FinTech Summary 75 – Apple Bank, Expensive Bitcoin, Bots, PSD2 Effects

FinTech Summary 75

Every so often a new hype cycle comes around, it was bitcoin, then it was blockchain now it’s bots. We are early into development circle and expectations currently set out by the public are unlikely to be met. It won’t feel like talking to a human any time soon, not you can’t just chat to your banking bot when you’re bored at 3am about the game you saw yesterday. It will feel more like an advanced Q&A box where you don’t need to use keywords but the bot implies them from your sentence. There are challenges that we need to overcome, particularly the data ownership. If you’re using a bot a banking bot on Facebook, everything you say about your banking life will now be with Facebook. That’s a problem for me, and for many others. It is still a huge technological advancement and it will be huge, someday, just not tomorrow.

Thanks for reading; YOU are awesome! Just leave a comment if you want to get in touch 🙂

Have a wonderful week,


How PSD2 Will Change Europe’s Banks For The Better
By Artem Tymoshenko

Open APIs will change this by forcing banks to give the same access to your banking information that their website has. Banks will still be required to authenticate users and provide the same level of security that they do now, but they will not be allowed to restrict account owners to accessing it only through their services. This will allow third-party financial service providers to build services directly on top of banks’ data and infrastructure. This means that banks will no longer be competing just against other banks, but against everyone who wants to offer financial services.


Hello, May I Speak to My Personal Bot?
By Eran Livneh

By and large, customers want to better manage their finances, but they don’t have time to stay on top of it all. That’s where the chatbot can lend a helping hand, by automatically executing money management tasks on behalf of customers, dutifully working to improve their financial well-being behind the scenes. Because of its ability to always be available, predictive, understand compliance, and work autonomously, a chatbot can become a critical – even if not an exclusive – channel for customers interacting with their banks. At the end of the day, if a customer receives excellent customer service, he/she won’t care if it comes from a human employee or a chatbot.


Will Apple Bank be the first new American #Fintech Bank?
By Chris Skinner

On Wednesday the American Office of the Comptroller of the Currency (OCC)* followed up on its promise last December to introduce a national bank charter for Fintech bank startups by issuing a white paper on how to apply for a licence, the evaluation process and what will be involved. It’s a massive move towards allowing Fintech firms like Square, Stripe and Simple to become full banks in the USA, if they want to be, plus any other firm who fancies a shot like Apple, Wal*Mart and even Ant Financial. It doesn’t mean they’ll get a license, but it does mean they can apply for one through one agency rather than having to deal with 200. This is a significant step towards encouraging Fintech banking competition in the USA and reflects similar moves made in other geographies.


But, but… I thought Bitcoin was supposed to be cheap?
By Izabella Kaminska

Total transaction fees in bitcoin are on the ascent, challenging a key claim put forth by bitcoin acolytes in the early days: that the bitcoin payments network could compete with the mainstream banking system on cost. Reality, however, is finally catching up with bitcoin. Fees are escalating due to capacity constraints being imposed on the network on account of blocksize limitation as well as the reduction in bitcoin mining awards. If unresolved such constraints will impede further scaling of the network and make bitcoin prohibitively expensive for day-to-day transaction use. Thus far, however, a have-your-cake-and-eat-it solution has escaped the developer community with all options on the table introducing some sort of compromise, whether that’s to bitcoin’s security or its decentralised and trustless nature. And, naturally, because this is the anarchic utopia bitcoin, nobody can agree on how to proceed anyway


Brave New (Open API) World



Focus is essential. This is very FinTechs have advantage over incumbents, they don’t need to worry about canibalising their different revenue streams, pulling resources from different projects, playing politics to make sure key stakeholders don’t feel left out. Startups just need to get it done. Do it quick and dirty and then iterate to improve. Incumbents don’t have the luxury to do this. If you don’t want to fall behind, step back, prioritise and laser focus on it. This is a bigger competitive advantage than most people give it credit for.

Thanks for reading; YOU are awesome!

