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Weekly News Highlights – 01 February 2024

Welcome to the latest in fintech news, where cutting-edge technologies and innovative financial solutions converge to reshape the landscape of banking, investing, and payments. Stay tuned as we explore the trends driving the future of finance!

Concerns Over Financial Inclusion Gap in Rural Areas Amid More Bank Closures (The Fintech Times)

Lloyds Banking Group plans to shut down its mobile van banking service and 123 branches, raising concerns about reduced access to financial services in rural and underserved areas. The decision comes amid a broader trend of branch closures in the banking industry, with over 5,800 branches closed since 2015. Research suggests that nearly three million people may live in areas without a physical bank branch by the end of the year. Concerns are raised about the impact on older individuals and the existence of “banking deserts” with limited access to financial services. Fintech experts emphasize the need for collective attention to bridge financial disparities in underserved communities. Meanwhile, digital banking platforms like Bluevine highlight the benefits of online banking, providing flexibility and breaking down geographical barriers for customers, including small business owners. Read more

Revolut unveils Mobile Wallets for cross-border payments (FinExtra)

Revolut, a leading fintech company, has introduced a new service called Mobile Wallets, aimed at simplifying international money transfers. Users can send remittances quickly by using recipient IDs, such as names along with phone numbers or email addresses. This service allows Revolut customers in the UK and most European countries to send money to Bangladesh (via bKash) and Kenya (through M-Pesa), with additional wallet routes expected to be launched soon. The goal is to address the challenges expats face when sending money home, providing an affordable and convenient solution for international money transfers. Read more

Blackhawk Network to acquire Tango Card (The Paypers)

Branded payment technologies firm Blackhawk Network (BHN) has finalized an agreement to acquire Tango Card, a digital B2B gift card rewards company. The acquisition aims to enhance BHN’s global rewards platform by leveraging Tango’s capabilities, API, and global content. BHN, a long-term partner and early investor in Tango, plans to merge services to provide scalable solutions to the rewards and incentives industry, improving customer support and services. The transaction, subject to regulatory approvals, is expected to close by the end of 2024. This strategic move aligns with BHN’s goal of supporting global relationships between brands and customers, complementing its recent collaborations and diverse portfolio. Read more

Exterro unveils advanced AI assistant for cybersecurity professionals (Fintech Global)

Exterro, a leading provider of data risk management software, has launched Exterro Assist, an advanced AI assistant tailored for E-discovery, privacy and data governance, forensic investigations, and cybersecurity professionals. Integrated within Exterro’s suite of products, Exterro Assist allows users to search and retrieve information and automate workflows using natural language, aiming to boost productivity by up to 75%. Initially available as an add-on for Exterro Legal Hold customers, it is set to become an integral part of every module within the Exterro Data Risk Management Platform. The AI-powered assistant aims to enhance platform-wide productivity, accelerate and automate investigations, ensure defensibility, and maintain enterprise-grade security standards. Ajith Samuel, Cofounder and Chief Product Officer at Exterro, highlighted the tool’s ability to complete E-discovery tasks and workflows through simple conversational interactions. Read more

Deutsche Bank to slash 3500 jobs (FinExtra)

Deutsche Bank has announced plans to cut 3,500 jobs as part of an ongoing operational efficiency drive. The German bank, which reported a 14% drop in net profits to €4.9 billion, is currently engaged in a €2.5 billion operational efficiency program. Savings from completed efficiency measures reached €1.3 billion by year-end 2023, with approximately €900 million realized to date, including around €350 million in 2023. The remaining savings of €1.6 billion are expected to come from measures related to infrastructure and technology efficiencies, platform optimization in Germany, and front-to-back process redesign, leading to a reduction in non-client-facing back-office roles. Read more

Top wealth manager Julius Baer caught in property write-off storm as CEO steps down (CNBC)

Swiss bank Julius Baer reported a net credit loss of 606 million Swiss francs ($701 million) related to its exposure to troubled property group Signa Holdings. CEO Philipp Rickenbacher announced that he would step down in the “best interest of the company.” The bank also revealed plans to cut 250 jobs, impacting around 3% of its 7,425 employees. The losses are linked to Julius Baer’s exposure to Signa Holding, which has struggled amid a higher interest rate environment. The bank aims to exit its private debt businesses and will focus on mortgage lending and specialized personal lending loans. Shares rose around 10% on the news. Read more

FTC announce investigation into Big Tech AI funding (Payments Cards and Mobile)

The Federal Trade Commission (FTC) has initiated an inquiry into the AI investments and partnerships of major tech companies, including Microsoft, Amazon, Google, Alphabet, and OpenAI. The investigation is specifically focused on generative AI, and the FTC aims to determine whether these companies are potentially dominating the market, limiting competition. The regulatory body has ordered the companies to provide information on recent investments and partnerships related to generative AI within 45 days. The inquiry will assess the impact of these relationships on the competitive landscape and examine multibillion-dollar investments, including Microsoft’s involvement with OpenAI and Amazon and Google’s investments in Anthropic, an AI startup. Read more

Keystone Agency Partners expands reach with acquisition of LifeQuotes (Fintech Global)

The Reserve Bank of India (RBI) has imposed restrictions on Paytm, preventing the platform from onboarding new customers and limiting the ability of existing users to send or receive money. The action follows an audit report citing “persistent non-compliances and continued material supervisory concerns” and will be effective from February 29th. The restrictions affect Paytm wallets, Fastags, and Mobility Cards. Paytm will not be allowed to accept new deposits, and users will not be able to add money to their savings accounts. While users can withdraw their balances, no debit or credit transactions will be permitted. The RBI also requires termination of nodal accounts for Paytm’s parent companies. Read more

Another one bites the dust: Kikapay goes under (FinExtra)

Kikapay, a UK open banking startup, has ceased operations, becoming the latest casualty in the changing economic landscape. Founded in 2018, Kikapay used open banking to facilitate immediate single payments and fixed recurring payments for businesses. The largely bootstrapped startup had raised £580,000 since its inception, with its last funding round in February 2021. Kikapay’s co-founder, Philip Godden, shared a farewell message on LinkedIn, expressing belief in the future of open banking for payments but acknowledging the challenges ahead. This follows the recent closure of business app Paysme, citing a tough macro-economic climate. Read more

GFT Technologies acquires Sophos Solutions from Advent International (IBS Intelligence)

GFT Technologies has agreed to acquire Sophos Solutions, a core banking expert based in Colombia, from Advent International. The move is set to position GFT as one of the top IT services providers across Latin America. Sophos is known for its expertise in core banking, AI, and cloud modernisation, and the acquisition is expected to enhance GFT’s presence in the region. The transaction is scheduled to be completed in early February 2024. Sophos generated revenues of approximately 257 billion Colombian pesos (around €60 million) in 2022. GFT reported over €730 million in revenues worldwide during the same period. Read more

US proposal on non-bank payment providers slammed by industry, consumers and bipartisan politicians (The Banker)

The US Consumer Financial Protection Bureau (CFPB) is facing backlash over its proposal to extend regulatory supervision to non-bank providers of digital wallets and payment apps. The proposal, aimed at companies facilitating more than five million transactions per year, including big tech firms like Apple and Google, seeks to ensure they adhere to consumer protection laws. Critics argue the lack of clear definitions in the proposal and the potential stifling of innovation are major concerns. On the other hand, banking industry groups support the move, emphasizing the need for consistent consumer protection across banks and non-banks. Read more

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