BFC FinTech Monitor (July 2023)

Stay up-to-date on all the latest FinTech news and information from around the world in the BFC FinTech Monitor.

Around the World

#Reports and Studies

• For the first half of 2023, global funding for fintech startups fell by 49% year-on-year, amounting to USD 23 billion. At the same time, this represents an increase of USD 6 billion over the level of funding in the second half of 2022.
• A survey by open finance provider TrueLayer has found that 55% of respondents end up not completing many transactions due to slow processing speeds and/or the presence of “annoying factors”.
• A study by Skyhigh Security Cloud Adoption and Risk Report uncovered that the average number of public cloud services used by financial institutions has increased by more than 50%.

#Innovations

• Fintech startup Bottomline has launched the ‘Payer NameVerification’ service, which will help companies verify specified account holders when processing direct debit payments.
• Mastercard has launched the ‘Consumer Fraud Risk’ solution to help financial institutions predict and prevent payment fraud of all types.

#Cryptocurrencies, Blockchain, Non-Fungible Tokens (NFTs) and Decentralized Finance (DeFi):

• Binance analysts believe the state of the cryptocurrency market in the first half of 2023 is better than expected.
• Analysts from the International Monetary Fund (IMF) have calculated that, if all countries had introduced a tax on cryptocurrency in 2021, it would have generated approximately USD 100 billion in revenue.
• The Global Crypto Hedge Fund Report states that hedge funds remain confident in the value proposition and long-term sustainability of digital assets.
• A new Juniper Research report is predicting that stablecoin payments will exceed USD 187 billion by 2028, up from USD 53 billion in 2023.
• A report by K33 Research has found that the number of jobs in the crypto industry has decreased by 10%.
• Sam Altman, the CEO of OpenAI, has launched the Worldcoin cryptocurrency project, which hopes to register 1 billion users within the next two years.
• The Gnosis blockchain project is cooperating with Visa to issue Gnosis Card, a cryptocurrency credit card.
• The developers of the Wallet Telegram bot have launched the ‘Wallet Pay’ service, which allows users to make payments using bitcoin, TON and USDT.
• The Financial Stability Board (FSB) has introduced a regulatory framework governing cryptocurrency activities.
• A joint report by PwC and technology platform Aspen Digital has revealed that the custody services market reached USD 447.9 billion in 2022.
• Larry Fink, CEO of BlackRock, believes that cryptocurrencies have “differentiating value compared to other asset classes” and are so “international that they go beyond any one currency”.
• The European Securities and Markets Authority (ESMA) has submitted a package of consultations on the regulation of the crypto-assets market for comments from stakeholders.
• Infrastructure provider Voltage (which is specialized in the Bitcoin Lightning Network) has agreed to cooperate with Google Cloud; the cooperation will allow Voltage to roll out bitcoin-based services around the world.
• A 200-page bill to regulate the US crypto market has been published.
• The Kuwait Capital Markets Authority has banned virtually all cryptocurrency transactions in the country.
• A bill on tax exemptions for foreigners owning digital assets passed during its first reading in the Israeli Parliament.

#Central Bank Digital Currencies (CBDCs)

• The European Central Bank has presented the fourth status report on the digital euro, which describes the phased implementation of the CBDC and presents the results of market research conducted with potential external providers.
• A WealthRocket survey has found that 59% of Canadians are prepared to use a CBDC if the Bank of Canada launches it.
• South Korean financial institutions Hana Bank and Woori Bank are exploring CD tokens as an alternative to stablecoins and CBDCs.

