FinTech Futures: Top five news stories of the week – 16 August 2024
Here’s our pick of five of the top news stories from the world of fintech this week, featuring Scotiabank, Tally, Experian and more.
Scotiabank buys 14.9% stake in KeyCorp for $2.8bn
Scotiabank acquires 14.9% stake in KeyCorp
Canadian banking heavyweight Scotiabank has agreed to buy a 14.9% pro-forma ownership stake in KeyCorp, the parent of Ohio-based KeyBank, for a total cash consideration of $2.8 billion.
The investment, pending regulatory approval, will occur in two phases. Scotiabank will pick up an initial 4.9% stake anticipated to close in the fourth quarter of the fiscal year 2024, before acquiring the additional 10% in the fiscal year 2025.
Commenting on the deal, Scott Thomson, Scotiabank’s president and CEO, says the investment “significantly increases the capital deployed to our identified priority markets”.
“We believe that this transaction provides attractive near-term returns to our shareholders and creates future optionality for Scotiabank in the North American corridor, given our unique position as the only Canadian bank with a presence across Canada, the US, and Mexico,” Thomson adds.
US fintech Tally to shut down after failing to secure “necessary funding” to continue operations
US-based fintech start-up Tally is shutting down, with founder and CEO Jason Brown saying the company has been “unable to secure the necessary funding to continue our operations”.
Announced via a LinkedIn post, Brown explains that “after nearly nine years of helping people manage and pay off their credit card debt, we have made the difficult and sad decision to shut down Tally”.
The fintech had previously secured $80 million in a Series D funding round led by Sway Ventures in 2022.
“While this is the end for Tally, our expectation is that it is not the end of our mission. The need for financial tools that truly help people is as critical as ever. I hope that what we started with Tally will inspire others and influence new ideas and approaches to managing debt,” Brown adds.
Debt repayment platform Haboo Money prepares for 2025 launch
UK start-up Haboo Money prepares for launch
UK-based start-up Haboo Money is preparing to introduce a new service that will assist borrowers in making punctual debt and loan repayments, with a go-live scheduled for Q1 2025.
The proposition has been designed to integrate with lending platforms’ financial well-being and vulnerability offerings and enable their customers to “make repayments in a much more personalised and dynamic way”, co-founder Hannah Baynham tells FinTech Futures.
Baynham explains that the B2B2C service will leverage open banking to derive deeper insights into customers’ income patterns, before applying variable recurring payments (VRPs) to mimic those patterns within repayments.
“So if a customer gets paid a bonus or gets a pay rise, or for gig workers whose salary changes every week or every month, we can then reflect that in what they repay, ultimately helping them stay on top of their loan repayments,” Baynham says.
Experian snaps up behavioural analytics firm NeuroID
Global financial services firm Experian has acquired NeuroID, a US-based tech start-up specialising in behavioural analytics, for an undisclosed sum.
Founded in 2014 and based in Montana, NeuroID says it provides digital businesses with a “privacy-centred first line of fraud defence”. The company claims its behavioural analytics software can distinguish between humans and bots and assess the risk level of human users by analysing “how familiar they are with the data they enter and interact with”, enabling firms to proactively monitor, alert, and act against potential fraud.
Experian expects the acquisition to enhance its fraud risk suite by providing clients with a “new layer of insight” into digital behavioural signals and analytics, helping them to combat AI-enabled fraud.
Ohio’s first female-led bank Fortuna nears launch after raising $20.7m
Fortuna gears up for launch with $20.7 million round
Fortuna Bank, an Ohio-based start-up, is preparing to open its doors after securing $20.7 million in funding and receiving conditional approval from the FDIC.
The new financial institution, founded by board chair Lisa Berger and CEO Ilaria Rawlins, a former First Financial Bank executive, will be majority female-owned and says on its website it will offer “boutique banking for small businesses”.
While the official launch date is not yet determined, the firm states on LinkedIn that its “facilities are rapidly taking shape and we’re on track to meet our September occupancy date, perfectly aligned with a fall 2024 opening”.
In addition, the bank says its core processing system is “under construction”, and that it plans to “introduce key individuals” in the coming month.
