Fintech Fortnightly – March 8, 2023 –

Fintech is a vast, multi-sector, global industry whose growth affects not only the banking world, but society at large. Our deep dives, interviews and coverage examining the evolution of payments, finance and banking are powered by constant updates, news and commentary on deals, funding rounds and partnerships.

Over the past fortnight, the banks have provided advice to start-ups; Britain welcomed a new bank (with restrictions); players become safer, financially; and the SME Finance Forum gets a new fintech partner. Meanwhile, one fintech player is making profits while another is posting losses.

We could all use some feedback…

Bank of America offers insights to startups

On March 1, Bank of America (BofA) hosted a group of fintech startups at its London headquarters to provide banking industry insights and market fit guidance. All the startups were part of the Accenture FinTech Innovation Labs global program that supports fintech startups to scale their businesses in competitive markets. BofA has hosted the event since 2013, when Accenture launched the program in London.

An interview examining the current fintech landscape with Andrew McKibben, the bank’s international chief technology officer, will appear on thebanker.com next week.

New bank alert!

UK Banking-as-a-Service (BaaS) provider Griffin receives banking licence – Griffin

Griffin has been authorized to operate as a UK bank with restrictions from the Prudential Regulation Authority. The company says it is now mobilizing to become the UK’s first full-stack BaaS platform with a banking licence. It considers this announcement “a major milestone in the journey from fintech startup to bank”.

“This moment has been in the making,” said David Jarvis, CEO and co-founder of Griffin. “Becoming a bank is testament to the determination of our team, who have tirelessly built a modern core banking system, a robust operational backbone and a robust compliance framework. This will enable us to deliver an exceptional banking platform for the UK fintech community.”

Griffin is now listed on the Financial Conduct Authority register and is in mobilization, meaning the company can operate as a bank subject to restrictions. During this period, Griffin can hold a limited number of deposits and perform a limited amount of payment services.

Looks like a gamer, thinks like a gamer, works like a bank

Itaú Bank continues its ambition to be the bank of choice for players — Itaú Player’s Bank

Itaú Bank has announced a strategic partnership with online protection provider GamerSafer, with the aim of strengthening the security of the bank’s gaming community customers.

As part of the partnership, GamerSafer’s digital identity platform will be integrated with Itaú’s Player’s Bank – a single app where players can earn cashback for purchasing games, purchasing accessories, viewing content streams, accessing exclusive content from the largest player organizations and accessing other financial services .

GamerSafer’s platform is specifically designed to prevent crime, fraud and toxicity in the gaming community. As part of this partnership, the company will extend its security services to customers who use Discord – one of the most popular communication platforms among gamers, with more than 150 million active users worldwide – to interact with Itaú. With more brands turning to Discord for customer engagement, there is a growing demand for improved security, especially for transactions involving sensitive information such as banking and financial transactions.

Meanwhile…

Fintech startup Uplinq partners with SME Finance Forum, managed by IFC — SME Forum

Uplinq, a global credit rating and scoring platform for SME borrowers, signed a partnership with the SME Finance Forum, a global network aimed at expanding financing to small and medium-sized enterprises (SMEs). The SME Finance Forum was established by the G20 Global Partnership for Financial Inclusion and is managed by IFC, part of the World Bank Group.

Following the G20 Summit in Seoul in 2010, the Global Partnership for Financial Inclusion – which includes all G20 countries, interested non-G20 countries and other relevant stakeholders – launched the SME Finance Forum to expand financial inclusion and accelerate access to finance for 200 million global businesses that need it to invest to grow and create new jobs. To advance this goal, the SME Finance Forum brings together financial institutions, technology companies and international development institutions to share knowledge, promote innovation, stimulate policy change and build connections that will promote the growth of SMEs.

Fintech provides…

Revolut reports its first ever year of profit — The charge

Revolut reported its first year of profit on Wednesday, in a long-awaited set of 2021 financial results that showed the neo-bank growing its customer base and revenue on higher-margin products.

Revenue at the neobank almost tripled from £220m in 2020 to £636m in 2021. That meant the bank made a pre-tax profit of £39m – its first results in the black.

But unlike its UK-headquartered neobank competitors, Revolut faces a key roadblock to growth: it has yet to obtain a banking license in its home market, the UK. Although the need to update its internal accounting systems has been cited as a contributing factor to the delay in obtaining a licence, Mikko Salovaara, chief financial officer at the bank, says the UK Financial Reporting Council’s requirements for the audit were quite separate from the business that an entire.

…and Fintech is taking away.

Klarna has an annual loss of 1 billion dollars, the biggest ever — The charge

The Swedish buy now, pay later giant says it is making progress towards profitability, despite a bruise in 2022.

Klarna has posted its biggest annual loss to date, but claims it has made “clear progress” to return to profitability, according to annual results published on Tuesday.

Annual losses rose 47% to reach NOK 10.4 billion ($1 billion) in the 12 months to 31 December 2022, up from NOK 7.1 billion in 2021 – it was a tough year for fintech, which had its value reduced by 85% to $6.7 billion.

Klarna, Europe’s most valuable private technology company until the downturn last summer, also had two rounds of layoffs last year, cutting more than 700 jobs in total. At the same time, the results show that CEO Sebastian Siemiatkowski’s total remuneration increased by 35% to NOK 13.2 million.