Apparently, Ireland is one of the countries using Neobanking the most, with around 22% of Irish people using a digital-only bank according to an article appearing on the website of Seon Technologies.  It goes on to say that '[a]ccording to current population estimates, around 1,127,178 residents currently use Neobanking. Finder predicts this could increase to 34% by 2027.'  This is interesting because, Revolut said in July 2022 that it has 1.9million customers in Ireland.  

Beating Ireland to the top spot is Brazil at #1 with 43% of the population having a Neobank account followed by India in the #2 spot with 26% of Indians using a digital-only bank.

Seon Technologies, which used data from Finder, reported that around 356,553,704 of India's populatuion could be Neobank account holders, putting them in first place as the country that uses digital banking the most. Meanwhile according to current population estimate for Braziln at 91,719,000, digitization of its economy has been accelerated by both the pandemic and popular Neobanks seeing their client base grow exponentially (a bit of a cause and effect observation).  Brazil is also home to Latin America’s biggest Neobank, NuBank, which has over 48 million users.

In the BRICs, Neobanks appear to be offer their customers convenience, 24-hour support and often reduced costs as they help serve the unbanked and underbanked.

In January 2022, Finder released the above infographic on digital banking adoption in the UK. See Figure 2.

It reported at the time that about 1 in 4, in fact 27%, of Brits own a digital-only bank account. (1) It is hard to believe that the percentage has dropped in the period between January to July 2022; and (2) accordingly, why was the UK left off Finder's July 2022 update which showed that the top three spaces fell to Brazil, India and Ireland. At 27%, all things being equal, the UK at either the #2 (or #3) spot would have edged Ireland into 4th spot, right?

Looking at the above graphic, sourced from the links above, the United Kingdom is the clear leader when it comes to the amount of capital raised by Neobanks.  The collective total raised by UK Neobanks  Wise, Revolut, Monzo, Starling Bank and OakNorth ​(as shown above) equates to USD17.9million. It is probably worth noting that if the USD figures for UK Neobanks were converted from GBP to USD, then these figures might need to be revisited given the slump of GBP against the USD this year.

The US comes 2nd to the UK based on the above figures at $11.5mn, with Brazil and Germany in 3rd and 4th place at $3.9mn and $1.7mn respectively.

​Hats off to the Philippines, with around 13% of the population currently using Neobanks, Finder predicts (see link to source above) that by 2027 that figure will be around 33%, representing 33.3mn people. If correct that represents a 154% increase from 2022.  Mexico, in position #2 is expected to see a 141% increase from 2022 - meaning that by 2027, 41% of Mexican residents (51.6mn) will likely be using Neobanking.  Presently, it is estimated that 17% of people in Mexico currently hold a digital-only bank account.

No surprise to many of us in global fintech that Portugal makes the top 3 in this group.  Around 14% of the Portuguese population currently uses a Neobank, and an estimated 32% will use Neobanking services by 2027.  This indicates a 129% increase in Neobanking usage in the next five years.

​Check out Fintech Ireland's and CompliReg’s handy authorisation guides for e-money institutions and payment institutions at https://fintechireland.com/fintech-authorisations.html

Click here for Video

Cold day to be outside talking about the hot topic of #bitcoin and #cryptoassets / #digitalassets for Fintech Ireland with Will Goodbody of RTE, who also interviews Henrik Andersson, CFA (CIO Apollo Capital) and Lory Kehoe (Adjunct Assistant Professor, Trinity Business School) about their thoughts on #crypto as an asset class and regulation.

I am seeing:

1) a ramp up in scam investments, riding the epic wave of the #BTC price increase aimed at luring people into the FOMO (fear of missing out) opportunities; and

2) the loss of sight of the 'democratisation of financial services' and decentralised ethos' of #crypto in favour of speculative nature of 'assets' like bitcoin.

Don't read my comments as being negative on decentralisation and distributed ledger technology; they are leading to many interesting cost effective and time efficient applications.

Rather be wary of the bitcoin salespeople whose interests have noting to do with the " purely peer-to-peer version of electronic cash [that] would allow online payments to be sent directly from one party to another without going through a financial institution" heralded in the abstract of the Nakamoto paper.

Or put another way, 'don't lose sight of the forest for the trees'.

Linkedin Post here: https://www.linkedin.com/feed/update/urn:li:activity:6764935828859887616

And follow Fintech Ireland on LinkedIn here: https://www.linkedin.com/company/9349449

** Two additional Electronic Money Firms now authorised in Ireland **

Our last post on additions to the Irish regulated fintech family of payment services firms and electronic money firms was back on 30 September when we released Version 2.1 of the 'Emoney & Payment Services Firms Authorised in Ireland Map' as at 11 September 2020.

Again thanks to CompliReg we have released an update to that Map, which now stands at Version 3.0.  The new joiners are Modulr FS Europe Limited and SumUp Limited.  In addition to their emoney authorisations, both firms can provide payment services 3(c) and (5), and in addition, SumUp can also provide payment services 3(b).  See below for a description of these payment services numbers*.

Followers of Fintech Ireland will recall that we co-hosted an event with Modulr at the start of the year (when during pre-covid 19 days we could all get together) on 3rd March 2020, aptly titled 'The Future of E-Money - Modulr & Fintech Ireland' with Myles Stephenson, Founder and Chief Executive and John Irwin, General Manager of Modulr and Fintech Ireland's/Fintech UK's our Peter Oakes.

