Panacea Financial, the financial technology company dedicated to providing world-class financial services to doctors and doctors’ practices, today announced that it has raised $24.5 million in Series B funding to fuel its strategic growth among the doctor community. Valar Ventures, a global venture capital fund, was the sole institutional investor in the round.

Panacea’s Series B financing will enable the company to expand its team of technology, financial services, and healthcare experts, introduce innovative products and services, and ultimately provide the doctor community with a more comprehensive and integrated financial platform. Since its launch in November 2020, Panacea has experienced tremendous growth and has become profitable on a GAAP basis for the full year 2023. In the past year, the Company more than doubled its revenues, maintained excellent credit quality, and has now provided more than $450 million in total financing to doctors and their practices. In addition, it is the preferred financial services partner for 20 national and state medical, dental and veterinary associations and organizations representing approximately 40 percent of all active doctors in the U.S.

"We are proud to announce the successful completion of our Series B funding round," said Tyler Stafford, CFA, CEO and Co-founder of Panacea Financial. "Our goal is to build a widely diversified and deeply integrated suite of financial products and services for doctors, their practices, and ultimately the broader healthcare industry. We chose Valar Ventures as our partner to help achieve this goal given their unmatched experience helping neobanks and fintechs significantly scale across the globe. I am incredibly proud of what our team has built so far, but I feel like we are just getting started.”

"We're convinced that new ideas can make a difference, especially in areas the traditional industry cannot serve well," said Andrew McCormack, Founder and Managing Partner at Valar Ventures. "Valar has invested in financial services globally for many years, and the large investment we are making in Panacea shows the excitement we have in the team’s blend of knowledge of what healthcare professionals care about and the technical skill to use technology to transform financial services in a way that works for doctors."

Panacea recognizes that doctors are the key decision-makers in healthcare, directing more than 70 percent of the $4.5 trillion in total U.S. healthcare spend in 2022. Panacea is poised to become the preferred financial services company for doctors, positioning the company at the intersection of healthcare and finance with the ability to provide robust insights into healthcare and a myriad of services to support broader healthcare.

“As a doctor-founded company, we built Panacea to address doctors’ financial needs in ways other financial services firms struggled to meet,” said Michael Jerkins, MD, M.Ed, President and Co-founder of Panacea Financial. “Now having served thousands of doctors and their practices, it is clear that there are many additional ways we can further support the lives of doctors. This funding empowers Panacea to implement meaningful innovations, positioning us to achieve our goal of becoming the preferred financial services company for doctors nationwide.”

The Consumer Financial Protection Bureau (CFPB) today proposed a rule to rein in excessive overdraft fees charged by the nation’s biggest financial institutions. The proposal would close an outdated loophole that exempts overdraft lending services from longstanding provisions of the Truth in Lending Act and other consumer financial protection laws. For decades, very large financial institutions have been able to issue highly profitable overdraft loans, which have garnered them billions of dollars in revenue annually. Under the proposal, large banks would be free to extend overdraft loans if they complied with longstanding lending laws, including disclosing any applicable interest rate. Alternatively, banks could charge a fee to recoup their costs at an established benchmark – as low as $3, or at a cost they calculate, if they show their cost data.  

"Decades ago, overdraft loans got special treatment to make it easier for banks to cover paper checks that were often sent through the mail," said CFPB Director Rohit Chopra. "Today, we are proposing rules to close a longstanding loophole that allowed many large banks to transform overdraft into a massive junk fee harvesting machine."

The proposed rule would apply to insured financial institutions with more than $10 billion in assets, which covers approximately the 175 largest depository institutions in the country. These institutions typically charge $35 for an overdraft loan, even though the majority of consumers’ debit card overdrafts are for less than $26, and are repaid within three days.

Approximately 23 million households pay overdraft fees in any given year. The CFPB estimates that this rule may save consumers $3.5 billion or more in fees per year. The potential savings would translate to $150 for households that pay overdraft fees.

