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FINTECH BRIEFING: UK digital-only banks ready for launch — WeChat payments soar — Swiss regulator pushes fintech growth

Welcome to The Fintech Briefing, a morning email providing the latest news, data, and insight into disruptive fintech in the UK and Ireland, the Continent, and beyond, produced by BI Intelligence.

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MONDO CO-FOUNDER ON THE FUTURE OF DIGITAL-ONLY BANKS. Several digital-only banks are due to launch in the UK this year, including the high profile


10 things in tech you need to know today (AAPL, TWTR, AMZN, NFLX, YHOO, MSFT, FB)

Security researchers discovered a flaw in Apple's messaging system that could let hackers intercept photos (AAPL)

Researchers at John Hopkins University claim to have discovered a flaw in Apple's encrypted messaging system that allows them to access private messages sent between individuals, The Washington Post reports.

The flaw worked on Apple customers using outdated versions of Apple's operating system. Every iOS release increases security, but there will be plenty of customers using outdated software.

Researchers haven't explained exactly how the attack was carried out, and won't do so until Apple has fixed it. But they explained that they were able to repeatedly guess the numbers that form links for photos stored on Apple's servers until they found the correct combination that allowed them to access the file.


Kindle users need to update their devices by Tuesday or they'll stop connecting to the internet (AMZN)

Amazon is warning owners of some models of Kindle e-reader that they could stop working properly if they don't download a new update by Tuesday, The Verge reports.

Kindles should automatically download and install the update if they're turned on and connected to Wi-Fi. But if they're not then the devices won't be able to connect to the internet and download new books.

Amazon has posted a notice online about the update and has also emailed affected users. 


A Google AI 'godfather' says machines could match human abilities in 5 years (GOOG)

Geoffrey Hinton, an artificial intelligence (AI) expert who splits his time between Google and the University of Toronto, believes machines could match human abilities in five years.

Hinton, known as the godfather of "deep learning," said the most powerful machines are still about a million times smaller than the human brain.

They only have the equivalent of around a billion synapses (the connections between the neurons in the brain), compared to 1,000 trillion in the human brain.

But machines are becoming more sophisticated every year.

When asked to predict how long it will take before machines possess human-level abilities, Hinton said: "More than five years. I refuse to say anything beyond five years because I don’t think we can see much beyond five years."


A startup that helps police track criminals using bitcoin just raised $5 million

A startup that helps law enforcement agencies in the US and UK catch criminals that are using bitcoin has raised $5 million (£3.5 million) from Washington-based Paladin Capital and Santander InnoVentures.

Elliptic, which was founded in London but also has offices in New York, uses machine learning and graph analysis to analyse bitcoin's blockchain — the decentralized ledger of transactions that underpins the network.

The company's technology is used to identify suspicious transactions and trace holders of bitcoin.

Dr James Smith, CEO and co-founder of Elliptic, told Business Insider that the company currently had two main groups of customers. The first are "companies that transact a lot using bitcoin — the exchanges and payment processors of bitcoin.


Two market data giants just announced a $13 billion merger

UK-founded financial data giant Markit is merging with US rival IHS to create "a global leader in critical information, analytics and solutions" that will be headquartered in London.

The pair announced on Monday that they have reached "definitive agreement" for "an all-share merger of equals" to create a company with a combined market capitalization of $13 billion.

The merged company will be renamed IHS Markit, with IHS shareholders taking 57% of the new company and Markit investors holding the rest.

Both businesses say they have identified $125 million worth of costs they can cut post-merger and revenue opportunities of $100 million. The combined company will also undertake a huge $1 billion share repurchase programme in both 2017 and 2018.


Fintech startup Uphold owns $17 million of Voxels — a speculative cryptocurrency created by its chairman

It turns out that the relationship between fintech startup Uphold and the speculative, non-tradable cryptocurrency "Voxel" it's holding in its coffers is more complex than we first thought.

Business Insider reported last month that Uphold was holding $116 million (£81.9 million) in Voxels, a new digital currency issued by a separate company called Voxelus. (The value of the holding has since shifted to $115.95 million.)

Uphold is a "cloud money" platform — it lets you hold, move, and convert money cheaply on its online platform. It caters for 25 currencies, including bitcoin, and 4 precious metals.

Voxelus, meanwhile, is a virtual reality company aiming to build a marketplace for virtual reality goods and objects. The Voxel was created as the "coin of the realm" for this new virtual reality marketplace, yet to be launched.


Top tech banker on the 'unicorn industry': 'All it will do is end in tears'

Ken Olisa, the founder of two technology merchant banks and a grandee of British tech, is not impressed by "unicorns" — tech startups with a valuation of more than $1 billion.

"I dismiss it all as hype," Olisa told Business Insider at the launch of VTC Group in London this week. VTC Group is a new startup chaired by Olisa that aims to bridge the gap between startups, academics, and big corporates.

"I'm so old I know that the only value is cash," Olisa says. "If a unicorn can demonstrate that in 3 to 5 years time it can generate enough cash to defend a $1 billion+ valuation, then bring it on. But that's the question, not these backroom deals that give a headline value of $1 billion but actually give investors a get out of jail free card."