BFC FinTech Monitor (23rd May — 23rd June)

Tags Artificial Intelligence Cryptocurrency Cybersecurity Digital Banking Events Payments Regulation

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 report by Curity, nearly half (43%) of all large financial institutions have already implemented open banking.
• A new study on the fintech landscape of Central and Eastern Europe has revealed the decentralized finance (DeFi) has had the biggest impact on financial ecosystems in the region.
• The popularity of buy-now-pay-later (BNPL) services could lead to a credit crunch among needy consumers. According to a Citizens Advice report, more than 2 in 5 users have borrowed money to pay off debt.
• Biometric vendor Jumio has found that the vast majority of consumers feel more secure when interacting with brands that provide digital identity verification measures, especially with regard to finance matters.
• The European Banking Association (EBA) has published a report on open banking in order to improve financial services offered to small- and medium-sized enterprises.
• Venture capital firm Andreessen Horowitz has found that publicly-traded fintech companies suffer more from significant cost reductions than those that work with other technologies.
• The European Banking Authority has released a report analyzing the potential risks and recommendations for regulatory approaches related to the EU non-bank lending sector.

#Innovations and Neobanking

• The Metaverse Standards Organization, which is made up of representatives from Meta, Microsoft, Huawei, NVIDIA, Qualcomm, Sony Interactive Entertainment, Epic Games, Unity and Adobe, plans to develop uniform standards for the metaverse.
• Cloud banking software developer Temenos has introduced ESG Investing-as-a-Service to help financial institutions and asset managers with sustainable investing.
• Ant Group has launched Singapore’s first Anext neobank for micro and small-sized businesses.
• Spain’s CaixaBank has issued a Visa card embedded with Braille for customers with visual impairments. The bank is also planning to work with Microsoft on creating an innovation lab for a metaverse working environment.
• Mastercard has partnered with Danish fintech company Aiia to introduce the Pay-by-Link payment feature, which makes it easier for businesses from any industry to accept payments.
• Fintech solutions provider Kiya.ai is launching a banking metaverse in which employee avatars will serve customers.
• British fintech startup Revolut has launched an in-app spending management service that will allow businesses to issue cards with a single tap and set spending limits by time and category. Revolut users will also be able to seamlessly transfer money to accounts throughout Europe using technology from Tink.

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

• Visa is launching an experimental cryptocurrency card. Currently, the card is only available to users from Latin America.
• Coinbase has fired one fifth of its staff due to a collapse in the crypto market.
• Ethereum founder Vitalik Buterin stated that crypto assets have no chance to dominate traditional currencies.
• American financial holding JPMorgan Chase has developed a blockchain solution for managing traditional finance collateral.
• At a meeting of the Organization for Economic Cooperation and Development (OECD) in Paris, representatives of the cryptocurrency sector have come out against attempts by regulators to force them to report details of NFT, DeFi and retail payments to tax authorities.
• The head of the European Central Bank (ECB) has stated that cryptocurrencies are not backed by anything and should be regulated. The ECB also released a report stating that an increase in the number of financial institutions using cryptocurrencies and digital assets as a form of payment could increase the “side effects on the economy in as a whole”, which has cause the EU to consider tightening rules regarding crypto transactions.
• MoneyGram has agreed to cooperate with the blockchain developer Stellar Development in order to facilitate the transfer of money around the world using cryptocurrency technologies.
• British fintech startup Revolut plans to launch its own cryptocurrency token and is already developing a non-custodial e-wallet to this end.
• According to an ECB survey in 6 EU countries (Belgium, France, Germany, Italy, the Netherlands and Spain), approximately 10% of residents own cryptocurrencies.
• The Federal Reserve Board has included cryptocurrency data in its US Household Economic Health Report for the first time.
• The Chinese government may impose even tougher rules on cryptocurrencies and stablecoins due to the “collapse of the Terra ecosystem.” In fact, the Chinese social network WeChat has already begun blocking accounts that mention cryptocurrencies.
• The Central African Republic is tokenizing its natural resources to attract foreign investment.
• PayPal users will be able to transfer cryptocurrencies from their accounts to other wallets and exchanges.
• The CEO of the Russian Export Center has noted that Russian business can switch to cryptocurrencies when financing external transactions.
• A recent Deloitte survey has found that three quarters of US retailers are planning to accept cryptocurrency payments.
• 7 NFT marketplaces are planning to cooperate with Mastercard, which will allow users to purchase NFTs using a card instead of having to join a crypto exchange.
• Julius Baer Group, one of the oldest banks in Switzerland, has announced the launch of cryptocurrency products.
• The US Securities and Exchange Commission (SEC) has launched an investigation against the crypto exchange Binance due to the BNB token.
• Rapper Jay-Z and Twitter co-founder Jack Dorsey have opened a bitcoin academy that provides free financial education focused around cryptocurrencies.
• BKO Bank Polski has saved USD 7 million by using blockchain-based services.