The Truth in Lending Loophole

In 1968, Congress enacted the Truth in Lending Act. In 1969, the Federal Reserve Board wrote rules to implement the new law, which generally required lenders to clearly disclose the cost of credit to a borrower. At the time, many families received and sent checks through the mail, and had little certainty about when their deposits and withdrawals would clear. When a bank clears a check and the consumer doesn’t have funds in the account, the bank is issuing a loan to cover the difference. The Federal Reserve Board created an exemption to Truth in Lending protections if the bank was honoring a check when their depositor “inadvertently” overdrew their account. At the time, this was used infrequently and there was a modest cost. It was not a major profit driver.

However, in the 1990s and early 2000s, with the rise of debit cards, institutions began raising fees and using the exemption to churn high volumes of overdraft loans on debit card transactions. Annual overdraft fee revenue in 2019 was an estimated $12.6 billion. And, in 2022, Wells Fargo and JPMorgan Chase led the way – accounting for one-third of overdraft revenue reported by banks over $1 billion.

Recent policy changes at some banks have lowered overdraft fee revenue to about $9 billion per year. The policy changes followed enforcement and supervisory efforts by the CFPB to root out illegal overdraft practices, such as charging fees to consumers who had enough money in their account to cover the transaction at the time the bank authorized it.

Proposed Rule

The proposed rule would require very large financial institutions to treat overdraft loans like credit cards and other loans as well as to provide clear disclosures and other protections. Many banks and credit unions already provide lines of credit tied to a checking account or debit card when the consumer overdraws. The proposal provides clear rules of the road to ensure consistency and clarity.

The CFPB also is proposing to limit the longstanding exemption to overdraft practices that are offered as a convenience, rather than as a profit driver. The proposed rule would allow financial institutions to charge a fee in line with their costs or in accordance with an established benchmark. The CFPB has proposed benchmarks of $3, $6, $7, or $14 and is seeking comment on the appropriate amount.

CFPB’s Junk Fee Efforts

The proposed overdraft rule is part of a continued effort by the CFPB to rein in junk fees and spur competition in the consumer financial product marketplace. In early 2022, the CFPB launched an initiative to save Americans billions in junk fees, which generated more than 80,000 responses from the public. The overwhelming majority of the responses were complaints about overdraft fees.

The CFPB has taken multiple actions to curb out-of-control overdraft fees and other junk fees prevalent in consumer financial products. The CFPB issued guidance to rein in surprise overdraft fees in October 2022. It also took enforcement actions against Wells Fargo, Regions Bank, and Atlantic Union to return to consumers $205 million, $141 million, and $5 million in unlawful fees, respectively, in addition to significant civil money penalties paid to the CFPB’s victims relief fund.

Additionally, the CFPB’s recent supervisory efforts resulted in financial institutions returning $120 million in junk overdraft and non-sufficient funds fees to consumers. And in a separate enforcement action, the CFPB ordered Bank of America to pay $90 million for, among other things, double-dipping on non-sufficient funds fees.

After the CFPB began its work to tackle junk fees, many banks began reforming their overdraft and non-sufficient funds fees policies. Those reforms have resulted in $3.5 billion in annual savings on overdraft fees and an additional $2 billion in savings on non-sufficient funds fees.

The CFPB has also taken actions on credit card late fees and customer service fees. In February 2023, the CFPB proposed a rule to rein in excessive credit card late fees. In October 2023, the CFPB issued an advisory opinion to halt large banks from charging illegal junk fees for basic customer service.

Global Fintech leader Broadridge Financial Solutions, Inc. today announced that Danske Bank has selected Broadridge’s multi-asset trading and market-making solution, Tbricks, to support multi-asset trading, pricing and position management across Danske Bank locations. Tbricks offers a modular trading platform with a flexible user interface, powerful built-in functionality, and a high degree of customizability. Tbricks will integrate with existing systems at Danske and allow the bank to scale and streamline operations, creating the capacity to focus on strategic initiatives rather than technology management, and providing long-term cost predictability.

