Fintech Inside #3 - 26th Sept, 2020 | FinCEN Files
Hi, Osborne here.
Welcome to the first edition of Fintech Inside. Fintech Inside is intended to be the front page for Fintech in emerging markets.
Diving in
One Big Thought
FinCEN Files and the need for more AI in Fintech
Earlier this week, Buzzfeed and other news agencies released a report how Bank’s knew of suspicious activities (from drug cartels, organized criminals and corrupt politicians) in their systems but did nothing about them. No surprise here. These reports came from thousands of leaked documents related to Suspicious Activity Reports (SAR) of European Banks. These SAR’s are documents from Banks when they identify suspicious transactions or suspicious accounts in their systems. This is great but here banks claim their responsibility ends when they report these SAR’s not necessarily act on them.
The challenge with all this, is that banks’ systems are monolithic and archaic. This leads to delayed identification of such transactions and accounts. There is no active monitoring of transactions and accounts. KYC is still paper based. Moreover some countries’ KYC regulations are superficial. Don’t get me wrong, Bank’s want to upgrade their systems, they want to identify such transactions but their system setups make it excruciatingly difficult to implement active monitoring of their systems.
For any bank to onboard a new fraud and money laundering prevention system, it usually takes 6 months just to do a proof of concept and then there’s a phased implementation. Usually, banks have a long drawn out process for such an implementation and rightly so. There’re privacy issues, security issues, effectiveness and many other considerations that go into making such a decision and transition.
But all this doesn’t go to mean that there are no solutions that can actively monitor and alert authorities up on detection of suspicious activities. Several startups such as Tookitaki, Signifyd, Namescan and many more are tackling exactly this problem and doing it currently with several regional banks. The edge employee at a bank is always the weak-link that can be manipulated. Only with technology can that bias and manipulation be removed and implemented at scale.
More reading on FinCEN Files at Buzzfeed News, BBC and Finshots
Fintech’s Hiring
Clinkk, an Indian blue collar healthcare and insurance business, is hiring Engineers and Interns. Read More
If you’re a Fintech who’s hiring I’d like to help. Write to me and I’ll put your requirement here.
India
Market Updates:
GooglePay, Google’s payment app in India, launched “Tap-and-Pay” feature for its users at NFC-enabled POS terminals. The feature will be available to users with Axis Bank and SBI Bank cards Read More
IRDAI, India’s insurance regulator, notified acceptance of e-KYC and Video KYC for on boarding customers Read More
Indian government has set its sights on app based lenders with Chinese “links” for claims regarding data security and privacy Read More
SEBI, India’s securities regulator, is likely to introduce new guidelines for a NASDAQ-like stock exchange. Read More
Micro loans disbursement falls 96% in Q1 as borrowers struggle for livelihood amid pandemic Read More
PhonePe, Walmart’s Indian payments platform, joins Paytm in campaign against Google Play Store Read More
A study by India’s IIT Bombay concludes that the move by the Finance Ministry of zero MDR for RuPay cards (homegrown card network) is killing it Read More
SBI YONO (You Only Need One), digital banking arm of India’s largest public sector bank, is planning to spin off as a separate entity to provide Banking-as-a-Service to other banks in India Read More
WazirX, an Indian cryptocurrency exchange owned by Binance, has launched a zero-fee staking facility to provide users with 2-16% returns on crypto coins Read More
Funding Announcements:
Razorpay, Indian payments platform, is set to raise USD 150 mn from GIC at a unicorn valuation Read More
Vivriti Capital, Indian bulk lender, raised USD 14 mn from existing investor Creation Investment Read More
InsuranceDekho, insurance aggregator platform, raised USD 20 mn from parent company Girnar Soft Read More h/t Rahul Mathur’s Tweet
OnSiteGo, after sales warranty and services firm, raised USD 9-10 mn from IFC as part of Series B extension. Total Series B funding is USD 30 mn Read More
Servify, after sales warranty and services firm, raised USD 25 mn from Iron Pillar and existing investors Read More
South East Asia
Market Updates:
Mox, Standard Chartered’s digital bank has officially launched in Hong Kong. The App was developed in partnership with Hong Kong-based telcos PCCW and HKT and online travel agent Trip.com Read More
