Author: ysong2

Companies like Lending Club, an online loan marketplace, and Square, which allows small businesses to accept electronic payments, have been changing the ways Americans expect to receive financial services. These companies have also operated outside of some of the regulatory constraints on traditional banks.

The licenses from the Office of the Comptroller of the Currency, which oversees many national banks, will be available to companies like Square and Lending Club that accept deposits, facilitate electronic payments or lend money.

Many technology firms have been pushing for some sort of new regulatory system that would allow them to cut through the patchwork of state and federal laws that govern financial activities and make it hard to expand nationally.

The introduction of the licenses, called special purpose national bank charters, underscores how quickly so-called fintech firms are growing and how significant they are considered to the future of the financial industry.

“Providing a national charter to those responsible innovators who seek one and meet our high standards can help promote economic growth across the country and recognizes that technology-based products and services are the future of banking and the economy,” Mr. Curry said in a speech at Georgetown University.

In my previous blog, I mentioned that the U.S. government should clarify the law and regulations on fintech industry as soon as possible. This license will help innovative fintech companies to grow with certainty in government regulations and support. Eventually, the growth in the fintch sector will improve the overall economy of the country.

 

 

Source: https://www.nytimes.com/2016/12/02/business/dealbook/technology-start-ups-to-get-a-license-to-bank.html?_r=0

 

The U.S. is producing many fintech startups attractive to investors but not as attractive as the Asian startups. The third quarter of 2016 was the second of the year in which Asian fintech companies attracted more venture capital funding than North America. America remains a fintech leader, but its position is being challenged.

One reason is that the U.S. fintech hubs are subject to regulation at the state level, by the Department of Financial Oversight in California and the Department of Financial Services in New York, respectively. Another is the lack of government support and collaboration with businesses in innovative fields.

One major step undertaken by the U.S. government to deal with the problem is the attempted creation of a “sandbox” on the model of the successful U.K. one, with the Financial Services Innovation Act of 2016.

Some information source says new regulation specific to fintech may not be coming at all, and the lack of clarity about the administration’s economic plans will likely slow investment in the sector.

In my opinion, the U.S. government should clarify the law and regulations on fintech industry as soon as possible. The damaging effects of the uncertainty of regulations on American fintech growth, are likely to continue until specific steps are outlined to ease and clarify the regulatory burden facing U.S. companies.

 

Source: https://techcrunch.com/2017/02/16/us-regulatory-environment-threatens-the-rise-of-fintech/

In 2016, the amount of venture capital funding increased 10% to $23.2 billion, which was largely assisted by investments in China and Japan, reports Fortune.

China is embracing Fintech very quickly during the past few years. China’s Ant Financial Services Group raised $4.5 billion during a fundraising round. Hong Kong-based industry investment firm, Credit China Fintech Holdings Ltd. also announced that it was entering a $30 million agreement with bitcoin and blockchain industry giant BitFury.

Japan in the past year has emerged as a strong market for cryptocurrencies and blockchain technology. The technology adoption, combined with government’s liberal attitude towards Bitcoin and blockchain could give a significant boost to the country’s growing fintech ecosystem. Moreover, the Bank of Japan launched a blockchain test drive at the end of last year to gather more insight into how the technology works. According to governor Haruhiko Kuroda, the new technology could bring significant change and impact to the financial industry.

It’s very exciting to see the adoption of Fintech in Asian countries. From my point of view, there is no doubt that Fintech will play a big role in the financial industry of China. Meanwhile, the development of fintech industry in Japan will be instrumental in improving the Japan’s economy as well.

 

 

 

Source:

http://www.newsbtc.com/2017/03/05/japan-fintech-revenues-2021/

https://www.cryptocoinsnews.com/china-japan-lead-asian-interest-fintech/

 

The COO of UBS’ Wealth Management sector said recently that banks are now focusing on working with FinTech companies instead of regarding them as competition. They need to find very smart ways to partner up and improve the existing business model of banks. Banks need FinTech to stay relevant in the fast-paced technological world we live in and FinTechs need banks to help them become more mainstream.

However, while FinTech companies are enjoying the benefit of working with banks, banks should be more careful when it comes to cyberattack. Some banks believe that greater regulatory oversight is needed within the sector. Last December, the Bank of England is reported to have recruited financial technology companies to help prevent cyberattacks targeting financial institutions after a survey found that cyber risks topped the list of financial service concerns.

From my point of view, as long as banks are proactive to prevent cyberattack, they will continue to enjoy the benefit of working with FinTech and vice versa. Moreover, regulation should be made as more and more collaboration will happen between banks and FinTech. Hot FinTech market, such as Australia, India and China with increasing funding flows to FinTech, should work on regulation to ensure a health market.

 

UBS Wealth Chief: ‘We Are Embracing FinTech’

China’s Fintech market booms as mobile payments in China rise. In 2015, WeChat Pay announced that it was accepting bitcoin for its concierge services. At the beginning of the year, Starbucks revealed that it would also start accepting WeChat Pay at its China stores.

As a person who come from China, I can see how China dominates the mobile payment market. The credit card use in China is smaller comparing that in the U.S. because China’s credit card security system is not as well-developed as the U.S. Most people complete mobile payments through third party such as Alipay and Wechat Pay – the two companies that operated by Ant Financial and dominated the market. Recent research found that Alipay received the biggest investment in 2016 at $4.5 billion as FinTech funding increased in China. Research from iResearch in China has found that Chinese third-party mobile payments more than tripled in 2016 to $5.5 trillion.

There are good opportunities for Fintech companies targeting at China’s mobile payment markets, providing the best technology and collaborating with the Chinese firms. However, the policy in China tends to protect and benefit local Fintech firms and will be very hard for the U.S. companies to compete with the local firms.

