Fintech news for the week of January 16, 2017.
Cash in on Trump’s tweets
Donald Trump is known to never shy away from voicing his displeasure on social media. From TV reporters to car manufacturers, his rants cast a wide net. A fintech company is now offering a way to profit from his tweets. By leveraging artificial intelligence, London based startup Trading.co.uk will generate trading alerts based on Trump’s social media activity. The technology distinguishes between mere mentions of a company and those which may impact stock prices.
Obama’s fintech farewell
As the sun set on Barrack Obama’s presidency, his administration published a white paper detailing the US’s perspective on fintech and advocating for greater efforts in promoting the industry. As the summary states, the paper sets forth policy objectives and “provides ten overarching principles that constitute a framework policymakers and regulators can use to think about, engage with, and assess the fintech ecosystem in order to meet these policy objectives.” It remains to be seen whether Donald Trump will adopt a similar mindset.
Bank license for fintech in the US meets resistance
The news that the US Comptroller of the Currency, a major US bank regulator, was planning a new banking license for fintech companies was met with much enthusiasm. The move was an indication of regulators’ openness to the industry and an attempt for bespoke oversight. The sentiment has soured since with serious domestic opposition. In a letter to the Comptroller, the New York State Department of Financial services outlined a series of negative consequences to the decision, including potentially undermining consumer protection laws and stifling innovation. The criticism did not stem from a single source as the Pennsylvania Secretary of Banking and Securities shared similar concerns.
Banks turn to external fintech expertise
Collaboration over confrontation is a popular theme in both banking and fintech communities. Nowhere is this better exemplified than in accelerator programs. Select startups are “incubated” within the walls of banks and provided with the resources and mentoring to grow. The programs also benefit financial institutions by giving them first-hand industry insight that can be leveraged for future products. In line with this theme, banks continue to rely on external expertise. HSBC for one has formed an advisory board composed of fintech all-stars to help it become, in its words, “simpler, better and faster”. Fifth Third Bank, a regional US player, has partnered with venture capital firm QED investors for advisory on its overall fintech strategy.
Major Chinese tech company invests in insurance
UK insurer Aviva has announced plans to develop an insurance company in Hong Kong. The news is significant in that one of the partners in the project is Tencent, parent of mammoth Chinese messaging service WeChat. Given the scale of the 700 monthly users which rely on the service for everything from payments to social media, Tencent has the potential to make significant inroads in the insurance market.