Have a wonderful week,


The Future Of Insurance Is Insurtech
By Matteo Carbone

The reach of this digital transformation goes way beyond the elimination of “the middle man” and interpretations from a distribution point of view. The amplitude of the digital transformation happening in the insurance industry is widespread and encompasses all of the phases of the insurance value chain, from underwriting to claims. Every insurance sector player, whether it’s a reinsurer, a carrier or an intermediary, ought to pose this question: how should the insurance value chain be reshaped by using the new technologies at hand?


Bitcoin’s Security Model: A Deep Dive
By Jameson Lopp

When discussing consensus mechanisms for different cryptocurrencies, one issue that often causes arguments is a lack of understanding (and definition) of the security model that they provide for the historical data in the ledger. Every security model has two main parts: assumptions and guarantees. If the assumptions used as inputs hold true, then so should the guarantees that are output by the model. One of the greatest assumptions made by bitcoin’s security model is that the majority of miners are honest – that they are working to secure the blockchain rather than attempting to undermine it. In practice, this has held true throughout bitcoin’s history due to miner incentives, though some question if it will continue to hold true in the future.


Banking On The API Bundle Of The Future
By Jessica Elerm

If you thought ‘fintech’ was a buzzword, get ready for ‘open’. Open data, open APIs, open access – you name it. Banks are under pressure on multiple fronts to open the doors and let in the tech punters, all of whom are hungry for a slice of customer data. Open APIs seem inevitable at this point, with governments around the world starting to push the case for banks to get comfortable with handing over customer data when requested to third parties, a move that is enabling the API movement to take off. As a consumer, I’m certainly looking forward to a future where I can identify myself once then freely pick and mix my banking services from a range of providers. It seems to me that we’ll unbundle only to re-bundle, just a little differently to how we did it before. Like changing fashions, what’s old eventually becomes new again – perhaps banking is no exception.


Root Insurance And The Unbundling Of The Insurance Stack Using Open APIs
By Daily FinTech

Although it took a long time for Fintech startups to become full stack regulated banks, it is happening now. In most markets we see banks variously described as Challenger Bank or NeoBank or Digital Bank. Some are VC funded and some are Bank funded. This is 7 years after the Cambrian  explosion phase of Bank centric Fintech c 2009 after the Global Financial Crisis. Insurtech Cambrian  explosion phase came much later around 2014, yet we already see a lot of full stack Insurtech startups.


5 things that made me smarter this week

US regulators told electric cars to make some noise. With quiet vehicles posing a danger to pedestrians, the government finalized new rules requiring that electric and hybrid models beep when moving at low speeds. Authorities expect fewer pedestrian injuries once the rules are implemented.

An airline pilot announced that everyone should shut up about Donald Trump. He asked passengers to not bring up politics because “we’re going to be in a metal tube at 35,000 feet.”

We can now fly airplanes with our minds. Neurotechnology researchers invented a system that controls aircraft through electrical activity in the brain.

Pigs can be pessimists. A study of 36 domestic pigs found that some are ambitious and optimistic, while others have a glass-half-empty disposition.

Human blood can revive old mice. Plasma from teenagers improves memory, cognition, and physical activity in one-year-old rodents (that’s 50 in rat years).

FinTech Summary #52 – The Banking Bazaar

Digital Banking - FinTech Summary 52

Today is the 52nd issue of FinTech Summary! What a year this have been. I have learnt a lot about this fascinating industry. Met loads of like-minded people. Made friends. I hope you have too! If you haven’t (and you live in London), hit me up and let’s grab a coffee.

I wanted to thank you all for reading; YOU are awesome!

