Author: Julie Muhn (@julieschicktanz)

Monzo Officially Launches in the U.S.

Monzo Officially Launches in the U.S.
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news

U.K. digital bank Monzo is officially entering the U.S. market this week. The startup announced it’s now allowing U.S. clients to apply for a Monzo account.

Monzo has been in closed beta for the past 18 months, during which time it has onboarded thousands of new U.S. customers, processed millions of dollars of transactions, and gathered user feedback.

The company has launched new features inspired by this feedback, one of which is a salary sorter. This tool that helps users divide their paycheck, separating their spending, savings, and bills once their paycheck is received.

This week’s news comes after Monzo withdrew its U.S. banking license application last October. “While this isn’t the outcome we initially set out to achieve, this allows us to build and scale our early-stage product offer in the U.S. through existing partners and invest further in the U.K.,” a Monzo spokesperson told CNBC last year. “We have big ambitions for Monzo U.S. There are many routes to market we’re exploring that have been successful for other market entrants who are now major players.”

One of those “routes” is a partnership with a traditional bank based in the U.S. While Monzo is a fully licensed bank in the U.K., the startup is partnering with Ohio-based Sutton Bank to provide its U.S. accounts. Sutton will hold user deposits and provide protection with FDIC insurance.

Monzo was founded in 2015 and seeks to be a hub for users to manage their entire financial lives via its mobile app. In addition to financial management and budgeting, Monzo also offers a Mastercard debit card with no overdraft fees, no minimum balance, and no foreign exchange fees.

The digital bank has five million U.K. customers. This number is small when compared to competitor Revolut, which counts more than 14.5 million users. However, Monzo U.S. Product Manager Thomas George noted that it’s not just about the number. “We don’t believe it’s possible to build a globally impactful company without considering the impact we have on the communities we serve,” George said. “Too many people around the world lack access to vital banking services. So we’re also working to improve financial inclusion, support customers in vulnerable circumstances, and play our part in creating a more just society.”

Photo by frank mckenna on Unsplash

Share this:

Send Post Twitter LinkedIn Facebook

BNPL Player Amount Acquires Linear Financial Technologies

BNPL Player Amount Acquires Linear Financial Technologies
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Mergers & Acquisitions

Modern banking experiences provider Amount has acquired SMB loan and account origination platform Linear Financial Technologies for $175 million.

Founded last February, Linear offers financial services organizations a set of tools to help create a smooth customer experience. The Virginia-based startup provides a digital originations and servicing platform for credit cards, loans, and deposit accounts to help companies optimize the experience for their customers. Linear’s clients include Citizens Bank, PNC Bank, Fifth Third Bank, Bank of the West, and American Express.

Amount, a three-year-old company based in Illinois, helps financial services companies digitize their infrastructure to keep up with the rapid pace of technological change. The company’s modular approach offers firms their choice of embedded finance tools, including omni-channel account opening, credit cards, loans deposits, buy now pay later (BNPL), and more.

“In Linear, we saw an opportunity to pair Amount’s consumer banking solution and buy now, pay later technology with Linear’s small business banking solutions to help financial institutions simplify and streamline business processes to create new business opportunities and increase value for our clients,” said Amount CEO Adam Hughes. “We admire what Sam and his team have built at Linear, especially as we share many of the same values when it comes to developing technology, with a heavy focus on bringing data and insights to the forefront, to improve customer experiences, business processes, and risk management. I’m excited to welcome the Linear team to Amount and look forward to working beside them to expand Amount’s product set.”

After the deal is finalized, Linear will rebrand and operate as Amount Small Business. Linear CEO Sam Graziano will join Amount’s executive team and become Head of Amount Small Business. Combining the two companies will boost Amount’s employees to almost 600. The firm will maintain offices in New York City, New York; Reston, Virginia; Chicago, Illinois; and Los Angeles, California. 

Today’s announcement comes four months after Amount partnered with Marqeta to help banks enter the BNPL space. The company, whose bank clients collectively manage just over $3.1 trillion in assets and serve more than 50 million U.S. customers, was valued at over $1 billion after a $100 million Series D funding round last May.

The BNPL space flooded with new players last year. This influx of new companies, plus the pressure from incumbent financial services firms such as Goldman Sachs offering BNPL solutions, has made competition in the credit card alternative space hotter than ever. Today’s merger will offer Amount a better competitive advantage against established BNPL players such as Klarna, AfterPay, Affirm, and Sezzle. As the BNPL market begins to mature, we can expect to see much more merger and acquisition activity in 2022.

