Author: ssingh4

Recently, application based banks are becoming more and more popular. This extends not just to North America, but to Asia as well. I mention Asia, because Asia is becoming one of the most prevalent forces in the FinTech industry. As I mentioned in one of my previous blog posts, in 2016 the biggest deals in FinTech investment wise were centered in Asia. Between 2011 and 2014 the number of users on mobile based banks, almost doubled and the slope of the trajectory continues to become steeper as these companies gain more and more money from investments. With FinTech developments in banking, we can see there is a shift to focus on the needs of the consumer, rather than the consumer focusing on the banks. As efforts are made to improve security, the accessibility and features that such apps provide, can perhaps even vault them to the popularity of the big banks in the future. This is true especially as many of these companies grow their consumer base, and begin to make a name for themselves. A McKinsey study also showed that in Asia people checked their banking information more from their mobile devices than using cash machines or visiting banks by a large amount. It will be interesting to see if these trends continue, or if big banks find ways to push back on an international level.

 

http://www.atimes.com/financial-technology-making-app-based-banks-future/

2017 will be an interesting year for FinTech companies and the Fintech market as a whole. PWC predicts in the annual report that they publish that in 2017 global fintech investment will exceed 150 billion dollars. According to the Fortune this, along with new trends in the Fintech environment, will allows 2017 to be a strong year for Fintech. One of the biggest keys to Fintech success in 2017 will be the increased role of mobile devices in the FinTech environment. With smartphones becoming such an integral part of consumers everyday lives, by integrating a mobile driven aspect to Fintech technology, companies can reach a greater audience and at the same time provide a greater benefit to the consumers. Blockchain is also playing a large role in the FinTech world. A few of the biggest fintech deals in 2016 revolved around the use of blockchain technology, and continues to gain more and more popularity and developments are made to strengthen security and privacy issues. The most important characteristic however, has to continue to be accessibility. The Fintech market holds so much potential because many of the technologies that are being developed have the potential to reach lower income families, and make it easy for them to use, eg through mobile apps or lower fees. If Fintech continues this trend, then we could be seeing an expansion of total investment and companies.

http://fortune.com/2017/03/10/financial-technology-trends/

 

According to a report recently released by the consulting firm Accenture, overall investment in FinTech companies was up almost 10 percent to a total of 23.2 billion dollars. According to the report, the year over year increase was attributed in large part to investments in China and Japan. In Japan fintech investments doubled in 2015-2016 alone. In China, this number tripled to 10 billion and accounted for almost 90 percent of all FinTech ventures in Asia. Japan also became of the first country to enforce a regulation of virtual currency on a national level. This demonstrates that Japan has trust in the fintech companies, and sees potential for them to expand at an even more rapid pace. On the other hand, looking at China, much of the fintech investment centers around the use of blockchain technology. China was also host to some of the biggest fintech deals of 2016, such as 4.5 billion into Ant Financial Services group.

 

http://cio.economictimes.indiatimes.com/news/corporate-news/global-financial-technology-investment-up-10-in-2016-report/57407723

The presence of FinTech has been growing strongly in China recently. Experts in the industry think this emerging popularity for fin tech is one of the main factors contributing to the increase of consumer spending in China. Mobile Payments technology has made increasingly easier for the Chinese population to make online purchases, and goods can often be bought very inexpensively online in China. Online retail sales increased almost 26 percent in mainland China in the past year alone, pushing a 10 percent increase in overall retail sales. As the number of mobile users also increases in China, so does the ability to which this financial technology can be accessed. This could potentially push even more growth in the near future to come. The ability to get a loan through fin tech has also been eased , and this in turn gives more money to be spend on the online marketplace. The potential for mobile lending is also large, as aforementioned the number of mobile users in mainland China is rapidly increasing. If these trends continue it will be interesting to see how the growth of the rest of the world will be effected.

 

 

 

 

http://www.scmp.com/business/china-business/article/2073798/how-financial-technology-driving-chinese-consumer-spending

In 2016 data according to Business Insider data shows that the Fintech “funding volumes” decreases year over year looking at 2016 vs 2015. The number was about 12.7 million in 2016, so about 13% down from the 14 billion dollar number in 2015. However, the number of deals stayed around the same, indicating that it was the size of the deals that caused this decrease in funding volume. There are a few potential factors that could account for this. Due to the large amount of funding in 2015, that may have left less money from VC companies to fund fintech companies in 2016. We may even see that trend continue into 2017. In fact the article notes that if not for two large deals in China the year over year decrease in VC funding of Fintech companies would amount to around 28%. There was more caution in the overall market in 2016 as well, and that could have also led to a lower amount of funding overall by VC firms. However, looking at the potential for Fintech companies, especially in today’s business environment, there is ample room for market disruption which could pave the way for record funding numbers. This extends to emerging fintech sectors such as P2P lending, online banks, and fintech “robo” advisors. Looking at 2017 will give a better idea of the direction that the fintech funding numbers will be trending.

