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Fasanara Bi-Weekly Digest



Lenders in Troubles, Fintech Unicorns, Wirecard Billions, Bigger During COVID-19 & Other Highlights

Happy Monday!

In this post:

  • Why This Group Of Fintechs Could Be Europe’s Next Unicorns

  • Are Neobanks Really Challenging?

  • AI Only Scratching The Surface Of Potential In Financial Services

  • Big Tech Gets Bigger During Covid-19

  • A Stocktake On UK Government’s COVID-19 Business Support Schemes 

  • Why Asia's Online Lenders Are In Trouble

  • Wirecard And The Missing €1.9bn.


Why This Group Of Fintechs Could Be Europe’s Next Unicorns.

It’s difficult to get excited about startups you can’t see. Yet major investors are betting that it’s precisely the fintechs you don’t know – the backend operators, that sit behind your pre-paid cards and lending apps – that will become profitable, billion-dollar companies in the next five years, according to a new report by Sifted.

So-called ‘fintech enablers’ (or ‘banking as a service’ players) are the technology platforms that quietly rent out their core banking infrastructure to power countless financial apps and services. To date, enablers have helped countless fintechs come to market faster by providing them with core chunks of the banking technology ‘stack’, such as compliance, authentication and payment processing. Yet the real value VCs see in them is that by modularising banking, fintech enablers can help companies of any genre to offer financial services; a hugely lucrative and vast field.

Are Neobanks Really Challenging?

Neobanks are viewed as a direct challenge to the status quo of the established traditional banks, with their lower cost structure and hyper-personal customer experience. With all the advantages and features compared to traditional banking, neobanks face a fair share of difficulties. With a huge consumer base, these banks are still facing a challenge in terms of long-term profitability. The Neobanking 2.0 Report by MEDICI looks at the growth of Neobanking and explores how agility provides them with an advantage over incumbents. Find out about how neobanks are losing customers despite the edge, and whether it is an opportunity for incumbents to bridge the gap in the digital banking space.

AI Only Scratching The Surface Of Potential In Financial Services.

Financial services companies are becoming hooked on artificial intelligence (AI), using it to automate menial tasks, analyse data, improve customer service and comply with regulations. About half of financial services and insurance firms globally already use AI and that number is expected to grow as new uses are found for the technology.

“We are not at the level yet where machines [have] the equivalent [intelligence] of humans,” says Chris Skinner, a financial services consultant and author. “But [AI] is getting more and more advanced every day.” However, when AI can handle complex tasks previously performed by humans, job losses are inevitable, experts say. “Most trading and investment roles will disappear and over time, probably most roles that require human services will be automated,” says Mr Skinner. “What you will end up with is banks that are run primarily by managers and machines. The managers decide what the machines need to do, and the machines do the job.”

Big Tech Gets Bigger During Covid-19.

Tech giants have emerged as the clear winners of the Covid-19 crisis. The pandemic has demonstrated the potential power of tech companies as a force for good and they are as profitable as ever. It could result in the public and government alike looking at them in a new light, as technocrats and lobbyists have long wished.. Breaking up Big Tech may never happen but that does not mean we should not insist on an even higher standard in which these companies can be a force for good without exploiting monopolistic practices.

A Stocktake On UK Government’s COVID-19 Business Support Schemes.

Since March, the UK government has implemented unprecedented measures to avoid a severe economic downturn due to the COVID-19 pandemic including the Coronavirus Business Interruption Loan Scheme, the Coronavirus Large Business Interruption Loan Scheme, the Bounce Back Loan Scheme and the Future Fund Scheme. To date, these schemes have provided £38.36bn worth of support (directly or via guarantees) providing finance to more than 900,000 companies. The UK government has published data and statistics on the implementation of these schemes enabling a first stocktake three months since their inception. However, the ultimate stocktake is likely still some time away, once the medium-to long-term economic effects of the pandemic crystallize.

Why Asia's Online Lenders Are In Trouble.

Financial Times Asian technology correspondent explains why the boom in Asian financial technology is facing its first serious setback as businesses focused on providing services to the vast number of people in the region without bank accounts struggle to cope with the fallout from Coronavirus.

Wirecard And The Missing €1.9bn.

Surveillance, spear phishing and missing billions. 'At times I thought I was going crazy.' Dan McCrum of the Financial Times explains the twists and turns behind the massive fraud.


Thank you for the time!


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