Wrap of Week #7: CXA, Calpers, Sofi & Zenbanx, P2P lending, Innovation


This week we wrote about the discomfort of uncertainty, as an essential part of innovation. Read Embrace uncertainty to give your fintech start-up the edge.

In Insurtech dont miss our insights in CXA Group $25 million Series B shows the maturing of InsurTech and future of Innovation Capital.

We devoted two days in the growing private markets, starting the week with Calpers and the quiet data driven disruption of Private Equity and ending the week with our insights in SoFi buying Zenbanx either signals the first Mega NeoBank or a unicorn losing the plot.

Last but not least, don’t miss reading A little bit of P2P is all I need – Mambo in Lending while listening to the Lou Bega’s classic.

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Wrap of Week #6: Regulatory competition, Robos & systemic risk, Xero & SMEs, N26, Reinsurance as a service.


We started the week with a focus on policymaking and regulations. Fintech Regulatory competition heats up as governments calculate the economic return on innovation.

We prompted great discussions after sharing our insights regarding the comments of the Governor of BOE. Read I am with French when it comes to robo-advisors.

Consumer banking is being transformed; N26 is using an app store to become a digital universal bank.

In Insurtech we are moving from vertically insurance companies that control the whole stack to a horizontal stack with services at the application layer by consumer facing born-digital ventures. Read Reinsurance As A Service.

Fintech for small businesses is a huge opportunity. Read Xero opens the door for fintech banks to become SME advisors.

The Fintech Genome platform

Join any of the conversations on the Fintech Genome. The global community is sharing insights, creating great conversations, and business is starting to happen.

Check the latest topics that include ICOs, binary options, crowdfunding, digital asset marketplaces, etc


If you enjoy reading the Daily Fintech insights by our experts è Subscribe to this newsletter.

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Fintech Regulatory competition heats up as governments calculate the economic return on innovation


For a long time, entrepreneurs faced competition and regulators sent them the rule book. Regulators were government employees who thought about competition only in the abstract.

Today, the environment is more fluid as governments recognize the economic return on innovation in terms of jobs and GDP growth. The regulators now face real competition because their political masters have to keep citizens happy and citizens care about jobs and GDP growth.

With both Fintechs and global banks being increasingly mobile, jobs can disappear fast if regulators get it wrong. Plus, innovation is the primary driver of productivity which drives GDP per capita.

Pity the poor regulator who must balance that with protecting citizens from fraud and abuse.

In this post we review the Fintech regulatory initiatives in these countries:






Hong Kong




We end by looking at common themes across jurisdictions.

USA: Fintech Charter vs States Rights

America is the largest single market in the world, is home to the biggest banks and the biggest tech companies. So when the OCC (Office of the Comptroller of the Currency) issues a draft Fintech Charter, we pay attention.

The problem is that there is always a push & pull between central government initiatives such as this and States Rights.

In simple terms, more central power means less state power. One of the comments on the OCC Fintech Charter (which is still only a draft) is from the New York State Department of Financial Services and it is not positive.

A national Fintech charter would mean there will be no reason to have a state license. States do not have the authority to regulate national banks, even those located in the state. This will reduce fee income from granting charters and regulating banks. Looked at from the other side, this will reduce the cost of going national for Fintech ventures. Banks that are already national may lobby to keep it like it is.

Nor do States agree at the policy level. California, home of tech, tends to favor the Tech in FinTech and New York, home of Wall Street, tends to favor the Fin in FinTech.

The politics of this currently are really unclear. So this falls into the wait and see category.

UK: the Post Brexit Landscape

The UK pioneered using smart regulation to promote financial innovation. Initiatives by the FCA helped turn London into the Fintech Capital of Europe and  that sparked Fintech growth that was giving credence to the idea of London as the Fintech Capital of the World. Financial Regulators around the world studied how the FCA did it and how Government, Banks and Fintechs worked together. The ability to have a conversation with regulators and have them listen was pioneered by the FCA and was a major breakthrough.

Then Brexit happened.

