Latest banking news

June 24, 2022 2:33 PM

Our bonus coverage begins with a pair of stories on the growing buy now/pay later sector. We've also got items on Bank of Montreal's new office tower in Chicago and a delisting threat against Republic First.

Scroll through to see what you might have missed this week in banking, payments, credit unions and more.

Klarna launches multiretailer loyalty card feature

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Klarna, the Sweden-based buy now/pay later fintech, has added a loyalty feature to its app where users can store digital versions of various stores’ rewards programs. The move provides in-app access to shoppers’ existing loyalty cards at more than 8,000 retailers worldwide, streamlining the ability to continue earning rewards at those stores when financing a purchase through Klarna. The feature incorporates technology from Stocard, a German mobile wallet startup Klarna acquired last year. — Kate Fitzgerald

Revolut rolls out Pay Later in Ireland to rival Klarna, Afterpay

Rafael Henrique/Photographer: Rafael Henrique/SO

Revolut has picked Ireland as the first market to launch its buy now/pay later product that will see it go head to head with the likes of Klarna and other fintechs in the rapidly growing area of lending. The digital bank plans to roll out its “Pay later” offering across Europe, adding Poland and Romania later this year, Revolut said in a statement Friday seen by Bloomberg News. In its first market of Ireland, 1.9 million adults have a Revolut account. Analysts believe the BNPL market in Europe is set to grow to £680 billion ($831 billion) over the next five years.
Revolut, which is seeking to become a superapp offering a range of financial products, will allow customers to spread payments over three installments with qualifying customers given a credit limit of 499 euros ($524). Revolut will assess customers’ creditworthiness before transactions using open banking data they have granted access to, rather than at the point of sale, to ensure users are not getting into unmanageable debt. There will be a 1.65% fee per purchase. Joe Heneghan, CEO of Revolut Europe, said its offering would encourage people to pay off their credit within two months, “rather than calling on overdrafts and credit cards which don’t carry the same emphasis on quickly paying back the amount borrowed.” Revolut will not allow customers to use the new product to buy cryptocurrencies or stocks within its app or to withdraw cash. Attention to BNPL lending is heating up as more consumers turn to the unregulated form of credit. The U.K. government announced on Monday that it would tighten regulation of the sector amid growing concern some users don’t fully understand the product. — Aisha S Gani, Bloomberg News

BMO opens new U.S. headquarters in Chicago

Bloomberg News

Bank of Montreal opened its new American headquarters in downtown Chicago, with Mayor Lori Lightfoot cutting the ribbon at the 50-story BMO Tower. The site, beside the Chicago Union Station, will house more than 3,000 employees. "We're the largest bank in the world that has its U.S. headquarters in Chicago, a market in which we have a long, proud history of over 160 years," David Casper, U.S. chief executive of BMO Financial Group, said in a statement. — Victoria Zhuang

Former teller pleads guilty to $100,000 theft from bank

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A former teller at Summit Community Bank in Salem, West Virginia, pleaded guilty to stealing almost $100,000 from the bank’s customers, the Justice Department announced. David Paul Ritter, 31, stole the money from client accounts in 2020 but didn’t pay taxes on it. He faces a fine of $1 million, as well as up to 30 years on the theft charge and another three years for failing to pay the IRS. The bank has already reimbursed the bilked customers. — Chana R. Schoenberger

KeyBank turns to Salesforce’s dedicated products for financial services

Ty Wright/Bloomberg News

Salesforce has expanded its suite of products specific to financial services, including banks, wealth management firms and insurance companies, the company announced Thursday. One new feature lets customer service agents collaborate in a central Slack channel, and another allows call center agents to view comprehensive insights about customers in one place. KeyCorp in Cleveland is one financial institution using the new features, specifically for its wealth management and commercial banking clients. The goal is to increase productivity and improve personalization. — Miriam Cross

Eight charged with fraud tied to Paycheck Protection Program

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Eight California residents were charged Wednesday in the Eastern District of Pennsylvania with conspiring to commit wire fraud during the pandemic. The defendants allegedly stole over $7 million in loans from the Paycheck Protection Program, Economic Injury Disaster Loans, and pre-pandemic Small Business Administration programs by posing as businesses that needed the money to stay in operation and by submitting fake bank statements and tax documents to authorities. If convicted, each could face up to 20 years in prison. — Victoria Zhuang

Former People's United risk chief joins Israel Discount Bank

Israel Discount Bank of New York hired Daniel Roberts from the former People's United Bank as its chief risk officer. Roberts worked for the past nine years as risk chief at People's United, before its sale to M&T Bank in Buffalo, New York, this spring. Before that, he spent 25 years at Citigroup on the risk and auditing teams. — Victoria Zhuang

Smart Financial Credit Union in Texas has its first female CEO

Smart Financial Credit Union in Houston promoted LeAnn Kaczynski to become its next chief executive and the first female to occupy the role. Kaczynski, who joined Smart Financial in 2005 and was most recently its chief financial officer, succeeded Larry Seidl, who retired at the end of March, as CEO. “When we all work together for the common good, it's assured that our credit union will prosper and positively impact our communities for years to come," Kaczynski said in a press release. — Frank Gargano

Nasdaq threatens to delist Republic First

Nasdaq electronic sign in Times Square, NYC.

Republic First Bancorp has been put on notice by the Nasdaq stock exchange that it is in jeopardy of losing its listing after falling out of compliance with a regulation requiring companies’ audit committees have a minimum of three directors, all of them independent. Since the death of director Theodore Flocco in May, Republic First’s audit committee has had just two members, but a long-running split among the remaining directors has paralyzed the board, leaving it unable to name a successor for Flocco, who served as audit committee chairman. A federal judge appointed a custodian for the $5.6 billion-asset Republic First earlier this week. The custodian, Philadelphia attorney Alfred Putnam, has indicated he plans to convene a special shareholder meeting to fill Flocco’s vacant board seat by July 29. Nasdaq gave the company until May 2023 to find a solution. — John Reosti

McDonald’s adds Adyen’s technology to its mobile app

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McDonald’s has formalized a global partnership with the Dutch payments processor Adyen to improve capabilities within its U.S. mobile app. The hamburger chain, which began working with Adyen in the U.K. in 2020, is relying on the fintech to streamline speed and expand the volume capacity of McDonald’s mobile ordering, including new capabilities for managing loyalty and promotions. — Kate Fitzgerald