Fintech fix 14/12/2022 | FF News

Welcome to The Fintech Fix, where we cover the biggest fintech stories of the working week. Whether it’s the next breakthrough trend in crypto, or a new partnership that’s about to change the global financial landscape, this is the place to keep up with the future of breaking news.

Location, location, location

Lockdown couldn’t have ended soon enough for the fintech world, as an assembly line of the industry’s most ambitious companies forge ahead with their plans for national and international expansion.

SME banking service provider, Tide, ventured out of the UK and launched the Tide app in India. With its two solutions – Tide Business Account and its RuPay-powered Tide Expense Card – the company aims to onboard half a million SMEs in India over the next two years. Small businesses that sign up for the business account will have access to contactless services and can use the spending card to withdraw cash for in-store purchases, as well as e-commerce and other payment options.

India is home to an astounding 64 million small and medium enterprises. Tide’s commitment to this market includes the goal of introducing “a large segment of this market into the formal economy,” said Oliver Prill, CEO of Tide.

In the UK, Starling Bank has opened its fourth UK office in the city of Manchester. With teams in London, Cardiff, Southampton and Dublin, this new edition promises the creation of 1,000 new jobs – mainly in operations, software engineering, data science, cyber security and customer service.

The move is strategic for the neobank, as Manchester has been named the UK’s best digital tech city in 2020, according to The Data City report, fueling a £5bn digital ecosystem. This marks the end of an incredibly successful year for Starling, which has enjoyed its first year of profitability, hit the 3 million account milestone and launched its BaaS offering, Engine.

Across the pond, in the state of Georgia, Access to Capital for Entrepreneurs Inc (ACE), a non-profit lender, has received its largest grant of $3.75 million from the Truist Foundation – in a joint effort to establish Divers, Equitable and Inclusive Small Business Capital strategy. Already a trusted lender to small and medium-sized businesses in Atlanta and North Georgia, the grant will be used to provide equity loan capital to minority-owned businesses over three years. The grant will also be used to enforce job creation and infrastructure expansion in South Georgia.

“We are proud to partner with ACE and its work to eradicate barriers to entry for minority entrepreneurs, and build a more equitable economy across Georgia,” said Lynette Bell, the president of the Truist Foundation.

A unique year for Neobank

As the previous stories with Tide and Starling have shown, neobanks have had a successful year, despite the economic downturn and funding drought generally felt in the financial and non-financial services sectors. In our increasingly digital world, this pattern is testament to neobank’s stronghold on the current zeitgeist of real-time and online payments.

In an exclusive article for The Paytech Magazine, we spoke to Alex Weber, Chief Growth Officer of German favourite, N26, about the digital solutions offered by neobanks and what it takes to push this offering onto the world stage. N26 has ambitious expansion plans, particularly defining territories in Eastern Europe and Brazil. Their exit from the US and UK markets was not for lack of enthusiasm – N26 had half a million customer accounts in the US – but the cost of running multiple operations in different regions, with different payment habits from their local. This has not stopped the bank’s global efforts, regrouping, I expect their absence from the UK to be short-lived.

“Around the world, we still have a long way to go to reach any level of harmonization,” Weber said. “It’s a good vision to have. I would like to see more harmonization, as we have in Europe, to allow truly global players in the industry. Much cooperation would be required; to enable new business models as well.

Alongside neobanks, we have card payment innovators like Curve, which recently secured a deal for its first $1 billion in loans with a facility provided by Credit Suisse. This astronomical investment will be used to scale the company’s lending business, Curve Flex, across the UK, EU and US. As a way to nurture customer management, Curve Flex allows users to split transactions they have made through Curve, using any of their included payment cards, into monthly installments.

The product has been available in the UK with the Swipe Now to Pay Later (‘SNPL’) product, the funding will be used to further offer access to direct lines of credit before a transaction and the refinancing of previous lines of credit. Kurven is diving headfirst into the BNPL market, and plans to launch an offer in 2023.

A silver lining for hospitality

With the global recession and limitations in funding avenues, 2022 has not been kind to the hospitality industry. With needs becoming more oriented around digital payment options and accessibility, fintechs can offer a much-needed solution to breathe new life into the sector.

Fintech platform Adyen has continued its partnership with KodyPay to further support hospitality businesses by offering seamless payments, data analytics and frictionless financial functions. The two previously worked on a successful QR code system in 2021, which has now helped KodyPay exceed $100 million annual gross payment volume in just 5 months. With Adyen’s new embedded financial products, the new venture aims to provide better access to capital for small business owners, and autonomy over loans and customer insights.

“Sharing the same values ​​and visions with a business partner is of utmost importance to us at KodyPay, it is essential to building a brand and a solution that propels us forward and into our ambitious growth journey,” said Yoyo Chang, Founder and CEO director of KodyPay.

Mirroring the recent success of neobanks, FintechOS has also announced its revenue growth, with insurance revenue increasing by 300% year-on-year. The acceleration is thanks to the company’s portfolio of industry-leading clients and partners, including Admiral Insurance Group, Howden Group and Vienna Insurance Group.

With their focus on code-free accessibility and data-driven personalization, FintechOS has proven popular with insurance companies for their goals of increasing their share of wallet and reducing cost ratios. The company operates primarily in the UK, and the company’s 2023 resolution involves building its presence in the US’s giant insurance market.

– The insurance industry is changing rapidly. Timelines are compressing, customer expectations are rising, and competition – especially from digital-first upstarts – is fierce,” said Teo Blidarus, CEO and co-founder of FintechOS.

That concludes your weekly Fintech Fix! Stay tuned for a new round of great fintech buzz, here on FF Nyheter.