And we’re kicking off the week with new analysis and opinions on investing, open banking, metaverse and more. Dive into the latest fintech insights and have a great start of the week!
Cost-of-living crisis could spur fintech adoption (ComputerWeekly.com)
The cost-of-living crisis could spur innovation in the fintech sector as consumers look for help with managing their finances. The current financial struggles of people across the world could encourage the adoption of apps, just as the Covid-19 pandemic did, but for different reasons. When Covid-19 hit the world in 2020, the need for people to avoid contact with others drove the adoption of digital banking. With high streets shut down for long periods, the take-up of financial technology exploded as people across all age groups turned to apps to manage their money. Apps could also help people manage their finances during the current cost-of-living crisis, with financial management tools, personalised financial products and a range of credit options available. Read more
BankThink Bank-fintech partnerships don’t need more regulation (American Banker)
In the aftermath of the global financial crisis, fintech companies burst onto the scene with a dizzying array of exciting new products and services. While fintechs are perhaps best known for designing online and mobile applications that make it easy for consumers and small businesses to make payments and apply for financing, they also have introduced underwriting tools that help banks expand credit availability. Rather than viewing banks as competition, many fintechs have elected to work closely with banks on new product offerings. In these partnerships, the fintechs have the technological expertise and creativity, while their bank partners bring expertise in lending, payments and complying with the panoply of laws and regulations governing their business. The combination has proved highly effective, with studies confirming positive impacts on credit availability, financial inclusion and the user experience. Read more
Build a Better Fintech: Invest in Compliance (The Fintech Times)
The US doesn’t have an overarching compliance regime for its fintechs, making it difficult to determine which regulations and licences they need to follow at any given time. The more a fintech grows, expanding its marketing, increasing its profile and attracting press attention (both positive and negative), the more likely it is to be exposed to state and federal scrutiny of its compliance status. Non-compliance can quickly lead to huge fines, jail time, and reputational damage. US fintechs have seen an increase in the scrutiny of their compliance status in 2022. If you’re one of the 73 per cent of fintechs without a dedicated compliance officer, now is the time to get an idea of what you need to know. Whether US-based or working with US clients, fintechs need to know what they want to achieve and have the necessary regulatory cover to ensure they can operate and fulfil their goals. Read more
CBDCs come to the international stage as a future cross-border option (Fintech Futures)
The last thing anyone reading this needs is another pundit on about Bitcoin. But lest you think this is yet another op-ed piece about the promise or volatility of digital currency, consider this statement: digital currency will become the de facto cross-border payment mechanism within the next decade, or possibly sooner. Bold, I know. But I firmly believe that in the form of government-backed central bank digital currencies (CBDCs), the statement is conservative and based in market realities. And lest you think I’m alone in this belief, listen to someone who can actually make it happen. “CBDCs, in my view, are the most efficient answer to this (cross-border payments),” chairman of the Reserve Bank of India Rabi Sankar said recently, adding: “For example, if India and the US have CBDCs, we don’t have to wait for the banks to be open to settle transactions… That massively takes out the settlement of risk from cross-border transactions. So, the internationalisation of CBDCs is something I am looking forward to.” Read more
Metaverse in fintech: banks worry about environmental impact (Fintech Magazine)
More than two-thirds of banks (67%) are concerned that the metaverse will have a negative impact on their carbon footprint, according to the results of a new survey. Digital transformation agency Mobiquity asked 150 senior UK banking executives about their attitude towards the metaverse. Over half (56%) say they are actively investing in the metaverse with 61% of large banks already engaging with metaverse technologies. But many banks believe the new frontier will pose a challenge for their carbon footprint, at a time when large financial institutions are pledging to hit net zero within the coming decade. A vast majority of UK banks (94%) are planning to address the environmental impact of the metaverse’s energy needs in some way, conscious that their involvement with the technology will have a negative impact on their carbon footprint. Read more
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