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Railsbank Launches in Australia, Plans to Develop Embedded Finance Market Opportunity

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Railsbank, a leading global Banking as a Service (BaaS) platform, has launched in Australia via a partnership with the country’s first neobank, Volt.

The partnership enables Railsbank to continue its expansion within the APAC region and it considers Australia a highly strategic market.

The embedded finance market in Australia is in its infancy, but both Railsbank and Volt believe it is set for rapid growth over the coming years.

Volt will also engage with Railsbank’s global network of partners and customers, and enable a broader BaaS solution in Australia that will enable companies to prototype, launch and scale financial products within their own customer experience.

Nigel Verdon, co-founder and CEO of Railsbank, said: “This deal has a personal resonance for me as one of my ancestors, Sir George Verdon, was General Manager and a founding father of the ANZ Bank, so it’s good to be back in Australia again!

“It’s very exciting to see that Australia’s fintech scene is thriving. We are ready to support all Australian business that want to innovate and capitalise on the expected exponential growth of embedded finance.

What we bring new to the table is represented by deconstructed financial components, tools for product managers, and APIs to allow anybody to come into our toolset to access our consumers and customers for distribution.

These can then be reconstructed into financial use cases. This is what Apple did with iTunes. They deconstructed the music industry and changed the economics of the industry.

Collaborating with Volt gives us access to local knowledge and capabilities to help us succeed. This is a significant partnership for Railsbank as we continue our global expansion and strengthen our foothold in Asia Pacific.”

Justin Xiao, COO of Railsbank, Asia Pacific, said: “Australia is strategically important for Railsbank and it’s a real privilege for us to be partnering with Volt in this next phase of our growth. The strength of the Volt brand, balance sheet, and compliance offering makes it the ideal partner to help us launch into the local market and tap the growth opportunity in embedded finance.

“Australia’s fintech scene is vibrant and Railsbank has a lot to offer in terms of bringing innovative solutions and best practices to customers. Collaborating with Volt gives us access to local knowledge and capabilities to help us succeed. This is a significant partnership for Railsbank as we continue our expansion in the Asia Pacific region.”

Volt founder and CEO, Steve Weston, said: “We are proud to be the first and only bank selected to launch Railsbank’s embedded finance offering in Australia.

“Railsbank has a proven track record of servicing millions of customers through partnerships with banks like Volt in global markets. This partnership demonstrates how our prudent and measured approach to market entry, built on the sturdy foundation of our unique BaaS platform and partnership strategy, could help to make Volt a long-term contender for a share of Australia’s highly lucrative banking sector.”

Railsbank is headquartered in the UK and has offices in Singapore, the Philippines, Malaysia, Vietnam, Sri Lanka, the US, Germany, Lithuania. Melbourne and Sydney.

It has relationships with numerous banks and financial institutions across Europe, the US, and Asia-Pacific and will continue its expansion across Asia with a view to deepening its footprint in Japan, the Philippines, Thailand and Vietnam later this year.

In November last year, Railsbank raised US$37 million as part of continued equity funding to support its global growth and product expansion. Significant investors include Mastercard and Visa.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Fintech

Global Investments into Fintech Companies Plunged by Almost 40% amid Pandemic

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The year 2020 was a challenging year for many fintechs. The global slowdown in funding caused by the COVID-19 led to a significant drop in the number of venture capital deals and brought uncertainty for many companies operating in this market.

According to data presented by AksjeBloggen.com, global investments into fintech companies hit $105.3bn in 2020, almost a 40% plunge amid pandemic.

US Fintechs Raised 75% of Total Investments

Fintech companies apply modern tech solutions in the financial services industry to offer digitally enhanced products and allow widespread access to financial products at a lower cost than traditional players. Over the years, these innovative startups transformed how people and businesses spend, invest, save, or borrow money.

Even before the pandemic, many fintechs found it difficult to access funding, as investors focused on established companies instead of early-stage businesses. Nevertheless, the total value of investments into fintech companies increased dramatically in the last decade.

In 2010, fintechs raised $9bn in funding, revealed the KPMG’s 2020 Pulse of Fintech report. By 2015, this figure grew more than seven times to $67.1bn. In 2018, the total investment value jumped to $145.9bn and continued rising to $168bn in 2019, as the record year for fintech investments.

After the COVID-19 pandemic brought many deals to a halt in the first half of 2020, H2’20 reversed the trend as investors and fintechs learned to do business in a new normal. Nevertheless, statistics show that last year witnessed 2,861 deals worth $105.3bn, almost $63bn less than before the pandemic.

The Americas were the region attracting the most investments in the sector, accounting for 75% of the total, or $79.2bn. Fintechs from the EMEA region raised $14.4bn last year. Asian fintechs followed with $11.2bn worth of investments.

The Number of Fintech Startups Doubled Since 2019

Although the COVID-19 affected the investment activity in the fintech sector, it also triggered a surge in the use of fintech solutions, creating a huge space for new companies.

The BCG data revealed the number of fintech startups worldwide more than doubled since the pandemic struck, rising from over 12,200 in 2019 to almost 26,500 this month.

As of April 2021, there were 10,738 fintech startups in North America as the leading region, up from 5,800 in 2019.

However, statistics show Europe, the Middle East, and Africa have witnessed even more impressive growth in the number of fintechs. In 2019, almost 3,600 companies were operating in this sector. Since then, the number of fintech startups in the EMEA region surged by 160% to more than 9,300.