Photo by Anika Huizinga on Unsplash

Share this:

Send Post Twitter LinkedIn Facebook

Expensify Launches Payment Card for CPAs and Accounting Firms

Expensify Launches Payment Card for CPAs and Accounting Firms
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Expensify

Expense management firm Expensify has come out with its first product since making its debut on the public markets last year. The California-based company debuted a corporate payment card designed specifically for CPAs and accounting firms.

The Expensify CPA card comes with a high credit limit and doesn’t require a credit check or personal guarantee. The card continuously reconciles between Expensify and QuickBooks, Xero, Sage Intacct, and NetSuite. This real-time reconciliation offers administrators an up-to-date picture of company financials.

Expensify Founder and CEO David Barrett explained why the new CPA card was a timely offering from his company. “Expensify is already used by nearly half of the top 100 CPA firms in the U.S.,” Barrett said. “We used that expertise and experience to build the first card program that caters directly to the accounting profession and their clients.”

CPA-specific features of the new card include free American Institute of Certified Public Accountants membership, free CPA certification renewal, free CPE credit reimbursement, free access to three CPE credits with ExpensifyApproved! University, and free Expensify CPA Cards for both their firm and clients. Cardholders will also receive access to a team to help with high-level strategy, client onboarding, and training.

There is no information on the cost of the new card. However, cardholders receive a discount for signing up their clients. Firms that have 21 to 1,000 clients who are monthly active users receive anywhere from 15% to 30% off.

Expensify was founded in 2008 with a flagship receipt-scanning app and a simple motto, “Expense reports that don’t suck!” Since then, the company has launched a corporate payment card, offered a COVID-friendly virtual travel assistant, and expanded into billpay. In November of last year, Expensify went public on the NASDAQ under the ticker EXFY. The company has a current market capitalization of $2.1 billion.

Photo by MART PRODUCTION from Pexels

Share this:

Send Post Twitter LinkedIn Facebook

Routefusion Raises $10.5 Million to Help Give Fintechs Cross-Border Superpowers

Routefusion Raises $10.5 Million to Help Give Fintechs Cross-Border Superpowers
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Funding

Earlier this week Routefusion, a company that helps financial services companies with global expansion, raised $10.5 million. The Seed round was co-led by Canvas Ventures and Silverton Partners. Haymaker Ventures, Initialized Capital, Sherwin Gandi, and Aldrin Clement also participated.

The new capital boosts Routefusion’s total funding to over $14 million. The company will use the funds to grow its team and to expand its operations in new markets, specifically in Latin America and Africa, two regions poised for growth. Adding the two new regions will extend Routefusion’s reach to more than 180 countries and more than 150 currencies.

Routefusion was founded in 2018 and helps small to mid-sized fintech companies expand their operations internationally in order to compete with traditional financial institutions and large financial services giants. The Texas-based company offers customers access to more than a dozen different banking and foreign exchange providers. Routefusion’s customers include Synapse, Jeeves, Novel, PaymentLabs, and Wyre.

“Gone are the days when go-to-market meant a domestic launch in one market. Today’s most ambitious fintech companies know that in order to win big, they must launch globally,” said Routefusion Cofounder and CEO Colton Seal. “We understand how to expand a company’s product and financial infrastructure, eliminating the obstacles associated with international payments and banking operations. With Routefusion, companies can embrace the global economy and scale across borders and oceans.”

As competition heats up in the digital alternative banking space, cross-border payments are only expected to grow. In fact, they are estimated to total $156 trillion by next year. Routefusion echoes this growth. The company has experienced a 200% growth in customers and a more than 5000% revenue growth in the past 11 months.

Photo by TK on Unsplash

Share this:

Send Post Twitter LinkedIn Facebook

What The U.S. Federal Reserve Omits in its CBDC Paper

What The U.S. Federal Reserve Omits in its CBDC Paper
By Julie Muhn (@julieschicktanz) Posted on
Categories: Thought Leadership

The U.S. Federal Reserve has issued a discussion paper today on central bank digital currencies (CBDCs). The paper is meant to serve as the first step in a public discussion about CBDCs between the Federal Reserve and stakeholders.

