A recent study by Harvard Business School looked into the contribution of marketplace lending on the overall lending market; while companies like Lending Club and Prosper have improved consumer access to affordable loans the study also discussed whether these types of platforms are too transparent; this transparency according to the study gives large investors who leverage the availability of data an advantage in buying loans resulting in an uneven playing field. Source
Acting Consumer Financial Protection Bureau (CFPB) Director Mick Mulvaney has testified on numerous occasions about the risk of data breaches; in December he helped put a freeze on data collection, though collection resumed a few weeks later without much talk or solutions; Mr. Mulvaney has not been clear on the types of breaches that have occurred and what has been done to plug the holes; experts believe this could be more about politics so the bureau is cast in a bad light. Source.
Crowdfund Insider explores Sofi’s move to offer banking service without become a bank itself; the rent a bank model allows for FDIC insured accounts while Sofi gets to own the customer experience and offer these services without the regulatory burden of a bank; Sofi Money is set to roll out in 2018 and will offer 0.96% APY on accounts; there are no account fees and they will offer free ATMs internationally; many banks still have legacy systems and lack the culture of fintech companies so it will be interesting to see how they compete. Source
The Global Findex Database and accompanying report give a clear indication of how fintech is impacting access to financial services globally. Source
Despite the rumors of a spinoff and losing Amber Baldet JPMorgan Chase is still pushing forward with their Quorum blockchain; they recently tested the issuance of a $150 million, one-year, floating-rate Yankee certificate of deposit on the blockchain, in parallel with the actual issuance of the CD according to American Banker; in regards to the spinoff the bank has yet to completely deny the rumors, though they could spinoff parts of the group and still house Quorom within the bank. Source.
Goldman Sachs has been exploring the creation of a crypto trading desk and now has hired a former crypto trader; the bank hired Justin Schmidt as a vice president and head of digital asset markets; the move is seen as another step by the bank to eventually create a crypto trading desk as they have been rumored to be exploring this for quite some time; no major bank has started a crypto trading desk yet. Source.
According to a new report by CB Insights global fintech funding reached $5.4bn across 323 deals in Q1 2018; deal activity was highest in the U.S. and Asia, Europe on the other hand fell to a five quarter low; early stage companies in Europe were not receiving investments, though later stage companies were still having success; regtech, wealth management and digital banking led the way, while online lenders lagged behind. Source.
Point72 Ventures led a $3 million round in a company called Extend which was announced today; it allows for business owners to share credit cards with employees and freelancers without giving them physical cards; Point72 also recently invested in Imperative Execution, a dark pool trading platform, “Say” which aims to improve the proxy voting process and DriveWealth. Source
Chase will soon allow credit card customers to use voice authentication when dialing the call center, which will help to cut down on additional security questions; Chase will join TD, HSBC, Barclays and ANZ Banking Group in using voice authentication; the voiceprint is securely stored as a mathematical equation, and only works for verification with the bank’s system according to reporting by TearSheet; representatives can ask further authentication questions if needed, almost 30 percent of calls are requests for account access and improving efficiency will cut down on costs as well as time. Source.