FINTECH ARTICLES OF THE WEEK 11/27/2016
In the wake of the election of Donald Trump, the Brexit vote, and the uncertainly surrounding financial regulation, tensions are certain to escalate on both sides of the Atlantic.
Trump will struggle to balance a desire to deregulation with promises to maintain jobs. Banks will find plenty of tension in technology transformation. FinTech startups face either falling investment or shifting investment strategies. While regulators and financial services firms alike are looking to make sense of big data and what it means for consumer experience and protection.
FinTrump
With economic uncertainty ahead over the next four years, Pascal Bouvier attempts to unpack what a Trump presidency will mean for the financial services sector. The piece provides a rich analysis of each FinTech sector and notes the tension between Trump’s desire to “drain the swamp,” to preserve jobs, and to support deregulation in financial services. “Even though a majority of the tech industry did not support Trump, it is hard to imagine his administration being directly hostile to the technology sector, FinTech included, and in so doing will hurt job creation. Yet the newest technologies do just that.
Reboot the bank’s boardroom NOW!
Indeed, the tensions produced by technologies in financial services will inevitably lead to few jobs in the sector. Banks are becoming more like technology companies, Chris Skinner points out, and as such they will begin to fail like technology companies. They will also shed thousands of jobs in the next decade, as they become increasingly efficient through digital transformation. New leadership will be required to make the tough choices. As Skinner puts it, “If a bank is serious about changing from physical to digital, they must reboot their boardroom. After all, making those tough decisions to close trading floors, lay off tellers, close branches and get rid of all the colleagues they worked with or hired, is hard.”
FinTech’s remedy for Brexit pain
Brexit has dented FinTech investment in Europe, writes Bloomberg Gadfly columnist Lionel Laurent. Investments in European FinTech are shifting to corporate-backed investors while bank stocks are doing better. London still enjoys is an open-minded regulator. For FinTech startups, the battle for survival is getting tougher. “An open-minded regulator is certainly helpful,” Laurent writes. “But there are now more than 40 challenger banks in the U.K. chasing a market that threatens to be cut off from the rest of Europe. The key to survival will be attracting funding and strengthening ties with the banks that are investing and acquiring to defend their own competitive advantage.”
Request for information regarding consumer access to financial records
The Consumer Financial Protection Bureau announced that it is seeking public input about consumer access to financial account and account-related data in order to assist market participants and policymakers to develop best practices. Meanwhile, the CFPB prepares to face a reckoning with a hostile Republican Congress.
What we learned about robo-advisors in the last 19 months
In reality, robo-advisors for wealth management is not a new concept, but improvements need to be made in the fees, quality of data available, and greater accessibility, reports Let’s Talk Payments. In fact, much like the ATM didn’t wipe out bank tellers, the robo-advisor market has a long way to go before upending human wealth management advisors.