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The Swiss Federal Council is aiming to make regulatory changes to create a more prominent fintech market. With new financial technology  such as bitcoin becoming more valuable and relevant, the goal is to create a more welcoming environment for startups. The undecided regulatory amendments would be aimed at Switzerland’s domestic financial industry to account for fintech. The proposition is to have different regulations for “firms that accept less than 1 million Swiss francs in deposits”. This would create a “regulatory sandbox” that allows startups to experiment with new technology.

I think this will be a re-occurring trend in many different countries as fintech continues to disrupt norms and processes in the world of finance. Most developed and developing nations understand the strategic necessity of changing regulations to increase efficiency as the market structure changes. More importantly, a lack of proactive and effective regulations would pose a major security risk related to the leaking of confidential information. Paying close attention to these regulations is a smart and beneficial decision that will better Switzerland in the future.

http://www.coindesk.com/switzerland-attract-more-blockchain-startups/?utm_medium=email&utm_source=fintechweeklycom

Square has launched a new integrated retail app that will help very small businesses to keep track of different aspects of their business. The app is a next-level retail solution for merchants with finished, packaged products who need more than just the Square Reader and basic Square mobile app. The first aspect of the search-based app is the smart customer directory that storeowners and retail staff can use to track and find clients. The second part of the app is inventory management that can manage real time actions that can scale across locations. The last component is an employee management system that allows the employer to give access to certain people or groups What I believe this app will greatly do is track all of the users information and store it in Square’s servers so that they can sell the data to other companies that will utilize it for their own purposes. If this is true then this storage will be another intrusion of privacy by Silicon Valley companies that will just integrate our lives for better or for worse.

Link: https://techcrunch.com/2017/02/08/square-for-retail-aims-to-be-the-only-store-software-most-shop-owners-need/

Fintech is changing the world people manage their money, apply for loans, maintain credit ratings and other services that banks provide. This is true for the western more developed companies. Fintech is slowly trying to effect the developing countries in the same way. More than half the population is lives in the developing world category of which many of them are not tapped by the Fintech market. This article explains how several Fintech companies are adapting to the situations in their own country to increase the ability for people to manage their money and increase eligibility to get loans. One such example is SERV’D in India which helps informal workers such as drivers, cooks and nannies to create simple formal work contracts and pay them online. This helps in them in a big way to apply for loans as they now have a way to show their income and ability to get a loan and pay it back accordingly. With the help of such innovative Fintech startups in the future populations that do not have banking ability or services around them to grow and increase their ability to manage money and achieve a higher standard of living.

https://hbr.org/2017/01/fintech-companies-could-give-billions-of-people-more-banking-options

With increase of urbanization, The daily requirements of people are also increasing along with options of availability. Every Store and every bank offers there unique card discounts to attract people. Struggling with the amount of cards and the weight of wallet , Mobile wallets was introduced.As it came up as a new technology everyone in the tech market like Google, Apple, Samsung and PayPal wants to capture this. As Apple pay and Samsung are only restricted to their phone users, Android and PayPal are widely spread. Coming out of the tech competitors, there are other type of wallets available like Capitol One Wallet which is specific to some bank brands, Star bucks or Walmart which are specific to stores.The usage of these handy wallets is not dependent to only users but the vendors also play a very important part. The users are concerned about the security issues, therefore something that seems new to them is difficult for them to adapt.But for vendors ,they have to bear the initial cost of installing the contact less point of sale (POS ) equipment.Either way, the popularity of mobile wallet is increasing day by day and it is expected to get 22% more users by next six months.

References:

http://www.toptenreviews.com/business/payment-processing/best-mobile-wallets/

https://thefinancialbrand.com/55074/mobile-wallet-payments-digital-banking-report/

      In this article, there is a discussion of why banks need to stop copying startups and start creating their own innovation model. Corporations are envious about how agile startups are able to innovate, yet should understand the large difference is goals between a startup and traditional bank. Larger corporations naturally act in far more in strategic and slow manner attempting to access mass markets. On the other hand, startups are trying to create as many different things as possible in hopes that every one in a million idea will gain traction. 

Corporations can not follow the lean startup model as a way to answer their innovation needs. Corporations using this model often end up wasting a lot of resources and capital that could be used more effectively elsewhere. One of the main findings that can help aid corporation innovation without blindly following the startup model is for big companies to understand what the customer wants and uses. After this is understood, creating a project around this becomes a better use of time and the chances of success is much higher. Banks need to find new ways to efficiently and effectively innovate in this quickly moving landscape.

https://www.americanbanker.com/opinion/rather-than-copy-startups-banks-need-their-own-innovation-model

A consortium of Australia’s biggest banks aims to gain access to the iPhone’s NFC antenna, which is what makes contactless payments on mobile phones possible. Initially attempting to negotiate a bloc with Apple, the banks responded to Apple’s claims of them attempting to block the expansion of Apple Pay into Australia by calling such claims “conspiracy theories.” Even though the banks have invested in their own payment technologies, they fear that any competition with Apple Pay will be severely one-sided. The banks are also attempting to gain permission to negotiate together, boosting their negotiating power, a move the Australian Retailers Association supports. Apple claims that restricting access to the NFC antenna to their own apps is crucial to the security and usability of the system.

