Fintech Update, 7/10 - 7/16
July 10-16, 2017
Leading Off
The OCC released its new semiannual risk report, highlighting key technology risks to U.S. banks; the U.K. FCA is considering AI and machine-learning tools to help banks improve regulatory compliance efforts; the number of debit card transactions passed that of cash transactions in the U.K.; Ant Financial asked CFIUS again for approval of its bid to acquire MoneyGram; and Revolut raised $66M in Series B funding.
In the News
OCC warns of tech risks in new report. The OCC released its Spring semi-annual risk report [full text], suggesting that U.S. banks have opened themselves to “increased strategic risk” by developing new products and services to compete with fintech rivals. The OCC also highlighted its concerns about increasing cyber attacks and greater reliance on third-party tech partners.
FCA explores AI for regulatory compliance. The U.K. Financial Conduct Authority (FCA) is considering using artificial intelligence and machine-learning tools to enhance regulatory reporting and detect financial irregularities. The regulator is seeking feedback from regtech firms regarding “better use of speech-to-text software, social media and media analytics.”
Santander bets on AI and machine learning. The Spanish bank’s $200 million fintech fund invested in several machine learning startups that could supplement the work of the company’s employees. “AI is an area where we see significant potential for . . . reducing costs and improving efficiency,” said Mariano Belinky, managing partner of Santander InnoVentures.
Debit cards pass cash use in U.K. According to a new report from the British Retail Consortium, “debit cards have overtaken cash to become the number one payment method in the UK.” After increasing to account for nearly 43% of all retail transactions in 2016, the volume of card transactions now accounts for “more than half of all retail purchases” in the U.K.
Stripe partners with Alipay and WeChat. The payments facilitator expanded its partnership with Ant Financial’s Alipay and created a new one with Tencent’s WeChat. Both partnerships will enable Stripe’s network of global online merchants to accept payment through China’s most popular digital wallet services.
Paypal expands partnership with Apple. The digital payments service will now be available as an option for Apple’s in-app purchases and subscriptions on iOS devices in the U.S. and several other countries. Customers can also use PayPal for Apple Music, iTunes TV, and iCloud storage.
Ant Financial resubmits MoneyGram bid to CFIUS. The Chinese fintech giant, which submitted the high bid to purchase the U.S. money transmission firm, refiled its submission with the Committee on Foreign Investment in the United States (CFIUS) after failing to secure the committee’s approval for the deal within its maximum 75-day deliberation period.
Revolut raises $66M Series B. The London-based mobile banking firm, which offers card and current account features, raised $66 million in its most recent round, led by Index Ventures and Ribbit Capital. Revolut also announced that it is enhancing account features across Europe to enable customers to hold, exchange, spend, and transfer cryptocurrencies.
How are global political movements impacting fintech? In an interview with CNBC, Western Union’s head of partnerships and international expansion expressed “some concern for the fintech industry” due to the waves of protectionism and populism currently influencing politics in the U.S. and Europe.
Have a great week!
The Fintech Update Team