The FinTech Year in Stories: November

By Louis Thompsett

January 04, 2025

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We look at the articles that made the news in fintech in 2024. Today, it is November…

Banks Seek Tech Productivity Boost to Drive Innovation

Financial institutions are focusing on increasing the productivity of their engineering teams to boost technological innovation without expanding IT budgets, a new report from McKinsey says.

Global management consulting firm McKinsey reveals that banks are adopting strategies from digital-native software companies to maximise their technology workforce's efficiency.

The report states that top-performing banks can achieve 50% more technology capacity than average institutions with the same budget.

McKinsey's research indicates that leading banks are implementing scorecards to measure the speed and productivity of engineering teams. This approach allows institutions to identify areas where engineering speed and accuracy can be improved.

The report says: "By helping their engineering teams work smarter, leading institutions significantly increase their technology capacity compared with average institutions, with no increase in budget."

Streamlining Software Development Processes

One major bank discovered that its software development process was hindered by manual efforts and multiple approvals. McKinsey reports that the bank conducted an "X-ray" of each engineering team to understand existing practices and performance.

This data-driven approach enabled management to identify cross-cutting initiatives that would deliver the most significant productivity increases.

The report reveals: "The company overhauled its engineering tools, automated its security controls, and created a coaching team to train frontline engineers in the new approach."

As a result, the bank created 30% more capacity in its existing technology team without increasing its budget. The report's authors emphasise the importance of establishing a culture of continuous improvement, similar to lean manufacturing operations.

Wise Expands Global Reach as Customer Growth Hits 25%

International money transfer company Wise plc has reported a 25% increase in active customers to 11.4 million in the six months to September 2024, marking a 2.8-times expansion in its customer base over four years as the fintech deepens its integration with domestic payment systems.

The London-based firm, which offers cross-border payments and multi-currency accounts, processed £68.4bn in transactions during the period, representing 19% growth year-on-year on a reported basis and 21% at constant currency.

This volume growth has driven a 3.4-times increase in underlying income and a 7.7-times rise in underlying profit before tax over the past four years.

Boosting infrastructure investment

Wise has added three new approvals for direct integration with domestic payment systems in Brazil, Japan and the Philippines, bringing its total to eight connections once fully implemented.

Direct integration allows Wise to process payments through a country's central payment infrastructure rather than relying on correspondent banking networks.

“Our infrastructure is developing quickly. This week we launched our sixth live direct connection to a domestic payment system, this time in the Philippines,” Kristo Käärmann, Wise’s Co-founder and Chief Executive Officer, said in an earnings statement.

The company reports that 63% of transfers now complete instantly – defined as under 20 seconds from end to end. This increases to 83% of payments completing within an hour and 94% within 24 hours.