FinTech Futures: Top five stories of the week – 31 March 2023
Here’s our pick of five of the top news stories from the world of finance and tech this week.
Apple launches BNPL offering Apple Pay Later in the US
Apple Pay Later launches in US
Tech giant Apple has launched Apple Pay Later, its new buy now, pay later (BNPL) offering, in the US, allowing consumers to spread the cost of their purchases over time.
Apple Pay Later will allow Apple Wallet users to split their purchases into four payments spread over six weeks, with no interest and no fees. The company has so far rolled out the pre-release version to a select number of customers, with plans to offer it to all eligible users over the coming months.
Users will be able to access Apple Pay Later within the Wallet app on their iPhones and iPads, where they can apply for loans of $50 to $1,000. Apple says the firm will do a soft credit check during the application process, which it claims will not impact users’ credit scores.
To prevent people from taking on more debt to pay off loans, Apple says users will only be able to link debit cards as their loan repayment method and credit cards will not be accepted.
Sergio Ermotti returns to UBS as group CEO to help manage Credit Suisse takeover
Following its recent acquisition of Credit Suisse, UBS has appointed Sergio Ermotti as group CEO and president of the group executive board, effective 5 April 2023.
Ermotti was previously group CEO of UBS for nine years between 2011 and 2020, leading the group following 2008’s global financial crisis. This “unique experience”, UBS says, makes Ermotti well placed to handle the integration of Credit Suisse.
He succeeds Ralph Hamers, who will remain at UBS and work alongside Ermotti as an advisor during the transition period to ensure “a successful closure” of the Credit Suisse transaction and a “smooth hand-over”, UBS says.
Mizuho and Line call off plans to launch mobile bank in Japan
Line and Mizuho halt mobile bank plans in Japan
Messaging giant Line Corporation and Mizuho Financial Group have announced that they are ceasing plans to launch a new mobile bank in Japan, citing increasing competition and scrutiny towards the security of services.
In a statement, Line says the firms have “mutually reached the conclusion that additional time and investment would be required to provide a secure and convenient service that meets customers’ expectations and that at present, this would not be attainable in a timely manner”.
The joint venture, named Line Bank Preparatory Company, was first announced in November 2018. It was established in May 2019 through a joint investment by the companies’ subsidiaries Line Financial Corporation and Mizuho Bank.
Both firms say the dissolution and liquidation proceedings of Line Bank Preparatory Company will now go ahead.
First Citizens Bank strikes deal with FDIC to buy Silicon Valley Bank assets
First Citizens Bank has entered into an agreement with the Federal Deposit Insurance Corporation (FDIC) to purchase substantially all loans and certain other assets of Silicon Valley Bridge Bank.
The deal includes the purchase of assets of $110 billion, deposits of $56 billion and $72 billion of SVB’s loans at a discount of $16.5 billion. Approximately $90 billion in securities and other assets will remain in the receivership for disposition by the FDIC.
As part of the acquisition, the two firms have entered into a loss-share transaction wherein both will share the losses and potential recoveries on the loans.
The FDIC says SVB’s collapse will cost its Deposit Insurance Fund (DIF) an estimated $20 billion in losses.
Additionally, the FDIC has also received equity appreciation rights in First Citizens BancShares common stock with a potential value of up to $500 million.
First Citizens Bank will also receive an available line of credit from the FDIC for “contingent liquidity purposes”. As of 27 March, all of the 17 former SVB branches have been reopened as First Citizens Bank branches.
Vemanti taps Finastra to power new SME neobank in Southeast Asia
Vemanti taps Finastra for new SME neobank
Fintech company Vemanti Group has partnered up with Finastra as it looks to build Southeast Asia’s first SME-focused neobank.
Vemanti will deploy Finastra’s core banking solution Fusion Essence to launch a full digital banking offering initially in Vietnam, in a bid to increase financial inclusion in the country’s “underserved” SME market.
Tan Tran, CEO of Vemanti, says businesses in the region “struggle to meet collateral requirements that tend to be designed for large corporations, leaving many unable to access formal financial services”.
Vemanti has also chosen Lendscape, part of Finastra’s partner ecosystem, for its invoice financing and supply chain financing technology.
