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Weekly Research Highlights – 24 November 2020

This week’s research piece dives into the latest numbers, trends, graphs & pie charts to bring you additional information on the fintech landscape. See below the materials we selected, covering the global fintech ecosystem, cloud migration services, sustainable business models, AI 2020 status check, digital agility, crypto-assets, fintech and big tech credit markets, financial & risk literacy updates, strategies for digital transactions, and new trends on Dutch consumers shared payment data in exchange for services. Happy reading!

Global Fintech Ecosystem Report 2020 (Startup Genome)

This report provides a late overview in terms of fintech startups and identifies the key highlights and trends from the industry. Europe and North America no longer hold the top 20 fintech ecosystems, with the Asia-Pacific region contributing as many globally leading hubs as North America. In addition, the growth in fintech funding is slowing down on a global level, with China in particular seeing a downward spiral effect. Digital-only banking is seen to be on the rise, with new offerings in terms of wealth management and bundle services. Read more

DNBulletin: A quarter of Dutch consumers shared payment data in exchange for services (DNBulletin)

According to a recent study published earlier this week by DNB, a quarter of the Dutch consumers authorised the use of their payment data during the past 12 months in exchange for the provision of new services based on these data. Consumers predominantly authorised their own banks; other companies were only occasionally given permission. Payment data are perceived as highly privacy-sensitive, also compared to other types of data. Read more

Accelerating Enterprise-Wide Innovation with Cloud Migration and Data Governance (Finextra & Collibra & AWS

This study emphasizes the growing popularity of cloud services and data analytics for financial institutions. Cloud migration posits many benefits for businesses, in terms of the current data being stored, accessed, and processed. Moreover, with the pandemic climate, data generation is expected to have a rapid acceleration, especially as the adoption of mobile technology rises on a global scale. Read more

The Most Popular Blockchain Networks With Capital Markets Players (CB Insights & Blockdata)

In this analysis, a complete overview on which types of networks are attracting startups and corporates is presented. For blockchain initiatives managed by small companies like startups, DLT networks like Ethereum and Bitcoin are the most popular choice, mainly due to the fact that these networks are “permissionless,” meaning that anyone can participate. For financial institutions and tech incumbents, permissioned DLT networks are more attractive, such as Corda and Hyperledger Fabric. Read more

Fintech and SMEs sustainable business models: reflections and considerations for a circular economy (ResearchGate)

Sustainable business models have been of increased interest lately for the fintech industry. Fintech has taken a central role especially for SMEs’ voluntary adoption of such business models, by launching new services which avoid the organizational barriers. The findings of the paper are focused on building and developing a sustainable business model canvas that takes into account the role of fintech in the circular economy. Read more

The state of AI in 2020 (McKinsey)

The McKinsey Global Survey on artificial intelligence (AI) shows that AI has been increasingly used as a revenue generating tool by many businesses in 2020. Due to Covid-19, companies have more than ever started to search for new ways to accelerate their digital transformation, thus, a rising interest for AI technology. However, this new fast adoption trend will lead to a divide between AI leaders and those struggling to survive. In addition, one main concern still remains for AI, pointed out by risk modeling and analytics, and fraud and debt analytics. Read more

Mastering digital agility: Staying nimble to navigate change (Blend)

For this report, the benefits of digitization processes for financial institutions are highlighted,  such as acquiring and retaining loyal customers. Faced with disruptive technologies, companies need to be on top of the trends, and be agile when it comes to digitalization. There are two main forms of digital agility responses which firms can follow: the reactive response to an unexpected disruption and the proactive ability to stay ahead of the pack through innovation. Read more

Crypto-assets in Dutch perspective (Dutch Banking Association)

According to the findings of this paper, the benefits of distributed ledger technology (DLT) have had positive effects especially for the financial industry. In this instance, DLT is a driver for innovative digital finance, allowing more efficiency in the various stages of the capital markets, transaction lifecycle, more financial inclusion, increased access to financial products and higher resiliency of market infrastructure. The results focus on providing better insights for the crypto-assets market and consider the risks, highlighting the advantages that DLT has for the Dutch economy. Read more

Fintech and big tech credit markets around the world (Vox.eu)

With more credit markets undergoing transformations, fintech and tech companies provide the primary support in terms of lending to households and small businesses. According to the study analysis, fintech credit flows reached $223 billion in 2019, while big tech credit reached $572 billion. The fintech and big tech credit are experiencing rapid global growth, setting the scene for these new forms of lending to contribute to the overall increase of the economy, while also encouraging risks for the macroeconomy and financial systems. Read more

Financial & Risk Literacy: Resilience in times of Corona (Euler Hermes & Allianz)

According to this recent study, financial knowledge is a critical factor that explains why one segment of the population is better able to cope with the shock compared to others. However, the findings show that the level of financial literacy is low, across countries such as  Austria, France, Germany, Italy, Spain, Switzerland and the US. In addition, the level of risk literacy is also low (22.8%), and the gender gap still predominates (9.6% points). Read more

Strategy for digital transactions, beyond payments (Innopay)

In this analysis, it is emphasized that banks executives need to embrace 3 core beliefs in order to fully gain the benefits of using a blue ocean strategy in the data economy. Although important, digital payments – and related collaborations – are not sufficient for banks to remain relevant in a world in which everything is a digital transaction. Banks should ideally be placed to unlock the potential of the data economy by creating a digital trust infrastructure and become society’s everyday data custodian. Read more

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