Swift says that blockchain technology is not yet ready to handle the billions in daily cross border bank payments; they recently completed a proof of concept test to reconcile international payments between 34 banks; they said the test went well but that progress was still needed before they can trust the technology to handle the scale; the other aspect to consider is that the 11,000 thousand banks on the Swift system would still need to make upgrades to switch to blockchain based payments. Source.
JoinedNov. 30, 2016
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Todd is the host of PitchIt: the fintech startups podcast, a weekly interview show featuring emerging fintech founders and leading venture capitalists. He is responsible for leading the content team which covers fintech through daily & weekly email newsletters, editorial, virtual events, and in-person conferences. He has been covering fintech, banking, and venture capital for more than 15 years, including speaking regularly at industry events.
Digital investment startup M1 Finance drooped their assets under management fees to zero in December; the company plans to make money through back end services and charges fees fopr paper statements, wire transfers and transferring to another brokerage; “It’s taking a similar approach to how the rest of financial services works,” CEO Brian Barnes said to TearSheet. “Banks make money on cash, assets, transaction revenue and the ability to cross sell — the more users, the more assets, and the more money M1 will make.”; the company current holds more than $100mn assets under management. Source.
UK based digital only bank, Atom Bank, raised more than $205mn from investors including BBVA; the new capital will help the bank further investment in technoloy and business capabilities; BBVA Chief executive Carlos Torres Vila tells the FT, “we are fully aligned with the vision of banking that Atom is pursuing, and the disruption it is already bringing to the UK financial services sector.” Source.
Last year’s batch of Chinese IPOs did not perform well and ended up losing almost $1bn worth of shareholder money; there is an expectation that the number of Chinese IPOs will jump 30 percent in 2018; Qudian, one of the biggest from a year ago, has seen their stock plummet by more than 50 percent; expectations and the Chinese government crackdown on online lending has really hurt the prospects of some companies looking to list. Source.
The main lobbying group for banks, the Consumer Bankers Association, is trying to get the government to add caps on how much graduate students and parents of undergraduates can borrow from the government; caps would force people to go to private lenders and would benefit those with better credit histories; there is also a group of investors trying to get clearer legislation passed for income sharing agreements; changes could result in billions of dollars worth of opportunities for banks and investors as the most recent academic year totaled $107bn. Source.
Formed in 2016, the Golden Contract Coalition was designed to help small banks negotiate better with core banking providers; the mission has now expanded to include a FinTech Advantage unit dedicated to helping the banks by financial technology; the member banks of the coalition pay a fee for the group to provide more negotiating muscle; Fiserv, FIS and Jack Henry are the major core providers for banks and the group is there to help smaller banks even the playing field. Source.
The head of the UN economic agency says that central banks in Africa are failing to understand the power of banking innovation; less than a third of people in sub-Saharan Africa have access to the financial system; certain countries like Kenya have seen wide adoption of services like mobile money, but then crossing into Nigeria the same service can be used by 1 percent of people; Telcos have really taken the lead on the continent to help bring access, but central banks are still regulating banks through the lens of traditional banks; regulators are starting to learn and enthusiasm for new ideas is increasing. Source.
The continued push by Amazon into financial services could have a bigger effect on startups over banks; Nicolas Parmaksizian, global head of Capco digital, tells TearSheet, “If you combine an Amazon with a Capital One, you’re combining the amazing power of Amazon and Capital One’s data analytics, and that’s a challenging thing to compete with as a startup banking brand.”; digital only banks look to offer a better experience at a lower cost than the traditional banks, adding Amazon into the mix could drown out those startups before they ever get going. Source.
In a recent speech on the future of money Bank of England Governor Mark Carney said a ban on crypto would stifle the useful innovation with blockchain; Mr Carney tells the FT about payment systems needing to change, “These must now evolve to meet the demands of fully reliable, real-time, distributed transactions.”; he also talked about the community driven approach to the tech and the many use cases for it that increases efficiency and transparency around systems that are in need of an upgrade. Source.
Caitlin Long recently stepped down as President and Chairman of blockchain startup Symbiont to help turn Wyoming into an ideal environment for digital asset businesses; she helped with the Delaware Blockchain Initiative and, along with her partners, recently introduced 5 bills in Wyoming; 3 of the 5 have passed and the Governor has indicated he will sign them into law later this month; American Banker interviewed Caitlin on institutional interest cryptocurrencies, bitcoin becoming financialized, the different between security and utility tokens and more. Source.