Fraud Complaints Surge at Revolut and Monzo

Hey Digital Banking Fanatic!

The UK's Financial Ombudsman Service (FOS) has reported significant increases in fraud complaints for major challenger banks during the first half of 2023. Revolut saw 2,888 fraud complaints, up 31% from the previous six months, while Monzo received 1,864 complaints, marking a 44% increase. Starling Bank recorded 378 complaints, a 9% rise.

The complaints data, obtained through Freedom of Information requests, covers push payment fraud, chip and PIN fraud, and disputed card transactions. For context, Revolut serves over 10m UK customers, Monzo has more than 11m, and Starling has over 4m customers in the UK. According to Action Fraud figures from October, Revolut was named in nearly 10,000 complaints, the highest among major UK banks.

Revolut reports cutting fraudulent transactions in the UK by over 20% in 2023, preventing over £475m in potential fraud losses globally. Monzo notes that people nationwide lost £1.17 billion to fraudsters last year, while both banks highlight their continued investment in fraud prevention technologies and customer protection measures.

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Cheers,

Marcel

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INSIGHTS

Revolut launched Singapore's first Card Vending Machine in NUS.

DIGITAL BANKING NEWS

🇬🇧 Revolut and Monzo see spike in fraud complaints. Two of the UK’s challenger banks have faced a surge in fraud complaints, with the Financial Ombudsman Service reporting 2,888 complaints about Revolut and 1,864 about Monzo in the six months to June end this year.

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🇩🇪 Troubled FinTech Solaris in search of fresh funding. German banking-as-a-Service platform Solaris is reportedly seeking an emergency cash injection of £100 million and will put the business up for sale if it fails to raise fresh funds.

🇪🇺 ECB publishes second progress report on digital euro. Since the first progress report, the ECB has updated its digital euro rulebook to harmonize payments across the euro area and concluded a call for applications to select providers of digital euro components and services.

🇺🇸 Shastic announces partnership with MeridianLink to provide AI workflow automation for banks and credit unions. This partnership reflects the similar missions of MeridianLink® and Shastic to democratize lending for community banks and credit unions, making advanced solutions accessible to thousands of financial institutions. 

🇬🇧 UK FinTech Offa acquires Bank of Ireland’s Alburaq Sharia-compliant home finance portfolio. Offa’s CFO, says that customers transferred through this purchase will now have “access to a wider range of Sharia-compliant property re-financing options”.

🇸🇬 Singapore central bank fines JPMorgan $1.8 million over misconduct by relationship managers. The Monetary Authority of Singapore (MAS) said that JPMorgan's relationship managers provided inaccurate or incomplete information to clients in 24 instances of over-the-counter bond transactions, charging them spreads above the agreed rates.

🇬🇧 Nationwide partners with Experian to digitise payslip income. Nationwide will use Experian’s work report income and employment verification service, which will digitally confirm homebuyers’ declared income “removing the need for applicants to provide manual income proofs, such as copies of their payslips”.

🇬🇧 Sabadell names COO to run UK unit TSB amid BBVA takeover bid. Banco Sabadell has named its chief operating officer, Marc Armengol, to run its UK unit TSB, whose future with the lender is unclear if Sabadell gets taken over. The decision to appoint Armengol was formally taken by TSB’s board.

🇬🇧 Ordo joins Charity Finance Group to expand open banking donations for charities. As a Corporate Partner, Ordo will use Open Banking to improve donation access, ensuring more funds reach vital causes. This offers charities faster, secure, and transparent transactions while reducing traditional fees that cut into donations.

🇬🇧 UK specialist mortgage lender Vida Homeloans secures full banking licence, rebrands as Vida Bank. With its new banking licence, the company will operate as a specialist mortgage bank offering residential and buy-to-let mortgages. The new bank plans to launch a range of savings products “before the end of the year”.

GOLDEN NUGGET

Here is an example of what a modern bank's platform architecture could look like when composed of cloud-based services orchestrated via APIs.

𝗟𝗲𝘁'𝘀 𝗱𝗶𝘃𝗲 𝗶𝗻𝘁𝗼 𝘁𝗵𝗲 𝗪𝗵𝗲𝗲𝗹 𝗼𝗳 𝗙𝗶𝗻𝗮𝗻𝗰𝗲:

In the rapidly evolving landscape of the commercial and retail banking industry, many institutions now find themselves at a pivotal juncture.

For years, they have relied on internally developed systems, traditional infrastructure, and well-established processes and channels to attract and serve customers. But this approach has become a stifling anchor that can drag you into the abyss of stagnation.

It hinders innovation and slows time to value for those keen on embracing open finance, composable banking, and other modern technologies.

What is a financial services ecosystem?

A financial services ecosystem is an evolving collaboration model among various financial institutions that helps leverage their complementary offerings.

This multi-lateral, dynamic environment enables the delivery of a unified and seamless customer experience that is underpinned by mutuality and shared value across participants.

The diagram above is an example of what a modern bank's platform architecture could look like when composed of cloud-based services orchestrated via APIs.

This composition of ecosystem players providing critical capabilities is just the first step.

Modern banks can also take advantage of expanding the ecosystem with other partners to extend their products, services, and brand reach beyond their own digital channels and into areas that may be ancillary to their core propositions (e.g., investments, loyalty schemes, insurance, small business loans, etc).

I highly recommend reading the complete source article by Zühlke Group for more interesting info on this topic.

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