Rishi Khosla, chief executive and co-founder of OakNorth, told CNBC that eventually the company plans to make the move into China; "It is going to be a market that we will go into. It's just a question of when and how rather than if," Khosla explained at a fintech event last week.; talk of a move comes after China’s new central bank head said he is willing to open the market to foreign companies; OakNorth has said they are in discussions with a variety of countries across the globe about expansion plan. Source.
Citigroup has shrunk its retail banking business over the years, but is now looking to become a national player; they plan to do this by expanding mobile app features to serve new customers wherever they live; the app will include banking, credit card, lending, investment tools and account aggregation; Citigroup has invested three years into their digital plans and also has plans for a roboadvisor within the app Source
Florida based Axiom Bank launched a new all digital account targeted at the unbanked; Axiom partnered with fintech company Malauzai to help design and launch their mobile app; "For many in our community, AxiomGo provides the first tangible banking experience that not only eliminates expensive fees, but also enables them to perform any banking transaction needed at any time of day,” says Ron Strand-Sorrell, the bank's chief operating officer, in a release reported by American Banker. Source.
UK based digital bank OakNorth reported an annual profit of $149mn, becoming the first digital bank to do so; in their second year of full operations the bank has seen their loan book triple in size and deposits double in size; Rishi Khosla, OakNorth chief executive, told the Financial Times, “we build them for profit and on strong foundations so as you grow you’re scaling a real business rather than what happens to a lot of fintech where you just keep building for top-line or number of customers, but don’t necessarily have the strongest business model.” Source.
German Digital bank N26 has raised $160mn to fund their U.S expansion plans; Tencent and Allianz were lead investors in the round and it could set the stage for a future IPO according to N26 co-founder and CEO Valentin Stalf; “It's a good round to be as independent as possible,” Stalf said to TechCrunch. “This funding round really brings N26 to a pre-IPO stage. I think we see a clear path to a very sustainable company with this funding round. Maybe in the next five years there will be an IPO.”; the bank currently has eight staff members in NY and customers have been signing up on the waiting list since October 2017. Source.
TD Bank has signed a partnership agreement with nCino to digitize the bank’s corporate and commercial lending; the nCIno technology will allow for quicker lending decisions and more transparency; nCino’s Bank Operating system features CRM, loan origination, account opening, workflow, content management, business process management, customer engagement, and instant reporting all on a single platform according to Banking Technology. Source.
Lloyds CEO António Horta Osório told a conference that his bank is the largest digital bank in the UK with more than 30 million digital customers; the bank plans to spend about $1.5bn annually on their digital strategy for the next three years; he also stated he thought partnerships between banks and fintech companies will become even more important and wants to work with them in a symbiotic relationship. Source.
UK based digital bank Revolut launched disposable card numbers form within the app; the disposable nature of the number can help to reduce card fraud, one of the main areas of financial fraud; the move is part of a wider trend in banking to make the online shopping experience more secure and tailored to millennial customers; Revolut also allows users to freeze/unfreeze cards and disable functions like contactless and swipe payments. Source.
Digital only banks have certainly attracted the attention of incumbents as they look to keep up with customer experience innovation; in the past year banks like Chase, RBS and others have started creating their own digital only brands; the digital only banks have been able to more easily create online marketplaces for products, better options for traveling and mobile workers and they have made the customers a part building the experience; this more nimble, quicker way of building has put pressure on big banks to keep up as many sizable banks have many layers of compliance and process to build. Source.
While the focus of the new bill that recently passed the Senate has been on banks, it could effect fintech is a big way; the bill releases restrictions on banks, especially smaller one’s, where they can better leverage technology and potentially hurt the market share of fintechs; banks were heavily restricted after the financial crisis when many of these regulations went into effect; if the bill were to be signed then fintechs would have to start ensuring they can be long term sustainable businesses. Source.