FinTech Futures: Top five stories of the week – 13 October 2023
Here’s our pick of five of the top news stories from the world of finance and tech this week.
Fintech unicorn Slice to merge with India’s North East Small Finance Bank
Slice to merge with North East Small Finance Bank
Indian credit card fintech Slice has been given the green light by the Reserve Bank of India (RBI) to merge with North East Small Finance Bank (NESFB) in an effort to serve the country’s most financially underserved.
Slice CEO Rajan Bajaj says the merger allows the fintech to “serve a wider audience” and “strengthen our risk underwriting through the use of technology and data”.
It comes after the RBI issued an order last year banning credit lines being loaded through prepaid payment instruments. While Slice initially reacted to this order by shifting its provision to term loans, its latest deal will now see it evolve once more into a small finance bank.
Kazakhstan fintech Freedom reportedly under investigation by SEC, DOJ
Kazakhstan-based fintech firm Freedom Holding is reportedly under investigation by the US Securities and Exchange Commission (SEC) and the US Department of Justice (DOJ).
According to a CNBC report, the Nasdaq-trading fintech firm is being investigated over compliance issues, insider stock moves, and an offshore affiliate concerning sanctioned individuals. As per documents seen by CNBC and sources, the Boston office of the SEC has been investigating Freedom for months.
Additionally, the documents reportedly reveal that the SEC and DOJ are also investigating Freedom’s majority stakeholder and CEO, 35-year-old billionaire and former Russian citizen Timur Turlov, amid claims he gave its Russian client base undue access to US initial public offerings (IPOs).
While Turlov declined to speak to CNBC, in an interview with a local Kazakh outlet, he “acknowledged” that “almost all global regulators came to us this summer”.
BaaS fintech Synapse lays off 40% of staff in fresh round of job cuts
US-based Banking-as-a-Service (BaaS) platform Synapse has laid off 86 of its employees, or about 40% of its workforce, in its second round of job cuts this year.
Synapse lays off 40% of staff
Speaking on the cuts, CEO Sankaet Pathak says: “We made the difficult decision to reduce and restructure our team in areas that were staffed for unrealised growth or redundancy.”
Synapse had previously announced a reduction and restructuring of its team back in June, which impacted 18% of its workforce at the time, citing macroeconomic conditions which had “begun to impact our clients and platforms, affecting our anticipated growth”.
The company adds in a statement that despite the layoffs, it has “a strong group in place” to manage its operations and customers.
HSBC acquires Citi’s $3.6bn consumer wealth portfolio in China
HSBC has agreed to purchase Citi’s retail wealth management portfolio in China, including deposits and investment assets under management (AUM) worth $3.6 billion.
Expected to close in the first half of next year, the deal marks the winding down of Citi’s consumer banking business in China, as part of a “strategic refresh” that will see it exit 14 markets across Asia, Europe, the Middle East and Mexico.
So far, it has closed sales in eight markets including Australia, Bahrain, India, Malaysia, the Philippines, Taiwan, Thailand and Vietnam, with plans to close the sale of its Indonesia consumer business later this year.
FCA’s new crypto marketing regime comes into force, regulator issues 146 alerts in first 24 hours
The UK’s Financial Conduct Authority (FCA) has issued a total of 146 alerts within the first 24 hours of its financial promotions regime for cryptoassets coming into force.
The FCA issues 146 alerts for cryptoasset promotions
The new regime requires firms to promote their products and services clearly and without misleading the consumer.
The regulator has put a ban on marketing any incentive to invest, and requires firms to clearly display risk warnings and conduct appropriateness assessments and positive frictions to allow consumers to fully understand the information being presented to them.
The FCA has previously expressed that it was “concerned by the poor engagement from many unregistered, overseas cryptoasset firms who have UK customers on this important change”, and that the lagging levels of engagement raised “serious concerns about unregistered firms’ readiness to comply with the new regime”.
These concerns appear to have been validated by the 146 alerts the regulator issued on the first day of the regime going live, all of which it has displayed publicly via a warning list.
