Report: OakNorth and N26 Have Received the Most Funding Out of All US and European Digital Banks

Digital-only banks, or neo-banks, are not dependent on outdated, legacy financial infrastructure. These virtual banks are more efficient than traditional banking institutions because they operate without the costly networks of physical branches.

Neobanks have been working towards transforming the retail banking sector in major financial markets throughout the world.

According to Crunchbase data, OakNorth ($1 billion) and N26 ($670 million) have received the most funding out of all other major US and European neobanks.

Other top European and American digital banks include Atom bank, Revolut, Monzo, Chime, Starling Bank, Varo Money, and Aspiration. These digital-only financial services providers have benefited from an innovation-friendly regulatory environment and have picked up significant momentum in Europe during the past three years.

Several European digital banks are already entering the US market leveraging the experience generated by operating in continental Europe and the UK.

Although many of the relatively older digital banks are based in the US, which includes Simple (launched in 2009) and Moven (established in 2011), the American digital bank ecosystem has not made as many advancements as Europe’s digital-only banks. This is largely due to a convoluted regulatory regime.

In the UK, one of the most robust Fintech markets, regulations are relatively streamlined. Digital banks have been encouraged to compete with traditional brick and mortar banks.

The US, by comparison, possesses a stultifying regulatory approach that makes it exceptionally difficult to receive a federal bank charter. Few digital banks possess a federal banking charter. Lobbying by traditional financial services firms have also slowed the development of digital banks.

Agile Fintechs have learned to adapt and today most US-based digital banks partner with a chartered bank to provide bank-like services.

Consumers, particularly the younger generation, have become increasingly frustrated with traditional banking services providers. Millennials are also more eager, or inclined, to consider using digital solutions, which may lead to more people using digital banks in the future.

There are many reports that have been prepared (including Business Insider’s Evolution of the US Neobank market) to address questions related to how digital banks and other modern Fintech firms are planning to establish their operations in the world’s financial markets.

European Union Plans to Invest €100 Million in Blockchain & Artificial Intelligence Startups During 2020

The EU Artificial Intelligence and Blockchain Investment Fund is planning to invest €100 Million in European startups next year. This is according to note from the European Commission.

The new EU investment fund seeks to boost innovation in these two key technologies. The Fund was launched earlier this year and will finance the development of AI and blockchain companies as part of a wider move to create a dynamic EU-wide innovation ecosystem.

The Fund will be managed by the European Investment Fund. The first phase of the AI and blockchain fund will make available €100 million in 2020 to support companies working in this sector.

The European Commission notes that investment levels in Europe have traditionally lagged those in the US and Asia, however, and the aim of the fund is to narrow this investment gap and support the development of innovation in this field.

Additionally, an investment support program will also be set up to complement the fund, leveraging further financial support from EU Member States.

The European Union seeks to make Europe more attractive for start-ups to stay and grow in Europe.

Research indicates that the lack of access to finance causes nearly half of start-ups in the central, eastern and south-eastern Europe choose to leave.  The European Commission, along with the European Investment Fund, has launched a pilot investment program that leverages EU resources under the InnovFin Equity program.

The European Digital Innovation and Scale-Up Initiative (DISC) provides finance for highly innovative high-risk digital start-ups across this region of Europe and as well as carrying out market consultations with investors and tech companies.

The European Fifth Anti-Money Laundering Directive Kicks in On January 10th

In the European Union, the fifth Anti-Money Laundering Directive (5AMLD) entered into force on 9 July 2018 but impacted firms have until January 10, 2020, to become compliant.

Crypto companies, or virtual asset service providers (VASPs), will be expected to step things up and adhere to rules that set a high level of due diligence and the need to submit suspicious activity reports (SARs) while monitoring all transactions. Recent FATF guidance is part of this too.

This past October, the Financial Intelligence Analysis Unit published a consultation document on the Prevention of Money Laundering and Funding of Terrorism Regulations (or PMLFTR). Feedback regarding the consultation was due November 5, 2019 and thus the regulations should be hardening now.

If you are a VASP, there are some things you simply must due.

Elliptic, a crypto compliance and forensic firm, has put together a high-level overview of the compliance demands. You can read the whole thing here. If you are a crypto exchange most certainly you have already engaged with counsel to ensure you do not get tripped up.

Here is Elliptic’s summary of requirements:

  •  Secure all necessary registration and licensing: Europe is a single market but member states still have regional rules. You will need to be in compliance with every member state where you provide services
  • Conduct a risk assessment of your business: “If you are unable to demonstrate to your regulator that you have the systems and policies in place needed to ensure preparedness in mitigating risks you face, you could find yourself facing a visit from the regulator,” says Elliptic.
  • Implement a robust blockchain monitoring solution for AML: This is probably the best one of all. You have to know who is selling and know who is buying for most of your crypto transactions.

Of course, Elliptic would like to to have your business but there are multiple good options alongside Elliptic.

While some VASPs have complained about the stringent requirements being foisted upon them, if they ever want to establish the industry as a respected segment of the financial services industry – this is the designated path.

European Crowdfunding Association Publishes Report on Blockchain – DLT Use Cases

The European Crowdfunding Association (ECN), the leading advocacy group for online capital formation in Europe, has published a report on blockchain – distributed ledger technology (DLT) and use cases in alternative finance. The report adds a new acronym “BDLT” thus representing the combination of the two commonly used terms for the technology.

