FinTech Futures: Top five stories of the week – 21 October 2022
Here’s our pick of five of the top news stories from the world of finance and tech this week.
US fintechs Brex and MX announce layoffs
American companies Brex and MX have joined the long list of fintechs to announce staff cuts this year.
Pedro Franceschi, founder of Brex, cites the current macro environment and wanting to increase focus on the company’s strategy as reasons behind his firm’s decision to lay off 136 employees – approximately 11% of its total workforce.
In June, Brex announced that it will stop serving traditional small businesses and shift its focus to helping organisations scale with its new product offering Empower, which was launched in April.
“Late last year, we decided to sharpen our focus and serve fewer customers really well. Today’s change is a continuation of this,” Franceschi says, adding that Brex has been “laser-focused” on serving early-stage start-ups and scaled companies this year.
Apple and Goldman Sachs to launch savings account for Apple Card
Apple has partnered with Goldman Sachs to offer Apple Card users a new “high-yield” savings account to help customers save money and access rewards.
Due to launch “in the coming months”, the savings account will allow Apple Card users to deposit their “Daily Cash” rewards automatically with no fees, no minimum deposits and no minimum balance requirements. Users will be able to spend, send and save Daily Cash directly from their Apple Wallet.
Additionally, customers can also deposit funds into the savings account through a linked bank account or from their Apple Cash balance. They will also be able to withdraw funds at any time for no fees.
Mastercard to enable banks to offer crypto trading services with new solution
Payments giant Mastercard is gearing up to launch a new solution designed to give banks and other financial institutions the ability to offer crypto trading services to customers.
Named Crypto Source, the new offering is being developed in partnership with New York-based fintech Paxos, a blockchain infrastructure platform.
Upon launch, Mastercard says its partners will have access to “buy, hold and sell services for select crypto assets, augmented with proven identity, cyber, security and advisory services”.
Mastercard has made a number of moves to further its crypto strategy in recent years.
In September 2021, it acquired blockchain analytics start-up CipherTrace to boost its crypto cybersecurity capabilities. Later that year, it partnered with crypto start-up Bakkt to enable its merchant, bank and fintech customers in the US to offer cryptocurrency solutions and services.
Temenos cuts 2022 guidance, CRO leaves after just seven months
Swiss banking software provider Temenos has cut its targets for 2022 due to rising costs, banks delaying the signing of contracts and ongoing wider market uncertainty.
In its Q3 results, the firm revised its annual recurring revenue (ARR) guidance for FY 2022 from 18-20% to 17-18% and its software licensing growth from 16-18% to 0%.
Temenos was also expecting earnings growth to be in the region of 10%, but now says FY 2022 will see earnings before interest and taxes (EBIT) fall by 25%. The company also saw an EBIT decline of 53% to $40.8 million in Q3 thanks to lower subscription revenues and cost increases.
The firm cites banks being “more cautious in their decision-making” given the ongoing macroeconomic uncertainty which has plagued the fintech sector in recent months, which has led to some delaying signing decisions in the last weeks of Q3.
Along with its Q3 results, the firm revealed chief revenue officer (CRO) Erich Gerber, who only joined the company in March, has left the business “effective immediately”.
Santander partners VC firm Forgepoint for new cybersecurity investment company
Santander has teamed up with venture capital firm Forgepoint Capital to create a new management company that will invest in emerging cybersecurity companies across Europe and Latin America.
The bank, which says cybersecurity is “critical” to its business, is expecting to invest up to €300 million in the strategic partnership across three initiatives: the forming of the aforementioned venture capital management company, Forgepoint Capital International (FPCI); Santander’s participation in Forgepoint’s next North American fund; and a programme for select co-investments.
FPCI intends to launch its first fund in 2023, which will be open to both institutional and private investors. Santander will act as the fund’s anchor investor, while Forgepoint, with its cybersecurity focus, will work alongside Santander to identify gaps in the market and investment opportunities.