posted by Collin Canright on November 14, 2016 - 9:59am
In a surprise move, the Indian government retired the country's current high-dollar bank notes and replaced them with new versions. ATMs ran dry as people went to banks to exchange their banned old notes for the brand-new ones.
The government took the action to fight corruption and collect taxes on the business that takes place off the books, with bills saved under the proverbial mattress and circulated through economic activities outside of the banking and tax system.
The move comes just more than a week after the eight anniversary of Satoshi Nakamoto's publication of a paper that created the first widely accepted digital currency. The currency, called bitcoin, was initially criticized for its use in economic activities outside of the control of the banking and tax system.
Nakamoto's paper has also led to the technologies projected to save the banking industry billions as a result of their ability to maintain more efficient records of financial transactions.
Meanwhile, New York businessman Donald Trump achieved an upset win for the office of President of the United States. The financial markets, initially roiled by stunned European investors, rallied and reached record highs by week's end.
Now, to this week's links:
The state of cash: preliminary findings from the 2015 Diary of Consumer Payment Choice
Yes, online and digital payments continue to evolve and offer users more options, but cash remains a heavily used payment method, according to the Federal Reserve Bank of San Francisco. The Fed’s findings suggest that cash dominates small-value transactions and is widely used in a variety of circumstances. Read the full assessment here.
FinTech in capital markets: a land of opportunities
Though FinTech firms have made a great deal of strides in the capital markets sector, there’s still room for improvements in the IT architecture, developing industry standards, improving partnerships between key players and decreasing risk of working with various vendors, according to a BCG Perspectives report. “In order for the FinTech boom to realize its full potential, a number of barriers must be overcome in the way that FinTechs relate to investment banks and the capital-markets ecosystem as a whole.”
Bank innovation changing response to competition
To compete with the up-and-coming startups aiming to gain more market share, banks are working with those same FinTech firms while improving their own back-office operations and internal culture, writes Jim Marous for The Financial Brand. These moves are giving way to new banking models and further digital transformation in the United States and abroad.
The bank of the future
As banks give way to the pressure of evolving technology, several trends will converge to shape the banks of the future. Among those trends being product partnerships to bring new offerings to consumers and a portfolio of data providers integrated through insights and analytics capabilities, according to Oliver Wyman.
PayPal beats bank brands for online checkout, P-to-P: Report
With 77% of consumers who know of the brand and use it to purchase goods online, PayPal is the most widely recognized online checkout service, an Auriemma Consulting Group study of 800 U.S. credit-card customers found. Paymentssource has more on the FinTech giant and how it’s keeping its stronghold on digital payments.
Framework to be developed to boost FinTech services
The Financial Services Agency, which regulates financial services in Japan, is working with with banks and FinTech firms to create a framework to keep personal information from being leaked, according to The Japan News. Banks, fintech firms, the FSA and additional experts established a review panel earlier this month and will compile a report by the end of this fiscal year.
THE BLOCKCHAIN WATCH
Federal prosecutor Kathryn Haun on how criminals use bitcoin—and how she catches them
Haun acknowledges that bitcoin and blockchain aren’t meant for illegal activities any more than cash is, but using other means to cover their tracks, bitcoin and other cryptocurrencies can be used for fraud, drug smuggling or other crimes. Forbes has the full story.
FinTech could be bigger than ATMs, PayPal, and bitcoin combined
FinTech investment reached $15 billion by mid-August 2016, a sign that the sector will continue to grow in the future. FinTech startups looking to become the next Visa, PayPal or Charles Schwab will have to focus on improving important areas like blockchain transactions, payments and transfers and insurance, among others, according to Business Insider.