FinTech Futures: Top five news stories of the week – 4 October 2024
Here’s our pick of five of the top news stories from the world of fintech this week, featuring Monese, Starling Bank, Fiserv, Wells Fargo and more.
Digital Federal Credit Union and First Tech Federal Credit Union to merge
DCU plots 2025 merger with First Tech
Two US-based credit unions, Digital Federal Credit Union (DCU) and First Tech Federal Credit Union, have announced plans to combine through a merger of equals.
Once the planned merger is finalised in 2025, the combined entity will become a $28.7 billion credit union serving nearly two million members across more than 50 branches in eight states, operating under the First Tech Federal Credit Union name and DCU’s charter.
Current members of both sides will experience “no immediate changes” as the two firms “will operate independently…until systems and processes are integrated and operational”, according to DCU.
Mastercard acquires Minna Technologies to upgrade subscription experience
Paytech giant Mastercard has agreed to acquire Swedish subscription management fintech Minna Technologies for an undisclosed sum.
The purchase is expected to enhance the subscription experience Mastercard offers to its customers, with Minna’s payment-scheme agnostic services to complement the paytech’s “broader set of tools that help manage the merchant-consumer relationship and minimise any disruption in their experience”.
This move, which is still pending regulatory review, comes hot on the heels of Mastercard’s $2.65 billion September deal for US-based AI-powered threat intelligence platform Recorded Future.
Fiserv ends joint venture in Wells Fargo Merchant Services
Fiserv’s joint venture with Wells Fargo to expire
Fiserv is preparing to terminate its joint venture in Wells Fargo Merchant Services (WFMS), which will expire on 1 April next year, according to an 8-K filing Fiserv made with the US Securities and Exchange Commission (SEC) on 20 September.
The filing states that Fiserv expects to receive “a cash payment or assets equal to the value of its share of the joint venture” upon expiration.
Despite the expiration of the joint venture, the filing indicates that Fiserv has committed to continue processing payments for all “current and future merchant clients” of Wells Fargo’s merchant business, along with providing “other services”.
FCA fines Starling Bank £29m for sanctions screening failures
The Financial Conduct Authority (FCA) has fined UK challenger Starling Bank £28,959,426 for financial crime failings related to its financial sanctions screening, including breaching rules on high-risk customer accounts.
The final notice posted by the FCA notes that the challenger’s “measures to tackle financial crime did not keep pace with its growth”.
Starling previously agreed to halt opening new accounts for high-risk customers following concerns raised by the regulator in 2021.
However, the FCA reports that Starling failed to implement corrective measures properly and did not adequately monitor compliance, having opened over 54,359 accounts for 49,183 high-risk customers between September 2021 and November 2023.
HSBC reportedly writes off remaining $5.8m stake in UK fintech Monese
HSBC reportedly writes off Monese stake
HSBC Holdings, the banking group’s investment arm, is reportedly writing off its stake in banking services provider Monese, as pressure intensifies on the UK-based fintech.
The bank acquired a minority interest in Monese for £35 million in 2022, as part of a strategic partnership to enhance its banking-as-a-service (BaaS) platform.
However, a report by City AM indicates that HSBC has now “completely impaired” its remaining $5.86 million stake in Monese, citing recent filings.
This decision, which a spokesperson for HSBC declined to comment on, comes as Monese seeks fresh funding for 2024 after reporting a £30.5 million loss in 2022.
