Hello Fintech Friends,

Live from New York, it’s Friday morning!

Quote of the week

“Nobody taught us about how to use money.”
- Kunal Shah, founder of CRED, on Indian financial literacy

Open role spotlight

Employee benefits and personal finance platform Brightside is hiring a Head of Business Development in San Francisco or New York. Happy to put anyone in touch with John Grogan, who is hiring for the role.

Read of the week

In a very rare move for American financial regulators, the Fed, CFPB, FDIC, OCC, and NCUA came out jointly in support of the use of alternative data in financial services. You can read the CFPB’s statement here and the Fed’s here. The amount of data we produce online is staggering (by some measures, over 90% of data in the world was generated in the last two years alone.) This information is rich in potential: if it can be interpreted correctly, any resources from loans, to ads, to purchases can be allocated more efficiently. The regulatory move provides tailwinds for more fintechs to leverage data to provide better-tailored services.

In banking and credit card news, in the US, new research by Jefferies suggests that young people still see physical bank branches as important in selecting a bank.

Goldman Sachs is putting the brakes on the expansion of its retail bank Marcus into the UK for compliance reasons.

JP Morgan continues to roll out its white-labeled digital wallet for services like Apple and Airbnb preserve their contractor payment margins and provide bank-like services.

UK banks HSBC and Santander were forced to refund over £8 million to customers who incurred overdraft fees, when the banks broke rules on sending text alerts to customers. Banks NatWest and RBS, meanwhile, had major mobile outages over Black Friday, affecting shoppers’ ability to buy. One-fifth of UK adults were also impacted by credit card fraud this year, as payments fraud rings become more sophisticated.

NatWest is testing a biometric payment fob linked to customer fingerprints to allow customers to make purchases of up to £100. This comes after the trial of a biometric card in 2018. Non-card consumer payment hardware has always struggled to take off -- with mobile just now gaining traction in the US and EU -- because, at the end of the day, the pain points of using credit cards are pretty minor. It will be interesting to watch this trial, but unlikely that biometric fobs will replace cards anytime soon.

At the same time, Mastercard reports that payments made through wearables like smartwatches grew 8x in Europe over the last year and smartphones made up a record $3 billion of the $9.4 billion in online Cyber Monday sales in the US.

French bank Societe Generale released an API to allow its financial institution clients to enable real-time payments, a feature that is not yet available between most US banks.

Chinese bank Hang Seng is beginning to allow customers to withdraw money from ATMs via mobile withdrawals and QR codes.

Compliance firm Wolters Kluwer launched an online white-label loan application tool to allow community banks and credit unions to take loan applications on any digital device.

Italian bank Unicredit is the latest to join the downsizing trend, and will cut 8,000 jobs and 500 branches over the next 3 years.

Explosives attacks and violence at ATMs have led Dutch bank ATM Amro to shut down half of its ATMs.

---

In fintech news this week, and in a sign of the times, California’s fintech startups are all moving to New York. Get ready for new neighbors.

Paypal is expanding its Instant Transfers partnership with Mastercard, which allows customers to transfer Paypal funds onto prepaid cards, into Singapore and Europe.

Trading app Robinhood, which brought commission-free trading to retail customers, topped 10 million user accounts this week. This comes as assets that are passively managed by robo-advisors (vs. active stock-picking) grew by 10% in 2019, up to $283 billion. (Fortune also speculated on whether Robinhood is overvalued.)

GoCardless and Transferwise have partnered to launch “the world’s first global network for facilitating recurring payments via direct debits.”

Monzo, the UK neobank that is in the middle of expanding to the US, hired ex-Visa Global Head of Products TS Anil as its US CEO. Fortune also profiles neobank Chime this week, which has grown prodigiously to 5 million+ accounts but also struggled with tech problems.

Apple launched Express Mode via Apple Pay for London tube commuters, which lets them tap and go without login and on very low battery life.

