What’d I miss? News and Insights that got noticed

Key themes this week (August 18 - 24)

• Citi introduces 'relationship tiers' for retail customers
• Bill to compete with Intuit after partnership ends
• JP Morgan offers merchants Tap to Pay on iPhone
• Car Prices Might Be Unsustainable for Buyers

Citi introduces 'relationship tiers' for retail customers

"...Citi is revamping its retail banking offering, ditching account packages in favour of a new set of "relationship tiers.”

Key takeaways:

• The bank compares the new system to an airline or hotel rewards programme, with customers unlocking tiers as their combined average monthly balance grows
• Customers can also secure higher tiers by linking eligible family members who live in the same household

LinkedIn Post

Goldman Sachs explores selling part of its wealth business: reports

"...Goldman Sachs is considering selling part of its wealth management division, Reuters reported Monday. The Wall Street giant is exploring alternatives for its registered investment advisory business, Personal Financial Management — a unit that supervises $29 billion in assets, the wire service noted..”

Key takeaways:

• The potential sale marks the latest move in an ongoing transformation that has seen Goldman scale back its consumer-lending ambitions amid mounting losses
• Goldman’s profit declined 60% in the second quarter as write-downs on its consumer businesses and real estate investments weighed on earnings

LinkedIn Post

Banks Don’t Love Rich Mortgage Borrowers as Much as They Used To

"...The Fed’s interest-rate hikes and recent bank failures mean lenders aren’t competing so fiercely for jumbo loans.”

Key takeaways:

• Banks are tapping the brakes on big home loans known as jumbo mortgages, which they have typically viewed as a low-risk way to attract wealthy customers
• Jumbos usually carry lower rates than regular-size mortgages, but that has reversed in recent months. The going rate on a jumbo was 7.44% on Friday, versus 7.20% for a typical smaller loan
• Last month, U.S. regulators proposed rules that would effectively require banks to keep more capital against some mortgages, making it less lucrative to hold them

LinkedIn Post

Bill to compete with Intuit after partnership ends

"...Bill-pay software provider BILL will try to scoop up more business directly and through other channels after financial software company Intuit called off a six-year co-marketing and embedded bill-pay partnership between the companies. Bill provides services for small and medium-sized business payments.”

Key takeaways:

• Of Bill’s 400,000 customers, about 12,000 used its embedded feature in Intuit’s bill pay solution. 
• “While we expect the majority of these micro businesses to churn over the next two quarters, we expect some of the larger businesses to become Bill direct customers,” Bill CFO John Rettig said during the call.
• Bill also said it expanded agreements with JPMorgan Chase and Bank of America

LinkedIn Post

JP Morgan offers merchants Tap to Pay on iPhone

"...JP Morgan is rolling out support for Apple's Tap to Pay to its US merchant clients, with beauty giant Sephora the first retailer out of the gate.”

Key takeaways:

• Tap to Pay on iPhone enables merchants to accept in-person contactless payments with a just a tap of their payment cards or mobile wallet, with no need for additional terminals or hardware
• Max Neukirchen, global head, payments and commerce solutions, JP Morgan Payments, says: "This solution means our merchants don’t need to worry about certain pain-points like card reader Bluetooth connectivity, terminal power charging or manually entering card information

LinkedIn Post

Car Prices Might Be Unsustainable for Buyers

"...Surging loan delinquencies signal that many consumers can’t afford their auto loans.”

Key takeaways:

• Today’s average new car loan has a monthly payment north of $750, with an interest rate of 9.5%
• The average term for loans issued over the past three years is nearly six years, according to data from Experian
• Seasonalized rates of severe delinquency for auto loans are the highest since at least 2006, but the jobs market is strong

LinkedIn Post

Kenyan fintech Zanifu raises $11.2m

"...The Zanifu Android app allows small retailers to procure inventory from their suppliers and pay once they have sold the goods. The company does not require users to put up any collateral or to have a credit history, only an existing relationship with the supplier.”

Key takeaways:

• Kenyan startup Zanifu has raised $11.2 million in debt-equity funding for its platform providing micro, small and medium-sized businesses with inventory financing
• CEO Steve Biko tells TechCrunch that about 13,000 micro-firms have used the platform, paying between five and six per cent interest a month, with a 99.2% repayment rate

LinkedIn Post

Check this out:

Looking forward to seeing you all at #finovatefall2023 and hope you will attend this session in the Lending Track on why banks must embrace the digital lending revolution:

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