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Apple acquires UK open banking startup Credit Kudos
- deleted 5y ago[deleted]
- jxub 5y agoKudos (?) to the team. My guess is that they will want to roll out their own credit score system when paying by installments, rather than rely on Barclays as the credit broker as they currently do.
- tksb 5y agoAs far as I know the Barclays partnership ended at least a few years ago. Apple Card was launched with Goldman Sachs.
- traceroute66 5y ago> As far as I know the Barclays partnership ended at least a few years ago. Apple Card was launched with Goldman Sachs As far as the UK is concerned, neither. There is no Apple Card in the UK (or indeed Europe for that matter, AFAIK).
- tksb 5y agoYou're totally right, thanks! I read right past the UK in the headline.
- RossM 5y agoAt least in the UK, all financing arrangements for phones, laptops are with Barclays and PayPal Credit https://www.apple.com/uk/shop/browse/financing https://www.apple.com/uk/shop/browse/financing
- mcintyre1994 5y agoI bought a new iPhone with Apple's 0% interest financing in the UK in December, and the financing is provided by Barclays. Goldman Sachs doesn't have much of a presence in the UK yet, only Marcus AFAIK and no credit products.
- vineyardmike 5y agoGoldman doesn’t have much of a consumer presence anywhere. Only Marcus is their consumer facing side (besides Apple Card). In America apple doesn’t use Goldman for their financing of products unless it’s financed via Apple Card.
- crate_barre 5y agoown credit score system when paying by installments These are good ideas. Many people have debt from all kind of life issues and it kind of seems insane to lock them out of financing for … a phone or the like. The credit score system is the OG social credit system that China ain’t got nothing on.
- toomuchtodo 5y agoThere is a lot of opportunity in issuing credit to folks with thin or no credit files where you can rely on other signals to determine creditworthiness, and it’s win win. The lender makes a profit, and the borrower is able to obtain credit they otherwise wouldn’t be able to, or credit at a lower cost.
- crate_barre 5y agoSo I’ve heard but for the thing that really matters, renting and certainly buying a home, you are more or less fucked (at least for the 7 years they put you in financial jail).
- deleted 5y ago[deleted]
- toomuchtodo 5y agoThe mortgage banking origination pipeline, mortgage backed securities, and the housing/wage macro situation is a topic onto itself.
- NovemberWhiskey 5y agoThat's certainly not true. I relocated to the U.S. in 2015 with zero credit history, and was able to get a jumbo mortgage in 2016 because I worked with a lender that was willing to look beyond a credit file with zero seasoned tradelines.
- crate_barre 5y ago
- deleted 5y ago[deleted]
- talideon 5y agoBecause it's not obvious from the headline posted here, the startup in question is Credit Kudos.
- deleted 5y ago[deleted]
- nailer 5y agoFred and Matt formed Credit Kudos in my cohort in https://joinef.com https://joinef.com back in 2015.
- Angostura 5y agoI wonder if this means we will finally get Apple Cash up and running in the UK
- axg11 5y agoThis is great news for expansion of Apple's financing/credit/card services to the UK. On the downside, does this mean it's incredible hard for Apple to scale these services to all the countries they operate in? I can't imagine they can acquire a similar company for every market.
- maxfurman 5y agoThey have essentially unlimited cash. They certainly could acquire a small bank(ing startup) in every major market if they wanted to.
- sschueller 5y agoDon't all these new online banks (Wise, Revolut, etc) get UK bank license and then operate in the entire EU (although UK is no longer in the EU)?
- alibarber 5y agoI don’t know of any that will extend credit across the whole EU. The closest service I have gotten to this was (also not exactly an EU company) American Express - but that was still two different legal entities.
- rgallagher27 5y agoA lot of Fintechs get their banking license in Lithuania now for the EU
- fumblebee 5y agoAs another commenter mentioned, for the EU many fintechs will opt to get a banking license in Lithuania. For example, Revolut is a bank in the EU via a Lithuanian banking license, but only an "e-money institution" in the UK (though the application to become a British bank -- and for that matter, an American bank, and other jurisdictions -- is in progress). Monzo is a UK bank, but opted to cancel their US banking application, and I don't believe is an EU bank either (someone please fact check me here!)
- physicsguy 5y ago
- explaingarlic 5y agoOpen Banking is some serious business. Wondering if they're gonna face any fines in the coming years due to non compliance... These won't be the regular EU slap-on-the-wrist fines either.