#Central Bank Digital Currencies (CBDCs)

• American think tank Atlantic Council has identified privacy as the top consumer risk of CBDCs.
• SWIFT is working with Capgemini to test cross-border payments using CBDCs.
• Russian bank VTB plans to start testing the digital ruble as early as September 2022.
• China is testing a digital student card with digital yuan at Hainan Lu Xun Middle School. The card allows all purchases made by students to be tracked.
• The Central Bank of India has proposed a three-stage approach to implementing its CBDC in order to result in “the least shock” for the traditional financial system.

#Miscellaneous

• Mastercard will partner with e-commerce payment solution provider HyperPay to accelerate the adoption of digital payment solutions in the Middle East and North Africa (MENA) region. The payment system has also announced a partnership with One Global and i2c regarding the release of digital mobile wallets in the region.
• British fintech startup Revolut has expanded into new markets (Azerbaijan, Chile, Ecuador, Oman and Sri Lanka) with a simplified version of their app.
• The Green Digital Finance Alliance and the Swiss Green Fintech Network, with the support of the Swiss State Secretariat for International Finance (SIF), are launching the world’s first green fintech classification system.
• Mastercard has invited international tech communities to collaborate on cybersecurity innovations through its Experience Centre.
• The Basel Committee has adopted a set of principles for the effective management and oversight of climate-related financial risks.
• Apple has entered the BNPL market as US customers can now use Apple Pay installments.
• According to TradingPlatforms.com, Turkey, with a score of 85%, ranks first in the world in terms of mobile banking adoption.

Ukraine

• Ukraine has received USD 125 million in crypto asset donations since the start of the war.
• The Ukrainian Fintech Awards ceremony was held in Lviv, with Sportbank recognized as the best neobank, Rozetka recognized as the best marketplace and Сoncord Fintech Solutions recognized as the best fintech ecosystem. The full list of winners is available here.
• Mastercard has launched the Start Path initiative for Ukrainian fintech companies and entrepreneurs. Under the initiative, 6 months of mentoring support, access to resources and networking opportunities will be provided to 5 Ukrainian startups.
• The chairman of the board of the Ukrainian Association of Fintechs and Innovation Companies announced that Ukraine, over the past 4 years, has created a healthy fintech ecosystem. He hopes that, after the war, Ukraine fintechs can continue to change the world.
• The Business Insider portal has published an article on how Ukrainian banks and fintech companies are functioning during the war.
• Anna Khristyanovich, fintech program manager at Sigma Software, discusses how the financial ecosystem manages to maintain stability in the current war environment.
• PaySpace Magazine discusses Money20/20, Europe’s largest fintech conference.
• Concord Fintech Solutions has donated UAH 50 million to the Ukrainian army and hospitals.
• Ukrainian studio IamUkraine, creators of the Zelenskiy NFT project, is collaborating with the charity project Piece Koalas NFT to raise funds for Ukrainian humanitarian organizations and those affected by the war.

Kazakhstan

• The National Bank of Kazakhstan has launched a system of instant payments between clients of different banks.
• Crypto exchanges with a license to operate a digital asset platform from the Astana International Financial Center (AIFC) will be able to open accounts with several banks in Kazakhstan as part of a new pilot project.
• Users of the eGov mobile app will be able to revoke banking apps’ access to digital documents.
• Freedom Bank customers now have the opportunity to apply for an online used car loan and receive a decision within 24 hours. This is a first-of-its-kind fintech service for Kazakhstan.
• AIFC participated in the annual meetings of the Islamic Development Bank (IDB) group to discuss possibilities of financing Kazakh projects as well as how AIFC can assist in the development of the Islamic financial services.
• The chairman of the board of Jusan Bank Nurdaulet Aidosov discusses how the bank has begun to transform into a fintech company.
• Russia’s MTS-Bank has announced the launch of an instant top-up service for any Visa and Mastercard bank cards issued in Kazakhstan.

