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NEW ICO-BACKED CRYPTO-FRIENDLY NEOBANKS VS «CLASSIC» FINTECH NEOBANKS: REINVENTING THE WHEEL 2

Сrypto-friendly for Retail Crypterium Bankera 2getherbank

Narbonne

Polybius Bank Change Bank

1

FIINU

Сrypto-friendly for SME

BABB

Jibuan Soon

Qapital

Final

Nubank

GoBank

LunarWay

buddybank

Starling bank

Monese

Bank Mobile

KAKAOBANK

Morning

Pockit

Compte Nickel

N26

DoPay

Banco Original

CivilizedBank Ferst Digital

Revolut

Tandem

Fidor Bank

Loot

Koho

Atom Chime

Pepper

Tangerine

neat Canvas

Lintel Bank SECCO - in development

Monzo Osper

Tochka

Soldo Anna

Coconut

MyBank

Bankaaol WeBank

Qonto Tide

Hello Bank Neon

Albo

ImaginBank

- live - live with banking license

Holvi

4

Classic fiat for Retail

3

Classic fiat for SME

NEW ICO-BACKED CRYPTO-FRIENDLY NEOBANKS VS «CLASSIC» FINTECH NEOBANKS: REINVENTING THE WHEEL

The overview covers 8 crypto-friendly neobanks (2 have already held ICOs, 6 are in the process). They have already raised more than $45 million, and are going to raise about $150 million in aggre-gate. This is about half of the investment attracted in 2016 by “traditional” fintech neobanks, which are higher in number and at a later growth stage! None has gone live - at best, they have implemented a registration module for the future neobank (digital KYC). But even these solutions in the field of blockchain-based digital KYC, judging by the information available, have not been accredited by the central banks or data protection authorities. Meaning that these startups just have it. All are going to serve retail customers – no one is focusing on small and medium business. Whereas in the context of major problems with traditional banks and the existing (not in the future but current) needs for crypto-friendly neobanks, it is the SMEs that are now the most mature target audience: about 500 startups that have already held ICOs (raising over $3 billion which they can’t freely use), crypto-exchanges themselves, crypto-payment startups, and other community members. Moreover, these SMEs are now bringing greater number of retail customers (their employees, partners and customers) than those predicted in the future by new crypto-friendly neobanks. They are all being established by those who have launched startups before (in some cases fintech startups, but not Class A names), but not banking startups (lacking the experience of communicating with the regulator), neobanks\challenger banks. For example, one of the startups had successfully raised money through the ICO, but when they have applied for a license, they have discovered that the regulator was not ready to accept phiath in the bank's capital after the conversion of the crypt raised from the ICO. Considering that almost all of them are going to apply for their own licenses, but none of them have ever done it before, the question arises: there is no doubt that they know how to make cool applications, but do they have enough experience to launch and run a regulated bank? One crypto-friendly bank has made a pretty strange move claiming: we accept crypto to establish a crypto-friendly bank, but "in the beginning we will not work with crypt, in order to obtain a license first." It sounds like "we are opening a gay-friendly bar, but we won’t serve gays for the time being, and, just to be on the safe side, we will participate in gay-bashing because the society requires such behavior." Am I wrong? They all reincarnate “card + app to manage your account” – exactly what has been done a long time ago by the previous and current generations of "traditional" fintech neobanks. That is, instead of taking into account their best practices and adding blockchain / crypto component - they are really reinventing the wheel. “I want to give rise to a new style of verses but I would like to start with reinvention of the English language”. If you are a blockchain expert who is well aware of the current needs of the crypto world, shouldn’t you add your knowledge and functionality (and licenses) to existing neobanks, actively building partnerships with them rather than cannibalize the immature market?

The Problem: Making digital money tangible The Bubble generation isn’t accepted by traditional banks (even by fintech-neobanks). Bitcoin’s capitalization is around $100 billion, ether’s capitalization is around $30 billion, the total funds raised through ICOs – more than $3 billion. No one is waiting for you. Banks have "little or no appetite" to get involved with bitcoin and cryptocurrencies due to fears of a bubble and illicit activity associated with it, the chief executive of Credit Suisse said. The chief financial officer of ING also weighed in on cryptocurrency worries, saying that, although digital assets are an effective means of exchange, the bank was not advising clients to in invest in them. Almost all major banks refuse to accept money after the conversion of the cryptocurrency. Let's call things by their own names - traditional banks hate the crypto. But this hatred is stemming from the lack of understanding, fear of uncertainty and laziness rather than anger. The money that bank receives after the conversion of the cryptocurrency goes through compliance depart-

ment where forty-fifty year old “experienced” employees simply do not understand what it is and where it came from. And here is the most stupid thing: if they spend time to sort out the issue, nobody will praise them for that (therefore they lack motivation), but if they make a mistake, they will be fired. If you convert crypto into fiat and transfer to your bank account less than $50,000, most likely, everything will go smoothly, and you will tell the market that there are no problems and everything works without failures. If you convert from $100K to $300K, the situation is 50\50. But if more than $500K, you will definitely have to talk to your bank's compliance. KYC, AML, source of funds… It would even be good that they ask all these questions if they were more tech-savvy (quick and convenient), and if they really wanted to figure it out. But no one wants to sort out your issues; therefore, you get your "account freeze" and "notification of the need to close within 30 days."

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Alternatively, you can find some shitty bank in a third world country that will not ask you questions. But in practice the questions will not disappear anywhere and will arise each time you make a payment outside your shitty bank. Let’s assume you have found a shitty bank that is friendly to this type of operations, or have armed yourself with an army of lawyers / accountants / auditors and defeated your clear and large traditional bank. The problems will still be there. If you make transactions in US dollars (and most transactions are sooner or later transferred to dollars at some stage), then you face the "problem of correspondent banks" in the SWIFT system. Your bank should have a correspondent bank in the United States, so that its transactions are conducted around the world through such "superfluous intermediaries". If suddenly your bank "gets on the radar" (will raise questions) of the correspondent bank (and sooner or later, especially with the growth of such transactions, questions arise), then your friendly bank will get to know who it should (not) be friends with. And this is the point when you need to make your choice whether you want to be as inconspicuous as possible in order not to attract attention, and be constantly hiding and avoiding questions. Or you have legally earned your money and want to build new services and a new economy, and do not want to waste time and resources on any political and bureaucratic nonsense?

Why does bank compliance is not willing to understand your issues? First, they already have a large and understandable business (with which they are familiar), and they are not interested in a new and small (albeit fast-growing) business because its profitability is still small, the risk of losing the current big business is big, and there are many issues they will have to deal with. Second, imagine a specialist in compliance. He/she is 40/50 years old, not highly paid, without any career perspectives. Their mindset is built on the past (instead of the future) and their decisions are conditioned "how to avoid something bad to happen” (instead of "how to help something good to grow easier and more convenient"). They see a lot of transactions daily and finally they see some odd transaction after the conversion of the crypt, and … they block it. Why? Not because they are bad people. Simply because they don’t know anything about blockchain, cryptocurrencies and ICO - and in their world "everything that is odd is forbidden". They could even address the matter and the client, but it would take too much time and no one would give them a premium for this. But if they make a mistake, they will be fired. Therefore, they send a page or two of dreary questions, and then simply block the account. Are there any "workarounds"?? For sure. In return to one or two pages of questions provide ten to twenty pages of meticulous and detailed answers, thus, “starving the bank out.” However, you need substantial capital for this purpose as you will have to spend money on your back office (lawyers and accountants) in order to collect and accurately store all papers, electronic statements and screenshots of all transactions on mining, receiving, buying and selling of the cryptocurrency; to be able to quickly reply with exhaustive explanations (with schemes and conclusions) about blockchain, cryptocurrencies and ICO; describe how you and your contractors underwent KYC, AML, source of funds procedures; provide full review and conclusion on your partner exchanges. You should better hire a large audit company (such as Deloitte or E&Y) $30-50K, which regulatory verifies what kind of business you do, who you cooperate with and how, where your crypto comes from and how you spend fiat money. You will also need to come up with different purposes of payments from your bank because the "receiving bank" will have questions about the origin of funds, and regular similar transactions with the same justifications will raise questions.

Why the existing cryptocurrency wallets and cards can’t solve this problem? Since these are half-hearted solutions (it's like gluing more and more plasters on the arm affected by gangrene). You depend on your partner bank. And if you reach some large amounts within its cash flows (in fact the business strategy of such partner banks that agree to such an additional risk is to "drown" your transactions in their core business so that they are not noticed, and receive additional income for the risk), the risks that this bank will be approached by senior bankers (regulators and correspondent banks) and asked to stop working with you are not eliminated but simply deferred to a later date. Check the spending limits for these kinds of cards - though it's great that such cards do exist, - but the limits allow you to painlessly buy coffee and t-shirts, while such limits will not work for larger purchases or full-fledged business. They work only for retail customers. What shall SMEs or freelance entrepreneurs do?

Crypto-friendly neobanks Name

Country

Motto/Idea

Primary focus

Plan to apply for a license

Funding

Founded

1

Change Bank

Estonia

The future of finance

Retail

No

$15 mn (ICO)

2016

2

Narbonne

Switzerland

Bank for crypto miners

Retail

No

Plan $10 mn (ICO)

2017

3

BABB

UK

Everyone is a bank

Retail

Yes

Plan $50 mn (ICO)

2016

4

Polybius Bank

Estonia

Regulated bank for the digital generation

Retail

Yes

$30 mn (ICO)

2017

5

Bankera

Lithuania

Digital bank for the blockchain era

Retail

Yes

Plan $30 mn (ICO)

2017

6

Crypterium

Estonia

The JP Morgan of Cryptobanks

Retail

Yes

Plan ICO

2017

7

Fiinu

UK

Blockchain-friendly British bank

Retail

Yes

Plan $75 mn (ICO)

2017

8

2getherbank

Spain

The first collaborative bank

Retail

No

Plan ICO

2017

Analysis provided by:

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which can save money and time for banks and make payments almost instantaneous for consumers. Smart contracts allow consumers to exchange money, shares, property or anything of value in a secure, conflict-free way without anyone in the middle to take a cut. Thanks to the transparency of smart contracts, buyers can easily check merchants’ reviews and previous ratings before buying as well as rate them themselves after receiving the item. The rise of cryptocurrencies, or simply digital money, has created a demand for a blockchain-based bank. It wouldn’t be outrageous to suggest that most of the future banks will be digital banks with traditional banking services, supporting both crypto and regular currencies.

The growth in digital banking is showing no signs of slowing down. Convenience, speed and security aren’t just extra benefits in consumers’ minds anymore. As a rule, traditional bank institutions struggle to build a loyal customer base, while the newly emerging digital-only banks, like Monzo or Tandem, have all the attributes of a strong brand and can keep customers both happy and engaged with their product. There’s no doubt that mobile banking is one of the most fundamental parts of digital banking. In the future, we’ll see even more payment solutions that take advantage of the Internet of Things and consumers’ state of connectedness. Has the future of digital banking already begun? Several fintech experts argue that what we see today is not digital banking but simply digitized banking. Hundreds year old financial products are being adapted to the digital era and distributed via smartphones and the Internet. Many believe that the real innovation will sprout once the legacy banks and fintech startups move away from modernizing the digital experience and plunge themselves into launching new digital capabilities.

It’s difficult to gauge what lies ahead, mostly due to yet untapped potential of the blockchain technology. But with the legacy banks jumping on the trend and new blockchain-based startups exploring innovative use cases of decentralized financial solutions, we can expect the future of digital banking to unfold in many unexpected ways. Once we move away from digitizing traditional banking services to inventing digital banking services that suit the blockchain era, we will experience increased accessibility and trust, cheaper and faster services and a significantly more automated banking industry.

One direction that is shaping up to be an extraordinary one is blockchain banking. It’s a much faster, more efficient and less prone to error process than the traditional automatic clearinghouse (ACH) banking,

Overview of neobanks’ universe Crypterium

2

Сrypto-friendly for Retail

Bankera 2getherbank

Narbonne

Polybius Bank Change Bank

1

FIINU

Сrypto-friendly for SME

BABB

3

Jibuan Soon

Classic fiat for SME

Qapital Pockit

Final

Compte Nickel

Starling bank

LunarWay

Pepper

- live - live with banking license

Revolut

Soldo Fidor Bank

Loot

Atom Chime Tangerine

Monzo neat Canvas

Lintel Bank SECCO

CivilizedBank

Banco Original

Tandem

Koho

- in development

Ferst Digital

GoBank

Bank Mobile

buddybank Morning

DoPay

N26

Nubank KAKAOBANK

Holvi

Monese

MyBank

Bankaaol Osper

Tochka

Anna Coconut

Qonto Tide

WeBank

Hello Bank Neon

ImaginBank

Albo

4

Classic fiat for Retail

Analysis provided by:

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CHANGE BANK Change was founded in early 2016 in Singapore. Shortly after, angel investors backed the proposition with over $200k in early investment. Since the beginning Change CEO vision was to combine innovative companies in investment, e- wallets, remittance, credit and insurance to create a global fintech bank. Change aimed at simplifying banking in Southeast Asia. The team focus all efforts in creating a simpler and more innovative financial proposition, making use of blockchain technology to link independent high-performing fintech companies around the globe. To accomplish this goal, it has launched an ICO campaign, which ended on October 16 and has raised over $15 mn. Change mobile application starts with the e-KYC platform. It can on-board users from anywhere in the world, in record-time and requesting no more than what is needed automatically validating the users’ transactions with other third-party service providers through Tokenised KYC Information Sharing. The quest towards finance without borders starts here, designing a modern bank that is global from day one. Launching in December 2017 Change's crypto wallet with simple sign-up with minimal information required to store & send cryptocurrencies is being tested by beta testers. Change’s Wallet facilitates the storage of all major cryptocurrencies, easy management of crypto portfolios, simple transfers of funds between peers, and a multitude of other functionalities. 05


CHANGE BANK Change’s crypto wallet is secured by applying the highest industry standards. Change works together with a leading wallet security provider in the industry to ensure the safety of funds. The funds are also secured by a combination of hot and cold storage solutions, which provides further security. The ID of the multi-asset wallet is user's e-mail address and/or phone number. User registration automatically creates a blockchain wallet. Access to your wallet is locked by a 6-digit pin-code and any transfers out from your wallet is also secured by a 2 Factor Authentication (2FA) to provide an additional layer of security. Every crypto investor faces the same problem: opportunities to exchange digital coins for goods and services in our everyday lives are very limited. Buying with cryptocurrencies should be as easy as buying with dollars, euros, or yen. Change Card is a card that intends to solve this issue, allowing users to spend their cryptocurrencies in millions of online and offline locations worldwide. Cryptocurrencies held within the Change wallet and will only be converted into fiat currencies in real time at the point of payment transaction. With cryptocurrency spending card Change brings cryptocurrencies to offline use. The first 500 cards (cards are not exist yet) are given to the first token sale contributors. In addition, card holders will be earning rewards by paying with Change Tokens. Change issue cards using industry leader in crypto payments processing. The issuer is a principal member of leading payment gateways such as Visa and Mastercard in Europe and has strong security protocols, including real-time updates to electronic verification solutions & fraud. Change’s card systems allow for industry leading dynamic CVV functionality that generates a unique CVV for every transaction. Change Card holders can use the cryptos they stored on their Change wallets to pay for services and products at all Mastercard merchants around the world. The company plans to start sending out the first cards in December 2017, shortly after the launch of Change App.

