new ico-backed crypto-friendly neobanks vs «classic ... · reinventing the wheel - in development...

NEW ICO-BACKED CRYPTO-FRIENDLY

NEOBANKS VS «CLASSIC» FINTECH NEOBANKS:

REINVENTING THE WHEEL

- in development

Anna

MyBank

Qonto

Soldo

Ferst Digital

Fidor Bank

BABB

2getherbank

Change BankPolybius Bank

Narbonne

FIINU

Bankera

- live

Nubank

Loot

Koho

Pepper

Morning

Lintel Bank

Chime

buddybank LunarWay

Starling bank

neat

Canvas

Osper

Bankaaol

WeBank

Bank Mobile

Compte NickelDoPay

Coconut

Final

ImaginBank

PockitQapitalSoon

Jibuan

GoBank

AlboNeon

Hello Bank

Monese

Tandem

KAKAOBANK

Revolut

Tide

SECCO

Tochka

Tangerine

Crypterium

- live with banking license

Сrypto-friendlyfor Retail2

3

4 Classic fiatfor Retail

N26

Banco Original

MonzoAtom

Holvi

CivilizedBank

Classic fiat for SME

1 Сrypto-friendlyfor SME

on Nov 8.

stand #A 728

See you at

in the Fintech

Exhibition Area

02

NEW ICO-BACKED CRYPTO-FRIENDLY NEOBANKS VS «CLASSIC» FINTECH NEOBANKS: REINVENTING THE WHEEL

The overview covers 8 crypto-friendly neobanks (2 have already held ICOs, 6 are in the process). They have already raised more than $45 million, and are going to raise about $150 million in aggre-gate. This is about half of the investment attracted in 2016 by “traditional” fintech neobanks, which are higher in number and at a later growth stage!

None has gone live - at best, they have implemented a registration module for the future neobank (digital KYC). But even these solutions in the field of blockchain-based digital KYC, judging by the information available, have not been accredited by the central banks or data protection authorities. Meaning that these startups just have it.

All are going to serve retail customers – no one is focusing on small and medium business. Whereas in the context of major problems with traditional banks and the existing (not in the future but current) needs for crypto-friendly neobanks, it is the SMEs that are now the most mature target audience: about 500 startups that have already held ICOs (raising over $3 billion which they can’t freely use), crypto-ex-changes themselves, crypto-payment startups, and other community members. Moreover, these SMEs are now bringing greater number of retail customers (their employees, partners and customers) than those predicted in the future by new crypto-friendly neobanks.

They are all being established by those who have launched startups before (in some cases fintech startups, but not Class A names), but not banking startups (lacking the experience of communicating with the regulator), neobanks\challenger banks. For example, one of the startups had successfully raised money through the ICO, but when they have applied for a license, they have discovered that the regulator was not ready to accept phiath in the bank's capital after the conversion of the crypt raised from the ICO. Considering that almost all of them are going to apply for their own licenses, but none of them have ever done it before, the question arises: there is no doubt that they know how to make cool applications, but do they have enough experience to launch and run a regulated bank?

One crypto-friendly bank has made a pretty strange move claiming: we accept crypto to establish a crypto-friendly bank, but "in the beginning we will not work with crypt, in order to obtain a license first." It sounds like "we are opening a gay-friendly bar, but we won’t serve gays for the time being, and, just to be on the safe side, we will participate in gay-bashing because the society requires such behavior." Am I wrong?

They all reincarnate “card + app to manage your account” – exactly what has been done a long time ago by the previous and current generations of "traditional" fintech neobanks. That is, instead of taking into account their best practices and adding blockchain / crypto component - they are really reinventing the wheel. “I want to give rise to a new style of verses but I would like to start with reinvention of the English language”. If you are a blockchain expert who is well aware of the current needs of the crypto world, shouldn’t you add your knowledge and functionality (and licenses) to existing neobanks, actively building partnerships with them rather than cannibalize the immature market?

The Bubble generation isn’t accepted by traditional banks (even by fintech-neobanks). Bitcoin’s capitaliza-tion is around $100 billion, ether’s capitalization is around $30 billion, the total funds raised through ICOs – more than $3 billion. No one is waiting for you. Banks have "little or no appetite" to get involved with bitcoin and cryptocurrencies due to fears of a bubble and illicit activity associated with it, the chief executive of Credit Suisse said. The chief financial officer of ING also weighed in on cryptocurrency worries, saying that, although digital assets are an effective means of exchange, the bank was not advising clients to in invest in them.

Almost all major banks refuse to accept money after the conversion of the cryptocurrency. Let's call things by their own names - traditional banks hate the crypto. But this hatred is stemming from the lack of understand-ing, fear of uncertainty and laziness rather than anger. The money that bank receives after the conversion of the cryptocurrency goes through compliance depart-

ment where forty-fifty year old “experienced” employees simply do not understand what it is and where it came from. And here is the most stupid thing: if they spend time to sort out the issue, nobody will praise them for that (therefore they lack motivation), but if they make a mistake, they will be fired.

If you convert crypto into fiat and transfer to your bank account less than $50,000, most likely, everything will go smoothly, and you will tell the market that there are no problems and everything works without failures. If you convert from $100K to $300K, the situation is 50\50. But if more than $500K, you will definitely have to talk to your bank's compliance. KYC, AML, source of funds… It would even be good that they ask all these questions if they were more tech-savvy (quick and convenient), and if they really wanted to figure it out. But no one wants to sort out your issues; therefore, you get your "account freeze" and "notification of the need to close within 30 days."

The Problem: Making digital money tangible

03

Why does bank compliance is not willing to understand your issues? First, they already have a large and understand-able business (with which they are familiar), and they are not interested in a new and small (albeit fast-growing) business because its profitability is still small, the risk of losing the current big business is big, and there are many issues they will have to deal with. Second, imagine a specialist in compliance. He/she is 40/50 years old, not highly paid, without any career perspectives. Their mindset is built on the past (instead of the future) and their decisions are conditioned "how to avoid something bad to happen” (instead of "how to help something good to grow easier and more convenient"). They see a lot of transactions daily and finally they see some odd transaction after the conver-sion of the crypt, and … they block it. Why? Not because they are bad people. Simply because they don’t know anything about blockchain, cryptocurrencies and ICO - and in their world "everything that is odd is forbidden". They could even address the matter and the client, but it would take too much time and no one would give them a premi-um for this. But if they make a mistake, they will be fired. Therefore, they send a page or two of dreary questions, and then simply block the account.

Are there any "workarounds"?? For sure. In return to one or two pages of questions provide ten to twenty pages of meticulous and detailed answers, thus, “starving the bank out.” However, you need substantial capital for this purpose as you will have to spend money on your back office (lawyers and accountants) in order to collect and accurately store all papers, electronic statements and screenshots of all transactions on mining, receiving, buying and selling of the cryptocurrency; to be able to quickly reply with exhaustive explanations (with schemes and conclusions) about blockchain, cryptocurrencies and ICO; describe how you and your contractors underwent KYC, AML, source of funds procedures; provide full review and conclusion on your partner exchanges. You should better hire a large audit company (such as Deloitte or E&Y) $30-50K, which regulatory verifies what kind of business you do, who you cooperate with and how, where your crypto comes from and how you spend fiat money. You will also need to come up with different purposes of payments from your bank because the "receiving bank" will have questions about the origin of funds, and regular similar transactions with the same justifications will raise questions.

Alternatively, you can find some shitty bank in a third world country that will not ask you questions. But in practice the questions will not disappear anywhere and will arise each time you make a payment outside your shitty bank. Let’s assume you have found a shitty bank that is friendly to this type of operations, or have armed yourself with an army of lawyers / accountants / auditors and defeated your clear and large traditional bank. The problems will still be there. If you make transactions in US dollars (and most transactions are sooner or later transferred to dollars at some stage), then you face the "problem of correspondent banks" in the SWIFT system. Your bank should have a correspondent bank in the United States, so that its transactions are conducted around the world through such "superfluous intermediaries". If suddenly your bank "gets on the radar" (will raise questions) of the correspondent bank (and sooner or later, especially with the growth of such transactions, questions arise), then your friendly bank will get to know who it should (not) be friends with. And this is the point when you need to make your choice whether you want to be as inconspicuous as possible in order not to attract attention, and be constantly hiding and avoiding questions. Or you have legally earned your money and want to build new services and a new economy, and do not want to waste time and resources on any political and bureaucratic nonsense?

Why the existing cryptocurrency wallets and cards can’t solve this problem? Since these are half-hearted solutions (it's like gluing more and more plasters on the arm affected by gangrene). You depend on your partner bank. And if you reach some large amounts within its cash flows (in fact the business strategy of such partner banks that agree to such an additional risk is to "drown" your transactions in their core business so that they are not noticed, and receive additional income for the risk), the risks that this bank will be approached by senior bankers (regulators and correspondent banks) and asked to stop working with you are not eliminated but simply deferred to a later date. Check the spending limits for these kinds of cards - though it's great that such cards do exist, - but the limits allow you to painlessly buy coffee and t-shirts, while such limits will not work for larger purchases or full-fledged business. They work only for retail customers. What shall SMEs or freelance entrepreneurs do?

BABB Yes 2016Plan $50 mn (ICO)UKEveryone is a bank

Retail

Polybius Bank Yes 2017$30 mn (ICO)EstoniaRegulated bank for the digital generation

Retail

Fiinu Yes 2017Plan $75 mn (ICO)UKBlockchain-friendlyBritish bank

Retail

Bankera Yes 2017Plan $30 mn (ICO)LithuaniaDigital bank for the blockchain era

Retail

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Crypto-friendly neobanks


NamePlan to apply for

a licenseFunding FoundedCountry Motto/Idea Primary focus

Change Bank 2016$15 mn (ICO)EstoniaThe future of finance

Retail No

Narbonne 2017Plan $10 mn (ICO)SwitzerlandBank for crypto miners

Retail No

2getherbank 2017Plan ICOSpainThe first collaborative bank

Retail No

YesCrypterium 2017Plan ICOEstoniaThe JP Morgan of Cryptobanks

Retail

8

Analysis provided by:

04

The growth in digital banking is showing no signs of slowing down. Convenience, speed and security aren’t just extra benefits in consumers’ minds anymore. As a rule, traditional bank institutions struggle to build a loyal customer base, while the newly emerging digital-only banks, like Monzo or Tandem, have all the attributes of a strong brand and can keep customers both happy and engaged with their product.

There’s no doubt that mobile banking is one of the most fundamental parts of digital banking. In the future, we’ll see even more payment solutions that take advantage of the Internet of Things and consumers’ state of connect-edness. Has the future of digital banking already begun? Several fintech experts argue that what we see today is not digital banking but simply digitized banking. Hundreds year old financial products are being adapted to the digital era and distributed via smartphones and the Internet. Many believe that the real innovation will sprout once the legacy banks and fintech startups move away from modernizing the digital experience and plunge themselves into launching new digital capabilities.

One direction that is shaping up to be an extraordinary one is blockchain banking. It’s a much faster, more efficient and less prone to error process than the traditional automatic clearinghouse (ACH) banking,

which can save money and time for banks and make payments almost instantaneous for consumers. Smart contracts allow consumers to exchange money, shares, property or anything of value in a secure, conflict-free way without anyone in the middle to take a cut. Thanks to the transparency of smart contracts, buyers can easily check merchants’ reviews and previous ratings before buying as well as rate them themselves after receiving the item. The rise of cryptocurrencies, or simply digital money, has created a demand for a blockchain-based bank. It wouldn’t be outrageous to suggest that most of the future banks will be digital banks with tradition-al banking services, supporting both crypto and regular currencies.

It’s difficult to gauge what lies ahead, mostly due to yet untapped potential of the blockchain technology. But with the legacy banks jumping on the trend and new blockchain-based startups exploring innovative use cases of decentralized financial solutions, we can expect the future of digital banking to unfold in many unexpect-ed ways. Once we move away from digitizing traditional banking services to inventing digital banking services that suit the blockchain era, we will experience increased accessibility and trust, cheaper and faster services and a significantly more automated banking industry.

- in development

Anna

MyBank

Qonto

Soldo

Ferst Digital

Fidor Bank

BABB

2getherbank

Change BankPolybius Bank

Narbonne

FIINU

Bankera

- live

Nubank

Loot

Koho

Pepper

Morning

Lintel Bank

Chime

buddybank LunarWay

Starling bank

neat

Canvas

Osper

Bankaaol

WeBank

Bank Mobile

Compte NickelDoPay

Coconut

Final

ImaginBank

PockitQapitalSoon

Jibuan

GoBank

AlboNeon

Hello Bank

Monese

Tandem

KAKAOBANK

Revolut

Tide

SECCO

Tochka

Tangerine

Crypterium

- live with banking license

Сrypto-friendlyfor Retail

Overview of neobanks’ universe

2

1

3

4 Classic fiat for Retail

N26

Banco Original

MonzoAtom

Holvi

CivilizedBank

Сrypto-friendlyfor SME

Classic fiat for SME


Analysis provided by:

Change was founded in early 2016 in Singapore. Shortly after, angel investors backed the proposition with over $200k in early investment. Since the beginning Change CEO vision was to combine innovative companies in investment, e- wallets, remittance, credit and insurance to create a global fintech bank. Change aimed at simplify-ing banking in Southeast Asia. The team focus all efforts in creating a simpler and more innovative financial proposition, making use of blockchain technology to link independent high-performing fintech companies around the globe.

To accomplish this goal, it has launched an ICO campaign, which ended on October 16 and has raised over $15 mn.

Change mobile application starts with the e-KYC platform. It can on-board users from anywhere in the world, in record-time and requesting no more than what is needed automatically validating the users’ transactions with other third-party service providers through Tokenised KYC Information Sharing. The quest towards finance without borders starts here, designing a modern bank that is global from day one.

Launching in December 2017 Change's crypto wallet with simple sign-up with minimal information required to store & send cryptocurrencies is being tested by beta testers. Change’s Wallet facilitates the storage of all major cryptocurrencies, easy management of crypto portfolios, simple transfers of funds between peers, and a multitude of other functionalities.

05

CHANGE BANK


Change’s crypto wallet is secured by applying the highest industry standards. Change works together with a leading wallet security provider in the industry to ensure the safety of funds. The funds are also secured by a combination of hot and cold storage solutions, which provides further security. The ID of the multi-asset wallet is user's e-mail address and/or phone number. User registration automatically creates a blockchain wallet. Access to your wallet is locked by a 6-digit pin-code and any transfers out from your wallet is also secured by a 2 Factor Authentication (2FA) to provide an additional layer of security.