More specifically, ECN targets the following verticals:

  • BDLT for online payment and identity services
  • BDLT for peer-to-peer investing and investment services
  • BDLT for financial democratization

The examples in the report include security tokens, cryptocurrencies, platforms and more. The authors state that while it is too early to provide concrete recommendations to policymakers and crowdfunding industry stakeholders, they seek to raise awareness for further observation.

Overall, ECN believes that BDLT will have a positive impact on online capital formation:

“Blockchain and DLTs, in general, can drive change in the financial services by introducing transparency, simplification and efficiency. The key benefits of these new technologies are related to their ability to create trust in a distributed system, increase efficiency in real-time or near real-time reporting of transactions, and support high resilience.”

Regarding the rise, and subsequent fall, of the initial coin offering (ICO) sector, ECN says the results are sobering. This is due to the rate of fraud and the lack of success of many of the ICOs. The report also notes that listing a crypto on an exchange can cost from $1 million to $3 million – a significant disincentive.

But the initially robust nature of the ICO market displayed a technology that can “enhance workflow and management of financi[al] services.”

Regarding the emerging security token offering sector or STOs, the main advantages of BDLT are:

“… increased efficiency, by simplifying the process of issuing and reducing clearing and settlement time. This will lead to a reduction of costs for financial services, both for investors and issuers, and might not only influence clearing and settlement but also trading and exchanges themselves. Some banks and exchanges are already experimenting with blockchain technology and e.g. exploring how to “make digital central bank money available for the trading and settlement of tokenized assets between financial market participants. For now, the technology is not sufficiently stable and scalable to be broadly adopted. On top, regulatory challenges and compliance with securities law still need to evolve.”

The report then segments out various live and in the wild BDLT projects. These include:

  • BDLT for payments and identity: Dash, Fractal and Blinking
  • BDLT for peer to peer and investment services: Conda, Realmarket, Stokr and Finexity
  • BDLT for financial democratization: Goteo and Blockbonds

The blockchain and DLT industry remains in its infancy. “Pioneering the blockchain sector is challenging,” notes ECN.

Additionally, the regulatory environment in the EU is not clear. Regulated platforms must initially go to the member state regulator for approval. Hope remains for harmonized rules across the EU. Education and advocacy need to be pursued the knowledge of the opportunities and risks remains limited. Widespread adoption will take time.

This a great snapshot report and a must-read for industry insiders and policymakers.


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Hungary Is “Behind Everyone” When It Comes to Adopting Latest Digital Banking Technology, Says Senior Law Firm Executive

A senior executive at CMS, a law firm working with the National Bank of Hungary (MNB) on its Fintech strategy, says Hungary is “behind everyone” when it comes to adopting the latest digital banking technology.

The CMS executive stated:

“Hungarians do not use sophisticated Fintech apps.”

Formulated independently from Hungary’s national Fintech strategy, the MNB’s technology plan provides a clear roadmap of 24 different proposals and projects that aim “to speed things up.”

Hungary is notably among the first nations in the Central and Eastern European (CEE) area to draft such guidelines, however, it’s lagging behind nearby countries such as the Czech Republic, Poland, and Romania when it comes to adopting the latest digital technology.

Erika Papp, managing partner and banking and international finance head at CMS, told Fintech Futures:

“Hungarians do not use sophisticated Fintech apps. They are really behind where Europe is … Hungarians still love to walk into branches and do banking personally.”

CMS’s research study with Big Four auditing firm Deloitte (last year) revealed that there had been a “long break and then Hungary” was behind other European nations when it came down to reducing the overall cost of its banking operations.

Papp noted:

“Hungary is overbanked, and so it is heavy to move so many banks. In order to give an expedited licensing to Fintech companies across the country, the MNB has recognized the licensing process needs to be reviewed and sped up.”

Papp said that the country’s central bank plans to establish “a space for newly-established Fintech companies to have a temporary permission to operate in Hungary.”

Papp added that MNB’s strategy provides a more detailed and thorough roadmap than Hungary’s national version, as it outlines 24 “concrete” proposals and projects.

In addition to speeding up the licensing process for Fintech firms, Hungary’s central bank aims  to educate people on topics related to banking and financial management.

Papp remarked:

“The MNB would like to change the Hungarian mindset.”

The MNB will be working closely with local academic institutions, and it will release digital transformation guidelines which can be converted into personalized plans for Hungary’s financial institutions.

In response to a question about which Fintech scene is similar to Hungary’s markets, Papp said there are several relatively small banking industry firms, however, he thinks that overall, “there is not much going on.”

Papp also mentioned that at first, MNB aims to attract Fintechs working on instant payments solutions and digital ID verification, as these are “the two most required.”

Papp said “it’s very exciting to be in Hungary at this time with the national bank being so active.”

She added that it’s a tricky situation for Hungarian banks who’re at the digital transformation crossroad.

She remarked:

“It’s a Catch 22.” 

If the nation’s traditional banks lose the branch, then they will also lose many clients. However, if the branch remains open, then customers will increasingly move to digital platforms, so it comes down to “who’s going to make the first move?”