The documentation offers a basic background on what CBDCs are and how they may impact citizens. As a part of the discussion, the paper depicts potential benefits and risks of implementing a CBDC. Specifically, the Fed cites the following:

Benefits

  • Safely Meet Future Needs and Demands for Payment Services
  • Improvements to Cross-Border Payments
  • Support the Dollar’s International Role
  • Financial Inclusion
  • Extend Public Access to Safe Central Bank Money

Risks

  • Changes to Financial-Sector Market Structure
  • Safety and Stability of the Financial System
  • Efficacy of Monetary Policy Implementation
  • Privacy and Data Protection and the Prevention of Financial Crimes
  • Operational Resilience and Cybersecurity

Ultimately, the 35 page document leaves out a key issue when it comes to CBDCs: governmental control. A government-issued CBDC would allow the government to dictate how, where, and when currency holders spend their funds. As an example, consider unemployment money issued in the form of a CBDC. The government could restrict the funds to not work at businesses categorized as liquor stores or bars.

Restrictions such as these aren’t necessarily a bad thing. In some cases, giving the government control over government-issued funds makes a lot of sense. In fact, it is even common practice in programs such as WIC, which offers low income mothers access to healthy foods.

However, if there’s one thing Americans love, it’s freedom. And if citizens receive their paycheck in the form of a CBDC, it’s likely they won’t want the government to control their spending. When it comes to monitoring citizens’ spending of CBDCs, however, the Fed did note the risk of balancing privacy with the need to prevent financial crimes. Under the Potential risks section, the paper states, “Any CBDC would need to strike an appropriate balance between safeguarding consumer privacy rights and affording the transparency necessary to deter criminal activity.”

The purpose of the paper is to essentially open up the discussion of CBDCs with the American people. While the Fed makes it clear it may not necessarily proceed with issuing a CBDC, it proposes 22 questions to readers in an effort to gather comments from all stakeholders. If you’re interested, you have until May 20, 2022 to submit your thoughts.

While the concept of CBDCs is fairly new in the financial services world, the conversation around the new form of cryptocurrencies is being taken quite seriously. At the moment, 90 countries are currently exploring or launching their own CBDC. In fact, TechCrunch reported earlier this week that China’s digital Yuan wallet now has 260 million users.

Share this:

Send Post Twitter LinkedIn Facebook

Plaid Acquires Cognito

Plaid Acquires Cognito
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Mergers & Acquisitions, Plaid

Open finance network Plaid is snapping up identity verification and compliance platform Cognito in a deal valued around $250 million.

Plaid’s “next major step” as a company is to help developers build onboarding experiences. And because identity is a huge piece in the onboarding process, Cognito’s technology will be key in the launch of the new tool. “This means simplifying every step of the consumer journey from their first interaction during signup, to the first magical moment delivered by that product – the first time sending money to a friend, or the first time trading a stock or cryptocurrency,” Plaid CEO Zach Perret said in a blog post.

Perret cited identity verification, account connection, and account funding as three parts of a complete onboarding experience. Currently, Plaid’s technology takes care of the latter two pieces but is missing identity verification technology. According to TechCrunch, Cognito’s technology will be available to Plaid’s 5,500 clients as an optional add-on. Plaid’s services range from a free option to a package that costs north of $500 per month.

Cognito’s technology verifies user identity by connecting their phone number with their traditional identity data such as name, date of birth, address, and social security number. The California-based company also helps businesses stay compliant by managing and automating their anti-money laundering and politically exposed person screening. Since it was founded in 2014, Cognito has verified 76 million users for 300 clients including Affirm, Brex, and Current.

Today’s news is another signal of expansion for Plaid, which partnered with Dwolla, Square, Checkout.com, Currencycloud, and Marqeta last October to move into account-to-account payments.

With $734 million in funding, Plaid helps 11,000+ FIs offer their customers access to third party financial services via a suite of APIs to connect consumers, financial institutions, and developers. Plaid also offers a suite of analytics products that provides further insights into transactions. The company was founded in 2013 and is headquartered in San Francisco, California.

Photo by Edilson Borges on Unsplash

Share this:

Send Post Twitter LinkedIn Facebook

If You Can’t Beat Them, Join Them: SoFi Earns Bank Charter

If You Can’t Beat Them, Join Them: SoFi Earns Bank Charter
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Daily news, SoFi

Digital banking platform SoFi is leaving the ranks of its challenger banking competitors to become a fully fledged bank. The California-based fintech announced today it has received approval from the U.S. Office of the Comptroller of the Currency (OCC) and the Federal Reserve to become a bank holding company.

SoFi CEO Anthony Noto called today’s regulatory approval an “incredible milestone,” adding, “With a national bank charter, not only will we be able to lend at even more competitive interest rates and provide our members with high-yielding interest in checking and savings, it will also enhance our financial products and services to ensure they efficiently meet the needs of our members, business partners, and communities across the country, while continuing to uphold a high bar of regulatory standards and compliance. This important step allows us to add to our broad suite of financial products and services to better be there for our members during the major financial moments in their lives and all of the moments in between.”

