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🌳 Banks working for a better climate


This week in fintech

October 5 · Issue #30 · View online

A weekly summary of the latest news in our world of finance, design, and technology.

🌳 Banks working for a better climate
In April, we covered Bunq, which had planted over 100 000 trees for every € 100 spent by their premium users.  Now, half a year later, they can report planting over 1 million trees . This week Starling announced a similar move, planting a tree for  every successful customer referral.
This week  Citigroup Inc reported that they are starting to measure and disclose how much carbon emissions is tied to their massive lending portfolio . This follows the news that they would stop providing financial services to thermal coal-mining companies.
“We have to recognize that we’re in a transition [regarding climate action]”
Mike Corbat, CEO Citigroup Inc
In January, Jan Erik Kjerpeseth, CEO of Sparebanken Vest,  stated that banks’ climate requirements would increase in the future . This is a trend that we’re seeing more and more of. Sparebanken Vest is open to reducing the interest rate for companies reaching their emission targets and excluding companies that don’t have plans for cutting emissions. However, they haven’t announced anything official yet.
On a related note, Sparebank1 SMN is partnering with the Norwegian startup  Ducky to develop a solution to display your climate footprint in their online bank based on your transaction history. The goal is to motivate users to make better environmental choices.
(As a curiosity Sir David Attenborough just broke the Instagram record for fastest time to reach one million followers. His first video? Voicing his global warming concerns – indicating that not just banks are concerned about our climate)
💳 Green loyalty program
This week the Norwegian CEO of the saving-app Dreams, Øystein Høie, broke the news that he will join the startup Fauna.  Fauna is currently developing a bonus-program to act more environmentally friendly , with an app packed with gamification and incentives. They want to be a guide to good climate choices with a proven effect. Something many are interested in considering a recent survey from Opinion showing that 8 out of 10 Norwegians want to be more environmentally friendly, but that they do not know how to proceed.
🛫 Frequent flyer programs more worth than airlines?
The Financial Times pegs the value of Delta’s loyalty program at a whopping $26 billion, American Airlines at $24 billion, and United at $20 billion. All of these valuations are comfortably above the market capitalization of the airlines themselves — Delta is worth $19 billion, American $6 billion, and United $10 billion. In other words, if you take away the loyalty program, Delta’s real-world airline operation — with hundreds of planes, a world-beating maintenance operation, landing rights, brand recognition, and experienced executives — is worth roughly negative $7 billion. But the economics of the loyalty program doesn’t work without a robust airline operation.
⛓ Crypto don't care
A lot of companies are taking a hard stance on environmental issues (and other political issues). This week Brian Armstrong, CEO of Coinbase,  took another stance , stating that, from now on, his company would be what he calls “mission-focused.” With that, he means that Coinbase will devote all of its attention to achieving the goal of creating the “infrastructure for the crypto economy,” but will refrain from any activism, and won’t take a stand on policy or societal issues that go beyond their mission. Later, Armstrong also announced that  Coinbase would offer severance packages to employees who were dissatisfied with the updated mission statement. Maybe this can make Coinbase keep their blinds on,  considering the vast environmental impact of cryptocurrency? 🤔
🤝 Vipps: cooperation as an export product
A month ago, we talked about Vipps going international. We mentioned that selling a mobile wallet in Europe will be an uphill battle for Vipps when their main competitors are Apple and Google, which create the devices users are paying with. This week, Rune Garborg, CEO of Vipps, replied to Lucas Weldeghebriel’s  original article on Vipps going international. Rune Garborg acknowledges it’s going to be an uphill battle but states that the genuinely unique thing about Vipps’ success in Norway is not the technology or the marketing - it is the cooperation between the banks. It now remains to be seen whether Vipps can cooperate with European banks, considering no one has earned any money from Vipps yet.
💸 Struggling neobanks
Speaking of Fintechs earning money: more and more neobanks are starting to focus on unit economics as a response to COVID-19, as consumer spending has declined. Both Monzo and Starling announced they are now introducing new fees for their customers since they receive less in interchange fees from card usage.  Seema Amble from Andreessen Horowitz speculates if this could lead to such banks being acquired, consolidated, or even shuttered . Not unthinkable if they can’t find a way to profitability – they are banks, after all.
📱 The business case for inclusive design
Inclusive design can improve the lives of millions of people. And it has the power to make your products more successful, too. Yet inclusive design is rarely given the attention it deserves. Stakeholders often don’t see the value of it or don’t invest in it early enough.  This article provides 7 ways inclusive design can help businesses succeed along with their users.
🙏 Don't keep it a secret!
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Marius Hauken, partner Stacc X
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