In 2018, Change has set to launch the global financial technology marketplace on blockchain which will aggregate the best ways to invest, insure or lend and will let you use these services from a single interface & wallet. Change vision goes beyond just using cryptocurrencies for payments. “It is time that you could also use your cryptos to invest in stocks, P2P loans, real-estate or anything else you can imagine. It is time that you could buy travel or car insurance instantly with your Ether or take a loan in bitcoin. Not We just believe in de-centralized data but also in the power of de-centralized services. Think of Change as an "AppStore" for specialized financial service companies that outperform your bank, while removing the need to sign up or deposit funds to these services individually. Invest in a diversified stock portfolio or real estate, finance loans, sign travel insurance - all from one interface with complete transparency and zero delay.” "We live in a time where for almost every single service a bank offers, there is a fintech company that utilizes state-of-the-art technology and a lean & mean team to provide a better, faster and cheaper service. This isn't a forecast, this is today," says Kristjan Kangro, CEO of Change. The company focuses on nailing one specific service, be it transfers (Transferwise), payments (Stripe), investing (Smartly) or insurance (Oscar). In order for the marketplace to be regulatory compliant, Change is building a multi-tiered standardized KYC (Know-Your-Customer) utility. Users won't need to present extensive information to simply sign up for the app and get a crypto payment card. However, "to use regulated fintech services, you'll need to verify your identity" says Kangro. Estonia's e-Residency conducts a thorough background check, while also having a very strong potential customer-base to offer services to. The API library will be open to all developers that wish to be part of our financial ecosystem. By opening our data, functionality and services to third-party developers, they can integrate their systems and Change can expand its list of innovative services.

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CHANGE BANK Change marketplace integration allows various KYC information to flow within the Change financial ecosystem. This means that one digital identity will be applied across all partners that have integrated. As Change's platform becomes the standard of the industry for shared KYC and easy integration, it will create a network effect to pull more and more fintechs in to the ecosystem. This is aimed to create a diverse financial ecosystem that collaborates, innovates and thrives. Change has partnered with the e-Residency project by the government of Estonia, the most advanced digital society in the world and it will be available to every of projected 10 million e-Residents. "Digital Identity is one of the keys to solving financial inclusion so we are delighted that Change is using our secure government-backed digital identities to help solve this issue and develop their business." - Kaspar Korjus, Managing Director of e-Residency. Vision of the all-in-one platform for financial services is not geographically bound by borders. Today’s technology and regulation allows us to create a de-centralized third-party marketplace that brings you the leading financial technology products. ANYONE can use the most suitable service provided from ANYWHERE. In 18 months, the Change API will be opened to credit and insurance. Change enables the allocation of funds to financial services based in foreign countries, avoiding the bureaucracy of traditional banks, bringing to life the concept of truly borderless finance. Fintech companies benefit from joining the Change Marketplace as they are able to present their products to users of the crypto bank, with no geographical restrictions. Local companies, expanding their user base, reaching millions. The Change Marketplace is self- regulating, meaning that while initial approval is decided by the Change team, a fintech can only remain in the marketplace if it is popular and satisfactory the services will be rated and usage rates published.

Users will be rewarded for using the Change Card and other third party services on the platform - online or offline - receiving part of the transaction back in the form of Change Tokens. Any time a user makes an online or offline payment using Change Card, he or she will receive a 0.05% rebate in the form of Change Token. The rebate will double if the user pays using Change Token. This incentive benefits token users and holders, as it ensures that the currency is constantly being traded, making it more desirable and valuable. For example, a user that spends 3000 Change Token on a brand new laptop will receive a rebate of 3 Change Token. Third-Party Service Providers (TPSPs) share 20% of their revenues generated from Change users with Change. This 20% is distributed between Marketplace investors and holders of Change token in a 1:5 ratio. With 16.67% going to marketplace investors and 83.33% being distributed to Change Token holders. The Change has a team of 10: Kristjan Kangro, CEO – Serial entrepreneur. Previously CFO of Expara and CEO of SwingBy. Artur Luhaaar, Partner – Serial entrepreneur. Current CEO of Smartly (Singapore-based robo advisor) and former analyst at an investment firm. Gustav Liblik, Partner – Serial entrepreneur. Current CEO of Catapult, former CEO of Wastescanner. Edgars Simanovskis, CTO – Also the current CTO of Danabijak. Previously an iOS developer for various companies. Change has a team of advisors, including Roger Crook, ex-CEO of DHL Global Forwarding, Rob Findlay, Founder of Next Money, and Miguel Soriano, Professor at the National University of Singapore. Change has conducted regular meetings with companies across the fintech and cryptocurrency space.

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NARBONNE Narbonne will be a fully automatic bank without people and offices. Narbonne - a crypto bank for users and corporations. You will be able to spend your cryptocurrency around the world, using Narbonne debit cards. It will use extensive experience in the field of online micro-lending, peer to peer lending and traditional bank lending. Narbonne team has experience in creating from the scratch financial institutions in the field of micro-lending in Spain, Germany and Russia. The company’s head office will be in Switzerland. Narbonne Services: For Deposits in crypto-currencies - Narbonne Wallet Safe For any Settlement accounts for business Narbonne Wallet Enterprise Globally accepted Debit cards Pledged and unsecured loans

Technology Implementation will include Application of smart bots with AI elements; Voice Control of online banking system; Face recognition system determining age and gender of person; A system made to handle online applications of lending and deposits. Tech developed by Narbonne team has already become quite popular in the crypto community and is being used by over 40 fiat money organizations. These include banks and other famous micro-lending companies that are based all around the globe. Overall it will have debit cards, automated lending, marketplace, private accounts safe wallets, secured currency, deposit derivatives and smart contracts. Narbonne will use the system of initial coin financing for the Narbonne project. For this purpose, Narbonne will issue a token: the Narbonne Credit Coin (NCC). The token is acceptable by all Narbonne services. NCC token can be used to make loan repayments to Narbonne. There will be two groups to which tokens will be distributed namely, Narbonne's debtors and partner's lending institutions whose borrowers will use NCC. A total of 1000 million of tokens will be issued for this purpose. The token functionality issued initially is of ERC20 standard.

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NARBONNE This year, NCC will be used by most of the lending organizations dealing in cryptocurrencies. Over the next year, the demand for NCC on exchanges can outgrow its original volume by a factor of 25, which would lead to an exponential growth of its value. From this point onwards, the currency will be founded on the loans made by Narbonne and loans that users have taken from other banks around the world. The following steps will be taken to create credit support for NCC: (1) Narbonne issues Narbonne Credit Coin (NCC). As a result of the ICO, a proportion of the tokens (35%) will be distributed among banks and lending institutions around the world. (2) As a condition for receiving these shares, these banks will have to agree to accept loan repayments in NCC. Why is Narbonne a crypto bank project? Banks have long existed as centralized organizations for saving cash. Bitcoin destroys cash. Therefore, we have preserved the property of an organized bank: the technology for lending. We have re-invented the approach of banks of the past to create a decentralized crypto bank with a marketplace that will now operate globally without restrictions for all people. And our automated systems will help in this.

so fast that that they become a part of our life almost without us noticing, because more agile companies are all trying to inspire customers to use their services. Narbonne Team: The founder and CEO of Narbonne is Maxim Elsner. He founded AFCOM.TECH, currently one of Europe's leading companies specializing in software development for microfinance and banking. He won the Microsoft Research Faculty Fellowship Award. The Chief Operating Officer of Narbonne is Garcia Y. Maria. She has experience of work in Unicredit Bank. She Has a PhD Finance. The Chief Technology officer of Narbonne is Vasily Nesterov. He has experience of leading teams over 15 years in various technological projects. He also worked in Microsoft Azure. The developer team of Narbonne has developed software for 40 banks and microlending companies.

It can be said that some innovations spur other innovations, accelerating the emergence of newer and more advanced technologies. Innovations now are emerging

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to each other, allowing peer-to-peer transactions over the network. Beneficiaries and senders will be connected directly, without resorting to unnecessary middlemen or middle-layers of technologies.

BABB BABB (or Bank Account Based Blockchain) is the World Bank for the Micro-Economy, a decentralized banking platform that leverages blockchain, AI, and biometrics technologies to offer anyone in the world access to a UK bank account for peer-to-peer financial services. In June 2016 BABB raised seed funding and was accepted into the Level39 Accelerator Space in Canary Wharf. As of October 2017 the company plans to do an ICO planning to raise up to $50 mln. “I believe BABB’s plan to bring banking services to everyone, through the blockchain and the latest mobile technology, will both provide new features not seen in the high street banks and include many who have been excluded from the traditional financial system,” said Guido Branca, CEO of BABB. The company doesn’t consider itself as a challenger bank but rather as an enabler helping existing banks and financial institutions to innovate. The platform will allow users to “leverage their social connectivity and their money in new ways” with more control and greater transparency. It will connect users

In March BABB announced that it has entered into an agreement with Contis Group Ltd to use their white-label license and Contis’ banking services infrastructure to provide UK bank accounts, transfer and card payment services. The first stage of this relationship will cover integrating BABB’s core blockchain banking platform with Contis’ banking services and payments infrastructure. BABB plans to soft launch its blockchain-based banking platform in 2017. The company is currently applying for a full banking license and is seeking to enter the UK’s Financial Conduct Authority (FCA) sandbox. The company is building a banking platform based on a “permissioned” ethereum blockchain implementation of a distributed ledger using smart contracts technology. The platform is based on a decentralized information model to minimize costs while maximizing data fidelity and security. Using biometrics to facilitate client onboarding and transaction authentication, with big data analytics to optimize match-making and control risk and with AI-based customer self-service intended to provide banking services for all.

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BABB

“This is why we say: “Everyone is a Bank” irrespective of their income level”. Every user downloads the app, provides a selfie and a voice print, and gets a UK based account upon activation. With the BABB app, you can open a UK bank account from anywhere in the world by taking a selfie and saying a passphrase. Once you’ve entered the BABB ecosystem, you become your own bank. Anyone with a smartphone and an internet connection can participate in BABB’s global marketplace. “You can send money to any other BABB user anywhere in the world instantly and for almost no charge. Simply choose the amount you want to send and the person you want to send it to, and confirm the transfer using your digital identity.” As a bank, you can exchange currencies directly without any middlemen. It’s cheaper, faster and easier than doing it any other way. A multi-sided platform, BABB is designed to provide banking and other financial services to individuals and small businesses. Customer data will be encrypted and stored security on the blockchain where the permissions for who can access or use that will be entirely controlled directly by the customer. The Black Card bridges the divide between the digital world and the physical world. It is a secure payment card that links directly with your BABB bank account via a secure QR code or NFC tag. It allows both a debit-like functionality, and can also be issued as a pre-paid card for your friends and family. Retailers can accept payment using the BABB card by simply downloading the BABB app and scanning the QR code or via NFC. Payment is made instantly into the retailer's bank account and the funds can be used immediately. With the Black Card you are able to spend your BAX in shops and peer-to-peer. Payments can be made instantaneously, anywhere in the world or for online shopping.

