Fintech Update, 6/5 - 6/12
June 5-12, 2017
Leading Off
FRBSF grew its team to focus on monitoring fintech and engaging with Silicon Valley; Amazon saw an uptick in its lending business, loaning out over $1 billion to small businesses over the past year; the U.S. State Department created a blockchain working group to assess the impact the technology may have on foreign policy and diplomacy; investment management platform Addepar raised $140 million; and Apple will debut a P2P mobile payment feature in its IOS update this fall.
Last Week's News
FRBSF grows its team to focus on fintech. The Federal Reserve Bank of San Francisco has hired several analysts tasked with monitoring fintech developments, engaging with Silicon Valley, and increasing technical expertise among the Fed’s supervisors. The team will also inform broader Fed policy as it brings a financial institution supervision perspective to the fintech industry.
Amazon sees uptick in its lending business. Newly released figures from Amazon show that the company’s lending division has loaned out over $1 billion to small businesses over the past year. Amazon’s wealth of merchant data from its online marketplace allows the company to identify promising merchants who would likely be unable to secure loans from traditional banks.
U.S. State Department creates blockchain group. Acting within the Global Partnerships office, the working group will assess the impact that blockchain may have on U.S. foreign policy and diplomacy. The agency notes the technology “is not just for bitcoin,” but that “nations and cities around the world are actively utilizing [blockchain] to transform the work of government.”
Addepar raises $140 million. The San Francisco-based investment management platform, used by portfolio managers to gain better insight into their high-net worth clients’ investing behavior, vaulted into the billion dollar valuation ranks with its latest funding round led by Valor Equity Partners and 8VC. The firm will use the money to pursue acquisitions and expand internationally.
Apple debuts P2P mobile payment in latest IOS update. In a forthcoming update to its IOS mobile operating system, Apple will debut a peer-to-peer mobile payment feature enabling users to send and receive money via iMessage using the card information they already have stored in Wallet. The service will compete with apps like Venmo, but will only work across Apple products.
Innovation vs. Incumbents. Morgan Stanley published a white paper [full text], noting the decline in VC funding for fintech startups. The researchers suggest the relatively slow change of behavior in financial services, along with increased capital requirements for financial products and governmental scrutiny, pose hurdles for many of these startups thus favoring incumbents.
Dubai’s FSA creates fintech license. Modeled after the “widely copied” fintech regulatory sandbox first inspired by the U.K.’s FCA, Dubai's Financial Services Authority is creating an “innovation testing license” (ITL) for qualifying fintech startups to develop and test financial products for six-to-twelve months without being subject to traditional regulatory requirements.
Internet Trends 2017. In her annual report, Kleiner Perkins partner and famed technologist Mary Meeker highlights China’s mobile payments market. She profiles China’s top digital payment providers, AliPay and WeChat, which have 54% and 40% of the mobile market, respectively. Meeker also covers Chinese fintech firms Tencent, Ant Financial, and JD Power.
Have a great weekend!
The Fintech Update Team