There are two scenarios:

  • Scenario 1: UK is too small a market to matter on the global stage, business will flow to other centres in Europe (Dublin, Frankfurt, Berlin, Luxembourg etc) and globally to New York and Singapore.
  • Scenario 2: Freed from the bureaucratic constraints of Brussels, London can innovate away on the global stage and become the Fintech Capital of the World (and thus of Europe by default).

This is another fluid, wait and see situation where politics will be key.

Switzerland: This is mission critical for this tiny rich country

Financial Services accounts for 10% of GDP and 5% of employment in Switzerland and the country is a global leader in Wealth Management. So, what happens here really matters.

In November 2016, Switzerland announced a Fintech License. Like the US Fintech Charter, this is not yet law. These are the key features:

– No “maturity transformation” allowed. This is mandated Asset Liability Management and that eradicates systemic risk (no more bailouts) and favors Market Place Lending without any lending from their own balance sheet.

– Deposit Only License. You can provide deposit services, but not lend. You can accept up to SF100m once licensed. Separating Deposits from Lending is a bold and radical move in a world of ZIRP. Deposits is a nascent area of Fintech innovation.

– Up to CHF 1 million via sandbox innovation area. This allows a startup to build an MVP and get to PMF before investing in being regulated

– minimum of SFr300,000 in capital (vs SF10m for banks). If a startup has got to PMF that is a very manageable hurdle.

– not covered by deposit protection (read, no risk to taxpayers). It is a buyer beware free market.

–  crowdfunding grace period in settlement account. This defines when donors can withdraw the money. Today it is 7 days. The proposal is to raise it to a 60 days. which would give the company greater security.

– No limit to how many lenders or investors for crowdfunding services.

– You must abide by money laundering rules applied to banks.

Bitcoin is also legal currency in Switzerland and is home to some major crypto ventures. The Swiss Fintech License is a bold move, but it is not yet law. With so much employment at risk in traditional banks, the politics are still uncertain..

Singapore: Hub for the fastest growing region

Asia is where the growth is and Singapore is the hub for that growth, with people who are equally comfortable doing business in India and China and all other parts of Asia. The Singapore Monetary Authority is very open to innovation and the most proactive regulator at reaching out to the Fintech community. They have a Fintech Festival and a very approachable online presence and people who mingle with ease at tech oriented conferences.

Singapore itself is a small market and each country in Asia makes their own rules. There is no United States of Asia or Asian Union as yet, but we can be confident that Singapore will be central to any harmonization initiatives.

Shanghai: The Wild West gets a Sheriff

This data from KPMG shows the return on innovation. The line that matters is the P2P Composite Interest Rate that is falling like a stone in that chart. For China to transform from export led to a consumer economy, it must have low interest rates. If Fintechs and BAT can deliver that better than Banks, the regulation will deliver what is needed. This is the context for the news and plans we see in the Five Year Plan for 2016-2020.


As always, the regulator must balance the risk from fraud as Market Place Lending (MPL) moves from the Wild West phase (with hundreds of marketplaces and lots of scams and very crude, violent debt collection practices) to the Settler phase, when the Sheriff rounds up the bad guys and the settlers move in and we get towns and cities and the big money is made.

These are the 12 commandments laid down in December 2015 by the China Banking Regulatory Commission (“CBRC”). Thou shalt not (my comments in italics):

1. Use the platform for self-financing or for financing of related parties. (This stops the most egregious scams).

2. Directly or indirectly accept and manage lender funds. (This is interesting. It prevents what in the West has become called Balance Sheet Alt Fi Lenders and it is unclear if that is a bad thing).

3. Provide guarantees to lenders or promise guaranteed returns on principal and interest.

4. Market or recommend loan investments to users that have not completed identification verification after registering on the platform

5. Directly make loans to borrowers, unless stated otherwise by applicable laws and regulations

6. Structure loans into investment products with liquidity timing that differs from the original loan term (“thou shalt not have have Asset Liability Mismatch” is another way of saying “thou shalt not have systemic risk”).

7. Sell bank wealth management products, mutual funds, insurance annuities and other financial products (Hmm, so MPL can only be an exchange, China is banning the 20th century strategy of vertical integration).

