Digital Fuel

It's data. As The Economist newspaper put it in last week's briefing, "data are to this century what oil was to the last one: a driver of growth and change."

Picking up on the theme, Hong Kong attorney and FinTech connector Janos Barberis asks, "Who owns the digital oil?", a question also at the heart of last week's newsletter, "Regulatory Riddles".

"Similar to the oil industry, the added value is not in the extraction of the raw material but in its refinement," Barberis writes. In other words, understanding and making sense of data (quickly and efficiently) is more valuable than the data itself. The article is based on newly released academic research, "From FinTech to TechFin: The Regulatory Challenges of Data-Driven Finance" .

Slow API adoption is dragging U.S. banking down

American banks’ slow adoption of application programming interfaces (APIs) and open banking are slowing the advancement of digital banking in the United States, argues Nabeel Siddiqui, vice president of North America for Currencycloud. "While there is still no larger market, the U.S. has already begun to fall behind other countries when it comes to consumer finance. For example, even though payment app services like Venmo are catching on fast in the U.S., widespread adoption of instant, real-time payments is still trailing that of other countries, where many citizens may have never seen a paper check before. That is something still foreign to many Americans." That, however, is not so much a problem with APIs and open banking, as important as they are, as with the country's overall payments infrastructure.

‘Most bank innovation programs are just innovation theater’

“I’ve been having these discussions about innovation over the past couple of months," Zions Bank's Alex Jimenez tells Zach Miller of FinTech publication Tearsheet. "A lot of people define innovation as any type of change or improvement. I don’t define it that way. That may be process improvement, but innovation really is taking a fresh look at a problem and coming up with a new approach to a solution." Listen to the podcast here.

SoFi plans to apply for a bank charter in the next month

The FinTech firm that focuses primarily on helping consumers pay student loans has long wanted to offer banking services, TechCrunch reports. SoFi plans to apply for an industrial bank charter. SoFi CEO Mike Cagne gives Ryan Lawler an update on the firm's plans and progress in the wake of raising $500 million in equity financing and acquiring online banking startup Zenbanx. "The greater challenge for SoFi is that there haven’t been any new ILC applications approved in nearly a decade," Lawler writes.

P2P payments are the new social norm

Bank of America's latest "Trends in Consumer Mobility" report shows adoption of person-to-person payment spanning generations, with Millennials leading the way, at a 62% adoption rate. Time savings and peer influence are the top reasons for adoption, which the bank's survey puts at 36% overall. For the rest, this is the year.

ICBA delivers paper on bank regulation to U.S. Treasury

Independent Community Banks of America argues that tiered community bank regulations will bolster economic growth. “Community Bank Regulatory Relief: A Roadmap to Economic Growth and Prosperity” lays out the economic benefits of community banks, the challenge of overregulation and its effect on industry consolidation, and regulatory solutions.

CHICAGO CORNER

Burling Bank sponsors a new Chicago FinTech center
Burling Bank announces its support of the Chicago FinTech startup community as a founding corporate sponsor of Currency, a center of excellence for financial firms, startups, government, regulators and universities, set to launch on June 1.

PCI P2PE Case Study: Northwestern University & Arrow Payments
Everybody knows that P2PE is validated point-to-point encryption, which combined with EMV chip card greatly enhances payments security at the point of sale. If you didn't, this case study will tell you how it works.

Data trends
Elise Fleischaker, vice president, marketing at Chicago-based Trading Technologies, summarizes the presentations at last month's FinTech Exchange. The conference focused on the latest trends in market data.