#Miscellaneous

• Block, the developer of payment platform Square, has filed a lawsuit in connection with a “conspiracy” of payment processors inflating interbank fees for customers.
• Fifteen of the largest fintech companies, including Wise, Revolut and Monzo, oppose hidden fees for international payments.
• Apple intends to develop its own generative AI and chatbot.
• Neobank Papara has become the first Turkish fintech unicorn after acquiring Spanish Rebellion Bank.
• The European Commission (EC) has approved a new strategy on Web 4.0 and virtual worlds to provide an open, secure and trusted digital environment for EU citizens, businesses and governments.
• Visa has announced a partnership with SAP to streamline and simplify B2B payments in the Asia Pacific region.
• Car IQ has reached an agreement with Visa that will allow motorists to pay for fuel, parking, insurance, service and repairs through the ‘Car IQ Pay’ wallet.
• Fintech Galaxy has connected more than 10 Egyptian fintech companies to its open finance platform (FINX), expanding their operations in the Middle East and North Africa (MENA) region.
• US fintech firms are tightening lending standards in order to boost their access to debt financing from Wall Street investors.
• Tanzania is preparing to introduce the new ‘Unique Number ID’ system, which will contain much more data than the previous system and also allow public and private services to be accessed via a unique ID number only.
• Elon Musk has founded xAI to develop safer AI.
• A flaw in the Revolut payment system allowed attackers to steal more than USD 20 million over a few months in 2022.
• Pilara Arzuaga, senior associate at McDermott Will & Emery, discusses the main problems when financial institutions use generative AI.

Ukraine

• The iForum-2023 conference will be held in Kyiv on August 10, 2023 and feature topics related to military tech, AI and the future of Ukraine.
• Leonid Gorev, CEO and co-founder of IT company Alty, discusses how Ukrainian online banking differs from other online banking experiences around the world.
• Privatbank and ZEN.COM have launched a service for fast money transfers to cards and bank accounts.
• Andriy Kmetyuk, head of innovative products at UNITY-BARS, outlines Ukraine’s transition to open banking.
• Fintech Insider has published materials on the prospects for launching a bank under the Ukrposhti brand.

Kazakhstan

• The profits of financial institutions in Kazakhstan increased by 74% year-on-year, with Bank RBK having increased profits of 230%.
• Fintech giant Kaspi.kz has bought a stake in the company that owns the Avtoelon.uz service, meaning that it is likely to enter the Uzbek market in the near future.
• Kazakh-British Technical University (KBTU) has become the first university in the country to issue NFTs for diplomas.

Kyrgyzstan

• Two Kyrgyz companies – Bitkor CJSC and Ticketnet LLC – have received crypto licenses.
• Russian fintech company Abanking has conducted market research in Kyrgyzstan, finding that only 15% of Kyrgyz financial institutions issue products through apps.

Tajikistan

• RTGS.global (an infrastructure provider for cross-border payments) will partner with Humo Bank in Tajikistan and Credo Bank in Georgia as part of a pilot project to launch a settlement service.

Uzbekistan

• The Fintech Association of Uzbekistan will take part in Korea Fintech Week 2023.
• Nuriddina Lafizova, head of Alif Uzbekistan, provides an overview of the fintech industry in Uzbekistan.
• Applications are now being accepted for the Urban.Tech Uzbekistan hackathon. The total prize fund for the hackathon is UZS 200 million.
• PLUS magazine has published a large-scale overview of the payment market in Uzbekistan.
• Research agency RISE and the Venture Capital Investment Association of Uzbekistan have published the results of a study on the venture capital industry of Uzbekistan.
• Spot has published materials covering the Fintech, Banks and Retail international forum that was recently held in Tashkent.

Azerbaijan

• Azerbaijan is preparing to introduce the concept of open banking.
• The Parliament of Azerbaijan has adopted, during the third reading, the draft Law on Payment Services and Payment Systems.

Armenia

• Revolut Lite, an optimized version of the Revolut app, is now available in Armenia.
• Banks in Armenia, Georgia, Kazakhstan and Uzbekistan have banned transfers through Unistream after the operating bank of the system came under US sanctions.

Moldova

• More than 10,000 residents used the services of British fintech startup Revolut in its first month of operation in Moldova.
• Telecommunications company Moldcell and Visa have announced a strategic partnership to promote digital transformation in Moldova.