News > FinTech

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>
China payments go digital
FinTech
<p>The latest data from the People’s Bank of China (PBoC) show a surge in the use of electronic payments for all types of transactions by Mainland consumers. The South China Morning Post reports:<br /> [The] bulk of the growth in the China payment market is increasingly coming from e-payments which bypasses banks and their legacy paraphernalia of bills and notes. While it is often difficult to track all the myriad modes of e-payments, the ones that are routed through the banking system and can be tracked by the PBoC is now a 553 trillion yuan market. Chinese users have made 27 billion e-payments through banks only in the three months to September-end.</p> <p>In this segment, the fastest growth is coming from the mobile market, which has this year grown at 254 per cent from last year.<br /> Why should this matter? It means that even the all-dominant Chinese mega-banks in the mainland are losing market share in basic payments, the gateway to selling more expensive products to captive customers.<br /> Photo: michael davis-burchat</p>
Black Friday bitcoin initiative enters its third year
FinTech
<p>As Black Friday (November 27) rolls around everybody is looking for a good deal, but preferably without the sharp elbows and rugby tackles. As more people turn to the internet, Bitcoin evangelists are looking to entice more to the adopt the cryptocurrency through the Bitcoin Black Friday website.</p> <p>Launched in 2012 by Jon Holmquist, the site is active for one day from 00:00 EST, offering deals from 150 merchants, including:</p> <p> Namecheap, which offers hosting services<br /> REEDS Jewelers<br /> Mixedtee, which sells clothing merchandise<br /> Bitsoaps, which sells bitcoin-shaped soap.</p> <p>But, the importance of the event is less about generating sales on the day, and more about supporting the bitcoin economy in the longer term. Speaking to the Coin Telegraph, Holmquist said:<br /> “We've generally seen a bit of a bump on Black Friday, but generally I think the actual spending doesn't affect the price very much. There isn't a whole lot of consumer volume compared to the daily trade volume. But I think the positive press and news ends up affecting the price.”<br /> Photo: Steve Jurvetson</p>
Terror fears drag up data privacy debate in Europe
FinTech
<p>As security tightens in Europe in the wake of the Paris attacks, issues over privacy and data are back in the spotlight with France demanding more access to Swift payments data as part of its anti-terror efforts.</p> <p>Under the current system, Europe relies on the U.S. authorities to rummage through payments data from the Swift interbank system for clues on terrorist financing. This has to change, French finance minister Michel Sapin tells Reuters.<br /> "We Europeans don't have the capacity to exploit our own data. I don't think this can carry on this way. Since we do not have the means to analyze the data located in Europe, we transfer all of this data to the Americans, who have the capacity to analyze it.”<br /> Access to Swift data has been a source of tension between the U.S. and Europe since 2006 when it was first revealed the U.S. government has used emergency powers to access data on suspicious Swift transactions in the wake of 9/11.</p> <p>This is part of a broader trend as France is not the only country now demanding more information on transactions. Spain, for example, wants to give its finance ministry the go ahead to track the bank accounts of suspicious people whether they have committed a crime or not.</p> <p>How long will it be until security services and politicians turn their gaze to the broader fintech space where issues of anonymity and privacy dominate?<br /> Photo: Amnesty International UK<br /> &nbsp;</p>
BIS reports on bitcoin challenge
FinTech
<p>It's official: the suits really are taking notice of the hoodies.</p> <p>Digital currencies such as Bitcoin could threaten the ability of central banks to control economies, issue cash and measure money aggregates, according to a report by the Bank for International Settlements (BIS) released this week. (Coindesk.com)</p> <p>"A widespread substitution of banknotes with digital currencies could lead to a decline in central bank non-interest paying liabilities. This, in turn, could lead central banks to substitute interest paying liabilities, reduce their balance sheets, or both. The result could be a reduction in central bank earnings that constitute central bank seigniorage revenue," said the BIS.</p> <p>"The emergence of distributed ledger technology [blockchain] could present a hypothetical challenge to central banks, not through replacing a central bank with some other kind of central body but mainly because it reduces the functions of a central body and, in an extreme case, may obviate the need for a central body entirely for certain functions."</p> <p>"In some extreme scenarios, the role of a central body that issues a sovereign currency could be diminished by protocols for issuing non-sovereign currencies that are not the liability of any central institution."<br /> Photo: BTC Keychain<br /> &nbsp;</p> <p>&nbsp;</p>
Apple may be Square's next big competitor
FinTech
Progress is a beautiful thing. pic.twitter.com/VmLhkahutD — Square (@Square) November 19, 2015 Square just released a new payment reader that is now compatible with both Apple Pay and Android Pay. To push out the chip-compatible reader, Square is even offering to give away 250,000 of the $49 readers for free. But there could be a fly in the Square ointment.
