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ΤΙΝΚ RAISES $63M IN LATEST FUNDING ROUND: Open banking platform Tink announced that it raised €56 million ($63 million) in an investment round led by Insight Venture Partners, with participation from existing investors SEB, ABN AMRO Digital Impact Fund, and Nordea Ventures, among others. New investors included Nikolay Storonsky, cofounder of neobank unicorn Revolut. Tink allows its partners, including big banks and fintechs, to build account aggregation, payment initiation, data enrichment, and personal finance management products with its plug and play application programming interfaces (APIs). Its partners can integrate Tink's products into their existing apps or use them to develop stand-alone services. The funds will be used to expand its European connectivity to 20 markets by year-end, build four more offices, and double its workforce from 150 employees currently. The startup also announced it's launching in five new European markets — the UK, Germany, Austria, Spain, and Belgium — bringing its total number of markets to nine.
Competition among open banking API providers is heating up amid heightened demand for their products. Tink already boasts high-profile partners such as BNP Paribas Fortis, ABN AMRO, SEB, and Klarna — and now it's secured a significant amount of funding to expand into new markets. Further, the funding round reportedly pegs Tink at a €240 million ($272 million) post-money valuation, raised $20 million in a funding round co-led by Goldman Sachs and HSBC.
Increasing demand for API platform providers signals competition among banks is also accelerating. One of the main aims of the revised Payment Services Directive (PSD2) and Open Banking is to intensify competition in retail banking and enable a long overdue shake-up in the sector. And at the center of these initiatives are consumers. Spurring competition allows new players, such as fintechs and big techs, to compete against banks, but also urges incumbents to innovate beyond their current business models to create new consumer-centric ideas, such as convenient new ways for people to manage their finances. By granting partners access to their technology, Tink and other open banking providers help to accelerate this process as partnering banks and fintechs are able to quickly and easily build and launch new products that enhance customer experience and are tailored to their broad client base.
SIX STOCK EXCHANGE POSTPONES ROLLOUT OF DIGITAL EXCHANGE TO H2 2019: Swiss Infrastructure and Exchange (SIX) has postponed the rollout date for SIX Digital Exchange (SDX) from H1 2019 to the second half of the year due to regulatory issues, according to launching blockchain pilots in 2018, we're likely to see more firms start to scale the tech and use it in their operations during H2 2019 and 2020, bringing us into the next stage of blockchain.
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CREDIT SUISSE AND BANCO BEST PROCESS LIVE END-TO-END FUND TRANSACTIONS USING BLOCKCHAIN: Banco Best and Credit Suisse Asset Management worked with FundsDLT, a blockchain-based platform for the processing of fund transactions, to enable the cross-border distribution of an investment fund, announced it settled $250 billion in FX trades using blockchain. Major financial institutions are becoming increasingly interested in the technology, and as the number of successful tests grows, we expect to see blockchain adoption for a number of existing and new use cases accelerating in 2019.
UK GIG ECONOMY-FOCUSED INSURTECH EXPANDS WITHIN EUROPE: UK-based insurtech Zego, which focuses on providing personalized insurance offerings for gig economy workers, has extended its around 40% of the workforce currently works in the irregular labor market, giving Zego a large addressable market outside of the UK for its services. With many legacy players still focusing on targeting large homogenous groups of people — a characteristic gig economy workers don't fall into due to their changing schedules and work hours — it seems likely that Zego will see equal demand for its services in the rest of Europe as it has in the UK and Ireland.
LATEST RESEARCH FROM BUSINESS INSIDER INTELLIGENCE:
Incumbents can appeal to SMBs by focusing their Open Banking services around financial management. While the offerings that resulted from the regulation are still limited, it seems that a number of small- and medium-sized businesses (SMBs) would engage with such services. Read (Premium Subscription Required) »
European banks focusing on improving product agility amid a changing digital banking landscape. By focusing on product agility, banks can take advantage of their extensive know-how, broad customer base, and deep pockets to lead product innovation. Read (Premium Subscription Required) »
CASE STUDY: How Goldman Sachs changed the retail banking game — by entering it. Goldman saw retail banking's sluggish approach to digitalization as an opportunity to start a new business line. Read (Premium Subscription Required) »
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