Kyrgyzstan

• The National Bank of Kyrgyzstan has recommended refraining from using cryptocurrencies in payments and settlements as the country prepares a legal framework for regulating virtual assets.
• PayBox.money will rebrand to Freedom Pay but will continue to operate as usual. The rebranding process is expected to take approximately 3 months.
• The Kyrgyz regulator has approved a regulation on accessing financial services through financial platforms using open software interfaces.
• Halyk Bank is considering launching Halyk Market in Kyrgyzstan.
• Elkart Beskontakt cards from the Kyrgyz Republic will work in Uzbekistan.
• According to the National Bank of Kyrgyzstan, the number of e-wallets in the country grew by 35% in 2021.
• Sanarip Systems has officially become the payment system operator in Kyrgyzstan.

Tajikistan

• The online publication ASIA-Plus discusses how mobile wallets work within the MegaFon Life app and why the app can be considered an alternative to a digital bank.

Uzbekistan

• The National Agency for Advanced Projects has developed a draft regulation on issuing licenses to crypto exchanges.
• Startups from Uzbekistan will be able to take part in the Mastercard Sustainable Banking Challenge, which includes the topics of financial inclusiveness, green banking and internal sustainable development. Finalists will pitch their solutions at Astana Finance Days 2022, with winners receiving up to USD 1,+0,000 to launch a pilot project in Kazakhstan.
• UZCARD and the Innotech group of companies will jointly use an integration platform for businesses in Uzbekistan. The platform will serve as an ecosystem for the interaction of companies and organizations in a one-stop setup that follows common rules and standards.
• Fintech startup MARTA has launched the MARTA Terminal app, which allows users to use their smartphone as a payment terminal.
• The State Assets Management Agency has announced a competition for select consultants regarding the privatization of the Paynet payment service.
• Ravnaq-bank has become the first in Uzbekistan to launch transfers to Visa cards via phone number.
• PLUS magazine has published an article on the benefits of Russian fintech companies relocating to Uzbekistan.

Azerbaijan

• The Azerbaijani regulator is preparing a concept for the digital manat.
• Fintex Summit was held in Baku June 16–17, 2022 with the support of the Azerbaijan Banking Association, the Central Bank of Azerbaijan and VISA. The main topics of the summit were financial ecosystems and innovative solutions for the financial services sector.
• According to the chairman of the board of the Azerbaijan Fintech Association, there are 20 fintech companies operating in Azerbaijan, most of which are payment aggregators and service providers.
• The Central Bank of Azerbaijan is continuing to expand non-cash payments by expanding cooperation with fintech projects and adopting a number of new regulations.
• PASHA Bank board member Jalal Orujev has stated that non-traditional players should be expected to appear in the Azerbaijani financial services market as the country develops an opening banking environment.
• Fintech startup Epoint has taken second place at the Take Off Baku Startup Summit.

Armenia

• The State Revenue Committee has appealed to the Central Bank of Armenia to ensure the regulation of crypto assets in order to reduce tax evasion and money laundering.
• The number of virtual POS-terminals in the first quarter of 2022 increased by 12.1% compared to the same period last year.

Georgia

• Residents of Uzbekistan will be able to use HUMO cards while traveling in Georgia under a new agreement signed by the National Interbank Processing Center and TBC Bank.

Moldova

• #DTFINCON’22, a digital transformation and financial inclusion conference, has taken place for the second time in Moldova. The main topics included digital transformation and financial inclusion in the new regional paradigm, the challenges of neo-banking and e-commerce. Videos from both days of the conference are available on YouTube: 1st day and 2nd day.
• Fintech Moldova and the NayaOne platform, a global provider of digital innovation sandboxes, will collaborate to bring Moldovan fintech startups to the international market.