FinTech for Breakfast
Held on Wednesday, September 6, 2017.
With support from Dentons
Izabella Kaminska (FT Alphaville)
David Galbraith (Anthemis)
The future of FinTech
- Deloitte and the World Economic Forum put out a bumper report, entitled Beyond Fintech: A Pragmatic Assessment Of Disruptive Potential In Financial Services, exploring the potential for disruption across different industry segments.
- The CFA Institute’s Market Integrity Insights blog wondered whether FinTech will follow the pattern of diminishing returns seen in High Frequency Trading.
- Izabella gave a useful synopsis of a long (and fairly involved) article in Cornell Law Review. Short version: banks have structural funding advantages that mean FinTechs will probably wind up partnering with them rather than out-competing them.
ICOs, money laundering, tax sheltering and Switzerland…
- At the end of July, the SEC issued a warning outlining some parallels between ICOs and investment fraud. They’ve now updated that with particular reference to “pump and dump” scams.
- Paris Hilton is promoting Lydian Coin (a crypto-currency aimed at reducing ad fraud – as opposed to the 7th century BC electrum specie).
- ShapeShift, a crypto-currency ‘money’ changer, is cooperating with authorities after processing a chunk of the WannaCry ransom.
- Congress and the IRS still aren’t agreed on how to balance privacy against tax evasion (at least not in the case of crypto- transactions). The IRS is investing in software to monitor Bitcoin transactions anyway.
- “Crypto Valley”, where Swiss private banking meets cryptocurrency, is continuing its push to attract global start-ups (UTRUST and Breadwallet being the latest to move there).
…and yet more blockchain.
- Delaware has amended its laws to allow companies to issue securities on blockchain technology.
- Estonia is floating the idea of an “official” virtual currency, Estcoin.
- Microsoft has a distributed database technology called Coco, which possibly isn’t a blockchain.
- Several new banks have joined the “utility settlement coin” initiative, aiming to accelerate cross-border settlements.
Pivoting challenger banks
- Tandem, the start-up bank devoted to a “more liberating financial future for everyone”, is seeking regulatory approval to merge with Harrods Bank.
- Monzo is ready to move from prepaid cards into genuine current accounts.
- Atom Bank is competing hard for term deposits again.
- For anyone struggling to keep track of all the new entrants in the UK banking market, Banking Technology have produced a handy list.
Voice Banking & Banking Bots
- Barclays is now allowing customers to initiate payments using Siri.
- Financial assistant Cleo.ai secured £2m in seed funding.
- Nordnet has launched an AI-powered banking bot, dubbed “Amelia”.
- Bloomberg asked whether robo-advisers are free from the conflicts of interests and incentives that affect their organic colleagues.
- A survey of active investors by Minerva Lending found that only 12% of those over 35 trusted robo-advice.
- In the pensions market, the FCA’s interim Retirement Outcomes Review concluded that innovation has been limited. It also found a significant number of savers were fully cashing out their pensions without any kind of advice.
- Whether Pensions Dashboards will facilitate innovation, or encourage unadvised decisions, or both, is attracting some comment.
P2P Lending & Consumer Credit Quality
- Zopa’s annual report flagged the risk of deteriorating origination standards in UK consumer lending.
- EY’s FinTech Adoption Index has attracted various interpretations – with notable differences over what to make of the statistic that 7% of UK consumers have borrowed via a FinTech. The FT is unimpressed, Forbes more forgiving.
- AutoFi Inc raised $10m to fund its quest to make the car finance market even more competitive. BoE staffers recently used the Bank Underground blog to explore concerns that the industry is already plenty competitive.
For those of you still sunning yourselves in Sardinia or yachting in the Adriatic, we’ll be holding a catch-up session of our FinTech group at the start of September to cover most (or at least a big slice) of what’s been happening over the summer.
As ever, Izabella Kaminska of FT Alphaville will be in the driving seat, assuming she hasn’t gone to the dark side and launched her own coin offering. Joining her, we are pleased to welcome David Galbraith of Anthemis – serial entrepreneur, designer and now Partner at the FinTech-focused venture capital firm.
We’ll be watching the news all summer, but as a flavour of what you may have already missed on your sunbeds:
- the EBA is consulting (and potentially developing an Opinion) on FinTech regulation across the EU;
- the ICO boom/bubble is to become a fundraising channel for private equity firms (at least in Singapore);
- competition for AI programmers is ever more intense, with Hastings the latest to join the war for talent;
- Tandem are trying to buy Harrods Bank; and
- robo-advisers may be just as prone to conflicts of interest as their human predecessors.
If you (or a friend/colleague) would like to join us to share your own experiences, please let us know by calling 0207 621 1056 or emailing email@example.com. As usual, thanks to Dentons’s hospitality, there will be tea, coffee and buns.