Every crypto investor faces the same problem: opportu-nities to exchange digital coins for goods and services in our everyday lives are very limited. Buying with crypto-currencies should be as easy as buying with dollars, euros, or yen. Change Card is a card that intends to solve this issue, allowing users to spend their cryptocur-rencies in millions of online and offline locations worldwide. Cryptocurrencies held within the Change wallet and will only be converted into fiat currencies in real time at the point of payment transaction. With cryptocurrency spending card Change brings cryptocur-rencies to offline use. The first 500 cards (cards are not exist yet) are given to the first token sale contributors. In addition, card holders will be earning rewards by paying with Change Tokens.

Change issue cards using industry leader in crypto payments processing. The issuer is a principal member of leading payment gateways such as Visa and Master-card in Europe and has strong security protocols, including real-time updates to electronic verification solutions & fraud. Change’s card systems allow for industry leading dynamic CVV functionality that gener-ates a unique CVV for every transaction. Change Card holders can use the cryptos they stored on their Change wallets to pay for services and products at all Mastercard merchants around the world. The company plans to start sending out the first cards in December 2017, shortly after the launch of Change App.

In 2018, Change has set to launch the global financial technology marketplace on blockchain which will aggregate the best ways to invest, insure or lend and will let you use these services from a single interface & wallet. Change vision goes beyond just using cryptocur-rencies for payments. “It is time that you could also use your cryptos to invest in stocks, P2P loans, real-estate or anything else you can imagine. It is time that you could buy travel or car insurance instantly with your Ether or take a loan in bitcoin. Not We just believe in de-central-ized data but also in the power of de-centralized services. Think of Change as an "AppStore" for special-ized financial service companies that outperform your bank, while removing the need to sign up or deposit funds to these services individually. Invest in a diversified stock portfolio or real estate, finance loans, sign travel insurance - all from one interface with complete transparency and zero delay.”

"We live in a time where for almost every single service a bank offers, there is a fintech company that utilizes state-of-the-art technology and a lean & mean team to provide a better, faster and cheaper service. This isn't a forecast, this is today," says Kristjan Kangro, CEO of Change. The company focuses on nailing one specific service, be it transfers (Transferwise), payments (Stripe), investing (Smartly) or insurance (Oscar). In order for the marketplace to be regulatory compliant, Change is building a multi-tiered standardized KYC (Know-Your-Customer) utility. Users won't need to present extensive information to simply sign up for the app and get a crypto payment card. However, "to use regulated fintech services, you'll need to verify your identity" says Kangro. Estonia's e-Residency conducts a thorough background check, while also having a very strong potential customer-base to offer services to.

The API library will be open to all developers that wish to be part of our financial ecosystem. By opening our data, functionality and services to third-party develop-ers, they can integrate their systems and Change can expand its list of innovative services.

06

CHANGE BANK


Change marketplace integration allows various KYC information to flow within the Change financial ecosys-tem. This means that one digital identity will be applied across all partners that have integrated. As Change's platform becomes the standard of the industry for shared KYC and easy integration, it will create a network effect to pull more and more fintechs in to the ecosys-tem. This is aimed to create a diverse financial ecosys-tem that collaborates, innovates and thrives. Change has partnered with the e-Residency project by the govern-ment of Estonia, the most advanced digital society in the world and it will be available to every of projected 10 million e-Residents. "Digital Identity is one of the keys to solving financial inclusion so we are delighted that Change is using our secure government-backed digital identities to help solve this issue and develop their business." - Kaspar Korjus, Managing Director of e-Resi-dency.

Vision of the all-in-one platform for financial services is not geographically bound by borders. Today’s technol-ogy and regulation allows us to create a de-centralized third-party marketplace that brings you the leading financial technology products. ANYONE can use the most suitable service provided from ANYWHERE. In 18 months, the Change API will be opened to credit and insurance.

Change enables the allocation of funds to financial services based in foreign countries, avoiding the bureaucracy of traditional banks, bringing to life the concept of truly borderless finance. Fintech companies benefit from joining the Change Marketplace as they are able to present their products to users of the crypto bank, with no geographical restrictions. Local compa-nies, expanding their user base, reaching millions. The Change Marketplace is self- regulating, meaning that while initial approval is decided by the Change team, a fintech can only remain in the marketplace if it is popular and satisfactory the services will be rated and usage rates published.

Users will be rewarded for using the Change Card and other third party services on the platform - online or offline - receiving part of the transaction back in the form of Change Tokens. Any time a user makes an online or offline payment using Change Card, he or she will receive a 0.05% rebate in the form of Change Token. The rebate will double if the user pays using Change Token. This incentive benefits token users and holders, as it ensures that the currency is constantly being traded, making it more desirable and valuable. For example, a user that spends 3000 Change Token on a brand new laptop will receive a rebate of 3 Change Token.

Third-Party Service Providers (TPSPs) share 20% of their revenues generated from Change users with Change. This 20% is distributed between Marketplace investors and holders of Change token in a 1:5 ratio. With 16.67% going to marketplace investors and 83.33% being distributed to Change Token holders.The Change has a team of 10:

Kristjan Kangro, CEO – Serial entrepreneur. Previously CFO of Expara and CEO of SwingBy.

Artur Luhaaar, Partner – Serial entrepreneur. Current CEO of Smartly (Singapore-based robo advisor) and former analyst at an investment firm.

Gustav Liblik, Partner – Serial entrepreneur. Current CEO of Catapult, former CEO of Wastes-canner.

Edgars Simanovskis, CTO – Also the current CTO of Danabijak. Previously an iOS developer for various companies.

Change has a team of advisors, including Roger Crook, ex-CEO of DHL Global Forwarding, Rob Findlay, Founder of Next Money, and Miguel Soriano, Professor at the National University of Singapore. Change has conducted regular meetings with companies across the fintech and cryptocurrency space.

07

CHANGE BANK


Narbonne will be a fully automatic bank without people and offices. Narbonne - a crypto bank for users and corporations. You will be able to spend your cryptocur-rency around the world, using Narbonne debit cards. It will use extensive experience in the field of online micro-lending, peer to peer lending and traditional bank lending. Narbonne team has experience in creating from the scratch financial institutions in the field of micro-lending in Spain, Germany and Russia. The company’s head office will be in Switzerland. Narbonne Services:

For Deposits in crypto-currencies - Narbonne Wallet SafeFor any Settlement accounts for business - Narbonne Wallet EnterpriseGlobally accepted Debit cardsPledged and unsecured loans

Technology Implementation will include Application of smart bots with AI elements; Voice Control of online banking system; Face recognition system determining age and gender of person; A system made to handle online applications of lending and deposits.

Tech developed by Narbonne team has already become quite popular in the crypto community and is being used by over 40 fiat money organizations. These include banks and other famous micro-lending companies that are based all around the globe.

Overall it will have debit cards, automated lending, marketplace, private accounts safe wallets, secured currency, deposit derivatives and smart contracts.Narbonne will use the system of initial coin financing for the Narbonne project. For this purpose, Narbonne will issue a token: the Narbonne Credit Coin (NCC). The token is acceptable by all Narbonne services. NCC token can be used to make loan repayments to Narbonne. There will be two groups to which tokens will be distributed namely, Narbonne's debtors and partner's lending institutions whose borrowers will use NCC. A total of 1000 million of tokens will be issued for this purpose. The token functionality issued initially is of ERC20 standard.

08

NARBONNE


This year, NCC will be used by most of the lending organizations dealing in cryptocurrencies. Over the next year, the demand for NCC on exchanges can outgrow its original volume by a factor of 25, which would lead to an exponential growth of its value. From this point onwards, the currency will be founded on the loans made by Narbonne and loans that users have taken from other banks around the world. The following steps will be taken to create credit support for NCC: (1) Narbonne issues Narbonne Credit Coin (NCC). As a result of the ICO, a proportion of the tokens (35%) will be distributed among banks and lending institutions around the world. (2) As a condition for receiving these shares, these banks will have to agree to accept loan repayments in NCC.

Why is Narbonne a crypto bank project? Banks have long existed as centralized organizations for saving cash. Bitcoin destroys cash. Therefore, we have preserved the property of an organized bank: the technology for lending. We have re-invented the approach of banks of the past to create a decentralized crypto bank with a marketplace that will now operate globally without restrictions for all people. And our automated systems will help in this.

It can be said that some innovations spur other innova-tions, accelerating the emergence of newer and more advanced technologies. Innovations now are emerging

so fast that that they become a part of our life almost without us noticing, because more agile companies are all trying to inspire customers to use their services. Narbonne Team:

The founder and CEO of Narbonne is Maxim Elsner. He founded AFCOM.TECH, currently one of Europe's leading companies specializing in software development for microfinance and banking. He won the Microsoft Research Faculty Fellowship Award.

The Chief Operating Officer of Narbonne is Garcia Y. Maria. She has experience of work in Unicredit Bank. She Has a PhD Finance.

The Chief Technology officer of Narbonne is Vasily Nesterov. He has experience of leading teams over 15 years in various technological projects. He also worked in Microsoft Azure.

The developer team of Narbonne has developed software for 40 banks and microlending compa-nies.

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NARBONNE


BABB (or Bank Account Based Blockchain) is the World Bank for the Micro-Economy, a decentralized banking platform that leverages blockchain, AI, and biometrics technologies to offer anyone in the world access to a UK bank account for peer-to-peer financial services. In June 2016 BABB raised seed funding and was accepted into the Level39 Accelerator Space in Canary Wharf. As of October 2017 the company plans to do an ICO planning to raise up to $50 mln.

“I believe BABB’s plan to bring banking services to everyone, through the blockchain and the latest mobile technology, will both provide new features not seen in the high street banks and include many who have been excluded from the traditional financial system,” said Guido Branca, CEO of BABB. The company doesn’t consider itself as a challenger bank but rather as an enabler helping existing banks and financial institu-tions to innovate.

The platform will allow users to “leverage their social connectivity and their money in new ways” with more control and greater transparency. It will connect users

to each other, allowing peer-to-peer transactions over the network. Beneficiaries and senders will be connect-ed directly, without resorting to unnecessary middlemen or middle-layers of technologies.

In March BABB announced that it has entered into an agreement with Contis Group Ltd to use their white-la-bel license and Contis’ banking services infrastructure to provide UK bank accounts, transfer and card payment services. The first stage of this relationship will cover integrating BABB’s core blockchain banking platform with Contis’ banking services and payments infrastruc-ture.

BABB plans to soft launch its blockchain-based banking platform in 2017. The company is currently applying for a full banking license and is seeking to enter the UK’s Financial Conduct Authority (FCA) sandbox. The compa-ny is building a banking platform based on a “permis-sioned” ethereum blockchain implementation of a distributed ledger using smart contracts technology. The platform is based on a decentralized information model to minimize costs while maximizing data fidelity and security. Using biometrics to facilitate client onboarding and transaction authentication, with big data analytics to optimize match-making and control risk and with AI-based customer self-service intended to provide banking services for all.

10

BABB


“This is why we say: “Everyone is a Bank” irrespective of their income level”. Every user downloads the app, provides a selfie and a voice print, and gets a UK based account upon activation. With the BABB app, you can open a UK bank account from anywhere in the world by taking a selfie and saying a passphrase. Once you’ve entered the BABB ecosystem, you become your own bank. Anyone with a smartphone and an internet connection can participate in BABB’s global market-place. “You can send money to any other BABB user anywhere in the world instantly and for almost no charge. Simply choose the amount you want to send and the person you want to send it to, and confirm the transfer using your digital identity.” As a bank, you can exchange currencies directly without any middlemen. It’s cheaper, faster and easier than doing it any other way.

A multi-sided platform, BABB is designed to provide banking and other financial services to individuals and small businesses. Customer data will be encrypted and stored security on the blockchain where the permissions for who can access or use that will be entirely controlled directly by the customer.

The Black Card bridges the divide between the digital world and the physical world. It is a secure payment card that links directly with your BABB bank account via a secure QR code or NFC tag. It allows both a debit-like functionality, and can also be issued as a pre-paid card for your friends and family. Retailers can accept payment using the BABB card by simply downloading the BABB app and scanning the QR code or via NFC. Payment is made instantly into the retailer's bank account and the funds can be used immediately. With the Black Card you are able to spend your BAX in shops and peer-to-peer. Payments can be made instantaneously, anywhere in the world or for online shopping.

No personal information is stored on the card itself. If you lose your card, you can easily disconnect it from your bank account, preventing anyone else from using it – all from your smartphone. If you find the card again, simply scan the QR code via your BABB app and it reconnects to your BABB bank account. New cards will be available very cheaply in shops and from major online retailers with next day delivery. Alternatively, pick up a spare from a friend, scan the QR code with your BABB app and you are good to go.

Social KYC: “Vouch for anyone you know, and give them access to a UK bank account using only a smartphone. BABB’s platform promotes trust. Therefore, on our network, other users’ trust is enough to open an account with core functionalities. Our innovative ‘Social KYC’ process allows anyone who is fully KYC-ed, with validated documentation, to vouch for other users and onboard them to the platform. In this way, we will extend our services to millions of people without requiring them to provide ID documentation. Our Social KYC mechanism will promote exponential growth of our user base. This is particularly useful for onboarding the unbanked in emerging markets, seeing as one of the main barriers they face is lack of documentation. As BABB’s value is proportional to the number of users on the network, there is a strong incentive for early adop-ters to encourage their peers to get on board.Removing barriers to access. To open a UK bank account, the new member simply needs to download the app, take a selfie and say a passphrase. By utilizing biometrics and digital identity technologies, we can remove barriers to access and create a frictionless onboarding process. There is no need for documenta-tion or face-to-face meetings with a bank managers. The whole process will be at your fingertips.”Social KYC is a key part of our strategy to create fully banked communities and promote financial, economic,

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BABB


and social integration. It will include those who cannot provide relevant documentation such as low-income employees, refugees, and asylum seekers. People are stronger when they work together, and social KYC will enable communities to become fully connected.

It is an Open Platform. Any business can accept support-ed currencies, fully compliant, anywhere in the world. BABB will empower the microeconomy, improving lives and livelihoods and creating new opportunities for individuals and businesses across the world. Businesses and developers can create applications to plug seam-lessly into the BABB platform. From freelancers employed in the gig economy to global corporations, BABB’s borderless integrated payment systems can reduce the cost of doing business.

