FTT Embedded Finance


Going big with embedded finance, frozen money and bad gum – FTT Bookmark Issue 25

Going Big with Embedded Finance, Frozen Money and Bad Gum

Your weekly resource for noteworthy news, fascinating features, and fintech titbits that caught our eye. Whether you live by your Twitter lists, save your Google Alerts or simply scroll through LinkedIn for insights and commentary – there is a wealth of content that weaves a global story around fintech.

Our job at Fintech Talents is to work within that global story – finding the news items, conventional wisdoms and hard data that aids us in bringing the industry the best content, community and experiences in the business. This week’s FTT Bookmark of timely resources and real time conversations that are shaping fintech is brought to you by Lisa Moyle, Director of Strategy at VC Innovations.

Go Big or Go Home

The buzz around embedded finance continues and not just at VC Innovations. Banking as a Service provider, Solaris Bank announced on Monday that it had both raised 190 million euros ($224 million) and was acquiring UK digital payments services company, Contis. Not only does the purchase give Solaris Bank a foothold in the UK market but it also adds payments processing to its service offering.

By going the buy versus build approach and with a stack of cash to boot, Solaris is posited for expansion across Europe. As CEO Roland Folz noted in an interview, there are around 800 million bank accounts in Europe and Solaris estimates that around half of those will change ownership. Strategically, Solaris wants to be the provider for whomever may come to win those customers. That may be a fintech, big tech, another bank or even a non-financial company.

It is that broad reach and range of possibilities that makes the embedded finance space so interesting and wide open. Customer loyalties are shifting and ever transient but their increased willingness to trust non-financial brands is clear. Coupled with changing behaviours and the ability to contextualize financial services products and services, there is most definitely a lot to keep pace with. A good place to start is FTT Embedded Finance North America (September 1st) and later this year, FTT Embedded Finance Europe (co-located with the Fintech Talents Festival, 15/16 November.

Tis the Season to Acquire

In other acquisition news, Starling Bank has purchased Fleet Mortgages. This is the digital challengers first acquisition, at a cost of £50 million, and it’s first foray into the mortgage market.  Though Fleet is specialist lender for the professional landlord types, a Starling spokesperson did note in the press that, in future, a ‘refresh’ could be in order.

If that ‘refresh’ means bringing some of the Starling digital experience and savvy to a largely unchanged and, quite frankly, often unbearable mortgage market then all I can say is happier days are ahead.

Bank Accounts Frozen without Warning

Money Box (on Radio 4 for the uninitiated) is truly great radio. It does, however, leave me with a sense of rage and a wish to fight injustice on a regular basis. This past weekend, I was listening to the stories of people who found their bank accounts frozen without warning (bad enough), without even being given a reason (worse) and seemingly, in a number of cases, completely without recourse (unbearable). Locked into the automation circle of hell and unable to access human support, their sense of desperation and worry was clear.

Of course, banks and Building Societies have regulatory obligations to screen for and take action against money laundering and other forms of fraud. The problem is that they aren’t always very good at telling the difference between criminals and innocent people.

As I learned from the FT during a quick google following the show ‘Not only are banks and building societies allowed to freeze accounts without any notice if they see fit, they do not have to tell customers their reasons for doing so. Most customers never find out exactly why their account caught the bank’s attention.’ So, as it turns out, you can be shut out of your account, payments may bounce and all sorts of financial harm experienced but there is very little you may be able to do about it.

During the pandemic as take up of digital channels in financial services increased rapidly, so did financial fraud. Scammers have truly been making hay whilst access to customer support, either through branches, which largely remained closed or limited in service and via remote channels has often been difficult to find.

Though there isn’t published data on frozen accounts, the online tool, Resolver, notes this is a growing issue. Interestingly, digital challenger banks and money apps have a higher ratio of complaints than larger incumbents in this respect.  It could well be that their modern tech is better at identifying potential anomalies and red flags but worse at enabling access to human support that can exercise judgement and take remedial action. In any case, it was an eye opener for me that your bank can cancel your account at any time but only need ‘treat your fairly’ whilst doing so. The definition of ‘fair’ is clearly difficult to automate.

Gum loses its cool

I’ve always hated chewing gum and it turns out I’m down with the kids. Lots of things accelerated during the pandemic, digital transformation, remote working and, as it turns out, an ongoing fall in gum sales.

There is a lot to learn about the history of gum but Americans commercialized its production and sale. Whilst doing so they swapped out chicle and replaced it with synthetic rubber and plastic.

Not only am I completely justified in my longstanding dislike of gum but it turns out that Gen Z doesn’t like the idea of chewing on plastic either. The decline of gum sales has some interesting drivers, including a link to the rise of smartphones and a growing interest into what we put into our bodies. I am not saying ban the gum but I won’t be sorry to see its use decline.

You know what else isn’t cool, burning coal. Please sort that out too world.