Uncle Sean's Update - 4/29/22

​Happy Friday!!!
 
Welcome to the last business day of April which means we are already 1/3rd of the way through 2nd quarter – Holy Cow!  Here is the Uncle Sean Update for 4/29/22:
 

• More great things coming out of Bankers Helping Bankers (BHB) platform and the newly created BHB BaaS Association.  Off to a screaming start (to the moon) as two of the leading Sponsor Banks in the nation join as founding, charter members just this week alone – stay tuned for more!
  • Sutton Bank joins BHB BaaS Association
  • Evolve Bank & Trust joins BHB BaaS Association

 

• Fiserv announces the launch of AppMarket allowing an open platform for banks on Fiserv core (DNA, Cleartouch, Precision, Signature, and Premier) to easily offer and integrate FI FinTech solutions “to address emerging opportunities in crypto finance, gig economy banking, small and mid-size business (SMB) lending and other priorities.”
  • Warning – some Uncle Sean op-ed here:  To my Banking friends - this is what we have been asking for.  An easy open platform to integrate third party FI FinTech solutions to your core.  It is not quite the Holy Grail solution as it is only core specific (not online or mobile), but it is exciting and is a GREAT start!!!!  Go into the Fiserv AppMarket Platform and play around to see what is being offered – it’s really cool!!!!
    • Recall just a few months ago when Jack Henry announced their open marketplace featuring 850+ fintech integrations through Banno.  The difference being the JHKY solution is mobile / online only whereas the FISV solution is core specific (but no mobile).  Again not the end–all solution, but a GREAT start!!!
    • Looking back, it feels like the O.G. to open marketplace was Finastra’s Fusion Fabric (via legacy Malauzai mobile).  Then came Q2 Innovation Studio and Partner Marketplace.  Now the major core processors are providing open solutions.  Exciting times as we begin to bring BaaS back to the bank!!!

 

• The Federal Reserve Bank of St. Louis released their 2021 Annual Report.  Do yourself a favor and read the Main Essay titled The Blockchain Revolution: Decoding Digital Currencies.  It is a bit of a longer essay, but it is easy to read and highly informative if you are looking for a refresher on crypto, defi, blockchain, smart contracts, tokenization, stablecoins, and CBDC.  Uncle Sean highly recommends it!!!! 

 

• Another CU acquisition of a bank – CoVantage Credit Union in WI (Charter #66848, $2.5B Total Assets) announced an agreement to acquire LincolnWay Community Bank in IL (Cert #57971, $277M Total Assets).
  • If you are keeping score, this is the 6th CU acquisition of a bank YTD for 2022 compared to 13 in 2021, 7 in 2020, and 16 in 2019 (source: FedFis)

 

• A pilot program for instant cross-border (IXB) payments is being launched by EBA CLEARING, SWIFT and The Clearing House (TCH) and is anticipated to launch before the end of 2022.  Initial proof of concept was completed last October.
  • It will be interesting to see how this impacts competition as fintech companies have really been active in this  cross-border payments space (i.e. Wise, Remitly, Sable, TransferMex, and many others).

 

• BetaBank (in organization) submits FDIC application for a de novo digital bank focused on SMB lending.

 

• KeyBank joins the ranks of recent financial institutions to restructure Overdraft Fees and eliminate NSF.

 

• Hmmm…  At Jack Dorsey’s request, Block (fka Square) filed an 8-K with the SEC to officially change Jack Dorsey's title from Chief Executive Officer to “Block Head” effective immediately.  Not ironic at all to me that this was filed on 4/20……  Okay then!  LOL!!!  😃
  • However, per this article in Fortune, Jack Dorsey owns 18,042,428 Twitter shares – giving him a $978M payday at $54.20 per share acquisition price by Elon Musk (a $270M premium over the closing price on April 1).  Touché Sir Block Head!!!

 

• Bond (embedded finance / BaaS infrastructure) and Evolve Bank & Trust (fintech sponsor bank) have partnered together to offer BaaS solutions.  Uncle Sean can’t help but wonder what this means to Synapse who has been a leading infrastructure partner with Evolve for years…???  😲

 

• Fidelity becomes the first major retirement plan provider to allow bitcoin as a 401(k) investment option for workers subject to their employers adoption and 20% allocation limits.
  • This comes fresh off of last month’s DOJ warning to fiduciaries focused on 401(k) plan investments in crypto to “exercise extreme care before they consider adding a cryptocurrency option to a 401(k) plan’s investment menu for plan participants.”

 

• Bolt (online checkout provider) finds themselves in a rather precarious position as they are being sued by their most prominent customer (ABG) citing a failure to honor a commitment to provide a checkout product with the ability to “seamlessly integrate” into its partners’ websites.  This looks really UGLY!!!

 

• And of course it wouldn’t be a full week if we didn’t have more CFPB saber rattling.  Now the CFPB is invoking some old Dodd-Frank legislation to examine nonbank financial companies (i.e. FinTech) that pose risk to consumers - namely mortgage, private student loans, payday lenders, debt collection, international remittance, and auto loan servicing.

 

• Notable FinTech funding for the week:
  • Cogni (digital banking app) raised $23M in Series A funding with expansion plans into crypto including a multichain wallet, crypto trading, high-yield savings account, and early access to limited edition NFTs.
  • MetaLend (lending protocol for NFT’s) raised $5M in Seed funding.
  • Ellis (U.S. neobank for immigrant students) raised $5.6M $5.6M in Seed funding.
  • Kard (rewards-as-a-service API for card issuers) raised $23M in Series A funding.
  • Copper (teen banking app) raised $29M in Series A funding round and is expanding the app to allow customers to gain the ability “to direct funds from their FDIC-backed accounts into a wide range of investments, from individual stocks to mutual funds to cryptocurrency.”  Thus creating a parental supervised environment where teens can learn as they spend, save, and invest.
  • ModusBox (payment integration infrastructure platform) raised $7.5M in Series A funding round.

 
 
Random Uncle Sean Stuff:

• DON’T FORGET – Mother’s Day is next weekend, May 8th!!!!!  You’re welcome - LOL!!!!
• Yep, you know Uncle Sean has some Dad Jokes for you:
  • Which letter is silent in the word “scent?”  Is it the S or the C???
  • Do twins ever wonder which one of them was unplanned?
  • Maybe Oxygen is slowly killing you and it just takes 75-85 years to fully work…
  • Why is the letter W called double U and not double V?
  • The word “swims” upside down and backwards is still swims (wait - there’s that double U)!!!

 
 
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.