US banks put the brakes on Open Banking

A US court has agreed to halt the implementation of Open Banking rules. The whole area of US banks providing data to fintechs has been very contentious, with major banks thinking of charging fees, suggesting that fintechs are riding free on their services. “The ruling effectively halts a U.S. open banking framework, pending further action by the bureau, which had joined banks’ efforts to quash the rule as recently as five months ago when it called the rule ‘unlawful’ in court filings,” reports Banking Dive. “The most significant unknown about the future concerns the fees banks may charge aggregators,” wrote Stewart Watterson, a strategic adviser at Datos Insights. “If banks begin charging aggregators for data between now and June, that is one place where it could have an impact. Only the largest banks are up and running on providing data, and they will most likely continue to wait and see, which is what we will all have to do.” Banks in other countries have largely opposed Open Banking rules, only to see them eventually pushed through by regulators. The future of the US Consumer Finance Protection Bureau, which initially pushed for Open Banking, remains uncertain.

A new leader for TymeBank in 2026

Congratulations to Cheslyn Jacobs, who will step into the chief executive role at TymeBank on 1 January 2026, with current leader Karl Westvig taking on an advisory role. Jacobs is currently Chief Commercial Officer and is a former Head of Sales who has been with the business since its inception in 2012. Westvig became chief executive since 2023 after TymeBank acquired Westvig’s SME lender Retail Capital for TymeBank in 2022. The bank has pioneered a hybrid model of digital services and kiosks based in retail outlets, and has successfully expanded out of South Africa into the Philippines and Vietnam. “Jacobs appointment comes amid a series of changes at the bank, which is set to change its name to GoTmye in 2026,” reports BusinessTech. “The bank is also partnering with Sanlam to offer unsecured personal loans bundled with credit life cover, entering a market dominated by Capitec. The broader TymeGroup, which also operates in Vietnam and the Philippines, plans to list on the New York and Johannesburg Stock Exchanges in 2028.” The lender has its eye on expansion into the Indonesian market. One of the fastest-growing banks globally, the lender reached over 10 million customers late in 2024. Patrice Motsepe’s African Rainbow Capital is the lead shareholder, and counts Nubank and Tencent as investors.

UPI just keeps growing

Can we call UPI a hybrid system? India’s digital payments network is still growing. UPI, now celebrating its tenth birthday, reached an all-time high volume of transactions during October and the festive season of Diwali, averaging 668 million transactions daily, with volume reaching 750 million on one day. “The milestone reflects the continued expansion of India’s digital payments ecosystem, supported by the growing use of QR based payments, recurring mandates, and the integration of UPI with credit lines and international corridors,” reports entrackr.com. “UPI has expanded to several new countries, including France and the UAE, with agreements in place for Namibia, Trinidad and Tobago, and Peru. It is already operational in Bhutan, Singapore, Sri Lanka, Mauritius, and Nepal, and recently went live in Qatar. Recently, Razorpay, through Razorpay Curlec, partnered with NPCI International Payments Limited (NIPL) to enable UPI payments in Malaysia.” As Asian Banking and Finance reported recently, “retail payments in India are now 99.8% digital, with paper-based instruments – primarily cheques – now ‘nearly obsolete’,” citing a CareEdge study. The study said that digital payments including UPI, AePS, IMPS, and others dominate retail transactions and account for 92.5% of the payment value and 99.9% of transaction volume. Cards and prepaid instruments are stable or in decline, meanwhile, as UPI substitutes for low-value transactions, CareEdge noted.

