Despite the legal and pandemic-related business challenges that have plagued neobanks in the United Kingdom in recent months, the challenger bank space in Europe is showing huge potential for 2022 as investor and customer interest continues to grow.
Read more: China’s Tencent Takes Stake in UK Challenger Bank Monzo
In major neobank news this week, the U.K.’s Monzo is the latest firm to raise fresh funding after Chinese technology giant Tencent made a $100 million capital injection for a minority stake in the firm, as part of a $600 million fundraising round that has put the British digital bank’s valuation at $4.5 billion.
Read also: US Dreams Dashed But UK and EU Neobanks Brim With Potential in 2022
Tencent’s interest in Monzo is a huge boost for the high-profile retail bank which has been dogged by profitability concerns due to widening annual losses in the last couple of years, not to mention a pandemic-induced drop in valuation, from £2 billion in 2019 to £1.25 billion in February.
Another issue to keep a close eye on this year is the potential anti-money laundering (AML) lawsuit the firm is facing in the U.K. that could result in criminal and civil liability.
Related news: Revolut Singapore Gets OK to Offer Silver, Gold Trading
FinTech unicorn Revolut, on the other hand, is spreading its wings beyond Europe. This week, the challenger bank received permission from the Monetary Authority of Singapore (MAS) to allow customers to trade gold and silver on its app, backed by real metals, based on live market performance data.
The company plans to launch the service this year, giving users the opportunity to transfer exposure to other Revolut customers and round up their spare change to save as silver or gold, PYMNTS reported, per The Business Times.
And even though transaction fees will vary depending on membership levels (1.5% for standard customers, 0.5% for premium or metal customers), there will be no minimum account required to begin investing.
Also read: Revolut Bank Granted Full EU Banking License Amid Criticisms of Unfair Competition
In other company news, the firm’s subsidiary Revolut Bank was recently granted a full banking license by the European Central Bank (ECB), allowing the ECB-licensed and the Bank of Lithuania (LB)-regulated specialized bank to issue consumer credit, among other services.
The bank currently operates in more than 15 European countries, launching banking services in 10 European countries earlier in March and more recently in France, Italy and Portugal.
Another British challenger bank made the news this week when it announced that it had stopped all paid advertising on Facebook and Instagram over the parent company Meta’s failure to tackle fraudulent financial adverts on the platforms.
In a blog post published Thursday (Jan. 6), Starling Bank CEO and founder Anne Boden said, “We want to protect our customers and our brand integrity. And we can no longer pay to advertise on a platform alongside scammers who are going after the savings of our customers and those of other banks.”
Boden also took aim at Facebook’s rebrand to Meta: “While Facebook (Meta) may hold out all sorts of promises for the future, I really hope its focus on the Metaverse doesn’t become a distraction from doing what is right today, here and now in the U.K. of 2022,” she said.
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