Fintech news for the week of 28 November 2016.
Bank license for fintech in the US
Back in March, I reported that the US Comptroller of the Currency, a major federal bank regulator, was updating its regulations in response to growing fintech offerings. That work has culminated in the agency’s “special purpose national bank charters”, a new banking license for fintech companies. The announcement is significant as it addresses many of the regulatory grey areas that fintech startups grapple with in the absence of regulation specific to the industry.
Robo-advisors break new grounds, face challenges
Robo-advisors are on-line tools that open investing to the masses and keep costs down. They do so by replacing human advisors with investment algorithms that assemble portfolios based on client profiles. Although the service has typically been limited to retail clients, US robo-advisor Betterment has broken new ground by entering the corporate space and managing the retirement portfolios of companies. Just north of the border however, Canadian robo-advisor Wealthsimple has run into headwinds where financial institutions have taken too long to transfer client funds and have charged on average a transfer fee of $101.
Amazon helps fintech companies with credibility
Making inroads with a new product in any industry is a difficult proposition. This also holds true in the financial industry where conservatism reigns. With the Amazon “AWS Financial Services Competency” program, fintech companies now have a powerful ally to help them gain recognition and credibility. Once applicants pass a thorough vetting process which includes an audit of their offering, they benefit from the full weight of Amazon’s reputation as well as spotlight features and the opportunity to participate in webinars and roadshows. Some of the initial launch partners include Accenture, Infosys and Wipro.
The corporate blockchain database
Tracking fintech and blockchain developments is a laborious task, a claim I can personally attest to. Given the popularity of the topics, media coverage is intense and difficult to sift through. Outlier Ventures’ new Blockchain Corporate Tracker offers a solution by cataloguing all corporate blockchain projects currently in the works and presenting them in an easily digestible manner. Among the topics covered by the tracker are patents filled and consortia membership. The findings from the project are also a good read.
Fintech makes strides in equity research
French bank Societe Generale has struck a partnership with Singapore based fintech company Smartkarma to outsource the equity research provided to institutional clients. According to its site, Smartkarma allows clients to “access insight from a global community of analysts, academics, strategists, lawyers and data-scientists.” Instead of providing its own free research in exchange for trading commissions, the bank will now offer access to Smartkarma’s pool of experts instead. The move comes in the backdrop of headcount reductions in research roles at major financial institutions.
As always, feel free to contact me to discuss these and related topics.