One of the UK’s biggest banks, Lloyd’s Banking Group, is planning to spend $4.2bn on digital transformation over the next 3 years; the bank is looking to go beyond just becoming more efficient as they said they are looking to also make the biggest ever investment in people; the move by Lloyd’s is part of a wider trend in banking where incumbents are investing heavily into digital. Source.
SunTrust Bank, Ally Ventures and Amazon Alexa Fund teamed up with others to raise $16mn for Greenlight Financial Technology; Greenlight makes smart debit cards for kids and college students to spend more wisely; The company also offers a mobile app complete with parental controls so parents can teach their kids how to spend; this is a further jump into financial services for Amazon as it looks to enter the space through the partnership model. Source
Digital banks have been presenting themselves as a more transparent fairer option than the traditional players; what these newcomers are finding is to scale and reach profitability they will need to figure out a way to lend that doesn’t strike the same tone as customers get from their typical bank; Tandem, Monzo, Starling Bank, Revolut and N26 have all started to roll out lending options in a variety of ways by using a tailored data driven approach; figuring out where the balance lies is the key piece if these banks are truly going to disrupt the banking system. Source.
In an interview with the Financial Times Revolut’s CEO Nikolay Storonsky talks about the firm’s successes and how he has built the company; they have raised more than $80mn in capital and are currently valued at more than $415mn; the company has gained a reputation for working long hours and having high demands from Mr. Storonsky; the hard charging CEO believes his style has helped the company grow to where it is today, more than 600,000 users and considered one of the hottest fintech companies sin market today; they interview also covers his time as a trader, his upbringing and who he learns from in business today. Source.
BBVA and digital business account provider Azlo struck a partnership that focuses on freelancers; with the freelance worker trend increasing the bank is looking to position themselves to better serve the market; BBVA invested in and helped incubate the company through their New Digital Businesses unit; this is part of a wider trend at the bank to help innovation, both inside and outside the bank itself. Source.
Customers using Zelle within their banking app have fallen prey to a scam where they send money for tickets but never receive the ticket; since the transaction is instantly done the scammer then closes their account and by the time the bank fully settles the payment the money is gone; banks in the Zelle network, and Zelle itself, have said do not send money to anyone unless you know and trust them; when money is lost customers are asking who should be responsible for replace the funds, should the bank refund them or Zelle; the relationship between the banks and Zelle is not entirely clear from the user perspective, with more frauds occurring customers are starting to ask more questions. Source.
TD Bank has run into a number of issues since updating their online banking and mobile app experiences; customers have had issues accessing their accounts, transferring funds and paying bills; the issues point to a problem among banks as they try to figure out how long new product releases should be tested before releasing to market; the bank has tried to ease customer complaints by responding on social media but that has only made problems worse; with the amount of competition for customers increasing in banking the traditional players will need to better prepare the beta testing phase. Source.
The investment will be deployed over three years and allow the bank to compete with other digital banks and fintechs; it marks an increase of 40% from Lloyd’s previous three-year expansion plan; Lloyds also hopes the investment will help cut costs. Source
The student focused digital bank, BankMobile, has created an online magazine entitled Paradigm Money; the effort is an attempt by the bank to build brand awareness and help current customers manage their money; the site has news, opinion, interviews and advice for customers; Ash Exantus, BankMobile’s director of financial education, tells TearSheet “We wanted to create a site that was independent from the bank that’s not promoting our products or services, but as a place other people can go for financial news and financial literacy.” Source.
Stash is fresh off a $37mn series D that will see the company double in size and expand into other banking products; the company helps customers invest on behalf of their kids; the typical Stash customer is 29 and makes $50k a year, they help them get more control of their financial lives and invest; “We offer education for these users to help them build the right financial habits from day one, and that doesn’t just stop at investing,” said founder and president Ed Robinson to TearSheet. “Our mission is to help our users throughout their whole financial lives.” Source.