No personal information is stored on the card itself. If you lose your card, you can easily disconnect it from your bank account, preventing anyone else from using it – all from your smartphone. If you find the card again, simply scan the QR code via your BABB app and it reconnects to your BABB bank account. New cards will be available very cheaply in shops and from major online retailers with next day delivery. Alternatively, pick up a spare from a friend, scan the QR code with your BABB app and you are good to go. Social KYC: “Vouch for anyone you know, and give them access to a UK bank account using only a smartphone. BABB’s platform promotes trust. Therefore, on our network, other users’ trust is enough to open an account with core functionalities. Our innovative ‘Social KYC’ process allows anyone who is fully KYC-ed, with validated documentation, to vouch for other users and onboard them to the platform. In this way, we will extend our services to millions of people without requiring them to provide ID documentation. Our Social KYC mechanism will promote exponential growth of our user base. This is particularly useful for onboarding the unbanked in emerging markets, seeing as one of the main barriers they face is lack of documentation. As BABB’s value is proportional to the number of users on the network, there is a strong incentive for early adopters to encourage their peers to get on board. Removing barriers to access. To open a UK bank account, the new member simply needs to download the app, take a selfie and say a passphrase. By utilizing biometrics and digital identity technologies, we can remove barriers to access and create a frictionless onboarding process. There is no need for documentation or face-to-face meetings with a bank managers. The whole process will be at your fingertips.” Social KYC is a key part of our strategy to create fully banked communities and promote financial, economic, 11


BABB and social integration. It will include those who cannot provide relevant documentation such as low-income employees, refugees, and asylum seekers. People are stronger when they work together, and social KYC will enable communities to become fully connected. It is an Open Platform. Any business can accept supported currencies, fully compliant, anywhere in the world. BABB will empower the microeconomy, improving lives and livelihoods and creating new opportunities for individuals and businesses across the world. Businesses and developers can create applications to plug seamlessly into the BABB platform. From freelancers employed in the gig economy to global corporations, BABB’s borderless integrated payment systems can reduce the cost of doing business. Despite building its banking platform on top of blockchain technology, BABB has decided to stick with fiat currency as opposed to developing a pure digital currency–based banking platform. “Crypto is still a challenge,” BABB CEO Guido Branca told Bitcoin Magazine. “It will play a role, but we need to transition to that new landscape. Stakeholders (central banks, regulators and the banking community) are still evaluating [the use of digital currencies in the financial system]. We think the underlying technologies of blockchain, smart contracts, tokens and distributed ledgers have a role to play in easing this transition but we must walk before we run.” “We are specifically targeting the micro-economy/market while [other mobile banks] are doing more or less the same services (but branchless) as the established high street banks. We believe that the financial market is so huge that many different [mobile banking] models will coexist.” Andrew Downin, innovation director at Filene Research Institute speaking during the 2017 CU Direct DRIVE conference in Las Vegas, said that BABB’s offering is an “intriguing development.” BABB cautious in that it is using a fiat currency [a government-based currency such as dollars, Euro or pounds] as opposed to developing a pure digital currency-based banking platform. Downin said this was a smart move. “We continue to see valuation risk in digital currencies such as bitcoin, and acceptance of these digital-only currencies is still nascent,” he said.

The BAX token is the native currency of the BABB platform. Token sale participants can buy and hold this currency and benefit from the value of the platform. The BABB team is a diverse group of visionaries spanning an exceptionally broad range of experience, knowledge and cultures from across the globe: CEO, Rushd Averroes is founder of BABB, leading a diverse team of industry veterans to make his vision a reality. He is a financial inclusion specialist and has an MA from University of Greenwich in Microfinance and Financial Inclusion. Before that, he attended the Ecole Polytechnique de Lausanne and was awarded an IT Science Degree in 2006. Rushd has managed a highly successful Authorised Payment Institution (API) in the UK Wowpaymobi. CTO, Jorge Pereira is an entrepreneur and technologist, with extensive experience in developing technology projects in a variety of areas, for local and global markets. He founded Seegno in 2008, a world-class web application development firm, where he remains as an advisor. In 2013 he joined Uphold, where as CTO he was responsible for the design and architecture of the whole technology stack, as well as UI and UX of its products. Ever since, Jorge has focused intensively on fintech, developing products and technology around Cryptocurrencies, Distributed Ledgers, Regulatory Compliance, KYC/AML, Fraud Prevention, Risk Mitigation, Trading, Hedging, Bank Integrations and other areas related to fintech platforms and applications. COO, Adam Haeems is responsible for the daily operations of BABB. He has a Master of Finance from Cambridge University (Judge Business School) and joins BABB fresh from an accomplished trading career at Bank of America Merrill Lynch and a $1bn global macro hedge fund (QCM). He is passionate about financial inclusion and improving market efficiency within the microeconomy.

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create of investment portfolios based on cryptocurrencies.

POLYBIUS Polybius Foundation, a financial services company established this year and registered in Estonia, is building a fully digital bank for businesses and individuals and the “first bank in the world to specialize in financial services for cryptocurrency startups and blockchain projects.” In February 2017 Polybius Foundation announced the opening of the Polybius Bank — the first European bank specializing in financial services for companies dealing with cryptocurrencies and blockchain worldwide. Polybius Bank will combine features of modern banking, IoT, Big Data and blockchain-based technologies while also meeting security and UX requirements. Polybius financial services will be fully interconnected with international systems to respond to the transaction needs of our customers worldwide. Polybius Bank will operate on the principles of an Open API, employing reputable innovations and service within the framework of payment and data processing industry. Polybius Bank will offer a traditional selection of financial services such as deposits, credit financing and bank card issuance, but also services especially targeted at blockchain startups and projects such as credits secured by cryptocurrencies as well as the ability to

Polybius Bank intends to apply for a EU financial institution license. The concept is similar to BABB App Ltd., a London-based startup that’s building a banking platform using Ethereum smart contracts. But according to our data, the European regulator has prohibited Polybius from using funds received from the ICO to fund capital requirements necessary to obtain a banking license. Not clear how the startup is going to deal with the issue. The Digital Pass technology, developed by HashCoins and implemented into Polybius Bank, will serve as an automation and digitalization ecosystem, allowing us to not only integrate single companies, but entire industries enabling access to financial and industrial services in the same Pass, at a click’s hand. Digital Pass is an independent environment as a service, which will serve as a storage for encrypted individual information. The security of access to the information will be enabled by SSL certificates, dynamic PINs and, to some extent, by biometrical data. Polybius Foundation, signed a memorandum of understanding (MoU) with Ukrainian startup Attic Lab in April, will be using Attic’s OpenBankIT blockchain platform to provide payments. The other startups involved in the digital bank’s foundation include CryptoPay, a cryptocurrency payments firm, HashCoins, a developer of blockchain solutions, and AmbiSafe, a developer of Ethereum smart contracts.

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POLYBIUS According to Ivan Turygin, co-founder and chairman of Polybius Foundation, the company has big dreams for its digital bank as it aims “to build the ultimate financial infrastructure, sort of a ‘financial Google.'” By providing the infrastructure for system-to-system communications, Polybius Foundation will act as a Trustee service and will be responsible for the control and execution of compliance-related directives. Designed to comprehend a variety of networks, the infrastructure of Polybius Foundation features a multi-segment decentralized data storage for personal data, cryptographic encryption of all entries and secure mechanisms of identification, authentication and authorization of individuals and companies by means of the interconnected instruments. The data will be driven from all the channels related to services of Polybius Bank, Digital Pass and its trusted entities for further processing and analysis. Due to the sensitive nature of the information and to ensure the scalability in processing capacities, the evaluation of data will be automated by means of applied AI algorithms. Polybius token - Polybius blockchain Share - represents the right to receive a part of company's profit. All token holders are eligible for obtaining dividends according to their stakes. Any number of tokens (100％) sold at the end of ICO have right to receive 20％ of company's profits. According to the company bylaws, at the end of a financial year 20％ of the company's profit is transferred to an ETH wallet. The ETH is then redistributed to all holders of Polybius Tokens according to smart contract conditions. While starting off as primarily a financial institution, the Polybius project is meant to grow into your daily servicer and companion ecosystem. Among other planned features are scoring and sensitivity systems for credit and insurance businesses, asset and currency trading systems, seed & VC investment tools, eID and Trust services and other features described in this Prospectus. The Polybius ICO ended on 5th July, immediately ranking among the top five largest ICOs of 2017, raising $31 mn with 27,000 participants. ICO proceeds are intended to be spent mainly, but not exclusively on acquisition of licenses, building out the systems, hiring the team and marketing. Polybius Bank will rely on a set of public and private licenses instrumental to comply with many regulations, existing in the financial field. Among them are the public EMI and banking licenses, the participation in Card Schemes, the creation of regulation-compliant identification mechanisms and other technical conditions to meet. Every milestone step is an advancement to a broader set of services at Polybius customers' disposal. During the initial step for a viable Polybius operation, a set of conditions needs to be met. Among the minimal requirements are licenses (small Electronic Money Institution (sEMI) or Payment Institution (P.I.) licenses) and mechanisms to comply with the law and financial regulations, Combating Financing of Terrorism (CFT), etc). At this step, instead of the sEMI license, Polybius, will apply for a license for the Authorized Payment

Institution (A.P.I.) for the sake of lowering the initial investment requirement. A.P.I. license is required to store clients’ money and organize payment processes. The time required to acquire the license is 3-9 months. Polybius A.P.I., will be legally considered a non-banking financial institution (NBFI-ND) and will not take deposits until acquisition of the banking license. SWIFT membership is also required as one of the key elements for banking procedures. Joining the SWIFT network enables a bank to receive a Business Identifier Code (BIC), and to be able to communicate with other financial organizations via SWIFT messages for electronic money transactions. It may take up to 3 months for the application to pass through. Polybius Payment Institution will adhere to the EPC Rulebooks to use them in the European payment and messaging network for the Euro zone. The EPC Rulebooks define principles of money transfer in Euro according to the European Union Regulatory Framework. The time required to join and to operate the EPC Rulebook network is expected to be 6 months. Compliance with specific rules, laws and regulations is of utter importance in banking environment. A banking institution is obliged to set and follow high standards of operations in order to protect its stakeholders. Besides that, the reputation of a bank can also be severely damaged by poor processes including KYC and AML/CFT techniques and software. We will use existing tested technologies to comply with the standards and the requirements. P2P loans are a new model in credit systems, which allow organizations to establish a platform that links those looking for loans with those looking for small investments and profit. Such systems are a great way for financial institutions that match the lenders with the borrowers to generate a capital-efficient, credit risk free revenue stream on processing (e.g. platform maintenance, customer due diligence, scoring). We see a particular opportunity in cross-border P2P lending while most of today’s platforms are locked into a single jurisdiction. The Polybius project is driven by a number of expert groups of with common vision everyone actively involved in the key strategic decisions, project planning and development. The team is regularly drawing on the expertise of the deep bench of the advisors affiliated with the project. Additional tech and finance professionals have committed to join the project. The core team includes: Ivan Turygin (Founder and Chairman at HashCoins OÜ). Sergei Potapenko (Founder and CEO, HashCoins OÜ). Nikolay Pavlovskiy (Blockchain Engineer and CTO at HashCoins OÜ). Vitali Pavlov (Production Management and Chief Product Officer at HashCoins OÜ).

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BANKERA The rise of cryptocurrencies, or simply digital money, has created a demand for a blockchain-based bank. Bankera is a startup that’s catering to that demand. It supports both fiat currencies and cryptocurrencies and provides a good range of services like any traditional bank, including payment processing, debit cards, loans and low-cost investment products. The catch here is that although Bankera acts like a traditional bank, it is crypto first by nature, pioneering innovative services like taking crypto assets as collaterals for loans. Launched in 2017, Bankera is an operating subsidiary of the popular cryptocurrency exchange, e-wallet, debit card and payment processor — SpectroCoin. SpectroCoin team has which developed bank-like infrastructure releasing Bankera to leverage regulatory and IT infrastructure to develop a bank for the blockchain era. Bankera as a proper bank will offer payments, investments, and loan and deposit solutions. Later on, it is planning to develop new types of money, such as inflation linked baskets. Payments including payment accounts with personal

IBAN, debit cards, interbank foreign exchange rates and payment processing. All services will support both traditional fiat currencies as well as cryptocurrencies such as bitcoin, Ethereum, DASH, NEM, ERC20 compliant tokens and others. It will make Bankera one of the first crypto-friendly regulated banks in the market. In the long term, Bankera will implement innovative solutions such as gross-domestic-product (GDP) linked currencies and the use of exchange traded funds as a substitute for money. The required IT infrastructure to facilitate payment processing and issue personal IBANs or payment cards have already been developed and are available as a minimal viable product (MVP) in the form of SpectroCoin. Support of full P2P transfers, mobile wallets and the start of membership application of the major payment networks such as card schemes and remittance networks will be implemented in wallet. The company plans to apply for a banking license after ICO. This will allow Bankera to offer loans and deposit services to the clients. Loans and deposits will be a key competitive edge as well as core service of Bankera. Current deposits will receive interest just as savings do. All Bankera clients will be able to benefit from higher interest rates due to proprietary information about borrowers' cash flow, as most loans will be given to business clients who use the payment processing solution.