Despite building its banking platform on top of block-chain technology, BABB has decided to stick with fiat currency as opposed to developing a pure digital currency–based banking platform. “Crypto is still a challenge,” BABB CEO Guido Branca told Bitcoin Magazine. “It will play a role, but we need to transition to that new landscape. Stakeholders (central banks, regulators and the banking community) are still evaluat-ing [the use of digital currencies in the financial system]. We think the underlying technologies of blockchain, smart contracts, tokens and distributed ledgers have a role to play in easing this transition but we must walk before we run.” “We are specifically targeting the micro-economy/market while [other mobile banks] are doing more or less the same services (but branchless) as the established high street banks. We believe that the financial market is so huge that many different [mobile banking] models will coexist.”

Andrew Downin, innovation director at Filene Research Institute speaking during the 2017 CU Direct DRIVE conference in Las Vegas, said that BABB’s offering is an “intriguing development.” BABB cautious in that it is using a fiat currency [a government-based currency such as dollars, Euro or pounds] as opposed to develop-ing a pure digital currency-based banking platform. Downin said this was a smart move. “We continue to see valuation risk in digital currencies such as bitcoin, and acceptance of these digital-only currencies is still nascent,” he said.

The BAX token is the native currency of the BABB platform. Token sale participants can buy and hold this currency and benefit from the value of the platform.The BABB team is a diverse group of visionaries span-ning an exceptionally broad range of experience, knowledge and cultures from across the globe:

CEO, Rushd Averroes is founder of BABB, leading a diverse team of industry veterans to make his vision a reality. He is a financial inclusion special-ist and has an MA from University of Greenwich in Microfinance and Financial Inclusion. Before that, he attended the Ecole Polytechnique de Lausanne and was awarded an IT Science Degree in 2006. Rushd has managed a highly successful Authorised Payment Institution (API) in the UK - Wowpaymobi.

CTO, Jorge Pereira is an entrepreneur and technologist, with extensive experience in developing technology projects in a variety of areas, for local and global markets. He founded Seegno in 2008, a world-class web application development firm, where he remains as an advisor.

In 2013 he joined Uphold, where as CTO he was responsible for the design and architecture of the whole technology stack, as well as UI and UX of its products. Ever since, Jorge has focused intensively on fintech, developing products and technology around Cryptocurrencies, Distributed Ledgers, Regulatory Compliance, KYC/AML, Fraud Prevention, Risk Mitigation, Trading, Hedging, Bank Integrations and other areas related to fintech platforms and applications.

COO, Adam Haeems is responsible for the daily operations of BABB. He has a Master of Finance from Cambridge University (Judge Business School) and joins BABB fresh from an accom-plished trading career at Bank of America Merrill Lynch and a $1bn global macro hedge fund (QCM). He is passionate about financial inclusion and improving market efficiency within the microeconomy.

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BABB


Polybius Foundation, a financial services company established this year and registered in Estonia, is building a fully digital bank for businesses and individuals and the “first bank in the world to specialize in financial services for cryptocurrency startups and blockchain projects.” In February 2017 Polybius Foundation announced the opening of the Polybius Bank — the first European bank specializing in financial services for companies dealing with cryptocurrencies and blockchain worldwide.

Polybius Bank will combine features of modern banking, IoT, Big Data and blockchain-based technologies while also meeting security and UX requirements. Polybius financial services will be fully interconnected with international systems to respond to the transaction needs of our customers worldwide. Polybius Bank will operate on the principles of an Open API, employing reputable innovations and service within the framework of payment and data processing industry.

Polybius Bank will offer a traditional selection of financial services such as deposits, credit financing and bank card issuance, but also services especially targeted at blockchain startups and projects such as credits secured by cryptocurrencies as well as the ability to

create of investment portfolios based on cryptocurren-cies.

Polybius Bank intends to apply for a EU financial institution license. The concept is similar to BABB App Ltd., a London-based startup that’s building a banking platform using Ethereum smart contracts. But according to our data, the European regulator has prohibited Polybius from using funds received from the ICO to fund capital requirements necessary to obtain a banking license. Not clear how the startup is going to deal with the issue.

The Digital Pass technology, developed by HashCoins and implemented into Polybius Bank, will serve as an automation and digitalization ecosystem, allowing us to not only integrate single companies, but entire industries enabling access to financial and industrial services in the same Pass, at a click’s hand. Digital Pass is an independ-ent environment as a service, which will serve as a storage for encrypted individual information. The security of access to the information will be enabled by SSL certificates, dynamic PINs and, to some extent, by biometrical data.

Polybius Foundation, signed a memorandum of under-standing (MoU) with Ukrainian startup Attic Lab in April, will be using Attic’s OpenBankIT blockchain platform to provide payments. The other startups involved in the digital bank’s foundation include CryptoPay, a crypto-currency payments firm, HashCoins, a developer of blockchain solutions, and AmbiSafe, a developer of Ethereum smart contracts.

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POLYBIUS


According to Ivan Turygin, co-founder and chairman of Polybius Foundation, the company has big dreams for its digital bank as it aims “to build the ultimate financial infrastructure, sort of a ‘financial Google.'”

By providing the infrastructure for system-to-system communications, Polybius Foundation will act as a Trustee service and will be responsible for the control and execution of compliance-related directives. Designed to comprehend a variety of networks, the infrastructure of Polybius Foundation features a multi-segment decentralized data storage for personal data, cryptographic encryption of all entries and secure mechanisms of identification, authentication and authorization of individuals and companies by means of the interconnected instruments.

The data will be driven from all the channels related to services of Polybius Bank, Digital Pass and its trusted entities for further processing and analysis. Due to the sensitive nature of the information and to ensure the scalability in processing capacities, the evaluation of data will be automated by means of applied AI algorithms.

Polybius token - Polybius blockchain Share - repre-sents the right to receive a part of company's profit. All token holders are eligible for obtaining dividends according to their stakes. Any number of tokens (100％) sold at the end of ICO have right to receive 20％ of company's profits. According to the company bylaws, at the end of a financial year 20％ of the company's profit is transferred to an ETH wallet. The ETH is then redistrib-uted to all holders of Polybius Tokens according to smart contract conditions.

While starting off as primarily a financial institution, the Polybius project is meant to grow into your daily servicer and companion ecosystem. Among other planned features are scoring and sensitivity systems for credit and insurance businesses, asset and currency trading systems, seed & VC investment tools, eID and Trust services and other features described in this Prospectus.The Polybius ICO ended on 5th July, immediately ranking among the top five largest ICOs of 2017, raising $31 mn with 27,000 participants.

ICO proceeds are intended to be spent mainly, but not exclusively on acquisition of licenses, building out the systems, hiring the team and marketing. Polybius Bank will rely on a set of public and private licenses instru-mental to comply with many regulations, existing in the financial field. Among them are the public EMI and banking licenses, the participation in Card Schemes, the creation of regulation-compliant identification mecha-nisms and other technical conditions to meet. Every milestone step is an advancement to a broader set of services at Polybius customers' disposal.

During the initial step for a viable Polybius operation, a set of conditions needs to be met. Among the minimal requirements are licenses (small Electronic Money Institution (sEMI) or Payment Institution (P.I.) licenses) and mechanisms to comply with the law and financial regulations, Combating Financing of Terrorism (CFT), etc). At this step, instead of the sEMI license, Polybius, will apply for a license for the Authorized Payment

Institution (A.P.I.) for the sake of lowering the initial investment requirement. A.P.I. license is required to store clients’ money and organize payment processes. The time required to acquire the license is 3-9 months. Polybius A.P.I., will be legally considered a non-banking financial institution (NBFI-ND) and will not take deposits until acquisition of the banking license.

SWIFT membership is also required as one of the key elements for banking procedures. Joining the SWIFT network enables a bank to receive a Business Identifier Code (BIC), and to be able to communicate with other financial organizations via SWIFT messages for electron-ic money transactions. It may take up to 3 months for the application to pass through.

Polybius Payment Institution will adhere to the EPC Rulebooks to use them in the European payment and messaging network for the Euro zone. The EPC Rulebooks define principles of money transfer in Euro according to the European Union Regulatory Frame-work. The time required to join and to operate the EPC Rulebook network is expected to be 6 months. Compli-ance with specific rules, laws and regulations is of utter importance in banking environment. A banking institu-tion is obliged to set and follow high standards of operations in order to protect its stakeholders. Besides that, the reputation of a bank can also be severely damaged by poor processes including KYC and AML/CFT techniques and software. We will use existing tested technologies to comply with the standards and the requirements.

P2P loans are a new model in credit systems, which allow organizations to establish a platform that links those looking for loans with those looking for small investments and profit. Such systems are a great way for financial institutions that match the lenders with the borrowers to generate a capital-efficient, credit risk free revenue stream on processing (e.g. platform mainte-nance, customer due diligence, scoring). We see a particular opportunity in cross-border P2P lending while most of today’s platforms are locked into a single jurisdiction.

The Polybius project is driven by a number of expert groups of with common vision everyone actively involved in the key strategic decisions, project planning and development. The team is regularly drawing on the expertise of the deep bench of the advisors affiliated with the project. Additional tech and finance profession-als have committed to join the project.The core team includes:

Ivan Turygin (Founder and Chairman at Hash-Coins OÜ).

Sergei Potapenko (Founder and CEO, HashCoins OÜ).

Nikolay Pavlovskiy (Blockchain Engineer and CTO at HashCoins OÜ).

Vitali Pavlov (Production Management and Chief Product Officer at HashCoins OÜ).

14

POLYBIUS


The rise of cryptocurrencies, or simply digital money, has created a demand for a blockchain-based bank. Bankera is a startup that’s catering to that demand. It supports both fiat currencies and cryptocurrencies and provides a good range of services like any traditional bank, including payment processing, debit cards, loans and low-cost investment products. The catch here is that although Bankera acts like a traditional bank, it is crypto first by nature, pioneering innovative services like taking crypto assets as collaterals for loans. Launched in 2017, Bankera is an operating subsidiary of the popular cryptocurrency exchange, e-wallet, debit card and payment processor — SpectroCoin. SpectroCoin team has which developed bank-like infrastructure releasing Bankera to leverage regulatory and IT infrastructure to develop a bank for the blockchain era. Bankera as a proper bank will offer payments, investments, and loan and deposit solutions. Later on, it is planning to develop new types of money, such as inflation linked baskets.Payments including payment accounts with personal

IBAN, debit cards, interbank foreign exchange rates and payment processing. All services will support both traditional fiat currencies as well as cryptocurrencies such as bitcoin, Ethereum, DASH, NEM, ERC20 compli-ant tokens and others. It will make Bankera one of the first crypto-friendly regulated banks in the market. In the long term, Bankera will implement innovative solutions such as gross-domestic-product (GDP) linked currencies and the use of exchange traded funds as a substitute for money.

The required IT infrastructure to facilitate payment processing and issue personal IBANs or payment cards have already been developed and are available as a minimal viable product (MVP) in the form of Spectro-Coin. Support of full P2P transfers, mobile wallets and the start of membership application of the major payment networks such as card schemes and remit-tance networks will be implemented in wallet. The company plans to apply for a banking license after ICO. This will allow Bankera to offer loans and deposit services to the clients. Loans and deposits will be a key competitive edge as well as core service of Bankera. Current deposits will receive interest just as savings do. All Bankera clients will be able to benefit from higher interest rates due to proprietary information about borrowers' cash flow, as most loans will be given to business clients who use the payment processing solution.

15

BANKERA


Investments will consist of low-cost investment prod-ucts such as exchange traded funds (ETFs), crypto-funds (a portfolio of various cryptocurrencies and crypto tokens) as well as roboadvisory solutions for wealth management. Eventually, Bankera will offer investment banking services including financing corporate strate-gies of our business clients.

Bankera launching an initial coin offering (ICO) to issue Bankera tokens on the public blockchain. After raising 25 million Euros during one of the biggest pre-ICO sales to date, Bankera, a blockchain based banking service, has announced it is going to hold its ICO sale on November 27.

The tokens called Bankers (BNK) issued during the pre-ICO and ICO. Each holder of Banker (BNK) tokens will be entitled to a referral commission, paid weekly; this will be constituted of 20% of Bankera and Spectro-Coin net transaction revenue. This will be implemented by taking 20% of Bankera's and SpectroCoin's net revenues and sending them to the smart contract. For example, if net revenues of Bankera for a week are 10,000,000 EUR, 2,000,000 EUR as referral commission will be sent to the smart contract.

Bankera will offer businesses instant payment settle-ments using advanced proprietary know-your-client (KYC) and fraud detection solutions to collect informa-tion about the incoming payments and automatically settle transactions which otherwise could take weeks. Advanced technologies will also allow Bankera to estimate clients' economic power and thus offer them a better loan and deposit rates.

At this point, Bankera has the necessary regulatory and IT arrangements and has put together a strong team and advisory board, including Lon Wong, president of the NEM.io foundation, as well as Antanas Guoga, a member of the European Parliament, also known as Tony G – a famous poker player. Guoga is actively endorsing blockchain technology and cryptocurrency at the European Parliament and beyond.

Bankera’s founding team already owns and operates a successful cryptocurrency exchange, e-wallet, debit card provider and payment processor. The aim of the ICO is not to test a speculative idea, but to provide the capital to enable Bankera as a product to expand its existing services to compete with existing banks as an equal across all areas of operation including payments, lending, currency exchange, and investments. The contribution of SpectroCoin to Bankera will be not only IT and regulatory infrastructure, but also an introduction of Bankera services to 400,000+ existing clients of SpectroCoin and share of a SpectroCoin’s talent pool of 50+ blockchain specialists. Most impor-tantly, SpectroCoin will be entitling Bankera token holders 20% from its net transaction revenue from the first week after start of pre-ICO.

Bankera recognizes that cash is still the predominate form of payment and Bankera will be active in the cash market. One issue is that Bankera will not have physical branches like traditional bricks and mortar banks. As such, Bankera has a three-pronged attack to remain competitive in cash. Partnerships with existing providers

for cash deposits and withdrawals. Bankera will partner with retail providers who currently distribute cash deposit and withdrawal services.

