Fintech News Issue #126 July 13th, 2017

The latest fintech news: Where banks fit in the fintech stack, reasons for consolidation in the fintech ecosystem and what's holding back blockchain in FS. – Michael and the FinTech Weekly team

Top Stories

    It’s a good question, and it’s also the title of a recent presentation given by Lael Brainard, a member of the Board of Governors of the Federal Reserve System. Ms. Brainard believes that the evolution of smartphones holds lessons for where the fintech ecosystem is heading, and what banks role within it might be. According to Brainard:

    The challenger banking battlefield is crowded, with new players coming into the marketplace every week. With the geographic and product scope of most new fintech challengers being limited, and venture capital being more selective, is consolidation inevitable?

    Starting out on a technology journey is never easy. History has taught us though that by starting the journey the path will become clearer and solutions will follow.

FinTech Articles

    Bitcoin’s price could be in for a big drop, and that’s because the cryptocurrency is facing a potentially contentious upgrade to its core software in August. If you haven’t heard about the impending deadline for a “user-activated soft fork”, here’s the story:

    Fintech startup Ripple has opted for using only parts of the technology because 'there are a few things wrong' with the classic version

    ONE THING THAT makes ISIS so hard to fight is that the terrorist network is diffuse and scattered, with small cells of operatives all over the world. Not only does this make it hard for law enforcement to predict where the group might strike next; it makes it incredibly complicated to track activity on the network—activity like banking transactions.

    If Europe cuts off London’s deep financial markets when Britain leaves the EU, costs will likely rise for Europe’s banks and companies. Both Britain and Europe could suffer.

    Consumer visits to retail bank branches are set to drop 36% between 2017 and 2022, with mobile transactions rising 121% in the same period, as customers increasingly shift to accessing their banking information via apps and secure, responsive sites on their mobile devices.

    It’s not the cryptocurrencies themselves that should be killed off, but rather the term (hence the quotation marks). Labeling everything going on in the crypto world (space, ecosystem, universe: pick one) "currencies" is dead, passé, OBE… You get the idea.

    The exploding popularity of RegTech
    via LSE Business Review

    Following on from our piece on WealthTech – we look at the rise and rise of RegTech (previously known as regulatory technology.) RegTech is a subclass of FinTech, and concerns the use of technology to create efficiencies in financial services for issues regarding regulatory reporting and compliance.

    Volume migration to pure digital players remains in the low single digits in the US, multiple challenger banks in the UK are facing funding and regulatory issues before they are even out of the gate, and many of the more successful fintech insurgents have been bought by incumbent banks just as they matured into legitimate competitors.

Digital – Innovation – Disruption

    Insurance companies and startups together have grown the insurtech ecosystem by leaps and bounds over the past two years. And investments are paying off with more consumers transacting digitally with consumers than ever.

    While Edward Lloyd is largely credited with commercializing the insurance industry, with the creation of his namesake firm, Lloyd’s, over 330 years ago, the original concept of spreading risk (or “mutualizing”) goes back even further.

Podcasts & Videos

    Spiros Margaris, venture capitalist, advisor and founder of Margaris Advisory, talks at SAP Financial Services Forum about the importance of collaboration between banks and fintechs, and the need for banks to take aggressive steps to work with software providers and deliver the best solutions to move forward.

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