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BANKERA Investments will consist of low-cost investment products such as exchange traded funds (ETFs), crypto-funds (a portfolio of various cryptocurrencies and crypto tokens) as well as roboadvisory solutions for wealth management. Eventually, Bankera will offer investment banking services including financing corporate strategies of our business clients. Bankera launching an initial coin offering (ICO) to issue Bankera tokens on the public blockchain. After raising 25 million Euros during one of the biggest pre-ICO sales to date, Bankera, a blockchain based banking service, has announced it is going to hold its ICO sale on November 27. The tokens called Bankers (BNK) issued during the pre-ICO and ICO. Each holder of Banker (BNK) tokens will be entitled to a referral commission, paid weekly; this will be constituted of 20% of Bankera and SpectroCoin net transaction revenue. This will be implemented by taking 20% of Bankera's and SpectroCoin's net revenues and sending them to the smart contract. For example, if net revenues of Bankera for a week are 10,000,000 EUR, 2,000,000 EUR as referral commission will be sent to the smart contract. Bankera will offer businesses instant payment settlements using advanced proprietary know-your-client (KYC) and fraud detection solutions to collect information about the incoming payments and automatically settle transactions which otherwise could take weeks. Advanced technologies will also allow Bankera to estimate clients' economic power and thus offer them a better loan and deposit rates. At this point, Bankera has the necessary regulatory and IT arrangements and has put together a strong team and advisory board, including Lon Wong, president of the NEM.io foundation, as well as Antanas Guoga, a member of the European Parliament, also known as Tony G – a famous poker player. Guoga is actively endorsing blockchain technology and cryptocurrency at the European Parliament and beyond. Bankera’s founding team already owns and operates a successful cryptocurrency exchange, e-wallet, debit card provider and payment processor. The aim of the ICO is not to test a speculative idea, but to provide the capital to enable Bankera as a product to expand its existing services to compete with existing banks as an equal across all areas of operation including payments, lending, currency exchange, and investments. The contribution of SpectroCoin to Bankera will be not only IT and regulatory infrastructure, but also an introduction of Bankera services to 400,000+ existing clients of SpectroCoin and share of a SpectroCoin’s talent pool of 50+ blockchain specialists. Most importantly, SpectroCoin will be entitling Bankera token holders 20% from its net transaction revenue from the first week after start of pre-ICO. Bankera recognizes that cash is still the predominate form of payment and Bankera will be active in the cash market. One issue is that Bankera will not have physical branches like traditional bricks and mortar banks. As such, Bankera has a three-pronged attack to remain competitive in cash. Partnerships with existing providers

for cash deposits and withdrawals. Bankera will partner with retail providers who currently distribute cash deposit and withdrawal services. Network of agents. In developing countries where infrastructure to handle deposits and withdrawals is not established (such as South America), Bankera will offer relevant retailers (such as newsagents or gas stations) the ability to be agents for Bankera to handle deposits and withdrawals. Each of these agents will have an account with Bankera to facilitate this. As Bankera will be issuing payment cards, they could be used as an option for withdrawals at most ATMs available globally when cash is needed. Bankera will offer money wallets in 22 fiat currencies initially, covering all the major currencies such as USD, EUR and GBP. In addition, Bankera will also support emerging digital currencies such as bitcoin, Ethereum, DASH, NEM and others ensuring that Bankera will be at the forefront of the emerging cryptocurrency ecosystem. One of the key challenges for fast growing businesses accepting non-cash payments is capital immobilization. Bankera will create short-term finance products to bridge this cash flow gap for businesses. As a payment processor, Bankera will have an advantage over banks because Bankera will collect live information about expected incoming payments. This will facilitate Bankera offering credit for businesses secured against expected future cash flows. Bankera will not only become a regulated European bank, but also will seek to become authorised issuer and acquirer of payment cards and obtain banking licenses in key jurisdictions to avoid dependency on the correspondent bank services, which are extremely fragile nowadays as identified by the World Bank when they concluded that correspondent banking relationships (CBRs) are declining1 due to several factors including AML risk or reduction of risk. Having multiple licenses will allow Bankera to offer instant cross-border transactions as well as having access to a low currency exchange rates due to direct access to financial markets in multiple jurisdictions because of having these licenses. Bankera has assembled an expert management team with a diverse range of skills: Vytautas Karalevičius (CEO) is currently completing a PhD in cryptocurrencies at KU Leuven University in Belgium. Prior to that, he received a MPhil degree in Finance from Cambridge University and BA degree in Business Finance from Durham University. He is currently conducting research on the potential of blockchain technology for securities transaction lifecycle for the SWIFT institute. Previously, he has worked at Bloomberg (London office) in management consulting. Mantas Mockevičius (CCO) has more than eight years’ experience in managing operations and compliance for an electronic and digital money exchanges. He holds a bachelor degree in economics and master degree in finance. Justas Dobiliauskas (CTO) has nine years’ experience in developing software for medium and large financial institutions as well as five years’ experience working with blockchain technology and cryptocurrencies. He is an expert in P2P technologies and holds a Masters Degree in Information Systems Security.

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CRYPTERIUM Crypterium which is headquartered in Estonia builds a cryptobank focusing on three main services: giving individuals the ability to use cryptocurrencies to make payments in their day-to-day lives, establishing an innovative infrastructure that gives businesses new opportunities for cryptocurrency acquiring (and makes it easy for vendors to receive cryptocurrency payments as fiat money), and cryptolending, which it is attempting to streamline. Doing all this requires a multidisciplinary team that brings in specialists in finance, banking, cryptocurrency, financial IT, strategic development, and investment.

The Crypterium goal is to create first full-fledged cryptobank of its kind, which will address everyday tasks associated with the use of money, for example using cryptocurrency, like in an ordinary mobile banking app, to pay for mobile services, utilities, and taxes, to make transfers, pay at a café or restaurant, take out loans, and other services that are currently offered by legacy banks. “In contrast to ordinary banks, Crypterium is regulated not by the ordinary regulatory authorities, but by the blockchain infrastructure. In addition, many banks operate locally; we plan to offer services worldwide. Banks restrict withdrawals and transfers; we have virtually no restrictions. In fact, the differences are much, much greater, but that’s a whole other conversation.” Crypterium’s Early Sale started on October 31, 2017, and will run until November 6, 2017. The Early Sale offers four tiers of bonuses depending on the number of purchased tokens. The next stage of the sale, which will commence on November 7 and will go on until November 27, will offer lower bonus amounts. The no-bonus sale will start on November 28, 2017, and end on January 13, 2018.

via the ICO will be directed to building a complete vertically integrated service that encompasses the best blockchain technology capabilities to solve the complex issues of using cryptocurrencies in the real world. “$7.5 million in CRPT token early sales gives Crypterium’s business model a firm vote of confidence from the blockchain community,” says Steven Polyak, Managing Director and Crypterium co-founder. “Right now, cryptocurrencies are not the financial instrument of choice for paying for the most routine purchases. The platform we are developing will offer the market a powerful and secure solution through which clients will be able to use cryptocurrency in the same scenarios in which they’re accustomed to using ordinary money,” he concludes. The project advisors, among whom are such renowned blockchain personalities as the TechCrunch co-founder Keith Teare and ICOBox co-founder Mike Raitsyn, are excited about the early results. “The project’s soft cap was set at 500 BTC. We are very pleased that it was reached right in the first day of Crypterium ICO,” says Keith Teare. Teare, a grizzled veteran of the international technology sector, is perhaps most famous as the co-founder of the TechCrunch tech news website, but has a long list of projects under his belt stretching back decades, among them Accelerated Digital Ventures, Minds and Machines Inc., MedCo, just.me, Archimedes Labs, Easynet, and RealNames. The latter two had valuations that hit $1 billion. Steven Polyak, commented on token sale: “Our token will perform two functions. The first will be similar to the ‘gas’ used in Ethereum. In our case it will be used to support and develop Crypterium. There will be a 0.5% charge on each transaction performed on our platform, which will be used to purchase tokens from the exchange that will be burned during the performance of operations. This will ensure stable demand and, accordingly, a growth in the value of token. The second function involves the formation of a token fund called the Monthly Cashback Fund, which will receive 30% of our economic benefit obtained from the fee paid by a business for the use of our platform.” Crypterium core team includes: Steven Polyak (Managing Director, Co-founder). Steven is highly experienced investment banker with a focus of interest on capital markets in the USA and Russia. Austin Kimm (IR Director, Co-founder). Financial services CEO, Austin Kimm is an international strategist for established and start-up companies. Gleb Markov (COO, Co-founder). Fintech, banking and cryptocurrency professional with over 10 years of experience in the industry. Vladimir Gorbunov (CCO, Co-founder). Entrepreneur with more than 10 successful new ventures and a particular focus on simplifying real-world issues through technology.

Crypterium managed to attract already an impressive $7.5 million from its supporters. All the funds collected 17


Fiinu will use up to 10% of the raised funds as working capital, while the remaining invested funds will be protected in an escrow arrangement until Fiinu receives its banking license. If the banking license application is unsuccessful, all Ether (ETH) in escrow will be returned to investors, with a minimum 90% money-back guarantee.

FIINU Fiinu, a UK-based tech-driven bank, has recently launched a pre-sale, ahead of its full ICO in November. The bank wants to be the UK’s first blockchain-friendly bank to also offer retail banking services and products for those currently under-served by the incumbent banks. Users of crypto-currency will benefit from a single account for both sterling and crypto-currency use, and will be able to drawdown crypto-currencies into sterling (and other currencies) for a fraction of the current market rate. Additionally, customers currently being under-served by the incumbent bank’s archaic credit rating system will finally be able to access services designed to lower the cost of banking and improve the quality of financial products. One of the key parts of Fiinu is its Finnuscore credit rating system. This credit rating system promises to “lend responsibly to consumers and small businesses against crypto-based assets and help their short-term credit needs with overdrafts whilst encouraging financial resiliency.” The company is undertaking positive discussions with regulators whilst applying for a full UK banking license. Upon receiving its banking license (scheduled for the end of 2018) and becoming profitable, investors will receive highly competitive returns on their investments, compared to investing in the shares of incumbent banks. In addition, Fiinu Coin (FNU) will offer a number of highly beneficial privileges: 33% of retained profit will be distributed to FNU holders every year; FNU can be borrowed against. Once authorized, Fiinu will grant credit in sterling, for up to 75% LTV against FNU, starting with UK-residents; Services will include innovative smart credit products and budgeting tools.

Commenting ahead of the pre-sale, Fiinu Founder and CEO Marko Sjoblom said: “This is an exciting opportunity, not just for Fiinu and its investors, but for the wider banking industry. Upon launch, Fiinu has a number of exciting products and services which will help those who have been ignored by their banks for too long. This includes lending against an individual’s crypto-based assets, as well as the world’s first Bank Independent Overdraft. We have one simple aim, making your money work for you. Investors in our ICO will become part of Fiinu’s story that sees the power of technology used to tackle failures in the market and provide better banking services to all customers.” Fiinu's founders have worked together for nearly ten years and their successes include building and managing a UK-based FinTech company that has lent and recovered over 4.5 million overdraft-style loans with a trade value exceeding £1 billion. Under their management, at its height, the company would have been in the Top 10 of the Deloitte Technology Fast 500 fastest growing technology companies in the world with nearly 35,000% revenue growth over a five-year period. Fiinu's core team has gone through the full UK-bank license authorization process once before, for a well-established family office, and have built a digital banking platform from scratch. Combined, they have a wide range of dedicated skills, experience and understanding of what it takes to earn a UK-bank license. Founded by Marko Sjoblom, who previously led payday lending alternative Myjar, the firm is currently applying for a full UK banking license. As it gets ready to launch, it has brought onboard Andy Briscoe, chair of The Money Advice Service, the government-sponsored organisation dedicated to improving the financial resilience of the UK public, as chairman. In addition, Bank of England and Santander veteran David Hopton has been named a non-executive director.

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2GETHERBANK 2getherbank aims to become a global collaborative Marketplace Banking Platform based on Big Data, Artificial Intelligence, Machine Learning and Blockchain that allows users and companies, in a high security environment, to exchange any kind of real asset, manage programmatically and automatically their economy and access, in a marketplace, all financial products and services provided for Fitntech and Banks from around the world using an unique user interface. 2gether is using the latest technologies and promoting collaboration among users and innovators to build the most fair, global and competitive financial ecosystem in the world. No white paper is publicly but company says that ICO is coming soon. It will be public and will be launched along with the Private Beta. The company claims that

they have been working in building a true operational banking service, built on Blockchain technology, for over 18 months and don’t want to launch a Token Sale without proof that they have a real working product and get some feedback from the community. Currently, only for the institutional and professional investors window is open. The company is founded and run by Salvador Casquero whose professional career was deeply related to fintech. Working for financial industry leaders from JPMorgan to banking entities such as BBVA, La Caixa and Banco Sabadell have been mixed with new technological skills acquired in tech companies such as Eresmás or Wanadoo and self-learning skills from his continuous exploration and testing of new technologies such as blockchain, artificial intelligence, predictive and matching algorithms, machine learning, internet of things, big data or natural language processing tools. As a result, Salvador has acquired sufficient qualification to launch 2getherbank a new project where it aims to complement all the previous factors with the human one in order to achieve an ambitious and efficient distribution of resources, goods and services. 19


The Bubble Generation on the way to the first Bubble Bank Unfortunately, current crypto-friendly wallets \ cards and a new wave of ICO-placed neobanks are not able to solve the fundamental problem of rejection of the crypto \ ICO community by the traditional banking system. The main reasons are: They are hosted on very traditional banks, which is a time bomb. They are allowed to work within the framework until the volume of their business interferes with the core business of these players (which will happen sooner or later). While traditional banks are not ready to advocate for new players - they are ready to "allow them to exist" only until there are any risks on the horizon (which they will not be ready to bear). Some of them are going to obtain their banking license - but so far none have received it. Looking back on the experience of teams that develop such projects, then they had no previous experience in buying/selling banks and communicating with regulators since they are representatives of the techno-blockchain community. There is no doubt that we need crypto-friendly banks. We need separate banks with their licenses that are

not dependent on current players and are focused only on crypto-currencies and ICO-backed startups. The banks that will completely change and focus all business processes and technologies on this type of customers. The banks that are constantly communicating with regulators of different countries: explaining what they do and how, how they work with clients, what types of risk appear and how it can be solved, developing new technologies for this. In most jurisdictions, it’s easier to buy a bank than to obtain a new license as most regulators are determined to reduce the number of bank licenses in the market. Interestingly, all current projects are designed to receive licenses in Europe or the UK, i. e. to work with the euro or the pound as a currency, whereas according to statistics, most of the payments after the crypto conversion are converted into the US dollar at the first, second or third step. In addition, the American regulator constantly sets the "mood in the market" with its views on cryptocurrencies and ICO. Therefore, the question arises: why does one run away from the problem, instead of coming to its source? There are many small banks in the US – worth from $5 to $50 million – available for purchase. We believe that soon someone will decide to buy such a bank in the US, completely clear its balance from the current business (to avoid the conflict of interest), focus exclusively on the needs of blockchain / ICO world, and will change the team and business processes for such requirements. 20