8. Unless stated otherwise by applicable laws and regulations, collaborate with other investment or brokerage businesses to bundle, sell or broker investment products (sounds like the sort of grey area that would make fortunes for lawyers and/or those with good connections).

9. Provide false loan information or create unrealistic return expectations.

10. Facilitate loans for the purpose of making investments in the stock market. (No borrower would offer this as a reason to get a loan, so this sounds like the Casablanca scene “I am shocked. Shocked!! to find that there is gambling going on”).

11. Provide equity crowdfunding or project crowdfunding platform services. (Separation of asset classes by statute sounds like a hindrance to innovation).

12. Other activities forbidden by applicable laws and regulations (legal catch all phrase).

In a single party system there is no political risk; what the Government says is law is the law.

Hong Kong: Competing with Singapore and Shanghai

This headline says it all about regulators facing competition

Outdated fintech regulations hurting Hong Kong, Jack Ma says

Ant Financial to pick Hong Kong for IPO only if city is ready for innovation, Alibaba’s founder says

Hong Kong now faces competition on the Mainland from Shanghai and as a regional hub from Singapore. In the latter case, most commentary (such as this one on Bloomberg) puts Singapore in the lead.

India: The Dark Elephant

Often overlooked with all the attention on the China dragon, the Indian elephant is making some smart moves in Fintech and like China benefits from a growing economy and lack of legacy processes. India has pioneered with the Payment License and may be the first major economy to move to a cashless society. For more about India, go to our India Week.

Eurozone: Pencil Pushers or Tech Smart Regulators

Despite Brexit, this 28-country marketplace is still very big and the regulators seem to understand the Fintech innovation imperative pretty well. We see 8 regulatory initiatives;

Basel 3

Why: make sure banks have adequate capital so that there is not a “run on the bank” during any future financial crisis.

What: Tier One Capital is increased from 4% to 6%. Plus, banks must maintain enough “Liquidity Coverage Ratio” (a new concept in Basel 3) for 30 days.

When: Gradual rollout from 2014 to 2019. Banks need time to adjust and their strategies are already aligned to this rollout.

Where: Basel 3 is global, but voluntary. It is a “good housekeeping seal of approval” that gives confidence to the Bank’s investors. The US version of Liquidity Coverage Ratio is a bit tougher.

Elevator: Banks will be lending less. Plus Banks will be cross selling more (to show they have an operational relationship as it relates to Liquidity Coverage Ratio). US banks generally have stronger balance sheets than European ones.


Why: reduce the cost of payments within Europe.

What: Single Euro Payment Area. Making bank-to-bank transfers cheap and quick within the Eurozone.

When: Completed by 2010. These are the IBAN numbers that still baffle some paying into Europe.

Where: Specific to Europe, which was playing catch up with America on this front (now caught up).

Elevator: payments within the Eurozone are quick and cheap (cross border to and from Eurozone is still a pain point)


Why: protect investors from misselling and fraud.

What: Markets in Financial Instruments Directive. There is a lot in MiFID 2 and this FT Video is a good 6 min explainer. In short, MiFID 2 will a) reduce use of dark pools in equities, b) push derivatives and fixed income trading away from Over The Counter (OTC) to centralized clearing and c) curb abuse of High Frequency Trading.

When: From summer 2015 to early 2016.

Where: This is a European initiative, but as it is a big market and big global Fund operations are in Europe (Luxembourg, Dublin, London), this could set the benchmark globally

Elevator: Trading will become cheaper and more transparent. Wealth/asset managers will have to follow more rules in how they report to investors.

Solvency 2

Why: Protect consumers from insolvency of an Insurance company (ie they cannot pay on an insurance claim because they went bankrupt).

What: Specific to Insurance. Defines how much capital they need. Like Basel 3 but specific to Insurance rather than Banks.

When: Jan 2016 was final deadline.

Where: Specific to Europe.

Elevator: European insurers will be more conservative which may make premiums go up but will lessen chances of them not being able to payout due to insolvency.


Why: A global standard for accounting.

What: International Financial Reporting Standards.

When: Voluntary.

Where: The de facto standard is GAAP (Generally Accepted Accounting Principles) although this tends to be viewed as an American standard.

Elevator: Use both GAAP and IFRS (using automated translation tools) until it is clear which has become the global standard.