The approval comes with one contingency. The OCC said that SoFi Bank may not engage in any crypto-asset activities or services. SoFi currently offers a crypto wallet and trading platform, but as it is held under SoFi Digital Assets, LLC, the OCC’s contingency shouldn’t be an issue.

This approval comes in the wake of SoFi’s proposed acquisition of Golden Pacific Bancorp, a Sacramento, California-based bank holding company with consolidated assets of $150 million. The deal, originally announced in March of last year, is set to close next month for $22.3 million.

After the acquisition closes, SoFi plans to maintain Golden Pacific’s community bank business and footprint, including its three physical branches. Additionally, SoFi will help Golden Pacific pursue its national, digital business plan by contributing $750 million in capital.

As with most digital banks, SoFi relied on partnerships with traditional banks to hold deposits, issue loans, and provide FDIC insurance. Until next month’s acquisition closes, SoFi’s partner banks include Bank United, National Association; MetaBank Sioux Falls, SD; HSBC Bank USA, National Association; EagleBank, Bethesda, MD; East West Bank, Pasadena, CA; TriState Bank Capital Bank, Pittsburgh, PA; and Wells Fargo Bank, N.A, Sioux Falls, SD.

SoFi Technologies will continue to be traded on the NASDAQ under the ticker SoFi, but it will become the parent company of SoFi Bank, National Association. SoFi was founded in 2011 and has a current market capitalization of $11.4 billion. The fintech went public last year after a SPAC merger with Social Capital Hedosophia Holdings V.

Share this:

Send Post Twitter LinkedIn Facebook

Ford Inks 5-Year Deal with Stripe

Ford Inks 5-Year Deal with Stripe
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news

Remember when Andreessen Horowitz’s Angela Strange said that every company will be a fintech company? Though there has been much debate over the now-infamous catchphrase, there is news this week from automaker Ford Motor Company that further proves its truth. Ford announced it has signed a five-year partnership agreement with ecommerce technology company Stripe.

Ford aims to leverage Stripe to scale its ecommerce capabilities. “Stripe’s platform will help us deliver simpler, outstanding payment experiences in any channel customers choose and scale improvements faster,” said Ford CEO Marion Harris.

Under the deal, Stripe will process ecommerce payments for Ford’s personal and commercial customers. Beginning in the second half of this year, Stripe will power vehicle ordering, reservations, digital functions, and charging services. Stripe’s payment services will also be brought into Ford’s tech stack as the automaker develops more ecommerce offerings.

Specifically, Ford will implement Stripe Connect, a set of programmable APIs that helps businesses facilitate purchases between third-party buyers and sellers, to scale new ecommerce services. Ford will use Connect to facilitate payments between customers and their local Ford or Lincoln dealer. Among Stripe’s other customers for its Connect tool are Squarespace DocuSign, Mindbody, and Jobber.

The deal comes at a time when shoppers are more willing than ever to try digital experiences. “During the pandemic, people got comfortable paying online for groceries, health care, even home haircut advice from barbers,” explained Stripe CRO Mike Clayville. “Now, they expect to be able to buy anything and everything online. Ford is making ecommerce possible, too, and scaling that strategy with Stripe’s help.”

Founded in 2010, Stripe has millions of customers. Today’s partnership with Ford, however, marks one of the biggest deals the California-based fintech has landed. During a funding round last March, Stripe’s valuation was boosted to $95 million, ranking it among the most valuable fintech startups.

Photo by FourFour on Unsplash

Share this:

Send Post Twitter LinkedIn Facebook

Mastercard Adds Two Partners to its Business Payments Service

Mastercard Adds Two Partners to its Business Payments Service
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Daily news, MasterCard

Yesterday, Mastercard unveiled two new clients for its Mastercard Track Business Payment Service. The New York-based payments giant announced that BMO and Moneris Solutions Corporation have joined Mastercard Track.

Mastercard launched the new service for Canadian businesses earlier this year. Mastercard Track creates efficiencies for business users by simplifying and automating the exchange of payments data between buyers and suppliers. The service seeks to modernize the $135 trillion B2B payments market.

“Current business payment processes often require manual reconciliation work that can be very labour intensive,” said Sasha Krstic, President of Mastercard in Canada. “The availability of Mastercard Track through our new partnerships with BMO and Moneris will help Canadian businesses gain freedom from an inefficient process by simplifying and automating the exchange of payments to make B2B payments work harder, faster and smarter.”