EU: “No global stablecoin arrangement should begin operation in the European Union until the legal, regulatory and oversight challenges and risks have been adequately identified and addressed”

The Council of the European Union has posted a memo, or “draft joint statement,” regarding stablecoins – a hot policy topic these days due to Facebook’s attempt to launch a global, non-sovereign, cryptocurrency.

When Facebook revealed the creation of Libra, and the executive body the Libra Association, it took global policymakers a bit of time to ingest exactly what Facebook was attempting to accomplish. While the giant social media platform packaged Libra in a glow of altruism the true economic impact obviously has the potential to be far different. Facebook claims over 2 billion global users which could, potentially, migrate into the non-sovereign currency thus undermining monetary policy around the world. Understandably, both elected and appointed officials have hit the pause button on Facebook’s move to undermine national governments.

The Draft Joint Statement, in its final form, by the Council and the European Commission, will be officially submitted on December 5, 2019 to the Permanent Representatives Committee with a view to the approval by the Council (ECOFIN).

In brief, the statement declares:

“… the Council and the Commission state that no global stablecoin arrangement should begin operation in the European Union until the legal, regulatory and oversight challenges and risks have been adequately identified and addressed.”

This should effectively halt Facebook’s goal of launching Libra in Europe.

The Council and Commission believe that global stablecoins demand a “coordinated global response.”

The authors recognize the intrinsic innovation affiliated with stablecoins but the many known, unknowns far outweigh any benefits.

Perhaps the best outcome of Facebook’s ham-fisted attempt to create their own cryptocurrency is this should incentivize public entities to speed up the digitization of currency and facilitate faster payments.


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What the European Crowdfunding Industry Recommends for Harmonized EU Rules

Last month, Crowdfund Insider reported on comments by EC Vice President Valdis Dombrovskis, a Commissioner whose portfolio includes Financial Stability, Financial Services, and the Capital Markets Union, indicating harmonized crowdfunding rules may be forthcoming before the end of the year. In a tweet, Dombrovskis stated there is a “willingness to move forward and find compromises, hopefully still this year” (on investment crowdfunding).

Harmonization across all EU member states could dramatically help European SMEs and entrepreneurs access much-needed growth capital.  Platforms could operate across national borders with the assurance of a single set of regulations.

Currently, investment crowdfunding platforms must adhere to national, member state rules which vary dramatically across Europe. This fragmented ecosystem stands in stark contrast to what the European Union ostensibly seeks to achieve. Capital Markets Union has been a longstanding and obvious policy goal of Europe, but while simple in concept, the reality has been far more difficult to accomplish.

The most robust market for investment crowdfunding remains the UK – a country that will sometime soon exit Europe. While the UK platforms will continue to provide online capital formation across the continent, a single set of rules will help all involved. It will also foster competition between crowdfunding providers.

The leading voice for the sector of Fintech has been the European Crowdfunding Network (ECN) an association that has long advocated on behalf of a common-sense approach to regulation. Last month, the ECN published a position paper on what they expect the Commission should produce.

Currently, there are three proposals for regulatory harmonization as the European Parliament, European Commission and the Council have each had their say.

While it appears something (at some point) will be agreed upon, the ECN has itemized its point of view that, hopefully, the Commission will abide by as the industry understands the sector of Fintech better than anyone else.

So what does the ECN seek in final rules?

The ECN has published a position paper that outlines what the industry needs to succeed. The guidance comes in a 12 point outline of key issues. Below is a summary some of the more important aspects of the ECN’s recommendations:

  • Investment crowdfunding should be capped at €8 million. “A limit below €8 million is likely to exclude many of the types of businesses that the Regulation is intended to cover, explains ECN. Currently, the €8 million amount aligns with the prospectus requirement and is the de-facto cap utilized in the UK.
  • Conflict of interest: ECN states that it is very important that CSPs [crowdfunding service providers] be able to align their interests with those of sheir investors by investing in projects and/or charging carry as part of their fee model.
  • Investor classification: ECN believes sophisticated investors must meet one of a set of criteria to be deemed sophisticated:
    • (a) EUR 100k own funds; (b) EUR 2m net turnover; (c) EUR 1m balance sheet; and (2) natural persons that meet two of the following: (a) income of EUR 60k or investment portfolio of EUR 100k; (b) has worked in financial sector, or as an executive in a sophisticated legal person, for at least a year; (c) has carried out 10 significant capital markets transactions per quarter over past four quarters
  • Bulletin Board: This references secondary transactions. The ECN agrees that a buyer and seller should be able to transact on crowdfunded securities while stating there should not be an internal matching system.
  • Customer due diligence KYC: CSPs must apply due diligence measures including identifying the residency of an investor
  • Due diligence on issuers: ECN believes that due diligence is very important but the Parliament’s version (the only one provided) is not practical.
  • Entry Knowledge Test – consequences of failure: This has to do with risk notifications and the reality that many early stage investments have a high risk of failure. The ECN believes CSPs must warn non-sophisticated investors who fail or refuse to complete test but may still allow them to invest
  • Investment limits – There should be none.

There are other recommendations included in the position paper.

The ECN welcomes forthcoming regulation and believes it will have a positive impact on European startups and SMEs – as well as investors:

“A harmonised regime will at last make it possible for CSPs to provide their services on a fully cross-border basis within Europe, and with this will come an increase the volumes, quality and professionalism of crowdfunding across the continent.”

