Morning Brief 7.31.20: Canada's big banks get on board with open banking

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Canada's 'PSD2'

Canada's largest banks are among nearly three dozen organizations that are supporting the Financial Data Exchange, which enables interoperable data sharing among payment apps, fintech and financial institutions.

That's considered a key step toward open banking, which is driving connections between fintechs and banks globally, spurred by PSD2 in Europe. RBC, TD, Tangerine Bank (Scotiabank), Bank of Montreal and CIBC are among the FDX's supporters in Canada as the country continues a national review that could lead to nationalized open banking, reports Finextra.

FDX is also active in the U.S., where it has the support of about 100 organizations covering 12 million consumers. Most countries do not have a formal version of PSD2, though open banking has gained momentum in the U.S. with both Mastercard and Visa acquiring aggregators to support the concept.

Monzo's challenge

U.K. fintech Monzo is relying on an aggressive product launch schedule to survive the pandemic's impact, saying the coronavirus has threatened the company's existence.

The company's new CEO, TS Anil, who took over in May, told the Financial Times the company's revenues jumped 288% over the past year to £36 million, but its net losses increased from £47 million to £113 million.

Monzo raised £58 million from investors in June, but that came at a 40% discount to its previous valuation, the FT reports. Anil said the company would rely on its new business and premium accounts, and its new lending product, in an attempt to recover.

Face time

Singapore is working with DBS Bank to pilot facial recognition to sign up consumers for payment accounts and other financial services.

Called SingPass, it's the island's federated ID system, covering government agencies and private firms. The bank and government hope to increase usage of "selfie" identification as an alternative to other biometric forms as a way to reduce contact, reports ChannelNewsAsia.

Singapore has tied its national digital ID system to coronavirus contact tracing, signing up firms including OCBC Bank.

Aggregator partners

Payment processor Galileo is collaborating with financial services technology firm Plaid to improve speed and security for ACH transfers.

Visa is in the process of acquiring Plaid, which specializes in account aggregation that's the base for open banking partnerships. Rival Mastercard has made a similar deal to acquire Finicity, giving both card brands inroads into open banking.

The Salt Lake City-based Galileo's technology includes an API that enables quick creation of payment accounts for fintechs and gig economy companies.

From the Web

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Japanese conglomerate Rakuten has pulled the plug on its U.S. online retail store, originally known as, and will wind down its operations over the next two months, the company confirmed to TechCrunch.

Twitter says spear-phishing attack on employees led to breach
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