Read on to find more information about the names that caught our eye within this timeframe and the most prevalent subjects, namely:
Open Finance, Open Banking payments, and their entrance into separate verticals;
Digital banking tech and infrastructure;
Financial crime and fraud prevention;
Crypto, Web3, and CBDC developments.
Q3 2023 saw multiple collaborations centring on the adoption of Open Banking and Open Finance worldwide. Reiterating first those with a global focus, early in July, Salt Edge and Kindgeek, a fintech software developer, cooperated to provide PSD2 and Open Banking solutions to the fintech landscape. GoCardless and SMB platform Xero renewed their partnership for an additional five years, enabling Xero’s customers to leverage GoCardless within the Xero platform for recurring and one-off payment collection, both through direct debit and a GoCardless feature powered by Open Banking in the UK and PayTo in Australia. Embedded banking software company Treasury Prime has partnered with Astra to enable real-time payments to customers, providing access to instant account funding and disbursements via push-to-card capabilities.
Expediting real-time payments was a common focus within this timeframe, as seen through multiple collaborations in the industry. ACI Worldwide and Microsoft, for example, sought to facilitate instant payments via ACI’s Real-Time Payments Cloud (RTPC) platform. Standard Chartered and Starfish Digital, on the other hand, partnered to deliver API-led real-time data for cash management and improved cash visibility to corporate treasury teams. Another notable announcement came from Brankas and SaaS tech provider Konsentus, which sought to provide centralised tech infrastructure and BaaS solutions to expedite Open Finance. Moreover, SAP Fioneer tapped Mastercard to integrate its suite of commercial payment and Open Banking capabilities into the SAP Fioneer Card Management, Embedded Finance, and SME Lending platforms.
This expedited adoption comes from the multiple collaborations to have taken place in the UK, with one of the first news in Q3 2023 being that the Centre for Finance, Innovation and Technology (CFIT) made public the first Open Finance Coalition partners to further Open Finance in the area. Founding collaborators announced at the time were as follows: the Association of British Insurers, Allen and Overy, Amazon Web Services, Experian, the City of London Corporation, EY, HSBC, IBM, Innovate Finance, iwoca, KPMG, Leeds City Council, Lloyds Banking Group, Mastercard, MBN Solutions, Monzo, Open Banking Limited, the Open Finance Association, Revolut, the Smart Data Foundry, and Zopa Bank, with the support of the FCA.
July saw Volt partner with Primer, a payments automation platform offering the infrastructure for commerce experiences, to leverage Open Banking tech to simplify payments for merchants and customers alike, enabling Primer’s customers' access to instant bank payments. TrueLayer cooperated with InvestEngine to leverage variable recurring payments in ETF investing. Fintech Guavapay partnered with Yapily to integrate its Open Banking tech into the MyGuava platform for expedited top-up transactions for GBP and EUR accounts from supported bank accounts. Yapily also cooperated with Payhawk, a spend management platform, to create an instant payment experience for finance teams when upgrading their Payhawk wallets, a collaboration rolled out in the UK, France, Spain, Portugal, and the Benelux region, as well as with AI-powered solution Ntropy to improve financial information and transaction data for customers across Europe.
Moving onto the wide European area, A2A payment provider SEPAexpress cooperated with the Open Banking platform Tink to better its payment solutions across Europe. Denmark-based Saxo Bank and Mastercard joined hands to implement Open Banking payments in the former’s investment platforms. In contrast, two separate collaborations showcased the usage of open tech in other verticals, namely The Dutch Association of Insurers and INNOPAY, which sought to enable the players in the insurance sector to transition to Open Insurance. Coinbase tapped TrueLayer, a European Open Banking payments network, to expand its Easy Bank Transfers to the Netherlands, making Open Banking payments available to Dutch customers.
Mastercard’s partnerships focus ranged from modernisation tactics for financial inclusion, to product launches. It collaborated with Ingiz, a family financial management startup, to launch a digital payments app aimed at driving financial literacy and inclusion among youth in Egypt and signed a memorandum of understanding (MoU) with Fintech Saudi to further growth and development in the Saudi Arabia fintech industry. Similarly, it announced a cooperation with the Bahrain Institute of Banking and Finance to drive financial inclusion in Bahrain and the wider region. Within the North American space, together with spend management platform Extend, Mastercard assisted banking group BMO with the launch of a mobile wallet for virtual cards to enable the US- and Canada-based BMO Commercial Bank clients’ access to an improved payment management functionality. What is more, Mastercard and Oracle helped HSBC launch a virtual card solution to help customers complete supplier payments. Oracle Fusion Cloud Enterprise Resource Planning (ERP) connects with HSBC via Mastercard’s global virtual card platform to simplify and automate the B2B payment process.
