Latest banking news

July 22, 2022 3:06 PM

Barclays is joining the central bank digital currency fray by organizing a hackathon aimed at developing code for retail CBDCs for consumers and wholesale CBDCs for interbank transactions. Meanwhile, Varo Bank joined a growing list of fintechs that have fallen on harder times.

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

Barclays plans developer event for central bank digital currencies

Jason Alden/Bloomberg

With central bank digital currency projects underway globally, banks and the card networks are seeking a role in government-led projects. Barclays is planning a hackathon in which teams of developers will write code to address how the bank will connect its CBDC processes to both a central bank and other banks. The coding will cover retail CBDCs, which are designed for consumers, and wholesale CBDCS, which are designed for transactions between banks. The bank's goal is to support interoperability for CBDCs, which is one of the main challenges as digital currencies develop in different jurisdictions.— John Adams

Varo cuts 75 jobs as fintech rout continues

Colin Walsh.

Varo Bank, a fintech that acquired a bank charter in 2020, said it has cut 75 jobs as it looks to achieve profitability. The layoffs come as warning signs start to build for fintech companies, whose valuations have fallen sharply as the Fed jacks up interest rates. In a blog post Tuesday, Varo CEO Colin Walsh said it was an “extremely tough decision” and that Varo is “not immune to the impacts of our current environment.” Executives “must make some difficult decisions to ensure that Varo has sufficient capital to execute on our strategy and path to profitability,” he said. — Polo Rocha

Mastercard plucks Amex exec for corporate treasurer role

Scott Eells/Bloomberg

Mastercard has hired longtime American Express executive Vivian Zhou as its new corporate treasurer. Zhou held several roles at Amex during her 16-year tenure, most recently serving as head of investor relations. Previously she worked at KPMG. Zhou will assume her new role at Mastercard on Aug. 15, succeeding Alfred Kibe, who has been appointed chief financial officer of Mastercard’s North America region. — Kate Fitzgerald

Jewelry chain to shutter after military lending lawsuit

Dorling Kindersley/Getty Images/Dorling Kindersley

A jewelry chain that focused on military members is closing and refunding customers nearly $11 million under a settlement with federal and state authorities. Harris Jewelry, which had already shut its stores due to the pandemic, confirmed it “will not reopen” and said it did not admit or deny the allegations as part of the settlement. The Federal Trade Commission and 18 state attorneys general sued Harris for “false and unsubstantiated claims” that its in-store financing offers would improve borrowers’ credit scores. The agencies also accused the company of giving customers a false impression that purchase protection plans were necessary. — Polo Rocha

SumUp boosts payment tech for restaurants

Angel Garcia/Bloomberg

The digital payment firm SumUp has launched a QR code payment reader specifically designed for the hospitality industry. The reader, Magic Pay, performed well during a test, SumUp said. Consumers scan a QR code that's on the bill, and can split the bill and add a tip on the app with Apple Pay, Google Pay and other mobile payment apps as an option. Consumers can also receive a receipt by email. During a three-month pilot of 100 restaurants, half of guests chose the QR code option, tips increased an average of 38% and the time staff spent at tables declined an average of 12 minutes, SumUp said. — John Adams

Deutsche Bank settles money laundering case for $7.1 million

An illuminated sign for Deutsche Bank outside a bank branch in Frankfurt, Germany.

Krisztian Bocsi/Bloomberg

Deutsche Bank settled a probe by Frankfurt prosecutors looking into whether the bank violated money laundering prevention rules for 7.01 million euros ($7.1 million). The bank agreed to pay the amount and accepted an administrative penalty notice, the lender said in a statement. Frankfurt prosecutors confirmed the end of the investigation, which found the bank failed to file 701 reports of suspicious activities. Deutsche Bank acted “thoughtlessly,” they said. The settlement comes less than three months after law enforcement officials raided Deutsche Bank’s headquarters in Frankfurt as part of the investigation. — Steven Arons and Karin Matussek, Bloomberg News

Visa founder Dee Hock dies

David Paul Morris/Bloomberg

Dee Hock, Visa’s founder and CEO emeritus, died on July 16 in Olympia, Washington, according to a Visa blog post. He was 93. Hock played a key role in developing Visa’s card network, Al Kelly, Visa’s CEO, said in the blog post. Hock in 1969 set out to revitalize the struggling BankAmericard program by gathering a handful of banks to collaborate on enabling retail and consumer payments through a collaborative global system. Those efforts led to the formation of VisaNet in 1973, which was renamed Visa in 1976. Hock resigned from Visa as CEO in 1984 to pursue other interests, but continued to consult with Visa executives over the years, Kelly said. — Kate Fitzgerald

BNY relocates top Middle East banker for senior New York role

Gabriela Bhaskar/Bloomberg

Bank of New York Mellon, the world’s biggest custodian, is moving its top banker in the Middle East to New York for a senior position in its asset-servicing unit. Anthony Habis will relocate from Dubai for his role as global head of client coverage in the asset-servicing team in September, a spokesperson said in response to Bloomberg queries. He’ll help manage the bank’s relationship with large asset managers and sovereign wealth funds. A finance veteran of more than 20 years, Habis is a former private banker at Citigroup who joined BNY Mellon in 2018 and most recently led its business in the Middle East and Africa. In his new job he’ll report to Roman Regelman, CEO of securities services and digital. Regelman has been shuffling leadership within his division, recently appointing James Slater to lead product and client coverage as CEO of BNY Mellon’s corporate trust business, and Jane Mancini as global head of business development for securities services. BNY Mellon is the world’s largest custodian of institutional money and had about $47 trillion of assets under custody and administration at the end of 2021, according to its annual report. The New York-based company earlier this year promoted former Goldman Sachs banker Robin Vince to succeed Todd Gibbons as its next CEO. — Dinesh Nair, Bloomberg News

Texas Credit Union Commission chair named

Gov. Greg Abbott of Texas appointed Jim Minge chairman of the Texas Credit Union Commission. The commission supervises the department that regulates all credit unions chartered in the state. Minge is president and chief executive of the $1.9 billion-asset Texas Trust Credit Union in Arlington. — Paige Hagy