Fintech News Issue #201 January 24th, 2019

David vs. Goliath, the online banking bubble is about to burst and how to keep customers for life. Much more strategic advice, some lines on celebrities in fintech, regulation in the US vs. Europe...so much content. Enjoy! – Michael and the FinTech Weekly team

Top Stories

FinTech Articles

    Over the past year of its implementation Open Banking remains a key concern of banks given the regulatory environment, the changing consumer patterns and the new fintech firms. It is becoming a need for banks to embrace digital transformation in this area to achieve more profitable operations.

    To gauge the strategic challenges and priorities facing financial institutions in the year ahead, The Financial Brand asked four banking experts what a brand new bank or credit union might look like if it launched tomorrow. Would it be built entirely around digital channels and new technologies? Here's what they had to say.

    Ever since I started working in business process re-engineering and transformation a while ago, before most millennials were born I should say, I learnt a lesson early on. Transformation will never work without a crisis point.

    With social media being a significant part of society and culture today, it questions whether celebrity endorsements could work in the same way for fintech companies as they do for the beauty, fashion and music industries.

    With last week’s Constantinople delay offering a reminder that ethereum faces challenges in its long roadmap to migrate from a proof-of-work (POW) consensus algorithm to proof-of-stake (POS), it’s easy to miss the fact that elsewhere in crypto-land, POS is already a thing.

    I cover the whole spectrum of the FinTech space, and I am invested across the sector, as I am also invested, for instance, in InsurTech. I am a generalist, and I want to stay that way.

    Spare a thought for the financial regulators: the American ones, with no paycheck during the government shut-down and a whopping backlog awaiting when they eventually get back to work; and the European ones, with a fragmenting union, disjointed capital markets and a glut of new rules seeping through the labyrinthine halls of power.

    I’ve got lots more to write about digital transformation and the things I’m learning from banks engaged in doing it but, to give you a break, I also have a couple of fantastic guest submissions which are worth sharing.

    Across every sector, businesses are looking to technology to reduce costs and improve their products and services.

    There's a lot of talk these days about the possibility and probability of Amazon getting into banking: “Amazon is under pressure to keep increasing revenue, and financial services is a large pool they can go after.” — Asheet Mehta, McKinsey

    P2P Lending and the Inevitable Bank
    via FinTech Weekly Magazine

    What separates P2P lending from banking? As it happens, not a lot. Mechanically they operate in essentially the same way. The main differences lie in four areas: scale, risk, reward, and control.

    The impact of the government shutdown is thought to have had double the negative impact than was initially projected. While some banks and credit unions have responded to the hardships consumers are experiencing, many have not.

    You know that part in the airline safety videos that encourages you, in the event of an emergency, to fit your own mask before helping others? And how they always show you a video of a mother putting her own mask on first, before helping her child, because even though it feels wrong to do it in that order, you are no good to anyone if you are unconscious?

    Financial services firms have spent the past decade shoring up their balance sheets and conforming to regulatory overhauls all over the world. Now, like a coiled spring, they are ready to break out of their slow-growth cycle, inspired by the hypergrowth in customers and market values of leading technology firms.

    With so many financial, technological and delivery advantages to being a digital bank, the best strategy for traditional banks may be to just 'start over' – building a digital-only component of their business to supplement the incumbent organization.

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