- erinnh 5y agoWhy? There already is a standard for open banking in the EU with PSD2.
- explaingarlic 5y agoI have genuinely no clue what that is. I don't think it's the same thing as Open Banking, though. The FCA did just fine NatWest a quarter of a billion for their blatant money laundering.
- proctrap 5y agoExcept it's not a standard. It's "everyone has a different API that is broken in another way". But you can threaten legal action if they don't fix it or help you, which gets stuff done.
- rmesters 5y agoIt's happening already: https://www.finextra.com/newsarticle/39905/cma-writes-to-barclays-and-lloyds-over-open-banking-api-breaches https://www.finextra.com/newsarticle/39905/cma-writes-to-bar...
- davb 5y agoUnfortunately it seems that the biggest application of open banking (beyond "see all of your accounts in one app") are these type of credit risk analysis products with opaque (to the individual) algorithms responsible for informing decisions that have a potentially massive impact on a person's life. To apply for credit (such as a mortgage) you're required to connect your bank account to these services via Open Banking, allow them to extract all of your transaction data and trust that they make reasonable, unbiased and fair recommendations based on that data. While I understand that high value lenders (e.g. mortgage providers) made similar assessments based on submitted paper bank statements, the massive proliferation of these services using Open Banking (or worse, screen scraping after requesting your account credentials) is concerning. Especially in cases where they use difficult to reason about AI/ML algorithms. The volume of data that can be gathered far exceeds the n-months bank statements typically requested by a mortgage lender, and it seems that most lenders use third parties like Credit Kudos rather than doing the same risk analysis in-house. Generally speaking, I don't trust them and their networks of partners and contractors to keep my data secure. And it looks like it's becoming increasingly difficult to avoid these services when applying for a mortgage.
- kwhitefoot 5y ago> screen scraping after requesting your account credentials Sounds very odd. Handing your log in credentials to anyone is against the rules not to mention common sense. Even the bank itself will never ask for that. My bank's website has warnings about this right on the front page.
- rmesters 5y agoUnfortunately, this is still common in Europe: https://sifted.eu/articles/open-banking-finance-battle/ https://sifted.eu/articles/open-banking-finance-battle/ In U.S. most "open banking" is still done via asking people to share their banking passwords.
- vishnugupta 5y agoWhile it is indeed odd companies are making fortune out of this. Plaid is a recent example which was in news for failed acquisition by Visa (shot down by DoJ no less[1]). Yodlee is another old timer company. Why do regulators not go after such companies is beyond me. [1] https://www.justice.gov/opa/pr/justice-department-sues-block-visas-proposed-acquisition-plaid https://www.justice.gov/opa/pr/justice-department-sues-block...
- spratzt 5y agoIf I were a UK retail bank, I'd be deeply nervous.!!!
- ricardo81 5y agoPerhaps Apple could buy the lot for cash at their current market cap.
- spratzt 5y agoI'm sure they could, but why bother? They don't need the very obsolete technology, obsolete business processes and obsolete management mentality of most existing banks. Much better to start with a greenfield site and acquire customers from there. Many people would drop their existing bank in a heartbeat if there were a viable modern alternative. Apple is in a perfect position to capitalize on this widespread dissatisfaction.
- ricardo81 5y agoIndeed. Just thought that they could potentially do that as telling.
- fumblebee 5y agoDepends if you're talking about neo-banks (Revolut, Monzo, Starling, etc.) or the high-street banks (Barclays, HSBC, Lloyds, etc.). Some of the neo-banks (less so, Revolut) would be a rounding error in Apple's market cap valuation. Relatively "cheap" for Apple, more feature rich than American alternatives, and for good measure wouldn't bring with them the legacy issues you mentioned that are associated with the dinosaur institutions.
- tobylane 5y agoWhen HSBC bought the Midland Bank, the UK government required HSBC to legally relocate here. The current cabinet are craven, but I expect they’d still require this, a deal breaker for Apple. https://en.wikipedia.org/wiki/Midland_Bank https://en.wikipedia.org/wiki/Midland_Bank
- 5y ago
- sydthrowaway 5y agoI need a loan from Apple Bank!
- luxuryballs 5y agoPlease have some crypto projects...
- jeremy3o966 5y ago