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We are almost in the middle of September already, time passes and news in the FinTech world do not stop! Today we bring you news from the biggest players, such as Revolut which is being audited, JP Morgan buying deciding to buy Renovite, and much more, keep on reading...

Revolut under pressure after internal audit

Revolut has been criticised by a UK regulator for the unacceptably high risk of "material misstatement" in its account auditing.

The Financial Reporting Council (FRC) issued its damning verdict as part of its most recent audit quality inspections. Deficiencies in Revolut's payment processing were highlighted.

The challenger bank recently celebrated its seventh anniversary and the passing of 20 million customers.

However, alongside its rapid growth, the bank has seen a worrying turnover of risk and compliance staff. UK chief risk officer Victoria Stubbs, UK head of regulatory compliance Justine Wootton and UK money laundering reporting officer Mathew Seneviratne have all quit in recent months. Read more here.

Not only is Revolut due to file its 2021 accounts by the end of September, it is also likely to face pressure to invest more in its back office functions. 

    Learn more about Revolut in our deep-dive.


KPMG launches Embedded Finance Hub in Singapore

KPMG is opening an embedded finance hub in Singapore providing support to firms looking to make inroads into financial areas such as payments, blockchain and lending.

The hub is set to run for at least two years and provide incubation support to over 120 financial and non-financial enterprises bidding to enter the embedded finance arena.

KPMG says that its financial services experts will provide best practices and venture acceleration support to participants. Start-ups can also trial their innovations at the hub, gaining feedback from their fellow participants.

Meanwhile, the hub will look to facilitate collaboration between non-finance sector players and financial institutions as they test services as well as provide access to APIs that can be embedded in external channels and applications.

The next phase of the fintech disruption is moving beyond open banking to embedded finance. This unleashes new opportunities to create ecosystems for financial services to develop their as-a-service business and work with corporates to partner for new embedded finance initiatives. This will be improving customer experience and creating new sources of revenue.

Bolt scraps $1.5B deal to acquire Wyre

Online checkout company Bolt has pulled the plug on its $1.5B billion deal to buy blockchain infrastructure provider Wyre.

Bolt announced the acquisition in April, touting its plan to integrate Wyre's APIs, which enable simple and secure crypto to fiat payments, into its platform. Read more here.

However, while the two companies will continue to work together on bringing crypto to Bolt, the acquisition has been canned.

The move comes as Bolt faces up to the tech stocks bonfire. Just weeks after the Wyre deal was announced, the checkout decacorn was forced to lay off a third of its workforce, amounting to 250 people.


Source: C-innovation
    Learn more about M&A in our blog post.

JP Morgan Chase to buy Renovite

JP Morgan has struck a deal to buy cloud-native payments technology firm Renovite Technologies. Financial terms were not disclosed.

Renovite will become part of JP Morgan Payments, which combines the bank's corporate treasury services, trade finance, card and merchant services.

Founded in 2015, California-based Renovite has built six proprietary, cloud-agnostic and payment token-agnostic payments products to help its clients to optimise infrastructure, including switch, reconciliation, security, issuing, ATM and testing. 

The firm has worked with JP Morgan since last year and will now help the Wall Street giant build its next-generation merchant acquiring platform, bolster its payments modernisation strategy and support its journey to the cloud. 

"We are excited to acquire Renovite and accelerate our roadmap for helping our clients stay at the cutting-edge of payments innovation. This acquisition will help us achieve our goal to develop the next-generation payments processing platform globally," says Max Neukirchen, global head, payments and commerce solutions, JP Morgan.

Source: C-innovation
    Learn more about Mergers and Acquisitions in our blog.


£1.1B Bounce Back Loan record suspected to be fraudulent

The UK government has confirmed that of the £47B provided in loans through the Bounce Back Loan (BBL) scheme, £1.1B of these loans are suspected to be fraudulent.The figures, which run up to 31 July 2022, give the most granular incite yet of how tax-payer backed loans delivered during the coronavirus pandemic are playing out.

In total £263M has been paid out to lenders against loans with a suspected fraud flag since the scheme was launched in April 2022. It closed on 31 March 2021.

Digital banks are among those suspected of providing these fraudulent loans, Metro bank was flagged for £7.24M of suspected fraudulent loans and Starling for £92M. 

The UK’s traditional banks carried a substantially higher proportion of suspected fraud across their BBL loans, with Lloyds seeing £304.80 million and Barclays £259.41 million. 
The BBLS was first launched in May 2020 and was the largest of the three government-related business loan schemes. Loans of up to £50,000 were provided with payback schedules of six or 10 years.


Source: C-innovation
    Learn more about deposits, transaction volumes and lending in our blog post.

The C-Innovation Team

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Take a look at our latest report on Starling Bank 
Starling Bank: Money-making In Digital Banking

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Javier Guevara Torres

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