Using Mastercard Track will help BMO and Moneris modernize the business payments process for their customers. Ultimately, the service will free up working capital for businesses by offering them more control of their payments and helping them to optimize cash flow management.

Derek Vernon, Head of Payments Modernization of BMO’s North American Commercial Deposits and Corporate Card division said that the service “enhances the digital experience by offering a universal solution to simplify and automate B2B payments.” Specifically, Vernon noted that Mastercard Track will help reduce supplier friction and facilitate quicker speed-to-spend.

Mastercard is a public company listed on the New York Stock Exchange under the ticker MA. It has a market capitalization of $364 billion. Michael Miebach took the helm of the company as CEO in January of last year.

Photo by Cytonn Photography from Pexels

Share this:

Send Post Twitter LinkedIn Facebook

TransUnion Brings Credit Data to Public Blockchain Networks

TransUnion Brings Credit Data to Public Blockchain Networks
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Daily news, TransUnion

Consumer credit reporting agency TransUnion is moving in the direction of Web3. The Illinois-based company announced this week it will bring off-chain consumer credit, identity, and compliance information to public blockchain networks.

The move is made possible via a partnership with Spring Labs, a company that offers decentralized infrastructure for credit and identity data. Spring Labs allows network participants, such as financial institutions, to share information about credit and identity data without needing to share the underlying data itself. Specifically, TransUnion will bring its VantageScore to Spring Labs’ ky0x Digital Passport, a tool that enables blockchain and smart contract applications to access off-chain data sources to create new, permission-controlled decentralized Web3 services and applications.

“We believe in the growth potential of DeFi,” said TransUnion President of U.S. Markets and Consumer Interactive Steve Chaouki. “Providing credit and identity data on-chain is a huge step towards improving the financial products available in the space. Working with Spring’s ky0x, we now have a solution for users to control and share their data on blockchain in a privacy-preserving way, enabling them to safely interact with a broader set of financial products.”

Transporting consumer credit data to the blockchain allows users to offer up information about themselves while maintaining privacy and anonymity of their identity. This secure data sharing allows users to access smart contract applications and helps DeFi and Web3 apps to scale.

Ultimately, the move should benefit both end users and lenders. By having their credit score available on-chain, users can receive better interest rates from DeFi lenders. Simultaneously, DeFi lenders can reduce their risk.

“Enabling access to an industry-standard, trusted credit risk score like VantageScore on-chain and in a consumer permissioned, anonymous way opens the door to greater growth and financial inclusion in the DeFi space,” said TransUnion SVP Consumer Lending Business Leader Liz Pagel. “Paired with ky0x’s AML and KYC capabilities, DeFi lenders can transact with confidence at lower rates, potentially paving the way for lending without the over-collateralization that is standard today.”

To be honest, there is a potential downside to this partnership. Traditional credit scores are prone to racial bias and have negative consequences for borrowers who have no established credit. By porting this imperfect risk underwriting model to the decentralized world, we may be doing ourselves a disservice.

Photo by SHVETS production from Pexels

Share this:

Send Post Twitter LinkedIn Facebook

iPhone Turns 15. Here are 5 Ways it Helped Reinvent Fintech

iPhone Turns 15. Here are 5 Ways it Helped Reinvent Fintech
By Julie Muhn (@julieschicktanz) Posted on
Categories: iPhone, List series, Thought Leadership

Apple’s iPhone celebrated its 15th birthday this week (if that doesn’t make you feel old, I don’t know what will). Since its launch, the iPhone has been through 33 different models and Apple’s market capitalization has risen from $174 billion to $3 trillion.

In addition to making Apple shareholders much better off, the iPhone is also responsible for reinventing an entire industry– fintech. While fintech did indeed exist before smartphones and app stores, it was quite basic. As an example, check out Jim Bruene’s 2006 post titled, SMS Banking: Will it Work in the United States?.

Without the invention of the iPhone, smartphones would likely be around today– Blackberry and Palm Pilot would have gotten us here eventually. However, they probably wouldn’t have advanced as quickly as Apple did, and therefore wouldn’t have upended so many industries so quickly. So in celebration of the iPhone’s 15th birthday, here’s a look at how the big idea behind the small, rectangular device reinvented fintech to become what we know today.

