Fintech Update, 12/10 - 12/16
Dec. 10-16, 2016
Leading Off
State banking regulators considered how to make their banking charters more attractive to fintech firms; payments network SWIFT warned of the escalating cybersecurity threats affecting global banks; India assessed the impact of PM Narendra Modi’s surprise decision to go cashless, which has created a windfall for India’s mobile wallet companies; and the New York Times profiled the growing competition among automated financial assistants.
Policy & Regulation
States consider response to OCC “fintech charter.” Following the OCC’s decision to consider granting special-purpose national bank charters to fintech firms, some state banking regulators are considering how to make their bank charters more attractive. One proposal involves reciprocal agreements, in the hope of creating a “coordinated” regulatory regime among states.
Digital Currency & Blockchain
Former Barclays CEO joins blockchain startup. Antony Jenkins, who led Barclays for three years and recently launched his own fintech firm, 10X Future Technologies, has joined the board of directors for Blockchain, a digital currency startup. While peer firms like Circle and TradeBlock are moving away from processing bitcoin, Blockchain remains committed to its use.
Privacy & Cybersecurity
SWIFT warns clients of escalating cybersecurity threat. In a report sent to clients early last month, the secure financial messaging network voiced concern that the threat posed by cybersecurity to global banks is “very persistent, adaptive and sophisticated – and it is here to stay."
Personal Finance
Competition for automated financial assistance heats up. Financial apps like Credit Karma, Mint, and Digit are using machine learning and artificial intelligence to provide customers with proactive analysis, “rather than forcing someone to constantly [enter his/her own financial details].” Instead of offering their own financial products, Credit Karma and Mint believe more value is in “being the neutral intermediary” that helps consumers track their various accounts.
BoA adds new tools to its mobile app. Beginning in January, Bank of America will roll out new spending and budgeting tools for its mobile and online platforms. The new functionality will provide users with “a dynamic income and spending comparison and outlines trends up to the past 13 months,” assisting them with creating and managing their personal budgets.
International News
India reckons with Narendra Modi’s decision to go cashless. Last month, the Indian prime minister announced a surprise decree invalidating 86% of the country’s legal tender and placing India “at the forefront of the nascent global campaign against cash.” While fewer than a third of Indians have smartphones, the cash crunch has forced millions to sign up for mobile wallets or be left stranded for some everyday goods and services.
Indian mobile-payment firms gain windfall of new users. A July 2016 report [full text] from The Boston Consulting Group and Google found there were nearly 85 million active users of mobile wallets in India (just 7% of the population). Since Modi’s decree, Indian digital payment firms like MobiKiwk and Paytm have added hundreds of thousands of new accounts per day and are experiencing “a boost to the sector that would have taken years otherwise.”
Fundraising & Deals
Online lender BlueVine raises $49M in debt and equity. The raise was led by existing investors, including: Lightspeed Venture Partners, Menlo Ventures, Citi Ventures, and Silicon Valley Bank. With the latest funding, the Redwood City-based lender will hire new staff and expand its product offerings.
Company Spotlight
Fifth Third takes equity in online lender. The Cincinnati-based bank announced an undisclosed equity stake in ApplePie Capital, which lends to individuals starting franchises of chain brands (e.g., Dunkin’ Donuts and 7-Eleven). Fifth Third, which led the equity round with fintech VC firm QED Investors, is also considering purchasing some of ApplePie’s loans.
Commentary & Miscellaneous
CFTC Commissioner calls for uniform regulation of blockchain. J. Christopher Giancarlo, a commissioner at the Commodity Futures Trading Commission (CTFC) since June 2014, suggests five approaches that financial regulators can take to support distributed ledger technology and keep the U.S. fintech community competitive with London and other global innovation hubs.
NOTE: We’ll be on hiatus for the rest of December, but look forward to returning in the New Year! Best wishes for a happy, safe, and relaxing holiday season.
Happy Holidays!
The Fintech Update Team