Now it is up to the Commission to decide what to do. Hopefully, policymakers will take advantage of this opportunity to move forward with the future of online capital formation and foster a workable and robust crowdfunding ecosystem.

The ECN Position Paper is available here.

Five European Countries Uniting to Stall Libra, Facebook’s Proposed Global Cryptocurrency

Deputy finance ministers from France, Germany, Italy, Spain and the Netherlands have been meeting behind closed doors throughout October to devise a strategy to prevent Facebook from launching its proposed Libra cryptocurrency network among its 2.5 billion users next year.

According to four sources to Politico EU, the five ministers lobbied the rest of the EU assembly regarding Libra on Monday.

According to the outlet:

“Their opposition raises the barrier to introducing Libra in Europe and may add pressure on Facebook plus the 20 other companies and organizations behind the initiative to give it up. Mastercard and Visa have already left the group.”

When it announced Libra in May, Facebook seemed almost blindsided by the widespread condemnations and warnings that followed from regulators across the globe.

Many fear that a rapid rollout of Libra across Facebook’s global network could lead users to abandon local, government-controlled currencies in favour of a corporate one.

Such an event would likely make it difficult for governments to balance money supplies and implement fiscal policies.

Many other regulators worry that Facebook’s poor ethical track record implies its currency could become a popular means of transmitting illicit funds.

Politico EU says, “The Paris-led coalition is encouraging EU governments to consider banning Libra altogether, according to eurozone diplomats and European Commission officials…(but) an outright EU ban seems problematic in the eyes of the Commission…Brussels would need a legal reason to prohibit the payment service and still needs more information to know what rules would apply to Libra.”

For now, the diplomats are focussing on preparing a statement to be delivered by the ministers in December.

In it, the ministers will reportedly insist that the Libra Association shouldn’t be allowed to introduce the Libra currency unless the EU can properly regulate it.

A press person for France’s finance minister, Bruno Le Maire, told Politico to refer back to strong statements he made regarding Libra while attending the G7 in Washington October 18th.

There, finance ministers from Rome and Berlin also proposed that Libra be banned.

“Countries would lose their sovereignty to private interests and lose control over their monetary policies, which is something that would be totally unacceptable,” Le Maire said at the time.

In October, German Fi­nance Min­is­ter Olaf Scholz told WirtschaftsWoche magazine that he takes a “very, very critical” view of Libra and stands against private currencies that could disturb official money systems.

U.S. Treasury Secretary Steven Mnuchin was a sticking point at the G7, however, and reportedly wished to refrain from recommending policies for stablecoins in favour of simply emphasizing the risks.

Certain EU diplomats on Monday also reportedly warned against creating a law that would make the EU inhospitable for tech companies.

With regards to the ministers’ efforts at the EU, a spokesperson for the Libra association promised that its, “priority is to partner with regulators to ensure all their questions and concerns are rightfully addressed.”

Still Hope for Harmonized Crowdfunding Rules in Europe before End of the Year?

For some years now there has been a discussion at the European Commission regarding harmonization of online capital formation rules. Today, crowdfunding is regulated at the member state (national) level creating a mish-mash of European regulations that defy the entire concept of a single market – the entire reason the Europe Union was created.

To quote the EC:

“Investment is one of the 3 pillars of the EU’s economic policy priorities along with fiscal responsibility and structural reforms. The European Commission encourages the financing of investment in Europe through a wide range of financial programmes and instruments.”

Specifically on crowdfunding:

“The European Commission is working to help investors and businesses seize the potential of crowdfunding and make it easier for platforms to offer their services EU-wide.”

In a speech from February 2019, EC Vice President Valdis Dombrovskis, a Commissioner whose portfolio includes Financial Stability, Financial Services, and the Capital Markets Union, had this to say:

“In the crowdfunding market, for example, domestic regulations are hindering platforms from expanding across national borders. But as you know, you need a crowd to crowdfund. So this is one of the areas we have taken action. Last year, we proposed to allow EU crowdfunding platforms to operate across the EU based on a single license. This proposal is currently with the European Parliament and the Member States.”

Dombrovskis noted that EU rules already allow certain financial companies to operate in all member states with a single license. This has benefited some Fintechs like Transferwise, a payments and money transfer Fintech and emerging stealth bank. In fact, Dombrovskis highlighted the fact that Transferwise saw the ability to passport their services across the EU, unlike the United States where, obtusely, you need a license for Transferwise to operate in each of the 50 states.

But while you can leverage investment crowdfunding in all 50 states with one of three “federal” securities exemption, the same cannot be said of the Europe Union and its 28 member states which encompasses over 500 million individuals and tens of thousands of SMEs.

The Commission’s Fintech Action plan includes crowdfunding regulation (as well as blockchain, AI and more) as one of its goals.

But while there has been a fair amount of discussion regarding a regulatory update for crowdfunding that should be fairly simple to accomplish there has been a paucity of action.

Last week, Dombrovskis tweeted that there appears to be a “willingness to move forward and find compromises, hopefully still this year” on crowdfunding. Perhaps there is light at the end of the tunnel? 

Dombrovskis added in his speech from last winter:

“for European companies to freely access the Single Market we need one set of rules. So this is what we are working on, sector by sector …”

It is hard not to agree.