Why: Reduce Money Laundering.

What: The European standard for Anti Money Laundering (AML).

When: Still being defined.

Where: America led the way on this, rules are already clear.

Elevator: Follow American rules but have some flexibility in case European rules end up being tougher.

PSD2. This is a game-changer that we have written about many times  before. It is an example of tech smart regulation and key to creating a level playing field between Banks and Fintechs.

Directive on electronic invoicing in public procurement. This will cover all B2G e-invoices by November 2018. If this moves Europe’s current e-invoicing adoption rate of 24% closer to 95%, which is the tipping point for AP and AR to go fully digital, then this will be a very big deal. When AP and AR go fully digital, two big things happen. First, companies take a lot of cost out of AP and AR processes. Second, even more significant, working capital finance will scale beyond its niche today into a mainstream asset class and financing tool. The theory is that mandating it when Government is the buyer will set the ball rolling for adoption by corporates.


Three other countries making smart moves in Fintech regulation are Japan, Australia and Canada.

Common Themes

  • To be regulated or not to be regulated, that is the question. It is easier to get a  Bank License and Charter these days. The question for many Fintechs is do they provide a tech service to regulated entities or become regulated entities? There is no simple answer, but we can see that the number of banks is declining.
  • Unbundling. Startups focus in one service and usually don’t try to offer an all-encompassing service that compete directly with Banks. So we see the trend to unbundled regs (eg a Payment License and a Deposit License and a Current Account License).
  • More tech savvy regulators. PSD2 and Payment Bank Licenses in India are examples of regulation that moves from “throwing the paper rule book at your compliance team” to sending “standards docs to your tech team”.
  • Immigration and Talent question. No matter how smart your regulation, if the best talent is denied immigration, the innovation hub cannot thrive. This is clearly a political hot potato at the moment.

There is a great conversation happening on this subject over on Fintech Genome

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Wrap of Week #5: Mainland China Fintech thematic week

The year of the Rooster is upon us and both the size of the market in China and the unique accelerated pace of fintech innovation beckons us to turn our head towards the East and pay attention to what is happening there.

You can start with our introduction and follow the order of our posts, on WealthTech, Smallbiz, Insurtech and MPL. Or you can pick what interest you the most.

Introducing China Fintech Week

Digital Wealth – Shùzì cáifù – in China

No score, no problem. The lenders opening up access to SME credit in China

The Zhong An IPO in China could be the Netscape moment for InsurTech

With Lufax, Marketplace Lending is becoming a 4 horse global race

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Check the latest topics that include P2P investments, digital asset marketplaces, mortgageTech. etc


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Introducing China Fintech Week


Happy New Year. 新年快. Chinese New Year is on what the Western Gregorian calendar records as 28 January. So while in America and Europe we are done saying Happy New Year to each other, this is when Chinese people are saying Happy New Year to each other.


The biggest mistake is approaching Fintech in China with preconceived notions based on the past.

In China, Fintech is called Internet Finance. There is more to this than a name change. The way that the Internet and Finance is evolving in China is utterly different from how they evolved in America because the Chinese figured out that controlling the Internet was more important than controlling Finance.  

Three things to know about China – it is big, it is fast growing and it is different (from the West). We focus on China because it is big and fast growing, but our analysis focusses on the last part – how Fintech in China is different.

In the West we grew used to the idea that American innovation is adopted with variations in different countries. So it became customary to refer to any local ventures as the XXX (American leader) of YYY (country in question). China is different. Not only are the local variants very big, they also do things fundamentally differently from American companies. This does not only have ramifications for the second largest economy in the world (which is growing faster than the largest economy, America). The China model may also come to define the 21st Century in the same way that the America model defined the 20th Century.

I wrote this before the stunning news about Ant Financial buying Moneygram came out. The cat has landed among the pigeons. The payments game has changed. Read to the end for our take on this.

Bits don’t stop at category borders

One of our mantras at Daily Fintech is that “bits don’t stop at borders”. This is what we learned in the search and social eras of the Internet and what we saw with our own eyes at Daily Fintech. We just wrote what we figured was interesting and people from 130 countries found us.

