Fintech Update, 9/10 - 9/16
Sept. 10-16, 2016
Leading Off
Comptroller of the Currency Thomas Curry provided new fodder for supporters of the OCC’s rumored limited-purpose fintech charter; Circle worked with Apple to allow users to make real-time cross-border payments through the iMessage app; the FFIEC rolled out new cybersecurity guidance for bank examiners while the NYDFS proposed new state cyber regulations; and blockchain-based money transmitter Ripple raised $55 million in Series B funding.
Policy & Regulation
Curry discusses marketplace lending and regulation. Comptroller of the Currency Thomas Curry delivered remarks [full text] at the Marketplace Lending Policy Summit in Washington, DC. Curry spoke at length about online lenders, also touching on the OCC’s plan to complete a “framework . . . to assess responsible innovation . . . this fall” in connection with the development of a rumored limited-purpose charter aimed at fintech firms.
More on the OCC’s limited-purpose charter. Following Curry’s speech, the American Banker (AB) delved into how the OCC could administer a “potential future fintech charter.” The ability to issue such a charter would hinge on the OCC’s ability to “invoke an obscure banking law to levy receivership powers over noninsured national financial institutions.”
U.S. House voices support for national innovation policy. The U.S. House of Representatives passed a “non-binding resolution calling for a national technology innovation policy,” specifically referencing digital currencies and blockchain. The resolution, introduced in July by Reps. Adam Kinzinger (R-Ill.) and Tony Cardenas (D-Cal.), may presage “a more substantive bill” next term.
Marketplace Lending & Credit
New WEF insights on regulation and online lending. Georgetown University’s Center for Financial Markets and Policy and the World Economic Forum (WEF) published a white paper [full text] assessing the “complex regulatory landscape” affecting online marketplace lenders. The WEF also published a related article outlining 12 policy ideas regulators should consider.
Banking & Securities
FPA says fintech will bring needed change. At the annual Financial Planning Association (FPA) conference in Baltimore, industry experts discussed how fintech innovations could make financial advisers “more productive” thanks to the advent of big data, analytics, and real-time insights on client behavior.
Payments
Circle integrates with iMessage. Payments firm Circle launched an extension for Apple’s iMessage, allowing Circle’s iOS users to transfer dollars, euro, pound sterling, and bitcoin via the messaging app. CEO Jeremy Allaire said that integrating with "the most used app in the world" would help Circle grow its platform to compete against “more established payment apps.”
Digital Currency & Blockchain
Exploring the challenges of blockchain adoption. In its special report on the “Future of Fintech,” the Financial Times (FT) looks at two challenges to the widespread adoption of blockchain technology: whether it “can be made secure enough from criminals,” and whether the “unprecedented transparency of transactions” is compatible with banks’ privacy needs.
tØ platform partners with broker-dealer. The subsidary of Overstock.com will work with broker-dealer Keystone Capital as part of an effort to launch a blockchain-based equities trading platform that began in 2015 when Overstock gained SEC approval to issue its public shares on a blockchain. Through Keystone, tØ users now will have access to brokerage and trading services.
Cybersecurity
New FFIEC cybersecurity guidance for bank examiners. Last week, the Federal Financial Institutions Examination Council (FFIEC) released a revised information security section of its examination handbook. The new guidance “will help examiners measure the adequacy of an institution's culture, governance, information security . . . operations, and assurance processes."
New York proposes new cyber regulations. Governor Andrew Cuomo and the Department of Financial Services proposed new rules that would require banks take additional actions to combat cyber attacks, including “[hiring] a chief information security officer and implement[ing] measures [to] detect and deter cyber intrusions and protect consumer data.”
International News
Visa takes on Kenya’s M-Pesa. The world’s largest payments network partnered with several Kenyan banks on its new mVisa service, aiming to “break M-Pesa's stranglehold on the country's mobile payments market.” Visa billed mVisa as a more inclusive alternative to M-Pesa, since two parties need not be “customers of the same bank or mobile operator” to exchange funds.
Global praise for the FCA. In a recent survey conducted by Ernst & Young (EY), The U.K.’s Financial Conduct Authority (FCA) won plaudits as the world’s most fintech-friendly regulator. Of the world’s regulators, noted EY’s head of fintech, only the FCA has “a mandate to promote innovation and competition, as well as . . . financial stability and consumer protection.”
Singapore and Switzerland cooperate on fintech initiative. The Monetary Authority of Singapore signed an agreement with the Swiss Financial Market Supervisory Authority on a “framework for innovative Fintech companies.” The goal is for fintech firms in both countries to access “each other’s market and . . . reduce regulatory uncertainty and the time-to-market.”
Fundraising & Deals
Ripple raises $55 million in Series B funding. The cross-border payment business, which relies on blockchain technology to support its platform, now counts Standard Chartered, Accenture Ventures, and Santander Innoventures among its investors. Ripple’s latest financing round brings its total funding up to $93 million.
Commentary & Miscellaneous
Are corporations ready for same-day ACH? Rob Unger of the National Automated Clearing House Association (NACHA) appeared on the organization’s “Countdown to Same Day ACH” podcast series to discuss “what corporations and businesses should be expecting as the ACH Network moves closer to speedier payments and quicker settlements.”
Former Facebook GC stresses cooperation with regulators. At the annual TechCrunch Disrupt conference, Ted Ullyot, former General Counsel at Facebook and current head of public policy at venture capital firm Andreessen Horowitz, said that entrepreneurs must work to build ties with policymakers and regulators “right up front, as part of the original thesis” when starting up.
Have a great weekend!
The Fintech Update Team