Weekly News Highlights – 10 November 2023

Stay up to date with the latest news from fintech! This week, we bring you updates on tech launches, cybersecurity, new entries, acquisitions, and more. Enjoy reading!

European digital identity: Council and Parliament reach a provisional agreement on eID (European Council)

The Council of the European Union and the European Parliament have reached a provisional agreement on a new framework for a European digital identity (eID), aiming to provide a secure digital identity for all Europeans. The agreement includes the creation of digital wallets, allowing citizens to link their national digital identities with other personal attributes, and emphasizes user control to share information securely, with the final legal text to undergo further technical work before formal adoption. Read more

SBI Holdings to launch $663M fund to propel Web3 and Fintech startups (Crypto Potato)

SBI Holdings plans to launch a $663 million fund supporting Web3, AI, and fintech startups, aiming to invest in 150-200 companies and commence operations by the end of the year. The fund, with significant backing from financial institutions, contributes to Japan’s efforts in fostering startup development, aligned with the government’s goal to increase investment in startups and position the country as a global startup hub. Read more

Mendoza Ventures closes Truist Ventures’ investment for its $100M Early Growth FinTech fund (Fintech Global)

Mendoza Ventures, a female and Latinx-founded FinTech, has announced that Truist Ventures is investing in its ambitious Early Growth FinTech Fund which is targeting $100m. With this fresh injection of funds, Mendoza Ventures aims to further strengthen its support for early growth-stage startups, particularly those with a focus on diverse teams. The investment from Truist Ventures not only fuels the growth of Mendoza Ventures but also signifies a broader endorsement of their strategic approach to venture funding in the fintech sector. Read more

Plaid and Adyen Partner to Power Pay by Bank (Fintech Nexus)

Plaid and Adyen have formed a partnership to introduce Pay by Bank to North American businesses, providing an alternative to traditional card payments. This collaboration aims to streamline payments by allowing consumers to pay directly via their bank accounts, reducing fees, minimizing fraud, and integrating authentication into mobile banking apps. The move responds to the challenges faced by small businesses with card payment fees and aligns with the global trend of open banking payments, with Plaid and Adyen aiming to enhance payment efficiency, lower costs, and increase conversion for businesses in North America. Read more

Payments app Cardeo shuts down (Finextra)

UK credit card management app Cardeo is shutting down due to a lack of fresh investment, ceasing operations on November 9, 2023. Launched in 2020, Cardeo utilized open banking data to consolidate consumer credit card debt and offered credit lines with lower interest rates than customer cards. The closure underscores the challenges faced by some fintechs in sustaining operations and highlights the increasing scrutiny on financial solutions seeking to address niche problems. Read more

HSBC to roll out custody platform for tokenized securities (Finextra)

HSBC is set to launch an institutional-grade custody service for tokenized securities in 2024, leveraging technology from Ripple-owned Swiss crypto safekeeping firm Metaco. This initiative, part of HSBC’s broader foray into digital assets, aims to meet the increasing demand for custody and fund administration of digital assets from asset managers and owners. The custody service will focus on tokenized securities issued on third-party platforms, excluding cryptocurrencies or stablecoins, and will complement HSBC Orion, the bank’s platform for issuing digital assets, and its recent launch of tokenized physical gold. Read more

EU agrees game-changing deal for instant payments (Finextra)

The European Council and European Parliament have reached a provisional agreement on the mandatory provision of instant credit transfers in euros, making it mandatory for payment service providers, including banks, to offer the service of sending and receiving instant payments in euros at no extra charge. Additionally, non-bank payment institutions, such as e-money institutions and stablecoin issuers, will be granted direct access to central bank payment systems. Read more

Crowdcube continues Europe expansion with acquisition of Semper (Altfi)

Crowdfunding platform Crowdcube has acquired secondary liquidity platform Semper, aiming to offer liquidity to European startup founders, angel investors, and early shareholders by opening private markets to retail investors. The founders of Semper, Mathias Pastor and Balthazar de Lavergne, will continue to lead the secondary business in collaboration with Crowdcube’s co-CEOs, Bill Simmons and Matt Cooper. Crowdcube aims to capitalize on the potential to create the largest private market investment platform in Europe, with Semper facilitating around €10 million in secondary sales for European startups, including Kry, Mano Mano, and Voodoo. Read more

Plend introduces interest-free ‘Social Credit’ for low-income borrowers (Altfi)

Ethical lender Plend is launching “Social Credit,” its first interest-free lending product aimed at low-income borrowers excluded from traditional finance. The not-for-profit initiative offers loans between £500 and £2,000 for terms up to 24 months, with no interest or fees. Plend aims to support 4,500 people by the end of 2024, focusing on those referred after being rejected by other lenders and at risk of falling victim to loan sharks. The move addresses exclusion from affordable credit due to credit scoring systems and the retreat of traditional lenders from near and sub-prime consumer lending markets. Read more

Klarna to establish UK holding company in preparation for billion-dollar IPO (Fintech Futures)

Buy now, pay later (BNPL) giant Klarna is planning to establish a new holding company in the UK as part of its preparations for an initial public offering (IPO). Klarna CEO Sebastian Siemiatkowski sought approval from the company’s largest shareholders to form a new legal entity that would sit above its existing corporate structure. The move aims to increase the chances of a successful IPO by leveraging the UK’s familiar legal, regulatory, and capital markets framework. Klarna is considering a listing as soon as the first half of next year. Read more

N26 to cease operations in Brazil within the next two months (Fintech Futures)

German challenger bank N26 is set to cease operations in Brazil within the next two months. N26 Brazil, led by CEO Eduardo Del Guerra Prota, made the decision in response to changes in N26’s global strategy, shifting its focus to key markets in Europe. N26 entered the Brazilian market in 2021 after obtaining a Sociedade de Crédito Direto (SCD) license from Banco Central do Brasil. However, the product testing faced delays, and despite previous plans to strengthen its position in the Brazilian market, N26 Brazil has now confirmed the cessation of operations in Brazil within the next two months. Read more

Dutch regulator calls for sustainability impact disclosures for all financial products (ESG Today)

The Dutch Authority for the Financial Markets (AFM) has proposed reforms to the EU’s Sustainable Finance Disclosure Regulation (SFDR). The AFM’s position paper suggests removing the regulations’ Article 8 and 9 classification categories and replacing them with a new sustainable investment labeling regime. Additionally, the AFM recommends that all financial products, even those without sustainability features, should provide some sustainability-related disclosures. The proposals aim to make the SFDR regulation more meaningful to investors and facilitate capital flows towards investments with a sustainable impact. Read more

SimCorp in merger with Axioma following Deutsche Börse takeover (Fintech Futures)

SimCorp, a provider of investment management platforms, is set to merge with Axioma, a global risk solutions provider. This decision comes after SimCorp’s €3.9 billion acquisition by the Deutsche Börse Group in September. Axioma, which offers factor risk models, portfolio construction tools, and multi-asset class enterprise risk solutions, was part of Qontigo, a subsidiary of the Deutsche Börse Group since 2019 and a strategic partner of SimCorp since 2021. The merger aims to create a powerful client-first offering across the entire investment management value chain, strengthening SimCorp’s presence in key markets, particularly North America. Read more

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