According to Reuters, the new US regulator bank rules will require banks to reinforce recordkeeping for accounts that fintech companies hold on behalf of customers.

Custodial Accounts

In a statement posted on the FDIC website, the US regulator noted that banks hold customer funds in individual deposit accounts. Fintech companies- which are typically non-bank firms, don’t place funds belonging to their customers in individual accounts within banks. Instead, all customer funds are lumped up together in a one custodial account in a bank.

Often, custodial accounts hold funds belonging to thousands of fintech customers. This means that banks that host such accounts for fintechs may not necessarily know the individual owners of the funds held in the custodial accounts.

The new FDIC proposal for banks seeks to change this situation. Under the proposed rules, FDIC-insured banks will be required to maintain accurate records of individual owners of funds held in custodial accounts. Additionally, such banks will be expected to reconcile accounts for each individual owner each day.

Safeguarding Customer Funds

FDIC’s bank proposal comes months after Synapse Financial Technologies collapsed early this year. Synapse was a bank-fintech middleman whose collapse led to the freezing of numerous accounts. Through the new rules, the banking regulator will ensure that customers can access their funds in a timely manner, even in situations where there is a failure on the part of the bank.

“The Notice of Proposed Rulemaking approved by the FDIC Board today is an important step to ensure that banks know the actual owner of deposits placed in a bank by a third party such as Synapse, whether the deposit has actually been placed in the banks, and that the banks are able to provide the depositor their funds even if the third party fails,” FDIC Chairman Martin J. Gruenberg said.

Under the new US regulator strengthened rules third parties such as Synapse will have to maintain beneficiary records for as long as they meet specific requirements. These requirements include banks maintaining open access to beneficiary records even in the event of insolvency or bankruptcy.

Synapse filed a bankruptcy application in April 2024. Accounts belonging to thousands of customers from partner banks were frozen. One of its partner banks, Evolve Bank & Trust, was providing banking services like deposit accounts to fintech firms.

Bank Merger Regulation

The US banking regulator is planning to introduce a new policy to tighten scrutiny of bank mergers that combine banks with assets that are valued at over $100 million. The new policy will underscore the need to maintain stability in the banking sector. The policy is set to update FDIC’s merger guidelines that have been in existence for the last 16 years.

The post New US Regulator Bank Rules Set to Protect FinTech’s and Customer Funds appeared first on Tech Research Online.

According to Reuters, Revolut’s valuation announcement comes after the Financial Times reported that the UK government was planning to meet Revolut’s leadership to convince them to list on the London Stock Exchange instead of New York.

Cashing Shares

The latest share sale now allows staff in Revolut to cash in their stock and bring new investors into Revolut’s fold.

“We’re delighted to provide our employees the opportunity to realize the benefits of the company’s collective success. It’s their hard work, innovation, and dedication that has driven us to become the most valuable private technology company in Europe,” Nik Storonsky, Revolut said.

The shares sale was led by various partners including Tiger Global, D1 Capital Partners, and Coatue.

Valuable Than Banks

The $45 billion Revolut share valuation makes the fintech company more valuable than some European banks. The fintech company’s valuation now doubles that of the French Bank Societe Generale whose current valuation now stands at $19 billion. Revolut is also more valuable than UK’s Barclay’s $43 billion.

In Europe, valuation of conventional banks has been affected by new regulations and weak profitability. For instance, Barclays bank shares have been on the recovery path for more than a decade. Revolut investors are positive that the fintech company will have better growth prospects compared to those of conventional lenders.

Revolut’s valuation hit the $33 billion mark in 2021 following an $800 million funding round that it won after jostling with Checkout.com and Klarna for Europe’s most valuable startup title. The latest Europe valuation share sale places Revolut at the top of the list.

Banking License

Revolut recently secured a UK banking license following a three-year wait that resulted from difficulties in scrutinizing its internal accounting procedures. Investors are confident that with the license, the fintech company will lure customers who opt for app-based banking from leading street banks.

Revolut can do this without incurring the cost associated with maintaining a network of branches. In 2023, the company announced a pre-tax profit of $564 million and $2.2 billion in total revenue.

The size of the latest Revolut share sale has not been disclosed. It’s also unclear whether Storonsky also cashed part of his stake in the share sale. Previously, Sky News reported that the CEO would sell part of his stake.

The post Revolut is Now Europe’s Most Valuable Startup appeared first on Tech Research Online.

