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Weekly Research Highlights – 15 December 2020

For this research piece, we take a closer look at the wrap ups for this year. We explore the latest European InsurTech hotspots, take a reflexive lookback at the year 2020 for fintech and see what 2021 has to offer, dive into digital transformation, explore the case study of Bank of America and disruptive services, see the banking sector updates for 2020, map down the most successful Indonesian fintechs, look at cross-border banking flows, and analyze what 2021 has in store for the European Tech sector.

Happy reading!

Where are the European InsurTech hotspots?

InsurTech Startups in Europe (astorya.io)

In the below overview, astoryia.io presents a comprehensive mapping of the most prominent European InsurTech startups:

2020 & 2021 fintech…

Fintech Global: Year in Review 2020, Year to Come 2021 (Linklaters)

In this report by Linklaters, the fintech landscape is presented, with a focus on milestones for 2020 and expectations for 2021 at a global level. As main highlights and findings, the report suggests that 2020 was marked by Covid-related funding support schemes, central bank digital currencies, regulation of stablecoins and other crypto assets, tax treatment of virtual currencies, growth of DeFi, regulations for AI. For 2021, the report predicts an emphasis on central bank digital currencies, risks of Big Tech for finance, scrutiny of international transfers of personal data, cross-border payments, regulations to come into place for crypto assets, and special interest for ESG risks. Read more

On digital transformation…

Managing Compliance and Growth (Finastra & Finextra)

One recurring issue faced by both small and large banks regards the digital transformation and migration deadlines in order to cope with the current economic climate. Smaller and new market entrants are not dealing with the same legacy constraints faced by incumbents, being more attuned to the benefits and possibilities of emerging technologies. However, the startup culture can be risky, and competition fierce. This report based on several interviews with small and medium-sized banks, is gathering their perspectives and experiences in their efforts to grow and scale while managing compliance and all that goes with it. Read more

Online cross-border & mobile commerce…

Cross-Border Payments and Ecommerce Report 2020–2021 (The Paypers)

In this paper, insights and analyses from thought leaders in the field are given on key industry topics, such as regional particularities of cross-border online and mobile commerce, cross-border payments, global trade, the importance of payments orchestration and transaction routing, key challenges for marketplaces in different regions, multi acquirer setups, the best strategies to deal with local payments as a cross-border retailer, and many more. Read more

Case study: Bank of America…

Unbundling Bank Of America: How The Traditional Bank Is Being Disrupted (CB Insights)

In this study, the case of Bank of America is analyzed, in order to understand how the traditional banking system is being disrupted across a wide variety of core revenue streams. In Q3’20, Bank of America, saw profits drop 16% year-over-year (YoY) to $4.9B. Covid-19 has also imposed a rapid pace for technology adoption among financial services, targeting especially younger generations, who tend to prefer the digital and online banking methods of payments over dealing with traditional banks. Big Techs have also diminished the traditional bank’s market share. For example, stock trading app Robinhood’s commission-free approach to investing has forced incumbents to follow suit, while products like Venmo and Cash App have disrupted peer-to-peer payments. Read more

Banking sector – wrap up for 2020…

McKinsey’s Global Banking Annual Review (McKinsey)

In this report, a market status of the banking sector is provided. The research finds that in the months and years to come, the pandemic will present a two-stage problem for banks (see more in the overview below). The first issue that banks are expected to encounter through late 2021 will be the credit losses. In addition, banks will be likely to face obstacles on their ongoing operations that may persist beyond 2024. Depending on the scenario, from $1.5 trillion to $4.7 trillion in cumulative revenue could be forgone between 2020 and 2024. Read more

Indonesian fintech mapping…

Indonesia Fintech Report and Map 2020 (Fintech News Singapore)

In a recent study conducted by Fintech News Singapore, a comprehensive overview of the Indonesian fintech map for 2020 is presented (see more in the image below). Due to the fact that the Indonesian government has proactively introduced rules and regulations for P2P lending, digital payments and most recently open banking as well, innovation and financial inclusion are strongly encouraged. This favorable landscape has attracted the attention of both local and international investors, many of which are betting big on the prospects of digital financial services in the country. Read more

What about cross-border banking flows?

Central bank swap lines and cross border bank flows (BIS)

With central banks relying heavily on US dollar swap lines with the Federal Reserve in the first half of 2020, it has led to a surge in cross-border banking flows during this period. The large increase in cross-border claims on banks operating in the US, either in the form of cross border interbank and intra group positions, showed an increase in dollar liquidity demand from non-US banks partly met through use of the swap lines. This report specifically focuses on the use of the swap lines and their impact on global banking positions, highlighting the critical role that banks play in international payments, and capital flows more generally. Read more

What’s in store for the European Tech sector?

The State of European Tech (Atomico, Slush, Orrick & SVB Silicon Valley Bank)

The findings of this report present the numerous advantages brought by Covid-19 for the tech industry in 2020. With a growing interplay in European tech between venture capital, private equity and the public markets, there was an opportunity for having more M&A, a strong pipeline of future IPO candidates, and a greater talent pool. 2019 ended on a high, with a record $38.6B of capital invested, close to 180 $1B+ companies and $16B closed by European venture capital funds. However, with Covid-19, the world is looking at an economic recession and retrenchment by founders and investors. Read more

Sweden Fintech Mapping…

101 Sweden Based Fintech Companies (Fintech.Coffee)

With Sweden’s fintech sector on the rise, new companies are taking the lead every day. The technology provided by these companies have attracted the attention of major investors, such as major Swedish banks, like Nordea. Regulators are also interested in the developments of the sector, due to the fact that Swedish financial institutions are involved, and new partnerships arise between fintechs and banks. Swedish fintech companies have found new ways of innovating, to improve their customer experience, and increase their revenue. The analysis provides 101 fintech companies in Sweden that have put their mark on the ecosystem, such as Tink, Klarna, iZettle, Mitigram and Lendify. Read more

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