However, the Fintech coda is “bits don’t stop at borders, but money has to show its passport”. Financial Regulation is by country (and by State in America).

When we look at Fintech (or Internet Finance) in China, one thing jumps out. The Chinese Government was forward-looking and proactive. They wanted to control the future not the past. So they controlled Internet more than they controlled Finance. It was relatively easy for a Western bank to set up a Bank in China but very hard for a Western search engine or social network to set up a search engine or social network in China.

The other mantra is that “bits don’t stop at category borders”. This points to how the China model is fundamentally different from the America model.

In America, we grew used to each of these categories being separate with individual winners;

  • Search (Google)
  • Social (Facebook)
  • Ecommerce (Amazon)
  • Payment (Paypal)
  • Lending (Banks)
  • Wealth Management (Private Banks & Asset Managers)
  • Cloud infrastructure (Amazon)

The last one is interesting. Jeff Bezos is an amazing entrepreneur who understands that bits don’t stop at category borders. He saw no reason why a bookseller should not go up against IT giants by creating Amazon Web Services (AWS).

BAT Baidu Alibaba TenCent

We focus first on the Internet part of Internet Finance, dominated by the BAT triumvirate –  Baidu Alibaba TenCent – each of which has a fundamentally different strategy:

  • Baidu, the search engine giant, is going down the VC route by investing in ventures in all the above categories.
  • Alibaba leverages its e-commerce business to move first into the Payments sector, before expanding into Lending and Wealth Management. Given their heritage, they have focused on an area neglected by Banks, Small to Medium Enterprise (SME).
  • Tencent is tapping into its huge WeChat user base to build a consumer-oriented financial network.

These are the barbarians at the gates. Next we look at the incumbent firms behind those gates.

Incumbent financial institutions – watch out for Ping An

China’s banks are usually portrayed in the West as big and inefficient, with high non-performing loans. There is nothing here to match the scale and agility of a Goldman Sachs or JP Morgan Chase. Yes, we see some moves such as China Construction Bank and Industrial and Commercial Bank of China moving into e-commerce platforms; but this feels like catchup at best.

However, one incumbent financial institution in China is making some big waves – Ping An Insurance Group. This publicly listed holding company has two subsidiaries in traditional insurance: Ping An Life Insurance, Ping An Property & Casualty Insurance (where the company started) and various other traditional financial companies, but it is their Fintech holdings that are more interesting:

  • Pinganfang is a real estate e-commerce platform, helping home buyers to get mortgages. It is a collaboration with a major property developer in China called Shum Yip Group. They pitch it as “Real Estate + Internet + Financing”; this confirms the category busting “bits don’t stop at category borders”.
  • Ping An Puhui offers micro finance to the 67 million startup companies and 270 million blue-collar workers in China, a market that has not been well served by China’s big banks. This is critical to Beijing’s ambitions in financial inclusion and the transformation of China from an export-driven economy to a more broad-based consumer economy.
  • Zhong An is a full stack regulated InsurTech venture, created as joint venture between Ping An, Alibaba & TenCent. You can see a single round over $900m on Crunchbase; no step ladder funding here. Zhong An first got traction from return-delivery insurance for buyers on com(Alibaba online marketplace) and is a specialist in providing cover for various risks relating to the internet economy. Zhong An sells direct, not via traditional insurance agents and like Lufax is headed towards IPO.

Western banks are along for this ride as Ping An accepted investments from Morgan Stanley and Goldman Sachs in 1994 and from HSBC in 2002.

Bricks & Clicks – with a difference  

The Chinese consumer is the 21st century gold rush for retailers globally – offering both scale and growth. It is also of course brutally competitive but also the first market of this scale to come of age after e-commerce was the norm. The most fierce battles are in consumer electronics where two Chinese companies dominate the physical stores  – Gome & Suning. Both are combining their offline resources such as customer leads with data mining to design new financial products. This is like the American Banker’s nightmare of Walmart but worse as the Chinese banks are much less established with consumers. Consumer engagement and affinity are increasing, and online-to-offline mobile payment via smartphones has become a new battlefield where companies are already starting to compete fiercely for market share.

