July 22, 2022 FinTech Monitor

BFC FinTech Monitor (23rd June — 20th July)

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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

  • According to a study by NTT Data, banks have a preference for creating technological solutions rather than buying them. At the same time, only 22% of banks are prepared to create entire systems from scratch.
  • The volume of investment in fintech fell 33% in Q2 2022, with the average transaction amount down to USD 23 million (itself a 30% decrease). Interestingly, the number of transactions has not seen a decline.
  • A new report from Yapily indicates that the concept of opening banking in Europe is becoming more and more integrated and useful, especially in Germany, Sweden and the UK.
  • Visa’s 2022 Future of Urban Mobility study shows that cashless payment options is making public transport a more popular option, with 45% of study respondents indicating that they use municipal transport because of the ease of buying a ticket now.
  • FT Partners Research released a report showing that the amount of funding for the fintech industry in Q1 2022 amounted to USD 37 billion, making it the third-largest quarter in terms of money raised and the most active in terms of number of transactions (1,091).

#Innovations and Neobanking

  • ING and NXP Semiconductors are working with Samsung to test the NEAR payment method, which allows payments to be conducted through the close proximity of smartphones and with no need to enter card numbers, usernames or phone numbers.
  • The Russian analogue to the SWIFT system is ready for piloting. According to the head of the Central Bank of Russia, Elvira Nabiullina, 70 foreign banks from 12 countries have already joined the new system.

#Cryptocurrencies, Blockchain and Non-Fungible Tokens (NFTs)

  • A Ripple survey indicates that three quarters of financial institutions globally are planning to integrate cryptocurrencies into their business if allowed by legislation.
  • A recent CoinGecko report states that the total capitalization of the cryptocurrency market fell by more than 50% in Q2 2022, a sign that this entire year may be problematic for the crypto industry.
  • Fintech startup Plaid has added a number of major crypto exchanges to its platform, including Binance, Gemini, Robinhood and SoFi.
  • The UN Conference on Trade and Development has published a report on digital assets that recommends developing countries limit cryptocurrency advertising.
  • G20’s Financial Stability Board will release recommendations on the regulation of cryptocurrencies in October.
  • The European Council and European Parliament have agreed on a proposal related to crypto-asset markets. To enhance consumer protection and combat fraud, the proposal requires that service providers with crypto assets get permission to operate in the EU.
  • US Senator Cynthia Lummis from Wyoming has stated that the US will pass cryptocurrency regulations in 2023.
  • The Bank of England has called for the regulation of cryptocurrencies along the lines of traditional finance in order to reduce risks and increase investor confidence.
  • The European Central Bank has called stablecoins an unsuitable means of payment.
  • Delio has opened the first cryptocurrency bank in South Korea. Delio customers are able to deposit and withdraw cryptocurrencies, make transfers to other users and manage wallets.

#Central Bank Digital Currencies (CBDCs)

  • The Bank for International Settlements (BIS) has called on countries to cooperate in the early stages of developing CBDCs.
  • The Danish Central Bank has released a report on new types of digital money. It states that, if stablecoins are to become mainstream, CBDCs will be perceived as a safer payment method (even compared to bank deposits).
  • The European Central Bank has released materials stating that the digital euro will only be successful if it is actively used by EU residents.

#Miscellaneous

  • The Financial Times is reporting that the value of the largest fintech companies has decreased by USD 500 billion since the beginning of the year.
  • A payment function that uses the Meta Pay service is now available in Instagram chats.
  • G20’s Financial Stability Board has published an interim report on monitoring progress towards improving cross-border payments. The report includes preliminary recommendations for key performance indicators as well as ideas for potential data sources to measure them.
  • Google has launched the Wallet app for storing bank cards, vaccination certificates and other important documents. The app is also looking to add functionality that will allow for the storage of identity cards and a driver’s licenses.
  • Mass cases of chargeback fraud are resulting in African users of virtual dollar cards losing their ability to use them in the near future. This will affect cards from the fintech startups Flutterwave, Eversend, Busha, GetEquity and Payday.
  • The central banks of Indonesia, Malaysia, the Philippines, Singapore and Thailand are developing a common cross-border QR payment system.
  • Qatar National Bank has become the first bank in Qatar to launch WeChat Pay and AliPay+ mobile payment services.
  • Nairametrics expects that the African startup ecosystem will be able to resist even in the face of the looming global economic crisis given that local companies are already focused on solving large local problems such as increasing access to financial services and healthcare.
  • Meta will close the Novi wallet pilot project starting on September 1, 2022. User from Guatemala and the US participated in the pilot.
  • Revolut has developed the Revolut Reader payment terminal, which is capable of processing transactions in less than 5 seconds and conducting more than 200 transactions on a single charge. The new solution will be complemented by a fully digital POS service. For now, Revolut Reader is only available to business customers in Ireland and the UK.
  • The valuation of Swedish fintech company Klarna has fallen sevenfold, from USD 45.6 billion to USD 6.7 billion. At the same time, the company recently closed a USD 800 million round of investments. Klarna says that it has shown the strength of its business despite “the worst market downturn in 50 years.”
  • Hewlett Packard Enterprise has released the first episode of Get Ahead, a mockumentary comedy mini-series about the employees of an AI company. Episodes will air every Thursday.
  • The European Parliament has passed bills to regulate the algorithms of technology giants, which will now be required to fight against malicious content and the sale of illegal or unsafe goods. In addition, they will be required to explain to users how and why the recommendation system showed them a certain piece of content.
  • The State Duma of the Russian Federation plans to legalize Islamic banking given that the increasing partnerships with Islamic financing instruments.