Klarna is popular for its buy now, pay later loans that allow users to pay for products through interest-free installments. According to CNBC, the fintech company launched new products to encourage users to shift their saving and spending transactions on its platform.

New Opportunity

Klarna is rolling out the new products in 12 markets in Europe and the U.S. The company says the products will be reflected as ‘cashback’ and ‘balance’ on the Klarna App. According to Klarna’s founder and CEO, Sebastian Siemiatkowski, the products allow users to earn some money as they shop.

“These new products make it easier for customers to manage multiple scheduled payments, helping our customers use Klarna for more frequent purchases and driving loyalty. Klarna wants to support all consumers with their everyday spending and allow people to earn money while they shop and manage it in a Klarna account,” Siemiatkowski told CNBC.

EU customers will earn up to 3.58% interest on deposits made on Klarna. However, U.S. customers will not earn interest on deposits. In Ireland, Klarna will be competing with Revolut which is already offering interest-earning accounts to users. Revolut received a U.K. banking license last year.

Key Features

The new Klarna balance feature will allow users to keep their money in a personal account that’s very similar to a bank. They can use their deposits to purchase items and pay their buy now, pay later loans. Klarna users will also receive refunds directly in their accounts for any returned items.

The cashback feature allows users to earn rewards. Users can get up to 10% of the value of items they purchase from participating retailers as Klarna cashback rewards. The money earned is automatically deposited in their balance account.

This isn’t the first time that Klarna is offering conventional banking services. The fintech company has been offering savings and account products in Germany since 2021.

Klarna IPO

The unveiling of the two products is a major step for Klarna’s range of products as its U.S initial public offer draws closer. The company has not set a timeline for the stock market listing, but the company says the IPO could still happen this year. Early this year, Siemiatkowski gave the Klarna IPO update during a CNBC interview.

“We still have a few steps and work ahead of ourselves. But we’re keen on becoming a public company,” he said.

Klarna’s IPO valuation on the secondary market stands at billions of dollars. Currently, the fintech company is talking to investors about a share sale to provide it with some liquidity.

The post Klarna Unveils New Products Ahead of Much Anticipated IPO appeared first on Tech Research Online.

Wise stopped enrolling new clients for several months to overhaul its infrastructure after securing a Reserve Bank of India license. The license allows the Wise app users to send more money overseas.

Big Market

Wise India plans are focused on facilitating cross-border payments. The fintech firm says it will commence financial services in the coming months.

“India is a huge market for remittance. We will be primarily focusing on cross-border movement that’s currently almost entirely done by banks,” Wise Head of Expansion for Asia Pacific, Shrawan Saraogi, said.

In the Indian market, Wise will be taking on leading lenders like State Bank of India and ICICI Bank Limited which have dominated the outbound remittance market. Their dominance has been enabled by dated international payment rails, strict capital controls, and heavy taxes that reduce the impact of rival fintechs.

India’s external remittances for 12 months ending March 2024 stood at $32 billion, up from $27 billion the previous year. The remittances were mainly for educational, travel, and family expenses.

Not the First Time

This isn’t the first time that Wise has served Indian clients. The fintech company has been providing outbound payments in Asian countries since 2020 through a bank tie-up. However, the outbound remittances were previously capped at $5000 per transaction.

With the new Dealer 2 license, this will no longer be the case. Wise is revamping its back-end processes to comply with reporting and tax rules before it starts taking in first time customers under this license. India charges a 20% levy on external remittances.

Affordable Service

Wise overseas remittances will be more affordable than most of its Indian rivals. On average, the fintech charges a 65 basis points remittance fee globally. This is several times lower than that of Indian banks.

“We think we can be a pretty meaningful player in that market because we will launch a product that will be fast, that will be cheap, that will be transparent,” Saraogi said.

The Asia-Pacific market contributed a gift of Wise’s global revenue for the year ending March 2024. This was the second highest revenue for the fintech company after Europe, the UK excluded.

Fintech Rush

India’s digital payments market is expected to grow and hit the $7 billion market by 2030 up from $300 billion in 2018.

In 2022, digital transactions accounted for 46% of payments in the country. It is this opportunity that has attracted global fintech companies like Revolut and Wise to the Indian market.

In April, Revolut got a Prepaid Payment Instruments license from the Reserve Bank of India. The company already has 200,000 users on its waiting list, even though it is looking to unveil payment tools in the country soon.

Related Article: Revolut to Unveil Services in UK After Bagging Banking License

The post Wise Expansion Plan Targets India’s $32B Outbound Remittances appeared first on Tech Research Online.

