We’re kicking off the week with fresh news from fintech. In this analysis & opinion piece, we explore the backlash against SEC based on Ripple allegations, look at the aftermath of Visa and Plaid agreement dissolvement, dive into trends for SME banking in 2021, look at capital markets and digital assets, find out what the effects of a Passion Economy are, see how treasury infrastructure is upgrading, we analyze some opinions on how fintechs are competing unfairly with banks, and further understand why neobanks are now chasing profitability. Enjoy the material!
On SEC allegations…
SEC charges against Ripple face criticism (Bobsguide.com)
The Securities and Exchange Commission’s (SEC) latest charges against Ripple pinpoints new measurements taken by regulators to supervise the crypto sphere. According to Adam Bialy, CPO at OpenPayd, a digital Banking-as-a-Service business, SEC’s latest initiative seems to be an attempt to curb innovation. “The US government is desperately trying to hold the tide of people that are innovating in crypto,” Bialy says. “The interpretation of Ripple as a security is fundamentally flawed.” Read more
Visa and Plaid deal is off…Where does it leave fintech?
What’s Next For Fintech Infrastructure After Visa And Plaid Call It Off (Forbes)
Lindsay Davis, Head of Markets at Atomic, explores the consequences for the fintech world after the Visa and Plaid agreement failed to happen. While the $5.3 billion merger between Plaid and Visa was mutually terminated under pressure from the Department of Justice’s investigation, the market opportunity has grown substantially as fintech apps crossed over from targeted niche services to mass market adoption. Fintech companies already had significant upward growth opportunities across banking, consumer payments, and lending, among other verticals. Read more
Trends for SME banking in 2021…
Understanding the three key trends in SME banking for 2021 (Fintech Futures)
Tomer Guriel, CEO at Ezbob, explores what 2021 has in store for the UK’s small and medium-sized enterprises (SMEs) as they build towards recovery, and pinpoints the right strategies that allow SMEs to access the finance needed to fuel their growth. The analysis distinguishes 3 key trends for SME banking expected this year: more advanced technology for onboarding and loan management, deepening the relationships between banks and SMEs, and more uses for open banking. Read more
On Capital Markets & Digital Assets…
Private Capital Markets Present the “Greatest Opportunities” for Tokenized Digital Assets, According to Industry Professionals (Crowdfund Insider)
Mike Kühnel, Partner, Frankfurt at Bain & Company, Thomas Olsen, Partner, New York at Bain & Company, John Fildes, Expert Partner, Sydney at Bain, and Karl Gridl, Senior Manager, Zurich at Bain, have all co-authored a brief, titled “For Digital Assets, Private Markets Offer the Greatest Opportunities.” The authors have identified several emerging business models that “hold promise” by leveraging the potential benefits of blockchain or distributed ledger technology (DLT). Read more
On the effects of Passion Economy…
The payments ecosystem isn’t fit for the pandemic recovery economy (AltFi)
Luke Massie, CEO of VibePay, highlights that with the rise of the Passion Economy comes a more prominent role for the payments industry, with clear disruptive effects. The analysis highlights why the payments industry now needs to take advantage of the opportunity Open Banking provides and start building solutions for the passion economy. Fintechs no longer have to focus on creating the plumbing as Open Banking offers the foundations to build on top of this. But rather, fintechs need to focus time and attention on the solutions for the new wave of entrepreneurs, looking to other parts of the globe to build on the successes achieved elsewhere. Read more
Upgrading the treasury infrastructure…
Treasury’s digital revolution: How corporates can ensure stability in uncertain economic conditions (Global Banking & Finance Review)
In an interview with Frank Nicolaisen, UniCredit’s Head of Global Transaction Banking, Americas, it is explored how Covid-19 put pressure on corporates to upgrade their treasury infrastructure and what solutions can be undertaken. For the treasury industry, the most significant digital push facilitated by the pandemic context was the rise of e-banking. With corporates stepping away from branch-based or over-the-phone banking to platforms, and focusing instead on a seamless, fast and more efficient experience, this has paved the way for other efficiencies, such as virtual accounts. Read more
Banks vs fintechs…
Fintechs competing unfairly with banks, Dimon says (American Banker)
Jamie Dimon, JPMorgan Chase Chairman and CEO, warns fintech upstarts that are doing business unfairly. Many fintechs pull in revenue through high fees for debit-card swipes that banks such as JPMorgan aren’t allowed to charge. The largest US banks are constrained by the Durbin Amendment, which limits the fees lenders can charge merchants each time a consumer swipes a debit card at checkout. But those rules don’t apply to banks with less than $10 billion in assets. “There are examples of unfair competition, which we will do something about eventually,” Dimon said on a conference call with analysts. Read more
Why are neobanks chasing profitability?
Why neobanks have refocused from skyrocketing growth to reaching profitability (Finextra)
Ricardo Falter, Associate Royal Parks Partners, highlights that neobanks are shifting their aim, and focusing on reaching profitability rather than chasing expansion. As competition heats up in the market, profitability is becoming increasingly important for investors, signifying the ultimate test of a business model. For example, Monzo recently launched a premium account. Furthermore, both N26 and Revolut have announced that they will be introducing low- and mid-tier subscription plans. Read more
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