Fintech Nexus Newsletter

The impact of AI in financial services will gain a renewed focus on Capitol Hill. There has been an AI task force on the House Financial Services Committee for some time but we learned late last week that a new bipartisan working group on AI has been formed.

A $200m equity raise at a valuation double the previous round? No you did not wake up in 2021 this morning, it is (checks watch) definitely January 2024. I was just chatting with someone earlier this week about equity raises and I commented that there seems to be much more activity this month than in January 2023. While we are most definitely not back in 2021, VCs seem to be opening up their checkbooks a little more.

Chime is getting into the earned wage access business. The leading digital bank announced yesterday that it is launching MyPay, a new earned wage access service that will allow customers to access up to $500 of their paycheck before payday.

While check usage has been in decline for years, for many businesses it is still a primary method of payment. According to the Federal Reserve we processed over three billion commercial checks in 2023 valued at over $8 trillion.

ChatGPT launched a year ago and the tech world will never be the same. The New York Times has an in-depth look at the impact of this revolutionary new product, focusing on big tech. It is interesting to me that one of the greatest tech launches of the past decade came not from a big tech company but from an AI startup that was not even seven years old and was set up as a non-profit research lab.

Many people have called Capital One the original fintech.  Founded in 1994 by Richard Fairbanks and Nigel Morris (of QED) Capital One broke new ground as a monoline credit card bank that married technology and data science before that was a thing in banking.

There have been quite a few fintech startups in recent months that have pivoted to B2B from B2C (Tally, HMBradley, Onyx Private for example), but we haven't seen any fintechs go in the other direction until Mercury announced their personal banking product today.

It was only Thursday of last week when our lead story was about the challenges banks were facing in the Banking-as-a-Service space. Then Friday we learned that Blue Ridge Bank was hit with its second regulatory action in less than 18 months and is now deemed to be in a "troubled condition".

This year has not started well for loanDepot. We first heard the news two weeks ago that the mortgage lender had suffered a cyber attack that shut down critical systems.

The OpenAI story was eclipsed yesterday by monumental news in the world of crypto. The world's largest crypto exchange, Binance, has agreed to pay $4.3 billion in fines to the U.S. government for violating anti-money-laundering requirements.