Always on

Most people carry their phone on their person (or at least within arm’s reach) at all times. According to a 2021 study of smartphone usage statistics, 79% of users have their phone with them at least 22 hours each day, 22% of users check their phone every few minutes, and 51% of users look at it a few times per hour. These devices (and the information that they carry) have essentially become an extension of ourselves.

When your customers have their device nearby for all but two hours of each day, it not only gives them access to interact with your company and brand, it also offers you access to interact with them. Compare this to pre-iPhone era. Customers were only interacting with you when they were physically in a branch location, opening a piece of direct mail, or using their PC. Today, when a nagging thought comes up about their budget or investment information, they no longer have to jot it down to remember to look it up later. Instead, they can simply open an app on their phone to get their answer.

Push notifications

According to the study referenced above, the average smartphone user has 63 interactions with their phone each day. Some of those interactions are thanks to the user receiving alerts or push notifications, which Apple launched in 2009.

When used properly, push notifications can be a powerful tool to prompt users to take important action. Others are useful for simply promoting brand awareness. With the advent of the iPhone and push notifications, reminding customers that you still exist became much easier.

From SMS to GUI

Simply put, the iPhone helped take banks’ and fintechs’ digital customer interactions outside of strictly texting and email. The graphical user interface behind phone’s screen brought a new world to the user’s fingertips. Users were no longer limited to checking their balance or making simple transfers. Mobile apps opened up capabilities to do anything they could do online and (in many cases) in person in a bank branch.

Independent developers increasing competition

When you think of the expertise and capital required to start a bank vs. the requirements to launch a fintech, there are gaping differences. Thanks to an increasingly large talent pool of developers, anyone with a viable fintech product or service has the ability to compete with traditional banks by launching their own app in the app store.

Increased competition from fintechs has been overall healthy for the financial services industry and has made end consumers better off. When customers are unable to find a product they like or even when they have been rejected by a traditional bank, fintechs have consistently proven to meet their needs.

Authentication

Apple launched Touch ID in 2013 and in 2014 it was made available for third party apps to authenticate users. More recently, the company launched Face ID in 2017 to facilitate authentication. While fingerprint and facial recognition technology pre-dates the iPhone, it didn’t come on a pocket-sized device that consumers carry around with them.

Having biometric authentication technology available to verify the identity of users each of the 63 times they open their phone each day has made every day tasks safer for banks, fintechs, and users.

Photo by Jonas Vandermeiren on Unsplash

Share this:

Send Post Twitter LinkedIn Facebook

Tandem Bank Acquires Oplo

Tandem Bank Acquires Oplo
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Mergers & Acquisitions

Founded in 2015, Tandem Bank used to be among the ranks of U.K. challenger banks Monzo and Starling. But Tandem Bank has remained relatively quiet for the past year-and-a-half– seemingly sidelined from the digital banking race taking place across the globe.

That’s changing today, however. Tandem Bank announced it has acquired lending platform Oplo. Financial details about the deal were undisclosed.

“I think this is a really exciting business combination,” said Tandem Bank Group CEO Susie Aliker. “We have a shared and common purpose to create a greener and fairer banking proposition. We want to build on our digital and technology capabilities to really create a really exciting but also profitable challenger bank.”

https://www.youtube.com/watch?time_continue=1&v=rtfY2lYRqsE&feature=emb_logo

Oplo was founded in 2004 and has since lent over $1.2 billion (£900 million) to mainstream customers. The U.K.-based fintech offers car finance, personal loans, and secured loan products as alternatives to traditional bank loans. When it combines with Tandem, the digital bank will have $1.64 billion (£1.2 billion) in assets.

Tandem is very focused on the ESG initiative that has been sweeping the fintech industry; this includes digital banking players in particular. Tandem Bank currently holds $315 million (£230 million) in its Green Loans, a product that helps accountholders “save the planet whilst saving money.” Last year, the digital bank provided customers with loans for home improvements that contributed to over 12,000 tonnes of CO2 reductions.

The Green Loans product comes courtesy of Tandem Bank’s 2020 acquisition of Allium Money, an alternative lender that offers consumers financing to improve the energy efficiency of their homes.

“By joining forces, we will be able to offer a wider range of products and higher quality of service to more people than ever before,” Oplo said in a blog post announcing the change. “And together, as Tandem, we will build a fairer and greener bank for all.”

In a video, Aliker described the company’s recent shift to double-down on its ESG focus. “Our target market going forward will be what we call The New Mainstream.” We want to give them the choices so that they can also help contribute towards a fairer and greener future.”

Photo by Adolfo Félix on Unsplash

Share this:

Send Post Twitter LinkedIn Facebook