I will be cheeky and ask for a small birthday present:

If you could share this post with at least 1 friend I will be eternally grateful (or well, at least as far as my lifetime stretches) 🙂


The Banking Bazaar and the Bizarre Banker
By Chris Skinner

The marketplace is the focal point for many FinTech start-ups, as they can create ‘stalls’ here that become major technology businesses like Stripe and Square. Banks have the regulatory licence to be marketplace owners. The bank just owns the space where a stall holder offers their goods and services, charging a fee. Lots of partners sell services in their market to the banks’ customers and, equally, the bank can sell lots of services to the market stallholders and their customers. It’s a good space to be. The thing is that hardly any banks see the world this way today. They want their customers locked into an end-to-end delivery of mediocre digital services in a monolith structure. The banks who try to lock out the third parties and play by themselves will do just that eventually left and forgotten.


The Unbundling of Insurance
By Daily FinTech

Unbundling is what digitisation does to Incumbents. Insurance industry currently has a three stack layer: Brokers, Insurers and Reinsurers. Blockchain technology unbundles the link between Insurance Companies and Reinsurance Companies. Now any investor can be a Reinsurer. This could facilitate microinsurance type policies such as crop insurance. Companies using Blockchain technology, such as  Symbiont can transform insurance risk into a security, thus making it simpler for investors. The impact of the technology like this will be the unbundling of Insurance and the democratisation of Reinsurance.


Bitcoin – Its Time Has Come!
By Faisal Khan

The fundamental attribute of any technology can be traced back to the triangle of choice – price, quality, speed. You can choose any two elements, and the third one will go against you. Bitcoin (and the blockchain) are able to defeat the triangle of choice. You can have higher quality (read: global coverage, equal access to all), higher speed of transfer and a lower price per transaction with bitcoin. When something is disruptive in nature, it usually implies that all the norms have been shattered. Society needs to rethink and reevaluate in light of what has transpired. We need to rethink our money.


How [And Which] FinTech Startups Are Breaking Banking for Freelancers
By Pavel Cherkashin

The global financial system is broken, and freelancers are getting the short end of the stick. For example, a freelancer in the Philippines who makes $5 per hour and just finished a $100 project will have to pay roughly 10% cash out. Imagine your bank charging $1,000 to cash a check of $10,000. The free banking economy goes much deeper than you may think. In fact, every third working American is freelancing. There is a huge opportunity for a new cross-border, freelance-friendly banking services to become available. Then you’ll see an even higher exit from the traditional full-time employment, which will come at a cost to traditional banking leaving them with fewer and fewer customers.


5 things that made me smarter this week

Some words sound the same in every language. An analysis of two-thirds of the world’s languages found that certain basic words are associated with similar sounds.
Buzz Aldrin’s Guide to Earth Exploration. One of humankind’s first moonwalkers talks about his favorite travels on his home planet.
What is internet culture? For some of us, the internet culture is closer to our hearts than the culture of the physical place where we grew up.
A world without work is coming – it could be utopia or it could be hell. Robots will eventually do all our jobs, but we need to start planning to avert social collapse
How I Rewired My Brain to Become Fluent in Math. The building blocks of understanding are memorization and repetition.

FinTech Weekly Summary | July 17 – 24

Last week Ethereum community voted to create a hard fork (a piece of code that will overwrite immutable records on the Ethereum blockchain) to recover stolen the DAO funds. This is a historic moment in the cryptocurrency community. For example, Bitcoin community has been debating for over a year to increase the size of bitcoin. Ethereum has voted and implemented the change in under a month. While the community is smaller and they were under time pressure to make the decision to recover DAO funds, it shows that Ethereum developers and community are willing to be adaptable and solve problems as and when they appear – and they will. This is a major advantage for Ethereum in the Ethereum vs. Bitcoin debate.

Have a wonderful week,


Will Deposit Accounts Be The Next Wave of Fintech Innovation?
By Jessica Ellerm

There’s one sector of finance that really doesn’t get a lot of airtime when it comes to fintech – deposits. Checking accounts, savings accounts, transaction accounts – while they’re the bread and butter of banking, they’ve been relatively untouched since they were first invented. You put money in, and, if you’re lucky, earn a little interest before you take the money out. In today’s world, the humble bank account hardly feels revolutionary, yet the brilliance of it is we all need one. Is there an opportunity here for a fintech startup to slice away this part of a bank’s core business, by adding a little flavour to the whole deposit experience?