Asia and the Pacific ranked third with nearly 6,200 fintech startups as of April, up from 2,850 in 2019.

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Specta Records N100bn Consumer Lending Milestone

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Online instant lending platform, Specta and PaywithSpecta, a digital credit solution introduced by Sterling Bank has disclosed that it has disbursed over N100 billion in digital loans and about N5 billion digital credits, respectively.

Both solutions make loans and digital credits available in less than five minutes to banked Nigerians, irrespective of their bank, without paperwork and collateral.

But above all, they are also the best in the segment for providing the best lending rates and interest free funding up to 90 days for online and offline purchases.

Divisional Head, Retail and Consumer Banking at Sterling Bank, Mr. Shina Atilola, in a statement made available to the press explained: “Specta has disbursed about N100 billion in digital loans in three years. It is an important milestone worth celebrating by a platform that revolutionised and opened digital lending space in Nigeria.

“PaywithSpecta, the digital credit solution extension of Specta has also exceeded expectations. In a few months, it has provided over N5 billion in digital credits to Nigerians.

“We are proud to be at the forefront of deploying innovative solutions that meet the needs of everyday Nigerians and small businesses. Our profound gratitude to our esteemed retail customers and business owners for their loyalty that has made Specta and PaywithSpecta the country’s undisputed market leaders in digital lending and credit solution segments.”

Specta, an instant lending platform that offers up to five million naira consumer loans in five minutes, was unveiled in 2018 by Sterling Bank Plc.

The lending platform uses proprietary data and analytics to process and disburse consumer loans to borrowers who belong to pre-approved communities in less than five minutes without paperwork and collateral.

The types of loans offered include personal, payday, wedding finance, rent, education, and medical finance loans, among others, to salary earners and business owners.

Following the success of Specta, Sterling Bank recently creed another variant of it known as PaywithSpecta to enable customers to pay for goods in instalments. At the same time, Merchants are credited instantly, thereby helping businesses to increase sales.

PaywithSpecta offers digital credit limits to customers to purchase items in-store at Merchant locations or Merchant online platforms. It also allows Merchants to access credit for their business activities.

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Trove, Bamboo Assure Nigerian Investors Assets Are Safe Following SEC Warning

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Bamboo - Investorsking.com

Trove and Bamboo, the two of the numerous fintech companies, facilitating investments in foreign assets for Nigerians in Nigeria have released statements to assured Nigerians that have invested through their platforms that their investments are safe.

The assurance came few hours after the Nigerian Securities and Exchange Commission (SEC) released a circular to warn the public against unregistered online investment and trading platforms facilitating access to foreign markets.

The SEC, in a circular titled, ‘Proliferation of Unregistered Online Investment and Trading Platforms Facilitating Access to Trading in Securities Listed in Foreign Markets’ stated that its attention has been “drawn to the existence of several providers of online investment and trading platforms which purportedly facilitate direct access of the investing public in the Federal Republic of Nigeria to securities of foreign Companies listed on Securities Exchanges registered in other jurisdictions. These platforms also claim to be operating in partnership with Capital Market operators (CMOs) registered with the Commission.”

“The Commission categorically states that by the provisions of Sections 67-70 of the Investments and Securities Act (ISA), 2007 and Rules 414 & 415 of the SEC Rules and Regulations, only foreign securities listed on any Exchange registered in Nigeria may be issued, sold or offered for sale or subscription to the Nigerian public. Accordingly, CMOs who work in concert with the referenced online platforms are hereby notified of the Commission’s position and advised to desist henceforth.

“The Commission enjoins the investing public to seek clarification as may be required via its established channels of communication on investment products advertised through conventional or online mediums.”

However, Trove immediately released a statement, saying “Our attention has been drawn to the SEC circular that was recently issued.

“Please be aware that we are and will remain committed to being in compliance with all local laws and regulations. We have always maintained good standing with all existing compliance requirements and regulatory frameworks.

“Be rest assured that your funds and equities are safe and secure with Trove.

“Since the memorandum, we have been liaising with the SEC to get more clarity on the circular. We are also engaging with top level executives at our local partner brokers. Additionally, we have involved legal professionals to manage the on-going mediation.

“From all indications, we anticipate everything would be resolved.

“Kindly note that your US funds and equities are held in custody by Drivewealth LLC, a regulated broker dealer in the US and protected by the SIPC, for up to $500,000.

“You can continue your trading activities as normal as we are still fully capable of carrying out our responsibilities as usual.

“Be rest assured that we are on top of all the happenings and would actively communicate with you all as things progress. Thanks for all your support and confidence”

Bamboo also responded in a similar version to calm thousands of investors on its platform.

Richmond Bassey, CEO, Bamboo, in a statement sent to all registered investors said “We are aware of the recently released SEC circular about trading in foreign markets.

“First off, we want to assure you that your assets on Bamboo remain safe and easily accessible to you.

“We are already in discussions with the SEC and our broker partner and are fully committed to working with them to ensure your interests as our users are fully protected.

“We want to reassure you that there’s nothing to be concerned about. We are still able to carry out all our operations and will continue to do so. Should the situation change, we will inform and advise you on the best course of action.

“Thank you for your continued faith and trust in us. We will continue to put in all the hard work to serve you. Thank you.”

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