Tag Archives: Fintech

Goldman-backed fintech startup Marqeta launches in Europe
October 22, 2018 12:00 am|Comments (0)

LAS VEGAS (Reuters) – Marqeta, a U.S. financial technology startup that helps young companies including digital-only banks issue payment cards, has expanded into Europe, the company said on Sunday.

The company will service the region from London, where it has hired at team of five and signed up new clients, it said.

Backed by Goldman Sachs Group Inc and Visa Inc, Marqeta has developed a platform that it says makes payment card issuing and processing simpler and more efficient for businesses.

It is expanding in Europe through its partnership with Visa.

Marqeta’s U.S. clients include some of the most well-known new entrants in finance such as Square Inc, the payments company founded by Twitter Inc CEO Jack Dorsey, and Affirm, the lending startup led by PayPal Holdings Inc co-founder Max Levchin. It also works with Alipay, the payments business spun out of China-based technology company Alibaba Group Holding.

Britain and the rest of Europe are a promising market because of the growing cohort of young digital-only banks and fintech startups based there, Marqeta’s founder and CEO Jason Gardner said in an interview at an industry conference in Las Vegas.

“We have invested an enormous amount of resources in tech and operations, and have been quietly building a presence there,” Gardner said.

While the company plans to open another office somewhere else in the region, Gardner said the UK’s decision to leave the European Union had not been a concern when picking its first base in Europe.

New entrants in the banking and payments market, such as financial technology startups and challenger banks, have acquired a larger share of industry revenues in the UK than their counterparts in the U.S. and the rest of Europe, according to a report by Accenture.

In the UK new entrants have secured 14 percent of the total €206 billion ($ 238.45 billion)in industry revenues, compared to the 3.5 percent the total $ 1.04 trillion captured in the U.S., according to the report.

Founded in 2010, Marqeta has raised a total of $ 116 million in venture capital, most recently in a round led by Iconiq Capital with participation from Goldman Sachs.

Reporting by Anna Irrera; editing by Grant McCool

Tech

Posted in: Cloud Computing|Tags: , , , , ,
BoE says banks may be underestimating fintech threat
November 28, 2017 12:14 pm|Comments (0)

LONDON (Reuters) – Britain’s banks may be overstating their ability to stop “fintech” firms stealing customers and eating into profits, the Bank of England (BoE) said on Tuesday.

The Bank of England is seen through the columns of the Royal Exchange in the City of London, Britain, November 2, 2017. REUTERS/Toby Melville

The BoE was publishing the results of its 2017 stress test of seven major banks: HSBC, Barclays, Lloyds, RBS, Santander UK, Standard Chartered and Nationwide.

For the first time, it included an “exploratory” scenario on how lenders would cope with a seven-year downturn and competition from financial technology – or fintech – firms.

Fintechs offer payment services and aggregate different bank accounts and balances via smartphone apps. New European Union rules from January will make it easier for them to compete with banks.

Fintech is creating opportunities for customers and businesses, BoE Governor Mark Carney said.

“In the process, however, it could also have profound consequences for the business models of incumbent banks,” Carney told a news conference.

The BoE said the banks tested concluded they could cope with prolonged low growth and fintech competition without making big changes to business models or taking on more risk.

The emergence of fintech, however, may cause “greater and faster disruption” to banks’ business models than the banks themselves project, the BoE said.

Fintechs may make it easier for customers to manage their money more effectively to avoid costly overdrafts. They could also direct customers to cheaper credit and avoid going into the red.

“These dynamics seem likely to impact both the quantity and price of banks’ overdraft products, which could lead to a material reduction in their profitability,” the BoE said.

Overdraft revenues contribute 2.6 billion pounds ($ 3.5 billion)to annual pretax profits at major UK banks, it added. Banks could also lose to fintechs some of the 800 million pounds in fees they charge for providing payments services.

Fintechs may also break or weaken the link between a bank and its customer.

“For instance, in the future, it may be possible for a customer to manage their finances with only minimal direct engagement with their banks.”

Stiffer competition from fintechs means that banks could have to double spending on marketing and cut their aggregate annual pretax profit by a billion pounds.

The BoE said banks in the test may also have overstated their ability to slash costs to maintain steady returns on equity to investors and keep offering a broad range of services.

“Supervisors will now discuss the results of the exercise with banks, including the potential implications of these risks,” the BoE said.

Reporting by Huw Jones; Editing by Mark Potter

Our Standards:The Thomson Reuters Trust Principles.

Tech

Posted in: Cloud Computing|Tags: , , , ,
China Citic, Baidu launch direct bank in fintech push
November 18, 2017 12:00 pm|Comments (0)

BEIJING (Reuters) – China Citic Bank Corp (601998.SS) and search engine giant Baidu Inc (BIDU.O) launched on Saturday a direct banking joint venture, dubbed AiBank, to capitalize on China’s rapidly growing fintech sector.

FILE PHOTO: A man stands in front of CITIC bank’s branch in Beijing, China, March 23, 2016.REUTERS/Kim Kyung-Hoon

AiBank is one among several tie-ups between an internet firm and a lender in China’s booming online finance market where technology gurus like Alibaba Group Holding Ltd (BABA.N) and Tencent Holdings Ltd (0700.HK) have already set up their own finance arms to offer a range of financial products including payment, wealth management and micro loans.

A direct bank offers services over the internet instead of through physical branches.

AiBank will focus on lending to individuals and small businesses while leveraging big data and artificial intelligence to build new risk control models, Li Rudong, president of the new bank said at a launch event in Beijing.

Li said 60 percent of the new bank’s employees will be technology staff.

“AiBank is the future of intelligent finance…It is an institution that understands customers best and understands finance best,” said Baidu Chief Operating Officer Lu Qi.

Mid-tier lender Citic Bank owns 70 percent of the joint venture, while Baidu controls the remaining 30 percent. The direct bank has a registered capital of 2 billion yuan.

China’s banking regulator approved the establishment of AiBank earlier this year.

Reporting by Shu Zhang and Elias Glenn; Editing by Muralikumar Anantharaman

Our Standards:The Thomson Reuters Trust Principles.

Tech

Posted in: Cloud Computing|Tags: , , , , , , ,