And we start the week with new analysis and opinions on investing, open banking, the metaverse and more. Dive into the latest fintech insights and have a great start to the week!
The cost-of-living crisis could drive fintech adoption (ComputerWeekly.com)
The cost-of-living crisis could spur innovation in the fintech sector as consumers look for help managing their finances. The current financial struggles of people around the world could encourage the adoption of apps, just as the Covid-19 pandemic did, but for different reasons. When Covid-19 hit the world in 2020, the need for people to avoid contact with other people led to the adoption of digital banking. After high streets were closed for long periods, the penetration of financial technology grew as people of all age groups turned to apps to manage their money. Apps can also help people manage their finances during the current cost of living crisis, with financial management tools, personalized financial products and a range of credit options available. Read more
BankThink Bank-fintech partnerships don’t need more regulation (an American banker)
Since the global financial crisis, fintech companies have burst onto the scene with a dizzying array of exciting new products and services. While fintech companies are perhaps best known for designing online and mobile applications that make it easier for consumers and small businesses to make payments and apply for financing, they have also introduced underwriting tools that help banks expand the availability of credits. Rather than seeing banks as competition, many fintech firms have chosen to work closely with banks to offer new products. In these partnerships, fintech companies have technological expertise and creativity, while their bank partners bring expertise in lending, payments and compliance with the set of laws and regulations governing their business. The combination has proven to be highly effective, with studies confirming a positive impact on credit availability, financial inclusion and user experience. Read more
Build Better Fintech: Invest in Compliance (The Fintech Times)
The US does not have a comprehensive compliance regime for its fintech companies, making it difficult to determine which regulations and licenses they must follow at any given time. The more a fintech grows, expanding its marketing, raising its profile, and attracting press attention (both positive and negative), the more likely it will be exposed to state and federal scrutiny of its compliance status. Failure to comply can quickly lead to huge fines, jail time and reputational damage. US fintech companies are seeing increased scrutiny of their compliance status in 2022. If you’re one of the 73 percent of fintech companies without a dedicated compliance officer, now is the time to get an idea of what you need to know. Whether they are based in the US or work with US clients, fintech companies need to know what they want to achieve and have the necessary regulatory coverage to ensure they can operate and meet their goals. Read more
CBDCs are emerging on the international scene as a future cross-border option (Fintech futures)
The last thing anyone reading this needs is another Bitcoin expert. But lest you think this is yet another article on the promise or volatility of digital currency, consider this statement: Digital currency will become the de facto cross-border payment mechanism within the next decade, or possibly sooner. Brave, I know. But I firmly believe that in the form of central bank digital currencies (CBDCs) backed by the government, the statement is conservative and based on market realities. And lest you think I’m alone in this belief, listen to someone who can actually do it. “CBDCs, I think, are the most effective answer to this (cross-border payments),” Reserve Bank of India Governor Rabi Sankar said recently, adding: “For example, if India and the US have CBDCs, we don’t have to wait for the banks to be open to settle transactions… This massively de-risks settlement of cross-border transactions. So the internationalization of CBDC is something I’m looking forward to.” Read more
Metaverse in fintech: banks worry about environmental impact (Fintech Magazine)
More than two-thirds of banks (67%) are concerned that the metaverse will have a negative impact on their carbon footprint, according to the results of a new survey. Digital transformation agency Mobiquity asked 150 senior UK banking executives about their attitudes to the metaverse. Over half (56%) say they are actively investing in the metaverse, with 61% of large banks already engaging with metaverse technologies. But many banks believe the new limit will pose a challenge to their carbon footprint at a time when major financial institutions are pledging to reach net zero within the next decade. The majority of UK banks (94%) plan to address the environmental impact of the metaverse’s energy needs in some way, aware that their involvement in the technology will have a negative impact on their carbon footprint. Read more
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