 

http://www.businessinsider.com/fintech-deal-sizes-are-shrinking-2017-2

 

 

Financial Technology startups of late have been finding new ways to try and help lower income Americans. This extends to those especially who don’t have the means to obtain a bank account or rely on payday loans to make ends meet. About 7 percent of all Americans do not have a bank account. Because the regular banking systems aren’t designed to meet the needs of those living day to day, there is an opportunity here for fin tech firms to help, and also create business. This includes easing access to money, and loosening the restrictions on credit and low cost services. The article looks at a fintech company called Wise Banyan as an example. WiseBanyan is a robo-advisor app that offers investment advice after taking in clients financial goals into account. Customers can also withdraw and deposit with no fees similar to Robinhood. The CEO says one of the motivations for this was to allow anyone regardless of financial situation to be able to achieve their financial goals. He also noted that over 25% of his customers have incomes of under 50,00 dollars. There are similar companies that act in a similar manner, but have many hidden fees which people of lower classes may not have knowledge of. While the lending industry is still geared towards high income clients, there are definite movements to face the needs of the lower class, and fintech companies seem to be trying to fill that void.

 

https://digiday.com/brands/are-low-income-can-americans-the-new-market/

The rise of financial technology companies, has pushed the growth of other industries, which now see strong potential for change and innovation. For example, we can look at the real estate industry. Companies like Redfin and Realtyshares, allow to make the transactions more efficient, and less time consuming, often saving the users thousands of dollars. We can also look to the payments, industry and the rise of alternative digital wallets than Paypal. This includes Square, Dwolla, Skrill and others. These all offer different benefits, and have been used on a more worldwide scale than Paypal. The lending industry is also changing, as the often tedious task of getting a loan has been simplified and streamlined. They match borrowers with investors through a smooth easy process. They have figured out ways to pull from a pool of “investor cash” and by doing that they can lower margins and rates and make the data easily integrated and accessible through their platform. Essentially they are cutting big banks out of the equation, and can reduce costs greatly.  We can see that these changes often come as a benefit to the consumer and a detriment to the existing members of the industry. Fintech has the potential to do so much more to these industries, and will be affecting many more industries as time goes on.

http://www.nasdaq.com/article/industries-where-fintech-is-changing-the-game-cm740805

There are a few ways that Fintech has been able to disrupt the trading market and open up new possibilities in online trading. No-free trading is one way that has become increasingly popular. Fintech companies such as Robinhood have found way to garner large MAUs and offer trading without charging a fee. Speaking from experience, the app is easy to use and seems seamless, and has a large following especially with the youth of society. Binary options are also being offered by fintech firms, and are fin derivatives that allow you to bet on an asset with a specified time horizon. There is also no unlimited risk so it has become a popular option for day traders. Another way the industry has changed is the concept of social trading. This entails following strong traders on social media and using their strategies and trading in a similar way. This includes preset platforms in order to ease the trading process and make it easier to replicate these strategies.

3 Ways Financial Technology Has Disrupted Online Trading

The article comes from the journal FinTech Weekly and is written by Bryan Yurcan. A group of Fintech companies has recently created a lobbyist group, based on the premise of allowing consumers to share fin data with certain third parties. Companies included in this effort include Kabbage, Ripple, Envestnet-Yodlee, and Varo Money. This effort stems from a larger struggle between banks and FinTech firms such as these regarding users sharing their bank information with users consent. Banks claim that these practices can be dangerous in regard to information and identity theft, but these firms seem to think that the banks are trying to keep away the competition. The lobby group also puts forth a plan for easing the process of allowing this type of information to be shared, stating that a risk hierarchy should be established and the customers should be allowed to note this and continue with their data sharing. It is in the customers interests to be able to view their financial situation in its entirety.

US financial technology regulation has undergone some changes as of December 2016. For example, the OCC—Office of the Comptroller has announced that it will consider to allow fin tech applications to become “special purpose national banks”. In addition, the US Federal Reserve also released its information regarding regulation for distributed ledger technology. Until now most regulation has been nonexistent in regard to financial regulation technology. Also talked about is the Financial Services Innovation Act which was discussed this past fall. This would create an environment in which fin tech firms can test products/services absent of the regulatory consequences that would originally take place. This would also help to ease the sharing of data of these results and help to improve the level of innovation in the fintech industry.