FinTech Populism

posted by Collin Canright on February 6, 2017 - 9:21am

It's a bit of a cheap headline, I'll admit, but I've been reading about the so-called populism that the current U.S. president has tapped into and wondered what it has to do with financial technology. FinTech has been styled as a way to empower people, and that's basically where populism started.

"Populism" in the most generic sense refers to a concern for the common people. It also carries the charge of dissing establishment types, whether they are politicians, intellectuals, media types—maybe even banks.

Disrupted, disintermediated, and distributed. That's supposed to be the financial service industry's lot. Except the people's—call them consumer's—money is pretty tightly locked up in incumbent institutions, and the populist agitators—call them technologists—are having a bit of difficulty breaking down the barriers.

This week's articles—and a forthcoming one of my own—focus on the need to work together. I doubt we'll see much of that in the United States any time soon, but the incumbents have a lot to learn from the technologists when it comes to their ability to interact with consumers. We'll see whether the technologists can dis the incumbents and bring along the consumers.

I suspect the warning that Accenture gives its clients in its 2017 trends report, its second to focus on technology for people, applies to both sides: "In five years, the majority of customers will be purchasing goods or services through a digital ‘middle man’—such as messaging platforms, connected devices, or smart assistants." Or FinTech systems, both business- and consumer-oriented.

"More than ever, the digital partnerships companies make today have long-term implications for their future. . . . An explosion of collaborative ventures between industry leaders is on the horizon, and the success of these endeavors is what determines who will lead new digital markets, and who gets left behind."

I don't expect partnership and collaboration to return to political governance any time soon. I'd like to see businesses lead the way.

Practical FinTech: 5 best personal finance apps of 2017
Judging apps based on detailed information, crisp visuals and analytical features, CoinTelegraph named Mayvio Budget, CoinKeeper, Visual Budget, Money Flow and Income OK as the best finance apps for mastering your money this year.

The digital banking revolution: who will survive?
“Two issues at the heart of the issue: trust and customer experience. Traditional players have the edge on trust, but FinTechs have the upper hand when it comes to CX,” writes Jeffry Pilcher for The Financial Brand. There are three key areas financial executives say they need to change: adapting the role of the branch network, cultivating the right talent and updating their technology adapting the role of the branch network, cultivating the right talent, and updating their technology.

2017: the year FinTech grows up and learns to play nice
There are two reasons why FinTech firms are better positioned to shake up the industry, Richard Magrann-Wells asserts in the Willis Towers Watson Wire. “First, this is the year that banks and startups truly recognize that they are better together. Second, the legacy core systems that have held back banks in recent years will become relics of the past after this year’s developments.”

Bank of England’s Mark Carney predicts FinTech game changer
During the recent Deutsche Bundesbank G20, the current Bank of England governor spoke about the potential for FinTech to improve customer choice and efficiencies and also make the system more effective and more resilient, Computer Business Review reports. But he also recognized the potential for operational risk and greater complexity.

Technology Vision 2017
The new Accenture report, quoted above, outlines key tech trends, including harnessing artificial intelligence for a better user experience and reaching industry-wide consensus on best practices for implementing digital technologies.

Paris wants a slice of the London FinTech pie
The Paris FinTech Forum, which attracted more than 1,500 bankers, investors and entrepreneurs this week, showed signs that the city is positioning itself as another FinTech hub following the UK Brexit vote, according to Bloomberg.


Robo advice, big data/AI and DLT. What do European regulatory authorities think (and intend to do)?
The European Securities and Markets Authority has put forth a framework for working with FinTech firms which is centered on investor protection, financial stability and orderly markets. For now, some think it’s best for regulators to take a wait and see approach to blockchain oversight, because it hasn’t quite reached its peak, says senior regulatory analyst Gianluca D’Imperio in a LinkedIn Pulse post.

Is blockchain the answer to building transparency and trust?
The first ever Global Blockchain Business Council was launched in Davos last week at an event hosted by blockchain firm Bitfury, writes Uschi Schreiber in a post for LinkedIn Pulse. “Blockchains can’t single-handedly create trust where none exists. However, their distributed nature and transparency can act as the foundations of trust and make that trust more resilient.”

Lending Robot combines robo advice and blockchain
The Seattle-based hedge fund will only invest in peer-to-peer loans: LendingClub, Sofi, Funding Circle and so on. LendingRobot publishes every week a detailed ledger of its holdings, down to the value and individual payments made by each note, and a "hash code" signature of the ledger is integrated in the subsequent versions as well as notarized in Ethereum's blockchain to ensure the data is tamper-proof, according to International Business Times.

How blockchain is helping solve Japan’s ‘Galapagos Syndrome’
Japan wants to set itself apart from the increasingly global economy, but blockchain is slowly changing that. Yoichiro Hirano, co-founder of the Blockchain Collaborative Consortium, says: “The Japanese government wanted to differentiate the new technology from the (rest of the world), so they put their budget to some unique features for Japanese companies. But the other result is bad interoperability, or bad compatibility. So that makes a 'Galapagos' product.”