FinTech Markets

The U.S. General Accounting Office (GAO) published a comprehensive report on FinTech regulation (PDF) in the United States across the primary FinTech market segments: payments, lending, wealth management, and cryptofinance. Missing is the capital markets segment, though the Commodity Futures Trading Commission (CFTC) is nearing completion of its review of FinTech potential.

The GAO doesn't provide particular recommendations, but it noted that regulations should vary depending on the types of products or services offered and the way they’re delivered to consumers. The report provides a solid overview of current regulations and will be of particular interest to banks, the market participants with the most to gain and to lose in the FinTech revolution.

More to come after we've had a chance to review the report in more detail. In the meantime, this week's links focus on FinTech market status and directions for banks.

Small business in eighth place?

The small business owner is an underused source for low-cost deposits, writes Joel Pruis for GonzoBanker. By focusing on their mobile offerings, self-service capabilities, online credit applications and industry niches, banks can start appealing to underserved small business clients.

Is open banking an opportunity, a threat or both?

Banca Sella Group CEO Pietro Sella weighs in on banking advancements in the near future. Self-service only is on the horizon, Sella predicts, adding that top-notch security and customer policies will be necessary. Small banks will be more nimble when it comes to adapting to consumer needs, whereas larger banks must combat legacy systems in order to remain competitive.

Everything you wanted to know about PSD2 but were too afraid to ask

In a post for bobsguide, Alara Basul breaks down what banks need to know regarding the Second Payment Services Directive 2, which is due for implementation in institutions in Europe by January 2018. The mandate requires banks to use open APIs through which third parties will have to access consumer data.

Bankers undecided — Are FinTechs friend or foe?

Nine out of 10 financial firms expect to lose approximately 24 percent of revenue to FinTech firms, and four out of five plan to partner with FinTech firms within the next three to five years. “The surprise is that banks or financial firms think so much revenue is at risk. I haven’t seen a lot of fintech startups gain a dramatic share of market share,” Aaron Schwartz, head of FinTech research at PwC, tells Forbes.

Here’s one FinTech that’s still going head-to-head against banks

Lyric Financial, a firm which provides financing services to musicians, and TuneCore, a digital music publishing and distribution provider for independent musicians, partnered to create TuneCore Direct Advance. The service will allow TuneCore artists to get advances on future music sales. The venture illustrates a trend of FinTech firms providing solutions for previously cumbersome, niche markets, Bryan Yurcan reports for American Banker.

Innovation spotlight: BankMobile

Bianca Spangler talks with BankMobile’s managing director and Chief Digital Officer Dan Armstrong about the company’s in-house FinTech software development and its execution of innovation strategies. Rather than partnering with or purchasing FinTech firms, the company develops majority of its technology for cards, remote check deposit, and peer-to-peer payments solutions in-house.

Weekly briefing No. 76 | FinTech Sandbox Special Edition

This week The Financial Revolutionist’s round up features a follow-up interview with Quantopian’s CEO John Fawcett during which he discusses the current data science war. The company’s next target is U.S. futures, and in the meantime, it’s keeping a close watch on Google and Facebook.

THE BLOCKCHAIN WATCH

Are we at the brink of an industrial revolution?
We’re not surrounded by the smoke-filled skies of the actual industrial revolution, but the internet and its impact on the way we work, research, and bank. The use of distributed ledgers for money management could ultimately help control the UK’s money supply for good.

Positive outlook from Japan and Russia drives bitcoin toward new highs
The price of bitcoin got a lift after Japan legalized the use of the cryptocurrency, while a Japanese city known for its cherry blossoms started collecting donations to maintain its parks in bitcoin. "Not only can bitcoin now be legally used in Japan to make purchases and send remittances, but the digital currency is also exempt from sales tax," reports CoinTelegraph.