A financial software applications and marketplaces provider, Finastra’s Q3 2023 partnerships had a focus on overall digitalisation for financial services and banking, as well as expediting real-time payments and Open Finance within said services. One of its first announcements involved North America-based Open Finance company MX Technologies, to enable personalised money experiences by integrating MX’s Personal Financial Management (PFM), Insights, and Account Aggregation solutions with Finastra’s Fusion Digital Banking solution and help FIs better guide consumers toward financial wellness. In the span of one week, the company made public three additional partnerships. Firstly, it announced a global agreement with Microsoft to support banks in their trade modernisation journeys, it extended its collaboration with Corvallis, part of Tinexta Group, an IT services provider in the Italian financial services sector to expedite the modernisation of IT infrastructures and the adoption of real-time payments, helping Italian banks accelerate their instant payment offerings, and lastly, it partnered with Philippines-based digital bank Tonik to improve its end-to-end core banking capabilities with Finastra Essence.
Moving onto worldwide developments, US-based B2B payments provider Convera has chosen Temenos to leverage its cloud-native platform for access to real-time payments and enhanced resilience, providing the necessary business agility to capitalise on new market initiatives like instant payments and ISO 20022. The Fintech Open Source Foundation (FINOS) announced the formation of an open standard project based on an approach developed by Citi, to describe consistent controls for compliant public cloud deployments in the financial services sector. The project involves participation from over 20 FINOS Member firms globally, including Bank of Montreal (BMO), Citi, Goldman Sachs, Morgan Stanley, Royal Bank of Canada (RBC), London Stock Exchange Group (LSEG), Natwest Group, cloud service provider Google Cloud, and vendors such as GitHub, Red Hat, Symphony, Adaptive, Container Solutions, ControlPlane, GitLab, and Scott Logic.
Other Q3 2023 announcements within this space focused on automation, embedded financing, and the implementation of generative AI solutions for further optimisation. US tech provider NCR Corporation partnered with Autobooks to integrate digital invoicing, payment acceptance, and accounting into NCR Digital Banking, aiming to help FIs offer unified payment and cash management solutions tailored to the needs of SMBs. GoCardless teamed with Kolleno, a financial operations platform, to enable financial officers and credit controllers to schedule and automate their invoice collection. Embedded finance applications were sought after within the lending space, as showcased by ChargeAfter's partnership with Wells Fargo to expand its embedded lender network, and by OnBuy and YouLend, an embedded financing platform, with the former aiming to provide flexible financing options to businesses that sell on OnBuy’s seller account. When talking about generative AI, Deloitte tapped NVIDIA to leverage its AI tech for the creation of generative AI solutions for enterprise software platforms, and IBM Consulting and Microsoft extended their collaboration to aid joint customers in accelerating the deployment of generative AI.
Europe
Moving onto financing-related and financial wellbeing developments, LHV Bank tapped Raisin UK, an online savings platform, to expand into the personal savings market. HSBC UK and Nova Credit provided newcomers in the region with the option to include international credit history when applying for a credit card, whereas consumer lending marketplace Aro and Plend sought to provide UK clients with optimised, accessible, and affordable finance. Other notable developments within the European space were that of fincrime assurance provide Cable which joined the BaaS Association to support the future of BaaS. AI’s applicability was also sought after in the European space, with the NAGA Group tapping Resolve AI’s ‘Brain’ platform to integrate it into its proprietary tech and social trading app, NAGA Trader, as well as NAGA Pay for improved online payments and brokerage.
Other companies to have contributed to developments within this space are as follows: the EY organisation announced two collaborations, namely with AI SaaS company SymphonyAI to help digitally transform organisations with generative AI-enabled retail and financial services platforms, and with Microsoft to deliver its Assurance technology platform as part of a USD 1 billion investment programme. Financial service tech provider eCU Technology and payroll connectivity provider Atomic sought to bring automated direct deposit switching to credit unions to help modernise the banking experience for their members. In the Central & Southern American space, Mexico-based BanCoppel, part of Gruppo Coppel, collaborated with cloud banking platform Temenos to modernise its core banking services, and modern card issuing platform Marqeta expanded into Brazil following a partnership with BaaS platform Fitbank and network certification with Visa.
Other developments that caught our attention within this timeframe focused on the UAE, with trade financing platform 360tf partnering with Ebury to better financial services, and the Huawei Mobile Services (HMS) collaboration with Abu Dhabi Commercial Bank (ADCB), Emirates NBD (ENBD), First Abu Dhabi Bank (FAB), Mashreq, Abu Dhabi Islamic Bank (ADIB), and Standard Chartered Bank UAE, which sought further the development of the UAE digital banking scene. HMS’ focus was present within the African space as well, having cooperated with Standard Bank to provide digital banking solutions for clients in South Africa.