Network of agents. In developing countries where infrastructure to handle deposits and withdrawals is not established (such as South America), Bankera will offer relevant retailers (such as newsagents or gas stations) the ability to be agents for Bankera to handle deposits and withdrawals. Each of these agents will have an account with Bankera to facilitate this. As Bankera will be issuing payment cards, they could be used as an option for withdrawals at most ATMs available globally when cash is needed.

Bankera will offer money wallets in 22 fiat currencies initially, covering all the major currencies such as USD, EUR and GBP. In addition, Bankera will also support emerging digital currencies such as bitcoin, Ethereum, DASH, NEM and others ensuring that Bankera will be at the forefront of the emerging cryptocurrency ecosystem.

One of the key challenges for fast growing businesses accepting non-cash payments is capital immobilization. Bankera will create short-term finance products to bridge this cash flow gap for businesses. As a payment processor, Bankera will have an advantage over banks because Bankera will collect live information about expected incoming payments. This will facilitate Bankera offering credit for businesses secured against expected future cash flows.

Bankera will not only become a regulated European bank, but also will seek to become authorised issuer and acquirer of payment cards and obtain banking licenses in key jurisdictions to avoid dependency on the corre-spondent bank services, which are extremely fragile nowadays as identified by the World Bank when they concluded that correspondent banking relationships (CBRs) are declining1 due to several factors including AML risk or reduction of risk. Having multiple licenses will allow Bankera to offer instant cross-border transactions as well as having access to a low currency exchange rates due to direct access to financial markets in multiple jurisdictions because of having these licenses.

Bankera has assembled an expert management team with a diverse range of skills:

Vytautas Karalevičius (CEO) is currently completing a PhD in cryptocurrencies at KU Leuven University in Belgium. Prior to that, he received a MPhil degree in Finance from Cambridge University and BA degree in Business Finance from Durham University. He is currently conducting research on the potential of blockchain technology for securities transaction lifecycle for the SWIFT institute. Previously, he has worked at Bloomberg (London office) in management consulting.

Mantas Mockevičius (CCO) has more than eight years’ experience in managing operations and compliance for an electronic and digital money exchanges. He holds a bachelor degree in economics and master degree in finance.

Justas Dobiliauskas (CTO) has nine years’ experience in developing software for medium and large financial institutions as well as five years’ experience working with blockchain technology and cryptocurrencies. He is an expert in P2P technologies and holds a Masters Degree in Information Systems Security.

16

BANKERA


Crypterium which is headquartered in Estonia builds a cryptobank focusing on three main services: giving individuals the ability to use cryptocurrencies to make payments in their day-to-day lives, establishing an innovative infrastructure that gives businesses new opportunities for cryptocurrency acquiring (and makes it easy for vendors to receive cryptocurrency payments as fiat money), and cryptolending, which it is attempting to streamline. Doing all this requires a multidisciplinary team that brings in specialists in finance, banking, cryptocurrency, financial IT, strategic development, and investment.

The Crypterium goal is to create first full-fledged cryptobank of its kind, which will address everyday tasks associated with the use of money, for example using cryptocurrency, like in an ordinary mobile banking app, to pay for mobile services, utilities, and taxes, to make transfers, pay at a café or restaurant, take out loans, and other services that are currently offered by legacy banks.“In contrast to ordinary banks, Crypterium is regulated not by the ordinary regulatory authorities, but by the blockchain infrastructure. In addition, many banks operate locally; we plan to offer services worldwide. Banks restrict withdrawals and transfers; we have virtually no restrictions. In fact, the differences are much, much greater, but that’s a whole other conversation.”Crypterium’s Early Sale started on October 31, 2017, and will run until November 6, 2017. The Early Sale offers four tiers of bonuses depending on the number of purchased tokens. The next stage of the sale, which will commence on November 7 and will go on until Novem-ber 27, will offer lower bonus amounts. The no-bonus sale will start on November 28, 2017, and end on January 13, 2018.

Crypterium managed to attract already an impressive $7.5 million from its supporters. All the funds collected

via the ICO will be directed to building a complete vertically integrated service that encompasses the best blockchain technology capabilities to solve the complex issues of using cryptocurrencies in the real world. “$7.5 million in CRPT token early sales gives Crypterium’s business model a firm vote of confidence from the blockchain community,” says Steven Polyak, Managing Director and Crypterium co-founder. “Right now, cryptocurrencies are not the financial instrument of choice for paying for the most routine purchases. The platform we are developing will offer the market a powerful and secure solution through which clients will be able to use cryptocurrency in the same scenarios in which they’re accustomed to using ordinary money,” he concludes.

The project advisors, among whom are such renowned blockchain personalities as the TechCrunch co-founder Keith Teare and ICOBox co-founder Mike Raitsyn, are excited about the early results. “The project’s soft cap was set at 500 BTC. We are very pleased that it was reached right in the first day of Crypterium ICO,” says Keith Teare. Teare, a grizzled veteran of the international technology sector, is perhaps most famous as the co-founder of the TechCrunch tech news website, but has a long list of projects under his belt stretching back decades, among them Accelerated Digital Ventures, Minds and Machines Inc., MedCo, just.me, Archimedes Labs, Easynet, and RealNames. The latter two had valuations that hit $1 billion.

Steven Polyak, commented on token sale: “Our token will perform two functions. The first will be similar to the ‘gas’ used in Ethereum. In our case it will be used to support and develop Crypterium. There will be a 0.5% charge on each transaction performed on our platform, which will be used to purchase tokens from the exchange that will be burned during the performance of operations. This will ensure stable demand and, accord-ingly, a growth in the value of token. The second function involves the formation of a token fund called the Monthly Cashback Fund, which will receive 30% of our economic benefit obtained from the fee paid by a business for the use of our platform.”

Crypterium core team includes:

Steven Polyak (Managing Director, Co-founder). Steven is highly experienced investment banker with a focus of interest on capital markets in the USA and Russia.

Austin Kimm (IR Director, Co-founder). Financial services CEO, Austin Kimm is an international strategist for established and start-up companies.

Gleb Markov (COO, Co-founder). Fintech, banking and cryptocurrency professional with over 10 years of experience in the industry.

Vladimir Gorbunov (CCO, Co-founder). Entrepre-neur with more than 10 successful new ventures and a particular focus on simplifying real-world issues through technology.

17

CRYPTERIUM


Fiinu, a UK-based tech-driven bank, has recently launched a pre-sale, ahead of its full ICO in November. The bank wants to be the UK’s first blockchain-friendly bank to also offer retail banking services and products for those currently under-served by the incumbent banks. Users of crypto-currency will benefit from a single account for both sterling and crypto-currency use, and will be able to drawdown crypto-currencies into sterling (and other currencies) for a fraction of the current market rate.

Additionally, customers currently being under-served by the incumbent bank’s archaic credit rating system will finally be able to access services designed to lower the cost of banking and improve the quality of financial products. One of the key parts of Fiinu is its Finnuscore credit rating system. This credit rating system promises to “lend responsibly to consumers and small businesses against crypto-based assets and help their short-term credit needs with overdrafts whilst encouraging financial resiliency.”

The company is undertaking positive discussions with regulators whilst applying for a full UK banking license. Upon receiving its banking license (scheduled for the end of 2018) and becoming profitable, investors will receive highly competitive returns on their invest-ments, compared to investing in the shares of incum-bent banks. In addition, Fiinu Coin (FNU) will offer a number of highly beneficial privileges:

33% of retained profit will be distributed to FNU holders every year;

FNU can be borrowed against. Once authorized, Fiinu will grant credit in sterling, for up to 75% LTV against FNU, starting with UK-residents;

Services will include innovative smart credit products and budgeting tools.

Fiinu will use up to 10% of the raised funds as working capital, while the remaining invested funds will be protected in an escrow arrangement until Fiinu receives its banking license. If the banking license application is unsuccessful, all Ether (ETH) in escrow will be returned to investors, with a minimum 90% money-back guaran-tee.

Commenting ahead of the pre-sale, Fiinu Founder and CEO Marko Sjoblom said: “This is an exciting opportuni-ty, not just for Fiinu and its investors, but for the wider banking industry. Upon launch, Fiinu has a number of exciting products and services which will help those who have been ignored by their banks for too long. This includes lending against an individual’s crypto-based assets, as well as the world’s first Bank Independent Overdraft. We have one simple aim, making your money work for you. Investors in our ICO will become part of Fiinu’s story that sees the power of technology used to tackle failures in the market and provide better banking services to all customers.”

Fiinu's founders have worked together for nearly ten years and their successes include building and managing a UK-based FinTech company that has lent and recov-ered over 4.5 million overdraft-style loans with a trade value exceeding £1 billion. Under their management, at its height, the company would have been in the Top 10 of the Deloitte Technology Fast 500 fastest growing technology companies in the world with nearly 35,000% revenue growth over a five-year period.

Fiinu's core team has gone through the full UK-bank license authorization process once before, for a well-es-tablished family office, and have built a digital banking platform from scratch. Combined, they have a wide range of dedicated skills, experience and understanding of what it takes to earn a UK-bank license.

Founded by Marko Sjoblom, who previously led payday lending alternative Myjar, the firm is currently applying for a full UK banking license. As it gets ready to launch, it has brought onboard Andy Briscoe, chair of The Money Advice Service, the government-sponsored organisation dedicated to improving the financial resilience of the UK public, as chairman. In addition, Bank of England and Santander veteran David Hopton has been named a non-executive director.

18

FIINU


2getherbank aims to become a global collaborative Marketplace Banking Platform based on Big Data, Artificial Intelligence, Machine Learning and Blockchain that allows users and companies, in a high security environment, to exchange any kind of real asset, manage programmatically and automatically their economy and access, in a marketplace, all financial products and services provided for Fitntech and Banks from around the world using an unique user interface. 2gether is using the latest technologies and promoting collaboration among users and innovators to build the most fair, global and competitive financial ecosystem in the world.

No white paper is publicly but company says that ICO is coming soon. It will be public and will be launched along with the Private Beta. The company claims that

they have been working in building a true operational banking service, built on Blockchain technology, for over 18 months and don’t want to launch a Token Sale without proof that they have a real working product and get some feedback from the community. Currently, only for the institutional and professional investors window is open.

The company is founded and run by Salvador Casquero whose professional career was deeply related to fintech. Working for financial industry leaders from JPMorgan to banking entities such as BBVA, La Caixa and Banco Sabadell have been mixed with new technological skills acquired in tech companies such as Eresmás or Wana-doo and self-learning skills from his continuous explora-tion and testing of new technologies such as blockchain, artificial intelligence, predictive and matching algorithms, machine learning, internet of things, big data or natural language processing tools. As a result, Salvador has acquired sufficient qualification to launch 2getherbank a new project where it aims to comple-ment all the previous factors with the human one in order to achieve an ambitious and efficient distribution of resources, goods and services.

19

2GETHERBANK


Unfortunately, current crypto-friendly wallets \ cards and a new wave of ICO-placed neobanks are not able to solve the fundamental problem of rejection of the crypto \ ICO community by the traditional banking system. The main reasons are:

They are hosted on very traditional banks, which is a time bomb. They are allowed to work within the framework until the volume of their business interferes with the core business of these players (which will happen sooner or later). While traditional banks are not ready to advocate for new players - they are ready to "allow them to exist" only until there are any risks on the horizon (which they will not be ready to bear).

Some of them are going to obtain their banking license - but so far none have received it. Looking back on the experience of teams that develop such projects, then they had no previous experience in buying/selling banks and commu-nicating with regulators since they are represent-atives of the techno-blockchain community.

There is no doubt that we need crypto-friendly banks. We need separate banks with their licenses that are

not dependent on current players and are focused only on crypto-currencies and ICO-backed startups. The banks that will completely change and focus all business processes and technologies on this type of customers. The banks that are constantly communicat-ing with regulators of different countries: explaining what they do and how, how they work with clients, what types of risk appear and how it can be solved, develop-ing new technologies for this.

In most jurisdictions, it’s easier to buy a bank than to obtain a new license as most regulators are determined to reduce the number of bank licenses in the market. Interestingly, all current projects are designed to receive licenses in Europe or the UK, i. e. to work with the euro or the pound as a currency, whereas according to statistics, most of the payments after the crypto conver-sion are converted into the US dollar at the first, second or third step. In addition, the American regulator constantly sets the "mood in the market" with its views on cryptocurrencies and ICO. Therefore, the question arises: why does one run away from the problem, instead of coming to its source? There are many small banks in the US – worth from $5 to $50 million – available for purchase. We believe that soon someone will decide to buy such a bank in the US, completely clear its balance from the current business (to avoid the conflict of interest), focus exclusively on the needs of blockchain / ICO world, and will change the team and business processes for such requirements.

20

The Bubble Generation on the way to the first Bubble Bank


For sure we need more than one such a bank, we need them in different jurisdictions, not only in the US as soon as the customers are located in different countries that have different regulation, which each time is optimal only for solving a number of issues of a certain range of clients; have their own currencies (and custom-ers want and should freely operate all major currencies). The bank’s business should be cleared from all non-core businesses and focused only on the blockchain\cryp-to\ICO with all technologies, processes, business logic focused exclusively on a new class of assets and customers. We should also build an open dialogue with the regulator instead of playing dumb and talking about traditional business in meetings while making innova-tions under the table. We should declare that we do this and nothing else, we understand this, we are fully responsible for everything that we do and with whom we do it, we are in a constant dialogue/educating you, we disclose everything in detail and when we see something incomprehensible or a failure - we search how we can solve it at the level of technologies and processes.

Most likely, the operations of such a bank/banks will be sabotaged by SWIFT - the main interbank transfer system (which always defends the interests of the

largest correspondent banks and the dominance of the US currency) – therefore, these banks are likely to be linked to some new system of interbank transfers. For example, Ripple. So far, there is no way to avoid restric-tions imposed by geographic boundaries and there is no jurisdiction optimal for the whole world. One can start with two or three major jurisdictions (US - for the dollar, a European country - for the euro, Britain - for the pound), make a network, and then connect new players as partners. It is necessary to understand beforehand that this is not a struggle for one and only universal bank in the world (and you will never become one), but simply for the first practical full-fledged example/standard (not monopoly) to which people/banks will connect.

