FinTech Futures: Top five stories of the week – 21 April 2023
Here’s our pick of five of the top news stories from the world of finance and tech this week.
Worldline partners Crédit Agricole to build “major payments player” in France
Global paytech Worldline has partnered with retail bank Crédit Agricole to build a new joint payment company in France.
The joint venture is expected to be operational by 2025 and will leverage Crédit Agricole’s merchant acquiring footprint, distribution network and knowledge of the French market as well as Worldline’s tech and global infrastructure capabilities across in-store and online payments.
Worldline CEO Gilles Grapinet says the partnership represents a “unique opportunity” for the paytech to expand its footprint and scale within continental Europe’s largest acquiring market, worth around €700 billion in merchant sales value.
“Structured primarily as a contribution in kind of our respective technological capabilities, commercial footprint and distribution capabilities to a joint company, this major contemplated transaction fully preserves our balance sheet and financial and strategic flexibility,” Grapinet adds.
Goldman Sachs mulls potential sale of BNPL fintech GreenSky
US banking heavyweight Goldman Sachs is exploring the sale of its recently acquired GreenSky fintech unit.
GreenSky, a fintech lender and buy now, pay later (BNPL) provider, was acquired by Goldman in September 2021 in a $2.24 billion deal as it looked to furnish its Marcus banking app with the platform’s capabilities.
However, Goldman Sachs folded its digital bank offering Marcus into its wider asset and wealth management division in October 2022 as the firm shifted its focus away from its retail banking proposition.
The bank’s CEO David Solomon told analysts this week that despite GreenSky performing well, “given our current strategic priorities, however, we may not be the best long-term holder of this business”.
Former CIO of TSB Bank fined £81k by PRA over 2018 IT disruption
The UK’s Prudential Regulatory Authority (PRA) has fined former TSB Bank chief information officer (CIO) Carlos Abarca £81,620 for breaching its senior manager conduct rules, stating he “failed to take reasonable steps to ensure that TSB adequately managed and supervised appropriately its outsourcing arrangement in relation to its 2018 IT migration programme”.
The latest announcement follows UK regulators fining TSB Bank a total of £48.6 million in December last year over the botched systems migration, citing “operational risk management and governance failures”.
The PRA claims that as CIO of TSB Bank, Abarca failed to comply with its outsourcing rules. It alleges that Abarca did not ensure that TSB had obtained “sufficient assurance” from its chosen third party supplier regarding its preparedness for the migration.
Blockchain infrastructure platform Paxos to pull out of Canada
New York-based fintech Paxos, a blockchain infrastructure platform, is to withdraw from Canada citing regulatory uncertainty.
Customer accounts without funds will be closed on 9 May, while from 2 June customers will no longer be able to transact from their Paxos account, aside from withdrawing funds.
In a statement, Paxos says: “Paxos will continue to assess its readiness to re-enter the Canadian market in cooperation with the Ontario Securities Commission (OSC) at a future date.”
In February, the Canadian Securities Administrators (CSA), which regulates Canada’s capital markets, laid out the investor protections it expects from cryptocurrency trading platforms operating in the country.
The CSA says crypto exchanges must have enhanced protections for the custody and segregation of crypto assets for Canadian clients and are prohibited from offering margin, credit or other forms of leverage.
SME Finance secures €100m credit facility from London’s Fasanara Capital
Lithuanian debt financing firm SME Finance has secured a €100 million credit facility from London’s Fasanara Capital.
The latest funding brings the total committed from Fasanara to €240 million.
SME Finance CEO Mindaugas Mikalajūnas says the new credit facility extension “will help us greatly in making finance accessible for every business”.
“We believe strongly that this sector is one of the cornerstones of our economy, and there is a lot of demand right now for finance partners that speak the language of small- and medium-sized business,” Mikalajūnas adds.