Payments, Banking & FinTech roundup: September 2020
As we approach Q4 2020, focus very much remains on the recovery of the financial services sector.
We recently launched parts 2 and 3 of our series of ‘Ready for the re-build?’ white papers that explore this theme in more detail. Part 2, Bank to the Future, takes a look at attitudes towards digital within Europe and the UK, as well as how to challenge the lingering resistance around updating infrastructure in order to best respond to future change. Part 3, Home Away from Home, looks at where the greatest growth opportunities are likely to be.
Banking Circle also launched a new product, Payments on Behalf of (POBO) and Collections on Behalf of (COBO), designed to enable Banks and Payments businesses to provide their customers with full payment transparency across 24 currencies.
Here are other important stories from the industry you may have missed this month.
FinTech funding slows further in Q3
FinTech funding has declined in Europe as well as globally, in the first half of 2020 compared to the same period last year. The decline since July has been even steeper, dropping 44% in Europe and 18% globally.
In order to navigate the economic impact of the pandemic, FinTechs will need to find an altered path to profit.
Tech Nation launches the Fintech Pledge
Along with support from the HM Treasury and the Fintech Delivery Panel, Tech Nation has announced the introduction of its Fintech Pledge to encourage collaboration between banks and FinTech firms.
Described as a ‘world-first initiative’ the pledge will focus on ensuring banks provide clear guidance to technology companies on the onboarding process, as well offering a named contact, guidance and feedback. All banks have been invited to sign the pledge, and a number of leading names have already been announced as early voluntary signatories including Barclays, HSBC, Lloyds Banking Group, Natwest Group and Santander.
UK FinTech sector launches initiative to end harassment
The Fintech For All Charter is a new initiative created to tackle harassment and promote diversity within the industry, and is being led by data platform Inchorus, with support from Innovate Finance, the Fintech Alliance and Level39. The steering committee will also be supported by the Financial Conduct Authority (FCA).
Banking Circle fully supports inclusion and diversity. Working with European Women Payments Network (EWPN) we previously surveyed individuals working across all areas of banking and finance, and found that almost half (46%) have felt the need to falsify, hide or deliberately not disclose at least one element of their identity. Our research also revealed that 59% of respondents do not feel the industry does enough to encourage gender parity and diversity with respect to opportunity and pay.
It’s clear real action needs to be taken, and this new charter is a step in the right direction.
Open banking could help to end financial bias against women
On a similar theme, it’s hoped that open banking could be used to tackle one of the industry’s most deep-rooted problems – data bias. Traditionally, credit rating decisions have been based on factors that tend to favour men, thanks to higher salaries and fewer career breaks due to raising children.
Thankfully, this is an issue that’s now being recognised, and there are calls to address this imbalance, and take into account more relevant considerations such as someone’s transactions and live account data as a more appropriate way to calculate risk.
A new report on the collaboration between FinTechs & Banks
Finextra has launched its Future of Fintech 2020 report. With a theme of ‘Disrupt, reset, re-launch’, the report looks at how FinTechs and banks have entered a new era of partnerships, and the benefits this holds for customers.
The report also takes a look at how banks have embraced innovation, as well as how the industry should behave in the face of a crisis.