Currently everyone understands that this kind of bank should have an open-architecture - a set of open APIs integrated into its own BaaS-platform. It will allow to:

quickly launch products and partner with third-party developers for the customers’ sake;

effectively integrate in one network your banks and any other banks (both traditional and neobanks that have raised or are raising ICO rounds in order to get their own banking license in their own countries), which want to join the community of crypto-friendly banks;

to land any other fintech, blockchain, crypto-startups: to create, in fact, the first fintech-bank in the world allowing them to launch faster and cheaper as well as to scale to other countries. There is no need to reinvent all fintech services once again – too many people have been doing this for the past five year! You simply need to help them to move to new rails, integrate them among themselves on the basis of your open architecture and business processes tailored for a new type of customers;

one of the key APIs should be blockchain-based digital KYC. It allows very fast complete legal verification (of both individuals and businesses) for any financial service performed online from any country. There will be no need to register and verify again in all other partner services. For partner startups it will reduce time and costs for development of their registration and compli-ance processes. In the future, based on these digital passports, as you accumulate data about your behavior in other services (only if you want to share this data! and only with those you choose!), you will receive your online score, which will make it easier for you to get loans from existing lending fintech startups and emerging blockchain startups;

why are these 8 banks going to obtain 8 licenses in two countries? Seven licenses in eight coun-tries – cool, but licenses + backends won’t give you a competitive advantage. You can rent them to other players. It’s important and difficult to do it for the first time. But it’s silly to do it for 3,4,5,10 times. People need new services, not new licenses.

21



As mentioned before, a big shortcoming of existing projects (not yet launched but planning the launch): is their focus on retail customers instead of small and medium business. Whereas there about 500 customers (which have raised over $3 billion through ICO) on the market. This type of customers is very homogeneous, fast-growing, and absolutely no one is ready to serve them now. In the second approximation, there are other very clear clients with similar problems: crypto-exchang-es, exchangers, wallets, money transfer services, etc. The "Blue Ocean" are, of course, the representatives of the GIG-economy: freelancers, independent contrac-tors, makers and doers. They should work with SMEs first (and not second or third) as they are the driver of the new economy. While retailers - their employees, partners and customers - will come after them.

Clayton M. Christensen, who coined the term ‘disruptive innovations’, in The Innovator's Dilemma analyzes how large and successful corporations continue to be successful and innovative (this is the "innovator's dilemma" - the lack of motivation to disrupt yourself if you are already big and successful) and concludes that the only way is to completely separate your new business from the old one. The new business should have its own goals and objectives (not overlapping with the old business), its people and corporate culture, even its own separate buildings and uniform. The same story is with blockchain, cryptocurrencies and ICO - trying to shove them into the old framework, processes,

approaches and regulation, you stumble upon the fact that they are rejected and do not take root, they die and damage the "old body".

It is only possible to give life to a new economy by giving it a certain degree of freedom (the opportunity to take risks, try, make mistakes and not be punished - the fear of making mistakes destroys any innovations: this is a long-proven axiom). We must admit that the old rules and regulations do not work if we really want to grow something new and useful for society. While the new ones are non-existent, they just have to be created.

Therefore, the regulator should regulate with caution: not as a judge, but as a mentor. Regulators are able to kill anything, but no regulator is able to create something - this is the destiny of entrepreneurs. Given that rules are only being formed, players should not be punished for what was committed before their introduc-tion. You shouldn’t regulate too harshly what has not yet appeared and formed - you can only kill it this way. We are for the fact that if regulation comes into conflict with logic, progress and benefit for clients - such regulation should be changed. Rules are not the Bible, they were invented looking up the past (instead of the future). They are created to help achieve some goal, and if the goal is changing, then the rules should change! If something is not clear, it does not mean that it is something bad. This is something that challenges us to study it, to help it grow.

22



The new report by Life.SREDA

https://goo.gl/ztyovn

A lot of hype, but almost nothing inside

OVERVIEW OF CRYPTO-FRIENDLY CARDS

https://goo.gl/ztyovn

G

G

K

from Money Of The Future 2H'2016 fintech&blockchain report

25

Traditional brick-and-mortar banks are often skeptical about challenger and neobanks and think they can eas-ily copy all the perks of newcomers, thereby staying on top of the market. This is not quite right. The difference is

the same as between a traditional car

stuffed with an electric engine and Tesla.

First, innovational solutions are built in

a mobile-first paradigm – not branch-

first. This implies a fundamentally differ-

ent user experience. Second, newcom-

ers focus on new young clients – not the

existing ones – which critically changes

their brand positioning, language and

perception. Generally, these new clients

have never been served by traditional

banks – either because they are young

or from underbanked regions. Third,

the level of servicing is entirely different

– with neobanks you can ask any ques-

tions in any form through a messenger

(as if you asked your friend) and get an

answer immediately. Therefore, it is fun-

damentally wrong to treat neobanks as

just another channel of service delivery.

Neo and challenger banks are comple-mentary to a variety of fintech sectors (e-wallets, P2P and online lending, PFM/PFP, mPOS-acquiring), which creates a wide range of opportunities for M&A, partnerships ad synergies.

E-wallets generally have poor function-

ality (ApplePay, SamsungPay, Android-Pay) and difficulties with customer

retention and scalability (AliPay, Paytm).

Direct banks (CapitalOne, MetroBank, SBI, etc.) are slightly outdated techno-

logically and need a boost, also being

geographically limited. P2P and online

lending platforms are strong in terms

of margin and growth, but they experi-

ence ever-increasing costs of customer

acquisition. They need financial info

about prospective clients in advance

in order to decrease credit risks, and

about existing clients – to retain them.

Neobanks can help them here. PFM/PFP

services do not get as much attention

as neobanks. However, they could

provide these banks with differentiating

products and a better understanding of

clients’ needs. mPOS-acquiring solu-

tions (Square, SumUp, iZettle) collect

large databases of merchants and their

customers (purchases, cards, con-

tacts), which they could use to deliver

value to these customers (except for

a raw Square.cash product, they have

not used these opportunities yet).

There is a lot of debate on the emer-gence of fintech-banks. While up to today traditional banks accounted for the majority of acquisitions of fin-tech companies, today the functional

diversity of fintechs is wide enough

to build a fully-fintech bank with a large

enough customer base to compete with

incumbents. The main question about

these fintech-banks is what will play

the role of a nexus of all these sepa-

rate services. From the technological

point of view, BaaS-platform is a clear

winning solution. And a user interface is

where neobanks come upon the stage.

Neobanks have already started to feel their way in this field. The majority of

newcomers (Tandem, Monzo, Star-ling, N26) announced they have been

working on open API. mPOS-acquiring

German startup SumUp integrated with

neobanks Fidor (Germany) and Holvi (Finland). American Moven integrated

with Commonbond, a student on-

line lending service. Neobanks N26 (Germany) and Monese (UK) – with

online remittance services Transfer-

wise and CurrencyCloud accordingly.

Another new trend for modern banks is crowdinvesting (equity crowd-funding). During the last half year two

British challenger banks, Tandem and

Monzo, crowdfunded £1M each from

their own perspective clients on Seedrs

and Croudcube platforms according-

ly. The market perceived these cases

very positively because they imply that

Tandem and Monzo had not just got a

one million financing, but that they in-

fected prospective clients by the idea so

much that those were ready to risk their

own money to help build the product.

The growing competition and atten-tion to the sector is evidenced by a number of acquisitions (Rocketbank by

Russian Otkritie, Fidor by French BPCE,

Holvi by Spanish BBVA) and launches of

proprietary products (GSbank by Gold-

man Sachs, Indian Digibank by Singa-

porean DBS, JP Morgan’s activity in

Indonesia), though these products have

not shown yet any advantages over neo

and challenger banks.

26

Audience-targeted neobanks are another interesting trend: Monese

for London’s expats, Danish Ernit and

Singaporean Yololite for families,

British Loot and Hong Kong's Neat for

students. There are great opportunities

for online banks for SME, for example,

existing Holvi (BBVA), Tochka (Otkritie)

and new players Anna, Tide and Civi-lized bank (all from the UK).

Client communications are also sub-ject to innovation. Despite well-known

messengers and video calls, neobanks

start using chat-bots (Tochka, Digibank)

and integrate with artificial intelligence

applications (Siri – N26, Monzo, Alexa –

CapitalOne).

Generally speaking, the most mobile banking activity is focused on the in-tersection of two segments: the youth

(18-29 old) and emerging markets (es-

pecially unbanked ones). Geographical-

ly, there is a number of interesting cases

in the USA and Canada. The demand in

Brazil is high. There is little neobanking

activity in Asia, which spurs Asian banks

and investors into looking for solutions

abroad and thinking about how to bring

these solutions into the region. Europe

is a leading region with the UK being a

clear world leader in the sector, thanks

to Monese (55K mobile app downloads

and £41M in transactions), Tandem (got a financing of £22M with valuation

of £65M), Monzo (35K clients on the

waiting list), Starling (finished a $70M

financing round), Atom (acquired a de-

sign bureau Grasp and now in process

of raising £100M for mortgage services).

Atom, Tandem, Monzo and Starling have already received a special new license. Scandinavia also offers interest-

ing projects, such as Danish Lunarway and Ernit, Swedish Tink (raised $10M

from SEB Ventures, has 300K users,

planning to expand into Europe), and

Finnish Holvi (reportedly, sold to BBVA

for $80M; is planning to expand, too).

German N26 (200K users in eight coun-

tries, banking license) raised $40M from

a pool of investors led by Hong Kong’s

Horizon Ventures. However, there has

been a growing number of negative

responses on their client support. In

the USA we have VaroMoney ($27M in

financing and promising PFM function-

ality) and ZeroFinancial. The boost of

fintech activity in Canada is noticeable,

including neobanks (Koho with 7K

clients on the waiting list and EQbank).

Asia has little to show: Neat, Yololite,

Vietnamese Momo and Timo, Russian

Tochka and Rocketbank, Pakistani Fin-ja. As already said, Brazil is the most in-

teresting market today. After the success

of NUbank ($52M and $80M rounds in

2016, $500M valuation, 1M clients on a

waiting list and 300K in the process of

verification) new players emerge, such

as Neon.

In terms of launching activities, we see an even stronger dynamics compared to the last year, now new digital banks

are more concentrated and focused on

launching banking services for specific

audience by geo or demographic fac-

tors, like Hong Kong-based students and

millennial or immigrants and unbanked

workers in the UK or digitally covered

the Internet and 4G users in Pakistan and

Brazil.

Some cases mentioned below during

the year truly overcame our expec-tations and thoughts on the sector

and despite the fact that retail banking

remains in the top banking sectors,

which provide a relatively positive

experience, some consumers continue to actively consider their choices. And

2016 has really become a powerful year that enjoyed another taken stake from banking profits. While banks

have always been looking to control the

financial services industry, with the rise

of new incumbents the situation has

changed drastically. This year banks and

banking institutions looked at how they

could collaborate with new incumbents

so as not to lose the links in the value

chains that make them so powerful.

Socio – demographic changes

Starting from the foundation, this year

we saw a continued growth of share of

mobile banking users among mobile

phone users with almost 300% growth

in mobile banking users from 2009

to 2016 and continued expansion of

usage with almost doubled amount of

users from groups of 30 – 60+ years old

during the same period of time.

(figures below)

THE SHARE OF MOBILE BANKING USERS AMONG MOBILE PHONE OWNERS IN THE

UNITED STATES FROM 2009 TO 2016.

The statistics below represent almost

300% growth in mobile banking users amount

from 2009 to 2016.

27

Once again, the distribution of mobile

banking users continued to grow, and

now, there is almost a doubled amount

of users in categories 30-44, 45-59, 60+

compared to 2012.

Consumers in 2016 continued to rely

on multiple channels when prospect-

ing, with the corporate website and

online comparison sites most relied on.

More than last year, 58 percent of bank

customers use mobile devices often

when prospecting or seeking support.

Out of the average 17 interactions per

month made by a customer with its

main bank, seven are through on-line

banking and three are through mobile/

tablet. Emerging markets, where the

average of total monthly interactions

is 21, display an even higher propensity

to use digital channels.

The appeal of virtual banks – which

represented the largest net migration

in the US and the second largest in

Canada – reflects consumer’s value focus. Neobanks and challengers target

customers whose top banking intention

is simple and seamless transactions with

lower fees.

What is interesting here, the tendency

of major fintech banking start-ups to go

with financial institutions that are able

to facilitate or substitute certain services

in their value chain in a more cost-ef-

fective manner was a success and a big

thing this year.

NUbank (Brazil)

Nubank a financial technology start-up

based in San Paulo, one of the most

notable banks from Brazil in 2016

received a $52M financing round led by Mr. Thiel’s VC firm - Founders Fund. The new investment valued Nubank at

approximately $500 million, significant

for a company less than three years old.

Nubank, which was founded by a former

Sequoia Capital partner, David Velez,

and provides a digital credit card for

smartphones, is trying to take custom-ers away from Brazil’s highly profit-able banks, which have long seemed untouchable. More than one million

Brazilians have applied for the card and

approximately 300,000 are on a waiting

list while their credit history is examined.

The popularity is linked with the current deepening recession in Brazil and fact that the average annual credit card interest rates in Brazil have risen

in 10 of the last 11 months, reaching 99

percent in November, but Nubank has

not changed its 7.75 monthly interest

rate in over a year. It also hopes that

being digital both reduces overhead

and results in better customer ser-

vice. Banks, after telecommunications

companies, usually generate the most

customer complaints in Brazil. That has

helped its popularity here grow .

Neon (Brazil)

In July 2016, Neon Bank was launched

in Brazil [2], an app-based banking service

that promised to let young Brazilians

leave behind the frustrations of branch-

es, bureaucracy and hidden fees.

The bank’s iOS and Android app uses

biometric facial recognition technology

from US vendor Daon so that customers

can ditch usernames and passwords

and log in and authenticate transactions

by taking selfies with their phones.

The app has usual features associated

with mobile banking, allowing users to

check their balance, make

DISTRIBUTION OF MOBILE BANKING USERS IN THE US FROM 2012 TO 2016, BY AGE GROUP.

The Statistics below shows the usage of mobile banking services in the United States

from 2012 to 2016, by age group. We see almost doubled number of users

from the roups of 30 – 60+ which certainly represents a market growth.

INTERACTIONS BY CHANNELSHow many times do you usually interact/get in touch with your main bank,

on monthly basis using the methods listed? (numbers of interactions)

*Base = 9,000 (Total retail banking respondents in12 key markets: Australia, Brazil, Canada, China, France,

Germany, Indonesia, Italy, Spain, UK, US **Other Digital Channels = Video chat and Instant messaging

is certainly represents a market growth.

