Fintech Nexus Newsletter

We learned yesterday that federal prosecutors are investigating Block for widespread compliance lapses. NBC News broke this story after interviewing a former Block employee. This person provided roughly 100 pages of documents that showed transactions involving entities in countries subject to U.S. sanctions.

UK digital banking pioneer Monzo reported its financial results for the 2023-24 fiscal year today. The numbers are impressive. Total revenue was £880 million for the year, more than 2x the £356 million from the previous year.

House Financial Services Committee Chairman Patrick McHenry (R-NC) announced yesterday that he will not be seeking reelection to the North Carolina seat he has held for almost 20 years. Over the years whether serving as the Committee Chairman or as the Ranking Member, he has been a tireless champion for financial innovation on the House Financial Services Committee.

We have been following the recent developments in real-time payments with some interest. While adoption is increasing it is not going as fast as many industry observers had hoped.

Caitlin Long, the CEO and founder of Custodia Bank, has been fighting for access to the Fed payments system for many years. Custodia first applied for a Fed master account in October 2020. After her application was endlessly delayed, she sued the Fed to review her application. They eventually did and ruled against her. So, she sued the Federal Reserve again.

For the past two decades, the investment banking ecosystem in fintech has been dominated by one player: Steve McLaughlin's FT Partners. Now, that is not to say that other investments have not done deals. The really big deals are often done by the likes of Goldman Sachs, Morgan Stanley, or JPMorgan Chase.

We are moving to a world of instant payments but how we get there is still uncertain. A blockchain-based payments system designed for central banks has just completed its first live transactions with the Bank of England. Created by Fnality, the system processed live payments from member banks, Lloyds, Santander and UBS.

We learned back in February that Klarna's AI chatbot was doing the work of 700 people. Today, Klarna is reporting about its employee's internal use of AI. It's internal AI assistant, named Kiki, is answering 2,000 employee questions a day and over 87% of its employees are now using it.

Swift announced today that the European Payment Council's awkwardly named One-Leg-Out Instant Credit Transfer scheme (OCT Inst) went live this week and it enables payments to and from Europe to be processed 24 hours a day, seven days a week.

Zelle has started refunding imposter scam victims, after years of banks questioning their responsibility to do so.