Fintech Update, 6/19 - 6/25
June 19-25, 2017
Before we get into it, a couple quick announcements:
First, thanks to the growing interest in fintech and increasing readership of the Update, we're excited to announce that we're growing our team AND rolling out a new website! Stay tuned for more on both things, and get ready to bookmark thefintechupdate.com starting in July!
Second, in celebration of July 4th and as we prepare to increase our online footprint, please note that our next weekly update will be on Monday, July 10.
We hope everyone has a wonderful Fourth, and we greatly appreciate your readership!
Leading Off
The OCC’s office of innovation announced it will hold “office hours” for fintech firms in New York next month; Facebook outlined plans to improve the Messenger payments experience; Venmo announced a new bank transfer service designed to compete with Zelle; Canadian messaging app Kik plans to raise new funds via an ICO; the FBI reported that it received over 2,600 ransomware complaints last year; and the WSJ profiled several notable emerging fintech and cybersecurity startups.
In the News
OCC will hold NY office hours from July 24-26. The OCC’s office of innovation will host an “office hours” event in New York next month to help answer questions about regulations, charter options, and bank partnerships. The OCC kicked off its office hours initiative last month with a similar event in San Francisco. Interested parties may request a session through July 5.
GeoQuant targets big banks with AI-based risk scoring. The startup has made a name for itself by applying AI to risk assessment models that “big banks, hedge funds, and governments [use for] . . . everything from foreign currency investment to foreign aid.” The firm digests data from both traditional and nontraditional sources, including social networks, to develop its risk reports.
Facebook wants to improve the Messenger payments experience. In an interview with Recode’s Decode podcast, David Marcus, formerly of PayPal and now head of Facebook Messenger, discusses how the social network plans to build “the best possible payment experience” for Messenger’s 1.2 billion users.
Kik CEO discusses planned ICO. The Canada-based messaging app, which has already raised over $120 million in VC funding since its launch in 2009, will pursue an initial coin offering (ICO) by selling cryptocurrency “shares” to investors. Kik plans to sell 10% of its coins and retain the remaining internally in a move to take the “pressure off a possible acquisition or IPO.”
The FBI received over 2,600 ransomware complaints in 2016. In its annual review of cybersecurity threats, the law enforcement agency’s Internet Crime Complaint Center documented nearly 300,000 cybercrime-related complaints, 2,673 involving ransomware, with losses totaling over $2.4 million.
ECB plans Eurozone-wide instant payments service. The European Central Bank plans to build an instant payments settlement system, enabling citizens and businesses to digitally send money anywhere in the Eurozone within seconds. Set to launch in November 2018, the platform will offer real-time money transfers, beating the current 24-hour processing period.
Venmo to launch “instant” bank transfers. Facing new competition from the bank-backed Zelle network, Venmo will begin allowing customers to transfer money to their accounts in minutes, using eligible debit cards. The new functionality is in beta but will soon be available to all US users for a 25-cent fee per transaction. Transactions made using Venmo's current 24-hour processing period will remain free.
New York FinTech Innovation Lab debuts new cohort. One of the pioneers of fintech incubators, the Lab debuted the eight startups of this year's class at its annual Demo Day. Nearly all of the firms are focused on compliance, security, and data analytics, and will spend the next 12 weeks identifying pain points in those areas while working with executives from big banks like Capital One, BoA, and Wells Fargo.
WSJ notes tech companies to watch. In its annual "Top-25" ranking, the Wall Street Journal identified 25 emerging technology companies by “assess[ing] their founders' experience, investor track record . . . investments raised, growth of workforce and buzz [generated]." Five of the companies featured were in the cybersecurity and fintech industries.
Will Amazon become a force in fintech? With Amazon’s lending division loaning out over $1 billion to small businesses over the past year, some observers see Amazon as aspiring to become a dominant player in fintech, including further expansion into payments, lending, and credit scoring, drawing parallels to China’s Ant Financial.
Have a great week!
The Fintech Update Team