“Implementing a managed solution of Broadridge’s Tbricks for multi-asset trading and market making presents us with the latest in trading technology, as well as a long-term partner which over time can expand our offerings within the equities and derivatives trading space,” said Claus Harder, Global Head of Markets & Transaction Banking at Danske Bank. “After a thorough review of other Fintech and capital markets solution providers, we are excited to expand our longstanding relationship with Broadridge.”

Capital markets firms are increasingly searching for highly adaptable, modular solutions that combine speed and accuracy with the flexibility demanded by today’s ever-changing financial markets. Broadridge’s multi-asset trading platform allows clients to utilize agile systems that enable a high level of interoperability, allowing them to adapt to change quickly, employ sophisticated trading strategies, and capitalize on business opportunities.

“At Broadridge, we’re committed to building a leading suite of innovative and scalable solutions across the trade lifecycle,” said Ofir Gefen, Managing Director EMEA and APAC, Broadridge Trading and Connectivity Solutions.  “We are excited to expand the services we offer to Danske Bank and to enable them to deliver enhanced front-office trading solutions for their clients. Today’s announcement further underscores Broadridge’s commitment to serving our clients across EMEA.”

Tonik Digital Bank (Tonik), the Philippines’ first digital-only neobank, leveled up its Big Loan catering to a wider range of financial needs for small businesses in the Philippines.

As the first digital bank in the country to offer a secured loan product, Tonik’s Big Loan offers entrepreneurs up to P5 million with flexible, tailored repayment options, competitive interest rates, and a streamlined application process that elevate the lending experience of small and medium enterprises (SMEs).

Tonik also provides personalized, end-to-end support through a dedicated team of experts available to assist borrowers throughout the lending process.

As micro, small, and medium enterprises (MSMEs) make up 99.58% of all businesses in the Philippines, 67% of which face credit constraints—Tonik’s Big Loan expands Filipino SMEs’ access to larger amounts with the flexibility and convenience they need to take their businesses to scale.

“Availing Tonik’s Big Loan is very convenient…it’s also very fast. Upon approval of my loan, it helped me buy a parking lot which I’ll use to generate passive income,” says Rowena Gotinga, a Tonik customer.

“By providing SMEs with accessible and flexible financing through the Big Loan, we are not just extending credit; we are unlocking opportunities. At Tonik, we focus our energies into ensuring that every Filipino entrepreneur, regardless of the size of their business, is empowered with the necessary tools and resources they need to thrive to turn their dreams to reality,” said Greg Krasnov, Founder and CEO of Tonik Digital Bank.

The digital lending market in the Philippines is seen to grow by 45.4 percent to reach $488.8 million in 2023 and is expected to ring up to $1.68 billion by 2027—led by digital banking service providers such as neobanks and fintech firms.

To help small businesses unlock the benefits of digital banking, Tonik will be participating in the “Pangkabuhayan QC” Event, a series of Livelihood Training Seminars for MSME owners from January 24-26, in partnership with the Quezon City Government’s Small Business Division.

ComplyAdvantage has launched its annual report into fraud, money laundering, and financial crime: The State of Financial Crime 2024. 

The report identifies the criminal use of artificial intelligence (AI) as an emerging fraud challenge while revealing that most financial institutions are investing in technology to combat this growing threat. However, a majority of consumers remain uncomfortable with AI, even when it is being used to protect them.

“Today, AI is being utilized by both criminals - who are using it as new ways to defraud customers - and institutions, who are using it to stay ahead of fraudsters and defend their customers,” said Vatsa Narasimha, CEO of ComplyAdvantage. “We know from our work with financial institutions around the world that AI-based technologies can significantly enhance the fight against financial crime. We see a tremendous opportunity for banks to show consumers how these new technologies and processes like explainable AI are being used to safeguard their finances.”

AI: Fighting the emerging threat

● Two-thirds (66%) of financial industry respondents think the use of AI by fraudsters and other criminals poses a growing cybersecurity threat. Risks include deepfakes, sophisticated cyber hacks, and the use of generative AI to create malware.

● Banks and other financial institutions are increasing their defenses against these threats, with 86% of respondents saying their company is investing in new technologies.

