The Monday Roundup: what we are watching this week | Feb 14th

By Gaia Lamperti

The Monday Roundup sets the scene for the week’s biggest news stories, industry deals, and upcoming events. For Prime subscribers only.

All eyes on BNPL

Retail bank Barclays is calling for more robust regulation of all ‘Buy Now, Pay Later’ products, as new research suggests that it was the lack of consistent affordability assessments leading shoppers to take on more debt than they could afford. The study was conducted among 2000 BNPL shoppers and found out that a quarter of respondents are concerned about their ability to repay their BNPL bills, a figure that rises to over a third among 18-34-year-olds. Barclays, which offers interest-free loans at the point of sale itself and recently struck a BNPL deal with Amazon, argues that the market should be subject to the same stringent regulation as the wider consumer credit sector.

The Financial Conduct Authority (FCA) is cracking down on potentially unfair and unclear terms in the contracts of BNPL companies like Clearpay, Klarna, Laybuy and Openpay, as the UK prepares to regulate the ‘Buy Now, Pay Later’ market. The FCA says it was concerned about risks of harm to consumers as a result of unclear terms. As a result, the firms are making terms on issues like contract cancellations and continuous payment authorities fairer and easier to understand. In addition, one of the terms that involved late payment fees has resulted in Clearpay, Laybuy, and Openpay agreeing to voluntarily refund customers who have been charged late payment fees in specific circumstances.

AI: yes or no?

The UK government has announced a £23 million fund to create more AI and data conversion courses, helping young people from underrepresented groups including women, black people and people with disabilities join the UK’s world-leading Artificial Intelligence (AI) industry. The new scholarships will ensure more people can build successful careers in AI, create and develop new and bigger businesses, and will improve the diversity of this growing and innovative sector.

UK financial regulators have warned banks looking to use AI  to approve loan applications that they can only deploy the technology if they can prove it will not worsen discrimination against minorities, as per the Financial Times. High street banks are exploring ways to automate their lending processes, including the use of AI and more advanced algorithms, to assess applications via historical data of the borrowers, who can be grouped by categories such as postcodes and employment profiles. The watchdogs are increasingly pressing Britain’s biggest banks about concerns regarding the use of AI in such circumstances which could have discriminatory outcomes.

Where is the buzz

GoCardless, a leading fintech in direct bank payment solutions, has secured a Series G funding round of USD312 million, making it the latest European and UK tech unicorn at a valuation of $2.1 billion. With the round, the company will broaden its focus to enable both recurring and one-time payments, and continue its international expansion. It will also open its ‘bank pay’ network to other payment service providers who want to tap into its technology and platform.

“The news that GoCardless has become the latest UK unicorn further cements the country’s status as a global fintech hub. The UK is now home to a total of 42 fintech unicorns and recent figures show that, in 2021, London attracted more fintech funding than the rest of Europe, the Middle East and Africa put together,” commented Stephen Kelly, Chair of Tech Nation, a UK network for tech entrepreneurs.