A Fortnight in Fintech: Facebook, FCA, handbags and subway rides
Where finance meets technology, interesting things are guaranteed to happen. We’ve been keeping an eye on various developments from the world of fintech. While some are rooted in financial services (Financial Conduct Authority, banking), others show the growing potential of blockchain, cryptocurrency and fintech in other sectors and people’s everyday lives.
Read on to find out more about these stories and our reactions to them.
The price of crypto scams
The Financial Conduct Authority has reported that in 2018/19, victims of cryptoasset and forex investment scams lost over £27 million in total. During this period, over 1,800 such scams were reported.
Hopefully this will encourage faster action from the FCA. Once there is a regulatory wrapper around digital assets, bad players can be removed from the market. It will also encourage better infrastructure and bring more institutions to the table.
If you’re considering an investment, you can find out more about the FCA’s ScamSmart campaign here.
Banks investing in blockchain
Reuters has reported that Several of the world’s largest banks are investing around $50 million in creating a blockchain-based digital cash system to settle financial transactions. The goal is to develop a system that will increase the efficiency of clearing and settlement in financial markets.
This is the latest promising chapter in banks’ history of getting together to build platforms for provision of data or trading. Perhaps with a number of larger institutions backing and testing this “utility settlement coin”, we may see expedited incorporation of blockchain technology into settlement of transactions on a wider scale.
The developing relationship between banks and fintech is sure to feature in our future roundups. An article published by Raconteur this week sums this up:
‘On the face of it, traditional banking and fintech are not a natural fit. But with high street banks hindered by legacy technology, they are having to place increasing trust in fintech investments.’
Is blockchain your bag?
It’s easy to forget that blockchain has wider applications outside financial services. For example, it can be used to track a product all the way through a supply chain, ensuring sustainable sources are used. Every step in the chain can be verified as meeting ethical, legal and quality standards.
This is the basis of the fintech startup Provenance, which its founder and CEO Jessi Baker discussed in a recent interview with The Next Web. Jessi’s comments are a reminder that behind businesses, even cutting-edge tech businesses, are aspirational people:
‘Provenance was born out of my personal frustration about the lack of information available around the things we buy.
The very nature of blockchain as an open, incorruptible, and decentralised network means that it is empowering every person involved in the supply chain, fostering greater equality all along the way.’
Another example of blockchain’s wide-ranging influence came through ConSensys’ announcement of AURA, the result of its collaboration with Microsoft and LVMH, whose brands include Louis Vuitton and Christian Dior:
‘Based on Ethereum blockchain technology … AURA makes it possible for consumers to access the product history and proof of authenticity of luxury goods — from raw materials to the point of sale, all the way to second-hand markets.
During production, each product is recorded on the shared ledger, irreproducible and containing unique information. At the time of purchase, a consumer can use the brand’s application to receive the AURA certificate containing all product information.’
So if you find yourself buying someone a handbag in the future – or, if you’re even luckier, have one bought for you – you can look forward to verifying its authenticity too…
A friend request from fintech?
Following a meeting of the Marks – Mark Carney from the Bank of England, Mark Zuckerberg from Facebook – there have been reports of Facebook’s advancing plans to launch its own cryptocurrency.
This would be interesting in terms of peer to peer and merchant payment transactions if it can get off the ground. It seems that to drive adoption amongst Facebook users, coins will be offered for viewing ads and interacting with content. Presumably this will be used to increase advertising revenue.
In addition, merchants will be offered preferential rates to accept the coins as payment, representing an entirely new revenue stream. If it does catch on, you may find yourself receiving friend requests from crypto enthusiasts who’ve previously avoided joining Facebook.
Catching the tech train
New York City’s Metropolitan Transportation Authority has announced the launch of OMNY, its new contactless fare payment system. Payment methods for passengers now include credit and debit cards, smartphones and smartwatches, and other wearable devices.
This story reminded one of our financial services team about a visit by his father from the US a couple of years ago. He presented his credit card to pay for dinner and it didn’t have a chip, leading to a memorable look of bewilderment from the restaurant staff. Now the US are catching up with payments tech, this kind of confusion may soon be limited to the different transatlantic meanings of ‘chip’…
For more information on how we can help your fintech business, please get in touch with your usual BKL contact or use our enquiry form.
You can also read our previous fintech news roundup here.