 

https://www.cryptocoinsnews.com/research-china-fintech-booms-mobile-payments-outpace-us-50x/

Non-paper-ballot voting has been going on for decades. The blockchain is perhaps the most secure design ever seen. Pete Martin, founder and CEO of Votem, a veteran of SAP consulting, along with his team set about figuring out a way forward to enable mobile and other types of digital voting, and came up with an open call for submissions of a mobile voting platform with a reward of $230,000. There was no requirement that the solution had to be blockchain-based, but the primary criteria of the submission was that it “couldn’t be hacked.”

Mobile voting could allow for identity verification on a whole new level. Martin points out that most US states prohibit invasive identification techniques.

Before the last election, Votem purchased the intellectual property of Konnech Inc., a company which had existing contracts with more than one jurisdiction. Their blockchain-based platform was utilized in the “fan vote” portion of the 2017 induction of Rock and Roll Hall of Fame members. Nearly 2 million votes were cast using the blockchain – the largest such use of blockchain in voting to date. Over 60% of its votes were cast via mobile phones.

 

Source: https://www.cryptocoinsnews.com/votem-blockchain-democracy-voting/

 

Bank of America, UBS, and Morgan Stanley are leading the traditional global wealth-management industry, with each responsible for managing more than $1 trillion in investors’ assets. These firms continue to draw multimillion-dollar clients, however, at the same time, many other leading wealth management firms are working on adopting robo-advisor along with their human financial advisors to help increase value for clients across different wealth spectrum.

Wells Fargo expects to launch its robo-advisors service early 2017, aiming to capitalize on its rich bank resources, intellectual capital and investment unit. Wells Fargo currently has more than 15,000 advisors with $1.4 trillion in client assets. The company believes that their clients are ready for this type of investment choice. Wells Fargo’s approaches to robo-advisors is a tremendous opportunity for the consumer and the financial advisor to utilize the robo-advisor platforms.

In the near future, certain amount of large firms will build their own platform of robo-advisory service, while mid-sized firms might buy independent robo-advisory firms. Smaller firms or start-ups may incorporate a branded industry solution.

 

Source: http://www.investopedia.com/articles/insights/072216/wells-fargo-launch-roboadvisor-2017.asp

 

Millennials nowadays account for more than a quarter of the total population of the U.S. and are forecasted to become the highest-earning generation by 2025. According to ETA’s Transactions Trends survey, more than half of millennials have used online payment services such as Venmo or PayPal to transfer and receive funds. However, cashless and online banking expose millennials to some hidden risks. Certain risks include bank overdraft fees, and digital theft that relates to fingerprint ID or Apple Pay.

Several new fintech companies and innovative banks are designing services to keep millennials’ finances more secure in the new digital landscape. Robo-advisors, such as Mint send notifications to help users keep track of their spending. Budgeting tools like Fudget and Goodbudget allow users to keep track of exactly how much they are spending on hidden fees like subscriptions. Innovative banks such as N26, Tandem and atom are offering a wider range of loans, accounts and overdraft policies to suit users’ spending habits. Some payment gateways like Stripe, Braintree and Google Pay are also available, which provide millennials with safe and convenience ways to the online payment process.

Source: http://www.ibtimes.com/millennials-money-how-fintech-will-help-lower-risks-cashless-society-opinion-2479617?utm_medium=email&utm_source=fintechweeklycom

The history of applying Artificial intelligence(AI) to banks goes back to the 50s. The benefits of AI in banking includes enhanced customer personalization, productivity gains, fraud detection, and better customer recommendations. One very exciting example of applying AI to banks is from a start-up company named Finie (for financial genie). They created a voice-powered AI platform to interact with a banking account using natural language queries. Finie can be asked, “How much did I spend on groceries”, instead of providing list of transactions.
Nowadays, AI is increasingly important for financial service firms to be competitive. In the near future, more financial service firms will adopt AI to deliver better experiences, lower costs, reduce risks and increase revenues.

During the most recent World Economic Forum Annual Meeting at Davos, Switzerland, Kaifu Li (an American venture capitalist, technology executive and computer scientist) commented that as the Chinese markets continue to accumulate more data, there will be more opportunities for AI technology, especially when it comes to credit card fraud detection, more and more Chinese banks will adopt AI. Embracing AI to banks is a win-win situation for both banks and tech companies.

 

https://thefinancialbrand.com/63322/artificial-intelligence-ai-banking-big-data/?utm_medium=email&utm_source=fintechweeklycom

Algorithms is now playing a crucial rule in innovating the Fintech industry. Nowadays, Fintech startups are implementing new technologies to provide low-cost financial services. LeadingRobot recently launched an automated hedge fund using blockchain technology. The automated hedge fund buys credits from online lenders and move investors funds based on risk tolerance and investment horizon. Unlike traditional hedge fund firms that charge a certain performance fee and management fee, LendingRobot only charges a 1% management fee and no performance fee.

Clearly, new technologies enable Fintech startups to disrupt traditional banking and financial service industry. At the same times, new technologies allow customers from different financial situations to manage their money at a very low cost comparing to traditional financial services.  Despite some risks related to new regulatory agenda and managerial changes within the startups, companies providing Robo-advisors or automated hedge fund services have highly chance to succeed. In particular, millennials tend to adopt these new Fintech services because they provide lower cost for more people and are easy to use as mobile phone apps. Moreover, a high mobile penetration rate in the US provides a large group of audience for Fintech startups.

 

Fintech Startup LendingRobot Uses Blockchain To Launch Automated Hedge Fund