Fintech Digest

FCA Is Concerned About Trading Apps

The most important events of the previous week in fintech: Ripple considered purchasing the assets of the FTX, and Amazon announced plans to make a movie about it, the UK aimed to become the «world’s next Silicon Valley», FCA warned about a hole in the financial apps security, and PayPal became a target of Polish regulators. We’ve also covered some crucial research.

Top News | 21.11-27.11

  • FCA is concerned about trading apps
  • FTX can still be saved
…or at least to be screened 
  • UK is going to be the «world’s next Silicon Valley»
  • Quant and UST join forces to create new opportunities for business
  • UK's police uncovered the biggest scam in history
  • PayPal became a target of Polish regulators
  • Visa and Mastercard's potential competitor strengths its position
  • JP Morgan is launching a new crypto product to benefit the market
  • Every second financial app is dangerous


  • JCB International identifies a gold mine for European merchants and acquirers
  • UK customers hold back on their purchases
  • People love digital wallets (and QRs as well)

FCA Is Concerned About Trading Apps

The Financial Conduct Authority (FCA) of the United Kingdom has advised stock trading app owners to consider design aspects, especially those with game-like components, that may drive customers to behave against their own interests.

Among the features are regular alerts with the latest market news and in-app points, badges, and celebratory messages for executing transactions. The FCA discovered that customers who used applications with these features were more likely to invest in items that exceeded their risk tolerance.

The FCA also published research that revealed that clients who use such trading applications are exposed to high-risk investments, and that some of them demonstrate compulsive gambling-like behavior.

While gamification may be used to positively engage customers, the FCA says it is being employed in ways that may mislead consumers or result in undesirable consequences.

FTX Can Still Be Saved

Cryptocurrency platform for payment systems Ripple is considering the possibility of acquiring the assets of the FTX crypto exchange amid its bankruptcy. In particular, the company is interested in business customer service-oriented divisions, said CEO Brad Garlinghouse in a conversation with The Sunday Times.

According to Garlinghouse, FTX founder Sam Benkman-Fried asked him for help when he was trying to attract funding to save the business. In a phone conversation, they discussed whether the exchange had divisions that Ripple "would like to acquire". 

The Ripple CEO added that the company considered this possibility back then, which is still relevant now. However, after the exchange filed for insolvency, the conditions under which Ripple was ready to acquire FTX assets changed.

…or at Least To Be Screened

Streaming giant Amazon is filming the story of the rise and fall of the FTX exchange. These miniseries will include 8 episodes. 

The Russo brothers worked on such famous films as "Avengers: Infinity War", "Avengers: Endgame", and "The Grey Man" were named the ones who will be responsible for the shooting process.

The whole plot will be based on insider reports written by anonymous journalists. The story will also touch upon the fate of CEO Sam Benkman-Friede, who lost his entire fortune of $15 billion overnight.

According to the Russo brothers, the collapse of FTX is one of the most brazen frauds. The directors also do not trust Sam very much, calling him an extremely mysterious figure with complex and potentially dangerous motives.

According to insiders, several Marvel actors may star in the film. However, the cast has yet to be revealed.

By the way, Amazon originally intended to screen journalist Michael Lewis' book on Sam Benkman-Friede. However, the rights to it were snatched the last time by Apple's streaming service. They offered the writer an offer he couldn't refuse for a seven-figure amount.

UK Is Going To Be the «world’s Next Silicon Valley»

Jeremy Hunt, the Chancellor of the Exchequer of the United Kingdom, outlined the trajectory of the British fintech industry last week. It was revealed that the United Kingdom intends to become the new Silicon Valley.

According to Hunt, the responsible EU authorities are already preparing to change financial services and digital technologies legislation. These changes will relate to GDPR. 

In particular, the government will submit a draft law on digital markets, competition, and consumer protection to the third parliamentary session, giving the DMU more power. These changes should contribute to the development of competition in the digital market.

The government also intends to launch a "Gigabit" digital infrastructure initiative. Its goal is to cover 85% of the entire UK with gigabit broadband coverage by 2025. At the same time, the whole country should be provided with fast and reliable gigabit connections by 2030. 

The budget for research and development is already allocated. According to Hunt, it will be protected and increased by 2025.

Quant and UST Join Forces To Create New Opportunities for Business

Quant and UST announced a collaboration in which it would offer technical integration and tokenization service to central and commercial banks. Offering these services to financial institutions would help them adopt digital assets.

According to newly-made partners, financial institutions rapidly realize the benefits of distributed ledger technology by issuing digital money and tokenizing current asset classes for faster settlement and access to new markets and consumers.

Quant will provide the underlying technology, with UST assisting with UI design and integration through its sandbox. The collaboration will concentrate on the issue of CBDCs, commercial stablecoins, and digital securities onto key distributed ledger networks.

UK’s Police Uncovered the Biggest Scam in History

British police caught a group of fraudsters who posed as representatives of banks, tax authorities, and other official institutions. They imitated calls from banks, obtaining victims' confidential information and emptying their accounts.

Coordinated law enforcement efforts resulted in the dismantling of iSpoof, an online service that offered subscribers the ability to call from swap numbers anonymously, send recorded messages, and intercept one-time passwords. According to a Europol report, cybercriminals used the service to deceive gullible users by posing as employees of customer services at banks, online stores, and government agencies.

Damage from iSpoof's activities exceeded 115 million euros (about $120 million) and affected more than 200,000 people in the United Kingdom.

