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:
Lots of banks have been testing blockchain based applications for trade finance…
Banking consortium R3CEV revealed today that 15 of its members have completed a distributed ledger trial focused on applications in trade finance. The test reportedly focused on how its distributed ledger platform Corda could be used in accounts receivable invoicing and letter-of-credit (LC) transactions.
BAML and HSBC partner with Singapore for blockchain test (Financial News)
Bank of America Merrill Lynch and HSBC have teamed up with a Singapore government agency to develop a blockchain-based trade finance application, as capital market firms speed up efforts to bring distributed-ledger technology into use.
(Question of the week: Why didn’t they all just run the experiment together? Especially considering BAML and HSBC are part of R3. Big summer mystery….)
A couple more on blockchain and bitcoin…
Bitfinex, the digital-currency exchange that lost $65 million to hackers last week, plans to spread the losses among all its users, including those not directly affected by the hack. The Hong Kong-based digital-currency exchange said in a statement Sunday that the losses from the theft would be shared, or “generalized across all accounts and assets” of its clients, with each taking a loss of around 36%.
Blockchain representatives from each of the ‘Big Four’ accounting firms are set to meet this morning with the American Institute of Certified Public Accountants to discuss establishing a distributed ledger consortium. Held at Microsoft’s headquarters in New York City, the event marks the first meeting between blockchain specialists from Deloitte, Ernst & Young, KPMG and PwC. Collectively, the four firms last year generated $123.7bn revenue.
Blockchain consortia are so 2015…get ready for the cyber groups.
Eight of the largest U.S. banks are forming a group that seeks to tackle the growing cyberthreat. It includes J.P. Morgan Chase & Co., Bank of America Corp. and Goldman Sachs Group Inc., among others. While still in its early stages, the big banks expect the group members will share more information with each other about threats, prepare comprehensive responses for when attacks occur and conduct war games designed for the issues facing the biggest institutions. (In the past similar initiatives have often struggled to actually get participants to share threat info. Curious to see how this one goes)
Alipay is looking to expand in Europe…watch out.
Jack Ma will set a bag aside for you at your favorite Paris store or hail you a ride in Rome — just as long as you’re not European. China’s biggest third-party payments platform Alipay, an affiliate of Ma’s Alibaba Group Holding Ltd., is signing deals with brick and mortar retailers in Europe to bulk up its offering for Chinese tourists and expats. It’s seeking to add extras to its mobile wallet app for Chinese travelers in France, the U.K., Germany and Italy, though it has no plans to offer its services to consumers who aren’t from China.
This next one is a bit extreme, but curious to hear your thoughts…
The other day, my bank sent me a new ‘contactless’ debit card. Immediately, I cut it up with a pair of scissors. Banks and credit card issuers might like to try to tell us that the future lies in the ‘cashless society’, in which we will make even the smallest purchases such as a cup of coffee or a daily newspaper by card, but I don’t want anything to do with it. I am not a Luddite — I just like and trust cash. (I kind of like not having to worry about having cash…but maybe I’ve been brainwashed as part the big cashless conspiracy.)
After Atom, Tandem and Starling… Mondo gets its banking license.
Digital Start-Up Mondo Gets Banking License (WSJ City)
A London-based start-up that aims to provide banking services entirely via mobile phone has been granted a banking license by UK regulators. Mondo announced on Thursday that it has received a license “with restrictions” by the Financial Conduct Authority and the Prudential Regulation Authority, less than 18 months after being founded. (Plus bonus: Mondo hits £20 million customer spend (Finextra))
And this week’s big news… The CMA said banks in the UK will have to open up their APIs by 2018. Did the report go far enough?
The competition watchdog has today handed fintech startups a bazooka for their mission of disrupting banks, with new rules for making data more open to improve customer choice. The so-called big four – HSBC, Lloyds, Barclays and Royal Bank of Scotland – and other smaller high street banks will have to work together to create standards for sharing data, on everything from the pricing of products to individuals’ transactions.
CMA report on UK banking industry is weak and disappointing (The Guardian)
Investigations into the structure of banking in Britain have become rather a cottage industry. There have been 11 separate inquiries into the sector in the past 17 years. Thousands of hours have been spent taking testimony from expert witnesses. Millions of words have been written. And nothing much has changed.
UK fintech breathes sigh of relief (FN Brexit Blog)
Startups whose business model rests on the expectation of getting greater access to bank data because of new EU rules will no longer have to fret over what will happen post-Brexit.
Speaking of Brexit and fintech…
Six weeks after Britain’s vote to leave the European Union threw London’s future as a leading global fintech hub into doubt, there are tentative signs the country’s reputation for innovation in financial services will survive. From high in a skyscraper in Canary Wharf to Victorian warehouses around “Silicon Roundabout”, some of the startups Britain has fostered to make its vital finance sector more efficient are less anxious than they were about the decision.
More cheerful news from LendingClub…
Online lender LendingClub Corp. said Monday that its finance chief had resigned to pursue a new opportunity, a management shift that comes three months after the company ousted its founder and CEO. The announcement that Chief Financial Officer Carrie Dolan was departing came as the company reported a second-quarter loss of $81.4 million, or 21 cents a share, on revenue of $103.4 million. That compared with a year-earlier loss of $4.1 million, or a penny a share.
Yet another senior departure at Nutmeg…
C-suite exec departs Nutmeg for Twitter (Financial News)
The chief product officer at London-based startup Nutmeg has left to join Twitter, the latest move in a wave of senior changes following the departure of co-founder and chief executive Nick Hungerford in May. Scott Eblen, who joined Nutmeg in January 2015 after more than six years at Google, left the Schroders-backed robo-adviser in July, according to his LinkedIn profile and a blog post he penned at the time.
And lastly: IBM’s Watson is great, but apparently not that great to get banks to buy it…
International Business Machines Corp is in an unusual fix in telling big U.S. banks they can use its Watson software of Jeopardy-winning fame as a cost-saving solution: bankers say they like it, but cannot afford it. IBM is in good company. Banks are in the fifth year of their belt-tightening campaigns that began in 2011, chasing billions of dollars’ worth of savings, and vendors that offer everything from technology to janitorial services are getting squeezed.