We have now gone two weeks without a banking failure here in this country so that counts as a win. And we now have a new owner for a good chunk of Silicon Valley Bank’s assets. Also making news this week is the new wallet from EWS, Apple Pay Later has launched, small and midsize banks are losing deposits and the FDIC needs to fill a hole in its deposit fund. Here are what I consider to be the top 10 fintech news stories of the week.
First Citizens Acquires Much of Failed Silicon Valley Bank from The Wall Street Journal – The week began with the 30th largest U.S. bank acquiring major parts of what was the 16th largest U.S. bank. First Citizens is buying all of Silicon Valley Bank’s deposits, $56.5 billion, and its $72 billion loan book at a discount of $16.5 billion. Not included were the securities portfolio and SVB’s $9.5 billion venture capital portfolio.
Zelle’s new sibling, Paze, aims to replace guest checkout online from American Banker – Early Warning Services, the organization behind Zelle, unveiled the name of its new digital wallet to compete with Apple Pay and Google Pay. Paze will roll out to 150 million Visa and Mastercard accounts in the fall and these cards will be pre-loaded into this new wallet.
Apple Launches Apple Pay Later And It’s Going To Be A Winner from Forbes – Apple launched its long-awaited buy-now-pay-later service this week, Apple Pay Later. Ron Shevlin is bullish on this new product and sees Apple using it as a gateway to adoption of the Apple Card. But Apple has some catching up to do when it comes to merchant services where Klarna, Afterpay and Affirm dominate.
Small Banks Are Losing to Big Banks. Their Customers Are About to Feel It. from The Wall Street Journal – There is a stunning graph in this article in the WSJ this week that shows $120 billion of deposit inflows to the top 25 banks after the SVB collapse while at the same time all other banks lost $108 billion in deposits combined. If this doesn’t normalize it spells big problems for many small and midsize banks.
FDIC Considers Forcing Big Banks to Pay Up After $23 Billion Hit from Bloomberg – The $128 billion FDIC deposit insurance fund has taken a $23 billion hit with the recent bank failures so it will need to be replenished. This means a special assessment is coming for banks and how this burden will be shared is still being worked out.
Post SVB sale, VCs move to sustainable growth from Fintech Nexus – The banking crisis has changed the venture capital industry. Now VCs are demanding insights into the treasury and banking strategies of their portfolio companies with new recommendations that fintechs now have between two and four primary bank accounts. There is also a lot of talk about what will become of SVB’s large venture capital portfolio.
US regulator sues top crypto exchange Binance, CEO for ‘willful evasion’ from Reuters – In the latest setback for crypto the CFTC has sued Binance, the world’s largest crypto exchange, as well as its CEO and founder CZ alleging the operation of an illegal exchange and a sham compliance program.
UK Treasury Cancels Plans for Government-Backed NFT from CoinDesk – This was greeted with much fanfare back in April 2022 when a senior UK government official announced the creation of a government-backed NFT. The UK was going to be a global crypto hub. Times have changed and the NFT-plans are now on indefinite hold.
White House Wants New Rules for Midsize Banks from PYMNTS – The White House has called for tougher rules on midsize banks along with tougher penalties on bank executives behaving badly. They are focused on banks between $100 billion and $250 billion in size, where there are less than 20 banks today.
The Office of the Comptroller of the Currency Creates Office of Fintech from Crowdfund Insider – The OCC has appointed Prashant Bhardwaj to be the head of its new Office of Financial Technology as part of its Office of Innovation. This new office was announced back in October 2022 and will focus on fintech innovation and its impact on financial services.
Every Thursday at 5pm ET the Fintech Nexus news team and a special guest discuss the news of the week in fintech. Below is the video we posted to YouTube of this week’s show. You can also listen to the show in podcast format.
