Fintech news for the week of 14 November 2016.
Singapore Fintech Festival recap
The inaugural Singapore Fintech Festival concluded this past week with almost 11,000 delegates enjoying conferences and festivities. The Monetary Authority of Singapore (MAS) took the opportunity to announce a slew of initiatives to further cement its position as a global fintech leader, including:
In addition, the MAS handed out fintech awards and announced the winners of its fintech hackcelerator. All this builds on the recent momentum generated by the release of 12 sets of data APIs to help financial institutions and developers offer new innovative products to their customers.
The taxman cometh
The US’s tax enforcement and collection arm is ramping up its efforts to crack down on those relying on bitcoin to evade taxes. The IRS has sent a sweeping request to Coinbase, a provider of digital wallets for trading in cryptocurrencies, for the names of all its customers. The agency’s request follows a discovery of three cases where bitcoin was used to evade taxes. However, only two of those users were Coinbase customers, leading the company’s head legal counsel to characterize the move as a “sweeping fishing expedition”.
Alibaba’s head calls for fintech collaboration
In the wake of China’s moves to reform its financial system dominated by large banks, the country has experienced strong digital adoption. Though fintech has opened services to previously “underbanked” consumers, fears permeate that the usual suspects will only be replaced by new ones such as Ant Financial, an affiliate of Alibaba group. To assuage those fears, chairman of the group Jack Ma recently called for cooperation among smaller and larger fintech companies. To that end, Ma believes that Ant Financial can serve as a platform to allow others to grow by sharing its data collection and data processing capabilities.
Fintech grows in India following cash curbs
In an effort to cut down on tax evasion and graft, India’s government recently scrapped two of the most widely used bank notes in circulation. The fallout from the decision was predictively negative with long queues at banks to exchange now worthless rupees. However, fintech startups benefited from the decision as payment and digital wallet providers saw a surge in clientele. One company experienced a 300% increase in app downloads and 700% traffic uptick to its site.
What’s ahead for fintech
Consulting firm McKinsey has released its view on the direction of the fintech market for the coming years. Seven key points are highlighted including an expanding scope of fintech products from both established and new startups, greater collaboration with financial institutions and further development of regulatory regimes. Of particular interest should be the prediction of consolidation in the market. This will not only allow existing fintech companies to fuel growth but, in my view, will also eliminate much of the noise made by smaller players who offer a “me too” approach to innovation.
As always, feel free to contact me to discuss these and related topics.