Regtech, challenge of the coming months

In the run-up to MiFIDII’s arrival, regtech is under the spotlight. Spending in the field is on the rise, as the exemple of fixed-income trading illustrates. According to a report from GreenWich Associates, fixed-income traders are indeed spending USD 20 billion a year on compliancy requirements. MiFIDII is perceived as a support to reduce these costs, thanks to a better employment of technology in order to smooth compliancy processes.

According to Kevin McPartland, Head of Greenwich Associates Market Structure and Technology Research: “MiFID II is forcing dealers to upgrade their technology, which should bring not only new compliance checks, but also improved sales-trader tools. A tight coupling of the two is the most efficient path forward, and MiFID II, with all of the headaches, is presenting an opportunity to move in a better direction technologically.”

Cryptocurrency still at the heart of controversy

Yesterday was a mixed day for crypto, as significant gestures both for and against digital currencies were made. Nobel prize-winning economist Joseph Stiglitz declared yesterday in an interview on Bloomberg Television that bitcoin ought to be ‘outlawed’, as the cryptocurrency “doesn’t serve any socially useful function” and that “the value of a bitcoin today is expectations of what the bitcoin is going to be tomorrow”. For the economist, cryptocurrency that is not backed up by governments is not welcomed in the financial ecosystem. 

On the other side of the spectrum, the second largest stock exchange in the world, Nasdaq, and the financial institution Cantor Fitzgerald announced the launch of bitcoin futures contracts by mid-2018. The addition of the cryptocurrency to their trading list is a significant step towards its adoption. Yesterday, the number of Bitcoin ATM increased in the US, allowing users to buy and sell the cryptocurrency in exchange for cash.

Another big player is also set to take part in cryptocurrencies, as PwC Hong Kong accepted yesterday its first payment in bitcoin, within the context of a contract with local blockchain and cryptocurrency companies providing them advisory services.

Fintech numbers are up

The global contactless payments market is expected to reach $2.23 trillion by 2025, according to a research by Grand View Research, an increase facilitated by IoT and mobile payments. On the funding side, Nordea set up a venture fund focused on fintech start-ups in the Nordics, for an undisclosed amount. Casper von Koskull, Group CEO, Nordea, says: “We want to play an active role in developing new technologies for the financial sector from early on. It’s not just about providing capital, but also about engaging with start-ups and sharing our expertise.” The fund is already in use as the bank invested in mobile money company Betalo. Banks ING, Santander and Crédit Suisse also launched their own fund dedicated to innovation in finance.