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Get an 'A' and get a microloan. Is that really so smart?
FinTech
A new microloan platform for  those debt-laden millennials has teamed up with Dwolla to power its money transfer platform. Dwolla is, of course, one of the original banking disruptors. It offers white label services to other startups like Lenny to provide a secure way to make payments. Lenny, which hasn't launched yet, takes into account student GPAs when calculating creditworthiness. The
Can you explain blockchain in a sentence?
FinTech
It is difficult to tell who has it hardest, the people trying to get to grips with the concept of blockchain - the technology behind bitcoin - or the people trying to explain it. Often described as digital decentralized ledger, blockchain is a big concept that's hard to pin down in a sentence, though plenty have tried. But in the effort to
Goldman Sach's zeal for blockchain
FinTech
Goldman Sachs is very serious about blockchain. Last week, the U.S. bank filed a patent for a virtual currency settlement system called SETLcoin that uses blockchain technology. If Goldman Sachs had its way, “SETLcoin” could ultimately be as much a part of the financial services lexicon as dollar, euros or yen, writes the Financial Times. (paywall) Of course, other top
Alleged Bitcoin founder Craig Wright erases himself
FinTech
Australian Craig Wright, who on Wednesday became that latest man to be credited with the invention of Bitcoin, now seems to have erased of all digital trace of himself, taking down his Amazon profile, his blog, and his twitter account, as well as profiles on YouTube, Google, and Quora. According to Gizmodo -- which, alongside Wired Magazine, first named Wright
Screw FICO: How social underwriting could expand access to credit
FinTech
With Kiva Zip, Kiva is growing its U.S. operations to provide loans to entrepreneurs who can't get money from banks. Financial institutions normally decide loan eligibility based on factors like your credit score, cash flow, and the amount of collateral you have. On Kiva Zip—the micro-lender's platform for U.S. entrepreneurs—it's different. What matters is whether you're trusted by the community,
Goldman Sachs files virtual currency patent
FinTech
Goldman Sachs CEO Lloyd Blankfein likes to point out that his investment bank is actually a tech firm. Indeed, according to some reports, Goldman employs more programmers and engineers than Facebook. So, I guess this is what they're up to: Goldman Sachs has made a patent application for a cryptocurrency settlement system in a move that underlines bank hopes that
Is Fintech putting half of all finance jobs under threat?
FinTech
<p>This week ex-Barclays boss Anthony Jenkins became the latest voice to describe banking industry’s “Uber moment”, predicting that fintech innovation could wipe out as many as half of all finance jobs by 2025. He is not the only one offering such a glum outlook.</p> <p>In a speech at The Royal Institute of International Affairs in London, Jenkins said that today’s large big banks risk becoming mere “capital providing utilities”, he added:<br /> “We will see massive pressure on incumbent banks, which will struggle to implement new technologies at the same pace as their new rivals. That will make it increasingly challenging for them to deliver the returns and profitability that their shareholders demand.</p> <p>“Ultimately, those forces will compel large banks to significantly automate their business. I predict that the number of branches and people employed in the financial services sector may decline by as much as 50% over the next 10 years, and even in a less harsh scenario I expect a decline of at least 20%.”<br /> His prediction follows a report by the Financial Times that highlights a recent McKinsey study predicting technological competition will slice 60% of profits from non-mortgage retail lending -- such as credit cards and car loans -- over the next decade.</p> <p>But the FT does not blame fintech for the job cull, instead it looks to regulation. Fintech companies, it maintains, are essentially more competitive because they are able to shift the responsibility of traditional bank functions -- such as due diligence, filtering and vetting – on to third parties, or to an algorithm, much like Uber does with its taxi app platform.</p> <p>Unable to follow suit, traditional banks are burdened with the costs of the current regulatory environment. They  have little choice but to cut labor costs.<br /> Photo: flazingo photos<br /> &nbsp;</p>
Skin in the game: The rise of biometrics in fintech
FinTech