Welcome to Ireland SumUp and Modulr and soon too the many others making their way through the Central Bank of Ireland authorisation pipeline!  

Those firms in the above Map which are indigenous to Ireland also appear on our bigger Fintech Ireland Map version 3.0 which you can find here. If you think you should be on the Fintech Ireland Map, complete our Survey.  Do it soon as version 4 of that Map is slated for release very shortly!

If you are looking to get authorised in Ireland as an emoney or payments firm, see these Authorisation Guides and feel free to contact us for a informative dialogue on the authorisation process.  We are chatting with about 2-3 firms a week.

* Payment Services:
3 Execution of payment transactions, including transfers of funds on a payment account with the user’s payment service provider or with another payment service provider:

(b). Execution of payment transactions through a payment card or a similar device;
(c). Execution of credit transfers, including standing orders
5. Issuing of payment instruments and/or acquiring of payment transactions

An MEP representing Ireland in the European Parliament, Mairead McGuinness, has been appointed as EU Commissioner for Financial Services, Financial Stability and the Capital Markets Union – which includes spearheading Europe’s new AML drive.

Ms McGuinness was appointed to the influential role following the resignation of Phil Hogan (a previous nominee of the Irish government) who served as Commissioner for trade.  Mr Hogan resigned his Commissioner role following a scandal involving an Oireachtas (Irish Parliament) Golf Society event at which a number of other people attended - including senior members of financial services and banking representatives - alleged to be in breach of Ireland's coronavirus guidelines last month.

When all is said and done, has to be viewed that Ireland, particularly its ever-growing fintech & financial services industry, should be very happy with Mairead McGuinness -  a current First Vice President of the European Parliament - being appointed as European Commission's new Commissioner for Financial Stability, Financial Services & Capital Markets Union.  Her new role will encompass banking, insurance, fintech  (payments & emoney), insurtech and financial crime including anti-money laundering.

It is important to bear in mind that Ms McGuiness is not appointed to fly the green flag nor wear the green jersey for Ireland.  Just as Mr Hogan was 'not Ireland's man in Brussels' which so many people who should know better said when his role at the EC was being questioned.  The role of an European Commissioner is to serve Europe first, not do deals to put Ireland's (or any Member State's) interest above the EU.  If that happens with respect to any such appointment, then there is at least one word to describe that - "corruption".  See further reading below.

Announcing Ms McGuinness' appointment Ursula Von der Leyen, European Commission President, described McGuinness as having “significant political experience on EU issues” as an MEP since 2004. She added that her previous experience was “crucial in carrying forward the EU’s financial policy agenda” and “ensuring it supports and strengthens the Commission’s key priority”.

McGuinness will oversee the upcoming sixth money laundering directive, which is due to be implemented by December 2020.  Which is rather interesting since Ireland was fined €2 million by Europe's highest court on foot of a complaint from the European Commission for Ireland's failure to implement the 5th AML Directive on time.  Goes to show that when it comes to Ireland, the European Commission acts in a very independent manner! In fairness, important to add that Ireland was not the only naughty school child - Romania was fined €3m for the same breach.

Some other observations, #1 and 2 captured above:

1. Ms McGuiness is not appointed to fly the green flag nor wear the green jersey for Ireland.
2. Ms McGuiness is to oversee the upcoming 6th AMLD due to be implemented by December 2020. Interesting since Ireland was fined €2 million for failure to implement 5th AML Directive on time.
3. Ms McGuiness's Director-General for Financial Stability, Financial Services and Capital Markets Union is an equally capable person, who also happens to be Irish: the Director-General John Berrigan (see org chart below).
4. Another Irish person with a senior influential role in Europe is Ireland's Minister for Finance, Paschal Donohoe, elected head of eurozone finance ministers back in July https://www.rte.ie/news/2020/0709/1152184-eurogroup-president-election/.  What is it with Irish professionals and EU finance and financial services?

Further reading:

"When Ursula Von der Leyen makes her selection, von der Leyen should ignore lobbying for specific posts from Dublin and every other member state and political grouping. It’s her right to assign portfolios as she sees fit, based on her assessment of the skills and experience of her commissioners and the overall composition she believes she needs to implement her agenda. The challenges facing the European Union, and the European Commission as its policy engine-room, are far too great to allow the effectiveness of the institutions to be compromised by the states’ all-too-narrow conception of their own influence."  Irish Times 7 September 2020. 

Thanks NewsTalk for radio interview this morning on Brexit & "Regulatory Arbitrage" and the fintech opportunities for Ireland. LISTEN TO AUDIO HERE

Background to this piece, thanks to Donal O'Donovan, is Irish and international media over the past few weeks reporting claims that Ireland is becoming a victim of 'regulatory arbitrage' and 'dangerous competition' for 'Brexit Spoils'.  The Irish Minister for State (Financial Services), Eoghan Murphy has been moved to raise concerns with Valdis Dombrovskis, the EU financial services commissioner.  Murphy informed Reuters that “We are hearing from various sources that companies are being offered certain incentives, that they are offering a back door to the single market, without the requirement to have capital to back up their entities in the European Union.”   In a sign that there may be more to come, the Financial Times reported that "against the background of the risk to stability in the European financial system. The heads of Esma and EIOPA, two key EU financial regulatory agencies, are believed to have raised similar concerns [to those of Eoghan Murphy] in recent days." [source FT, 14/03/2017 - Irish complain about rivals in Brexit race for London’s business].  

This post is also carried at LinkedIN - https://www.linkedin.com/hp/update/6249557917670862848