In Europe, slowing venture capital investment in fintech has caused increased reliance from the industry on traditional banks; as Brexit concerns have affected the fintech industry, traditional banks have increased their investment with more corporate and strategic participation in venture capital deals in Europe for the third quarter of 2016; over the last five quarters significant large bank investors in fintech have included Citigroup Inc., Banco Santander SA and Goldman Sachs Group Inc.; as the European market evolves with a number of regional factors continuing to affect both fintech companies and banks it is likely that more banking partnerships and fintech acquisitions will occur. Source
News Roundup
This page contains an archive of the Global Newsletter summaries and the weekly fintech news roundups.
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While fintech companies have focused on speeding up the lending process to small businesses, the IRS's continued use of fax machines continues to slow down the lending process when borrowing from traditional institutions; in an article from American Banker, the cumbersome process of getting a tax transcript from the IRS is outlined; when customers need capital on short notice they are often left with higher financing costs; Representative Patrick McHenry recently introduced the IRS Data Verification Modernization Act that aims to provide near-real-time communication of information which may level the playing field across lenders. Source
Germany's Federal Ministry of Finance has published a report on the emerging fintech sector; the report finds 433 fintech companies with 346 of the companies actively in business; robo advice had the highest annual growth rate; of the 433 firms, 13 were crowdlending companies with nine of the platforms actively in business; other highlights include transaction volume by segment and industry growth rates. Source
The Consumer Financial Protection Bureau (CFPB) will appeal the court's unconstitutional ruling in the case of CFPB v. PHH in which PHH argued the CFPB's authoritative powers were too broad following enforcement actions that resulted in penalties primarily for referring consumers to mortgage insurers for compensation; the CFPB is requesting that the case be heard by all judges in the D.C. Circuit Court of Appeals rather than a panel of only three judges which provided the October ruling; if the verdict in the case is unchanged, the president will still be able to replace the CFPB director at his discretion; it's likely that Director Cordray could be replaced by President-Elect Donald Trump given his plans for Dodd-Frank. Source
Overstock.com is utilizing blockchain for a blockchain security offering; the offering is part of its preferred stock capital raising which provides investors the option to invest through the company's blockchain technology using a URL; this offering has confirmed subscriptions with the post-trade process being managed on a shared, distributed ledger; since Overstock.com is a publicly traded company, all details of the subscription process have been documented with the SEC. Source
On November 14 to 18 Singapore held its first Fintech Festival providing S$1.15 million to ten fintech firms; supported by the Monetary Authority of Singapore and the Association of Banks in Singapore, awards were given ranging from S$250,000 to S$50,000; the top prize of S$250,000 for the MAS FinTech Awards (Singapore Open) was given to fastacash Pte Ltd; the Fintech Festival follows significant expansion in Singapore which now has the largest fintech hub in the world and numerous subsidies available to attract fintech startup companies. Source
Flender, a marketplace lending platform in the UK, is seeking to raise 500,009 british pounds from an equity crowdfunding campaign on Seedrs; the company offers P2P loans through a mobile application; the firm's business model seeks to connect borrowers with lenders in their social network helping to facilitate social network lending. Source
OnDeck has announced that it will be presenting at the J.P. Morgan 2016 Fintech & Specialty Finance Forum on November 30 in New York City; Noah Breslow, chief executive officer, and Howard Katzenberg, chief financial officer, will be the featured speakers; the event provides an opportunity for fintech and specialty finance companies to present on the competitive advantages of their firm for a range of corporate leaders, financial sponsors and institutional investors. Source
Germany's central bank is hosting a blockchain workshop as an increasing number of central banks are exploring the use of blockchain; the event is titled, "Blockchain Technology - Opportunities and Challenges"; discussions will be focused primarily for central bankers and regulators; topics will include the success of blockchain, business cases for the technology and the use of bitcoin; workshop participants include European central bankers, European Union Parliament members, financial institution executives, individuals from academia and representatives from blockchain-based companies. Source
Alibaba Cloud, a subsidiary of Alibaba Group, has announced it will be expanding its cloud business by opening four new data centers; the new data centers will be opened in the Middle East (Dubai), Europe, Australia and Japan by the end of 2016; the new data centers will expand Alibaba Cloud's data center network to 14 locations; Alibaba Cloud's services include platform development, data management, data storage, data analytics and cloud security. Source