4 Scenarios for Lending Club – the proxy for Fintech disruption or hype $LC
By Bernard Lunn

When Lending Club did it’s IPO in December 2014 I declared it as the Netscape moment for Fintech. Meanwhile, the $LC stock price tanked to such a level that by late May 2016, after the Lending Club CEO ouster, the conventional wisdom became that yes this was the Netscape moment for Fintech and we all know how the Netscape story ended – they were crushed by Microsoft. That is one of the 4 scenarios that we analyze in this post – that incumbency wins, that big banks crush Lending Club and that Marketplace Lending becomes a footnote in banking history.


Why It’s Not So Easy To Bring Down The Cost Of Banking

Every year, Bank of America spends about $1 billion to move money around in armored trucks and shuffle various other bits of paper about.  It is a cost they might like to cut – along with the costs of fixing broken ATMs and replacing lost cards – but these are costs that just aren’t going anywhere anytime soon. The digital banking revolution gets lots of airtime – and has surely led to many branches being closed in favor of the frictionless smartphone or ATM tech that does the same job better.  Or theoretically better anyway – when it came to cases, consumers complained they weren’t getting personalized enough services and JPMC found itself rehiring tellers. Which, in a nutshell, is the new tight spot banks find themselves in when trying to boost near-term earnings. Interest rates remain at historically low levels and sunk costs are – well, sunk – and also growing.


The Case For Bitcoin (Or Something Like It)
By Chris Skinner

So what does this mean? Well, many of us look at dollars, euros, pounds, yen, yuan as being of great value, but they’re not. These currencies are all useless. They’re just fictions. They are made up by governments to be of value, and because we believe in governments, they work. As long as the government works, the currency works. The Zimbabwe Dollar and the Venezuelan Bolivar are only imploding because their governments stopped working effectively. What happens when money stops working? For me, the bancor is bitcoin 4.0: a design upon a design that gradually makes the faults of bitcoin 1.0 to be wrinkled away until we do have a trusted digital currency. Bearing in mind what’s happening in Venezuela and Britain right now, maybe that wouldn’t be such a bad thing.


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FinTech Weekly Summary | May 22 – 30

FinTech is certainly trending right now. All major banks and consultancies are rapidly building up their FinTech arms, VCs are investing eagerly and ads of fintech startups are everywhere (some very expensive). FinTech is very visible right now but can they transform their visibility into credibility? Can FinTech become credible trustworthy names that customers automatically associate with trust. FinTechs need to find a way to achieve this to make a lasting impact.

Have a wonderful week,


Ethereum, Explained: Why Bitcoin’s Stranger Cousin Is Now Worth $1 Billion
By Timothy B. Lee

For the first time since its creation, Bitcoin is in danger of losing its status as the world’s leading cryptocurrency. The new challenger is a Bitcoin-like technology called Ethereum that has seen a surge of interest from users, developers, and the corporate world. The network’s currency, called ether, is now worth more than $1 billion — that compares to Bitcoin’s total market value of nearly $7 billion. Last week, a leading Bitcoin startup called Coinbase announced it was adding support for Ethereum to its popular currency trading platform.


Venture Capital Funding Is Flowing Back To FinTech Startups
By Ian Kar

In March, funding for fintech startups fell dramatically. In retrospect, it looks like that quarter was more akin to a speed bump than a car crash. The report speculates that this could be a great year for fintech investments. The $4.9 billion invested in the first quarter is 96% higher than the $2.5 billion in the same quarter last year. With Alipay’s parent company Ant Financial recently closing a $4.5 billion financing round in April 2016, the report says to expect next quarter to “bring more of the same.”


