TFU |Apr. 15-28

Leading Off

The New York AG’s office is investigating the parent company of the Bitfinex exchange for allegedly committing fraud valued at $850M; Robinhood applied for a national bank charter from the OCC; Revolut is facing investigations into its ties to Russia, and may lose its EU banking license; T-Mobile expanded its app-based checking account nationwide; SoftBank invested $1B in EU fintech Wirecard; and the American Banker profiled Mike Cagney’s new lending firm, Figure.

 

In the News

NY AG probes iFinex over potential $850M fraud.  New York State Attorney General’s office is investigating the company behind the Bitfinex exchange and the Tether stablecoin for allegedly covering “massive” losses with its own cash reserves, without informing investors. “Those transactions treat Tether’s cash reserves as Bitfinex’s corporate slush fund,” said the AG’s office in a release.

Robinhood applies for bank charter.  The popular no-fee brokerage and stock trading service applied to the Office of the Comptroller of the Currency (OCC) for a national bank charter. Robinhood’s proposed banking arm would be separate from its brokerage entity, despite being “offered to clients as part of a package of services.” The OCC has yet to grant a bank charter to a fintech firm.

Revolut could lose its European banking license.  The British challenger bank, which last year was granted a EU-wide banking license in Lithuania, may be at-risk of losing its banking license following calls to investigate founder Nikolay Storonsky’s alleged links to the Kremlin. The Lithuanian parliament is preparing to debate whether Storonksy’s ties to Russia make Revolut “politically vulnerable.”

T-Mobile launches app-based checking account.  The U.S. telecom partnered with BankMobile, the digital arm of Customers Bank, to make its “no-fee, interest-earning, mobile-first T-Mobile Money account . . . available nationwide.” User accounts are FDIC-insured and come with a Mastercard debit card, money management tools, mobile deposits, and a P2P transfer service.

SoftBank to invest $1B in Wirecard.  The investment will give the Japanese financial services giant a minority state in the German payments company, one of Europe’s most valuable fintech firms. The investment is viewed as a vote of confidence in the firm, whose shares have declined 30% since admitting to investigating accounting misconduct in January.

Transferring money across borders is getting cheaper.  The Economist highlights how fintech is disrupting the status quo of international money transfers, where tech-forward firms like TransferWise are undercutting the high fees of incumbents. While tightening AML rules are pushing banks to shrink their payments networks, fintechs forging their own correspondent relationships at lower cost.

JP Morgan plans new functions for IIN.  The bank plans to expand its blockchain-based Interbank Information Network (IIN) to improve real-time payments verification at point of settlement. Over 220 banks signed up for the IIN’s original sanctions screening use-case. JP Morgan is also planning a sandbox to allow third-parties to develop applications on the network.

Regions uses Watson to improve customer service.  Birmingham, Alabama-based Regions Bank has been testing IBM’s Watson for a year in support of its customer service function. Watson has been applied to the bank’s virtual assistant, Reggie; and it also helps call center staff quickly find information and analyze customer conversations to train staff on best practices

Visa introduces APIs for digital-first payment experiences.  Visa unveiled a platform with beta APIs and development tools that will help issuers and processors build and test digital payment products. The platform promises to help “re-imagine how people access, manage, and control their money in the digital age.”

Stripe acquires Touchtech Payments.   The San Francisco-based payments company has acquired Touchtech Payments, an Irish startup that helps banks set up and run ‘Strong Customer Verification’, an authentication process that will be required for most EU transactions beginning in September. The terms of the acquisition were not disclosed.

Figure wants to use blockchain to reduce closing costs.  The American Banker profiled San Francisco-based Figure, the online lender co-founded by former SoFi CEO Mike Cagney, which has a blockchain-based platform that it hopes will reduce mortgage closing costs for new homeowners. “We think we can take 70% of the cost out of it,” said Wendy Harrington, Figure’s chief marketing officer.

 

 

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