Uncle Sean's Update - 5/24/24

Happy Friday!!!
 
Happy Memorial Day Weekend to everyone as we honor those that paid the ultimate price for our freedom.  I hope everyone gets a chance to spend some extra time with family and love ones, eat good food, and go outside and play!  Here is the Uncle Sean Update for 5/24/24:
 

• High-five to Mbanq as the latest innovative firm to join The BaaS Association to enhance banking technology, compliance, and best practices in our rapidly changing industry.  Mbanq - “driving positive change in the industry.”  Love it!!! 😊

 

• There are a lot of product launches this week.  Kicking off with my friends at Atomic announcing the launch of PayLink Manage (subscription management tool for FI’s) allowing users to monitor recurring payments and make real-time changes within their existing banking app. 🏆

 

• FIS announced an upgrade of their mobile banking app (Digital One Flex Mobile 6.0) for financial institutions.  Featuring biometric login and authentication, enhanced money movement capabilities, and built on a single platform to make it easier for banks to deliver digital banking on both mobile and online.

 

• Synctera launches Bring Your Own Bank (BYOB) enabling fintech “customers to leverage the Synctera Platform while maintaining the flexibility to work with whichever bank best fits their needs.  For the sponsor banks of our BYOB customers, the Synctera Platform gives them confidence that their partner’s banking product is built using compliance-forward infrastructure with sound accounting principles and a complete reconciliation engine.”

 

• Google announced 3 new Google Pay features that are pretty cool 😎:
  • Card benefits – at checkout, you can see which cards offer the best rewards benefits for that specific transaction (starting with Amex and Capital One for now).
  • BNPL options (including Affirm and Zip) as a payment option when checking out online.
  • Autofill of full card details at checkout using the same authentication that you use to unlock your device (fingerprint, face scan, or PIN).

 

• FDIC Chairman, Martin Gruenberg announced he is "prepared to step down" once a successor is confirmed. 🤔
  • This comes at a critical time as the regulators are looking at the possibility of enhanced capital requirements.  Banking Dive has a good summary including the political impact of being “prepared to step down” once a successor is named as opposed to resigning immediately.

 

• Meanwhile, the FDIC published their 2024 Risk Review which is an overview of banking conditions in 2023 in five broad risk categories.
  • Noticeably absent is any mention of the terms fintech, BaaS, or even third-party risk management – with the exception of cyberthreats on third party supply chains… 🤷‍♂️

 

• 👀 The CFPB released interpretive guidance on BNPL providers as “lenders” and applicability to Reg Z akin to “card issuers.”
  • Basically meaning BNPL providers (err – lenders) must provide key legal protections and rights to consumers just as they would for conventional credit cards such as: investigate disputes (including pausing payment requirements during the investigation), refund returned products, and provide billing statements like the ones received for classic credit card accounts.
    • You can read the actual interpretive guidance here - Truth in Lending (Regulation Z); Use of Digital User Accounts to Access Buy Now, Pay Later Loans.

 

• Long live embedded finance!!!  Adro (technology platform providing banking services for international students and workers moving to the U.S.) announced they have selected Stearns Bank as their official bank sponsor.

 

• Another week and another CU acquisition of a bank.  This week it is Gesa Credit Union (Charter 68278; Total Assets $5.5B) to acquire Security State Bank of Centralia, WA (FDIC 13232; Total Assets $598M).
  • This makes 10 announced CU acquisitions of a bank thus far in 2024 compared to 11 in 2023, 16 in 2022, 13 in 2021, 7 in 2020, and 16 in 2019 (source: FedFis).

 

• CSI announced they are partnering with TruStage™ Compliance Solutions to integrate dynamic forms for account opening for CSI’s hundreds of community bank customers.  TruStage’s dynamic forms will enter beta testing later this year and will be available in early 2025 for CSI NuPoint® core customers.

 

• Coming to America!  Metropolitan Commercial Bank (MCB) selects ebankIT (Portugal-based global technology firm) to provide a core agnostic digital banking solution for MCB’s diverse client base of consumer and business customers.

 

• Pretty sure everyone saw this coming…  Capital One and Walmart announce the end of exclusive consumer credit card agreement.
  • Recall back in March where a judge ruled that Walmart could end the exclusive Capital One partnership early.
  • Also recall where Walmart’s fintech platform, One, has recently introduced BNPL in April as a direct competitor to Affirm who has been providing installment loans for Walmart customers since 2019.
    • Anyone want to place bets on how long before One launches a CC for Walmart? 😲

 

• The Synapse (proven failed connector/middleware BaaS model) Chapter 11 bankruptcy and Evolve Bank & Trust fiasco is still a mess.  Nothing really new to report on this week other than more finger pointing and the fact that end users still cannot access their cash…  Personally, I don’t see how this does not convert to Chapter 7 liquidation as well as consent orders, but I am hoping for a better resolution.  Here is one of the better summaries I saw this week - Fintech Fight Leads to Hundreds of Thousands of Frozen Accounts.
  • Be sure to follow Jason Mikula (publisher of Fintech Business Weekly) as he publishes updates regarding the Synapse meltdown in almost real-time.

 

• Notable FinTech funding for the week:
  • Footprint (identity and fraud detection) raised $13M in Series A funding round.
  • Majority (immigrant banking app) raised $20M in capital consisting of $12.5M in equity and $7.5M in debt.  Per the article, “The platform currently generates $40 million in annual recurring revenue (ARR) and receives $200 million in new deposits per month, according to figures from April 2024.”
  • Vitesse (UK treasury and payment solutions for insurance) raised $93M in Series C round to fuel its expansion plans to the US market.

 
 
Random Uncle Sean stuff:

• Thursday, May 23rd  was World Turtle Day – I did not know that was a thing, but I like it! 🐢 
• Our daughter is home from college for the summer and I am very much looking forward to spending some time hanging out this weekend and enjoying some BBQ, family time, and more than likely some cold adult beverages!!!! 🍺  Might even try to squeeze in a nap or two!
• Ah yes, we made it to the Dad / Bad Jokes:
  • If you flip a canoe over you can wear it as a hat….  Because it is cap-sized… 🙄
  • Scientists say it may be possible to live on Mars.  Well, I tried it for a month…  It worked, but I gained 35 pounds and the doctor said I am now diabetic… 🤠
  • Don’t forget to watch the Origami championship this weekend…  It’s on paperview…. 🤓
  • And to wrap it up, a pro-tip from Aunt Patty….  If you wear your old 80’s prom dress to the pharmacy, they’ll fill your antidepressants faster! 🤣🤪❤️

 
 
Have a GREAT Memorial Day 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 [email protected] | 214-604-6961 – or you can contact FedFis Sales Team at 512-960-0911 | [email protected] #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.