In some positive news for lenders, SoFi this week was granted a digital currency transmitter license from the New York Department of Financial Services, which should enable crypto trading on the student and consumer lending platform. Small business lending platform Funding Circle launched Small Business Choice in the US to provide businesses with more credit options. Personal lender Upstart’s loan securitizations are performing better than expected by ratings agency Kroll. And marketplace lending overall is expected to surpass £6 billion in volume in the UK this year.

Migo (previously Mines.io), a San Francisco-based emerging markets lender that had seen success in West Africa, is expanding to Brazil on the back of a $20 million fundraise.

Chinese authorities this week issued an edict requiring all peer-to-peer lending platforms in the country to shut down or change their business model within the next two years.

Fronted, an open banking platform for renters in the UK, plans to launch next year, co-founded by ex-Monzo, Apple, and Bud employees.

Recent polls suggest that Irish consumers still don’t trust neobank technology.

And last but definitely not least, I'm tired of these but feel compelled to include:

Financings

(in order of disclosed deal size)

• Chime raised a $500 million Series E at a $5.8 billion valuation to double the company’s headcount in 2020 and make acquisitions.
• Zopa raises an additional £140m in new capital to pursue its charter as a challenger bank and convert its provisional banking license, but at a discount to its prior valuation.
• Home financing fintech Figure, launched by ex-SoFi founder Mike Cagney, raised an additional $103 million.
• Mexican credit underwriting business lender Konfio raised $100 million in new capital from SoftBank.
• Singaporean company Finaccel secured $90 million in Series C funding to grow its credit lending app Kredivo to new markets.
• Copia, an e-commerce solution focused specifically on underbanked consumers in Kenya, raised a $26 million Series B to expand outside of Kenya.
• UK on-demand wage fintech Hastee raised an £8 million round and £200 million credit line to scale to more employers.
• Canadian neobank Koho raised a Series B-2 of C$25 million from domestic banks.
• Rapyd, a UK fintech API that provides back-end open banking integrations, added $20 million to its balance sheet at a $1.2 billion valuation.
• Delphia raised $14 million to build a platform that allows people to monetize their data, turn it into investment capital, and bet on the market.
• Otis, an alternative investment platform for art and illiquid assets, raised an $11 million Series A.
• Brazilian fintech Cora raised a $10 million first round to build out their small and medium business lending platform.
• Brazilian fintech Rebel raised $10 million to provide unsecured loans to middle-class consumers.
• Uncapped, a fintech startup that provides revenue-underwritten financing to European businesses, launched this week and raised £10 million.
• Salv, an anti-money laundering startup launched by ex-Transferwise employees, raised $2 million.
• UK student lending startup Student Finance raised a €1.15 million seed round.
• Percent, a UK-based card-linked app that lets users donate a percentage of spending to charities, received an investment from Nationwide.
• Portag3 Ventures, a Canadian fintech-focused venture firm, closed its second fund of $320 million.

---
Exits and M&A
Chinese bank Bohai is planning a $2 billion IPO on the Hong Kong stock market.Brazilian debt capital fintech XP filed for a $1.7 billion US IPO.Bill.com set the terms of its IPO, filing to raise $150 million.OneConnect Financial Technology, a Chinese fintech subsidiary of Ping An, filed for a reduced US IPO of $504 million.The Luxembourg Stock Exchange has acquired a ten percent stake in UK bond workflow platform Origin. Financial terms were not disclosed.

---

Deeper Reads

These Funding and Business Assistance Programs Are Helping Felons Restart Their Lives

“I was internet banking when internet banking wasn't cool.”

Alipay runs a virtual forest called Ant Forest in China, where if Alipay users “walk, travel by public transport, pay utility fees online, pay traffic tickets online,” or partake in other low-carbon activities, a virtual tree is added to their account. When enough virtual trees are grown, Alipay plants real trees to offset carbon emissions.

The impact of digital finance on financial inclusion and stability

Fintech is raising the bar for financial inclusion

How Fintech Startups Are Helping SMEs Keep Cash Flowing

November 2019 African fintech roundup

Is the fintech bubble bursting? (short answer, given by the article: no)

Fintech growing pains

A thousand stray dogs live in this doggy paradise