28

transfers, pay bills, receive payments,

categorize their spending habits, and

create financial goals. As it aims to sign

up 100,000 users across Brazil in its

first year, Neon is also stressing that the

bank is bidding to help customers with

their finances by charging no monthly

or annual fees, flat rates for interbank

transfer transactions, and offering no

lines of credit.

Neon also became the first bank in Brazil to partner with Gemalto the

world leader in digital security, to de-

liver innovative Visa Quick Read debit

cards to its customers. This innovative

card design groups together important

information, including account num-

ber, expiration date and security code,

simplifying online payment with one

unique entry. Neon is the first to issue

a card with this new, friendly format

in Brazil .

Monese (UK)

In July, Monese, the UK banking app for

immigrants and expats, finally landed on iOS. A Monese account provides a

fully-fledged ‘current account’ interface

(including a bank account number),

low-cost international money transfers,

and a Visa debit card. You’re also able to

make cash deposits and withdrawals,

and store money in multiple currencies.

What’s especially interesting about this

milestone, isn’t that iOS demand has

been strong, but how far Monese has

been able to get to without support for

Apple’s iPhone. According to some press releases, 55,000 people have installed the Android app since its

launch late last year, moving £41 million

through Monese. To put the latter figure

into context, £12 million was transacted

this July, with the startup growing 30 per

cent month-on-month.

Leaping ahead, we should note that

in January 2017 Monese raised $4.2M

in a seed round and $10M in Series A

(Anthemis Exponential Ventures, Korea

Investment Partners, Seedcamp among

investors).

Monzo (UK)

For startups as Mondo, this year was

particularly memorable. At the begin-

ning and end of the year, it landed two

funding rounds. At the beginning of

2016, Monzo received almost £10M in

funding from Passion capital and an-gel

group of investors, at a valuation of

£50M. With a huge success of their beta

launch, that gave a start to sending out

1000 cards to people at the front of its

52000-strong waiting list, this financial

support should definitely help Monzo

continue to grow and keep up with their

overwhelming demand.

Later the same year, Mondo raised £1 million in a record one minute and 36 seconds on crowdfunding plat-

form Crowdcube. Mondo was forced

to suspend its initial launch date for the

crowdfunding after a rush of applicants

from eager investors overwhelmed

Crowdcube servers. Up to 6000 peo-ple had registered to take part in the

raise, announced last month as part of

a £6 million funding round. On a day,

1861 people invested an average of £542 and will share 3.33% equity in the

soon-to-be bank .

But the biggest achievement was the

fact that Monzo finally has been granted a UK banking license ‘with restrictions’ by the UK regulators FCA and PRA. This

means that its beta testers can now, in

theory, begin switching to a Monzo cur-

rent account and use the startup to do a

lot more of their banking as the compa-

ny readies for a full banking launch early

next year. Despite the fact, that Monzo

is the latest of the four UK challenger

banks - Starling, Atom, Tandem, that

received a license, still, Monzo – is the youngest company, at 18 months old, ever to be granted a banking license .

Finally, in October, Monzo, as well as N26, released an Apple Pay and Siri integration on iOS10 to make it easier to

send and receive money. According to

Monzo, once users authorize Siri to ac-

cess their Monzo data, there are multiple

command users can use to send money

to contacts already on Monzo.

Starling (UK)

This year, Starling made 3 big things that are strong enough and show solid

traction of strategic activities taken

seriously. At first, Starling raised $70 million from Harald McPike, the founder of Bahamas-based quantita-tive investment manager QuantRes .

At second, Starling recruited a number of industry heavyweights, like Victoria

Raffé, Marcus Traill and Craig Mawdsley

who joined as non-executive directors,

alongside with Mark Winlow and Steve

Colsell, who were appointed earlier

in 2015. Ms. Raffé spent two decades

at the Financial Conduct Authority after

holding a number of senior positions at

Fidelity, Prudential and KPMG. Mr. Traill has held a number of senior positions

at QuantRes, alongside Mr. Mawdsley.

Mr. Colsell has served as Chief Finan-

cial Officer within divisions of Lloyds

Banking Group.

At third, Starling Bank was finally grant-ed a banking license by the Prudential Regulatory Authority (PRA) and the

Financial Conduct Authority and was

inviting prospective customers to sign up

ahead of a formal launch in January 2017.

The bank unveiled a new brand identity

and Website and a promise to stream-

line the way consumers manage their

money .

Atom (UK)

Atom Bank this year concentrated on

other businesses compared to rivals.

Atom is one of the first challengers,

which obtained a license, and this year

was more into operational projects.

The mobile-first bank made its iOS app available to users who pre-registered their interest. However, this is still a very

limited launch, restricted to a single product: a fixed term savings account offering an albeit fairly competitive

interest rate.

But the big news is that Atom an-nounced its first acquisition: Grasp,

29

a design and development house based

out of the North of England. Terms of

the deal are not being disclosed. Grasp

had already been working with Atom

as an outside agency, creating the

“shop window” for Atom. As part of the

deal, the head of Grasp, Brian Jobling,

became Atom’s business development

director. In Atom’s view, that includes creating mobile apps as the primary form of communications between the bank and customers; but also

by incorporating gamification, 3-D

visualizations, and other features to get

customers to use its services more.

In addition, Atom in September men-

tioned that they were raising £100 million ($129.6 million) from its shareholders to break into mortgages,

according to Sky News. The primary

reason they want to raise funds so it has

enough regulatory capital to break into

new products such as mortgages, as

well as fund losses, Sky News claims.

Tandem (UK)

Tandem, a neobank headquartered in London this year had two financing campaigns. It first raised £1m in just 20

minutes through crowdfunding plat-

form Seedrs. Tandem has already given

away 5,000 single shares to so-called

co-founders who it wants to help shape

the bank by giving feedback on how

it should work. Investors in Tandem’s

crowdfunding were able to buy-in at

the same valuation and price as its VC

backers and could invest from as little as

£15. The raise followed huge interest in

fellow digital challenger bank Mondo,

which also hit its £1m target on Crowd-

cube in just 96 seconds, and experi-

enced its own technical issues due to

the surge in interest .

Later, Tandem raised £22 million at a £65 million valuation from investors

including eBay founder Pierre Omid-

yar’s Omidyar Network. Knox said the

£22 million and the £1 million from the

crowdfunding went towards launching

the bank, something that was scheduled

for the end of this year. Interestingly,

they raised money again on January 4,

2017, $43M this time, from House of

Fraser, which wants Tandem to deliver

financial solutions for its clients .

Tide (UK)

Tide is a mobile banking app for SME.

With Tide businesses can get a fully

featured current account and business

MasterCard in just 3 minutes, which is a

solution for a critical problem of a gen-

erally time-consuming account setting

process for SMEs.

Tide raised a $2m seed round from Pas-

sion Capital and some other investor

this summer . However, it launched only at the very end of 2016, on

iPhone, Android and the web. It also integrated with Xero .

Tide’s clients’ deposits are kept in a

ring-fenced account at Barclays under

an FCA-regulated e-money license by

PrePay Solutions. Funds are held under

an e-money license, not a banking

license. The primary difference between

an e-money license and a banking

license is that banks can take investment

risks with the money held in their ac-

counts without any prior knowledge of

the business owner, however, e-mon-

ey license-holders can not do this.

Loot (UK)

Headquartered in London, Loot offers

a pre-paid card linked to a money man-

agement app. The startup has chosen

not to apply for a banking license, using

instead an E-Money license and part-

nering with other companies to offer

banking services.

In June 2016 Loot raised £1.5 million in Series A round from Austrian fund

Speedinvest, which backed Finnish

startup bank Holvi before it was ac-

quired by BBVA and Global Founders

Capital.

Later, in November, the company

topped up the funding round with an extra £2.5 million . It was going to

launch the new version of its app later

that month and begin a marketing push

after that. At that moment, Loot had 5,000 customers who were supposed

to move to the new service, and a wait-

ing list of 20,000 people.

CivilisedBank (UK)

CivilisedBank, another British business

and retail neobank, first announced its

plans to launch back in 2015 . While it

reportedly raised around £10M in

financing that year, it has not launched

up to now. In June 2016, the bank filed for banking license with FCA and PRA,

saying it expects to receive the license

and launch early in 2017 .

Fidor Bank (Germany)

Fidor Bank, Life.SREDA’s portfolio com-

pany had a very dynamic and positive

year in terms of business development.

Straight after it has launched its first

physical product in the UK, a contactless

debit card, in July 28th it was acquired by BPCE group.

Fidor is one of the first breed of new

digital banks, which established a rep-

30

utation in banking societies as a strong

disruptive innovator, utilizing a full range

of social media, crowdfunding, and P2P

lending technologies and digital curren-

cy services. Despite this, Fidor con-tinues to operate as an independent business following the acquisition .

Also, Fidor signed a partnership with Telefonica Germany to launch a mobile

banking service “O2 Banking” using

white – label technology supplied by

Fidor. Under the partnership, Fidor Bank

provides 02 with a banking license that

is valid throughout Europe, along with

individual customer, card and transac-

tion services.

Later in October, Fidor signed another partnership with Abu Dhabi Islam-ic Bank, to launch the region’s first

“community-based digital bank”. “The

features and services offered by the new

offering are based on customer insights

gained from intensive research. As we

strive to constantly innovate with our

offerings, we believe Fidor is an ideal

partner to help us introduce this

revolu-tionary solution,” Al Mahmoud

added.

N26 (Germany)

For N26, a Berlin startup that offers

financial services directly to consumers,

this year was quite bright. First, accord-

ing to the company’s press release,

it has acquired more than 200.000 customers across 8 European markets in 17 months since its launch in Jan-uary 2015. And already in early 2016 raised a $40 million in Series B round

led by Horizons Ventures. This funding

round is an important milestone in order

to become a major consumer-facing

bank in Europe. Existing investors Peter

Thiel’s Valar Ventures, Earlybird Ventures

and Redalpine Ventures re-invested as

well .

Right after the investment it received a German banking license that lets it

offer a fuller range of products across

Europe. The license should let it offer

savings, investment, credit and in-

surance products from partners. The

approval for the three-year-old compa-

ny provides another regulatory stamp of

approval for fintech startups, which seek

to undercut and outmaneuver bigger

banks by offering consumers financial

services directly from their smartphones

and tablets. Such companies have lured

younger customers with speedy credit

approvals, and slick, modern user inter-

faces for their apps .

Another feature that N26 launched this

year was introduction of international transfers in foreign currencies directly from the app, fueled by Transfer-Wise to make you pay less in fees. And

everybody wins as TransferWise gets

more users and Number26 gets more

features. This is just one of the first steps

as the company wants to create a Fin-

Tech Hub with other services. You can

expect savings, investment, credit and

insurance products. TransferWise is the

first of these integrations.

Finally, the last feature was integration with Siri for customers to request, send and receive money transfers to

and from their fellow N26 contacts via

Apple’s iPhone personal assistant. “Siri,

send €25 to Karen through the N26 app,

please.” Basically, according to N26, all

you have to do is instruct Siri to send or

request a certain amount and explicitly

ask to use the N26 app.

Tink (Sweden)

Sweden’s Tink, a mobile banking app,

has raised $10 million in Series B fund-

ing in a round led by Swedish invest-

ment firm Creades, and SEB Venture

Capital, the venture arm of Swedish

bank SEB. Tink works only in Sweden

and already has 300,000 users on Tink

1.0 and is currently running beta tests

in 10 additional European markets for

international expansion later this year.

The new capital was supposed to be

used to help the startup expand

internationally and, by taking advan-

tage of new European banking tech-

nical standards, evolve its product

beyond a ‘read only’ personal finance

app to something Tink CEO Dan-

iel Kjellén is calling a virtual bank.

Launched in Sweden in 2013, and avail-

able for iOS and Android, the first ver-sion of Tink’s mobile app lets you keep a handle on your personal finances, by

linking the app to banks accounts and

credit cards. From this ‘read only’ data

it presents insights into spending habits

via a news-feed style stream in a bid to

make it fun and useful.

Holvi (Finland)

In March, Spanish banking giant BBVA made another M&A play as it was look-

ing to companies like Holvi to help bring

new business and to build up alternative

revenue streams. Holvi was founded in

2011 and had raised just over $4M from

investors that included Seedcamp and

Speedinvest. It's one of a league of start-

ups that have been building a range of

services for businesses to run their own

financial operations and their own bank-

ing online. Its products include an online

sales platform, an invoicing platform

and a cashflow tracker. Even though the deal was not disclosed, we estimate an acquisition price of around $80M.

For Holvi, it gives the company more

scale and financial muscle to expand its

operations to more markets going down

the line. “We’ve found the ideal owner in

BBVA – a bank with the understanding

of the digital world to give us the neces-

sary room to grow, and then the scale

and expertise to underpin that growth

with sound foundations,” said Johan Lo-

renzen, CEO of Holvi, in a statement.

31

Ernit (Denmark)

Ernit is a provider of a digital piggy bank

for children, which has been selected as one of the 10 out of 1000 compa-nies to attend the prestigious accel-erator program Techstars in NYC with

help from tech giants such as Google,

Microsoft and Amazon. The company

enables parents to teach children how

to give, save, and spend money wisely.

It consists of an app and a smart piggy

bank.

The app enables children to set sav-ings goals and allows parents and oth-ers to contribute money. The electron-

ic piggy bank provides a physical way for

kids to connect with their savings. They

can hear when money is added, and the

light on their piggy’s snout lets them

know how far along they are toward

reaching their goal. Even though it's still

raising its round and expected to close

by the end of 2016th, we wish them a

good luck and success.

Lunar Way (Danmark)

Lunar Way is another Danish neo-

bank launched in 2015. As many other

mobile-first banks, it is partnering with

local banks in the countries in which

it operates, a strategy it believes has

enabled it to get to market and innovate

faster. It offers a mobile app that lets

you open a banking account, receive a

debit card (MasterCard), get a real-time

transaction feed of your spending, view

your transactions by shopping category

or retailer. You also can set saving goals

through the app, and pay bills.

In December 2016, Lunar Way disclosed

€4.2 million in new funding. Leading

the round was SEED Capital Denmark,

along with unnamed angel investors.

The partner bank Nykredit (the biggest mortgage lender in Denmark) is also a

minority shareholder.

