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Sweden declares war on cash, punishes savers
FinTech
<p>&nbsp;</p> <p>Among the endangered species in Sweden are the gray wolf, European otter—and cash. Back in June, I shared with you the story of how, in 1661, the Scandinavian monarchy became the first country in the world to issue paper money. (It was an unmitigated disaster, by the way.) Now it might be the first to ban it altogether.</p> <p>All across Sweden, cash—the physical kind, not cash in the bank—is disappearing. Many if not most businesses have stopped accepting it. ATMs are now as uncommon as pay phones. Churchgoers tithe using mobile apps. Fewer and fewer banks even accept or dole out cash.</p> <p>Here’s the chart showing the decline in the average yearly value of Swedish banknotes in circulation:</p> <p>SwedenSo what’s going on?</p> <p>For one, the Swedish people have enthusiastically embraced mobile payment systems. Even homeless newspaper vendors now carry card scanners.</p> <p>But that’s not the concerning part.</p> <p>Cash’s demise appears to be orchestrated by Sweden’s central bank, which of course stands to benefit from the switch. In a purely electronic system, every financial transaction is not only charged a fee but can also be tracked and monitored. Plus, taxes can’t be levied on cash that’s squirreled away in Johan’s sock drawer.</p> <p>Since July, interest rates in Sweden have lingered in negative territory, at -0.35 percent, forcing accountholders to spend their money or else see their balances slowly melt away. Negative rates can also be found in Denmark and Switzerland, where they’re as low as -1.25 percent. The Swiss 10-year bond yield plummeted to -0.40 percent on Tuesday, which means people are paying the government to hold their “investment.”</p> <p>Nick Giambruno, senior editor of Casey Research’s International Man, calls negative interest rates in a cashless society a “scam.”  His perspective is worth considering:<br /> If you can’t withdraw your money as cash, you have two choices: You can deal with negative interest rates… or you can spend your money. Ultimately, that’s what our Keynesian central planners want. They are using negative interest rates and the “War on Cash” to force you to spend and “stimulate” the economy.</p> <p>The War on Cash and negative interest rates are huge threats to your financial security. Central planners are playing with fire and inviting a currency catastrophe.<br /> Sovereign Man goes even further, writing:<br /> Financial privacy has been destroyed. Banks are now merely unpaid spies of bankrupt governments, and they will freeze you out of your life’s savings in a heartbeat if some faceless bureaucrat orders them to do so.<br /> Read more in ValueWalk <br /> Photo: Quan</p>
Deutsche Bank upgrades its business with robo-adviser
FinTech
Deutsche Bank has just become the latest among a growing group of asset managers incorporating robo-adviser technology. The German investment bank’s latest tool, AnlageFinder, was developed with fintech firm Fincite and uses questionnaires and algorithms to tailor equities portfolios for existing customers, Reuters reports. Deutsche Bank is keen to keep up with industry peers, and the new platform is way
Aussie firm ranks as Asia's fastest growing fintech startup
FinTech
When it comes to fintech in Asia Pacific it's Hong Kong and Singapore that seem to be getting the most attention, yet it was an Australian startup that clinched the top spot for fintech in the latest 2015 Deloitte Technology Fast 500 Asia Pacific. The list, which tracks the fastest growing tech companies in the region, ranked Sydney-based Prospa -- an
Cybersecurity is no longer an IT issue
FinTech
Cybersecurity is not the biggest threat facing the financial institutions of tomorrow, it’s the biggest threat facing the financial institutions of today, say industry professionals, and it needs to be tackled differently. Speaking at ASIFMA's annual conference in Hong Kong’s Conrad Hotel on Thursday, Ben Wootliff, managing director at Hong Kong-based risk advisory Control Risks said: Cybersecurity is no longer
JPMorgan teaming up with OnDeck Capital for lending
FinTech
JPMorgan won't be left behind. The biggest U.S. bank is tying itself to OnDeck Capital, one of the biggest online lenders, to offer small business loans. The pilot project will launch in January, with Chase, the main U.S. banking unit for JPMorgan, offering loans of up to $250,000 to its 4 million small business customers through the OnDeck platform, reports
WeConquer: WeChat is turning its social network into a fintech empire
FinTech
WeChat is fast becoming one of the biggest players in fintech. The 650 million-strong social network, owned by Tencent, has been offering payments to its users in China since early 2014 but now its expanding aggressively overseas. The first big move in this direction came last month when it  partnered with Western Union to allow users to send money to
South Korea approves first online only banks
FinTech
