FTT Embedded Finance


Sometimes a nudge is not enough – FTT Bookmark Issue 21

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 – JP Morgan buys Nutmeg

JP Morgan clearly likes the look of the retail banking and investment space in the UK. In addition to the planned launch of a UK digital bank, it was announced a few days ago that they were buying digital wealth management provider, Nutmeg. The UK banking space is looking increasingly competitive and I’m keen to see what how the launch of their digital bank performs later this year.

Reportedly purchased for £700 million, it will be interesting to see if this is the beginning of a buying spree of UK fintechs by incumbent banks. Partnership has been used as prelude to a purchase by the bank previously and, with that in mind, I would like to note that VC Innovations is happy to support with Marketing Services. The UK market is crowded and (note to Jamie Dimon) we can help.

Embedded Finance is onto a winner

There is so much activity in the embedded finance space and Klarna’s rapid growth is but one example. Growing use by US shoppers helped drive significant growth in the number and value of transactions made using its payments option. Transactions nearly doubled ($18.9 billion in the first quarter from $9.9 billion) in the past year.

The Buy Now Pay Later market has raised concerns regarding consumer indebtedness but it is clearly popular with consumers. On the back of its recent fundraising, Klarna is now the second most valuable fintech in the world after Stripe. Offering financial services ‘in the moment’ or in the relevant context is revamping the industry further but also brining in a new ecosystem of providers and partners. Exciting Stuff.

Mollie Who?

Coming up fast from behind Klarna is the somewhat lesser know Mollie. Supercharged by the pandemic, the digital payments space continues to grow with significant opportunities for expansion remaining. With a focus on SMEs, Mollie has plans to offer a range of complementary products and services to customers. Given that Mollie is now one of the most valuable fintechs in Europe, embedding access to financial products and services in ways that make it easy and accessible to end users is (I will say it again) a winning formula.

Action on Climate Change – More action, less talk

There seems to be agreement across every industry, sector etc that addressing climate change and driving the transition to Net Zero economies is an imperative. But how do we get there? How do we really shift the dial in terms of impact and meeting the goals of international agreements and targets?

The financial services sector, given its pivotal position in the economy needs to deliver tangible outcomes. That the FCA has announced climate-related disclosure rules may not set pulses racing but it is a crucial step in ensuring the companies make changes. The announced consultations will look at implementing disclosure rules for asset managers, life insurers and pension providers.

Affected firms would need to report how they account for climate related risks and, in addition, they would need to report on the products/portfolio management services they offer. This would include a set of metrics on carbon emissions. Information and transparency are crucial so that consumers and businesses can make informed decisions and so that outcomes can be measured. Voluntary codes have and continue to fail to make significant headway. Sometimes a nudge is not enough.

Next week it is over to my colleague Liz Lumley, Director of Fintech at VC Innovations for her views on the world of fintech.