London Stock Exchange Group launches social media platform for investors
FinTech
<p>ELITE Connect, the new social digital platform for investors and companies, was launched Monday. Developed by the London Stock Exchange, the service aims to simplify investor relations, reports FinBuzz.</p> <p>The social and professional network offers efficient corporate access between companies and investors.</p> <p>Features include a profile page, investor search, events calendar, and a digital ‘meeting room’ to hold conference calls or share documents. This is the product’s full-fledged launch after a 6-month beta period earlier this year.</p> <p>The program caters to investor relations professionals and is specially designed for public companies, stakeholders, brokerage and advisory firms, as well as institutional investors.</p> <p>“We know that approximately 90 per cent of listed companies travel the world to meet asset management firms and spend up to one month a year meeting face-to-face. ELITE Connect will help make investor relations more efficient, more international, and more valuable for all parties,” the press release said.</p> <p>Members have a database of investor information at your fingertips, as well as the means to reach out and communicate with investors and companies. Companies listed on the London Stock Exchange have already been given automatic access and dedicated profiles, whereas others can register on the website.</p> <p>Comments from the LSEG press release:</p> <p>Xavier Rolet, CEO, LSEG, said:<br /> “For over 200 years, we have been grounded in an unshakeable commitment to building markets based on transparency and trust. Now that new technologies are fundamentally impacting the way people interact and communicate, London Stock Exchange Group is offering a new solution that allows financial market participants to be the first movers in a rapidly changing environment.”</p> <p>Raffaele Jerusalmi, CEO, Borsa Italiana, Director of Capital Markets, LSEG, said:<br /> “We think there is a tremendous opportunity for a modern, digital approach to Investor Relations which offers companies, investors and intermediaries greater opportunities to engage and enhance visibility in a cost effective manner. After positive feedback during beta testing, we are excited to see how all users will adapt and shape ELITE Connect to their needs.</p> <p>“Participants understand the power of ELITE Connect. It has the ability to unite people across the globe, making investor relations more efficient, more international and more valuable for all parties.”</p> <p>Harriett Baldwin MP, Economic Secretary to the Treasury, said:<br /> “Digital initiatives like ELITE Connect are an innovative way of helping companies grow through greater and more efficient contact with investors. The UK is a world leader in FinTech and harnessing the power of technology to connect companies and finance is crucial to boosting productivity and economic growth. I’m delighted to see London Stock Exchange Group is bringing together the global business and investment community to give companies more tools to access new opportunities across the globe so they can innovate, grow and create jobs.”</p> <p>Francesco Starace, Chief Executive Officer and General Manager, ENEL SpA said:<br /> “Elite Connect is a great example of how to leverage on technological innovation to reach new frontiers of engagement, opening new business opportunities, reaching new investors across all geographies and creating connections in a fast and efficient way. This is well aligned with Enel Group’s overall digitalization strategy.”</p> <p>Alex Bolis, Head of Investor Relations, Telecom Italia said:<br /> “The progress of technology is tangible among our customers as well as our investors. A pan-European platform is a good way of fostering growth and providing services to a qualified business community.”</p> <p>John Gollifer, General Manager, IR Society said:<br /> “In many ways, the use of digital investor communications is creating a more level playing field by enabling companies to extend their reach to existing and new target audiences, while at the same time potentiall