The EU already has a rule in place where securities issuers are not required to produce a prospectus until they top €8 million in funding but the specific decision is still left at the member state level. Effectively, the prospectus rule has set a base point for securities issuers that raise capital online. In the UK, the most robust crowdfunding market in Europe, crowdfunding issuers frequently near the €8 million amount. If the Commission can follow the UK’s lead for continental Europe and streamline the regulatory process – it will certainly be a positive accomplishment for Fintechs, online capital formation, and European companies in need of growth capital.

BNY Mellon Executive: There’s More Open Banking Activity in US B2B Payments Industry than in the Eurozone

Laura McGortey, director of strategic partnership solutions at New York-based BNY Mellon (NYSE: BK), a multinational banking and financial services holding company, says that there is more open banking activity in the US business-to-business (B2B) payments industry, when compared to the Eurozone (on the last day of AFP 2019 in Boston).

McGortey noted that several key bilateral and strategic partnerships in the corporate payments space have led to open banking being embraced in the US as a “market driven phenomenon,” which is quite different from the PSD2 implemented by European authorities.

McGortey stated that “we no longer have to live in a batch world” and there are three main differentiators between how open banking has penetrated two different financial markets.

McGortey explains that with PSD2 in Europe, open banking has outlined ecosystem governance, security parameters, and established roles. There’s also “a mandate for consumer banks which enables open access to bank accounts at the customer’s request.”

However, she mentions that there are no compliant API connectivity format standards, even though there are many industry participants that utilize them. These standards should have been established by the UK’s Competition and Markets Authority.

McGortey stated:

“While adoption for consumer accounts is enhanced through regulatory drivers, adoption for business accounts is based on market interest.”

Security parameters in the US are established by financial institutions and not the Fintech sector. There are no defined regulatory roles, regulatory ecosystem governance and there’s no mandate for banks to facilitate access to bank account holders.

However, adoption in the US is taking place across business and consumer accounts due to market interest. McGortey noted that European regulators have been giving Fintech firms an open playing field, which is slowing down the adoption of open banking in B2B payments platforms.

The digital economy requires treasury practitioners to identify new, emerging opportunities that have the potential to streamline their business.

During the session, McGortey noted the World Economic Forum’s stance on the Fourth Industrial Revolution and said that the financial services sector is on “the brink of a technological revolution and the transformation is unlike anything humans have ever experienced because of the unprecedented compute power and increase in mobile connectivity.”

She pointed out the change in industry leadership during the past 10 to 20 years, with giant tech firms like Apple, Google’s Alphabet Inc, and Amazon becoming the dominant players.

McGortey asked the audience about how many firms have responded to the Fourth Industrial Revolution. Approximately 30% said they had launched a digital department and appointed a chief digital officer.

Lisa Akahoshi, payments strategy lead at Verizon, Jeremy Ordone, director of banking and cash management at Marriott, and Wayne Bognar, treasury manager at Evoqua Water, noted that many companies are unsure of whether they’re an actual business in their respective industry, or a tech firm with products and services in a particular industry. Smartphones have made significant changes to how businesses are operated.

Standard Chartered Announces Domestic Cash Management Services in Europe

Standard Chartered announced on Thursday it is set to offer clients an extensive range of cash management services out of London and Frankfurt covering the UK and Eurozone countries, following investment in a new cash management infrastructure.

According Standard Chartered, the infrastructure is currently scheduled for completion in mid-2020, and in addition to existing high- value clearing, transactional FX and pooling services the bank currently offers, it is developing additional services, which includes virtual accounts, enhanced pooling and liquidity services, API capabilities, low-value clearing, and UK Faster Payments.

While discussing the cash management service plans, Victor Penna, Head of Cash Management, Europe and Americas and Global Head of Cash Structured Solutions Development, stated:

“These new products, on top of our existing services will together enable us to support the day to day cash management activities of our clients operating in Europe including collections, automated reconciliation, salary and vendor payments, pooling, reporting, and other services.”

Karin Flinspach, Regional Head, Transaction Banking, Europe and Global Head of Implementation and Client Services, added:

“Once live, Europe will become a global hub as well as a new ‘footprint’ region for cash management services complementing what we already do in Asia, Africa and the Middle East, particularly supporting our Asian and African customers whose businesses have started to look towards Europe. This exciting development emphasises the bank’s continued journey as a leading provider of cash management services and our dedication to support our clients globally.”

Plug and Play Amsterdam Announces New Programs Focused on Smart Cities & Financial Services

Plug and Play Amsterdam reportedly held a Soft Launch for its new Smart Cities and Financial Services programs last Wednesday at the Johan Cruijff ArenA. According to Plug and Play, the event brought in more than 80 attendees including six startups and over 30 corporate guests.

“The new Financial Services program will bring together aspects from their Fintech, Insurtech, and Digital Identity programs. Financial Services will accelerate innovation for providers by building an innovation platform for industry changemakers. Smart Cities brings together industries such as Real Estate, Sustainability, and Mobility to push innovation within cities across the world. Plug and Play Amsterdam hopes to bring on more partners in the new year and continue to grow their ecosystem here.”

While sharing more details about the program, Seena Amidi, Board Member at Plug and Play, stated:

“Corporations are experts in their field and Plug and Play has connections with the best startups in each industry. Partners in our ecosystem are able to easily find new solutions to their business challenges so that they can focus on what they know best.”

