Uncle Sean's Update - 3/25/22

Happy Friday!!!
 
FinTech, Banking, Data – it’s in our DNA!!!  Here is the Uncle Sean Update for 3/25/22:

• High Five to the Community Bankers of Iowa (CBI) as the latest association of community bankers offering access to the Bankers Helping Bankers platform for their member banks in Iowa!  There is no stopping this movement!!!

 

• So we talked about this a few months ago back in September, but it is reality now.  Apple launches first driver's license in wallet with Arizona.  Uncle Sean will be curiously watching this to see if/how eKYC evolves from here adding “biometric authentication using Face ID and Touch ID helps ensure that only the person who added the ID to the device can view or present their ID or license in Wallet.”  So let’s check this out:
  • Here is what I have learned.  You scan the front and back of the driver's license or ID, take a video selfie to authenticate that “you are you”, then submit the image is sent to the state motor-vehicle department for verification.  Apple Support details the step by step process fairly painlessly.  You can also pair to your Apple Watch.
    • Authentication is done by Face ID or Touch ID to make sure that only you can use your license or ID (furthering wallet security).
  • Apple said the electronic version can be used at TSA checkpoints at Phoenix Sky Harbor Airport for now.  So don’t forget to have your physical ID for your return flight!!!  Apple says it's working with the TSA to get the digital IDs accepted at more airports; and is also working with the following states:
    • Colorado, Hawaii, Mississippi, Ohio, and the territory of Puerto Rico - plus the previously announced Connecticut, Georgia, Iowa, Kentucky, Maryland, Oklahoma, and Utah
  • Looking at this another way…..  Uncle Sean feels this is not too far off from being an NFT by creating a trusted, digital version of a real world asset (NFTs don’t have to be just art or music!).  Pretty cool!!!  😊

 

• Robinhood launched a new debit card called the Robinhood Cash Card.  The new Cash Card is in “wait-list” mode; and Robinhood is not accepting anymore applications for their current Cash Management account and card (these accounts will be converted to the new Cash Card).  Let’s dive into a bit of recent history as the last few years have been interesting in the ‘Hood:
  • Recall back in 2018 when they tried to launch Robinhood Checking with insurance through SIPC (cough, cough) and a stout 3% return - yeah, that ended badly with the SIPC slamming the brakes and Robinhood canceling the product in a very public manner.
  • Then they launched Robinhood Cash Management late in 2019 with a 2.05% APY (Sutton Bank Mastercard debit card), but this time moving uninvested cash to actual program banks for FDIC coverage.  Much better!
  • Now, Robinhood is no longer accepting new customers on the Cash Management platform and has re-launched as Cash Card which is now a Prepaid Mastercard GPR issued by Sutton Bank (here is the cardholder agreement).  The Cash Card is equipped with weekly round-ups and bonuses that automatically invest into the SIPC side with fractional shares.  Additional features include early access to direct deposit, instant savings (think rewards), and the ability to split your paycheck to automatically invest in Robinhood’s brokerage and crypto accounts.
    • I think the third time’s a charm here as Sutton (as a sponsor bank) is doing some cool things in the Prepaid GPR space.  Looks like Robinhood may have got this one right and I think the auto investing feature is pretty slick.

 

• Fed Chairman, Jerome Powell gave some words of wisdom this week speaking on a panel at the Bank of International Settlements Innovation Summit on CBDC’s stating that digital innovation in the financial sector is here to stay and with it, new regulations will need to be created per this Yahoo Finance article.
  • This Banking Dive article covering the same speech outlines Powell’s 4 qualifications of a US CBDC (ensure privacy, be identity verifiable, be intermediated, and widely accepted as a means of payment).  "It’s highly likely that digital financial activities that are currently outside the regulatory perimeter will … be brought within it, which is necessary to level the playing field, keep trust of users, protect consumers, and all of that," Powell said. 
    • Yep…  Regulation is coming and it might take some time…

 

• Figure announced personal crypto-backed loan of $10K - $1M without having to sell your crypto assets (BTC or ETH) so you can continue to HODL.  Not surprisingly, Figure also announced crypto home mortgage up to $20M with 100% LTV secured by both your crypto and the property.  WOWZA!!!!

 

• Bond (embedded finance platform) launched Bond Treasury and announced a partnership with Texas Medical Center entering the healthcare payments space.

