Weekly Update of Global Fintech

Editor’s note:

In order to strengthen the exchanges and information integration of member institutions of Fintech region, promote the discussion of the frontier issues, and exchange the newest ideas, Fintech Cooperation Committee (FTCC) of AFCA launched the "Weekly Update of Global Fintech" to sort out news of global Fintech hotspots and key information in the past week for reference by relevant institutions.

If you have information about Fintech to share, please send us by E-mail: zhaiminghao@afca-asia.org. We will indicate the source. 

Thank you for your support!

【CONTENTS】

I. London overtakes New York to steal global fintech investment crown

II. UK Finance launches cash initiative, calls for bigtech   collaboration

III. Bank of China and IBM team up to launch series of innovation labs

IV. Samsung gears up digital wallet with debit card and cross-border payments

V. Refinitiv extends Matching service to Vietnam

VI. Kreditech eyes expansion after securing EUR 20 million in equity financing

VII. Enterprise Ethereum Alliance’s Reward Token System Backed by Microsoft, Intel

VIII. SKF Acquires Industrial AI Company

IX.£44.1m in 'one of the largest ever' fintech series B funding rounds

London has overtaken New York to become the world’s number one city for investments in fintech firms, new figures have revealed.

In the first eight months of the year alone, London has attracted 114 investments with a record-breaking value of more than $2bn (£1.6bn), according to industry body Innovate Finance and the mayor’s promotional agency London & Partners.

The rush of deals puts the capital in the top spot for total number of deals secured, with New York and San Francisco in second and third place respectively.

 San Francisco still rules the roost in terms of total value, beating London with over $3bn of investments so far in 2019. New York took third place at $1.9bn.

“London has always been ahead of the curve and pivotal in embracing new technology and opportunities while pushing the boundaries of an existing ecosystem, to present an even better solution,” said Laura Citron, chief executive of London & Partners.

“This is why we’ve seen these outstanding global trends in fintech. The financial technology sector is diverse, creative, cutting-edge and innovative – these very qualities are shared by London and Londoners.”

Overall, the US remains the largest market globally, with $9.4bn raised this year. However, the UK continues to punch above its weight, pulling in $2.3bn.

London-based companies accounted for half of the 10 largest European investments recorded so far in 2019.

The capital’s success has largely been driven by the emergence of tech unicorns – the label given to companies with a valuation of more than $1bn.

Earlier this year London overtook San Francisco to become the city with the most tech unicorns worldwide, thanks to a string of new entrants such as Greensill and Checkout.com.

The latest figures also revealed that London attracts a wider international variety of investors than other European hubs, with roughly 40 per cent of investors coming from outside Europe.

Innovate Finance chief executive Charlotte Crosswell said: “The UK is the clear global leader in fintech, spearheaded by London’s success and its long-standing position as a major leading financial centre. 

“It’s no surprise that London and the whole of the UK fintech sector is experiencing record growth – we are home to world-class talent and our historical pedigree enables access to key global markets. With record investment under our belts, this is the time to boost the sector further and secure future growth.”

（2019-09-23 Source: City A.M）

UK Finance has launched the Community Access to Cash Initiative to identify and secure convenient access to cash and payment services.

The initiative will also pave the way to improved cash recycling, better access to digital alternatives and increasing engagement of key technology partners.

Chief executive of UK Finance Stephen Jones says it’s “vital” that the initiative is supported by other sectors such as telecoms, retailors and infrastructure providers to achieve “a resilient and sustainable cash landscape”.

On 30 August ATM provider Link pledged to make funding available to secure free cash access for every high-street in the UK where free-to-use ATMs or Post Office counters are not available.

In support of the Access to Cash Review led by Natalie Ceeney CBE and sponsored by Link, UK Finance has also published its ‘UK Cash & Cash Machines 2019’ report which says the average number of cash payments made by an adult each month is 17, overtaken by 28 card payments.

（2019-10-01 Source: Fintech Futures）

Bank of China (BOC) and IBM have announced an extension to their partnership which will see the development and deployment of several innovation labs deployed across the globe.

The first of the labs, located in Singapore, will “unify digital systems, introduce automation to processes and establish efficient means to comply with regulations,” according to IBM. BOC plans to deploy between six and eight new locations, and each will be co-created with the IBM Garage – Big Blue’s own innovation hub project.

“Bank of China is committed to becoming a world-class bank with technology and innovation as the cornerstones of our vision,” says Wang Fang, Bank of China Singapore branch vice president for Bank of China’s lab in Singapore.

“We look forward to having IBM as our partner, because we believe that in addition to the assistance they offer with technological leadership and industry expertise, we can learn even more from IBM’s own transformation and innovative models.”

Bank of China is one of the four biggest state-owned financial institutions in China. Founded in 1912, it is the oldest bank in mainland China still in existence. It operates with $3 trillion in assets under management and a net income of $28 billion.

