FinTech Futures: Top five stories of the week – 24 February 2023
Here’s our pick of five of the top news stories from the world of finance and tech this week.
US president Joe Biden nominates former Mastercard CEO to lead World Bank
Ajay Banga nominated to lead World Bank
US president Joe Biden has nominated former Mastercard CEO Ajay Banga to lead the World Bank following the resignation of current World Bank president David Malpass.
Banga, who is currently vice chair at private equity firm General Atlantic and serves in an advisory capacity for the firm’s $3.5 billion climate change fund, is a “global leader” in technology, data, financial services, and “innovating for inclusion”, the White House says.
As CEO of Mastercard for more than a decade, Banga led the company through a “strategic, technological, and cultural transformation” before leaving the firm in 2021.
Dutch challenger Bunq becomes first EU neobank to report a quarterly profit
Netherlands-based Bunq has become the first neobank in the European Union to report a quarterly profit after a decade of operations.
Bunq, which is the second largest neobank in the EU, reported a pre-tax profit of €2.3 million over Q4 2022.
The digital challenger claims in Q4 2022 its net-fee income grew 37% compared to Q4 2021. User deposits also climbed by 64%, reaching €1.8 billion.
At the end of 2021, Bunq broke even for the first time. Since then, it says it has been on “a steady path to profitability”, investing its operating profit in product development and international expansion.
African paytech Chipper Cash sheds around a third of its workforce
Chipper Cash cuts jobs
African cross-border payments firm Chipper Cash has embarked on a second round of job cuts in less than three months, reportedly shedding around a third of its workforce.
More than 100 employees at the firm have been affected, Techweez reports. The layoffs follow a round of job cuts in December, which saw around 12.5% of the company’s workforce – 50 employees – let go.
Announcing the news on LinkedIn, Stefano Pardi, Chipper Cash’s vice president of revenue, says all areas of the business have been impacted by the job cuts, including “recruiting, human resources, marketing, pricing, product, analytics, user experience, research and legal”.
According to TechCrunch, the engineering team was most affected, with a majority of teams losing more than half their staff.
Lithuania’s central bank reportedly investigating Railsr over AML failures
UK fintech Railsr is reportedly facing an investigation by the Bank of Lithuania over alleged anti-money laundering (AML) and terrorist financing failings within its Lithuanian subsidiary.
The Telegraph reports that the company’s Lithuanian subsidiary PayRNet is being investigated by the country’s central bank. PayRNet secured an electronic money institution licence from the Bank of Lithuania in 2020.
In a statement, the Bank of Lithuania says: “There is reason to suspect that the institution is grossly and systematically violating the Law on the Prevention of Money Laundering and Terrorist Financing.”
The central bank has reportedly applied for a court order compelling Railsr to stop taking on new clients, warning the firm “not to establish business relationships with new clients, as well as intermediaries and persons distributing and/or redeeming electronic money of this institution”.
A Railsr spokesperson says it has already “offboarded” customers who failed to meet the required standards and the firm is in the process of appealing the Bank of Lithuania notice, “which has been issued ahead of any final review findings”.
Bank of Japan to launch CBDC pilot programme in April
Bank of Japan to launch CBDC pilot
The Bank of Japan intends to launch a central bank digital currency (CBDC) pilot in April this year, following a successful proof of concept (PoC).
The announcement was made by Uchida Shinichi, the executive director of Japan’s central bank, at the fifth meeting of the Liaison and Coordination Committee on CBDC.
The pilot will test the technical feasibility of a CBDC not already covered by the PoC as well as leverage the technological and operational “skills and insights” of private industry.
Currently, the Bank of Japan does not intend to allow any actual transactions between retailers and consumers during the pilot, only simulated transactions.