<p>Passwords are not only out of date but are also dangerously insecure in a world where more and more of our daily transactions are becoming digitized. It only follows, then, that as financial technology has evolved, so have the biometric methods of authentication. Here are some of the innovations currently being adopted by different companies:</p> <p>Fingerprint recognition: This is probably the most widely used form of biometrics in existence today. The feature has existed on the Apple iPhone since 2013 and now adds an extra layer of security to the tech giant's contactless payments system, Apple Pay. The tech is now becoming a common feature among smartphones. Other tech giants, like Samsung, are also using it for payments verification.</p> <p>Facial recognition:  With all smartphones and ATMs now equipped with cameras, facial recognition is also becoming widely adopted. Earlier this year. The Wall Street Journal reported that American Express Co. had become one of the most high-profile institutions to experiment with facial recognition tech. The idea is that the technology could offer new capabilities for some of the firm's mobile apps, and new products aimed at customers underserved by financial services.</p> <p>Voice recognition: One of the hottest startups in the voice recognition space today is SayPay Technologies. The company – which recently won the APAC regional UBS Future of Finance Challenge – lets user say a unique SayPay code into a phone which allows the phone to authorize a transaction by matching the voice pattern with a database.</p> <p>Retina scan:  According to the WSJ, Citigroup is that latest to adopt this technology by teaming up with automated-teller-machine maker Diebold to develop a machine that would allow customers to withdraw money with an eyeball scan instead of a card swipe. But, quite rightly, the WSJ article asks whether consumers -- already suspicious of large financial institutions -- would be comfortable letting a bank scan their eyeballs regularly.</p> <p>Palm vein recognition: Japanese bank JCB made headlines last month when it unveiled a partnership with Fujitsu to develop a contact less payments system that incorporates the Japanese tech company’s palm vein authentication technology into JCB's global network. The technology is meant to be more difficult to falsify than fingerprint technology.  Fujitsu already claims to have shipped 470 of devices using the tech.</p> <p>A combination: Of course the best use of biometrics would be a combination of the some of the above. That is the approach the Deutsche Bank is taking with its new Callsign antifraud system. Nick Doddy, Deutsche’s regional innovation manager, recently explained to the Financial Times how the system can adjust to multiple profiles:<br /> If you’ve broken your right arm and . . . you’re at home and now you’re using your left hand, it will say her location is good, her pin is good, her biometric is good, but she’s now handling it in a different way, so it might say ‘give me a facial recognition’<br /> Photo: CPOA</p>
WhatsApp connects Indonesia
FinTech
<p>Technology leapfrogging in emerging countries is hardly a new concept. The use of mobile phones is perhaps the best example, obviating the construction of expensive infrastructure or bricks-and-mortar outlets.</p> <p>WhatsApp has spotted the enormous potential of Indonesia, a sprawling archipelago of more than 250 million people with rising personal incomes. As the Financial Times (paywall) reports:<br /> [The] chat app is used by anyone from businessmen arranging meetings to girls sharing images of their latest batik blouse, and its calling function is as central to daily life as free messaging.</p> <p>At the recent Tech in Asia summit in Jakarta, Thomas Lembong, a senior cabinet member, declared that he runs the government’s trade ministry through WhatsApp. And it is the same story with many chief executives in the country.</p> <p>There are particular advantages to using the service in emerging market cities such as Jakarta, where many offices and cafés offer free WiFi. That means bypassing not only mobile operator tariffs but also any problems with poor signal.<br /> Photo: Charles Wiriawan</p>
SoFi's expected $30B IPO adds fuel to the Renren fire
FinTech
<p>Back in March, Benzinga covered the intrinsic value of fintech investments made by fading Chinese social media company Renren Inc RENN 0.85%.</p> <p>Among Renren's many investments, its approximate 25 percent stake in SoFi looked to be the most promising, as the company was looking to IPO at around $3.5 billion. On Tuesday, Business Insider's Jonathan Marino said SoFi CEO Michael Cagney was now looking for a $30 billion dollar IPO.</p> <p>Cagney cited Dodd-Frank Wall Street Reform and Consumer Protection Act as the boost that accelerated its expected IPO valuation 10 times as much as what had been reported in March. One might be led to believe that investors in Renren would be ecstatic regarding this news.</p> <p>However, management led by Renren CEO Joseph Chen is looking to take the company private at $4.20; Shares traded recently at $3.50.<br /> Laughable Offer<br /> Aptus Capital's John Romero told Benzinga, "If and when SoFi reaches a $30 billion market cap, this translates into $17 for RENN which is an asymmetrical return from its present share price of $3.50. Knowing SoFi's long-term objective just underscores how laughable the non binding offer of $4.20 is from present management."</p> <p>Read more at Benzinga. <br /> Photo: Alexey Krasavin</p>