FinTech Futures: Top five stories of the week – 4 August 2023
Here’s our pick of five of the top news stories from the world of finance and tech this week.
The FCA’s Consumer Duty clamps down on unfair savings rates
The Financial Conduct Authority (FCA) is applying the principle of its recently introduced Consumer Duty to ensure banks and building societies pass on interest rate rises to savers with a new 14-point plan.
The FCA’s Consumer Duty came into effect this week
The watchdog’s latest announcement ascertained that while interest rates have been rising, a select number of UK banks and building societies have not passed on the increase to certain savings account holders.
For example, between January 2022 to May 2023, nine of the UK’s biggest savings providers only passed through 28% of the base rate rise to their easy access deposits. However, this was not the same for notice and fixed term deposits, with the same nine providers passing through 51% of the base rate during the same period.
With the FCA on the warpath against unfair deals and firms failing to act appropriately, its latest plan cements that it’s more than ready to take action.
Global fintech funding drops 17% to $52.4bn in first half of 2023
KPMG’s latest report confirms that the first six months of 2023 have been difficult for the global fintech market, with a “cloud of uncertainty” looming over investors.
It cites factors including high inflation, rising interest rates, geopolitical tensions and tech sector challenges including depressed valuations and lack of exits as reasons for the decline in investment activity, along with the collapse of several US banks.
Offering a regional focus, the report uncovered how fintech funding in Europe, the Middle East and Africa (EMEA) totalled $11 billion during H1 2023, a 59% tumble from the $27 billion generated during H2 2022.
While investment in the UK fintech scene led the way for EMEA, the US market succeeded in taking the lion’s share of funding, with its $34.9 billion accounting for more than two-thirds of the $52.4 billion seen globally.
For the rest of 2023, KPMG anticipates fintech funding to “remain relatively soft”, with no end in sight to the current macroeconomic and geopolitical uncertainties.
HSBC joins forces with Tradeshift to launch embedded finance business
Expected to launch in “early 2024” and backed by a two-stage $35 million investment from HSBC, the joint business venture is poised to embed a variety of digital solutions, including payment and fintech services, into the trade, e-commerce and marketplace experiences provided by Tradeshift and other platforms.
HSBC partners with Tradeshift
The investment from HSBC also forms part of a wider funding round for Tradeshift, with the fintech expected to raise a minimum of $70 million from the bank and other investors.
The venture is poised to scale Tradeshift’s business commerce proposition and power its global expansion. This ambition is to be further supported by the addition of HSBC to its board.
HSBC’s CEO of global commercial banking, Barry O’Byrne, explained that the agreement “supports our strategy of being a digital-first bank, which includes our commitment to partnering with fintechs and embedding our solutions into the platforms of others”.
Nexi buys 30% stake in German PSP Computop
Computop’s founders Frank Arnoldt and Ralf Gladis, who launched the PSP in 1997 and previously held 50% of the company’s shares each, are selling a 30% stake in the company to the Italian paytech firm.
With retroactive effect from 1 January 2023, this decision is thought to stem from their desire to increase capital and expand Computop’s global reach.
The additional funds generated by the sale will “expand its range of services in the areas of point-of-sale and e-commerce”, its official announcement said, with a specific focus on tapping the areas currently served by Nexi.
The announcement also confirmed that Computop will lead future projects for retailers and industrial companies that require individual solutions for Nexi customers.
For Nexi, the deal is set to extend its European processing abilities, while its international customers in the USA, Canada and Australia will also be able to access Paygate, Computop’s payment solution, and its other omnichannel solutions.
Over $10bn deposited into Apple Card’s savings account in first four months of going live
Savings, a high-yield account service offered through the tech giant’s partnership with US bank Goldman Sachs, has celebrated a new milestone with $10 billion being deposited within the first four months of operation.
Apple’s savings account offering secures $10bn in deposits
Integrated into the Apple digital wallet and available to Apple Card users, the account enables users to automatically deposit rewards from Apple’s Daily Cash scheme.
Within the first week of going live in April, the offering had already accumulated $1 billion in deposits.
This latest announcement confirms the rising popularity of Apple’s financial services, which most recently extended to credit cards and the launch of Tap to Pay in the UK.
“With each of the financial products we’ve introduced, we’ve sought to reinvent the category with our users’ financial health in mind,” said Jennifer Bailey, Apple’s vice president of Apple Pay and Apple Wallet.