Apple Pay is not the only mobile payment application on the market – Android Pay, Samsung Pay, Chase Pay, and Bronco Pay (OK that last one doesn’t exist yet) are other mobile payment services that are being accepted at more and more businesses, though Apple Pay is probably the most ubiquitous. As mobile payment services become more popular, it would be remiss for banks to not try and get a foothold in the market as well.

However, I do think that the banks may be wasting their time trying to get Apple to grant them access to the NFC antenna on iPhones. Doing so could set a precedent forcing Apple to grant other banks across the world similar access. This probably wouldn’t hurt the iPhone’s usability, but it would negatively affect their ability to maintain their competitive advantage of using their closed app ecosystem to better maintain a quality standard of apps on their app store. It is difficult for me to see Apple folding on this just because the banks demanded them to, but at the same time Apple needs the banks’ cooperation to bring Apple Pay to Australia. Whether the banks may be better off fighting Apple or giving up and relying on the open ecosystem of Android must be a question on the banks’ mind.

Source: https://www.bloomberg.com/news/articles/2017-02-12/apple-pay-dispute-about-tech-access-not-fees-aussie-banks-say

With every new disruption in the business world, if companies fail to a rapt, they will go out of business. In the banking industry, every company must now develop digital solutions or services in order to stay competitive. The article polled senior banking retail executives to see what they saw for the future of banking.

-49% of executives said that the traditional model of banking will be dead
-by 2020 people will value cheap services over human interactions for banking needs
-Cash will count for less than 5% of transactions as we move to a digital age
-Top priorities include customer segmentation to give customers of all groups exactly the right product

I mostly agree with the article. There are now apps to get mortgage and car loans through your phone and doing banking online has never been easier. The only reason I got to my bank is to deposit cash, which I never carry anymore. We could see a significant decline in brick and mortar banks as everyone becomes accustomed to banking online. Fintech startups that create their apps to target the future needs of these banks will most likely be some of the more prominent but unheard of companies in the coming years.

https://thefinancialbrand.com/63617/digital-banking-strategies-fintech-data-analytics/?utm_medium=email&utm_source=fintechweeklycom

Forbes contributor Chris Myers recently published an article (Myers, 2017) that outlined 3 reasons he felt FinTech is failing – 1) There is a fundamental strategic contradiction between tech and finance, 2) Market realities encourage short-term thinking, and 3) Incumbents in the market are powerful and resistant to change.

While I agree with Myers that the tech and finance industries have different timelines for success in the marketplace, I disagree that the three reasons cited are the only or even main factors that will determine the longevity of the FinTech market. I believe the major underlying factor in FinTech is deeply rooted in other societal factors. For instance, I believe the online lending market is fueled by the consumers desire to have a more streamlined loan selection, acceptance and closing process, as opposed to physically having to personally visit multiple financial institutions. For FinTech industries like digital wallets, the attractiveness to the consumer is once again the convenience, and not having to carry multiple forms of payment.  These consumer conveniences are not diminishing and I feel will continue to advance the FinTech market, thus offsetting any temporary declines most probably attributable to normal up and down business fluctuations.

 The uncertainty I have is more about how the change of the guard in the U.S. White House, along with the Republican majorities in congress, and the latest talk of relaxation of regulations will affect the FinTech industry – a topic I will save for a later date.

 Myers, C. (2017, February 7). 3 Reasons Fintech is Failing. Retrieved from www.forbes.com: http://www.forbes.com/sites/chrismyers/2017/02/07/3-reasons-why-fintech-is-failing/#639f869d7b6b

Up until recently, Bitcoin and other blockchain technologies have largely been seen as a niche segment of the transaction market. The technology has slowly been gaining more and more traction from the average user, but large businesses are hesitant to adopt the technology. Accenture has recently debuted a system that integrates technology called distributed ledger tech, with hardware security modules that corporate IT teams use to keep data safe. Many users of blockchain tech think it has the power to revolutionize the way back office systems in industries ranging from financial services to supply chain logistics.

The longstanding relationship between financial services and block chain is that they believe fundamentally in different methods for security. Financial services want to keep an closed off internal network whereas Bitcoin and other blockchain tech believe in a more free-for-all vision. The new security technology developed by Accenture seems to accommodate both parties. It lets large financial institutions use blockchain tech while still keeping their keys stored on a system that is inaccessible and incorruptable to the rest of the public. This new development could really change the landscape of blockchain users in the future as it allows larger financial institution to start investing and using currencies like Bitcoin.

Reference: http://fortune.com/2017/02/09/accenture-blockchan-security/