Koho (Canada)

Koho, a Vancouver – based fintech

startup, has closed a second round of $1M seed investment. The round was

led by Power Financial Corp with the

participation of Ferst Capital Partners,

Hedgewood, Highline, Stanley Park

Ventures .

Koho is a developer of a banking

platform. The company is developing

a banking service, which is aimed at

a low-cost and modern alternative to

traditional bank accounts. The company

has partnered with a federal financial

institution to offer customers a banking

card, Visa prepaid card, web app and

mobile app. The company offers stan-

dard banking functions, which include

direct deposit, purchases, bill pay, and

ATM use without monthly fees.

In addition, private beta was also released in mid-2016 to a select few

users for early testing and feedback and

should roll out to the remaining waitlist

of more than 7,000 Canadians over the

coming months .

EQ Bank (Canada)

Equitable Bank, the Canadian alterna-

tive-mortgage provider, announced its first digital product under the brand EQ Bank, online banking business with a

savings account that pays more than tri-

ple the interest rate of other branchless

rivals. It is the first consumer play for

Equitable, which has no branches, with

roughly $10 billion in assets (measured

in U.S. dollars) and converted to a bank

from a trust company three years ago.

The strategy of launching a digital-on-ly offshoot of an established brand has been used in the U.S. by Custom-

ers Bancorp in Phoenixville, Pa., with

BankMobile (during the late-1990s dot-

com boom, Bank One, a predecessor

to JPMorgan Chase, had a short-lived

online-only unit called WingspanBank.)

Equitable likely won’t be the last institu-

tion to take the approach either, at a time

when consumers are increasingly clam-

oring for digital services before walking

into a branch or calling an 800 number.

In Canada at least, the numbers point

to a warm embrace for a digital-only

offering. According to a report by the

Canadian Bankers Association, 55% of

that country’s population chooses to do

most of their banking online.

GS Bank (US)

In April, Goldman Sachs announced it had launched a GS Bank, an internet– based saving bank. The bank was

born out of Goldman’s acquisition of

GE Capital Bank, the online retail bank

previously run by General Electric’s

capital arm. The launch of GS Bank

and acquisition of GE Capital Bank is

a move by Goldman to diversify reve-nue streams and strengthen liquidity

in a market where traditional invest-

ment banking isn’t doing as well as it

has in the past. Currently, GS Bank has

total deposits of around $114 billion,

which pales in comparison to the total

deposits of large consumer banks like

Wells Fargo and Bank of America.

The thing here is to not expect to see a

national network of GS branches open-

ing up to support the new bank. Instead,

GSB represents the most mainstream

manifestation trend toward online – only banking. Our opinion on a busi-

ness side is clear and straight forward –

a more diverse portfolio of businesses is less risky and less likely to go down

32

by a single incident. Pushing this plan

forward, regulation departments forcing

investment banks to merge with deposi-

tory banks or launch their own .

Varo Money (US)

Varo Money, a developer of a mo-

bile-banking app, received a more than

$27 million in its second round from

the New York firm Warburg Pincus.

Funds are primarily to be used for prod-

uct development, to launch its debit

card, deposit, and lending products via a

mobile app and continue development

of digital financial coach that gives offer

proactive insights, analysis of spending,

and real-time budgeting.

Led by Colin Walsh, a veteran of Amer-

ican Express Co. and Wells Fargo & Co.,

Varo is developing a mobile-banking

app offering deposit accounts connect-

ed to budgeting tools and other digital

financial services. It is also seeking to

partner with a bank to provide accounts.

Varo plans at first to rely on the banking

partner to back the accounts to which its

software will provide access.

What sets the company apart is its willingness to consider seeking its own bank charter so it can offer the depos-its itself. That would be a shift within the

financial technology industry, which has

steered away from traditional banking

with its heavy regulations.

Zero Financial (US)

Zero, a startup building a new mobile

banking experience with transformative

functionality, economics and features,

announced in September it raised a $2.5 million seed round led by ENIAC

Ventures, with New Enterprise Asso-

ciates, Nyca Partners, Lightbank, and

Middleland Capital.

Launching to the public next year, the Zero mobile banking experience is powered by the Zero app and Zero-card, a Visa card that acts like a debit

card and earns credit card rewards. Zero

gives customers banking with better

cash rewards on purchases, higher

interest on deposits, and none of the

typical fees charged by traditional banks.

“Many people don’t want to take on

debt and don’t have time to worry

about multiple credit card statements,

balances and due dates in the name

of chasing down rewards, yet they still

don’t want to give up the opportunity to

get cash back on their spending. Zero

is the first modern banking experience

to solve this,” said Zero Founder & CEO, Bryce Galen .

Neat (Hong Kong)

In March 2016, the new bank Neat,

co-founded by former Citibank vet-

eran David Rosa, started testing its

technologies and receiving guidance

and mentorship as part of the territo-

ry’s SuperCharger fintech accelerator,

which is backed by Standard Chartered

and Baidu.

Much like the UK’s Mondo, Neat

operates from a smart budgeting and

savings app with a companion card and

uses facial recognition technology to

authenticate customers at log-in.

Neat also uses artificial intelligence and machine learning to gain deeper understanding of its users. While the

app is certainly open for anyone to use,

the company is specifically targeting

university students and young profes-

sionals. Not only do they tend to be

early adopters, the company’s market

research also revealed that university

students tend to need more help

with budgeting.

Finja Pvt (Pakistan)

This is a truly interesting case how Finja, a Pakistani FinTech startup has raised $1 million in a $1.5 Million bridge seed financing round led by Vostok Emerging Finance. Finja is a developer

of digital banking services in Pakistan.

The company is developing a custom-

er-facing mobile wallet in collaboration

with Finca Microfinance Bank. It aims

to change payment behavior and help

people handle and manage money

digitally.

These years, Pakistan's rapidly grow-ing 3G/4G enabled smartphone subscribers, supported by a progres-sive regulatory framework, are a game

changer for providing digital financial

services to the country’s 200 million

under-banked population. There is an

opportunity to transform lives by rein-

venting business models and removing

friction through digital interventions.

DATA USAGE ON CELLULAR NETWORKS IN PAKISTAN

Source: https://propakistani.pk/2016/05/19/mobile-users-consumed-30149-terabytes-of-data-in-one-

month-infographic/

https://propakistani.pk/2016/05/19/mobile-users-consumed-30149-terabytes-of-data-in-one-month-infographic/



33

RocketBank (Russia)

In May, Otkrytie, a major Russian bank,

announced that it has fully acquired a

mobile banking startup Rocketbank,

Life.SREDA’s portfolio company. Rock-

etbank offers such services as free card

loading and cash withdrawal at ATMs

worldwide, money transfers, expendi-

ture analysis, a discount guide, applica-

tion support, and an air miles program.

Users can also pay a person without

having to know their bank details by

picking who they want to pay from their

phone address book, enter an email

address, or e-wallet number.

The move follows a strategic part-nership inked in December 2015. “This partnership has already allowed

Rocketbank to attract customers more

efficiently, thanks to our strong brand,

and accelerate the development of its

product. On the other hand, Rocketbank

is providing us with benefits in terms

of technology, service and customer

communications,” Otkrytie’s CEO Elena

Budin stated.

Yololite (Singapore)

What is YoloPay and who is it for?

YoloPay is a Mobile-App based payment

solution linked to Visa prepaid cards

designed for multi-person payment

systems used by households and busi-

nesses.

YoloLite is the first product which is

designed for families in Singapore and

Hong Kong to disburse funds, man-

age and allow dependents, including

domestic help, to spend using their very

own Visa prepaid cards.

Families can now take more control

of how money is spent. Move money

around quickly and safely. And then

spend anywhere in stores, for travel or

online. All using your phone which is

linked to your very own set of Visa pre-

paid cards. And soon coming, Android-

Pay and also a series of cool wearable

devices.

Sign up in minutes and get going. You

only need to send us a picture of your

ID card, front and back, after you have

tested YoloLite and have decided you

want to use it.

And earn loyalty on everywhere you

spend. Borrow small amounts in emer-

gencies. Protect what you buy.

All new features exclusively offered

with YoloLite.

Source: http://www.unescap.org/sites/default/files/Pakistan%20Country%20Paper%20ver%2018032016.pdf

AREA INDICATORS OF ACCESS TO CREDIT JUN-11 JUN-12 JUN-13 JUN-14 JUN-15

MICROFINANCE

Gross Loan Portfolio (PKR billion) 28 34 47 61 81

No. of borrowers (in thousands) 2,030 2,232 2,635 3,144 3,507

SME FINANCE

Outstanding SME Finance (PKR billion) 271 258 234 253 261

No. of SME Borrowers (in thousands) 157 149 144 134 158

AGRICULTURAL

FINANCE

Agricultural credit disbursement (PKR billion) 263 294 336 391 516

No. of Agri borrowers (in thousands) 1,445 1,960 1,990 2,151 2,185

ISLAMIC FINANCE

Total Assets (PKR billion) 560 711 903 1,089 1,495

Deposits (PKR billion) 452 603 771 932 1,281

HOUSING FINANCE

Outstanding Housing Finance (PKR billion) 62 57 52 53 59

No. of borrowers (in thousands) 95,553 87,059 79,478 74,894 70,498

PROGRESS ON FINANCIAL INCLUSION INDICATORS

http://www.unescap.org/sites/default/files/Pakistan%20Country%20Paper%20ver%2018032016.pdf

NEOBANKS

AND CHALLENGER

BANKS

from Money Of The Future 1H'2016 fintech&blockchain report

Since its rise in 2008, fintech has

been touted as a major threat to the

traditional banking processes, and

one of the disruptive tech’s pio-neers has been Fidor. Fidor Bank

with more than 350000 clients is

a digital bank founded in Germa-

ny in 2009. It was revolutionary at

launch because it focused on letting

its customers actively participate

in the bank’s decision-making. It

made its foray into the UK market in

2015. Speaking at the WIRED Money

conference in London, Fidor Bank’s

CEO Kröner quipped his firm is the

«world's oldest fintech bank». It acts as a «holistic financial service

marketplace» and mixes fintech

solutions with «more traditional

solutions», to make it «far more

accessible for the customer». «Our

key mission is integration in what-

ever way possible», said Kröner.

«Collaboration, co-management...it's

open and it's efficient». Disruption

must be «mass market relevant», he

continued, and Fintech is not disrup-

tive because it's not used by a mass

market today.

The bank’s mission is fourfold — cre-

ating, better banking, digital and

«world». This involves «customer

centric banking», «driving innovation

as an entrepreneur», focusing on

speed, data and mobile offerings, as

well as ensuring its services are

borderless and have «no geographi-

cal restrictions».

Fidor has a German license that

also applies across Europe, and

treats its community of users as

«co-managers».

«If you treat your customer as a

co-manager, they act as a co-man-

ager», says Kröner. «We always

speak to our community before

we change any of our products.

We need to improve our interest

rates — we ask them what we do.

We ask them what the product

should contain, what we should call

it». Because of this, Fidor says it has

fewer customer enquiries because

of peer-to-peer sharing, fewer

costs, higher loyalty and is able to

educate its customers on finance.

«Innovation means acceptance by

the customer. There is no inno-

vation without acceptance by the

customer».

UK-based Tandem has raised £1m in just 20 minutes through crowd-funding platform Seedrs.

The high demand from pre-regis-

tered investors led to a «momentary

glitch» on the Seedrs site. Tandem

has already given away 5,000 single

shares to so-called cofounders who

it wants to help shape the bank by

giving feedback on how it should

work. Investors in Tandem's crowd-

funding will be able to buy-in at

the same valuation and price as its

VC backers and can invest from as

little as £15. The raise follows huge

interest in fellow digital challenger

bank Mondo, which last month hit

its £1m target on Crowdcube in just

96 seconds, and experienced its own

technical issues due to the surge

in interest. Before this Tandem has raised £22 million at a £65 million valuation49. London-headquartered

Tandem, which has no branches

and will operate simply through an

app, raised the cash from investors

including eBay founder Pierre Omid-

yar’s Omidyar Network. Tandem

founder Ricky Knox told: «Pierre

Omidyar has a pretty awesome fund

that’s trying to improve people’s

lives. It’s a philanthropic impact fund.

They’re investing in us because we’re

pretty serious about our mission of

making people actually better off

rather than worse off as their bank». Tandem got its banking license last

year but is yet to launch. It plans

to have a data-heavy approach to

banking that can ensure customer

are getting the best deals.

Berlin-based startup Number26 with 200000 clients just raised a $40 million Series B round led by Hong

Kong based Horizons Ventures.

Battery Ventures, Robert Gentz,

David Schneider and Rubin Ritteralso

also participated in today’s round.

Existing investors Peter Thiel’s Valar

Ventures, Earlybird Ventures and

Sopnendu Mohanty (MAS), Brett King (Moven), Matthias Kröner (Fidor) and Ricky Knox (Tandem) at MAS event organized by Life.SREDA.

35

Redalpine Ventures re-invested as

well. At heart, Number26 provides a

free current account with a Master-

Card. But compared to traditional

brick-and-mortar banks, Number26

has a few nifty features. For in-

stance, the mobile app is a well-de-

signed native app. When it comes

to the card, you can customize it to

your needs. For instance, you can

receive a push notification for every

transaction above a certain amount.

Or you can temporarily disable on-

line purchases, ATM withdrawals or

foreign transactions. You can re-en-

able everything later. The startup has

partnered with Wirecard for the back

end. Wirecard has a banking license

and actually manages your money.

Number26 sits on top of Wirecard

and handles all the consumer-facing

features. Technically, Number26 isn’t

a bank per se — or not yet, at least.

The company has expanded to six

other European countries (France,

Greece, Ireland, Italy, Slovakia and

Spain) and partnered with Transfer-

Wise for international transfers in

foreign currencies.

UK-based startup quasi-bank Loot has raised £1.5 million ($2.2 mil-

lion)52 from Austrian early stage fund

Speedinvest and is relaunching its

app as a broader, millennial-focused

banking product pitched at «Gener-

ation Snapchat». The startup is a pre-

paid card linked to a money man-

agement app that lets people track

spending and gives them insight into

what they are spending their money

on. Loot, founded by 22-year-old

recent graduate Ollie Purdue, was

originally pitched at overseas stu-

dents because of its quick account

opening time. It launched its service

last September to coincide with the

new university year. But Loot is now

launching a new version of its app

targeted at millennials more gen-

erally, not just students. The new

app has features tailored to travel,

shopping, and money management,

meant to appeal to young people.

