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Daily Tearsheet: How technology could enable sustainable banking, ESG giving rise to a new political divide, and are neobanks still considered disruptors?

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Daily Tearsheet: How technology could enable sustainable banking, ESG giving rise to a new political divide, and are neobanks still considered disruptors?

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Are neobanks still considered disruptors?

Unencumbered by brick-and-mortar, and armed with sleek UX, next-gen tech, and VC-backed checks, neobanks were seen as the disruptors of traditional financial institutions. But what seemed like a no-brainer a few years ago is not so obvious now.

Given the Q2 financial results of some publicly listed U.S. neobanks, a slew of bad press, and rumors of Marcus – Goldman Sachs’ digital bank – running at a massive $4 billion loss, the neo-shine of challenger banks is wearing off. It appears we’re witnessing the cautionary tale of the tortoise and the hare. And the big question that remains is whether they will make it through the incoming recession, let alone disrupt incumbents.

An interview with seasoned banking and fintech expert Darryl Knopp, a Senior Director at FICO, put a few things into perspective.

Read more

The Green Finance Podcast Ep. 8: How technology could enable sustainable banking with Kalliopi Chioti, Chief ESG Officer at Temenos

In finance, the sustainability agenda has now been condensed into three letters – ESG – standing for environmental, social, and governance factors that can be embedded into business decisions.

But the rising popularity of ESG investments in an unregulated market has also attracted quite a few bad apples, leaving investors overwhelmed with the rising number of options, many of which might not even be as “green” as their label suggests.

There’s an increasing demand for services that help banks and financial institutions discern between all these new labels that have grown in popularity almost overnight. And the supply side is responding – Temenos, one of the biggest banking infrastructure providers in the world, has launched an ESG investing-as-a-service tool for banks.

In episode 8 of the Green Finance Podcast, host Iulia Ciutina explores this topic with Temenos’ Chief ESG Officer Kalliopi Chioti to hear more about the company’s approach.

Listen / read more

The latest briefing

Green Finance Briefing: ESG giving rise to a new political divide

In the US, the topic of ESG is drawing political battle lines between Democrats and Republicans. These three letters, an unfamiliar acronym to the wider public not too long ago, are now at the center of a new political divide.

Those on the left feel that ESG is not really about sustainability, but about enterprise value creation. Meanwhile, the right looks at the ESG movement as investors trying to impose a social agenda that hurts companies’ profitability.

Read more (exclusive to Outlier members)

Just look at the charts

1. Digital banking is a loss-making business…unless they expand their product offerings

Source: David Jiménez Maireles

2. Over 60% of Americans are concerned about their savings

Source: Deloitte

Today’s stories

Affirm increases APY on savings accounts
Affirm has announced that its savings accounts now offer an annual percentage yield of 1.5%, noting that’s 11.5 times the national average. Affirm’s move follows other online banking providers that have been increasing the APYs they offer on savings accounts. (PYMNTS)

Alloy leans on fraud prevention to land a new $1.55 billion valuation
Identity verification fintech Alloy has raised $52 million at a $1.55 billion valuation, 11 months after raising $100 million at a $1.35 billion valuation. The fact that the startup has managed to raise this amount of capital in such a challenging fundraising environment is impressive, but the fact that it has also increased its valuation is notable as well. (TechCrunch)

Digital Asset reports solid performance in Q2’22
Blockchain firm Digital Asset announced another solid quarter of growth in Q2 2022. The firm reported a significant year-over-year increase in customer growth, with the number of new customers tripling as compared to Q2 2021. These new customer relationships are driven almost entirely by an increasing interest in asset tokenization. (Crowdfund Insider)

Jack Henry joins hands with Google Cloud
Jack Henry, a leading provider of technology solutions for the financial services industry, announced a collaboration with Google Cloud to further enable its multi-year technology strategy focused on helping financial institutions innovate faster and meet the evolving needs of their account holders. (Finextra)

Former ACI Worldwide banking unit debuts as fintech firm Dragonfly
Digital banking and treasury management firm Dragonfly Financial Technologies has launched as an independent company after the completion of One Equity Partners’ acquisition of ACI Worldwide’s corporate online banking unit. Dragonfly will add innovations to its product portfolio, expand its team, and target more U.S. and international commercial banking customers. (PYMNTS)


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