Apr 9, 2021

UK fintech startup TrueLayer raises $70m

Joanna England
2 min
UK fintech startup TrueLayer raises $70m
London-based TrueLayer says it will use the funding to expand its growth strategy...

TrueLayer, the British fitech startup that specialises in banking APIs for some of the world’s leading online banks and financial service companies, including Revolut and FreeTrade, has raised $70m in it’s latest funding round.

According to reports, the investments were led by Addition, the venture capital firm founded by former Tiger Global partner Lee Fixel. Existing investors Anthemis Group, Connect Ventures, Mouro Capital, Northzone and Singapore’s Temasek also took part.

Though it declined to share its most recent valuation, TruLayer, which was founded in 2016 and counts Chinese internet giant Tencent as a shareholder, has now raised $142m in funding to date.

Sources confirmed the new capital will be used to increase its services globally, first by expanding its European presence before launching a rollout in Australia. The fitech also is exploring South America as a possible new marketplace, with Brazil earmarked as the destination of choice.

TrueLayer in the pandemic

The past 12 months have seen TrueLayer expand on an unprecedented scale, which, company executives, say drove the move to explore more funding options. Francesco Simoneschi, TrueLayer’s CEO and co-founder, confirmed the company decided to raise more cash based on 2020’s successful outcome, which was assisted by the coronavirus pandemic and as consumers shifted toward digital ways to managing their finances.

He told CNBC that TrueLayer saw its payment volumes increase 600-fold, adding, “We were closing 2020 in an extremely positive way. We were going through an incredible year of growth.”

Open banking revolution 

The news follows on from yesterday’s announcement that the fin tech Plaid, TrueLayer’s competitor in Europe, had raised $425m in a new investment. The latest drive has resulted in Plaid being valued at $13.4bn.

Both Plaid and TrueLayer are considered part of a new, disruptive revolution in finance called “open banking,” which seeks to open up banking data and payment services to fintech firms and other approved third parties following consent provided by customers. 

TrueLayer and some other firms are now looking to undercut card networks led by industry giants such as Visa and Mastercard as an increasing number of fintech apps initiate bank transfers on behalf of users, at much lower fees.

Simoneschi said, “Open banking can be a real contender to the traditional card networks. The question is, can the card companies embrace this change, or will they resist?”

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Jun 23, 2021

CMA warns UK and Irish banks over bank transaction histories

2 min
The UK’s Competition and Markets Authority has issued warnings to several high-profile banks in the UK and Ireland over customer transaction histories

Specifically, the CMA named prominent challenger bank Monzo, the Bank of Ireland, NatWest Group, and Virgin Money as not providing customers with records of their bank transactions within the maximum outlined timescale (40 days after closing the account).

Such information is crucial not only for ensuring a smooth transition from one bank to another, but also to provide a foundation for credit applications in the future. 

According to the Retail Banking Market Investigation Order 2017, 95% of bank and building society customers should receive their bank transaction histories in at least 10 days.

Reputation: A bank’s greatest asset?

Of the 150,000 customers affected, Monzo was by far the main contributor - 143,000 (95.3%) - with the other three dividing the remaining 7,000.

The extent to which the magnitude of its mistake is attributable to being a digital-only bank is not clear, although it may give some customers pause for thought. With a superior customer experience being among the bank’s greatest assets, continued reputational damage is something that it cannot afford to sustain.

Although the CMA’s action in this instance has been to issue each bank a warning and order the immediate dispatch of all outstanding information, it has warned that future breaches will carry heavier consequences. Measures could include legally enforceable compliance audits on a yearly basis.

Helping customers get a better deal

Condemning the banks for negligence that could negatively impact customers’ desires to take out loans or mortgages, Adam Land, CMA Senior Director of Remedies Business and Financial Analysis, promised that his organisation would remain vigilant to similar behaviour moving forward.

“Banks must comply with all the rules – that includes providing a full transaction history promptly.

“We will be watching closely to make sure these leading names stick to their word and don’t let their customers down again. The Bank of Ireland, Monzo, Natwest Group, and Virgin Money should be in no doubt that the CMA stands ready to take further action if these failures are repeated.

Image source: gov.uk

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