In the ever-evolving landscape of financial technology (fintech), groundbreaking developments continue to shape the way we interact with and manage our finances. Stay tuned for the latest updates in the world!
Wirecard lawsuit against EY claims 1.5 billion euros in damages (Reuters)
EY, the global accountancy firm, is facing another lawsuit seeking 1.5 billion euros ($1.66 billion) in damages over its role in auditing Wirecard’s books prior to the company’s collapse in 2020. Filed by Wirecard’s insolvency manager in a Stuttgart court, this is one of several legal actions against EY, including a recent investor suit claiming over 700 million euros in damages. Wirecard’s insolvency in 2020, revealing a 1.9 billion-euro hole in its accounts, led to a cascade of legal challenges, investigations, and scrutiny of the German business and regulatory environment. Read more
American Fintech Council Identifies Hurdles in CFPB Open Banking Proposal (The FinTech Times)
The American Fintech Council (AFC) has responded to the Consumer Financial Protection Bureau’s (CFPB) proposed rule on personal financial data rights, aiming to finalize the rule in 2024 under Section 1033 of the Dodd-Frank Act. While the AFC supports the goal of codifying consumers’ rights to access and control their financial data, it has identified concerns about the proposed rule’s scope, limitations on data providers, framework for industry standards, and reauthorization requirements. The AFC, in its nearly 300-page submission, provides specific recommendations to address these concerns, emphasizing the importance of maintaining a competitive, consumer-protected open banking ecosystem. Read more
Aon to buy middle-market insurance broker NFP in $13.4 bln deal (Reuters)
On December 20, Aon, the management consulting firm, announced a $13.4 billion acquisition of privately held NFP, with the aim of tapping into the rapidly growing middle-market segment of insurance brokerage, wealth management, and retirement plan advisory. The deal, expected to close in mid-2024, will be funded with $7 billion in cash and $6.4 billion in Aon stock, financed through a new debt raise of $5 billion in 2024. Aon’s move comes after the termination of its $30 billion merger with Willis Towers Watson in July 2021 due to anti-trust scrutiny, and despite a 6% dip in Aon shares following the announcement, the acquisition positions Aon strategically in the insurance sector’s middle-market growth. Read more
Blackstone buys majority stake in Sony Payment Services (Finextra)
Sony Bank has sold a majority stake in its payments business to private equity funds managed by Blackstone. As part of the deal, Sony Bank will retain a portion of its equity and continue to support the growth of Sony Payments Services (SPSV) as a minority investor. The move, marking Blackstone’s first investment in Japan’s financial technology sector, aims to enhance SPSV’s capabilities through investments in IT and talent, aligning with the accelerating growth in the electronic payment industry in Japan. Read more
US companies dive into convertible debt to hold down interest costs (Financial Times)
In a notable surge within the otherwise subdued corporate fundraising landscape, US companies are increasingly turning to convertible bonds to manage interest costs. Convertible debt issuance rose by 77% in the past year to $48 billion, marking one of the few areas of capital markets returning to pre-pandemic averages post-2022’s market downturn. This trend is expected to persist in 2024 as companies seek to refinance maturing debt, with even established firms joining the market due to rising borrowing costs driven by Federal Reserve interest rate hikes. Read more
UN and EU back effort to improve Southern Africa remittances (Finextra)
The United Nations and the European Union are supporting two fintech companies in their efforts to reduce the cost of remittances in Southern Africa. The Platform for Remittances, Investments, and Migrants Entrepreneurship in Africa (PRIME Africa), funded by the UN’s International Fund for Agricultural Development (IFAD) and the EU, is addressing the challenge faced by migrant workers who lack the required documentation for formal remittance services. Read more
Fintech Kaspi.kz is set to be first Kazakh company to list in the U.S. (Morningstar)
Kaspi.kz, the Kazakh fintech set to become the first company from Kazakhstan to list in the U.S., has filed for an IPO on Nasdaq under the ticker “KSPI.” With a profitable track record, the company experienced a 77% increase in convertible debt issuance in 2023, reaching $48 billion. However, the prospectus outlines risks, including credit, liquidity, and market risks, as well as the evolving legal and regulatory landscape in Kazakhstan. The company will continue to be controlled by existing principal shareholders post-IPO. Read more
SentinelOne bolsters cloud defence with PingSafe acquisition (FinTech Global)
SentinelOne has revealed plans to acquire PingSafe, a specialist in cloud-native application protection platforms, as part of its strategy to strengthen cloud workload and data security offerings. The integration of PingSafe’s CNAPP with SentinelOne’s Singularity™ Platform aims to create a unified security platform, eliminating the need for standalone solutions. The acquisition aligns with SentinelOne’s broader expansion into cloud security and its Singularity Unity Release strategy. Read more
FinTech KindCard plans to acquire banking platform OpenTransact (IBSIntelligence)
FinTech and PayTech company Kindcard has announced its intention to acquire the banking platform OpenTransact. The move is aimed at bolstering Kindcard’s revenue and IP tech stack, enabling the provision of secure, all-in-one software and payments-as-a-service solutions to high-risk merchants. The acquisition aims to revolutionize high-risk transactions and enhance Kindcard’s position as an alternative payment provider. Read more
FBI charges Nigerian fintech founder with securities fraud (ITWeb)
Odogwu Banue Mmbousi, the founder of Tingo, a Nigerian-founded Nasdaq-listed agri-fintech company, has been charged by the FBI with securities fraud, creating false filings with the SEC, and conspiracy. The charges allege that Mmbousi declared hundreds of millions of dollars in false revenues and assets for three companies he controls. Mmbousi is currently on the run, and the FBI has secured a temporary asset freeze and other emergency relief against the related U.S.-based corporations. Read more
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