How has fintech transformed regulator – proactive vs reactive approach

Regulators perceived slow, inefficient and reactive. This would be best visualised by 1000’s of pages long tomes of regulatory frameworks such as Dodd-Frank Act. However, the role of the regulator has changed significantly. The regulator is under a constant spotlight to make sure that financial crisis of 2007 does not repeat itself. Equally, it is pressured to foster innovation, which, in turn, fosters competition. Having many small players reduces system risks and is fairer to the customer.

To do this regulator can’t simply be reactive anymore, i.e. you mis-sold insurance products – pay a fine and refund customers. The regulator is encouraged to become much more proactive to prevent the misconduct from happening in the first place. For this, the regulator needs to have a hand on the pulse of the market, lots of data and access to the innovators of tomorrow. Sandbox by the Financial Conduct Authority (FCA) is a great example of embracing forward-looking innovation. However, a sandbox is as much of proof of concept for the regulator as it is for the startups. It serves as a forum for discussion, a way to capture data and keep a hand on the pulse of cutting-edge innovation. Arguably, because of this the regulator will be much better positioned to take action when its needed next time.

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Brexit is not the death knell for UK fintech
By Oliver Bussmann

To be clear, I’m not saying that Brexit has sounded the death knell for UK fintech. Quite the contrary: there will doubtless be opportunities as well as challenges. Outside the larger EU framework, the UK government may have more room to introduce fintech-friendly regulation, or pursue policy to make it easier for these firms to find financing. It would also find it easier to enter into bilateral agreements with other countries. If the UK can, for instance, get closer to the US administration on the fintech topic, bringing each country’s fintechs and investors closer together, UK fintechs would no doubt profit. The shock may also prove to be a catalyst, pushing UK-based entrepreneurs and tech talent to work harder to produce the increased efficiencies and lower costs that fintech promises. Yet, there’s no doubt that Brexit has upended the apple cart. As long as the current uncertainty remains, concern is more than warranted.


Bitcoin vs Gold: which is a better long-term bet?
By Aaron Stanley

Imagine that you have $100,000 at your disposal. You must spend all of it on either bitcoin or gold – no mixing and matching – and the assets will then be stored in a trust that cannot be accessed again for 50 years. Which option would you choose? With the two commodities now in roughly the same price range, it’s worth putting aside some of bitcoin’s short-term volatility and liquidity concerns to compare them as long-term stores of value side by side. Sure, you might argue bitcoin is newer and flashier, and that it has arguably more utility in the digital era than gold. But, gold has the indisputable track record, having been a cherished store of value for thousands of years across human civilizations. However, bitcoin’s traits have led to those backing the cryptocurrency to believe it could potentially unseat gold over the long haul.


What does FinTech investment success look like?
By Rupert Bull

CBInsights quote “Venture Capital Funnel Shows Odds of Becoming a Unicorn Are Less than 1%” seems to imply everything else is failure. I strongly disagree. They reinforced this impression by saying further down in the article “70% of companies end up either dead, or become self-sustaining (maybe great for the company but not so great for investors).” This is wrong. I think FinTech investment success means creating a self-sustaining company. Becoming self-sustaining is good for the founders, the early stage investors and the employees. It is also good for the broader economy if more companies survive and grow – just think of all the spin off professional service revenues that ensue. If this were to happen at scale it would also mean less capital was wasted and therefore less capital would need to be raised and invested.


Rethinking capitalism with the blockchain – part II
By Kary Bheemaiah

As we move into a more digital world with faster technological evolution providing strong headwinds of change, it is important to realize that adapting to this change will not simply be a case of investing in the new tool or updating one’s skillset. Capitalism has always been a renegade, whose greatest impacts have been born out of conflict and change. At every turn, this has required that tough questions be asked, and our notions and conceptions be rewritten. If we are to continue growing with hedonistic sustainability, we need to better understand capitalism. The unison of complexity economics and the blockchain is a step in that direction and will entail the creation of new cultural forms, institutions and a new vocabulary for education. But with a better understanding of capitalism, people in democracies can play a much more positive and vigorous role in shaping their economic institutions. There would be no capitalism without a culture of capitalism and there would be no culture if the existing ideologies were not challenged and overcome. At a time when information is so abundant that we can get the answer to any question, the real responsibility becomes asking the right question. If we fail to ask these questions and leverage the power of decentralization and transparency, we risk starting a conversation with the next generation by beginning with an apology.

Also published on Medium.

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I'm a #26 Global FinTech influencer. An Economist by profession, I have worked on both sides of the table - tech startups and global financial organisations. I love football, technology, travelling and photography.