The Monday Roundup: what we are watching this week | November 21st

By Puja Sharma

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

Cost cutting and layoffs

✂️American companies Brex and MX have joined the long list of FinTechs to announce staff cuts this year.

Founder Pedro Franceschi explained Brex’s decision to lay off 136 employees – approximately 11% of its total workforce – by citing the current macro-environment and focusing on its strategy. A new product offering, Empower, launched in April, will enable Brex to help organisations scale by shifting its focus away from serving small businesses.

“Late last year, we decided to sharpen our focus and serve fewer customers well. Brex continues to focus on serving early-stage companies and scaled-ups this year, as evidenced by today’s change, said Franceschi.

Meanwhile, Utah-based MX has laid off an undisclosed number of employees in a reorganisation that it says will help the company “better deliver on our mission”. Writing on LinkedIn, the company has set up an opt-in list for impacted employees to share their details, which at the time of writing includes 51 names.

Founded in 2010, MX makes use of open finance APIs and financial data to “quickly and securely” connect to and verify data for “hundreds” of use cases including account opening, money movement, and underwriting.

As part of a new partnership with Goldman Sachs, Apple is offering Apple Card users high-yield savings account to help them save money and earn rewards.

Upon launch “in the coming months”, Apple Card users will be able to deposit their daily cash rewards into the savings account automatically, with no fees, no minimum deposits, and no 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.

Newer avenues

London-based FinTech firm Banked has raised over $15 million in a Series A extension round, led by Insight Partners. Banked raises more than $15m in new funding. Also participating in the round were Citi, National Australia Bank Ventures, and Rapyd.

The latest funding brings the total capital raised by Banked to date to over $50 million, and the start-up aims to deploy the fresh funds towards its expansion into new geographies, with a focus on the US.

Founded in 2018, Banked provides an alternative to card payment methods via Pay by Bank and employs nearly 100 people.

“Unlike other mainstream global payment methods, users do not need to create an account or pass any login information to Banked – they simply choose their existing bank at checkout and are securely connected to their mobile banking app to biometrically authenticate the purchase,” Banked says.

It claims total checkout time for a first-time user is under 30 seconds with costs “significantly lower” for merchants with transactions taking place in real-time and settled instantly.

Venture investor firm Knuru Capital announces that it will be providing KLAIM with a $5 million seed investment into an innovative securitized financing structure to help scale its receivable purchase operations in the UAE.

KLAIM is a FinTech company dedicated to healthcare that provides working capital to small and mid-size healthcare providers to ease their cash flow burden.

Through this deal, Knuru will provide an initial commitment with plans to increase this to over $30 million by way of a pool of Sharia-compliant investors. The funding will be used to support KLAIM’s medical claims receivable purchasing solution, which allows healthcare providers to quickly access working capital by selling their insurance claims that are pending payment and typically settled between 60 and 112 days.

What is the buzz

The US Department of the Treasury, in collaboration with the White House Competition Council, has released a report outlining recommendations to reduce the risks FinTechs pose to consumer protection and market integrity.

The report details how new non-bank firms, in particular FinTech, are adding “significantly” to the number of firms competing in core consumer finance markets. To shore up consumer protection, the report recommends that oversight for these newer firms should be “enhanced” about consumer financial activities, such as risks related to data privacy and regulatory arbitrage.

The report recommends that regulators should provide a clear and consistently applied supervisory framework for bank-FinTech relationships and that bank-fintech relationships must operate in compliance with the laws, regulations, and risk management standards applicable to the relevant insured-depository institution.

US Secretary of the Treasury Janet Yellen said that while FinTechs’ moves into core consumer finance markets have increased competition and innovation, “it has not come without additional risks to consumer protection and market integrity”.