interested in cryptocurrencies. The public awareness and estimate for ownership stand at around 2.3 million, as compared to 1.9 million in 2020. Moreover, the report mentions that 78% of British adults are aware of cryptocurrencies and a declining number of people view crypto assets as a gamble. Now, it became more of a complement to mainstream investments.
Having said that, the report also emphasizes that the overall public understanding of cryptocurrencies has gone down, with only 71% of surveyed individuals correctly identifying the definition of a cryptocurrency.
Sheldon Mills, FCA’s executive director, consumers and competition says: “The research highlights increased interest in crypto assets among UK customers. The market has continued to grow, and some investors have benefitted as prices have risen. However, it is important for customers to understand that because these products are largely unregulated that if something goes wrong they are unlikely to have access to the FSCS or the Financial Ombudsman Service. If consumers invest in these types of products, they should be prepared to lose all their money.”
The German banking-as-a-service fintech platform Solaris announced it has migrated its whole customer base to an in-house core banking system. Prior to this, the company has been using an externally sourced alternative.
Solarisbank was founded back in 2015 by a former Deutsche Bank expert and an ex-MD at Avaloq, Marko Wenthin and Andreas Bittner. As the company was busy developing its own core banking system for the past couple of years, the founders are excited about the completion of the migration occurring last weekend. By developing its own core banking system, Solaris has optimized its infrastructure to meet the requirements of a BaaS platform and the upgrade allows them to perform processes such as account openings and Sepa credit transfers.
Jörg Howein, CPO, Solarisbank, says: “Running our own core banking system allows us to offer all of our partners improved service level agreements and grants us full control over performance.”
JPMorgan Chase will acquire the digital wealth manager Nutmeg later this year. The goal is for Nutmeg to form “the bedrock of the bank’s retail digital wealth management offering internationally over the long term”. Nutmeg was founded 10 years ago and has since then acquired almost 150 000 clients. Although the company has recorded losses in its most recent set of full accounts, it has enjoyed a steady growth during the pandemic.
The founder of Nutmeg says, “The products and services our customers currently enjoy from Nutmeg will be unaffected and, as the deal completes later in the year after approvals are received, JPMorgan Chase and Nutmeg will be working closely on further developing our offering to the benefit of our investors.”
Commenting on the acquisition, Sanoke Viswanathan, CEO of the international consumer at JPMorgan Chase, comments: “We are building Chase in the UK from scratch using the very latest technology and putting the customer’s experience at the heart of our offering, principles that Nutmeg shares with us. We look forward to positioning their award-winning products alongside our own and continuing to support their innovative work in retail wealth management.”
As traditional banks are pushing into the fintech territory, American Express seems to be pushing into traditional banking territory as they launch their first checking account with the help of technology developed by a small business lender Kabbage.
Kabbage Checking, is a no-fee digital account that pays 1.1% interest on up to $100,000 in balances. It includes the most crucial features such as mobile check deposits, a debit card, bill pay and targeted savings features. It also provides access to ATMs and retail locations for cash transactions. One of the clear advantages is that any business can apply for an account in a process that will take only a few minutes.
“Small businesses should not have to sacrifice the features they expect from a bank in order to experience the benefits of an affordable business checking account,” says Gina Taylor Cotter, SVP of strategy and business operations at Kabbage. “Kabbage Checking is built to give small businesses the flexibility of mobile banking — from in-app account management to mobile check deposits — with the convenience of a traditional bank—including in-person cash deposits, free ATM access, and a compelling APY to directly support our customers’ growth.”
Jim Nguyen and Nas Kavian, a couple of former PayPal executives have just launched a decentralized payments network that aims at connecting banks, merchants, and payment providers around the world. The startup is backed by Borderless Capital, BCW Group, Grupo Supervielle and angels.
The startup is taking aim at Swift, arguing that as “we enter a new era of finance, businesses need a modern payment infrastructure that reduces inefficiencies in today’s money movement process”.
The platform is built on the Algorand blockchain. In the newly launched payment network, the organizations will be able to enable real-time payments using the efficiency of digital currencies.
Jim Nguyen,CEO, Six Clovers, says: “Six Clovers is a next-generation payments infrastructure that solves many of today’s challenges with domestic and cross-border payments, while opening up a whole new world of digital finance opportunities.
“We equip financial institutions, payment providers, and merchants with a full-stack, blockchain native payment infrastructure to seamlessly and securely move and transact in digital currencies globally.”
As Fintechs and neobanks are taking over the financial markets, the London-based 10x Future Technologies is a startup that helps established banks to build next-generation services and align with the changing demands of customers that live in a fintech-dominated world.
After the latest $187 million funding round, the valuation of 10x stands at roughly $700 million. 10x plans to use funds to expand into more territories and develop more technology for its flagship platform, SuperCore. The platform is developed to run a variety of banking services that included core banking, analytics, security and marketing, and mortgages. 10x’s customers can integrate the all-in-one platform into their existing technology or opt for 10x building them new services from the ground.
“The legacy systems are where banks’ issues sit, because they are all architected around the product, not customers,” the CEO of 10x said. “But we believe that the industry is ready to contemplate the process of migration now.” The company is not yet working on any projects of this kind, he added, but it expects to in the next 12 months.
“We have been impressed with 10x’s strategy and ambition to play a key role at the heart of transformations taking place in financial services, driven by technology innovation, consumer expectations, and regulatory reform,” said William Abecassis, BlackRock’s head of Innovation Capital, in a statement. “We are excited to be investing in the business as it scales into new markets.”
Leon Pedersen, MD, and head of Thematic Investing, CPP Investments added: “10x is very well placed to change how big banks are built and deliver for their customers. 10x presents an attractive opportunity for a long-term investor like CPP Investments as we believe they will benefit from their exposure to the structural growth trend of financial institutions investing in digital initiatives and renewing core technology infrastructure, allowing banks to introduce new offerings and products much faster than using legacy platforms.”
The first global browser providing Web3 capabilities, Opera, announced yesterday it will support Nervos blockchain through a a new CKB$ (Nervos crypto asset) integration via its native crypto wallet. With this announcement, Nervos will become the fourth blockchain incorporated into Opera, after Bitcoin, Ether, and TRON.
“Backed by an experienced team and a devoted global community, Nervos is making waves in the blockchain and crypto space, which makes it an ideal partner chain,” said Cuautemoc Weber, VP Business Development at Opera. “Nervos also shares our vision for mainstream adoption for Web 3 and is exploring the many possibilities that an interoperable blockchain and crypto ecosystem has to offer.”
“The support of Opera, a mainstream browser with hundreds of millions of users, is important not only for the Nervos network but also the success of the future decentralized economy,” said Kevin Wang, co-founder at Nervos. “We look forward to the feedback from Opera users and are excited to introduce them to the Nervos community.”