Purdue says: «We are focusing our

travel features on people who love

impulse trips. You don’t have to

worry about cash, you don’t have to

worry about a spending card, you

just take your bank account abroad

with you».«And we focus our money

management on people who just

want to know more about where

their money is going. Maybe they

keep checking their bank balance

and it’s surprising or they don’t know

what’s going on so they just want

to know a bit more about where it’s

going». Purdue says Loot currently

has 5,000 customers but is hoping to

reach 50,000 by the end of the year

after broadening out its service.

Sweden’s Tink, a mobile banking

app, has raised $10 million in Series B funding53 in a round led by Swedish

investment firm Creades, and SEB

Venture Capital, the venture arm of

Swedish bank SEB. The new capi-

tal will be used to help the startup

expand internationally and, by taking

advantage of new European banking

technical standards, evolve its prod-

uct beyond a «read only» personal

finance app to something Tink CEO

Daniel Kjellén is calling a virtual bank.

Launched in Sweden in 2013, and

available for iOS and Android, the

first version of Tink’s mobile app lets

you keep a handle on your personal

finances, by linking the app to banks

accounts and credit cards. From this

‘read only’ data it presents insights

into spending habits via a news-

feed style stream in a bid to make

it fun and useful. Broadly speaking

it might be compared to Mint and

Level Money in the U.S., and Numbrs,

Bankin’ and Money Dashboard in

Europe. «Today we're live in Sweden

with 300,000 users on Tink 1.0 and

are currently running beta tests in

10 additional European markets for

international expansion later this

year», adds Kjellén.

The New York firm Warburg Pin-

cus is leading an investment round

of more than $27 million in San Francisco-based Varo Money Inc.,

a startup that may one day take

the rare step of seeking its own

bank charter54. Led by Colin Walsh,

36

a veteran of American Express

Co. and Wells Fargo & Co., Varo is

developing a mobile-banking app

offering deposit accounts connected

to budgeting tools and other digital

financial services. It is also seeking

to partner with a bank to provide

accounts. Varo plans at first to rely

on the banking partner to back the

accounts to which its software will

provide access. But what sets the

company apart is its willingness to

even consider seeking its own bank

charter so it can offer the deposits

itself. That would be a shift within the

financial-technology industry, which

has steered away from traditional

banking with its heavy regulations.

Goldman Sachs launches GS Bank, an Internet bank with a $1 mini-mum deposit55. Goldman is opening

its doors to the masses with the

launch of GS Bank, an FDIC-insured,

Internet-based savings bank. GS

Bank’s interest rates will be high,

giving customers an annual yield of

1.05 percent. This rate trumps the

average U.S. saving’s bank yield of

.06 percent APY, but is relatively in

line with other online rival banks like

Ally, which offers 1 percent APY. The

bank was born out of Goldman’s

acquisition of GE Capital Bank, the

online retail bank previously run by

General Electric’s capital arm. The

launch of GS Bank and acquisition of

GE Capital Bank is a move by

Goldman to diversify revenue

streams and strengthen liquidity in a

market where traditional investment

banking isn’t doing as well as it has in

the past. Currently, GS Bank has total

deposits of around $114 billion,

which pales in comparison to the

total deposits of large consumer

banks like Wells Fargo and Bank of

America. The downsides to Gold-

man’s particular offering are consid-

erable56 — they don’t have a check-

ing account and there’s no ATM

access, so this couldn’t actually

replace a traditional bank — but

other online-only operators have a

more robust set of products, and

Goldman can of course expand over

time. What Goldman Sachs has that

other online banks don’t is a widely

recognized brand name built on

excellence in other dimensions of

financial services that could help

further push internet banking

beyond the early adopter demo-

graphic.

Hong Kong-based Neat to launch banking app that tells how much you can spend today57. The startup

partners with banks and uses both

cards and a smartphone app. Users

only need 10 minutes to set up a

bank account, with secure finger

print scans and facial recognition.

Users can use the app for money

transfers, checking account balanc-

es and topping up their account.

The app can be used for offline and

online purchases. Moreover, Neat

can also help users save money by

making a budget. It even sends out

notifications each time they spend,

showing them how much they can

spend each day. Neat also uses arti-

ficial intelligence and machine learn-

ing to gain deeper understanding of

its users. While the app is certainly

open for anyone to use, the compa-

ny is specifically targetting university

students and young professionals.

Not only do they tend to be early

adopters, the company’s market

research also revealed that university

students tend to need more help

with budgeting.

Atom Bank, which is backed by

Spanish banking giant BBVA, has

made its iOS app available to users

who pre-registered their interest58.

However, this is still a very limited

launch, restricted to a single product:

a fixed term savings account offering

an albeit fairly competitive interest

rate. In other words, let’s not carried

away just yet. Atom says that by

37

«the end of 2016» it will add current

accounts, overdrafts, debit and credit

cards, instant access savings and

residential mortgages to the list of

financial products, all serviced via the

app. An Android version is planned

too. Also Atom Bank announced its

first acquisition: Grasp59, a design

and development house based out

of the north of England. Terms of the

deal are not being disclosed. Grasp

had already been working with Atom

as an outside agency, creating the

«shop window» for Atom. So this is

partly about bringing more of that

relationship in-house to work on

deeper projects. As part of the deal,

the head of Grasp, Brian Jobling, will

become Atom’s business develop-

ment director. In Atom’s view, that

includes creating mobile apps as the

primary form of communications

between the bank and customers;

but also by incorporating gamifica-

tion, 3-D visualizations and other

features to get customers to use its

services more.

One more UK-based startup Mondo must raise at least £15 million ($22 million) later this year to gain

its full banking licence60. Mondo,

which crowdfunded £1 million in

just 96 seconds earlier this year, is

in the process of applying for its full

license and hopes to have a «re-

stricted licence» within two or three

months. Blomfield says the new

funding round values the startup at

£30 million. This is a sort of proba-

tionary licence that allows Mondo

to prove to regulators it is ready for

a full licence. CEO Tom Blomfield

told Business Insider: «The restricted

licence is a way of signalling to the

market that they are [the Bank of En-

gland and regulator Financial Con-

duct Authority] minded to approve

you, so you can then go out and

raise the capital you need to launch.

It is sort of a test phase».«We will

need around £15-20 million to get

those restrictions lifted. We are hav-

ing one or two conversations now

but we will leave the real fundraising

towards the end of the year».

Before this Mondo, the yet-to-launch

U.K. banking startup that is creat-

ing quite a lot of buzz amongst the

London tech scene and beyond,

opened its Beta to the public61 — al-

beit one limited in functionality while

the company seeks a full banking li-

cense. Mondo offers a pre-paid Mas-

terCard and a rather nifty iPhone app

that features the ability to track your

spending in realtime, view geoloca-

tion-marked transactions on a map,

view spending by category, and get

a graphical timeline of your overall

expenditure. There’s also the option

to send other Mondo members

money (ie peer-to-peer payments).

The startup will begin sending out

1,000 cards to people at the front of

its 52,000-strong waiting list, with

many thousands more being issued

over the next few weeks. «I feel like

we’ve delivered about 20% of the

functionality we’ll offer when we’re a

full bank», Mondo co-founder Tom

Blomfield tells. «We’re targeting peo-

ple who want to get involved early

to help build the kind of bank that

they’d be proud to call their own. At

this stage, you’re joining a mission to

improve the state of banking». Mon-

do also recently bolstered its fund-ing in anticipation of attaining reg-ulatory approval as a fully fledged bank, which I gather is hopefully on

track for later this Summer. Passion

Capital followed on with a further

£5 million last month, adding to the

£2 million already invested by the

London VC, and an additional £1

million was recently raised via equity

crowdfunding. «At the same time,

we’re planning to rollout in other

European countries, integrate Apple

Pay and implement tonnes more

useful features like bill splitting», adds Blomfield. Mondo has an open

API from the get-go, part of a wider

differentiator that’s seeing it build

a «full-stack» bank with its own in-

house banking tech in order to offer

features that legacy banks struggle

with as they are reliant on outdated

software and infrastructure. «We’ve

had hundreds of people attend our

hackathons and they’re now some of

our biggest supporters. It’s also great

for recruitment!» Blomfield says.

Starling Bank has recruited a former

regulator and a number of industry

heavyweights for its board while

raising $70m to spearhead its at-

tempt to move into the UK banking

market62. The new digital bank,

founded by Anne Boden, the former

chief operating officer of Allied Irish

Bank, is aiming to lure mobile-fo-

cused customers and provide a

superior current account service

to those offered by the incumbent

high street banks. The emergence of

Starling follows in the footsteps of

Atom Bank and Tandem, two digital-

ly-based challengers that received

regulatory approval for launch last

year, and heralds a new generation

of tech-savvy banks. They are among

a host of new lenders trying to break

into a market not only dominated by

four big names in Lloyds, Barclays,

HSBC and Royal Bank of Scotland,

but also one with longstanding cus-

tomer apathy to switching accounts.

Investors are drawn to new challeng-

38

ers for their high growth prospects

and their freedom from the burden

of old systems. Starling has secured

$70m of investment from Harald

McPike, the founder of QuantRes, a

Bahamas-based quantitative invest-

ment manager.

Founders Fund, the San Francis-

co-based venture capital firm Mr.

Thiel co-founded, has led a new

$52 million financing round in Nubank63, a financial technology

start-up based in São Paulo. The new

investment values Nubank at ap-

proximately $500 million significant

for a company less than three years

old. Nubank, which was founded by

a former Sequoia Capital partner,

David Velez, and provides a digital

credit card for smartphones, is trying

to take customers away from Brazil’s

highly profitable banks, which have

long seemed untouchable. More

than one million Brazilians have ap-

plied for the card and approximately

300,000 are on a waiting list while

their credit history is examined.

The CEO of Vietnams first Digital

Bank Timo, Claude Spiese, tells that

his mobile only bank is targeting

50 Millions Vietnamese and claims

to be sexy and secure64. «Timo is a

digital bank platform just like Moven

and Simple — but Timo takes it

one step further. Like Simple and

Moven, Timo is a digital front end

with a licensed banking partner

backend. But, whereas Moven and

Simple are limited to one financial

product (the current account), Timo

serves as a digital platform for a full

range of banking products, and even

non-banking financial products such

as investments and insurance. This

model allows Timo to focus on the

front end and to deliver an excep-

tional customer experience while the

partner financial institutions focus on

the back-end and licenses».

Their competitor, Vietnam-based

fintech startup Momo announced it obtained US$28 million in series

B funding from Standard Chartered

Private Equity and global investment

bank Goldman Sachs65, which is

an existing backer. It has over 2.5 million users in Vietnam. Launched

in 2014, Momo is an ewallet and

payments app that allows users

to pay online and transfer money

to each other digitally. At selected

stores, the app can be used for

cashless payments. The company

also has a physical network of over

4,000 over-the-counter agents where people can remit money

and avail of other financial services

through Momo. CEO Pham Thanh

Duc says the startup will use the

fresh investment to «accelerate Mo-

mo’s growth by continuing to invest

in the launching of new products

and services, expanding bank and

merchant connectivity, and ex-

tending the nationwide installation

of Momo point-of-sale terminals

at retail outlets». Goldman Sachs

previously invested US$5.75 million

in Momo. Standard Chartered, for

its part, teamed up with Momo to

provide the «Straight2Bank» wallet

payments for the bank’s corporate

clients in Vietnam. The service en-

ables corporations and government

organizations to make payments

directly to their beneficiaries via the

Momo wallet.

There are several unique selling points offered by new banking players, and it presents many

amazing opportunities: Mobile first;

Cross-sell and up-sell; Virtual finan-

cial advisor; Data driven. It is a great opportunity for investors especially Asia to be in touch with innovative

solutions in mobile banking. This

can be seen as Life.SREDA VC have

achieved prior successes through

exits in our first fund — Simple,

Moven, Rocketbank. Developing

markets like Southeast Asia fit the

prerequisites for this to kick off, given

their large amount of underbanked

and unbanked consumers who have

access to smartphones as well as low

rates of home broadband and urban-

ization that make traditional meth-

ods inaccessible to them. Beside

Singapore in the region, the digital

banking penetration is depressingly

low, ranging from 13-44 percent in

2014 — even though consumers in

their 20s are 50 percent more willing

than their parents to try mobile

banking. If banks are unable to con-

tinue to rapidly innovate and create

new, user-friendly and differentiat-

ed mobile offerings and effectively

advertise and distribute on these

platforms, they could lose market

share to existing competitors or new

entrants, and their future growth

and bottom line could adversely

take a hit. In other words, banks

have to start disrupting themselves

by acquiring new technologies and/

or partnering with technopreneurs

before they become a part of history.

The winners will be the ones that put

consumers’ digitalized lifestyles as

the core strategy.

KPMG: The game changers ChallengerBanking Results May 2015https://goo.gl/nljmD

39

https://goo.gl/nljmD

Get the new bookby Vladislav Solodkiy

Managing partner at Life.SREDA VC, Singapore-based fintech firm.

One of TOP35 the most influential fintech-investors in the world (by Institutional Investor magazine), TOP21 fintech influencers in Europe (by Fintech Magazine) and TOP100 fintech ecosystem builders in Asia (by NextBank and E&Y).

Contributor for Forbes, TheNextWeb, European Financial Review, EFMA journal, VentureBeat, TechInAsia, e27, LetsTalkPayments, FintechRanking, FintechNews, and other leading media.

Keynote-speaker at Money2020, Rise\MoneyConf, European Fintech Awards, Global Payment Summit, FinSpire, FinnovAsia, Fintech CEO Summit by IFC, Paris Fintech Forum, Global Venture Summit, Fintech Award LatAm, Dot Finance Africa, The Future Of Finance Summit, and many other conferences.

Author of «Money Of The Future» annual fintech report.

The Bubble GenerationManifestoSTOP blaming blockchain\crypto\ICOcommunityWe are the generation that was born in the eraof 9/11, the dot-com bubble, the real estatebubble, Putin and Trump, Brexit and Catalonia,the forthcoming largest wave of unemploymentdue to the introduction of AI and robots - youcan forbid us everything and take everythingaway from us. But, to be honest, we havenothing. The previous generation fuckedeverything up before us.

https://goo.gl/bXfZsj

https://goo.gl/8h1wK4

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