The Bubble Generation on the way to the first Bubble Bank

largest correspondent banks and the dominance of the US currency) – therefore, these banks are likely to be linked to some new system of interbank transfers. For example, Ripple. So far, there is no way to avoid restrictions imposed by geographic boundaries and there is no jurisdiction optimal for the whole world. One can start with two or three major jurisdictions (US - for the dollar, a European country - for the euro, Britain - for the pound), make a network, and then connect new players as partners. It is necessary to understand beforehand that this is not a struggle for one and only universal bank in the world (and you will never become one), but simply for the first practical full-fledged example/standard (not monopoly) to which people/banks will connect. Currently everyone understands that this kind of bank should have an open-architecture - a set of open APIs integrated into its own BaaS-platform. It will allow to: quickly launch products and partner with third-party developers for the customers’ sake; effectively integrate in one network your banks and any other banks (both traditional and neobanks that have raised or are raising ICO rounds in order to get their own banking license in their own countries), which want to join the community of crypto-friendly banks; to land any other fintech, blockchain, crypto-startups: to create, in fact, the first fintech-bank in the world allowing them to launch faster and cheaper as well as to scale to other countries. There is no need to reinvent all fintech services once again – too many people have been doing this for the past five year! You simply need to help them to move to new rails, integrate them among themselves on the basis of your open architecture and business processes tailored for a new type of customers;

For sure we need more than one such a bank, we need them in different jurisdictions, not only in the US as soon as the customers are located in different countries that have different regulation, which each time is optimal only for solving a number of issues of a certain range of clients; have their own currencies (and customers want and should freely operate all major currencies). The bank’s business should be cleared from all non-core businesses and focused only on the blockchain\crypto\ICO with all technologies, processes, business logic focused exclusively on a new class of assets and customers. We should also build an open dialogue with the regulator instead of playing dumb and talking about traditional business in meetings while making innovations under the table. We should declare that we do this and nothing else, we understand this, we are fully responsible for everything that we do and with whom we do it, we are in a constant dialogue/educating you, we disclose everything in detail and when we see something incomprehensible or a failure - we search how we can solve it at the level of technologies and processes. Most likely, the operations of such a bank/banks will be sabotaged by SWIFT - the main interbank transfer system (which always defends the interests of the

one of the key APIs should be blockchain-based digital KYC. It allows very fast complete legal verification (of both individuals and businesses) for any financial service performed online from any country. There will be no need to register and verify again in all other partner services. For partner startups it will reduce time and costs for development of their registration and compliance processes. In the future, based on these digital passports, as you accumulate data about your behavior in other services (only if you want to share this data! and only with those you choose!), you will receive your online score, which will make it easier for you to get loans from existing lending fintech startups and emerging blockchain startups; why are these 8 banks going to obtain 8 licenses in two countries? Seven licenses in eight countries – cool, but licenses + backends won’t give you a competitive advantage. You can rent them to other players. It’s important and difficult to do it for the first time. But it’s silly to do it for 3,4,5,10 times. People need new services, not new licenses.

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The Bubble Generation on the way to the first Bubble Bank As mentioned before, a big shortcoming of existing projects (not yet launched but planning the launch): is their focus on retail customers instead of small and medium business. Whereas there about 500 customers (which have raised over $3 billion through ICO) on the market. This type of customers is very homogeneous, fast-growing, and absolutely no one is ready to serve them now. In the second approximation, there are other very clear clients with similar problems: crypto-exchanges, exchangers, wallets, money transfer services, etc. The "Blue Ocean" are, of course, the representatives of the GIG-economy: freelancers, independent contractors, makers and doers. They should work with SMEs first (and not second or third) as they are the driver of the new economy. While retailers - their employees, partners and customers - will come after them. Clayton M. Christensen, who coined the term ‘disruptive innovations’, in The Innovator's Dilemma analyzes how large and successful corporations continue to be successful and innovative (this is the "innovator's dilemma" - the lack of motivation to disrupt yourself if you are already big and successful) and concludes that the only way is to completely separate your new business from the old one. The new business should have its own goals and objectives (not overlapping with the old business), its people and corporate culture, even its own separate buildings and uniform. The same story is with blockchain, cryptocurrencies and ICO - trying to shove them into the old framework, processes,

approaches and regulation, you stumble upon the fact that they are rejected and do not take root, they die and damage the "old body". It is only possible to give life to a new economy by giving it a certain degree of freedom (the opportunity to take risks, try, make mistakes and not be punished - the fear of making mistakes destroys any innovations: this is a long-proven axiom). We must admit that the old rules and regulations do not work if we really want to grow something new and useful for society. While the new ones are non-existent, they just have to be created. Therefore, the regulator should regulate with caution: not as a judge, but as a mentor. Regulators are able to kill anything, but no regulator is able to create something - this is the destiny of entrepreneurs. Given that rules are only being formed, players should not be punished for what was committed before their introduction. You shouldn’t regulate too harshly what has not yet appeared and formed - you can only kill it this way. We are for the fact that if regulation comes into conflict with logic, progress and benefit for clients - such regulation should be changed. Rules are not the Bible, they were invented looking up the past (instead of the future). They are created to help achieve some goal, and if the goal is changing, then the rules should change! If something is not clear, it does not mean that it is something bad. This is something that challenges us to study it, to help it grow.

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OVERVIEW OF CRYPTOFRIENDLY CARDS A lot of hype, but almost nothing inside

The new report by Life.SREDA

https://goo.gl/ztyovn

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from Money Of The Future 2H'2016 fintech&blockchain report

Traditional brick-and-mortar banks are often skeptical about challenger and neobanks and think they can easily copy all the perks of newcomers, thereby staying on top of the market. This is not quite right. The difference is the same as between a traditional car stuffed with an electric engine and Tesla. First, innovational solutions are built in a mobile-first paradigm – not branchfirst. This implies a fundamentally different user experience. Second, newcomers focus on new young clients – not the existing ones – which critically changes their brand positioning, language and perception. Generally, these new clients have never been served by traditional banks – either because they are young or from underbanked regions. Third, the level of servicing is entirely different – with neobanks you can ask any questions in any form through a messenger (as if you asked your friend) and get an answer immediately. Therefore, it is fundamentally wrong to treat neobanks as just another channel of service delivery. Neo and challenger banks are complementary to a variety of fintech sectors (e-wallets, P2P and online lending, PFM/PFP, mPOS-acquiring), which creates a wide range of opportunities for M&A, partnerships ad synergies. E-wallets generally have poor functionality (ApplePay, SamsungPay, AndroidPay) and difficulties with customer

retention and scalability (AliPay, Paytm). Direct banks (CapitalOne, MetroBank, SBI, etc.) are slightly outdated technologically and need a boost, also being geographically limited. P2P and online lending platforms are strong in terms of margin and growth, but they experience ever-increasing costs of customer acquisition. They need financial info about prospective clients in advance in order to decrease credit risks, and about existing clients – to retain them. Neobanks can help them here. PFM/PFP services do not get as much attention as neobanks. However, they could provide these banks with differentiating products and a better understanding of clients’ needs. mPOS-acquiring solutions (Square, SumUp, iZettle) collect large databases of merchants and their customers (purchases, cards, contacts), which they could use to deliver value to these customers (except for a raw Square.cash product, they have not used these opportunities yet). There is a lot of debate on the emergence of fintech-banks. While up to today traditional banks accounted for the majority of acquisitions of fintech companies, today the functional diversity of fintechs is wide enough to build a fully-fintech bank with a large enough customer base to compete with incumbents. The main question about these fintech-banks is what will play

the role of a nexus of all these separate services. From the technological point of view, BaaS-platform is a clear winning solution. And a user interface is where neobanks come upon the stage. Neobanks have already started to feel their way in this field. The majority of newcomers (Tandem, Monzo, Starling, N26) announced they have been working on open API. mPOS-acquiring German startup SumUp integrated with neobanks Fidor (Germany) and Holvi (Finland). American Moven integrated with Commonbond, a student online lending service. Neobanks N26 (Germany) and Monese (UK) – with online remittance services Transferwise and CurrencyCloud accordingly. Another new trend for modern banks is crowdinvesting (equity crowdfunding). During the last half year two British challenger banks, Tandem and Monzo, crowdfunded £1M each from their own perspective clients on Seedrs and Croudcube platforms accordingly. The market perceived these cases very positively because they imply that Tandem and Monzo had not just got a one million financing, but that they infected prospective clients by the idea so much that those were ready to risk their own money to help build the product. The growing competition and attention to the sector is evidenced by a number of acquisitions (Rocketbank by Russian Otkritie, Fidor by French BPCE, Holvi by Spanish BBVA) and launches of proprietary products (GSbank by Goldman Sachs, Indian Digibank by Singaporean DBS, JP Morgan’s activity in Indonesia), though these products have not shown yet any advantages over neo and challenger banks. 25

Audience-targeted neobanks are another interesting trend: Monese for London’s expats, Danish Ernit and Singaporean Yololite for families, British Loot and Hong Kong's Neat for students. There are great opportunities for online banks for SME, for example, existing Holvi (BBVA), Tochka (Otkritie) and new players Anna, Tide and Civilized bank (all from the UK). Client communications are also subject to innovation. Despite well-known messengers and video calls, neobanks start using chat-bots (Tochka, Digibank) and integrate with artificial intelligence applications (Siri – N26, Monzo, Alexa – CapitalOne). Generally speaking, the most mobile banking activity is focused on the intersection of two segments: the youth (18-29 old) and emerging markets (especially unbanked ones). Geographically, there is a number of interesting cases in the USA and Canada. The demand in Brazil is high. There is little neobanking activity in Asia, which spurs Asian banks and investors into looking for solutions abroad and thinking about how to bring these solutions into the region. Europe is a leading region with the UK being a clear world leader in the sector, thanks to Monese (55K mobile app downloads and £41M in transactions), Tandem (got a financing of £22M with valuation of £65M), Monzo (35K clients on the waiting list), Starling (finished a $70M financing round), Atom (acquired a design bureau Grasp and now in process of raising £100M for mortgage services).

Atom, Tandem, Monzo and Starling have already received a special new license. Scandinavia also offers interesting projects, such as Danish Lunarway and Ernit, Swedish Tink (raised $10M from SEB Ventures, has 300K users, planning to expand into Europe), and Finnish Holvi (reportedly, sold to BBVA for $80M; is planning to expand, too). German N26 (200K users in eight countries, banking license) raised $40M from a pool of investors led by Hong Kong’s Horizon Ventures. However, there has been a growing number of negative responses on their client support. In the USA we have VaroMoney ($27M in financing and promising PFM functionality) and ZeroFinancial. The boost of fintech activity in Canada is noticeable, including neobanks (Koho with 7K clients on the waiting list and EQbank). Asia has little to show: Neat, Yololite, Vietnamese Momo and Timo, Russian Tochka and Rocketbank, Pakistani Finja. As already said, Brazil is the most interesting market today. After the success of NUbank ($52M and $80M rounds in 2016, $500M valuation, 1M clients on a waiting list and 300K in the process of verification) new players emerge, such as Neon.

the Internet and 4G users in Pakistan and Brazil. Some cases mentioned below during the year truly overcame our expectations and thoughts on the sector and despite the fact that retail banking remains in the top banking sectors, which provide a relatively positive experience, some consumers continue to actively consider their choices. And 2016 has really become a powerful year that enjoyed another taken stake from banking profits. While banks have always been looking to control the financial services industry, with the rise of new incumbents the situation has changed drastically. This year banks and banking institutions looked at how they could collaborate with new incumbents so as not to lose the links in the value chains that make them so powerful.

Socio – demographic changes Starting from the foundation, this year we saw a continued growth of share of mobile banking users among mobile phone users with almost 300% growth in mobile banking users from 2009 to 2016 and continued expansion of usage with almost doubled amount of users from groups of 30 – 60+ years old during the same period of time. (figures below) THE SHARE OF MOBILE BANKING USERS AMONG MOBILE PHONE OWNERS IN THE UNITED STATES FROM 2009 TO 2016. The statistics below represent almost 300% growth in mobile banking users amount from 2009 to 2016.

In terms of launching activities, we see an even stronger dynamics compared to the last year, now new digital banks are more concentrated and focused on launching banking services for specific audience by geo or demographic factors, like Hong Kong-based students and millennial or immigrants and unbanked workers in the UK or digitally covered 26

Once again, the distribution of mobile banking users continued to grow, and now, there is almost a doubled amount of users in categories 30-44, 45-59, 60+ compared to 2012. Consumers in 2016 continued to rely on multiple channels when prospecting, with the corporate website and online comparison sites most relied on. More than last year, 58 percent of bank customers use mobile devices often when prospecting or seeking support. Out of the average 17 interactions per month made by a customer with its main bank, seven are through on-line banking and three are through mobile/ tablet. Emerging markets, where the average of total monthly interactions

is 21, display an even higher propensity to use digital channels. The appeal of virtual banks – which represented the largest net migration in the US and the second largest in Canada – reflects consumer’s value focus. Neobanks and challengers target customers whose top banking intention is simple and seamless transactions with lower fees. What is interesting here, the tendency of major fintech banking start-ups to go with financial institutions that are able to facilitate or substitute certain services in their value chain in a more cost-effective manner was a success and a big thing this year.