Global analytics software provider FICO alongside LigaData looked to bring advanced decision management and optimisation tools to telecommunications firms in Africa, the Middle East and Asia, aiming to add new revenue streams and expand financial inclusion in emerging markets. Similarly, Truist and Standard Chartered planned to strengthen trade finance offerings and capabilities in the same regions. BaaS and embedded finance enabler Ukheshe together with Diamond Trust Bank (DTB) announced their plans for the introduction of a BaaS platform in East Africa. A separate notable collaboration within the wider African region was that of the Pan-African Payment and Settlement System (PAPSS), which signed Memorandums of Understanding (MOUs) with African multinational commercial banking groups: Access Bank Group, Ecobank Group, KCB Group, Standard Bank Group, and UBA Group to better cross-border transactions settlement within the countries covered by said banks.
Moving onto worldwide developments, identity proofing and passwordless authentication company 1Kosmos partnered with NayaOne, a fintech ecosystem platform, to have the 1Kosmos BlockID distributed identity cloud service available on NayaOne for financial services providers. Mastercard and Riskified sought to help businesses mitigate fraud whilst increasing revenues, whereas Nethone and Verifi, a Visa solution, looked to help merchants that meet Visa Compelling Evidence 3.0 criteria to deflect first-party misuse disputes. With the increase of friendly fraud and chargeback disputes, two separate collaborations focused on chargeback management, one being that of payment orchestration platform FinMont which chose Chargebacks911 to offer its travel merchants an extensive chargeback management plan with enhanced data analysis and profits, and that of Justt which joined Forter’s partner programme to automate and simplify chargeback management within a single platform. 3SMoney together with regtech Know Your Customer sought to better efficiency, transparency, and inclusion in financial services.
The North American region saw Astra and Plaid join forces to offer customers instant authenticated payments through Plaid Identity Verification, whereas fintech TrueNorth tapped RADD LLC, a compliance consulting and internal audit firm, aiming to intertwine regulatory compliance with its financial technology solution development. J.P. Morgan was designated by the US Treasury Department to offer account validation services for federal government agencies, whilst Sumsub and AML Incubator, a Canada-based regulatory compliance outsourcing company aimed to simplify identity verification. Sumsub was one of the names to have had multiple collaborations in Q3 2023, having made public that it joined hands with crypto payments platform Wirex to provide transaction monitoring capabilities, Travel Rule compliance solutions for virtual asset transfers, and its KYC software for client identity verification. It also partnered with dtcpay to improve the security and reliability of digital currency payments in target markets, including Singapore, Hong Kong, Dubai, the UK, and Europe.
In the European space, Tuum has partnered with AMLYZE, an anti-financial crime solution provider, to extend its next-gen core banking offering with specialist anti-financial crime solutions, while digital challenger bank Starling Bank tapped intelligent compliance tech company Napier to better fight financial crime. Other fraud prevention-related developments to have taken within the European banking space are as follows: BBVA, Banco Santander, and CaixaBank announced a joint effort to fight financial fraud, and BaaS fintech Griffin selected Veriff to provide out-of-the-box identity and verification to BaaS customers. Identity services provider OneID integrated with Adobe Acrobat Sign to offer a secure, bank-verified eSigning experience for its clients, TangoPay has partnered with ThetaRay to protect its global payments platform from financial crimes, whilst Deloitte joined hands with Chainalysis to help clients with their crypto forensic, compliance, and investigative requirements.
Moving onto developments surrounding stablecoins, fintech Circle and Mercado Pago sought to bring USDC to Chile, whereas Bitcoin and BitPay rolled out PayPal USD payments for both merchants and consumers. Visa expanded its stablecoin settlement capabilities to the Solana blockchain and made public partnerships with Nuvei and Worldpay to send funds on-chain to acquirers and expedite settlement times for their merchants. A somewhat similar development was that of fiat-crypto payment gateway Alchemy Pay and Checkout.com which collaborated to support transactions between fiat currency and cryptocurrency across the globe.
The wider crypto and Web3 space saw Aptos Labs and Microsoft partner to integrate the Azure Open AI Service into the former’s network for increased Web3 accessibility. Coinbase and PayPal enabled users in Germany and the UK to purchase and withdraw crypto, whilst Deloitte and Bitwave announced a collaboration aimed at delivering increased speed, process efficiency, cost savings, and compliance improvements to businesses utilising digital assets. Another notable partnership surrounding the crypto space was that of Deutsche Bank and Taurus, with the latter’s tech being integrated with the bank to establish digital asset custody and tokenization services globally.
Summing up all the developments to have taken place in the banking and fintech space, there’s a clear focus on digitalisation, as well as an increase in Open Banking-based payments, together with alternative methods that seek to not only retain customers but also further competition amongst financial institutions. With the growing consumer demand for instant payments and optimised services, the industry is on the constant lookout for new technologies that can be integrated within their services for additional simplicity, whilst also aiming to better internal procedures, decrease enterprise costs, and ensure a successful fraud prevention and mitigation strategy. Be sure to follow The Paypers Global Quarterly Analysis series to find out more about the developments that took place during Q4 2023, which also includes contributions surrounding M&As and investments in the industry.
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