Wenchao Liu, vice president and managing director for Bank of China’s integrated account for IBM, says: “We believe that with the completion of the eight major global innovation centres and the whole innovation system, that Bank of China will be able to more efficiently incubate and rapidly iterate innovations. Thus, they will be able to achieve their strategic goal of building a world-class bank for a new era.”

（2019-09-30 Source: Fintech Futures）

Samsung Pay has added a new virtual prepaid cash card to its wallet called ‘Samsung Pay Cash’, allowing customers to shop in-store and online, as well as budget for everyday outgoings.

This follows Samsung’s introduction of a new international ‘Money Transfer’ feature in its Samsung Pay app with Finablr earlier this week. Samsung says these are its first steps to evolving Samsung Pay into “a platform that makes users’ financial lives more convenient”.

The South Korean conglomerate has designed a card which works anywhere Samsung Pay and Mastercard are accepted for contactless payments and magnetic stripe cards. Prepaid debit card provider Netspend is powering the product alongside Mastercard.

In its mission “to make lives easier” for its customers, Samsung says users have no need to worry about security, confirming the cash card is protected by mobile security solution Samsung Knox and Mastercard’s token services.

“We envision a future in which people can leave their cash and cards at home, take care of everyday financial matters easily, and earn rewards all along the way,” says Samsung America’s vice president and division head Sang W. Ahn.

（2019-10-04 Source: Fintech Futures）

Financial data and infrastructure provider Refinitiv has launched its global electronic trading service Matching in Vietnam, part of what the company is positioning as a commitment to emerging markets in the region.

The launch of Matching is Vietnam’s first electronic marketplace for the trading of Vietnamese dong, and will enable trade matching of a T+1 basis.

“Matching is a powerful, cost-effective and low-latency solution for FX traders which offers real-time credit-screening, easy price discovery, concentrated liquidity and efficient execution,” says Nigel Fuller, head of market development for ASEAN at Refinitiv.

（2019-10-04 Source: Fintech Futures）

Kreditech is ready to scale globally in the near-prime customer segment – declares David Chan, Kreditech CEO. The Germany-based online direct lender and Point-of-Sale (POS) financing provider estimates its global target market at ca. EUR 300 bn in consumercredit issuance. It aims to reach EUR 1 bn in revenue by 2025, which will be driven by growth in existing markets where Kreditech is present, as well as expansion into new geographies. Kreditech currently operates in India, Poland, Russia and Spain, and serves over one million customers. The company has raised EUR 20 million in its latest equity financing round.

Kreditech combines market-leading tech capabilities and data science, with sound insight into consumer borrowing needs and extensive experience in POS and e-commerce partnerships. Since 2018, the company has been focused on scaling its near-prime lending operations and driving toward profitability. With well-established and growing operations in Poland, Spain and Russia, Kreditech’s near-term focus will be on rapidly scaling its business in India. The company also has plans to further expand in other major consumer lending markets in the coming years.

The cornerstone of Kreditech’s operations is a unique, differentiated, end-to-end fully automated underwriting process that combines alternative data sources with machine learning. This process enables a seamless customer experience based on a dynamic application process, near-instant credit risk assessment and smart, personalized offerings. These features mean that Kreditech is able to effectively attract and serve customers with a variety of different risk profiles, thus enabling financial inclusion, while positioning Kreditech at the forefront of development in artificial and decision intelligence.

As a tech-based lender, Kreditech has developed an agile-driven, low-cost platform architecture that facilitates rapid partner onboarding, as well as lean, flexible, rapid scalability into new markets. As a result, Kreditech has been recognized for its ability to build strong partnerships with e-commerce and e-payments organizations, and for its ability to expand its direct lending through the Monedo brand globally.

“We are on track to realize our vision, which is to be one of the leading technology-enabled consumer-lending companies; a fintech platform of choice for both individuals and POS and e-commerce partners. With a new strategy in place, a solid capital base and our highly motivated and experienced team, we are perfectly positioned to achieve our goals”, says David Chan, Kreditech CEO.

The funds obtained during the latest round of equity financing will be utilized to scale Kreditech’s business in its existing markets. In outlining the company’s current situation and its future plans, David Chan explains: “We have a well-established presence in Poland, with strategic partnerships in a very dynamically growing e-commerce market. In Spain, we are in a very strong position as a recognized consumer lending brand, and we are growing rapidly in the near-prime market. In Russia, we are a leading online lender, locally self-funded, and targeting expansion into instalment loans”.

“I am really excited about our growth plans in India. We hold a first-of-its-kind digital NBFC (non-banking financial company) license in a large and fast-growing market. We have been successful in finding our niche and have established the right proof of concept. Now it’s time to scale up while a key target customer segment remains unaddressed by the competition”, says David Chan.

In October 2019, Kreditech will publish its financial statement for 2018. As David Chan underlines, the results will show the positive impact of the new company strategy on its trajectory and overall performance. “I am proud to say that we are on track to reach our target for profitability of the company. Our platform is designed to facilitate rapid, profitable growth”.

