According to a report from Banking Technology, Amazon could potentially be acquiring Capital One; Capital One uses Amazon's AWS cloud services; its credit card business could complement Amazon's current offerings for payment processing and credit cards while also expanding its services for Amazon's merchant network; according to Neil O'Brien, former director of digital banking at Santander US, "There has been speculation for a long time about a tech giant (GAFA – Google, Apple, Facebook, Amazon) buying a bank in the US, but the general sentiment was that banks were an undesirable target because of low margins and more importantly, high regulation."; the potential for a bank acquisition is now likely to increase given recent regulatory developments in the financial services industry. Source
Beepi is closing after failed attempts to merge with Fair.com and DGDG; the firm is now working with Sherwood Partners to sell its assets through an assignment for the benefit of creditors process; Beepi provided an innovative online solution for used car sales; sources say the firm was paying exorbitant salaries and benefits for its employees; Sherwood Partners has not provided any details on buyers of the firm's assets however it is reported that Fair.com may be involved. Source
UK digital bank Monzo is nearing completion of a new funding round that will add 20 to 30 million British pounds in capital for the firm; the investment round is being led by Thrive Capital; sources also report that the firm is planning an equity crowdfunding campaign later in the year; Monzo is led by CEO Tom Blomfield and the firm was granted a UK banking license in August 2016; it currently has 100,000 users with activity driven by pre-paid Mastercards and mobile applications; the firm recently declined an acquisition offer from an incumbent bank and says it still has a lot it plans to accomplish. Source
Jason talks about this year's LendIt USA event which will take place on March 6-7; while initially focusing just on online lending at its first event, LendIt USA has evolved to include a much broader agenda of fintech topics; IBM Watson will be giving a keynote on artificial intelligence this year and beyond just lending other featured topics will include blockchain, financial inclusion, wealth management and biometrics; PitchIt@LendIt has gained increased interest across the industry and this year had over 250 entries; attendees will also hear from asset allocators and learn about bank partnerships; LendIt has expanded networking within the LendIt mobile app to include 1-1 meeting functionality. Source
A 2015 McKinsey report says today's technology is ready to replace approximately 45% of US jobs across a wide range of industries; federal and state governments have been receiving numerous inquiries about the effects of robot automation on the labor market however little has been done by legislators on the topic; Bill Gates has one suggestion for the economy; he suggests a tax for robot automation; a number of scenarios have come from Gates' robot tax suggestions, including: a company tax for robot automation that would contribute to social programs, designating government funds for salaried workers affected by robots, using taxes to provide a universal income for all citizens and a negative income tax. Source
Technology and financial services innovation continue to create new market opportunities in a number of different ways; leading US tech companies Google, Amazon, Facebook and Apple (GAFA) have already begun to introduce financial services and some believe they could significantly disrupt the traditional financial system; the Financial Times outlines current activities from GAFA and also notes similarities to Ant Financial's plans in China; as services from these tech companies continue to expand into payments and other forms of financial services, market speculators believe one of the GAFA companies could even potentially buy a bank; while regulatory constraints and low ROE make this option unlikely, customers have expressed their increasing loyalty and trust in the GAFA companies; a report from Accenture says one in three global banking and insurance customers would switch their accounts to Google, Amazon or Facebook; while buying a bank could potentially be the extreme, given PSD2 changes in the UK and consumers interest overall it is likely that these companies will expand further into new types of payment technologies and fintech services in the near future. Source
Sentient Technologies has been developing an AI powered hedge fund for over a decade; Co-Founder Babak Hodjat has played a significant part in developing the company's AI powered system; Hodjat has 21 patents and his experience also includes development support for Apple's virtual assistant Siri; while many firms in the hedge fund space have been utilizing AI, Sentient is one of the only firms to build their entire business around it; the firm's AI system can analyze billions of data points, spot trends and adapt as it learns; in addition to developing investment decisions the AI system also facilitates trades which helps investment opportunities to be identified and acted upon faster; according to Hodjat, the vast amounts of publicly available data in the financial industry make AI ideal for investment management; the Sentient portfolio is highly diversified with a wide range of US stocks and trades hundreds of times per day; while the firm is becoming more well known for its AI focus it has yet to publicly disclose its performance; the company has received approximately $143 million and is owned by Li Ka-shing, and the Tata Group. Source
Bob Kerrey highlights positive factors resulting from an OCC fintech charter in an American Banker opinion editorial; notes the regulatory perspective of both democrats and republicans; says the charter will lower prices and result in better products while also promoting competition; Kerrey also suggests a continuation of state and attorney general enforcement of civil and criminal laws against fraud and unfair and deceptive practices which would ensure the charter does not allow businesses to escape set standards. Source
Data from KPMG's Q4 2016 The Pulse of Fintech report showed US fintech funding decreasing to $12.8 billion in 2016, down from $27 billion in 2015; deal flow was also lower with 489 deals in 2016, a decrease from 615 deals in 2015; globally, funding was lower at $25 billion versus $47 billion in 2015. Source
Plum uses artificial intelligence to suggest and automate savings for its customers; the RateSetter Plum partnership will add a new savings option for Plum customers; through the platform customers can now choose to automate investment to a RateSetter account with an average return of approximately 4.7%. Source