Fintech News Issue #130 Wednesday, August 23rd 2017 05:30PM

…and that is not because everyone is getting seriously aroused by the most recent Bitcoin price hike but rather because you keep receiving blockchain-related garbage to your inbox instead of 'penis enlargement pills' and 'Viagra discount' spam like in the good old days.

When the wave of new fintech startups burst onto the scene several years ago, announcing themselves loudly as disruptors of the banking industry, bankers rightfully worried. How would these new players affect day-to-day business? How would they be received by customers? And, importantly, how could banks keep up with the pace of the competition?

Banks are faced with more competitive disruption from tech behemoths than financial technology (fintech) start-ups, according to a report by the World Economic Forum (WEF).

For years Fintech has been the hottest topic of discussion in financial services, with incumbents, regulators, and consumers all asking the same question: “Will small technology-enabled ‘fintech’ start-ups redefine the way that banks and insurers operate, and upend the competitive landscape of the industry?”

New financial technologies are facilitating increasingly intricate flows of capital and are opening up a new era of economic growth. New markets, new asset classes, and new ways of creating and exchanging value are just the beginning.

In this brief report, Future Branches gives a snapshot of how several financial institutions are experimenting with new branch concepts to increase branch traffic and revenue.

As major global financial and innovation centers compete to become the “world’s Fintech hub”, China has not only caught up, but rather leapfrogged major cities such as New York, Silicon Valley and London.

The scope and scale of technological change in the financial industry is unprecedented. Will banks and credit unions be able to keep up? Or will they fall even further behind?

How you embrace change can make all the difference in the world. That’s true in life but it’s especially true in business. Right now, there’s no sector feeling the effects of digital disruption more critically than that of banking.

By 2019, banking will hit a tipping point when half of all new accounts will be opened digitally. Consumers are quickly making the shift to digital channels, but are financial institutions ready to sever their umbilical dependence on branches?

I was talking with a few FinTech firms the other day. They are all fully licensed banks, and are less than 15 years old. They all seem to have one thing in common: refreshment. What I mean by this is that they talk about technology in a very different way to traditional banks.

A few months ago Parker Thompson, a well known Silicon Valley VC, tweeted that "the concept of crypto-economics is stupid. It's economics. Inventing your own word is just an excuse to ignore well-understood concepts."

Last week, Quartz visited one of the world’s largest bitcoin mines, located in a decaying industrial park on the outskirts of the city of Ordos in Inner Mongolia. The mine is operated by Bitmain, one of the most influential companies in the $70 billion bitcoin economy.

It's a familiar trend, one that happened in communications (internet), and that is now playing out in energy (solar), manufacturing (3D printing) and finance (cryptocurrency) – power and control are moving into the hands of the individual and away from nation states.