The DAO Of Accrue
By The Economist

It sounds like a cult, but it wants to be a venture-capital fund of sorts. As The Economist went to press, the DAO (short for decentralised autonomous organisation) had already raised the equivalent of nearly $150m to invest in startups. This, say its fans, makes it the biggest crowdfunding effort ever. To understand the DAO it helps to keep in mind the concept of “smart contracts”. These are business rules encoded in programs that execute themselves automatically under certain conditions: for example, funds are only transferred if the majority of owners have digitally signed off on a transaction. Such contracts can also be combined to form wholly digital firms that are not based anywhere in the real world, but on a “blockchain”, the sort of globally distributed ledger that underpins crypto-currencies such as bitcoin.


The Internet of Blockchains, Or Something
By Dave Birch

I’ve said a few times that I think the Internet of Things is where mobile was a couple of decades back. Some of us had mobile phones, and we loved them, but we really didn’t see what they were going to turn in to. We’re in the same position now: some of us have rudimentary Internet of Things bits and bobs, but the Internet of Things itself will be utterly beyond current comprehension. The idea of shared ledgers as a mechanism to manage the data associated with the thingternet, provide a security infrastructure for the the thingternet and to provide “translucent” access for auditing, regulation, control and inspection of the thingternet strikes me as an idea worth exploring. That’s not to say that I know which shared ledger technology might be best for this job, nor that I have any brilliant insight into the attendant business models. It’s just to say that shared ledgers might prove to be a solution a class of problems a long way away from uncensorable value transfer.


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FinTech Weekly Summary | May 01 – 08

This week I’d like to share a short post from Seth Godin, a well-known marketing expert, that I read this week and has really resonated with me. I think this is really relevant for FinTech community. FinTech firms tend to overly focus on customer feedback, especially the ones’ they couldn’t convert. However, we should instead focus on the ones that we won over already and ask them for guidance. See Seth’s post below.”When someone doesn’t say yes, they’ll often give you a reason. A common trap: Believe the reason. If you start rebuilding your product, your pitch and your PR based on the stated reason, you’re driving by looking in the rear view mirror. The people who turn you down have a reason, but they’re almost certainly not telling you why.

“When someone doesn’t say yes, they’ll often give you a reason. A common trap: Believe the reason. If you start rebuilding your product, your pitch and your PR based on the stated reason, you’re driving by looking in the rear view mirror. The people who turn you down have a reason, but they’re almost certainly not telling you why.Fake reasons: I don’t like the color, it’s too expensive, you don’t have enough references, there was a typo in your resume. Real reasons: My boss won’t let me, I don’t trust you, I’m afraid of change. By all means, make your stuff better. More important, focus on the unstated reasons that drive most rejections. And most important: Shun the non-believers and sell to people who want to go on a journey with you.”

Fake reasons: I don’t like the color, it’s too expensive, you don’t have enough references, there was a typo in your resume. Real reasons: My boss won’t let me, I don’t trust you, I’m afraid of change. By all means, make your stuff better. More important, focus on the unstated reasons that drive most rejections. And most important: Shun the non-believers and sell to people who want to go on a journey with you.”

Have a wonderful week,


It Doesn’t Matter If Craig Wright Is Bitcoin’s Inventor
By Joon Ian Wong

An Australian entrepreneur, Craig Wright, has written an extensive blog post claiming to provide cryptographic evidence that he is bitcoin’s inventor, the pseudonymous Satoshi Nakamoto. It’s easy to see why so many are scrambling to parse Wright’s claim. Bitcoin, after all, has ignited an explosion of activity in the usually dull expanses of the international financial system’s back offices. Bitcoin itself has become a spectacular success: All the bitcoin in circulation today is worth about $7 billion; and indeed, it was the best performing currency of 2015. But while the question of Satoshi’s identity is a fascinating internet riddle, with more than a tinge of Keyser Söze-like mythology around it, the truth is, it doesn’t really matter.