<p>South Korea's financial regulator has granted preliminary approval for the launch of online-only banks by two groups of investors.</p> <p>On Monday, the Financial Services Commission gave a cautious go-ahead to telco KT Corp and Alibaba’s Alipay-led consortium of 21 companies that plans to invest KRW250 billion ($215.37 million) in its venture. The second group of 11 companies is led by mobile chat operator Kakao and boasts Tencent and eBay among the partners, and it intends to spend KRW300 billion.</p> <p>What's striking is the country's welcome embrace of dominant overseas fintech payments operators, in contrast to its continued reluctance to trust its homegrown chaebols to open up banks.</p> <p>In a bid to spur growth in its banking sector, South Korea is allowing non-financial firms to open banks but it still bars large industrial conglomerates such as Samsung Group and Hyundai Motor Group from taking part, says Reuters.<br /> Photo: Sébastien Bertrand</p>
Customers say “nein” to Germany’s Yapital
FinTech
<p>It doesn’t always pay to be a pioneer, as German retail giant Otto Group discovered this week when it shuttered it mobile payments business, Yapital, citing poor customer uptake, competition, and regulatory issues.</p> <p>Claiming to be “the first European, cashless cross-channel payment solution designed with modern commerce in mind,” the platform launched in 2011, and allowed customers to use QR codes to make payments and pay bills. </p> <p>Marc Berg, Yapital executive director, put forward a number of reasons for the company’s downfall,  saying that Europe's Interchange Fee Regulation had put pressure on the Yapital’s margins, but the real problem it seems was that not enough people used it. </p> <p>While retailers were said to love the concept, consumers were far less impressed. In a statement, he said:<br /> At the moment it is simply impossible to forecast business performance in this segment accurately – and above all, the development of the number of end-consumers. While we were already talking about the mobile-payment breakthrough three years ago, today studies indicate there are currently only 200,000 users in Germany.<br /> Despite Yapital's untimely demise , Germany does have a vibrant fintech sector. Only last month credit platform Kreditech raised 82.5 million ($87 million) euros from JC Flowers. But, as the Financial Times reported recently, the country's fintech startups are not without their problems, including risk-aversion among insitutions and stifling regulations.<br /> Photo: David Rosen</p>
When technology gives, it taketh away
FinTech
<p>Finance firms talk about the “disruptors” making the industry shake in its boots. But finance has always been subject to advances that have made people nervous. At a recent investment conference at Baruch College, industry veterans discussed the changes they’ve seen over the more than 40 years they’ve been working in finance.</p> <p>Electronic trading, “like Venus, sprang out fully formed,” says Art Cashin, UBS Director of Floor Operations at the NYSE. “I like humans because I happen to be one,” he joked, but the speed and efficiency of new technology has made the markets easier for everyone.</p> <p>Trading system crashes used to happen on a regular basis. Now a blip in the trading day sends investors into a tail spin.</p> <p>“Investors are really much better off than they were,” says William Brodsky, chairman of the Chicago Board of Options Exchange. Investing has become more democratized, giving average retail investors easier access to products previously only used by high-net-worth individuals. Retail investors are more competitive with less expensive strategy options. But this reality doesn’t matter if investors feel worse off, he says. The perception is important.</p> <p>“The reality is one thing and the perception is completely different,” agrees Cashin. “Everybody began to look at (the markets) like liquidity had completely disappeared,” he says. “The retail investor really feels the market is not friendly to him, and that’s critical.”</p> <p>With technology has also come some scarier issues that investors should approach with caution, the men said. There are now dozens of stock exchanges. While the New York Stock Exchange is dominant, the country still lacks a solid primary market, says Cashin. Dark pools, and some high frequency trading that hovers in these pools, are also concerning, says Richard Lindsey, CEO of the Callcott Group.</p> <p>“The road to hell is truly paved with good intentions,” says Cashin.</p> <p>Photo: David Foster</p>
Fidelity eyes robo-advising
FinTech
<p>Fidelity Investments is testing investment robots in attempts to keep up with the competition.</p> <p>Fidelity Go, an automated investing platform, is currently only available to a few hundred Fidelity employees, reports the New York Times. A small number of customers will be invited to test the product in early 2016, before it goes public.</p> <p>Much like competing platforms from Vanguard, Schwab, or Betterment, Fidelity Go has users fill out a questionnaire about investment goals and risk tolerance before suggesting low-cost investment options. The program is free now, but will eventually charge a fee, likely 0.1% to 0.2% annually plus mutual and exchange traded fund costs.<br /> Photo: frankieleon </p>