Categories
Weekly Update

TFU | May 4 – May 10

Leading Off

The FDIC issued a statement addressing the use of cloud computing services in the financial services sector; Libra hired Stuart Levey, HSBC’s Chief Legal Officer as its CEO; Samsung partnered with SoFi to launch a debit card; Zoom acquired encryption firm Keybase to bolster the security of its product; Robinhood raised $280M in a Series F round; and N26 extended its Series D with an additional $100M in funding.

 

In the News

FDIC shares guidance on FS cloud computing.  The Federal Deposit Insurance Corp. (FDIC) issued astatement addressing the use of cloud computing services . . . in the financial services sector.” The guidance [full text] is not intended to set out “new regulatory expectations”; instead, it highlights good practices for the “safe and sound use of cloud computing services” in financial services.

Libra gets a new CEO.  Facebook’s cryptocurrency project is hiring Stuart Levey, HSBC’s chief legal officer, as its CEO as it looks to revamp following an icy reception in 2019. Prior to joining HSBC, Levey was undersecretary for terrorism and illicit finance at the Treasury. At Libra, he will be tasked with working with global regulators to move forward a project which has already been revised in light of regulatory pressure. 

Samsung partners with SoFi to launch debit card.  Samsung plans to launch a Samsung Pay debit card this summer, which will be backed by a cash management account, in partnership with SoFi. Samsung joins Apple in offering a branded payment card, with Google is reportedly working on its own payment card.

Zoom acquires Keybase.  The video conferencing app acquired Keybase, a startup with encryption expertise. The company has faced a litany of security issues in the last couple of months amidst soaring demand, exposing security weaknesses in the platform. CEO Eric Yuan noted the acquisition will give paying customers increased security and new tools when Keybase is incorporated into Zoom.

Robinhood raises $280M. The popular investing app raised $280 million in a Series F funding round at an $8.3 billion valuation, bringing its total funding well over $1 billion. The funding, which comes after the app suffered severe outages on key trading days in early March, will be used to scale the platform and build out new products. Despite the pandemic, the firm has added more than 3 million funded accounts.

Revolut launches bank in Lithuania.  The London-based challenger bank opened Revolut Bank, a new entity based in Lithuania and operating under its European banking license. Lithuanian customers can now access a full suite of bank services with government-backed deposit insurance. Revolut expects to launch Revolut Bank “in other Central and Eastern European markets later in the year.”

Tencent purchases stake in AfterPay.  The Chinese gaming and social media giant acquired a 5% stake in Australian buy-now-pay-later firm AfterPay. The stake amounts to $250M and reflects Tencent’s desire to move into smart retail and payment platforms. Such pay-later services are growing in popularity because they allow customers to sidestep stringent rules associated with credit cards and loans.

IBM, Mastercard join new digital identity project.  The Trust over IP (ToIP) Foundation launched this week to improve the use of digital credentials to verify identity online, with IBM, Mastercard and the Canadian Province of British Columbia among the founding members. The project will sit within the Linux foundation and aims to develop common standards for digital identity.

Canada delays open banking review.  The federal government has delayed its consultation on open banking until the autumn due to the Coronavirus crisis. The consultation was due to take place now after the government’s advisory group released its first report in January. Some concerns have been expressed with the delay as consumers are already sharing their data without a regulatory framework.

Can Revolut ‘grow up’?  The Financial Times profiled the much-hyped startup which, having grown from a currency transfer service to Europe’s joint-most valuable fintech startup at $5.5B, has drawn criticism, promising in April of last year that it would “grow up”. Founder Nikolay Storonsky notes that, as the firm has grown it has been “treated [like] a bank”, but maintains “we’re still a startup”. 

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