Prior to the UK license, Revolut held a European banking license through its Lithuanian entity. This has helped Revolut to position itself as a bank within the European Union. Earlier this year, the fintech company got another license from Mexico.

However, its prospects were strongly hinged on getting the UK banking license.

Expanded Offerings

The Revolut banking license opens new opportunities for the startup company. The Prudential Regulation Authority (PRA) stamp of approval serves as a vote of confidence for the fintech company. It significantly increases chances of Revolut to be a regulated bank in major markets like the U.S.

“We are incredibly proud to reach this important milestone in the journey of the company and we will ensure we deliver on making Revolut the bank of choice for UK customers,” Nik Storonsky, Revolut’s Chief Executive said.

With the Revolut UK license, the fintech company can expand its product and service offerings it offers clients.

Consistent Growth

Revolut started as a travel finance app in 2015. Since then, it has launched other services including kids bank accounts, business banking, share and stock trading products, insurance, and hotel and flight booking. This year, the fintech company added Revolut X, a crypto exchange platform for professional traders.

“In the world of fintech, it’s sometimes not so easy to explain what Revolut is to our customers,” Antoine Le Nel, Chief Growth Officer at Revolut said.

Currently, Revolut’s EU operations account for about 70% of its revenue, which points to the kind of offerings the fintech startup will be rolling out in the UK if it sails through the mobilization phase.

For instance, Revolut users in Ireland can deposit cash in interest-earning accounts, and access loans and credit cards. Le Nel said that Revolut plans to introduce mortgage plans in the coming year. The mortgage plans will first be tested in Lithuania this year.

Restrictions

Revolut’s banking license in the UK comes with a set of restrictions. Despite getting the license, Revolut remains on the radar of UK regulators. Previously, the PRA found the fintech’s financial audits for 2020 to be inadequate. In 2021, auditors could not verify a portion of 2021 revenue. This issue was resolved afterwards. In 2022, Revolut experienced delays in posting its accounts; its 2023 results were posted early.

With 9 million UK clients and 45 million global clients, Revolut has gotten into the mobilization phase. This phase will involve building its banking operations and strengthening its senior management team. The mobilization period lasts for about 12 months. During this period, not much will change for UK customers.

The cash that Revolut holds will be protected via the e-money safeguarding process. This means the UK’s Financial Services Compensation Scheme (FSCS) deposit protection does not apply. The FSCS provides a guaranteed compensation of $109,000 for bank failure.

The post Revolut to Unveil Services in UK After Bagging Banking License appeared first on Tech Research Online.

According to Tech.eu, the funding from Meridien stake will enable DKK partners to move its global expansion plan forward.

Meridien specializes in CRM, global payments, and the banking industry, while DKK Partners specializes in foreign exchange liquidity and emerging markets.

Consistent Growth

Last year, DKK partners grew its transaction flow to $1.3 billion. Its EBITDA hit the $2 million mark with a 150% CAGR. The firm also expanded to key markets, opening offices in London, Dubai, Nigeria and Senegal.

“DKK has an incredible growth story, a fantastic customer base, and a scalable business model, alongside a strategic partnership with Seed Group, makes them a game changing VASP in the region. The partnership with DKK, in conjunction with our other acquisitions of listed and regulated financial institutions, is perfect for Meridien and its preparation to list on the NYSE, driving the goal of creating a revolutionary business model in the industry of global payments, banking and correspondent services,” Meridien Holding CEO, Erik Lara Riveros said.

Strategic Alliance

The Meridien-DKK merger deal includes forming a strategic alliance that complements their business plans. The two companies plan to do this by acquiring banking and forex liquidity capabilities. Additionally, the DKK-Meridien merger deal allows both companies to focus on securing global payments. DKK will get shares in Meridien in addition to cash injection to facilitate its rapid expansion.

“This is a pivotal moment for our business and it’s a real honor to partner with Meridien as we enter our next phase of growth. Both businesses have shared values and a commitment to excellence, and we’re thrilled to be working to build a truly disruptive global brand that will redefine the payments industry,” DKK Partners Co-Founder, Khalid Talukder said.

Earlier in the year, DKK collaborated with the Seed Group to facilitate efficient and transparent transactions for financial institutions. The fintech company also got initial approval to provide Virtual Asset Broker Dealer services in Dubai.