Magdalena Ramada, Innovation leader at Willis Tower Watson, then added:

“Bringing global startups to Europe fosters not only the global footprint of innovation from other places of the world but also generates important competition within the local ecosystems.”

PayRue Announces New Partnership With TokenMarket For European Expansion

PayRue, a European based wallet focusing on exchange, transfer, and storage of cryptocurrencies, announced on Friday it has teamed up with global investment platform TokenMarket to continue its European expansion. PayRue reported that as part of the partnership, it has acquired TokenMarket’s decentralized crypto exchange that will launch under PayRue’s Estonian license. It was also reported:

Parties have also agreed on long term, exclusive marketing and promotional activity, combined with the integration of services across their respective platforms that totals 200,000 users.”

Speaking about the partnership, Mikael Olofsson CEO of PayRue, stated:

“Working with TokenMarket on a cryptocurrency trading platform is an exciting development for PayRue. Some may see the exchange market as crowded, but our view is that regulated decentralized exchanges are the next evolution and very few companies are prepared for this. We believe that our users will benefit from the security and transparency that centralized exchanges are currently failing to deliver, as showcased with the continuous hacks and fake trading volume.”

Ransu Salovaara, CEO of TokenMarket, also shared:

“We are excited to work with PayRue as we believe there will be a monumental shift to regulated wallets and exchanges. This partnership allows us to put all our focus on token issuance and the tokenized securities market, which we expect will be a billion-dollar business in the coming years.”

As previously reported, PayRue was created to support the growth and mass adoption of cryptocurrency. To do this, the company offers an application that allows users to exchange, hold, and transfer cryptocurrency.

PayRue is offering services that will support the growth for cryptocurrency as a new emerging asset class. With already built and working technology and growing user base we feel we are well positioned to further expand our user base whilst adding on new services and cryptocurrencies.”

The partnership comes just a couple of weeks after PayRue closed its equity crowdfunding campaign on Seedrs. The platform secured a total of £118,098 in funding through the funding round. PayRue TokenMarket Exchange will launch its non-custodial exchange in October 2019 supporting cryptocurrencies, utility tokens, and stablecoins.

Plug and Play Insurtech Announces 14 Startups Selected for Batch Three of the Insurtech Europe Program

Insurtech Europe, Plug and Play’s Insurtech platform based in Germany, announced on Thursday the 14 startups that have been selected for its third batch. According to Plug and Play, the program aims to facilitate opportunities for pilots, POCs, and new relationships between the selected batch startups and Plug and Play’s global ecosystem with a special focus on the corporate partners Munich Re, Generali, Versicherungskammer Bayern, Talanx, Irish LifeWillis Towers Watson, Swiss Re, Covea and the most recently, Baloise.

While sharing more details about the program, Robert Pechholz, Munich Lead and Corporate Partnerships Manager for Insurtech Europe at Plug and Play, stated:

“We are truly honored to work with so many major European Insurance players, and believe we offer our batch startups an incredibly unique opportunity. We look forward to seeing what we can accomplish on this program with the energy levels so high.”

The 14 startups participating in the Insurtech Europe program are the following:

  1. Curiosity’s Mosaik software helps companies build AI-solutions for their unstructured text data. It offers easy customisation while performing at enterprise scale and security. Customers use Mosaik-based solutions for document similarity, classification, semantic search, and more. 
  2. DreamQuark: Financial Services can use, trust and control DreamQuark’s AI to solve their day-to-day business challenges. 
  3. EasySend: A no-code smart form builder that empowers enterprises to quickly convert paper forms into compliant digital processes with deep-analytics in less than two weeks. EasySend has been adopted by over 90% of the Israeli financial and insurance market and tier-1 US and German financial institutions. 
  4. Glassbox: Helps Insurers remain digitally compliant whilst keeping their customers happy and safe, with the most complete and secure digital experience orchestration solution on the market. 
  5. SlidePiper: Starts by building an enhanced customer experience then our technology automatically builds the onboarding management and compliance dashboard and tools to track, check and validate the whole process. SlidePiper does this faster, cheaper & more accurate by eliminating room for human error. 
  6. Vizru: delivers business AI process automation, data visualization and collaboration in real-time across your cloud and on-premise systems. 
  7. Voiceitt: The company’s automatic speech recognition (ASR) technology uses AI to help people with speech impairments communicate. 
  8. YUKKA Lab: A provider of Augmented Language Intelligence has developed a unique real-time currency for the sentiment of every company, topic & industry. 
  9. Aktivo: Captures real-time health and lifestyle data from a smartphone and generates a digital biomarker that predicts health and longevity. Insurers utilise Aktivo to acquire, engage and retain high-value customers, and to price and manage risk at scale. 
  10. Cobee: A one-stop SaaS solution for companies to manage all their employee benefits by providing them with a simple App and a VISA card to consume their products in a flexible manner. 
  11. Knexus AI: A platform enables brands to deliver best and latest content (social, marketing & product) in real time, making it hyper relevant to drive customer decisions across owned digital channels. Knexus substantially increases eCommerce sales whilst reducing marketing operation costs. 
  12. Cytegic: A cyber risk platform is the industry’s first, end-to-end solution automating cyber risk quantification and management across the entire insurance and risk value chain. Utilized globally by insurers, enterprises and global consulting partners Cytegic translates cyber risk into the language we all understand; dollars and ROI. 
  13. Fixico: An online platform that offers a new and fully digital way to handle car damage claims for insurance and fleet companies. The innovative platform offers a unique customer experience, an end-to-end repair management solution and leverages the largest body repair shop network in Europe
  14. Previsico: Enables real time actionable flood warnings using the latest weather predictions to make street-level flood nowcasts and forecasts. 

