Covid-19 Fintech Watch: Fintechs warn government SME loans will fail | US bank branches close | Bank of England scraps stress test

Fintech Watch is our daily wrap-up of overnight coronavirus-related news in the world of fintech and finance.

Here’s what you might have missed overnight:

Fintechs warn the government's SME loan scheme will fail. Announced just days ago by Chancellor Rishi Sunak, members of the fintech community including Tide and Iwoca are already urging a rethink.

“I have written to the government today to outline that the Coronavirus Business Interruption Loan Scheme, accessible via the British Business Bank, has a worrying lack of reach,” said Tide CEO Oliver Prill.

In The TimesIwoca’s CEO Christoph Rieche said: “The fintech community has not been taken advantage of yet. Hundreds of thousands of businesses need cash, and delivering that is not a trivial exercise.”

Part of their concern is that the 40 lenders listed on the British Business Bank’s Enterprise Finance Guarantee scheme don’t have the reach to serve all the UK SMEs in need.

More US banks are shutting branches. Following yesterday’s news of Canada’s banks closing up high street stores, more US banks are following suit.

JPMorgan Chase has already announced 1,000 of its branches will be closed, and that announcement was joined overnight by closures and drive-thu-only operation of branches from the likes of PNC Bank, KeyCorp and Fifth Third Bancorp.

 In the coming days it’s likely we’ll see more US banks and UK banks following suit.

Bank of England cancels its 2020 stress test. If times weren’t already stressful enough, the Bank of England has scrapped plans to hold its annual stress test of the country’s biggest lenders.

“The recent 2019 stress test showed that the UK banking system was resilient to deep simultaneous recessions in the UK and global economies that are more severe overall than the global financial crisis, combined with large falls in asset prices and a separate stress of misconduct costs,” the Bank of England said in a statement.

Certainly those claims might be put to the test in the days and weeks ahead.

That’s all for today folks...