Friend of the Financial Services Club and journalist with Financial News Anna Irrera has recently started producing a weekly roundup of FinTech news. She’s kindly agreed to let me republish this summary here on The Finanser, so here goes:
A good roundup of startups bringing AI to fintech…
The competition in the space is heating up as several companies focused on core AI technologies, like Sentient Technologies and Ayasdi, are bringing their products to fintech, for applications ranging from quantitative trading and sentiment analysis to threat detection and risk analytics. Just this year, over 15 companies using AI in fintech raised equity funding rounds.
And an in-depth report on the impact of fintech…
Two of the most common questions we hear from our clients are: “How is fintech going to impact what we do?” and “What should we do to prepare for the disruption from fintech companies?” In this report, we attempt to answer these questions by disaggregating the impact of fintech in six areas within financial services and across six business dimensions.
Speaking of fintech’s impact, UBS published a 63-page report concluding banks better wake up because the threat of fintech disruption is real. The report is based on a survey of more than 27,900 customers and management at 61 banks…
UBS to banks: Embrace fintech and grow your revenues (Financial News)
Banks face a “real and growing” risk that new technologies will replace their traditional services – but embracing this change, rather than fighting it, is what will help grow revenues. UBS predicted that consumers’ take-up of new applications including money transfers – identified as posing the biggest threat to bank revenues – P2P lending and so-called robo-advice could surge by between 47% and 150% over the next 12 months.
Look! An exit!
France’s BPCE to buy fintech Fidor Bank (Financial Times)
The old and new worlds of banking came together on Thursday as Fidor Bank, the German online bank, said it had agreed to be acquired by Groupe BPCE, the large mutually owned French lender. (Will all challenger banks just end up being acquired by incumbents? If so, isn’t that a bit anticlimactic for fintech? ;-))
On Brexit and fintech…
The one certainty banks and fintech firms face in response to Brexit is a long period of uncertainty. “The right forecast for business is that nothing is going to be resolved very quickly,” said Mike Laven, CEO of Currencycloud which provides inexpensive international payments services for small and mid-size companies. The best thing for me would be if we didn’t have to deal with this, he added.
Tech funding hits hard terrain (Financial News Brexit Blog)
UK tech firms got $200 million of venture capital since the Leave vote. Sounds ok — except they got $338 million in the same period last year.
After Amazon partnered with Wells Fargo on student loans, another tech firm partners with a big financial institution…
AXA will insure warranties and repairs for Alibaba’s international platform. French insurer AXA on Friday announced a partnership with Alibaba and the Chinese e-commerce giant’s financial arm, Ant Financial, to expand in China. (Lesson: don’t assume the incumbents are asleep.)
Growth in origination on UK marketplace lending platforms is stagnating….
Growth in UK marketplace lending stagnates (Financial News)
Growth in loans originated by the UK’s marketplace lenders is slowing thanks to a long list of difficulties – to which anxiety about Brexit may be added. Alternative finance data provider AltFi Data estimates that UK P2P platforms will have originated between £260 million and £290 million in loans July, in line with the amount lent monthly since April.
Fintech news from Germany…
FinTech Group AG said Tuesday it would create digital banking services in Europe together with Rocket Internet SE. FinTech Group is developing a digital bank for Rocket Internet using the banking license of FinTech subsidiary Bank biw as a first step of a comprehensive partnership of the two companies.
N26 launches its investment product in Germany (TechCrunch)
A few days after announcing its banking license, N26 (formerly known as Number26) is partnering with fellow German fintech startup vaamo to add a new service to its banking offering with its first investment product for German customers. vaamo manages different portfolios of risky and not-so-risky assets thanks to robo-advisors so that you don’t have to micro-manage these portfolios. (An interesting observation made to me by a savvy investor: Fees charged by robos are already low–some say unsustainably low–so how can a revenue share in this space be sustainable?)
Meanwhile in capital markets fintech….
New technologies both threaten traditional financial firms and liberate them from their brick-and-mortar roots. Will fintech raise the temperature on financial institutions till they no longer can function, will fintech providers be strangled by the same rules that challenge banks, or will traditional banks just leverage new technology to better engage clients, reduce costs, and leave fintechs in the dust?
TruMid, the startup backed by venture capitalist Peter Thiel and investor George Soros, has revamped its trading platform as it seeks a new approach to electronic bond trading. The firm rolled out its new system late last month and says its already led to more activity than the first iteration. (One of the many firms trying to help alleviate the liquidity crunch in fixed income markets. While there is a clear problem that needs fixing, it’s a challenging one to tackle. See Bondcube.)
A senior fintech appointment…
WorldRemit appoints president (Financial News)
One of London’s best-known fintech startups has hired a former managing director at betting firm William Hill Online as its president. Andrew Lee, who stepped down as managing director for William Hill Online in January, has joined London-headquartered remittances company WorldRemit.
A big investor made a big bet on a small company with a big idea….
Boston fintech startup gets up to $250M from hedge fund king (Boston Business Journal)
Steven A. Cohen, a well-known hedge fund manager and one of the richest people in the U.S., has turned to the Boston-based financial services technology startup Quantopian to manage up to $250 million of his money, a move Quantopian’s CEO called “a watershed moment for the entire industry.”
While another big investor is having a very bad year…
Nicholas Adams has long been one of the most prominent partners at Wellington Management, the Boston-based firm that oversees $943 billion and is known for being the biggest sub-adviser of Vanguard mutual funds. But Adams works in Wellington’s hedge fund business and he is having a very bad year.
And lastly: fintech and regulators…
Reserve Bank Of India Mobilizes Blockchain & Fintech Initiatives (Crypto Coin News)
In response to the challenges posed by technology, the Reserve Bank of India (RBI) has enacted initiatives to address cybercrime as well as the disruptions caused by the emerging fintech sector, including blockchain technology. The RBI has established the Reserve Bank Information Technology (ReBIT) has been established to address these issues.