BFC FinTech Monitor (19th – 27th October)

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

Around the World

#Research

  • Finch Capital experts are predicting the investments in fintech may actually fall next year due to their struggle to attract leading engineers and developers, a slowdown in public and IPO market activities, increased regulator control and a rise in interest rates.

  • According to the McKinsey Personal Financial Services Survey, the adoption rate of digital banking in emerging markets such as China, Indonesia, Malaysia, Philippines and Vietnam has reached 88%, up from 54% in 2017. Additionally, the penetration rate of non-bank financial service apps in these markets is up to 51%, 11% more than in 2017.

  • Experts from the American data platform MX released a study on the use of financial products and services by generation (millennial, gen Z and baby boomer). It revealed that 80% of all respondents trust their main financial services provider with their personal financial data and that more than 80% of gen Z and millennials use a money transfer app.

#Innovations

  • Goldman Sachs is partnering with American Express in the rollout of a cloud-based payment service for large corporate customers.
  • Klarna, via the travel planning platform Inspirock, has launched a service to allow their customers to pay for travel in installments. The buy-now-pay-later (BNPL) service also features a pay-now option that allows customers to immediately and completely repay their debt. This initiative is currently being piloted in the UK.

  • HSBC has come to an agreement with the American cloud provider Oracle, thereby also entering the banking-as-a-service (BaaS) market.

  • A group of European researchers has developed an artificial intelligence (AI) solution capable of spying on the PIN codes entered at ATMs, even when the number pad is covered.

#Neobanking

  • Digital bank N26 has attracted USD 900 million in investments, the largest round of financing for a neobank in Europe. N26 now has more than 7 million customers in 25 countries. 

#Cryptocurrencies and Non-Fungible Tokens (NFTs)

  • Mastercard is providing financial institutions and merchants on its networks with the ability to integrate cryptocurrency payments.
  • Tesla has provided the American Securities and Exchange Commission with relevant information that may allow them to accept bitcoin as payment for electric cars.

  •  Facebook, together with cryptocurrency exchange Coinbase, began testing its own digital wallet, Novi, in Guatemala and the US.

  • Singapore-based fintech startup Nium has launched a crypto-as-a-service (CaaS) platform in the US that allows financial institutions to embed cryptoinstruments into their applications. 

  • According to a study conducted by the US Department of Treasury, cryptocurrencies reduce the effectiveness of US sanctions instruments. 

  • Cryptocurrency exchange Binance has opened a USD 1 billion fund to accelerate the adoption of digital assets and blockchain.

  • Third Place NFT has launched an NFT platform for real objects of art.

  • The cryptocurrency exchange Coinbase is encouraging US authorities to create a new regulator to oversee digital assets. 

#Central bank digital currencies (CBDCs)

  • The European Central Bank has assembled a group of experts to advise on the creation of the digital euro.
  • Nigerian President Mohammadu Bukhari has announced the launch of Nigeria’s national digital currency, which was developed with the participation of the fintech company Bitt.

  • China is requiring McDonalds to organize for the acceptance of the digital yuan prior to its official launch. Additionally, the general director of the Digital Currency Research Institute of the Central Bank of China, Mu Changchun, assured the public that digital yuan transactions will be anonymous for small payments but tracked for larger ones.

  • Ghana is working to develop offline capabilities for its future CBDC using smart cards with pre-loaded balances.

  • Over the last 9 months, the French regulator has tested CBDC government bond transactions. 500 such transactions were carried out in primary and secondary markets.

  • The Bank of Japan is skeptical that there are no alternatives to CBDCs and plans on continuing to study the matter.

#Miscellaneous

  • The European Banking Authority has canceled its guidelines on the security of internet payments in line with the First Payment Directive (PSD1) and asked national competent authorities to take appropriate steps to accommodate this decision.
  • The Bureau of Consumer Financial Protection is obligating tech giants (e.g. Google, Facebook, Amazon, Apple, Square, PayPal) to transfer information about their payment systems in order to see how these companies collect and use customer data.

  • Tim Adams, president of the Institute of International Finance, believes that ESG principles can create new financial bubbles of assets which have significantly smaller fundamental value than their perceived market value.

Russia

  • Anatoly Aksakov, head of the State Duma’s Financial Market Committee, has proposed setting taxes on cryptocurrency mining. Additionally, Russian oilmen want to mine for cryptocurrencies in the field.

  • Russia has developed its first National Code of Ethics in the Field of Artificial Intelligence.

  • VisionLabs has presented a payment terminal with facial recognition. The terminal has already been certified by Visa PayWave and Mastercard Contactless.

  • In the news from Russian financial institutions: (1) video consultation service in sign language are now available from Sber; (2) VTB has launched a digital ecosystem for international businesses; and (3) Mir cards can now be connected to Google Pay.

  • The FINOPOLIS 2021 Forum of Innovative Financial Technologies will be held online in December.

  • Dmitry Salatov, co-founder of the Russian neobank Blank, discusses the difficulties they encountered during their launch and how they overcame them. 

Ukraine

  • The National Bank of Ukraine has presented a concept for creating an instant payment system. Its approval and launch are expected as part of the implementation of a development strategy for the financial sector of Ukraine through 2025.

  • Mariam Matiashvili, business development director at fintech company LeoGaming, spoke at the 10th Ukrainian Banking Forum.  Her main points were covered in a recent PaySpace Magazine article.

  • Monobank will stop servicing accounts in Polish zloty beginning on December 13, 2021. All balances in Polish zloty will be automatically converted to hryvnia. 

Belarus

  • Visa and CIVITTA have publishes their Belarusian Fintech Ecosystem 2021 report. The main conclusions of the report are: local fintech projects are strongly export-oriented; Belarus is ahead of Ukraine and nearly equal with Poland in terms of the number of fintech companies; and the most actively-developed fintech services are those linked with payments. 

Kazakhstan

  • Kazakhstan’s first fintech accelerator is now operational. It has the goal of building long-term partnerships between local financial institutions, startups and tech companies.

  • Kaspi.kz has purchased a Ukrainian subsidiary of Kazakhstan’s BTA Bank. This will allow the fintech giant to obtain a banking license and launch fintech products in Ukraine. 

  • Alan Dordzhiev, president of the Association of Blockchain and Data Center Industry in Kazakhstan, discusses how ‘gray’ miners undermine the country’s energy security.

  • The How IT Companies Can Start Working with Banks in Kazakhstan online conference will be held on November 2. Speakers include representatives of the Astana International Financial Center and numerous Kazakhstani financial institutions.

  • The managing director of Kazakh Alfa-Bank discusses how financial institutions help small businesses devote more time and energy on business development.

Tajikistan

  • The National Bank of Tajikistan’s board of directors has extended the work of international payment system Mastercard in Tajikistan for another five years.

Uzbekistan

  • Financial magazine Asiamoney has named Hamkorbank as ‘The Best Digital Bank in Uzbekistan’. Olmakhon Turazhanova, deputy chairman of the Hamkorbank’s board of directors, discusses how the bank has found success in their efforts to digitalize the country’s financial sector.

Azerbaijan

  • The Asian Development Bank has proposed coordinating the implementation of digital currencies in CAREC countries.

  • Kapital Bank is launching a digital card for legal entities and individual entrepreneurs.

Armenia

  • Holders of Visa cards from ACBA Bank, for the first time in Armenia, will be able to make contactless payments using Garmin smart watches.

Moldova

  • The FinTech Moldova Conference 2021 will take place on October 29. The conference will be attended by representatives of financial institutions, fintech startups, regulators and local and foreign investors. 

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