Fintech News Issue #217 May 16th, 2019

Host Jason Henrichs talks with Meg Tahyar, partner in the Financial Institutions Group at Davis Polk & Wardwell LLP and Sarah Biller, co-founder of FinTech Sandbox about changes happening in unexpected places: regulators themselves. Meg, Sarah and Jason share their thoughts on the FDIC’s inaugural “Fintech and the Future of Banking Conference” which included participants from Treasury, OCC, CFPB, CSBS, CFTC and the FCA as well as academics and industry leaders.

Global PayEx, a fast-growing player in the Electronic Invoice Presentment & Payment (EIPP) and business-to-business (B2B) payments space based in India, today announced a strategic investment by J.P. Morgan.

Scrappy online financial startups have spent the past few years building buzz, backing and the beginnings of a customer base. For a while, the world’s banking giants largely ignored them. Now they’re starting to feel the heat—and fighting back with the most formidable weapon in their arsenals: cash.

In 2018, the total market cap of the fintech industry grew to nearly $170 billion in U.S. In 2019, these companies are expected to continue to have double-digit growth. The companies which are expected to get into double-digit territory in 2019 are card issuers like Visa and Mastercard due to the growth of fintech payment companies like Square and PayPal. Financial technology companies are offering salary-linked products. Salary linked products are related to salary processing, loan payments and transfers.

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NASSCOM recently reported that around 400 fintech firms operate in India, boosted in large part by foreign investments in fintech-focused startup accelerators and incubators. 125 of these startups were launched in 2018 alone. NASSCOM predicts that India’s fintech software market alone could touch US$ 2.4 billion by 2020, doubling on the current rate of growth.

The days when you need to make an appearance at a financial institution just so you can complete a transaction are almost a thing of the past. This is true for bank withdrawals, loan approvals, and even bills payments. Back then, you had to present a passbook to either make a deposit or withdraw money from your bank account.

Set up by the House Committee on Financial Services, the fintech task force will look at domestic and international regulation of the nascent sector as well as the infrastructure and legal and regulatory framework for efficient payments. Other areas of interest for the team of legislators include fintech and lending, specifically the use of alternative data for loan underwriting, and the use of big data and its implications for privacy.

The UK leads Europe in scaleup technology investments, according to the latest annual government-backed Tech Nation report, with just the US, China and India. The UK’s strongest tech sub-sector, and where it currently ranks as number one in the world, is fintech, with investment in high-growth firms amounting to £4.5 billion between 2015 and 2018.

MPesa`s early success in Kenya, will remain the mobile money business case study of payment innovation in Emerging markets[1]. It was 12 years ago; in 2007 when Vodafone launched the service.

There are names who are shinning in the fintech space in India and abroad for, literally, dwindling fintech structures around the world. Rishi Khosla is one of them. The Indian-origin and British National is the co-founder of OakNorth Holdings.

The market for fintech companies has grown in recent years, as venture capital has come calling to find innovative new startups engaged in business ranging from mobile banking to point of sale financing and accelerating payments. Several startup firms in the space have recently raised additional funding to accelerate growth in some unique approaches to financial technology.

Hamburg-based fintech company Naga has released its new exchange platform, Nagax, after an intensive beta testing period. The developer promises a user-friendly interface and “super-fast execution,” as the system supports more than 10 million transactions per second.