● However, only 53% of financial industry respondents said they prioritize explaining their use of AI to their customers.

“Whether they use AI to identify fraud patterns, analyze networks, or streamline processes, banks can take the lead on what we believe will be a key trend in 2024: explainability. Namely, the ability of financial institutions to demonstrate to their customers how and why AI models have taken decisions that affect them,” continued Narasimha. 

“If compliance leaders are concerned about how customers will receive this information, our survey suggests they should be optimistic. 65 percent of consumers told us they are open to banks sharing their transactional details with other banks if it helps identify fraud patterns. So clearly, consumers understand that new, more innovative approaches are required to address our financial crime challenges. We would expect this percentage to increase further once the benefits of AI for improving financial crime detection are more widely know.”

Ongoing problem of payment fraud with millennials hardest hit

One example of growing criminal sophistication highlighted in the survey is payment fraud. With digital payments continuing to experience double-digit growth year on year, criminals are using new technologies to commit fraud on a mass scale.

● 60% of industry executives surveyed say that payment fraud has remained at the same high levels over the last 12 months, with 8% reporting an increase.

● Nine out of ten consumers surveyed (89%) expressed anxiety about being a possible victim of fraud.

● 1 in 4 consumers (23%) report being the victim of fraud in the last three years, with millennials (age 27-42) the hardest hit at 31%.

When asked what kinds of fraud they were the victims of, the most common responses were:

● Credit card fraud (59%)

● Identity theft and phishing (21%)

● Employment scams (12%)

● Investment fraud (10%)

“Millennials have embraced digital payments and mobile banking, which dominate how we access banking services today. The scale of fraud amongst this generation demonstrates how quickly criminals exploit technology and changes in consumer behavior,” said Narasimha. 

“Every compliance executive we surveyed said that they are either currently participating in an authorized push payment (APP) program or will in the near future. With APP fraud continuing to rise, we expect this to become a big priority for regulators and financial institutions in 2024.”

One in five consumers admit to “friendly fraud”

At least one in five of the consumers surveyed admitted to at least one behavior that is described as “friendly fraud.” Indicators of this include:

● Disputing a payment after receiving an inadequate response from a merchant (21%).

● Disputing a payment that they later realized was legitimate (12%).

● Claiming a debit or credit card refund despite not returning the item (9%).

“The surprisingly high level of ‘friendly fraud’ uncovered in our survey shows just how widespread and complex fighting fraud can be when consumers can - even inadvertently - commit behavior that may raise a red flag with their bank,” said Iain Armstrong, Regulatory Affairs Practice Lead for ComplyAdvantage.

Today, Tower Community Bank, a stalwart in the Tennessee banking sector for over 50 years, has reimagined its service offerings in the local market through a partnership with FintechOS. By embracing digital innovation, Tower has launched Momentum by Tower, a unique point-of-sale lending platform that empowers local businesses to provide bespoke financing options directly to their customers.

Faced with the challenge of integrating new technology with existing legacy systems, as well as recognizing the need to adapt to the evolving demands of modern banking customers and the increasing shift towards digital solutions, Tower found an agile partner in FintechOS, adopting FintechOS’s fintech enablement platform.

This strategic move has enabled Tower to retain its traditional values while enhancing customer service by offering a seamless digital lending experience. Moreover, the collaboration has produced a resilient solution that can be adapted to market changes while integrating with Tower's core infrastructure.

Momentum by Tower is a testament to the synergy between Tower's community-driven mission and FintechOS's cutting-edge technology. The embedded lending solution, designed for Tennessee’s medical community, allows patients to finance their medical and dental procedures at the point of service. It represents a significant step forward in customer empowerment, providing additional benefits for creating checking accounts and making deposits.

All aspects of the lending solution were defined using FintechOS Studio, a part of the FintechOS platform that allows non-technical teams to create and launch personalized products and customer journeys using a no-/low-code approach, driven by data and powered by automation. A flexible decision engine empowers the Tower team to define different types of loan products. Using prebuilt ecosystem connectors, customer credit checks are run in real-time, and all documents can be signed digitally to streamline the process.