Crypto Exchange bitFlyer Announces Additional Altcoins For Buy/Sell Platform Across Europe & the U.S.

Japan-based cryptocurrency exchange bitFlyer announced on Tuesday it is adding new altcoins to its platform across Europe and the US. bitFlyer reported that its Buy/Sell users in Europe will now be able to buy and sell Bitcoin Cash (BCH), Ethereum Classic (ETC), Litecoin (LTC), Lisk (LSK) and Monacoin (MONA), securely and directly on the regulated platform, while bitFlyer U.S. customers will have access to Bitcoin Cash (BCH), Ethereum Classic (ETC), and Litecoin (LTC).

Founded in 2014, bitFlyer describes itself as a Bitcoin exchange and marketplace thetas dedicated to providing customers with convenient and exciting ways to buy, sell, and spend Bitcoin. The platform launched in the U.S. in 2017 and received its payment institution license to operate in Europe this past year.

Speaking about the additional altcoins, Andy Bryant, Co-head and COO, bitFlyer Europe, stated:

“By adding new altcoins, we are expanding bitFlyer’s Buy/Sell offer significantly, giving our customers instant access to some of the largest and most exciting altcoins in the world. Those currencies were previously only available to our Japanese customers, so we’re also consolidating our offer across regions, building a global platform for traders all over the world. By leveraging our experience in Japan, we can offer our European and US customers the same level of speed, simplicity and transparency as we already do for those trading Bitcoin and Ethereum.”

bitFlyer went on to add that the new altcoins offer bitFlyer customers an alternative to Bitcoin (BTC) and Ethereum (ETH), the existing options on the Buy/Sell platform.

Plug and Play’s Fintech Europe Announces Eight Startups For Fourth Batch

Global innovation platform Plug and Play announced on Thursday its Fintech Europe accelerator program has selected eight startups for its fourth batch. Plug and Play reported together with Deutsche Bank, TechQuartier, BNP Paribas, Nets Group, UniCredit, Aareal Bank, Abanca, Danske Bank, DZ Bank, Elo, and Finablr, the program runs two 12-week innovation programs a year.

“After screening applications from all over the world and intensive weeks of reviewing preselected startups with the partners, the final group of eight startups have been accepted into Fintech Europe. The program aims at facilitating pilots, POCs, and business development opportunities for the participating startups and financial institutions.”

Speaking about the latest batch, Fernando Zornig, Program Director of Plug and Play’s Fintech Europe program, stated:

“This new class of startups are changing the landscape of Financial Services from new ways to evaluate customers credit scores using artificial intelligence and Machine Learning to KYC/AML for business customers. As we’re seeing a lot of regulatory changes in Europe over the next few months, I am confident that these solutions will help our corporate partners adapt to these changes faster.”

The eight selected are the following:

  • Apiax: A company that transforms complex regulations into digital compliance rules, which are constantly up-to-date and verified, accessible via an API.
  • CashDirector: A technology company that provides SMEs and banks with a Digital CFO integrated with on-line banking, helping with SMEs manage cash flow and accessing financing.
  • Credit Kudos: A credit bureau that uses financial behavior to measure creditworthiness.
  • Elucidate: A data-driven financial crime risk ratings agency. The Elucidate FinCrime Index (“EFI”) utilises modeling and machine learning to digitize and quantify FinCrime risk, enabling proactive management of exposure levels and clear pricing of FinCrime risk.
  • kompany: A global RegTech platform for audit-proof Business KYC, AML and UBO verification.
  • Uhura Solutions: An AI platform that reads and understands contracts and agreements just as humans do.
  • Mostly AI: Offers a Synthetic Data Engine that can be used to unlock data assets that are otherwise locked away for privacy reasons.
  • Responsive: Hybrid wealth solution that increases advisor productivity with better, faster decisions.

Stripe Makes Debut in Eight More European Countries

Payments platform Stripe announced on Monday it has launched its services in eight additional European countries. The countries are Poland, Estonia, Latvia, Lithuania, Slovakia, Slovenia, Greece, and Portugal.

Stripe claimed since its launch in 2011 tens of thousands of businesses across Europe has asked the payments platform to expand to their countries.

With today’s launch, we want to help thousands more entrepreneurs and companies in Europe grow and scale their online businesses. As just a couple of examples of the breadth of businesses building on Stripe already: Andcards from Poland uses Stripe to automatically bill their customers across the world in local currencies; Click & Grow from Estonia uses Stripe to sell a smart indoor garden to a global customer base. Thanks to the hundreds of companies that helped us shape our product during our beta.”