How Peer-to-Peer Changes The Financial World
By Chris Skinner

Another factor of reimagining finance for the internet age is the very nature of person-to-person connectivity and peer-to-peer networking. These two factors are very different and also different in the nature of how people are connecting. In the developed world, we have the viral connectivity of the smartphone; in the developing world, we have the basic connectivity of the mobile phone. Soon, both will transition into smart and mobile objects from cars and televisions to heating systems and refrigerators. The banking system meanwhile is still stuck in a world of debit and credit transactional structures of volume and value based upon people paying for things. As we move from paying for things to consuming parts of things and as our devices order those things on our behalf, the banking system needs to rethink.


FinTech Doesn’t Just Disrupt Banks, It Makes Them Platforms
By Josh Constine

It’s easy to move your money between banks. What’s annoying is moving your apps. Even down on the credit and debit card level, e-commerce products from Amazon to Uber have added friction to switching banks. You’d have to go in and update your accounts in each of these apps. Now fintech is doing the same with apps jacked directly into your bank account. That could allow banks to focus more on new customer acquisition and upselling than retention, because users are inherently becoming entrenched with their existing bank.


What Fintech Exits Tell Us About The Bubble Question
By Bernard Lunn

The hype talk on stage presentations is contrasted with behind the scenes talk about bubbles and down rounds and layoffs. We have been trashing the Fintech hype all through 2015, so we are clearly not perma-bulls and feel OK and now are offering a positive point of view amid all the gloomy talk. There is a new sober realism, neither hype nor gloom since we have some hard data to analyse recent exits to understand the market better.


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FinTech Weekly Summary | Jan 17 – 24

This week has seen some major events happening in FinTech arena. Firstly, Davos conference is on its way where the most powerful people discuss world problems, challenges and innovations. One such innovation that everyone can’t stop talking about is blockchain. Izabella Kaminska covers the current happenings of Davos with great humour. On the other side of the spectrum, Mike Hearn, one of the core Bitcoin developers published a post saying he has lost faith in the currency and that the project failed due to inability to agree on a core technical issue. Paul Vigna covers the details of the debate and possible alternatives. Finally, there’s no doubt that FinTech is one of the hottest areas of 2016 but Jeffrey Kutler is questioning whether we are starting to see some froth in FinTech markets.

As always, have an amazing week!


Blockchain Hype Storms Davos
By Izabella Kaminska

Blockchain, being fundamentally a cartel enforcement system, is appealing to banks for powerful fraud control reasons. Not only does it theoretically make it costlier for random hackers or intruders to cheat the banking system, it makes it costlier for banks to cheat each other as well. That’s the genuine insight of blockchain. But there is a catch. Banks know that forging a cartel as strong as that eliminates all possibility of out competing with each other in terms of risk, screening and security. As far as they’re concerned, they become one bank (with all the non-diversity risk that comes with monopoly systems). It also means erroneous transactions become near impossible to reverse, money supply becomes a constant and scaling is compromised completely.


Is Bitcoin Breaking Up?
By Paul Vigna

A prominent bitcoin developer has labeled the currency a failed experiment, widening the rift over an arcane but critical technical issue that has divided the community for nearly a year. The fight stems from growing congestion on the bitcoin network caused by size limits within the currency’s ledger of transactions. If the limits aren’t raised, the result could be debilitating bottlenecks. But fixing it requires altering a system that has been profitable for those that use heavy computer power to record transactions.
The problem is bitcoin is open-source software, so any change has to be approved a majority of the community, and it hasn’t been able to agree. Not making a change has ramifications as well. Congestion is already creating long delays in confirming some transactions as the growing network bumps up against the size limit. The decision needs to be reached shortly.


FinTech and the Fear of Froth
By Jeffrey Kutler

For more than half a decade, a seemingly irresistible momentum has been building around the idea that finance and technology are converging at a historical inflection point, a combination of business transformation and competitive disruption that has come to be labeled fintech. However, if fintech is booming, then it is not immune to cyclical decline. Any investment, whether in a strategic initiative or a start-up, carries risk. But might there be more secular, or macro, forces that could wreak havoc on fintech as a whole? Or, to spin it more positively, what will it take to ensure this emerging sector’s longer-term sustainability?


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