Fintech Update, 1/20 - 1/26
Jan. 20 - 26, 2020
Leading Off
The Bank of England is looking for a technology partner to help it develop a “fit for purpose cloud environment”; Japanese lawmakers are creating a proposal for a government-backed digital currency; Vodafone became the latest firm to drop out of the Libra Association; Democrats urged the U.S. FTC to investigate Yodlee for allegedly selling consumer financial data without consent; and Canapi Ventures unveiled a new, $545 million fintech fund.
In the News
BoE seeking cloud services partner. As part of its One Bank Service Transformation strategy, the Bank of England wants to engage a service provider to help it design and build a “modern, fit for purpose cloud environment." The central bank plans to replace 25 of its existing central services systems with a single cloud-based system, expected to save it £15 million per year in operating costs.
Japan may consider building a ‘digital yen’. Lawmakers are developing a proposal for the country to issue its own digital currency, a measure aimed at countering China’s forthcoming “digital yuan,” said the Japanese parliament’s vice minister for foreign affairs. The lawmakers, led by former economy minister Akira Amari, expect to deliver the proposal to the government as early as next month.
Vodafone backs out of Libra. The European mobile phone provider became the latest firm to leave the Libra Association, joining other former backers like Paypal and Mastercard. Although Libra continues to face significant regulatory challenges and flagging confidence, a Libra spokesman said the association’s “governance and technology ensures the Libra payment system will remain resilient.”
U.S. lawmakers call for data-selling investigation into Yodlee. Democratic lawmakers wrote to the Federal Trade Commission urging it to investigate the fintech data aggregator for selling consumer financial information without proper consent, in violation of the FTC Act. Yodlee provides software services to 15 of the 20 largest U.S. banks in support of consumer account data aggregation.
FCA and BoE announce financial services AI forum. The U.K.’s Financial Conduct Authority (FCA) and the Bank of England (BoE) launched the public-private forum to better understand the use and impact of AI and machine learning in financial services. The forum will explore how to support the safe adoption of these technologies within the sector and the best approach to regulation.
WEF launches crypto governance consortium, toolkit. The World Economic Forum (WEF) created a global governance consortium to aid transnational regulation of digital currencies, including stablecoins, and released a policymakers’ toolkit for central bank-backed digital currencies. The consortium’s backers include the Bank of England and the Monetary Authority of Singapore.
Canapi unveils new $545M fintech fund. Canapi Ventures, the fintech-focused venture capital firm co-founded by Promontory CEO Gene Ludwig and Live Oak Bancshares CEO Chip Mahan, announced its first fund, backed by $545 million from an investor base that includes over 35 banks and strategic investors “seeking attractive investments and greater partnership with the fintech ecosystem.”
Revolut rolls out savings accounts. The London-based challenger bank is partnering with finance platform Flagstone to offer savings accounts called “savings vaults”, which pay out interest daily. The feature is currently limited to Revolut’s premium “Metal” members, but the firm says it will offer the service to all its customers in the near future.
Flutterwave raises $35M funding round. The African payments startup raised $35 million and locked up partnerships with Visa and WorldPay to expand across the continent. The company, which helps “merchants accept payments both online and at the point-of-sale through . . . cards, mobile money and bank transfers,” is hoping to capitalize on Africa’s drive to electronic payments.
Fintech as a key to global development. Finextra discusses the theme of technology in financial services, a “central topic of discussion at this year’s World Economic Forum in Davos,” and its importance to global financial inclusion and development. The article highlights how fintech solutions can help the international community achieve UN Sustainable Development Goals by 2030.
Japan’s banks still at odds with fintech. Over a year after regulators issued open banking rules, Japanese banks and fintechs continue to haggle over access to client account data. The government hopes to nudge about 100 struggling regional lenders into the digital age through fintech partnerships, but the effort is floundering. Japan remains at the bottom of EY’s ranking of global fintech adoption.
Have a great week!
The Fintech Update Team