At some point in their fraudulent scheme, fraudsters, who posed as employees of such banks as HSBC, First Direct, Nationwide, TSB, Lloyds, Halifax, and other organizations, contacted nearly 20 people every minute.

Among the 142 people arrested was the website's administrator. Ukrainian and U.S. authorities seized and disconnected the site and the service's server two days after the arrest.

PayPal Became a Target of Polish Regulators

PayPal is accused of using prohibited contractual provisions. As a result, Poland's antitrust authority has opened an investigation.

If the regulator uncovers a flaw in the payment giant's user agreement, it will penalize the corporation up to 10% of its annual revenue.

UOKiK is concerned about three provisions of the agreement: the list of prohibited activities, the list of sanctions and the ban on the use of the account if it is blocked or suspended.

The document's terms, according to the Bureau's chief, may violate «good practices», resulting in a huge discrepancy of rights and obligations between the customer and the entrepreneur.

Nevertheless, the prohibited activity in which PayPal seeks to be caught was described «imprecisely», UOKiK claims.

In its statement to Reuters, PayPal says it takes its compliance obligations seriously and works closely with regulators.

Visa and Mastercard’s Potential Competitor Strengths Its Positions

Investors poured $2.2 million into a British startup aiming to compete with Visa and Mastercard.

Atoa Payments is a British startup that uses open banking and offers merchants an alternative to card payments. The company has raised $2.2 million in a pre-seed round of funding.

The startup intends to compete with payment giants Visa and Mastercard by offering merchants to download the Atoa app and connect their bank accounts. Setup takes five minutes, after which merchants can accept payments via SMS, link, or QR code. 

According to Atoa, its solution reduces the cost of accepting payments by up to 70% and provides instant payments instead of the standard one or two days in the case of debit cards.

JP Morgan Is Launching a New Crypto Product To Benefit the Market

One of the largest banks in the world, the American JPMorgan, has registered the trademark of the crypto wallet «JP MORGAN WALLET». Trademark attorney Mike Kondoudis wrote about this on Twitter.

The bank applied with the United States Patent and Trademark Office (USPTO) in July 2020; it was approved on November 15, 2022.

According to the source, the JPMorgan wallet covers crypto payment processing, virtual checking accounts, and other financial services, including managing counterparty funds for electronic transfer.

Earlier, the holding launched tokenized deposits in US dollars. In October, it became known about plans to launch the corresponding instrument in euros.

Earlier, JPMorgan Chase CEO Jamie Dimon said that bitcoin is worthless. It is worth clarifying that this statement doesn't value the company itself in any way but is Dimon's personal opinion. Anyways, that's what the market wants, and JP Morgan has nothing left but to give it.

Every Second Financial App Is Dangerous

Financial companies are not very concerned about the security of their applications. That was the conclusion reached by Promon, the company responsible for disclosing the critical Android StrandHogg and StrandHogg 2.0 vulnerabilities, finding out that more than 60% of financial apps are vulnerable to malware injections.

384 Google Play Store financial services applications were tested, including banking, cryptocurrency, trading, payment, government services, and other financial services. Ultimately, Promon discovered that 236 apps (61.5%) were vulnerable to application repackaging or cloning attacks. Of these, 154 were banking apps.

This scam allows cybercriminals to modify the application's functions so that it can perform additional background tasks (without the user's knowledge, of course), such as credential stuffing.

Promon also stated that 50% of financial apps tested were successfully able to be modified and repackaged.

Good to Know:

Several important research findings were published last week. Use them to bolster your strategy.

JCB International Identifies a Gold Mine for European Merchants and Acquirers

JCB International has concluded that the Indian payments market is one of the fastest growing in the world. The company says that between Q4 2021 and Q2 2022, Cardmembers will increase by 70% between Q4 2021 and Q2 2022.

The region is expected to have the third-largest number of high-income families by 2030, contributing $1.8 trillion to global consumption growth.

These accomplishments are the product of the Indian government's efforts, which has set itself the goal of transforming India into a «digitally empowered society and knowledge economy».

UK Customers Hold Back on Their Purchases

The cost-of-living crisis is taking its toll on finances in the UK. Researchers found that veteran credit card accounts had increased average balances when they missed two or more payments. This trend is seen in those cardholders who have had their cards open for five years or more, and those who are generally considered low-risk creditors. Credit card providers will be concerned about this.

The percentage of cardholders who skip one payment is likewise increasing, however the average debt for consumers who miss two payments is decreasing. This indicates that lenders took focused action earlier in the year to assist clients who had missed one payment in order to avoid debt escalation.

Total average credit card sales are another evidence of people reining back their spending. In contrast to the warm seasons, this decreased in September and totaled £775. It’s 4.56% lower than August.

People Love Digital Wallets (and QRs As Well)

Global digital wallet usage will approach 5.2 billion by 2026.

According to a new study, the introduction of super apps will promote digital wallet adoption in emerging regions that are now cash-heavy.

The following countries are expected to see significant growth over the next 4 years:

1.    Philippines
2.    Thailand
3.    Vietnam

As expected, digital wallet use by each of these countries will reach 75% by 2026. As a driving force for the transition are stated the growing availability of online and mobile commerce services.

Furthermore, the study highlighted QR code payments as the most prevalent digital wallet transaction type in 2026, with 380 billion transactions globally and accounting for more than 40% of all transactions by volume.