Weekly research highlights 28 August 2020

Weekly research highlights 28 August 2020

Weekly research highlights 28 August 2020

The UN Secretary-General’s Task Force on Digital Financing of the Sustainable Development Goals (SDGs) highlights in their newest report, “‘People’s Money: Harnessing Digitalization to Finance a Sustainable Future” findings and recommendations  on how to harness digitalization in accelerating financing of the SDGs. The report also analyzes problems such as lack of access to capital for SMEs and how to address these issues. Read more

The “Rise of the central bank digital currencies: drivers, approaches and technologies” paper by the Bank for International Settlements (BIS) focuses on the economic and institutional drivers of the central bank digital currencies (CBDCs) development. Moreover, the report highlights the stock of the technical design options, regarding the retail CBDC architectures. Read more

Research by Fintech Global finds that the global CyberTech investment is readjusting in Q2 2020, primarily due to the fact that investors are reconsidering the cyber risks. CyberTech investment started with a high capital in 2020, with $1.5bn raised in the first three months. However, the second quarter saw a 61.3% decrease in completed transactions and more than a two-fold drop in total funding compared to the opening quarter of the year. Read more

For Latin America, 3 fintech sectors are leading, covering over 95% of the market: payments leads with 50.5% of reported funding, followed by lending with 24.5%, and digital banks with 21.6%. The 2020 LATAM Fintech Report by KoreFusion highlights key findings, explaining how 20% of the registered fintechs across the five countries’ markets take into account economic activity from the last 18 months. Moreover, Brazil is the only country that has fintech “unicorns”: PagSeguro, Nubank, Stone, and EBANX. Read more

“Regulating fintech financing: digital banks and fintech platforms” report by BIS shows that web-based platforms for digital banking and finance transactions are on the rise, leaving questions as to whether the current regulatory system is sufficient. The study presents an overview of regulatory requirements across multiple countries and the decisions that financial regulators face at the moment when it comes to the new fintech developments. Read more

“The Nature of the Fintech Firm and its Implications for Financial Regulation” is an empirical paper from Howell E. Jackson, Harvard Law School that investigates the changes arising from disruptive technologies for the financial services, with further implications for the regulatory bodies. Fintech innovations, machine learning and AI further posit challenges in terms of legal concerns arising from human intentionality, particularly with respect to privacy and the gathering of personal information in private and public hands. Read more

The Hong Kong Institute for Monetary and Financial Research (HKIMR) showed in their newest report, “Artificial Intelligence in Banking: The Changing Landscape in Compliance and Supervision”, how Hong Kong’s financial industry can strategize to further develop on the long-term. When it comes to the advantages of AI technology, banks seem to be positive, with 80% of survey respondents stating that they are considering investment in AI over the next 5 years. The report also highlights the disadvantages of AI technology, such as data protection, quality of data, and the validation of new AI models. Read more

“The State Of Global Venture Funding During COVID-19” report from Crunchbase presents an overview on the journey of venture fundings during times of pandemic. As key findings, the report states that despite the rumours of global venture fundings slowing down during Covid-19 period, the first half of 2020 saw higher fundings than the first halves of 2016 and 2017. Compared to the first half of 2019, the global venture funding decreased by 6% only. Read more

The “2020 Multinational BrandedPay” report from Blackhawk Network highlights an increase of use in digital wallets and online shopping. According to the results, before the Covid-19, less than 38% of the US population was using digital wallets and with the reopening of the economy the percentage increased to 55%. Moreover, 8/10 countries surveyed in the paper reported that over 88% of consumers are currently using a digital wallet. Read more

According to Dealroom data, during the lockdown, EU fintechs have raised over €2.86bn between March and mid-August. However, not all fintechs sectors attracted valuable investments. InsurTech made up nearly 20% of all fintech rounds in Europe in Q1 2020 and alternative lending firms saw rapid drops during Covid-19. Read more

In a new report analysis, CB Insights looks into the 203 most expensive startup failures so far. The results show an overview on the reasons behind the failure of the well-funded startup companies, such as inability to have sustainable revenue, mismatch between the product offering and the market demand, competitors, lack of receiving any more funding. Read more

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