The European expansion comes just days after Stripe announced the launch of its new service, Stripe Capital, which allows internet businesses running on Stripe to access funding. As previously reported, with Stripe Capital, businesses will have the following:

  • “Quick” Access: No lengthy applications or collateral obligations; approved funds typically hit a business’s Stripe account the next day.
  • Eligibility is data-driven: Eligibility is determined based on a company’s history on Stripe.
  • Repayments are automated and flexible: Businesses repay money as they make money and they repay the loan with a fixed percentage of daily sales; there are no recurring interest charges or late fees.
  • Platforms can offer access to capital to their business users: Stripe Capital is also available to platforms and marketplaces on Stripe Connect. These B2B platforms can now offer their customers smart financing, with access powered by Stripe.

Will Gaybrick, Stripe’s Chief Product Officer, stated at the time of the service’s launch:

“Stripe Capital makes it easy for internet businesses to get the funds they need, when they need them. It’s important to think about financial inclusion not just in terms of consumers, but also in terms of businesses. Businesses, especially small businesses and startups, are the engines for job creation in our economy. It should be trivially simple and lightning fast for them to access the capital they need to smooth their cash flow and invest in their own growth.”

Dash Teams Up With IQ CashNow to be Accepted to More than 1,000 New Merchants & Over 250 ATMs

Digital currency for payments and e-commerce platform Dash announced on Thursday it is now accepted at over 1,000 new merchants and more than 250 ATMs through its partnership with IQ CashNow, a full-service provider specializing in cryptocurrency ATMs, point-of-sale (POS) terminals and e-commerce websites. Dash reported that across Europe, the U.S., and Ecuador, businesses are now accepting its service through IQ CashNow.

“Credit card transaction fees typically run between 3.5% and 5%, while the IQ CashNow cryptocurrency payment processing fee is around 1%. The average Dash transaction size on IQ CashNow is 10-20 Euros, meaning the average fee is between 10-20 cents compared to the 35-50 cent cost of a traditional credit card transaction.

Speaking about the collaboration, Gerald Wirtl, CEO of IQ CashNow, stated:

“Dash was an attractive addition for IQ CashNow because it’s capable of settling transactions instantly. Low fees, transaction speed, and security are all core elements to our customers and towards driving broader adoption of cryptocurrency, and we feel Dash is a perfect fit.”

Jan Heinrich Meyer, CEO and Founder of Dash Embassy, went on to add:

“Dash is now available to more people than ever. This partnership not only puts Dash and IQ CashNow closer to their shared mission of driving global adoption of cryptocurrency, it also makes transactions faster and cheaper for merchants across key countries and regions already seeing tremendous crypto growth.”

Robo.cash Says Interest in P2P Lending Growing in Eastern Europe

Robo.cash, a consumer lender that operates in several European countries as well as Southeast Asia, reports that interest in peer to peer lending in Eastern Europe is increasing.

Company analysts claim that the search activity associated with P2P lending in Europe indicates a relative popularity that is nearly 5 times greater in Western than in Eastern Europe. Additionally, while the interest in this segment in the East has been increasing steadily, interest has remained static in the West. The online lender states that growing volumes of the East European market confirm the indicators as from 2015 to 2017 they increased by 153%.

Robo.cash posits that the main reason popularity is growing in Eastern Europe is that these economies are experiencing more rapid development.

By their count, the top 3 countries by the number of P2P platforms in Europe include the UK (77 platforms), France and Germany (46 platforms in each). The leader among East European countries, Poland, ranks 12th with 15 P2P lending platforms.

Despite the number of platforms in developed countries, the numbers show a positive trend in Eastern Europe over the last 4 years, whereas in the West the search requests remain at the same level, claims Robo.cash This is supported by the fact that the East European market (Poland, Czech Republic, Slovakia, Hungary) has increased considerably from 2015 to 2017 – by 153% from €71 to €179 million. In Southeastern Europe (Romania, Greece, Turkey, Slovenia, Greece, Serbia) it grew by 357.7% from €10 to €45 million during the same period.

Robo.cash adds that during the last six months, the number of Bulgarian investors on the platform has increased by 6.2 times, from 70 to 440. Recently, the country ranked third by this parameter following Germany and Spain.

Report Says STOs in Europe Have Experienced a 17% Success Rate, Led by Switzerland

According to a report by Fintelum, a tokenization platform for primary issuance and secondary trading, 17% of security token offerings have been successful in Europe (EU + Switzerland and the UK). Granted, it is still very early in the digital asset realm so while the numbers are interesting they are really not necessarily an indicator of what is to come.

The report indicates that while 17% of the STOs have been successful 34% are ongoing, 23% are upcoming with 17% canceled and 9% in the failed category.

This is out of 35 publicly announced security offerings and NOT utility tokens which are mostly regulated in a different manner.

In total, €25 million has been raised according to Fintelum.

Switzerland has captured 31% of the market followed by:

  • The United Kingdom – 23%
  • Germany – 19%
  • Lichtenstein – 15%
  • The Netherlands, Lithuania, and Finland each at 4%

The report points to the fact that in the EU issuers may raise an unlimited amount of money online from all investors. The caveat is the fact it is required to produce a prospectus once you top €8 million. Some European jurisdictions have different caps on online capital formation pre-prospectus but the EU is expected to attempt (once again) to harmonize crowdfunding rules as this impacts ICOs, STOs etc.

So while today the numbers are quite small we predict a larger number of STOs issued, and traded, during 2020 as platforms evolve, regulations harden, and the digitization of securities continue.