The partnership with FintechOS has resulted in substantial growth in loans, deposits, customer base, and revenue streams for Tower. With the enhanced ability to expand beyond traditional geographic boundaries, Tower is now poised to explore untapped markets.

"The biggest benefit of working with FintechOS is the platform's unmatched flexibility. It's not just about acquiring a product; it's about investing in a dynamic ecosystem that nurtures your creative visions and translates them into tangible customer-centric solutions,” said Brett Hollenbeck, Director of Virtual Banking, Tower Community Bank. “The agility FintechOS provides is invaluable for continuous innovation. For anyone looking to elevate their digital services, FintechOS is the partner you’re looking for, and they were unquestionably the right choice for us.”

Tower and FintechOS are exploring avenues to extend this innovative lending solution to other sectors.

“We are delighted in our partnership with Tower Community Bank, an icon in the banking sector of Tennessee,” said Teo Blidarus, CEO and Co-Founder, FintechOS. “Our partnership with Tower has empowered them to innovate at pace, giving them the ability to define and update products easily and quickly so that they can respond to changing market conditions, customer preferences, and regulations – regardless of their legacy core technologies. We look forward to the future of working with Tower.”

N26 today announced the launch of a new Stock and ETF trading product that will allow all account holders to buy and sell stocks and ETFs for 0.90 EUR per trade, directly in the N26 app. The launch of this new and comprehensive trading product will see N26 continue to expand its offer beyond its digital bank accounts, bringing customers more solutions for savings and investments.

With financial independence increasingly front-of-mind for all customers, a growing number of Europeans aspire to proactively build their wealth. N26 Stocks and ETFs aim to make managing and building one’s investment portfolio simple and accessible to all. The new product will allow customers to buy and sell partial shares of some of the most popular European and US assets on the global equity markets at a market-leading execution price, thanks to N26’s partnership with Upvest.

The new product will be gradually made available starting today in the form of an early version to eligible customers in Austria, offering fractional investing in more than 100 ETFs, with orders starting from 1 EUR. The product’s simple and transparent pricing structure of a fixed 0.90 EUR per trade offers customers access to the equity markets at one of the most competitive prices in the market. N26 will also shortly roll out free trades with its premium memberships.

N26 plans to expand the range of assets offered to trade to the full suite of over a thousand stocks and ETFs in the coming months to customers in both Germany and Austria, with further availability in additional markets to be announced in due course. In the coming months, customers will also be able to invest regularly with fee-free Savings Plans.

Customers will easily be able to view a summary of their Stocks and ETFs portfolio and purchased assets alongside their Instant Savings and N26 Crypto accounts to get a full view of their finances with N26.

N26 account holders who have completed N26’s identity verification and eligibility checks will be able to sign up to open their trading account in a matter of seconds to begin investing. Funds for purchasing stocks and ETFs can then be easily moved from the main account to the trading account and invested with just a few taps.

To purchase their chosen stock or ETF, a customer simply needs to select the desired asset and the amount they would like to trade. Associated fees will be displayed transparently and will need to be reviewed and confirmed before each transaction is made, and the cash equivalent of the trade will be deducted from the account holder’s bank balance. Customers will also benefit from clear visualizations of their Stocks and ETFs portfolio, making it easy to track their purchase history and portfolio development over time.

Payhawk, the global spend management solution, is now a licensed Electronic Money Institution (EMI) in the UK. The Financial Conduct Authority (FCA) granted the licence after extensive due diligence into Payhawk's compliance, financial, and operational processes. The new UK EMI license will allow Payhawk to directly issue electronic money, facilitate digital payments and provide card issuance and payment solutions to new and existing UK customers.

In addition to the EMI license in the UK, Payhawk holds an EMI license covering the EEA, is a principal member of Visa Europe, is accredited by ICAEW's Technology Accreditation program, and maintains PCI DSS Level 1, SOC 2, and ISO 27001 certifications.