DISTRIBUTION OF MOBILE BANKING USERS IN THE US FROM 2012 TO 2016, BY AGE GROUP. The Statistics below shows the usage of mobile banking services in the United States from 2012 to 2016, by age group. We see almost doubled number of users from the roups of 30 – 60+ which certainly represents a market growth.

NUbank (Brazil) Nubank a financial technology start-up based in San Paulo, one of the most notable banks from Brazil in 2016 received a $52M financing round led by Mr. Thiel’s VC firm - Founders Fund. The new investment valued Nubank at approximately $500 million, significant for a company less than three years old. Nubank, which was founded by a former Sequoia Capital partner, David Velez, and provides a digital credit card for smartphones, is trying to take customers away from Brazil’s highly profitable banks, which have long seemed untouchable. More than one million Brazilians have applied for the card and approximately 300,000 are on a waiting list while their credit history is examined. The popularity is linked with the current deepening recession in Brazil and fact that the average annual credit card interest rates in Brazil have risen in 10 of the last 11 months, reaching 99 percent in November, but Nubank has not changed its 7.75 monthly interest rate in over a year. It also hopes that being digital both reduces overhead and results in better customer service. Banks, after telecommunications companies, usually generate the most customer complaints in Brazil. That has helped its popularity here grow .

INTERACTIONS BY CHANNELS How many times do you usually interact/get in touch with your main bank, on monthly basis using the methods listed? (numbers of interactions)

Neon (Brazil) In July 2016, Neon Bank was launched in Brazil [2], an app-based banking service that promised to let young Brazilians leave behind the frustrations of branches, bureaucracy and hidden fees. The bank’s iOS and Android app uses biometric facial recognition technology from US vendor Daon so that customers can ditch usernames and passwords and log in and authenticate transactions by taking selfies with their phones.

*Base = 9,000 (Total retail banking respondents in12 key markets: Australia, Brazil, Canada, China, France, Germany, Indonesia, Italy, Spain, UK, US **Other Digital Channels = Video chat and Instant messaging is certainly represents a market growth.

The app has usual features associated with mobile banking, allowing users to check their balance, make 27

transfers, pay bills, receive payments, categorize their spending habits, and create financial goals. As it aims to sign up 100,000 users across Brazil in its first year, Neon is also stressing that the bank is bidding to help customers with their finances by charging no monthly or annual fees, flat rates for interbank transfer transactions, and offering no lines of credit. Neon also became the first bank in Brazil to partner with Gemalto the world leader in digital security, to deliver innovative Visa Quick Read debit cards to its customers. This innovative card design groups together important information, including account number, expiration date and security code, simplifying online payment with one unique entry. Neon is the first to issue a card with this new, friendly format in Brazil .

Monese (UK) In July, Monese, the UK banking app for immigrants and expats, finally landed on iOS. A Monese account provides a fully-fledged ‘current account’ interface (including a bank account number), low-cost international money transfers, and a Visa debit card. You’re also able to make cash deposits and withdrawals, and store money in multiple currencies. What’s especially interesting about this milestone, isn’t that iOS demand has been strong, but how far Monese has been able to get to without support for Apple’s iPhone. According to some press releases, 55,000 people have installed the Android app since its launch late last year, moving £41 million through Monese. To put the latter figure into context, £12 million was transacted this July, with the startup growing 30 per cent month-on-month. Leaping ahead, we should note that in January 2017 Monese raised $4.2M in a seed round and $10M in Series A (Anthemis Exponential Ventures, Korea Investment Partners, Seedcamp among investors).

Monzo (UK) For startups as Mondo, this year was particularly memorable. At the beginning and end of the year, it landed two funding rounds. At the beginning of 2016, Monzo received almost £10M in funding from Passion capital and an-gel group of investors, at a valuation of £50M. With a huge success of their beta launch, that gave a start to sending out 1000 cards to people at the front of its 52000-strong waiting list, this financial support should definitely help Monzo continue to grow and keep up with their overwhelming demand. Later the same year, Mondo raised £1 million in a record one minute and 36 seconds on crowdfunding platform Crowdcube. Mondo was forced to suspend its initial launch date for the crowdfunding after a rush of applicants from eager investors overwhelmed Crowdcube servers. Up to 6000 people had registered to take part in the raise, announced last month as part of a £6 million funding round. On a day, 1861 people invested an average of £542 and will share 3.33% equity in the soon-to-be bank . But the biggest achievement was the fact that Monzo finally has been granted a UK banking license ‘with restrictions’ by the UK regulators FCA and PRA. This means that its beta testers can now, in theory, begin switching to a Monzo current account and use the startup to do a lot more of their banking as the company readies for a full banking launch early next year. Despite the fact, that Monzo is the latest of the four UK challenger banks - Starling, Atom, Tandem, that received a license, still, Monzo – is the youngest company, at 18 months old, ever to be granted a banking license . Finally, in October, Monzo, as well as N26, released an Apple Pay and Siri integration on iOS10 to make it easier to send and receive money. According to Monzo, once users authorize Siri to access their Monzo data, there are multiple command users can use to send money to contacts already on Monzo.

Starling (UK) This year, Starling made 3 big things that are strong enough and show solid traction of strategic activities taken seriously. At first, Starling raised $70 million from Harald McPike, the founder of Bahamas-based quantitative investment manager QuantRes . At second, Starling recruited a number of industry heavyweights, like Victoria Raffé, Marcus Traill and Craig Mawdsley who joined as non-executive directors, alongside with Mark Winlow and Steve Colsell, who were appointed earlier in 2015. Ms. Raffé spent two decades at the Financial Conduct Authority after holding a number of senior positions at Fidelity, Prudential and KPMG. Mr. Traill has held a number of senior positions at QuantRes, alongside Mr. Mawdsley. Mr. Colsell has served as Chief Financial Officer within divisions of Lloyds Banking Group. At third, Starling Bank was finally granted a banking license by the Prudential Regulatory Authority (PRA) and the Financial Conduct Authority and was inviting prospective customers to sign up ahead of a formal launch in January 2017. The bank unveiled a new brand identity and Website and a promise to streamline the way consumers manage their money .

Atom (UK) Atom Bank this year concentrated on other businesses compared to rivals. Atom is one of the first challengers, which obtained a license, and this year was more into operational projects. The mobile-first bank made its iOS app available to users who pre-registered their interest. However, this is still a very limited launch, restricted to a single product: a fixed term savings account offering an albeit fairly competitive interest rate. But the big news is that Atom announced its first acquisition: Grasp, 28

a design and development house based out of the North of England. Terms of the deal are not being disclosed. Grasp had already been working with Atom as an outside agency, creating the “shop window” for Atom. As part of the deal, the head of Grasp, Brian Jobling, became Atom’s business development director. In Atom’s view, that includes creating mobile apps as the primary form of communications between the bank and customers; but also by incorporating gamification, 3-D visualizations, and other features to get customers to use its services more.

away 5,000 single shares to so-called co-founders who it wants to help shape the bank by giving feedback on how it should work. Investors in Tandem’s crowdfunding were able to buy-in at the same valuation and price as its VC backers and could invest from as little as £15. The raise followed huge interest in fellow digital challenger bank Mondo, which also hit its £1m target on Crowdcube in just 96 seconds, and experienced its own technical issues due to the surge in interest . Later, Tandem raised £22 million at a £65 million valuation from investors including eBay founder Pierre Omidyar’s Omidyar Network. Knox said the £22 million and the £1 million from the crowdfunding went towards launching the bank, something that was scheduled for the end of this year. Interestingly, they raised money again on January 4, 2017, $43M this time, from House of Fraser, which wants Tandem to deliver financial solutions for its clients .

Tide (UK) Tide is a mobile banking app for SME. With Tide businesses can get a fully featured current account and business MasterCard in just 3 minutes, which is a solution for a critical problem of a generally time-consuming account setting process for SMEs. In addition, Atom in September mentioned that they were raising £100 million ($129.6 million) from its shareholders to break into mortgages, according to Sky News. The primary reason they want to raise funds so it has enough regulatory capital to break into new products such as mortgages, as well as fund losses, Sky News claims.

Tandem (UK) Tandem, a neobank headquartered in London this year had two financing campaigns. It first raised £1m in just 20 minutes through crowdfunding platform Seedrs. Tandem has already given

Tide raised a $2m seed round from Passion Capital and some other investor this summer . However, it launched only at the very end of 2016, on iPhone, Android and the web. It also integrated with Xero . Tide’s clients’ deposits are kept in a ring-fenced account at Barclays under an FCA-regulated e-money license by PrePay Solutions. Funds are held under an e-money license, not a banking license. The primary difference between an e-money license and a banking license is that banks can take investment risks with the money held in their accounts without any prior knowledge of the business owner, however, e-money license-holders can not do this.

Loot (UK) Headquartered in London, Loot offers a pre-paid card linked to a money management app. The startup has chosen not to apply for a banking license, using instead an E-Money license and partnering with other companies to offer banking services. In June 2016 Loot raised £1.5 million in Series A round from Austrian fund Speedinvest, which backed Finnish startup bank Holvi before it was acquired by BBVA and Global Founders Capital. Later, in November, the company topped up the funding round with an extra £2.5 million . It was going to launch the new version of its app later that month and begin a marketing push after that. At that moment, Loot had 5,000 customers who were supposed to move to the new service, and a waiting list of 20,000 people.

CivilisedBank (UK) CivilisedBank, another British business and retail neobank, first announced its plans to launch back in 2015 . While it reportedly raised around £10M in financing that year, it has not launched up to now. In June 2016, the bank filed for banking license with FCA and PRA, saying it expects to receive the license and launch early in 2017 .

Fidor Bank (Germany) Fidor Bank, Life.SREDA’s portfolio company had a very dynamic and positive year in terms of business development. Straight after it has launched its first physical product in the UK, a contactless debit card, in July 28th it was acquired by BPCE group. Fidor is one of the first breed of new digital banks, which established a rep29

utation in banking societies as a strong disruptive innovator, utilizing a full range of social media, crowdfunding, and P2P lending technologies and digital currency services. Despite this, Fidor continues to operate as an independent business following the acquisition .

to undercut and outmaneuver bigger banks by offering consumers financial services directly from their smartphones and tablets. Such companies have lured younger customers with speedy credit approvals, and slick, modern user interfaces for their apps .

ment firm Creades, and SEB Venture Capital, the venture arm of Swedish bank SEB. Tink works only in Sweden and already has 300,000 users on Tink 1.0 and is currently running beta tests in 10 additional European markets for international expansion later this year.

Also, Fidor signed a partnership with Telefonica Germany to launch a mobile banking service “O2 Banking” using white – label technology supplied by Fidor. Under the partnership, Fidor Bank provides 02 with a banking license that is valid throughout Europe, along with individual customer, card and transaction services.

Another feature that N26 launched this year was introduction of international transfers in foreign currencies directly from the app, fueled by TransferWise to make you pay less in fees. And everybody wins as TransferWise gets more users and Number26 gets more features. This is just one of the first steps as the company wants to create a FinTech Hub with other services. You can expect savings, investment, credit and insurance products. TransferWise is the first of these integrations.

The new capital was supposed to be used to help the startup expand internationally and, by taking advantage of new European banking technical standards, evolve its product beyond a ‘read only’ personal finance app to something Tink CEO Daniel Kjellén is calling a virtual bank.

Later in October, Fidor signed another partnership with Abu Dhabi Islamic Bank, to launch the region’s first “community-based digital bank”. “The features and services offered by the new offering are based on customer insights gained from intensive research. As we strive to constantly innovate with our offerings, we believe Fidor is an ideal partner to help us introduce this revolu-tionary solution,” Al Mahmoud added.

N26 (Germany) For N26, a Berlin startup that offers financial services directly to consumers, this year was quite bright. First, according to the company’s press release, it has acquired more than 200.000 customers across 8 European markets in 17 months since its launch in January 2015. And already in early 2016 raised a $40 million in Series B round led by Horizons Ventures. This funding round is an important milestone in order to become a major consumer-facing bank in Europe. Existing investors Peter Thiel’s Valar Ventures, Earlybird Ventures and Redalpine Ventures re-invested as well . Right after the investment it received a German banking license that lets it offer a fuller range of products across Europe. The license should let it offer savings, investment, credit and insurance products from partners. The approval for the three-year-old company provides another regulatory stamp of approval for fintech startups, which seek

Finally, the last feature was integration with Siri for customers to request, send and receive money transfers to and from their fellow N26 contacts via Apple’s iPhone personal assistant. “Siri, send €25 to Karen through the N26 app, please.” Basically, according to N26, all you have to do is instruct Siri to send or request a certain amount and explicitly ask to use the N26 app.

Tink (Sweden) Sweden’s Tink, a mobile banking app, has raised $10 million in Series B funding in a round led by Swedish invest-

Launched in Sweden in 2013, and available for iOS and Android, the first version of Tink’s mobile app lets you keep a handle on your personal finances, by linking the app to banks accounts and credit cards. From this ‘read only’ data it presents insights into spending habits via a news-feed style stream in a bid to make it fun and useful.