The recent round of equity financing was co-led by Runa Capital, a global technology venture capital firm, and a German private investor, with participation from long-time existing shareholders, HPEGrowth and Amadeus Capital Partners. A number of FinTech angel investors were also involved.

Runa Capital’s extensive experience and knowledge of the technology industry and of scaling such businesses is an ideal fit for Kreditech’s profile. “We are excited to be partnering with Kreditech as it continues on its path to becoming a global leader in digital near-prime lending. We believe that access to credit will continue to be improved through innovation and we see Kreditech as the emerging leader in this space, especially considering its presence in multiple fast-growing markets around the world,” said Andre Bliznyuk, General Partner at Runa Capital.

Tim van Delden, co-founder of HPE Growth, commented: “We are keen to support Kreditech. We have great trust in the new management team that Kreditech put in place in 2018. Kreditech’s track record over the last eighteen months, together with its business focus, strategy refinement and path to profitability has been truly impressive. For these reasons, HPE is convinced that Kreditech has the right management team to scale the business into the near-prime market. Kreditech’s core pillars of success remain the same – it is a technology and data-driven company that is able to use machine learning scoring models to make credit decisions in real time and with greater accuracy.”

Kreditech is an international company that has its headquarters in Hamburg, Germany. The company currently employs more than 300 people across seven countries and is developing regional centers of excellence and tech centers in Poland, Romania and Thailand. Kreditech lends to customers in India, Poland, Russia and Spain. 

（2019-10-04 Source: Fintech News）

Microsoft and Intel are backing a new system of reward tokens created by the Enterprise Ethereum Alliance (EEA).

EEA creates new reward token system

The EEA, which sets standards for Ethereum-based blockchain applications in business, shared the developments in a statement with Cointelegraph on Oct. 7.

The organization said that it has created a new system of reward tokens that has the support of both software giants.

The EEA is a blockchain consortium with over 450 enterprise business members such as Microsoft, JPMorgan Chase, Santander, Accenture, ING, Intel and Cisco. Its newly created token aims to incentivize and reward companies who are actively participating in a consortium. 

Intel’s blockchain program manager Michael Reed told Coindesk that there are three types of tokens — a reward token, a reputation token and a penalty token — adding:

“It really can be applied to any consortium to incentivize teamwork. The example we are using is a software development consortium like EEA, where we are trying to motivate activities like editing and contributing to specifications, developing and adding code. Then, of course, you could apply penalties for negatives, such as lack of contribution, lack of review, missing deadlines and so on.”

Cointelegraph has previously reported on the use of tokens to align and reward companies and individuals for their efforts. The Austrian capital of Vienna was reported to be developing a blockchain-based token as a part of a local incentive program in early 2019.

The so-called Vienna token would be granted in return for providing feedback about the city, in an application designed to pay for parking or for rewarding citizens for riding their bikes. The tokens might later be exchanged for something valuable, such as theater tickets.

EEA’s published use cases for telecommunications

In August, the EEA published a set of use cases for blockchain technology in telecommunications.

The list provided information on how blockchain technology could streamline business transactions and internal operations in the telecommunications industry.

Use cases included blockchain-based telecom call roaming user authentication, blockchain-based telecom call roaming reconciliation, and data privacy and monetization.

（2019-10-02 Source: Cointelegraph）

SKF has signed an agreement to acquire Presenso Ltd., a company that develops and deploys artificial intelligence (AI)-based predictive maintenance software. Presenso's AI capability enables production plants to find and act on anomalies that were previously difficult to detect, automatically and without the need to employ data scientists. Presenso's competence will be used to strengthen SKF's Rotating Equipment Performance offer. 

Victoria Van Camp, CTO and President, Innovation and Business Development, says: "SKF is all about reliable rotation, technology leadership and solving real world challenges. Today, we are welcoming a team of world-class AI developers, with a production-ready analytics solution into SKF. Together we will change the way industry looks at reliability and make AI an integrated part of production."  

Presenso is based in Haifa, Israel. The acquisition is subject to certain regulatory approvals and is expected to be completed during Q4 2019. 

（2019-10-08 Source: PR Newswire）

Fintech company Tide has raised £44.1m in its first round of Series B equity funding in a bid to increase its business banking market share.

Tide announced it had secured the funding yesterday in what it is calling “one of the largest ever” series B funding rounds for a fintech company.

The company, which provides digital business banking, said its goal was to increase its business banking market share to 8 per cent by 2023. 

As of August, Tide surpassed 100,000 members and increased its market share to 1.75 per cent.

Tide chief executive Oliver Prill said management will also begin to look at taking the company international.

“We want to challenge the oligopoly that has dominated and failed small-to-medium enterprises (SMEs) for too long.  

“With a clear plan for growth in the UK backed by significant investment, we are ready for an exciting future, which includes looking at taking Tide to an international market.”

The funding effort was led by The SBI Group and Augmentum Fintech and will be followed up by a subsequent round at the end of the year.

（2019-10-07 Source: City A.M.）