Ukraine

  • Ekaterina Danilchenko, chairman of the board of the International Bureau of Credit Histories, noted that fintech developments in recent years have helped Ukrainians maintain access to basic financial services, even amidst the full-scale Russian invasion.
  • Privatbank has switched to the Visa Cloud Connect connection platform and implemented a new way to securely connect to VisaNet via the cloud. This will allow the bank to reduce dependencies on hardware located in different regions of Ukraine.
  • Ruslan Kolodyazhny, the chief technology officer of British fintech company Wirex, explains why Ukrainian banks should consider crypto products now.
  • Ukrainian fintech fund N1 has invested USF 500,000 in the TRANSENIX solution, which allows payments made via a smartphone to be accepted.
  • Nikita Grechina, a senior associate with SBSB FinTech Lawyers, discusses changes in legislation that will help create a safer and more modern legal environment for fintech companies in Ukraine.
  • The upSWOT platform has launched the Investors for the Ukrainian World and Ukrainian Startups charity project. Find out more about the initiative here.
  • The LEO international payment system and IBOX Bank have become partners of Ukrainian hackathon initiatives.

Kazakhstan

  • Madina Abylkassymova, chair of the Agency for Regulation and Development of the Financial Market, has presented a draft concept for the development of the financial sector of Kazakhstan through 2030. Among its key principles is the creation of conditions for the development of financial technologies and the introduction of innovative products and services.
  • Forbes has released an article about how Capital Bank chairman Gani Uzbekov created the S1LKPAY payment service.
  • Kairat Kelimbetov, governor of the Astana International Financial Center (AIFC), has stated the need to require cryptocurrencies be converted into cash through financial institutions as a way of fighting money laundering.
  • The Kazakh regulator has launched the Interbank System of Payment Cards, which has been designed to process interbank transactions made using payment cards in the country.
  • The National Bank of Kazakhstan will conduct end-to-end testing of the digital tenge with market participants and consumers in the fourth quarter of this year.
  • Vitaly Nizhegorodtsev, regional manager of SunFinance Group, discusses how Kazakhstan can attract personnel for the development of the fintech industry.
  • Kazakhstan is becoming an increasing popular relocation place for many IT specialists and technology startups.

Kyrgyzstan

  • Interbank Processing Center has launched ELCART Pay, a system of electronic payments from mobile devices made via a mobile app.
  • An agreement has been reached between Germany company Bundesdrueckerei GmbH and Kyrgyzstan regarding the development and implementation of the digital som, which is expected to launch in 2026.

Tajikistan

  • Tajik fintech startup Alif is testing terminals that allow for cash to be withdrawn without the use of plastic cards.
  • The AI Council has introduced five new products in the fields of finance, telecommunications, healthcare, education and sales.

Uzbekistan

  • Residents of Uzbekistan can now withdraw cash from ATMs without plastic cards by instead using a smartphone equipped with the Quant app.
  • Uzpromstroybank has been recognized as the best bank in Uzbekistan by Euromoney magazine.
  • Fintech platform Humans has released its financial and operating results for the first half of 2022. Compared to the same period last year, the company’s revenue grew by 57%, and its number of active users exceeded 2 million people.
  • TBC Bank has launched the Happiness Center call center that will respond to any question. The aim of the call center is to give positive emotions and encourage repeat calls.
  • Rustam Rakhmatov, the founder of the fintech startup IMAN, discusses how halal financial products differ from traditional ones, how much his company has attracted in investments, what difficulties his company has faced and why many project participants do not consider Central Asia for expanding their businesses.
  • According to a World Bank, one in six residents of Uzbekistan do not trust digital finance.
  • Kristina Dorosh, Visa’s regional manager in charge of Central Asia and Azerbaijan, speaks about the difficulties international payment systems face in Uzbekistan.

Azerbaijan

  • Mobile operator Azercell Telecom has partnered with PASHA Bank, Visa and AzInTelecom as part of an effort to introduce digital banking services as well as payment cards for subscribers.
  • Speaking at the Fintex Summit in Baku, representatives of the international consulting company Simon-Kucher discuss new trends in the development of financial ecosystems as well as new ways to increase profitability in the banking sector
  • By the end of the year, the Azerbaijani regulator will carry out inspections of the country’s banks in connection with the introduction of a new ISO 27000 security standard.

Armenia

  • Representatives from Armenia and India discussed cooperation in the field of fintech within the framework of the eighth meeting of the intergovernmental commission.
  • Ameriabank has become the main sponsor of the cybersecurity hackathon featured at Tech Week 2022.

Prepared by BFC