Holvi (Finland) In March, Spanish banking giant BBVA made another M&A play as it was looking to companies like Holvi to help bring new business and to build up alternative revenue streams. Holvi was founded in 2011 and had raised just over $4M from investors that included Seedcamp and Speedinvest. It's one of a league of startups that have been building a range of services for businesses to run their own financial operations and their own banking online. Its products include an online sales platform, an invoicing platform and a cashflow tracker. Even though the deal was not disclosed, we estimate an acquisition price of around $80M. For Holvi, it gives the company more scale and financial muscle to expand its operations to more markets going down the line. “We’ve found the ideal owner in BBVA – a bank with the understanding of the digital world to give us the necessary room to grow, and then the scale and expertise to underpin that growth with sound foundations,” said Johan Lorenzen, CEO of Holvi, in a statement. 30

Ernit (Denmark) Ernit is a provider of a digital piggy bank for children, which has been selected as one of the 10 out of 1000 companies to attend the prestigious accelerator program Techstars in NYC with help from tech giants such as Google, Microsoft and Amazon. The company enables parents to teach children how to give, save, and spend money wisely. It consists of an app and a smart piggy bank.

The app enables children to set savings goals and allows parents and others to contribute money. The electronic piggy bank provides a physical way for kids to connect with their savings. They can hear when money is added, and the light on their piggy’s snout lets them know how far along they are toward reaching their goal. Even though it's still raising its round and expected to close by the end of 2016th, we wish them a good luck and success.

Lunar Way (Danmark) Lunar Way is another Danish neobank launched in 2015. As many other mobile-first banks, it is partnering with local banks in the countries in which it operates, a strategy it believes has enabled it to get to market and innovate faster. It offers a mobile app that lets you open a banking account, receive a debit card (MasterCard), get a real-time transaction feed of your spending, view your transactions by shopping category or retailer. You also can set saving goals through the app, and pay bills. In December 2016, Lunar Way disclosed

€4.2 million in new funding. Leading the round was SEED Capital Denmark, along with unnamed angel investors. The partner bank Nykredit (the biggest mortgage lender in Denmark) is also a minority shareholder.

Koho (Canada) Koho, a Vancouver – based fintech startup, has closed a second round of $1M seed investment. The round was led by Power Financial Corp with the participation of Ferst Capital Partners, Hedgewood, Highline, Stanley Park Ventures . Koho is a developer of a banking platform. The company is developing a banking service, which is aimed at a low-cost and modern alternative to traditional bank accounts. The company has partnered with a federal financial institution to offer customers a banking card, Visa prepaid card, web app and mobile app. The company offers standard banking functions, which include direct deposit, purchases, bill pay, and ATM use without monthly fees. In addition, private beta was also released in mid-2016 to a select few users for early testing and feedback and should roll out to the remaining waitlist of more than 7,000 Canadians over the coming months .

EQ Bank (Canada) Equitable Bank, the Canadian alternative-mortgage provider, announced its first digital product under the brand EQ Bank, online banking business with a savings account that pays more than triple the interest rate of other branchless rivals. It is the first consumer play for Equitable, which has no branches, with roughly $10 billion in assets (measured in U.S. dollars) and converted to a bank from a trust company three years ago. The strategy of launching a digital-only offshoot of an established brand has been used in the U.S. by Custom-

ers Bancorp in Phoenixville, Pa., with BankMobile (during the late-1990s dotcom boom, Bank One, a predecessor to JPMorgan Chase, had a short-lived online-only unit called WingspanBank.) Equitable likely won’t be the last institution to take the approach either, at a time when consumers are increasingly clamoring for digital services before walking into a branch or calling an 800 number. In Canada at least, the numbers point to a warm embrace for a digital-only offering. According to a report by the Canadian Bankers Association, 55% of that country’s population chooses to do most of their banking online.

GS Bank (US) In April, Goldman Sachs announced it had launched a GS Bank, an internet– based saving bank. The bank was born out of Goldman’s acquisition of GE Capital Bank, the online retail bank previously run by General Electric’s capital arm. The launch of GS Bank and acquisition of GE Capital Bank is a move by Goldman to diversify revenue streams and strengthen liquidity in a market where traditional investment banking isn’t doing as well as it has in the past. Currently, GS Bank has total deposits of around $114 billion, which pales in comparison to the total deposits of large consumer banks like Wells Fargo and Bank of America. The thing here is to not expect to see a national network of GS branches opening up to support the new bank. Instead, GSB represents the most mainstream manifestation trend toward online – only banking. Our opinion on a business side is clear and straight forward – a more diverse portfolio of businesses is less risky and less likely to go down 31

by a single incident. Pushing this plan forward, regulation departments forcing investment banks to merge with depository banks or launch their own .

Varo Money (US) Varo Money, a developer of a mobile-banking app, received a more than $27 million in its second round from the New York firm Warburg Pincus. Funds are primarily to be used for product development, to launch its debit card, deposit, and lending products via a mobile app and continue development of digital financial coach that gives offer proactive insights, analysis of spending, and real-time budgeting. Led by Colin Walsh, a veteran of American Express Co. and Wells Fargo & Co., Varo is developing a mobile-banking app offering deposit accounts connected to budgeting tools and other digital financial services. It is also seeking to partner with a bank to provide accounts. Varo plans at first to rely on the banking partner to back the accounts to which its software will provide access. What sets the company apart is its willingness to consider seeking its own bank charter so it can offer the deposits itself. That would be a shift within the financial technology industry, which has steered away from traditional banking with its heavy regulations.

Zero Financial (US) Zero, a startup building a new mobile banking experience with transformative functionality, economics and features, announced in September it raised a $2.5 million seed round led by ENIAC Ventures, with New Enterprise Associates, Nyca Partners, Lightbank, and Middleland Capital. Launching to the public next year, the Zero mobile banking experience is powered by the Zero app and Zerocard, a Visa card that acts like a debit card and earns credit card rewards. Zero gives customers banking with better cash rewards on purchases, higher

interest on deposits, and none of the typical fees charged by traditional banks. “Many people don’t want to take on debt and don’t have time to worry about multiple credit card statements, balances and due dates in the name of chasing down rewards, yet they still don’t want to give up the opportunity to get cash back on their spending. Zero is the first modern banking experience to solve this,” said Zero Founder & CEO, Bryce Galen .

Neat (Hong Kong) In March 2016, the new bank Neat, co-founded by former Citibank veteran David Rosa, started testing its technologies and receiving guidance and mentorship as part of the territory’s SuperCharger fintech accelerator, which is backed by Standard Chartered and Baidu. Much like the UK’s Mondo, Neat operates from a smart budgeting and savings app with a companion card and uses facial recognition technology to authenticate customers at log-in. Neat also uses artificial intelligence and machine learning to gain deeper understanding of its users. While the app is certainly open for anyone to use, the company is specifically targeting university students and young professionals. Not only do they tend to be early adopters, the company’s market

research also revealed that university students tend to need more help with budgeting.

Finja Pvt (Pakistan) This is a truly interesting case how Finja, a Pakistani FinTech startup has raised $1 million in a $1.5 Million bridge seed financing round led by Vostok Emerging Finance. Finja is a developer of digital banking services in Pakistan. The company is developing a customer-facing mobile wallet in collaboration with Finca Microfinance Bank. It aims to change payment behavior and help people handle and manage money digitally. These years, Pakistan's rapidly growing 3G/4G enabled smartphone subscribers, supported by a progressive regulatory framework, are a game changer for providing digital financial services to the country’s 200 million under-banked population. There is an opportunity to transform lives by reinventing business models and removing friction through digital interventions.

DATA USAGE ON CELLULAR NETWORKS IN PAKISTAN

Source: https://propakistani.pk/2016/05/19/mobile-users-consumed-30149-terabytes-of-data-in-onemonth-infographic/ 32

PROGRESS ON FINANCIAL INCLUSION INDICATORS

AREA

INDICATORS OF ACCESS TO CREDIT

JUN-11

JUN-12

JUN-13

JUN-14

JUN-15

Gross Loan Portfolio (PKR billion)

28

34

47

61

81

No. of borrowers (in thousands)

2,030

2,232

2,635

3,144

3,507

Outstanding SME Finance (PKR billion)

271

258

234

253

261

No. of SME Borrowers (in thousands)

157

149

144

134

158

Agricultural credit disbursement (PKR billion)

263

294

336

391

516

1,445

1,960

1,990

2,151

2,185

Total Assets (PKR billion)

560

711

903

1,089

1,495

Deposits (PKR billion)

452

603

771

932

1,281

Outstanding Housing Finance (PKR billion)

62

57

52

53

59

95,553

87,059

79,478

74,894

70,498

MICROFINANCE

SME FINANCE

AGRICULTURAL FINANCE

No. of Agri borrowers (in thousands)

ISLAMIC FINANCE

HOUSING FINANCE No. of borrowers (in thousands)

Source: http://www.unescap.org/sites/default/files/Pakistan%20Country%20Paper%20ver%2018032016.pdf

RocketBank (Russia) In May, Otkrytie, a major Russian bank, announced that it has fully acquired a mobile banking startup Rocketbank, Life.SREDA’s portfolio company. Rocketbank offers such services as free card loading and cash withdrawal at ATMs worldwide, money transfers, expenditure analysis, a discount guide, application support, and an air miles program. Users can also pay a person without having to know their bank details by picking who they want to pay from their phone address book, enter an email address, or e-wallet number.

The move follows a strategic partnership inked in December 2015. “This partnership has already allowed Rocketbank to attract customers more efficiently, thanks to our strong brand, and accelerate the development of its product. On the other hand, Rocketbank is providing us with benefits in terms of technology, service and customer communications,” Otkrytie’s CEO Elena Budin stated.

Yololite (Singapore) What is YoloPay and who is it for? YoloPay is a Mobile-App based payment solution linked to Visa prepaid cards designed for multi-person payment systems used by households and businesses. YoloLite is the first product which is designed for families in Singapore and Hong Kong to disburse funds, manage and allow dependents, including domestic help, to spend using their very own Visa prepaid cards.

Families can now take more control of how money is spent. Move money around quickly and safely. And then spend anywhere in stores, for travel or online. All using your phone which is linked to your very own set of Visa prepaid cards. And soon coming, AndroidPay and also a series of cool wearable devices. Sign up in minutes and get going. You only need to send us a picture of your ID card, front and back, after you have tested YoloLite and have decided you want to use it. And earn loyalty on everywhere you spend. Borrow small amounts in emergencies. Protect what you buy. All new features exclusively offered with YoloLite. 33

R E G

S K EN N A LL B O HA E N DC N A NKS BA

from Money Of The Future 1H'2016 fintech&blockchain report

Since its rise in 2008, fintech has been touted as a major threat to the traditional banking processes, and one of the disruptive tech’s pioneers has been Fidor. Fidor Bank with more than 350000 clients is a digital bank founded in Germany in 2009. It was revolutionary at launch because it focused on letting its customers actively participate in the bank’s decision-making. It made its foray into the UK market in 2015. Speaking at the WIRED Money conference in London, Fidor Bank’s CEO Kröner quipped his firm is the «world's oldest fintech bank». It acts as a «holistic financial service marketplace» and mixes fintech solutions with «more traditional solutions», to make it «far more accessible for the customer». «Our key mission is integration in whatever way possible», said Kröner. «Collaboration, co-management...it's open and it's efficient». Disruption must be «mass market relevant», he continued, and Fintech is not disruptive because it's not used by a mass market today.

well as ensuring its services are borderless and have «no geographical restrictions». Fidor has a German license that also applies across Europe, and treats its community of users as «co-managers».

«If you treat your customer as a co-manager, they act as a co-manager», says Kröner. «We always speak to our community before we change any of our products. We need to improve our interest rates — we ask them what we do. We ask them what the product should contain, what we should call it». Because of this, Fidor says it has fewer customer enquiries because of peer-to-peer sharing, fewer costs, higher loyalty and is able to educate its customers on finance. «Innovation means acceptance by the customer. There is no innovation without acceptance by the customer». UK-based Tandem has raised £1m in just 20 minutes through crowdfunding platform Seedrs.

The high demand from pre-registered investors led to a «momentary glitch» on the Seedrs site. Tandem has already given away 5,000 single shares to so-called cofounders who it wants to help shape the bank by giving feedback on how it should work. Investors in Tandem's crowdfunding will be able to buy-in at the same valuation and price as its VC backers and can invest from as little as £15. The raise follows huge interest in fellow digital challenger bank Mondo, which last month hit its £1m target on Crowdcube in just 96 seconds, and experienced its own technical issues due to the surge in interest. Before this Tandem has raised £22 million at a £65 million valuation49. London-headquartered Tandem, which has no branches and will operate simply through an app, raised the cash from investors including eBay founder Pierre Omidyar’s Omidyar Network. Tandem founder Ricky Knox told: «Pierre Omidyar has a pretty awesome fund that’s trying to improve people’s lives. It’s a philanthropic impact fund. They’re investing in us because we’re pretty serious about our mission of making people actually better off rather than worse off as their bank». Tandem got its banking license last year but is yet to launch. It plans to have a data-heavy approach to banking that can ensure customer are getting the best deals. Berlin-based startup Number26 with 200000 clients just raised a $40 million Series B round led by Hong Kong based Horizons Ventures. Battery Ventures, Robert Gentz, David Schneider and Rubin Ritteralso also participated in today’s round. Existing investors Peter Thiel’s Valar Ventures, Earlybird Ventures and

Sopnendu Mohanty (MAS), Brett King (Moven), Matthias Kröner (Fidor) and Ricky Knox (Tandem) at MAS event organized by Life.SREDA.

