Fintech news for the week of February 6, 2017.
Resistance to Apple Pay down under
While Apple Pay has been welcomed in most countries, Australia seems to be the exception. The Cupertino California based company has accused a group of leading local banks of creating roadblocks to the adoption of the payment system down under. The conflict stems from the banks’ insistence to having access to the iPhone’s NFC antenna. Apple views this as a ploy to avoid paying fees for the service or to charge customers for using it.
Ant Financial loading war chest for acquisitions
Alibaba’s financial services affiliate has plans to raise almost $3 billion in debt for future acquisitions. The fintech company was recently in the news for the purchase of Texas headquartered remittance business MoneyGram. It also purchased EyeVerify in 2016, a US startup that provides biometric technologies for securing customer data. Though it may be too early to decipher the company’s plans, the acquisitions nevertheless indicate a desire to grow internationally.
Artificial Intelligence making strides in finance
Artificial intelligence may have begun its ascent in fields usually within the purview of enviously compensated bankers. Goldman Sachs for one has gradually deployed automated trading programs to reduce the number of its equity traders. Buoyed by increased efficiencies and cost savings, the investment bank intends to deploy AI in currency trading and investment banking. Human involvement at hedge funds may also decrease significantly in the coming years. As this Bloomberg article reports, one hedge fund is being run entirely by an AI system that makes trading decisions based on mounds of scoured data.
Fintech and the securities markets
The International Organization of Securities Commissions has published a report highlighting the impact of fintech on securities market regulation. Among others, the report touches on crowdfunding, peer-to-peer lending, robo-advisors and blockchain and discusses both the opportunities and risks faced by investors, securities markets and regulators. The report is significant in that it has been prepared by an international body formed by securities regulators globally. The thought leadership displayed will surely trickle down to local markets which may in turn adopt policies that nurture the growth of fintech.
Bank of Canada highlights blockchain challenges
The Bank of Canada has been conducting tests on blockchain-based interbank payment systems. A recent op-ed penned by senior deputy governor Carolyn Wilkins highlights the challenges facing such an innovative system. Among the lessons learned, the deputy governor indicates that the initial design of a blockchain is capital intensive and may only yield cost savings from a reduction in bank reconciliation efforts. Singapore’s central bank may find the piece helpful as it is announced plans for a similar project last year.