Research Highlights - 31 August 2021

Weekly Analysis And Opinion Highlights – 9 January 2023

And we’re kicking off the week with new analysis and opinions on fintech with new finance space for 2023, open banking, and more. Dive into the latest fintech insights and have a great start of the week! 

Can Bitcoin Be a Financial Lifeline for Economies in Crisis? (Fintech Singapore
Bitcoin, the world’s first and most widely-recognized cryptocurrency, has gained a reputation for being a volatile and risky investment. However, in certain economies around the world, Bitcoin is being embraced as a useful tool that is allowing for financial stability and economic growth to continue despite unpredictable financial uncertainty. The recent collapse of exchange platform FTX and the 200 percent decline in the global cryptocurrency market has significantly dented confidence in Bitcoin again among speculative investors. But in many parts of the developing world, where volatile local economies have been upended by political or social instability, inflationary tactics and unreliable currency valuations, Bitcoin in particular has emerged as a potential ‘safe haven’ asset. Let’s look at some of the developing economies that have relied on a cryptocurrency like Bitcoin amidst deteriorating local currency situations and flat out economic crises. Read more

How RegTech fared in a year of war and peace (Global Fintech)
As another year ends, the RegTech sector has the opportunity to take stock on what was yet another successful year for the industry. What stood out amongst others? At the beginning of 2022, one of the key considerations for companies in financial services was regulated businesses implementing and adjusting to the European Union’s 6th AML directive. The 6AMLD was, in the opinion of Moody’s Analytics, an ‘exercise is jurisprudence’, aligning with the FATF predicate offenses, identifying certain crimes that were generating cash that would need to be laundered. These crimes, the firm claims, included human trafficking, cybercrimes and environmental crimes. Moody’s stated, “Much of 6AMLD was about catching up with progress made in other countries, but it was also about driving consistency across EU member states to ensure financial crime in Germany, France, Italy and so on were all viewed and treated in the same way. A good example of inconsistency in the EU has been the treatment of tax offences, which cost countries billions of euros each year.” Read more

Budgeting finances in 2023: Open banking and PFMs (Fintech Magazine)
Rolands Mesters is the CEO and co-founder of Nordigen discusses budgeting and managing finances in 2023, and the role open banking and PFMs will play. Open banking allows consumers to manage their finances more accurately and efficiently through the use of modern-day personal finance management tools. The use of these types of applications enables customers to elevate their financial literacy, save money and budget more effectively. These services are now taking it one step further with the addition of easy-to-use investment options that will allow users to not only manage their assets but also to grow them. In the last few years that open banking has been around, it has become a vital component across multiple industries including lending, accounting, identity, and income verification, along with many other customer-focused financial services. Open banking refers to the process that enables third-party service providers (TPSPs) to access customer financial information through secure API connections to banks. Allowing providers to gather this data, enables them to create a greater amount of personalised services and product offerings for customers and meet their needs in an increasingly effective way, creating more user-focused client experiences. Read more

Online Banks Draw in Customers as High-Street Banks Continue to Lose Out (The Fintech Times)
High street banks continue to close down at an alarming rate as their customers turn to online competitors. A modern approach to banking continues to draw in impressive numbers. But how are businesses reacting to the change? Comparison site NerdWallet suggests business owners may be joining consumers. A new study by NerdWallet found that business owners and leaders trust online banks more than traditional, conventional banks. This shift in opinion appears to be displayed as many of them have already moved to online-only banks. The study involved a survey of 500 business owners and senior decision-makers in the UK. The survey covered their opinions and experience of online banks in regard to running a business. Fifty-three per cent of UK business owners were found to trust online-only banks the same as high street ones. Meanwhile, 28 per cent said that they currently trust online-only banks more than their traditional counterparts. Only 10 per cent of the 500 business owners surveyed said they found conventional banks more trustworthy. The remaining nine per cent were unsure. The results clearly display a strong shift in favour of online-only banks. These opinions also appear to be backed up by vast numbers of business owners moving over to online banks. Read more

Banking-as-a-service (BaaS) vs embedded finance (Global Fintech)
Banking-as-a-service (BaaS) and embedded finance have become two of the biggest buzzwords/solutions. However, there seems to be a confusion about how they differ from one another. Reiss explained that it is common for people in the market to mistake the two. He said, “I’ve been to conferences where, if you were to ask people to produce a Venn Diagram of BaaS and embedded finance, they’d probably draw a circle. Given the nature of BaaS and its interoperability through APIs, they may even see themselves as service providers for embedded finance solutions.” Head explained that the main differences between the two lies in their focus. He explained that embedded finance is more front-end and focuses on the customer experience and providing financial solutions in conjunction with buying other goods or services. Whereas BaaS is a back-end process, providing financial services that allow digital banks and non-banks to offer these products for themselves. Read more

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