News Briefing - Crowdfunding, SME And Alternative Finance

A lady at the counter talking to a bank teller

1.UK – FinTech

 

Altfi reports:

 

“The UK’s financial regulator the Financial Conduct Authority is looking to scrap a key open banking rule requiring users to reauthenticate access to customer accounts every 90 days.  

While the growth of open banking in the UK has been well documented, many industry insiders have longed said the ‘90 rule’, which seeks to maintain and protect users’ permissions, has been a drag on the adoption of open banking. This is because of the added friction for users needing to re-apply the permissions. 

The ’90-day’ rule came into force in 2018. Aggregator apps were instantly forced to send their customers to re-authenticate with each bank every 90-days. The impact was immediate and negative for adoption owing to the added inconvenience. 

Drop off rates (where customers decided to stop using open banking) were above 50 per cent, affecting even the highly engaged consumers. 

The new rules come after an ongoing consultation by the FCA with the open banking industry. From 26th March 2022, banks will only have authenticate for the first access request of an account information service provider.” 

 

2. UK – FinTech 

 

Finextra reports: 

 

“Redwood, the British challenger bank for SMEs, has hit profitability less than four years after launching. 

Redwood opened in August 2017 after being ‘born in the cloud’ and achieving one of the fastest licence-to-launches in UK banking history, with a focus on offering secured SME mortgages for business owners.

Headquartered in Hertfordshire with more than 100 employees, it has now achieved monthly profitability after attracting more than 5000 customers. The bank has lent more than £400 million to SMEs and attracted deposits of over £400 million.” 

 

 

3. International – FinTech 

 

The Fintech Times reports: 

 

“Tenpay, a Tencent Holdings company, has received a fine from China’s foreign exchange regulator for violation of foreign exchange rules. 

The Shenzhen branch of SAFE (State Administration of Foreign Exchange) has fined Tenpay 2.78 million yuan ($436,000) for misconduct, including conducting foreign exchange business beyond the scope of its registration. 

The FX regulator also gave the company a number of warnings, ordered it to rectify the violations and confiscate illegal gains, 

The official statement reads: “In response to the problems found in the routine inspection in 2019-2020, Tenpay has immediately formulated an improvement plan and implemented it item by item, and has now completed the rectification of all of them.” 

It added that the company will further strengthen compliance management under the guidance of SAFE’s Shenzhen branch. 

China launched a widespread clampdown on its technology sector this year, with the competition regulator, in particular, dishing out fines and warnings and conducting investigations into the biggest names in the “platform economy”. 

At the beginning of this year, China’s central bank has ordered Jack Ma, one of the countries richest people and co-founder of Alibaba, a multinational technology company, to reign in his fintech empire with a major shake-up and scale back of the Ant Group‘s operations.” 

 

 

4. US – FinTech 

 

Crowdfundinsider reports: 

 

“Affirm notes that with supply chain blockages leading to new challenges every day, you might be facing difficult decisions regarding increasing prices while preserving margins. 

Although significantly higher prices might discourage customers just as the holiday shopping season arrives, you could soften the overall impact for many shoppers by providing pay-over-time plans—especially with longer terms, Affirm recommends. 

The Fintech company also mentions that the “sticker shock” of an $1800 sofa, for instance, may  put “less stress on a shopper’s budget when the total cost can be divided and paid over 18 months.” 

Affirm further notes that by providing longer terms (beyond 12 months) is “a good way to help shoppers retain more spending power despite rising prices in the current economic environment.” The company adds that the resulting lower monthly payments can “reframe the total purchase price in a more budget-friendly way.” For example, the payments for a high-tech piece of fitness equipment “could become similar to a monthly gym membership.” 

 

5. International – FinTech 

 

Finextra reports: 


“A former Citi trading executive has launched a $1.5 billion fund focused on investing in crypto infrastructure, blockchain protocols, and virtual worlds. 

Hivemind Capital Partners will make investments in crypto companies, trade digital assets, and feature a dedicated “play-to-earn strategy” in the gaming space. Crypto infrastructure, blockchain protocols, open internet, programmable money and virtual worlds are all on the fund's agenda.

The fund is the brainchild of Matt Zhang, an ex-Citi head of structured products trading, who also created the Sprint investments team at the bank.”