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Hello Fintech Friends,

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💭 One Big Thought: Is sports betting becoming a fintech feature?

At Robinhood's recent investor day, CEO Vlad Tenev disclosed that the brokerage firm is considering expanding into sports betting, off the back of a presidential election in which prediction platforms like Polymarket and Kalshi took center stage for their accuracy.

On its face, sports betting does not seem markedly different than the kinds of options trading or leveraged fund contracts that Robinhood is known for: high sigma investments that can quadruple overnight or quickly crater to zero. And it's not a stretch to say that, among investment platforms, Robinhood appeals more to retail gamblers than legacy brokerages like Schwab and Vanguard. That may be why they rolled out presidential election derivatives in the lead-up to the election.

But what obligation, if any, do brokerages have to protect users from themselves? On the one hand, platforms like Robinhood take pains to meet disclosure requirements for the investments they list, and freedom of choice is one of the hallmarks that makes the US such an attractive investment market. On the other, retail investing is not an entirely free market, as accredited investors can attest. Certain asset classes are gated from unqualified investors.

Matt Levine proposed a “Certificate of Dumb Investment," whereby retail investors could qualify for any investment they wanted if they signed an agreement stating, "I want to buy a dumb investment. I understand that the person selling it will almost certainly steal all my money, and that I would almost certainly be better off just buying index funds, but I want to do this dumb thing anyway."

For addictive and gamified options like sports betting, one option would be for platforms like Robinhood to protect their users (and themselves) by partnering with services like MoneyStack (disclosure: investor) to help users better understand their own finances and break their addictions to sports betting.

With the rise of sports betting in the US, I wouldn't be surprised to see platforms start to roll out improved gambling disclosures to better inform their customers of the risks. Until then, I'll continue chipping away at my own funds with parlays that never seem to hit :)

Please enjoy another week of fintech and banking news below.

(👍👎 Have feedback for us? Let us know! Find me at @nikmilanovic, @twifintech, and @ndm)

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💬 Quote of the Week

"The loftier the building, the deeper must the foundation be laid." - Thomas à Kempis

🏦 Financial Services & Banking

🚀 Product Launches

Bank of America rolled out its Paze online payment option to cardholders. Paze is a secure online checkout option to enable tokenized transactions across eligible debit and credit cards. Paze is designed to eliminate manual card entry and boost security in partnership with Newegg.

RBC introduced international trading capabilities for online investors, expanding its digital brokerage offerings globally.

Santander expanded its U.S. presence by launching its Openbank brand nationwide, offering high-yield savings accounts to consumers.

📰 Other News

The FDIC (finally?) announced plans to implement enhanced monitoring of fintechs partnering with banks – after BaaS provider Synapse declared bankruptcy – by creating a database to track third-party relationships and mitigate risks to banking institutions.

Google filed a lawsuit against the CFPB, challenging its oversight authority related to a discontinued financial product. The company expressed concerns about the scope of regulation potentially stifling innovation in financial services.

Meanwhile, the CFPB, working overtime before the presidential transition, finalized a rule yesterday that would limit overdraft charges at large banks and credit unions, a move that federal officials said could help save Americans billions in fees each year. The CFPB also proposed a rule to limit the data brokers’ access to consumer financial information, aiming to strengthen privacy and security protections​. It remains to be seen whether the new rules stand under the new administration.

Interac faces antitrust scrutiny over its flat fee on e-Transfers, with regulators examining its potential impact on market competition.

The U.S. Treasury is looking into creating a settlement network for multi-asset transactions to enhance efficiency in cross-border finance.

Former PayPal COO David Sacks was appointed by former President Trump as the U.S. “crypto and AI czar,” signaling potential policy and regulatory clarity for digital currencies.

💻 Fintech

🚀 Product Launches

Stablecoin XYZ introduced SBC, a payments-focused stablecoin, designed to reduce transaction (gas) fees and increase reliability for cross-border and domestic transactions.

Alpha launched a new AI-powered watchlist app, offering individual investors real-time market insights and personalized updates.

Orum unveiled a name-matching feature to verify account ownership, strengthening security and accuracy in financial transactions.

Marygold added a cash management account feature to its fintech banking app, providing returns of up to 6% on deposits.

Loop launched Canada's first multi-currency credit card tailored for SMEs, allowing businesses to manage international expenses more efficiently.

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📰 Other News

Google banned ads for payday lenders, emphasizing a commitment to protect users from predatory financial practices. The ban extended to services offering loans with annual interest rates of 36% or higher.

Ripple won approval from the New York Department of Financial Services for the upcoming launch of its dollar-backed stablecoin RLUSD.

Beacon is building a digital wallet to simplify financial integration for immigrants to Canada. The wallet enables users to open accounts, transfer funds globally, and prepare for life in Canada before arrival.

🤝 Partnership Corner

ThetaRay partnered with Microsoft to integrate generative AI into its financial crime detection solutions.

Stablecoin provider Circle and Binance collaborated to promote the adoption of USDC, focusing on expanding its use across global markets.

Corporate spend provider Mesh Payments teamed up with SoFi Bank and Galileo Financial Technologies to introduce streamlined solutions for businesses to manage travel expenses effectively​.

Card issuer Marqeta partnered with B2B payments provider Slope on a B2B buy-now-pay-later card.

Google Cloud joined forces with SWIFT to combat financial fraud, leveraging cloud-based technology to enhance real-time monitoring and secure global transactions​.

👎 The Bad News

Stash implemented a major restructuring by laying off 40% of its workforce in October 2024, following the departure of its CEO, Liza Landsman. This move included cutting about 88 positions and simplifying its management structure.

Klarna was fined €50 million for anti-money laundering violations, highlighting compliance gaps in customer due diligence and transaction mon​itoring processes. Regulatory authorities found that the company failed to adhere to required standards for KYC / AML.

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