Hristo Borisov, CEO and Co-founder of Payhawk says, "We are thrilled to achieve another important milestone in our journey to make managing business payments easy - for everyone. Our company's strong product DNA allows us to quickly launch new, high-quality features for our customers, and the new UK license unlocks new possibilities for us. By controlling more of the payment process stack for our customers, we can optimise the infrastructure to address the needs of our client base - further accelerating development velocity and innovation. This is a major step in our ambition to become the preferred global spend management company by combining our cutting-edge software with regulated payment services.”

In the past few months, Payhawk has added several executives to the leadership team who come with strong track records leading regulated financial institutions.  

Borisov continues, “We are happy to welcome Gareth Walsh, a former executive at SumUp, who joined as Group Chief Compliance Officer; Maor Fishman who joined our group as a General Counsel from Checkout.com, where he served the role of a Deputy General Counsel; and Pedro Batista who is in charge of our regulated activities in the UK as Chief Executive Officer of Payhawk Financial Services UK, and is also responsible for Payhawk’s global Payment & Operations division.”

Pedro Batista, now Chief Executive Officer of Payhawk Financial Services UK, says: “We are extremely proud of receiving our e-money licence in the United Kingdom and receiving the trust of the FCA, which, in our view, has one of the highest benchmarks of regulators worldwide and traditionally sets the tone of financial regulation globally. This confirms our commitment to providing regulated financial services of the highest standard.” 

Neo, the cross-border payments and FX fintech has today announced that the firm is now profitable as an increasing number of SMEs explore alternatives to banks for managing their international business needs. 

The Barcelona-based fintech which provides a one-stop-shop multi-currency account for corporate treasurers recorded an annual revenue of over €5 million and an annual profit of €1 million. It also saw cleared volume double in just under a year, reaching over €7 billion in 2023 alone, reflecting growing demand from businesses for alternatives to traditional banks.

Research shows that when working with traditional banks, SMEs with international operations suffer from unfair pricing, slow execution, and difficulties in reporting transactions. As a result, 92% of SMEs are having conversations about virtual account solutions such as digital wallets to help solve these problems.

There has also been an increased bank diversification drive since the banking crisis which highlighted the risks of relying on one or two banking partners. This has prompted company treasurers to diversify their banking pools and look to fintech providers as an alternative.

These factors have helped Neo acquire new clients and receive an increasing number of inquiries from corporates that are doing more business abroad and are looking to move away from their traditional banking providers. 

Neo has been able to help these businesses through its multi-currency account. It offers International Bank Account Numbers (IBAN) through which businesses can send and receive payments in 25 currencies. Neo’s wallet architecture makes it easy for firms to organize their funds and store multiple currencies, ready for making rapid payments or exchanging currencies, revolutionizing the way they transact. Neo has also put a strong focus on state-of-the-art client support by lining up a team of highly skilled professionals who support clients with their cross-border operations. 

Neo has evolved from a platform offering FX trading to becoming a one-stop shop for businesses across the globe, working with more than 300 corporates across 28 countries and more than 8,000 banks are connected to its Bank Identification Code (BIC) on the SWIFT network.

Laurent Descout, co-founder and CEO of Neo, said: “When we founded Neo, we knew that businesses were being underserved by treasury management software and banks which was holding back their international aspirations. So, we built a solution using our own proprietary software which simplifies cross-border payments, FX and treasury, giving them everything they need to expand internationally, all in one place. Our solution comes with a top-class support team that helps clients on a daily basis and offers a level of service that banks have failed to provide for too long.” 

“Over the past year, we have experienced exponential growth across our customer base, volumes and revenues which is a testament to the product and team we have built. Turning Neo into a profitable fintech was our main objective for 2023 and achieving this just three years after the launch of our multi-currency accounts positions Neo as a sustainable business. This helps us stand out against some VC-backed fintech players which have struggled with a lack of profitability. This is a very positive message for our shareholders, clients, supervisors and banking partners. Being financially independent will help us continue to grow our success and enhance our offering as we rebuild corporate finance from the ground up.”