Digital Euro Lumbers to Life

There’s been a definite contrast emerging between EU and US regulators this year, including over stablecoin regulation and bank capital requirements. Santander chair Ana Botin opened the aforementioned conference this week by saying EU regulators were in danger of over-regulating. “Regulation kills innovation... We need to understand that unless we allow companies to innovate, we are not going to grow,” said Botin. She also noted that US banks were facing looser solvency requirements which would widen the gap with Europe, allowing US banks to better support lending. US banking agencies are expected to present a more bank-friendly version of the Basel III rules in the next months. Nadia Calvino, head of the European Investment Bank (EIB), told the conference that deregulation was not on Brussels' agenda.While US companies in particular appear to be creating new stablecoins every five minutes, the ECB’s central bank digital currency is lumbering to life with all the speed and grace of Frankenstein. The EU’s finance ministers like it, as does the European Central Bank. The EU’s individual banks hate it, as does the fintech industry and stablecoin issuers, while consumers find it creepy. In planning since 2020, the ECB expects to launch the coin by 2029, but there’s pushback from banks and lawmakers. “Ahead of a key European parliamentary hearing on the project on Wednesday, 14 lenders including Deutsche Bank, BNP Paribas and ING warned that the digital euro could undermine private sector payment systems,” reports the FT. The banks have collaborated to create Europe’s Wero digital wallet scheme, after many years of failing to create a card-based alternative to Visa and Mastercard, and they say that the digital euro is only going to duplicate what they’ve been putting in place. In the interim, the US administration has ruled against a digital central bank dollar and promoted stablecoins, which some at the ECB see as another threat to European sovereignty. “A dramatic decline in the use of cash and the dominance of US payments providers creates the need for the digital euro to protect ‘our freedom, autonomy and security’, ECB executive board member Piero Cipollone said in September. The share of cash used in stores fell from 72 per cent to 52 per cent in the five years to 2024. The digital euro has received a boost from the rapid development of US-backed stablecoins, which many in Europe feel could threaten the role of the euro.” A trawl of social media suggests that many Europeans see a central bank digital currency as government overreach.

Don't call it gambling: the rise of prediction markets for retail investors

Entire cities have grown by offering legal or semi-legal gambling: now they're facing threats from online gambling, sorry, we mean prediction markets. This week a Nevada judge banned crypto.com from taking on clients in the state, saying the prediction market comes under sports gambling rules. "Legal experts indicate this case highlights the increasing uncertainty regarding how to regulate prediction markets in the US. While the CFTC (Commodity Future Trading Commission) oversees platforms like Kalshi, state gambling regulators maintain that contracts linked to sports or entertainment results constitute bets, irrespective of the technology or exchange format used," reports gambling advisory business SCCG. It seems that prediction markets, where participants buy and sell future contracts based on outcomes of games and elections, are a major new stream of income for retail investment businesses. You may have first heard of prediction markets such as Polymarket last year preceding the US election. The chief executive of retail investment platform Robinhood said this week that prediction markets have become a big earner – and it's no coincidence that prediction markets have swung towards sporting events. "Prediction markets, which allow users to bet in real time on everything from elections to the Super Bowl, are suddenly big business and growing fast," reports Fortune. "Robinhood underscored that during the company’s Q3 earnings announcement on Wednesday afternoon, stating that prediction markets have grown to $100 million in annualized revenue, and that revenue in October from the category eclipsed that of the entire previous quarter. Currently, the company relies primarily on a partnership with Kalshi to provide the exchange underlying most of Robinhood’s prediction market offerings. The startup, along with rival Polymarket, exploded in popularity in 2024 during the U.S. presidential election campaign, thanks in part to a court ruling that overturned a longtime regulatory position that most prediction markets were illegal." States including New Jersey and Nevada (hello Las Vegas) have issued cease-and-desist orders against prediction markets operating in their jurisdiction.

The future of Hong Kong as a financial centre will rely as much on fintechs as it will on banks. The city's de-facto central bank this week launched a five-year fintech strategy including initiatives for AI and tokenisation. “Ten years ago, the term fintech was far removed from the general public, but now fintech is a part of everyday life,” said Eddie Yue Wai-man, chief executive of the HKMA, in a media briefing after unveiling the Fintech 2030 strategy," the SCMP reports. "He said Fintech 2030 was the third stage of Hong Kong’s fintech strategy for the financial sector, noting that the first phase, launched in 2017, introduced digital banks, and the second phase in 2021 stressed fintech’s practicality. HSBC Group CEO Georges Elhedery said during a panel discussion at the conference that the bank had launched several tokenisation and fintech projects in the city. Standard Chartered CEO Bill Winters, who was on the same panel as Elhedery, said that he was "extremely encouraged to see the degree to which Hong Kong is being used as a test bed or staging ground for innovations'."