OCBC Bank, Malaysian incumbent bank, is pushing its digital agenda with launch of several features in its consumer app Read More
GooglePay launches all in one P2P payments app in Singapore Read More
Peter Thiel is launching a Special Purpose Acquisition Company (SPAC) to acquire a financial services or media company in South East Asia. Read More
Aspire, South East Asia’s first SMB neo bank, has launched virtual Visa cards in partnership with NIUM. The virtual cards will also be available on GooglePay Read More
Indonesian Fintech Lenders Association (AFPI), consisting of 156 Fintech’s, is planning to work with the Indonesian authorities to increase lending to SMB’s to tide with Covid-related stress Read More
75% of Indonesian fintech companies reported they are facing low financial literacy in the target market, 57% reported facing basic infrastructure problems and 44% reported facing limited capital or resources challenges Read More
Funding Announcement:
Merchantrade Asia, Malaysian digital money service, has completed the acquisition of fintech company Valyou from the Norwegian telecom major Telenor Group Read More
Syfe, Singaporean robo advisor, has raised USD 18 mn from Valar Ventures (Peter Thiel’s Fund) Read More
MyMy, Malaysian e-money platform, raised USD 2.4 mn from Koperasi Tentera. The capital is primarily for regulatory purposes required for securing the e-money license Read More
Altara Ventures, a new VC Fund from Ex-DBS Chairman, reported 1st close of its USD 100 mn fund. The fund will invest in 25-30 startups in Fintech among other sectors Read More
Europe
Market Updates:
Neo, Barcelona-based fintech, has launched its new international multi-currency account service for SMEs Read More
JPMorgan Chase tells 200 of its employees to figure out relocation from London base because of no-brexit deal looming Read More
Volvo launches all inclusive “vehicle subscription” service across UK. The service includes brand new cars from Volvo, with prices starting at £559 (around USD 724), covers bundling servicing, tires and other wear-and-tear maintenance, roadside assistance as well as 10GB of in-car wi-fi per month Read More
Glint, UK based gold payment platform, launches P2P payments with FIAT currency or gold to other Glint users Read More
Allica Bank, UK based SME challenger bank, plans to raise USD 100 mn primarily to acquire distressed lenders Read More
Answer Pay and MasterCard have completed the first live transaction of Request to Pay feature for transactions in UK Read More
Large European Banks reached new lows in their stock price as released documents claimed that they allow terror groups and drug cartels to function Read More
TransferWise announced its annual results. Fiscal 2020 revenue: GBP 302.6 million, up 70% from its fiscal 2019 result of GBP 179 million Read More
Deutsche Bank to close 20% of its branches in Germany Read More
UK’s Tech Nation announces latest cohort of 31 Fintech startups Read More
Revolut, European multi-currency payments platform, has started shifting its customers from UK entity to Lithuania entity in anticipation of no deal brexit Read More
Raisin, German open banking platform, has partnered with ProCheck24, a German financial product broker, to offer its services to ProCheck24’s 60K business partners Read More
Funding Announcements:
TrueLayer, European API banking platform, has raised USD 25 mn from Temasek, Anthemis, Connect Ventures and Northzone Read More
Exabel, Norway based AI analytics startup for asset managers, raised USD 3 mn Read More
Tink, Swedish API banking platform, has acquired the aggregation business of UK firm OpenWrks in a bid to further expand its European presence Read More
Illimity, Italian digital bank, acquired 50% of Hype, an open banking platform owned by Banca Sella Read More
Uncapped, a revenue-based finance platform for European SMB’s, raised GBP 26 mn from Mouro Capital (VC arm of Santander Bank) Read More
UnifiedPost, a Belgian cloud platform for digital identity, documentation and others, listed on Brussels EuroNext stock exchange, raising EUR 252 mn at a valuation of EUR 608 mn Read More
Kontomatik, a Polish banking data aggregator, was acquired by Amadeus Capital and Runa Capital. Kontomatik provides data from 130 countries in 11 markets Read More
Other Notable Stories
Covid effect on Fintech by a16z
Overview on India’s Open Credit Enablement Network (OCEN)
Stripe Teardown by CBInsights
Privacy.com and 1Password have partnered together to launch virtual cards
Robinhood announces USD 460 mn fund raise one month after announcing USD 200 mn funding at USD 11 bn
Report: State of European Fintech 2020 - Finch Capital
Mutual aid: The next big hit in insurtech?
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See you in the next edition.