Weekly Analysis And Opinion Highlights – 12 December 2022

And we’re kicking off the week with new analysis and opinions on fintech with super-powered artificial intelligence, open banking, and more. Dive into the latest fintech insights and have a great start of the week! 

The Future Of Fintech, According To AI (Forbes)
There has been an explosion in the computational power of artificial intelligence. To much fanfare, Open AI, a startup that raised $1 billion from MicrosoftMSFT +1.9%, released Chat GPT, an interface to interact with their AI model. So this naturally felt like an opportunity to learn about the future of fintech – according to AI (particularly since we’re at the end of the year, the customary moment for future looking predictions). At the end, we’ll dive into what this means. Read more

Mambu predicts embedded finance spike in 2023 (P2P Finance News)
Cloud banking platform Mambu has predicted a spike in the use of embedded finance in 2023, as more companies seek to integrate financial services. The firm has also predicted that big tech will move into banking, which could force banks to drive digital transformation. Embedded finance is set to increase, thanks to its ability to offer innovative, convenient and cost-effective solutions, according to the report. In the coming year, Mambu said that customers can expect to see companies using embedded finance to integrate financial services in non-bank products and business processes, while banks will use it to court the custom of small and medium-sized enterprises. Read more

Law change set to make Fed reveal holders of master accounts (Central Banking)
New legislation will require the US Federal Reserve board to create a database of institutions that hold, or have applied for, access to key Fed facilities known as master accounts. Republican senator Pat Toomey introduced the requirement in an amendment to the 2023 military budget, which passed the House of Representatives on December 8. The current version of the bill is the result of negotiations between the two houses of Congress and both parties, making it unlikely the bill will fail to. Read more

Fintech focus: Why digital banking is the future of finserve (Fintech Magazine)
Mike Kiely, Sales Director of Financial Services, IDnow, discusses the importance of digital banking and why all financial organisations need to adopt it. The answer to the question “What would you save if your house was burning down?” is always used to show a lot about the respondent’s personality. Pragmatists might opt for insurance or other documents related to financial security, whereas sentimentalists would rescue photo albums from the flames. But in 2022, there is a strong possibility that most people, when asked this question, would simply reply “I’d save my smartphone.” This would not be a performative bow to the big tech bosses at social media companies. Instead, it is a reflection that our lives are now controlled by these handheld computers. For sentimentalists, their family histories are saved in image galleries. For the pragmatists, the cogs which make their worlds turn are all there in app form – and that includes their financial management. Read more

It’s time for evangelising fintech governance (Business Standard)
New-age lenders reached out to new segments that were largely overlooked and unaddressed, even as more customers turned to them for their need for niche products and convenience. Customer empowerment — commonly known as customer protection — boils down to five fundamental principles in the lending world: fair treatment; offer of suitable and affordable products; loans on clear terms and conditions; privacy and security of information; and adequate complaint redress. Read more

We will need to find our own sources of climate finance (Mint)
The agreement to create a loss and damage fund salvaged CoP-27 somewhat. While funding contours and future contributors remain unclear, least developed and vulnerable smaller island nations in need of assistance to tackle climate disasters are its likely beneficiaries. Such funding will largely trickle-in via concessional loans ultimately, like before. A glance at the OECD’s climate finance trends report 2022 indicates that of the targeted $100 billion aggregate climate funding, about $83 billion was mobilized from developed nations via global agencies through 2020. Of this, bilateral and multilateral public climate finance from the developed West stood at $68 billion, comprising concessional and non-concessional loans (71%), grants (26%) and equity (2%), while private climate finance and export credit extended via agencies comprised just $15 billion. These total 2020 figures highlight the challenges in mobilizing the colossal climate investments required by the developing world each year. Not only must India continue pushing rich nations to contribute additional monies for past excesses, but also mobilize more private capital finance on its own by co-creating an auxiliary funding mechanism. Read more

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