Future Plans

Meridien Holdings plans to acquire financially regulated firms in multiple geographies. The goal is to aggregate the institutions and create seamless transfer of value throughout the Meridien ecosystem.

The post Meridien Boost NYSE Listing Plans with DKK Merger appeared first on Tech Research Online.

According to Yahoo Finance, Galileo’s wire service will help fintechs to attract and retain more customers. Galileo uses its wire transfer API to link fintechs that partner with the Community Federal Savings Bank with the Fedwire Funds Service.

Fueling FinTech Growth

Last year, Fedwire Funds Service reported that it processed upwards of 193 million wire transfers. Galileo is already boosting the growth of fintech startups by facilitating Fedwire transfers. Galileo’s money movement API provides a scalable solution for fintechs. It empowers them to cater to the growing demand for fast financial transactions.

Galileo’s CPO, David Feuer said, “Galileo continues to power most of the leading fintechs in the US and provide a one-stop-shop for a wide variety of payment methods. Adding wire transfer capabilities supports the demand for fast and secure money movement and integrates seamlessly with fintech’s existing financial infrastructures through API access.”

Galileo wire transfer capabilities enhance the efficiency of outgoing and incoming wire transfers. By doing so, it enables rapid and reliable movement of funds.

Same Day Transfer

Galileo financial technologies help fintechs to deliver funds to recipients the same day they are sent. Each transaction undergoes a thorough validation process to ensure safety and integrity. Demand for fast wire transfer services is high among businesses and individual consumers who seek instant, secure transactions. A good example is large transactions like home, vendor, or tuition payments.

“The demand for Fedwire transfers spans a broad range of use cases, from individual consumers managing personal financial needs to businesses handling large-scale, B2B financial operations,” Galileo said.

User Benefits

Galileo’s secure money movement solution offers users a range of benefits. These include enhanced security. Each financial transaction is subjected to a rigorous validation process to guarantee the safety of the funds transferred. Users enjoy speedy transactions. Notifications are sent to recipients and senders in real-time. This keeps them updated on the status of transactions at any given time.

Open API

As a fintech giant, Galileo leverages open APIs to power its fully integrated platform and fuel innovation across its financial and payment services. The company has earned the trust of digital banking heavyweights. It attracts enterprise clients and early-stage fintech innovators. The company supports virtual and physical payment cards for clients. It also supports digital push provisioning and customized financial products across industries and locations.

The post Galileo Unveils New Wire Transfer API to Power US FinTechs appeared first on Tech Research Online.

Inside the Mind of a
CISO Report

About Bugcrowd

Bugcrowd is a thriving community of ethical hackers and security experts dedicated to making the digital world safer. Through their platform, they collaborate with businesses to identify and address vulnerabilities, sharing their knowledge and expertise to strengthen cybersecurity defences worldwide. Bugcrowd fosters a culture of collaboration, rewarding researchers for their contributions and providing the resources they need to succeed. 

The post Inside the Mind of a CISO Report appeared first on Tech Research Online.

A press release published on BusinessWire shows that Freeflow Ventures raised $35 million through Fund Two, $25 million through Fund One, and $15 million through Opportunity Fund. The firm raised $15 million through special-purpose ventures.

The venture capital firm invests Freeflow equity funding in science-driven innovations that address planetary and human challenges. 

Rich Background 

Freeflow was established in the Caltech area of Pasadena, California in 2020. Since then, the venture capital firm has invested in 30 companies. It was founded by leading global scientists including three Chemistry and Physiology Nobel Laureates. 

In recent years, the venture capital market has experienced challenges. But even in the face of the challenges, Freeflow has grown its fundraising twice, from Fund One to Fund Two.  

Additionally, the venture capital firm launched an investment into Catena Bio recently. This is the first  Freeflow deeptech investment that the company is making in startups within the Berkeley ecosystem. 

Catena Bio is pioneering the next-generation Antibody Drug Conjugate (ADC) technology. The technology comes with a novel conjugation that facilitates varying payload capabilities in cancer treatment. These capabilities can improve patient outcomes significantly.  Catena Bio’s co-founder and CEO, Marco Lobba previously worked on the technology that underlies the ADC approach. At the time, he was taking his PhD at the University of California, Berkeley. Catena Bio is a member of the Bakar BioEngenuity Hub at the University. 

DeepTech in Berkeley

Breakthrough science and deepTech innovation are prominent in Berkeley. The two share similarities across Pasadena. From its inception, Freeflow Ventures funding has laid a strong investment foundation in Caltech. Now, the venture capital firm is looking to bring its tested ecosystem-based operating model to Berkeley. For Freeflow, this move is set to attract deals from two globally recognized scientific communities. 