The bank’s mission is fourfold — creating, better banking, digital and «world». This involves «customer centric banking», «driving innovation as an entrepreneur», focusing on speed, data and mobile offerings, as 35

Redalpine Ventures re-invested as well. At heart, Number26 provides a free current account with a MasterCard. But compared to traditional brick-and-mortar banks, Number26 has a few nifty features. For instance, the mobile app is a well-designed native app. When it comes to the card, you can customize it to your needs. For instance, you can receive a push notification for every transaction above a certain amount. Or you can temporarily disable online purchases, ATM withdrawals or foreign transactions. You can re-enable everything later. The startup has partnered with Wirecard for the back end. Wirecard has a banking license and actually manages your money. Number26 sits on top of Wirecard and handles all the consumer-facing features. Technically, Number26 isn’t a bank per se — or not yet, at least. The company has expanded to six other European countries (France, Greece, Ireland, Italy, Slovakia and Spain) and partnered with TransferWise for international transfers in foreign currencies.

UK-based startup quasi-bank Loot has raised £1.5 million ($2.2 million)52 from Austrian early stage fund Speedinvest and is relaunching its app as a broader, millennial-focused banking product pitched at «Generation Snapchat». The startup is a prepaid card linked to a money man36

agement app that lets people track spending and gives them insight into what they are spending their money on. Loot, founded by 22-year-old recent graduate Ollie Purdue, was originally pitched at overseas students because of its quick account opening time. It launched its service last September to coincide with the new university year. But Loot is now launching a new version of its app targeted at millennials more generally, not just students. The new app has features tailored to travel, shopping, and money management, meant to appeal to young people. Purdue says: «We are focusing our travel features on people who love impulse trips. You don’t have to worry about cash, you don’t have to worry about a spending card, you just take your bank account abroad with you».«And we focus our money management on people who just want to know more about where their money is going. Maybe they keep checking their bank balance and it’s surprising or they don’t know what’s going on so they just want to know a bit more about where it’s going». Purdue says Loot currently has 5,000 customers but is hoping to reach 50,000 by the end of the year after broadening out its service.

investment firm Creades, and SEB Venture Capital, the venture arm of Swedish bank SEB. The new capital will be used to help the startup expand internationally and, by taking advantage of new European banking technical standards, evolve its product beyond a «read only» personal finance app to something Tink CEO Daniel Kjellén is calling a virtual bank. Launched in Sweden in 2013, and available for iOS and Android, the first version of Tink’s mobile app lets you keep a handle on your personal finances, by linking the app to banks accounts and credit cards. From this ‘read only’ data it presents insights into spending habits via a newsfeed style stream in a bid to make it fun and useful. Broadly speaking it might be compared to Mint and Level Money in the U.S., and Numbrs, Bankin’ and Money Dashboard in Europe. «Today we're live in Sweden with 300,000 users on Tink 1.0 and are currently running beta tests in 10 additional European markets for international expansion later this year», adds Kjellén.

Sweden’s Tink, a mobile banking app, has raised $10 million in Series B funding53 in a round led by Swedish

a startup that may one day take the rare step of seeking its own bank charter54. Led by Colin Walsh,

The New York firm Warburg Pincus is leading an investment round of more than $27 million in San Francisco-based Varo Money Inc.,

a veteran of American Express Co. and Wells Fargo & Co., Varo is developing a mobile-banking app offering deposit accounts connected to budgeting tools and other digital financial services. It is also seeking to partner with a bank to provide accounts. Varo plans at first to rely on the banking partner to back the accounts to which its software will provide access. But what sets the company apart is its willingness to even consider seeking its own bank charter so it can offer the deposits itself. That would be a shift within the financial-technology industry, which has steered away from traditional banking with its heavy regulations.

GE Capital Bank is a move by Goldman to diversify revenue streams and strengthen liquidity in a market where traditional investment banking isn’t doing as well as it has in the past. Currently, GS Bank has total deposits of around $114 billion, which pales in comparison to the total deposits of large consumer banks like Wells Fargo and Bank of America. The downsides to Goldman’s particular offering are considerable56 — they don’t have a checking account and there’s no ATM access, so this couldn’t actually replace a traditional bank — but other online-only operators have a more robust set of products, and

Goldman Sachs launches GS Bank, an Internet bank with a $1 minimum deposit55. Goldman is opening its doors to the masses with the launch of GS Bank, an FDIC-insured, Internet-based savings bank. GS Bank’s interest rates will be high, giving customers an annual yield of 1.05 percent. This rate trumps the average U.S. saving’s bank yield of .06 percent APY, but is relatively in line with other online rival banks like Ally, which offers 1 percent APY. The bank was born out of Goldman’s acquisition of GE Capital Bank, the online retail bank previously run by General Electric’s capital arm. The launch of GS Bank and acquisition of

Goldman can of course expand over time. What Goldman Sachs has that other online banks don’t is a widely recognized brand name built on excellence in other dimensions of financial services that could help further push internet banking beyond the early adopter demographic.

37

Hong Kong-based Neat to launch banking app that tells how much you can spend today57. The startup partners with banks and uses both cards and a smartphone app. Users only need 10 minutes to set up a bank account, with secure finger print scans and facial recognition. Users can use the app for money transfers, checking account balances and topping up their account. The app can be used for offline and online purchases. Moreover, Neat can also help users save money by making a budget. It even sends out notifications each time they spend, showing them how much they can spend each day. Neat also uses artificial intelligence and machine learning to gain deeper understanding of its users. While the app is certainly open for anyone to use, the company is specifically targetting university students and young professionals. Not only do they tend to be early adopters, the company’s market research also revealed that university students tend to need more help with budgeting.

Atom Bank, which is backed by Spanish banking giant BBVA, has made its iOS app available to users who pre-registered their interest58. However, this is still a very limited launch, restricted to a single product: a fixed term savings account offering an albeit fairly competitive interest rate. In other words, let’s not carried away just yet. Atom says that by

«the end of 2016» it will add current accounts, overdrafts, debit and credit cards, instant access savings and residential mortgages to the list of financial products, all serviced via the app. An Android version is planned too. Also Atom Bank announced its first acquisition: Grasp59, a design and development house based out of the north of England. Terms of the deal are not being disclosed. Grasp had already been working with Atom as an outside agency, creating the «shop window» for Atom. So this is partly about bringing more of that relationship in-house to work on deeper projects. As part of the deal, the head of Grasp, Brian Jobling, will become Atom’s business development director. In Atom’s view, that includes creating mobile apps as the primary form of communications between the bank and customers; but also by incorporating gamification, 3-D visualizations and other features to get customers to use its services more.

One more UK-based startup Mondo must raise at least £15 million ($22 million) later this year to gain its full banking licence60. Mondo, which crowdfunded £1 million in just 96 seconds earlier this year, is in the process of applying for its full license and hopes to have a «restricted licence» within two or three months. Blomfield says the new funding round values the startup at £30 million. This is a sort of probationary licence that allows Mondo to prove to regulators it is ready for 38

a full licence. CEO Tom Blomfield told Business Insider: «The restricted licence is a way of signalling to the market that they are [the Bank of England and regulator Financial Conduct Authority] minded to approve you, so you can then go out and raise the capital you need to launch. It is sort of a test phase».«We will need around £15-20 million to get those restrictions lifted. We are having one or two conversations now but we will leave the real fundraising towards the end of the year». Before this Mondo, the yet-to-launch U.K. banking startup that is creating quite a lot of buzz amongst the London tech scene and beyond, opened its Beta to the public61 — albeit one limited in functionality while the company seeks a full banking license. Mondo offers a pre-paid MasterCard and a rather nifty iPhone app that features the ability to track your spending in realtime, view geolocation-marked transactions on a map,

view spending by category, and get a graphical timeline of your overall expenditure. There’s also the option to send other Mondo members money (ie peer-to-peer payments). The startup will begin sending out 1,000 cards to people at the front of its 52,000-strong waiting list, with many thousands more being issued over the next few weeks. «I feel like we’ve delivered about 20% of the functionality we’ll offer when we’re a full bank», Mondo co-founder Tom Blomfield tells. «We’re targeting peo-

ple who want to get involved early to help build the kind of bank that they’d be proud to call their own. At this stage, you’re joining a mission to improve the state of banking». Mondo also recently bolstered its funding in anticipation of attaining regulatory approval as a fully fledged bank, which I gather is hopefully on track for later this Summer. Passion Capital followed on with a further £5 million last month, adding to the £2 million already invested by the London VC, and an additional £1 million was recently raised via equity crowdfunding. «At the same time, we’re planning to rollout in other European countries, integrate Apple Pay and implement tonnes more useful features like bill splitting», adds Blomfield. Mondo has an open API from the get-go, part of a wider differentiator that’s seeing it build a «full-stack» bank with its own inhouse banking tech in order to offer features that legacy banks struggle with as they are reliant on outdated software and infrastructure. «We’ve had hundreds of people attend our hackathons and they’re now some of our biggest supporters. It’s also great for recruitment!» Blomfield says. Starling Bank has recruited a former regulator and a number of industry heavyweights for its board while raising $70m to spearhead its attempt to move into the UK banking market62. The new digital bank, founded by Anne Boden, the former chief operating officer of Allied Irish Bank, is aiming to lure mobile-focused customers and provide a superior current account service to those offered by the incumbent high street banks. The emergence of Starling follows in the footsteps of Atom Bank and Tandem, two digitally-based challengers that received regulatory approval for launch last year, and heralds a new generation of tech-savvy banks. They are among a host of new lenders trying to break into a market not only dominated by four big names in Lloyds, Barclays, HSBC and Royal Bank of Scotland, but also one with longstanding customer apathy to switching accounts. Investors are drawn to new challeng-

ers for their high growth prospects and their freedom from the burden of old systems. Starling has secured $70m of investment from Harald McPike, the founder of QuantRes, a Bahamas-based quantitative investment manager. Founders Fund, the San Francisco-based venture capital firm Mr. Thiel co-founded, has led a new $52 million financing round in Nubank63, a financial technology start-up based in São Paulo. The new investment values Nubank at approximately $500 million significant for a company less than three years old. Nubank, which was founded by a former Sequoia Capital partner, David Velez, and provides a digital credit card for smartphones, is trying to take customers away from Brazil’s highly profitable banks, which have long seemed untouchable. More than one million Brazilians have applied for the card and approximately 300,000 are on a waiting list while their credit history is examined.

The CEO of Vietnams first Digital Bank Timo, Claude Spiese, tells that his mobile only bank is targeting 50 Millions Vietnamese and claims to be sexy and secure64. «Timo is a digital bank platform just like Moven and Simple — but Timo takes it one step further. Like Simple and Moven, Timo is a digital front end with a licensed banking partner backend. But, whereas Moven and 39

Simple are limited to one financial product (the current account), Timo serves as a digital platform for a full range of banking products, and even non-banking financial products such as investments and insurance. This model allows Timo to focus on the front end and to deliver an exceptional customer experience while the partner financial institutions focus on the back-end and licenses». Their competitor, Vietnam-based fintech startup Momo announced it obtained US$28 million in series B funding from Standard Chartered Private Equity and global investment bank Goldman Sachs65, which is an existing backer. It has over 2.5 million users in Vietnam. Launched in 2014, Momo is an ewallet and payments app that allows users to pay online and transfer money to each other digitally. At selected stores, the app can be used for cashless payments. The company also has a physical network of over 4,000 over-the-counter agents where people can remit money and avail of other financial services through Momo. CEO Pham Thanh Duc says the startup will use the fresh investment to «accelerate Momo’s growth by continuing to invest in the launching of new products and services, expanding bank and merchant connectivity, and extending the nationwide installation of Momo point-of-sale terminals at retail outlets». Goldman Sachs previously invested US$5.75 million in Momo. Standard Chartered, for its part, teamed up with Momo to provide the «Straight2Bank» wallet payments for the bank’s corporate clients in Vietnam. The service enables corporations and government organizations to make payments directly to their beneficiaries via the Momo wallet. There are several unique selling points offered by new banking players, and it presents many amazing opportunities: Mobile first; Cross-sell and up-sell; Virtual financial advisor; Data driven. It is a great opportunity for investors especially Asia to be in touch with innovative

solutions in mobile banking. This can be seen as Life.SREDA VC have achieved prior successes through exits in our first fund — Simple, Moven, Rocketbank. Developing markets like Southeast Asia fit the prerequisites for this to kick off, given their large amount of underbanked and unbanked consumers who have access to smartphones as well as low rates of home broadband and urbanization that make traditional methods inaccessible to them. Beside Singapore in the region, the digital banking penetration is depressingly low, ranging from 13-44 percent in 2014 — even though consumers in their 20s are 50 percent more willing than their parents to try mobile banking. If banks are unable to continue to rapidly innovate and create new, user-friendly and differentiated mobile offerings and effectively advertise and distribute on these platforms, they could lose market share to existing competitors or new entrants, and their future growth and bottom line could adversely take a hit. In other words, banks have to start disrupting themselves by acquiring new technologies and/ or partnering with technopreneurs before they become a part of history. The winners will be the ones that put consumers’ digitalized lifestyles as the core strategy.

KPMG: The game changers ChallengerBanking Results May 2015 https://goo.gl/nljmD

Managing partner at Life.SREDA VC, Singapore-based fintech firm. One of TOP35 the most influential fintech-investors in the world (by Institutional Investor magazine), TOP21 fintech influencers in Europe (by Fintech Magazine) and TOP100 fintech ecosystem builders in Asia (by NextBank and E&Y). Contributor for Forbes, TheNextWeb, European Financial Review, EFMA journal, VentureBeat, TechInAsia, e27, LetsTalkPayments, FintechRanking, FintechNews, and other leading media. Keynote-speaker at Money2020, Rise\MoneyConf, European Fintech Awards, Global Payment Summit, FinSpire, FinnovAsia, Fintech CEO Summit by IFC, Paris Fintech Forum, Global Venture Summit, Fintech Award LatAm, Dot Finance Africa, The Future Of Finance Summit, and many other conferences. Author of «Money Of The Future» annual fintech report.

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