Sibos 2018: Alpha-bets S-Z
In the fourth part of our new feature for Daily News at Sibos, we have a quick look at fintech firms that are worth keeping an eye on at the Sydney event. This article focuses on four names within the S-Z letter range. Antony Peyton, Daily News at Sibos editor, makes his choices.
It’s been a good time for the core banking provider. There has been a healthy flow of new takers for its T24 system, but let’s focus on its £1.4 billion acquisition of trading platform provider Fidessa in early 2018.
The thinking behind that, according to Andreas Andreades, executive chairman of Temenos, is to “accelerate both companies complementary growth strategies in banking and capital markets and will enable us to cross-sell into our existing client bases and capture a greater share of the IT and software spend of banks especially as they move to the cloud”.
Staying on this M&A theme, Temenos said in May that it wanted to make it a success in the US. It was looking for more acquisitions to complement its existing offerings.
In an interview with FinTech Futures at the Temenos Community Forum in Dublin, Jay Mossman, chairman of the vendor’s North America advisory board, said the areas of focus are anti-money laundering (AML), fraud and wealth management. For the latter, trust accounting is especially of interest, as it’s specific to the US.
It will be interesting to see if Temenos can retain its momentum and to find out the results of its ambitious intentions in acquisitions.
This isn’t a token open banking mention, but the real deal called Token.
In May, the UK’s Financial Conduct Authority (FCA) authorised the California-based firm to deliver payment initiation and account information services, under the terms of PSD2.
This gave Token some handy momentum – and in June cross-border payments platform Caxton FX started piloting a new direct payments solution for clients of its multi-currency prepaid Mastercard.
As you guessed, the new capabilities came courtesy of a partnership with Token.
Soon after that, in July, Sberbank in Slovenia also teamed with Token as it sought to move beyond PSD2 compliance and toward a full embrace of open banking.
Aleš Zajc, deputy CEO in charge of retail banking for Sberbank in Slovenia, says: “With Token’s frictionless authentication programmed into each transaction, we will be able to increase payment speed and convenience without ever compromising on security.”
Token will be very aware that while open banking has been kind to it so far, a lot of other companies are also seeking out some action in this new arena.
The bank has been having a woeful time. There’s no other way of putting it as we’re not in the sugar-coated business. We leave that to banks and fintechs.
In April, it was hit with a $1 billion fine by the Consumer Financial Protection Bureau (CFPB) for its auto-loan administration and mortgage practices.
The bureau also found that Wells Fargo violated the Consumer Financial Protection Act (CFPA) in how it charged certain borrowers for mortgage interest rate-lock extensions.
That was followed by another downer. In June, the United Services Automobile Association (USAA) was suing Wells Fargo on grounds of intellectual property charges for unspecified damages, over USAA’s remote deposit capture patents.
“We’ve been abundantly patient with Wells Fargo,” Nathan McKinley, a USAA vice-president and its head of corporate development, said. “Now is the time for us to get the court’s assistance.” Wells Fargo stayed silent.
In September, its wholesale banking unit was probed for fraud; and the bank said it will cut down its staff by up to 26,500 over the next three years.
So why put the bank in Alpha-bets? Well, it can only get better and we want to see how it will achieve that. It needs to show off some innovations or digital developments.
As one of the big four banks Down Under, Westpac is going to have a fight on its hands as quite a few challengers have appeared. They are very keen to upset the status quo – and some of the founders have had caustic words to say on the old order.
You may know the new challengers – such as Xinja, Volt, Judo Capital and 86 400.
There is also the Royal Commission into banking – where the big four were slammed for their greed, lack of honesty and misconduct.
But let’s give Westpac some credit as it has been creative. In May, the new mobile peer-to-peer (P2P) payments platform Beem IT got up and running in Australia.
This followed on from October 2017, when three of the nation’s largest banks, the Commonwealth Bank of Australia (CBA), National Australia Bank (NAB) and Westpac partnered to create the app.
In what was described as an apparent bid to compete with new companies entering the finance sector, Beem IT is designed to allow customers to have a digital wallet on their mobile and make P2P payments.
That’s one thing but if Westpac wants to stop the challenger banks gaining momentum it’s going to have to come up with a lot more ideas.
This article is also featured in the Daily News at Sibos 2018 – Day 4 edition.
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