“This new funding enables us to expand our model to Berkeley, an important addition to our operating model because it shares so many similarities to Caltech and JPL where amazing founders working on large-scale solutions to important problems continue to create high-quality investment opportunities. These two communities align very well with our focused thesis on human and planetary health,” Freeflow Ventures Founder and Managing Partner,  David Fleck said.

The post Freeflow Ventures Funding Targets US-Based DeepTech Startups appeared first on Tech Research Online.

On Wednesday, Evolve Bank & Trust informed its retail customers and fintech partners that it had commenced investigations into the cyberattack.

In a notice published on its website, Evolve Bank said, “It appears these bad actors have released illegally obtained data, including Personal Identification Information (PII), on the dark web. The data varies by individual, but may include your name, Social Security Number, date of birth, account information, and/or other personal information.”

The company expressed confidence that the breach had been contained.

“Evolve retail banking customers’ debit cards, online, and digital banking credentials do not appear to be impacted by the cybersecurity incident,” Evolve Bank added.

Regulator Warning

The cyberattack on Evolve Bank comes soon after the U.S. Federal Reserve Board issued enforcement action against the bank. Earlier last month, the regulator instructed the bank to reinforce its risk management initiatives concerning anti-money laundering regulations and fintech partnerships.

A representative from the bank said that the bank had sought the support of law enforcement agencies to facilitate its inquiry and remediation efforts.

“We will offer all impacted customers (end users) complimentary credit monitoring with identity theft protection services. Those affected will be contacted directly with instructions on how to enroll in these protective measures,” the representative added.

Impact on Fintech Firms

The Evolve bank cyberattack has caused various fintech companies to initiate investigations into potential impact of the data breach. Mercury, a fintech startup, has already confirmed that its customer data was compromised. The company confirmed that Evolve’s intrusion disclosed emails, business owner names, and deposit balances for certain account numbers.

Mercury reported that impacted customers had been informed. The company also posted information on precautionary measures for its customers on X, formerly Twitter.

Another fintech startup, Affirm, reported possible unauthorized access of its customer database. However, the company says its Money Accounts and card may be safe to use as investigations continue. Other fintech startups that continue to investigate the impact of Evolve bank and Trust data breach include Melio, EarnIn, and Marqueta.

Kelly Kraft, Marqueta Spokesperson said, “Our customers affected by this incident have been notified, and we are working closely with Evolve to understand their remediation effort and how our mutual customers may be impacted.”

Publication of Stolen Data

Lockbut 3.0, a cybercrime group, reportedly published the stolen Evolve data on Tuesday. The hackers allegedly gave the Federal Reserve Board until Tuesday afternoon to comply with ransom demands to avoid disclosure of private information.

The post Evolve Bank’s Cyber Attack Exposes Risk Management Cracks in FinTech appeared first on Tech Research Online.

10 Essentials to Look for in a Crowdsourced Security Platform Checklist

About Bugcrowd

Bugcrowd is a thriving community of ethical hackers and security experts dedicated to making the digital world safer. Through their platform, they collaborate with businesses to identify and address vulnerabilities, sharing their knowledge and expertise to strengthen cybersecurity defences worldwide. Bugcrowd fosters a culture of collaboration, rewarding researchers for their contributions and providing the resources they need to succeed. 

The post 10 Essentials to Look for in a Crowdsourced Security Platform Checklist appeared first on Tech Research Online.

Expanding Risk Reduction with a Crowdsourced Security Platform

In a constant storm of cyber threats, one-off solutions and reactive measures simply do not cut it anymore. Crowdsourced security helps organizations take back control in this environment, helping organizations stop attackers before they can even think about striking. However, implementing crowdsourcing with scale and efficiency can be difficult.

This guide covers 10 ways to go beyond traditional security testing to provide elevated outcomes.

Download the guide

Download the guide

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About Bugcrowd

Bugcrowd is a thriving community of ethical hackers and security experts dedicated to making the digital world safer. Through their platform, they collaborate with businesses to identify and address vulnerabilities, sharing their knowledge and expertise to strengthen cybersecurity defences worldwide. Bugcrowd fosters a culture of collaboration, rewarding researchers for their contributions and providing the resources they need to succeed. 

The post Expanding Risk Reduction with a Crowdsourced Security Platform appeared first on Tech Research Online.