FinTech Futures: Top five stories of the week – 6 January 2023
Here’s our pick of five of the top news stories from the world of finance and tech this week.
Swift names Stephen Grainger as chief executive for Americas and UK
Swift appoints Stephen Grainger as chief executive
Swift has appointed ex-Mastercard executive Stephen Grainger to the role of chief executive for the Americas and UK region.
Grainger brings 20 years of banking and payments experience to his new role. He has previously served Swift in various senior development roles between 2015 and 2018. He has also held roles at Goldman Sachs, Bank of America and Citigroup.
In his new role at Swift, which he took up on 3 January, Grainger has been tasked with driving the region’s direction and growth, focusing efforts on further developing strategic customer relationships, supporting customers in their work to transform cross-border payments experience for end users and working with security firms to boost efficiency of post-trade processing.
US agencies outline risks of crypto to banking system
US agencies the Federal Reserve System (Federal Reserve), the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) have outlined the risks from crypto-assets to banking organisations.
The agencies say they have “significant safety and soundness concerns” with business models that are concentrated in crypto-asset-related activities or have exposure to the crypto-asset sector.
As a result, in a year marked by “significant volatility” in the cryptosphere, the agencies have highlighted a number of “key risks” that banking organisations should consider.
Among these risks are frauds and scams, legal uncertainties around custody practices and ownership rights, significant volatility in crypto-asset markets, and risks associated with wider decentralised finance networks.
Japan’s Smartpay launches open banking digital payments service
Smartpay launches Smartpay Bank Direct service
Japanese fintech Smartpay has launched Smartpay Bank Direct, the country’s first digital payments service that offers installments directly from users’ bank accounts.
Through the new service, Smartpay claims it is Japan’s first digital consumer finance company to utilise the country’s open banking system, with a network of 67 partner banks across Japan.
The digital payments service supports both credit cards and direct debit through an automated, single-click user experience at the point of purchase, with no additional fees or interest for consumers.
Founded in June 2021 and headquartered in Tokyo, Smartpay says it is focused on financial inclusion by offering an interest-free buy now, pay later (BNPL) solution to those who don’t have access to credit, and help the transition to a cashless economy.
Akulaku secures $200m from Japan’s Mitsubishi UFJ Financial Group
Indonesian digital finance platform Akulaku has raised $200 million from Japan’s largest bank Mitsubishi UFJ Financial Group (MUFG).
The funding will be used to support Akulaku’s anticipated growth as it looks to provide banking services across Southeast Asia’s underbanked populations.
The $200 million investment follows Akulaku’s $100 million investment secured from Thailand’s Siam Commercial Bank (SCB) in February last year.
As well as the investment, MUFG companies will work with Akulaku to develop technology and products and provide financing and distribution.
Akulaku says it “significantly expanded” its revenue, user base, Gross Merchandise Value (GMV) and loan disbursement throughout 2022.
Coinbase hit with $50m fine for “significant” compliance failures
Coinbase hit with $50m fine in New York for compliance failures
New York State’s Department of Financial Services (DFS) has slapped crypto exchange platform Coinbase with a $50 million penalty for “significant” compliance failures.
The firm has also been ordered to invest an additional $50 million into its compliance programme over the next two years.
Following an investigation, DFS found that Coinbase’s Bank Secrecy Act/Anti-Money Laundering programme – including its know your customer/customer due diligence (KYC/CDD), transaction monitoring system (TMS), suspicious activity reporting, and sanctions compliance systems – were “inadequate for a financial services provider of Coinbase’s size and complexity”.
The agency claims these failures made Coinbase vulnerable to “serious criminal conduct”, including fraud, money laundering, suspected child sexual abuse material-related activity and potential narcotics trafficking.
DFS superintendent of financial services Adrienne Harris says Coinbase failed to build and maintain a functional compliance programme that could keep pace with its growth.
