FinTech Futures: Top five stories of the week – 3 March 2023
Here’s our pick of five of the top news stories from the world of finance and tech this week.
Intesa Sanpaolo partners IBM to upgrade its IT infrastructure
Intesa Sanpaolo taps IBM for IT systems upgrade
Intesa Sanpaolo, Italy’s largest banking group, has partnered with tech titan IBM to “future-proof” its IT infrastructure.
Intesa says demand for digital services and “increasingly stringent security, compliance and sustainability regulations” have made it necessary for banks to review and upgrade their tech infrastructure regularly.
As such, the Italian banking group has developed an investment plan that will see it modernise its IT systems and bolster its operations with the latest cybersecurity tech.
Additionally, the investment plan includes the creation of its new digital bank Isybank, which is designed to offer consumers high levels of “performance, efficiency and security”, Intesa adds.
The new digital banking app is now ready for testing, with Intesa staff reportedly being asked to sign up for a trial beginning 1 March, according to Reuters.
MFS Africa partners Western Union to broaden financial inclusion
Paytech MFS Africa has partnered with Western Union to enable individuals and businesses across the continent to receive money from more than 200 countries and territories.
The service, which is set to launch initially in Madagascar, will see funds from around the world move through payment rails operated by MFS Africa, the continent’s largest payment gateway.
MFS Africa’s digital payments network connects more than 400 million mobile money wallets, more than 200 million bank accounts across Africa, and more than 200,000 agents in Nigeria, to enable cross-platform and cross-border payments for remittance companies, mobile network operators, banks, non-bank financial institutions and global merchants.
Kumar Shourav, managing director at MFS Africa, says: “Africa’s fast-growing populations and markets present important opportunities for businesses and individuals in an environment of slowing global growth.”
BNPL giant Klarna posts £1bn loss for 2022
Klarna reports a $1bn loss in 2022
Buy now, pay later (BNPL) fintech Klarna has reported a $1 billion loss for 2022, following on from the $680 million loss it recorded in 2021.
Despite the losses, the firm says it is edging towards profitability thanks to growth in its gross merchandise volume (GMV) of 22% year-on-year (YoY) and a 19% revenue boost in Q4 2022. Q4 2022 operating losses also declined. The company also embarked on a series of layoffs in May and September last year.
Despite gloomy macroeconomic conditions, the firm has made substantial inroads into the US market.
The US now represents Klarna’s biggest revenue stream, a milestone it passed in December last year. GMV in the US market has rocketed by 71% YoY and the firm claims more than 34 million Americans are now Klarna customers.
Thought Machine plans to boost headcount by 20% in 2023
Core banking vendor Thought Machine is to increase its global headcount by more than 20% this year, making 125 new hires over the course of 2023.
The firm intends to hire across India, Japan and South Africa for the first time, although most of the new intake will join Thought Machine’s engineering team in its London headquarters.
As well as a hiring spree, Thought Machine’s expansion plans also include opening a new office in Florida, USA.
Although Thought Machine made 200 hires during the first Covid-19 lockdown in 2020, the firm says it operates a “selective hiring process” that ensures roles critical to the company are filled “without overhiring”.
Paul Taylor, CEO and founder of Thought Machine, says: “It’s not all doom and gloom in the technology sector. While many businesses are cutting staff, we are not taking this approach.”
Revolut records first full year of profitability, plots global expansion
Revolut achieves first full year of profitability
UK-based financial super-app Revolut recorded £26.3 million in profit for 2021, marking the firm’s first full year of profitability.
In its long-awaited annual report for the year ending 31 December 2021, Revolut says it tripled its revenue from £220 million in 2020 to £636 million in 2021, driven in part by products including subscriptions, Revolut Business and foreign exchange and a surge in payments. The firm generated £100.3 million in adjusted earnings before interest, tax, depreciation and amortisation (EBITDA).
Meanwhile, Revolut’s auditor, BDO, has reportedly flagged that it could not independently verify three-quarters of its £636 million revenue, claiming some of the information may be “materially misstated”.
However, a Revolut spokesperson told Reuters the bank’s stated revenue “was not in question” and that the auditor’s concerns were “remedied in 2021”.