 

• Florida becomes the most recent (and largest) state to mandate personal finance education in high school.  This brings the total to 11 states that have a mandatory financial literacy course requirement to graduate.  According to the Next Gen Personal Finance bill tracker, there are 54 personal finance education bills pending in 26 states.  Nice!!!!

 

• The payroll API aggregators had a busy week!
  • Rize (fintech-as-a-service) partners with Pinwheel to allow Rize’s customers to securely switch direct deposits, access income and employment data (VOE anyone?), and more.
  • Sila (payment infrastructure-as-a-service) launches Virtual Accounts and partners with Argyle to allow Sila customers the ability to perform instant in-app direct deposit switching (including all or part of their paycheck) across Argyle’s network.

 

• Holy Cow - I guess interest rate increases have not deterred new funding (not yet anyway)…  Check out the notable FinTech funding for the week:
  • Ramp (corporate card and expense mgmt) raised $750M in financing ($200M equity plus $550M in new debt financing) at a $8.1B valuation citing “close to a 10x bump in revenue year-over-year in 2021.”
  • ClearBank (UK fintech RTP) looks to expand to the U.S. as they raise $230M to fund expansion plans.
  • DailyPay (on-demand pay / EWA) secured a $300M revolver.  Recall last month their announcement powering the PNC EarnedIt pay solution – DailyPay is on a roll.
  • Dave (fintech banking app) secured a $100M investment from FTX and is currently “exploring ways to introduce digital asset payments into Dave’s platform.”
  • Finally (fka Back Office) raised $95M in capital comprised of $11M in Series A plus $85M credit facility to expand into lending for SMB’s.
  • Jeeves (corporate card and exp mgmt) raised $180M in Series C at a $2.1B valuation – a 4x increase in valuation in less than seven months.
  • Capitolis (capital markets platform) raised $110M in Series D at a $1.6B valuation.
  • ChargeAfter (BNPL) raised $44M in Series B round.
  • Tomo (mortgage approval) raised $44M in Series B funding round at a $640M valuation.
  • Glia (digital customer service solution for financial institutions) raised $45M in Series D round at a $1B valuation.
  • TokenEx (cloud tokenization to secure sensitive data such as cardholder data) raised $100M in Series B funding round.
  • MixMode (cybersecurity) raised $45M in Series D to automate cyberattack detection.

 

• We lost former Secretary of State Madeleine Albright this week at the age of 84 – a true American patriot, diplomat, human rights champion, and recipient of the Presidential Medal of Freedom.  PLEASE do yourself a favor and read this NY Times article with an amazing biography of her life (specifically the Fabricated Memories section).  Somewhat embarrassed, I admit that I had no idea that Madeleine Albright and her family were forced to evacuate their home country of Czechoslovakia twice as refugees in a war-torn Europe (first in 1939 when she was just 2 and again in 1948) eventually landing in the United States.  A fact that is certainly not lost on me considering the current war in Ukraine and the children refugees specifically. 
  • I simply can’t help but wonder (and silently hope) if a future humanitarian hero is now being raised due to an unimaginable present situation as a child in Ukraine…..

 
 
Random Uncle Sean Stuff:

• Cooking up some cajun shrimp and sausage tonight for dinner!!!  Here is what I use - Cajun's Choice - Cajun Shrimp Seasoning Mix.  It is super easy and DELICIOUS!!!! You can thank me later!!!!
• Am I the only one who thought the Uber agreement to list NYC taxis on its app was just completely ironic???
• And some quick inspirational / philosophical Dad Jokes:
  • Everyone knows that light travels faster than sound….  Which is also why some people seem incredibly bright until they speak.  LOL
  • My doctor told me to avoid any unnecessary stress, so I threw his bill in the trash!  Yep – I feel better already!!!!
  • Always remember, to err is human but to forgive is not FDIC policy.  😊

 
 
Have a GREAT weekend and please stay safe!!!
 
Uncle Sean
 
 
Sometimes known as Sean Mayo – contact me directly for scope and pricing of custom reports / analysis projects at smayo@fedfis.com | 214-604-6961 – or you can contact FedFis Sales Team at 512-960-0911 | info@fedfis.com #FedFisHasTheData FedFis
 
FedFis, LLC disclaimer – The views and opinions of Uncle Sean are of his own and may not necessarily represent the views, endorsements, and/or opinions of FedFis, LLC – we all know he’s a little bit different; but that’s why we love him.