Wealth management

China’s capital market is opening up. As they accumulate more wealth, Chinese consumers are hunting for higher investment return. That provides opportunities for Internet-based wealth-management businesses. Younger Chinese consumers who get their first exposure to banking via mobile payments will find an upsell to wealth management quite natural.

SME finance

SMEs in China contribute about 80% GDP and 60% of employment. As in so many countries, the reluctance of banks to lend offers a huge opportunity for Fintech upstarts.

GAFA (Google Amazon Facebook Apple).

Uber gave up in China, but what about deeper pocketed GAFA?

Google seems to have retired from China.

Amazon is duking it out, with keen prices and pitching Amazon Prime hard in China. Jeff Bezos is not a man who is deterred by a price war. I suspect, Amazon may also score in another brutal price war and consolidation around cloud infrastructure. In China, financial institutions have mostly leapfrogged in-house data centers and gone direct to cloud-based services. Amazon faces stiff competition from Alibaba, Huawei and IBM.

Facebook is trying hard, but may have left it too late to get consumer attention away from WeChat.

Apple is a premium priced product in a price-conscious market but also seems to be in it for the long haul. On devices they will be beaten by cheaper products, so the real battle will be around digital services and there they face BAT.

Ant Financial buying Moneygram

Headline writers can have fun – ant eats dinosaur. Seriously the payments game has changed. Our thesis has been that e-commerce and payments are one market – that Uber is a verticalized payments system – and that the action is in cross border payments. To date we had a world of a) old fashioned payments rails b) banks c) scrappy upstarts. Each of those players will have to totally rethink their game. Banks will have rethink Trade Finance from the ground up, not tweaks to the current systems.

Jack Ma of Alibaba is one of those world-changing entrepreneurs, up there with Gates, Jobs, Zuckerberg, Bezos & Benioff. He stood outside Trump Tower and said he would help US small business sell to China. This is how he does that. Devil/God is in the details of course, but watch this space….

For the rest of the week’s coverage please go to:

Tuesday WealthTech

Wednesday Small Business Finance

Thursday InsurTech

Friday Consumer Finance

Happy Year of the Rooster.

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Wrap of Week #4: Japan-Bitcoin, Fintech-New Zealand, Insurtech, WEF theme-Fintech, Wells Fargo & Loyds -Fintech


We started the week looking at what is happening in Japan and whether it is advancing the mainstream adoption of Bitcoin. Read Japan is another rich developed country where Bitcoin is becoming respectable

Our Eastern coverage took us midweek to the New Zealand Fintech sector.

We took the WEF theme of “Responsive and Responsible Leadership” and used it as a filter for Fintech innovations in Responsive and Responsible digitization of financial services.

In Insurtech we offered our insights on the news of the past week in our Thursday post.

In consumer banking we picked Wells Fargo and Loyds and inquired when their earnings and thereafter their stock price may reflect the Fintech disruption in the US and the UK. Read When will Fintech disruption show up in Wells Fargo and Lloyds Bank stock price?

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If you want to engage and converse with the Fintech community è Register on Fintech Genome. 

Responsive and Responsible digitization of financial services


There is no disagreement that technology will enable change in financial services, from banking to insurance. The only uncertainty is timing and the path to the new way of delivering and consuming financial services. At DailyFintech we have been writing about this journey and sharing our insights about where we are heading.

The disruption is unfolding and as Davos took place just last week with the main theme “Responsive and Responsible Leadership”, I couldn’t help but think how this relates to the transformation of the financial services ecosystem which is underway.

In this post, we look at what components of the digitization of financial services result from stakeholders being “Responsive” and what falls under the category of being “Responsible”.


Fintechs and incumbents have been mainly responsive to digital natives and to digital immigrants; from mobile money to the mobile delivery of a wide range of financial services (payments, FX, PFM, wealth, credit etc). Few examples are Acorns, CBW bank, Betterment etc

The design of services and UX that are tailored for specifics target groups is also a result of a “responsive” ecosystem eager to serve clients and prospects as their expectations change. For example, designing hybrid automated savings and investment services for women, or retirees, or students.

Creating customized services by leveraging technologies like Machine learning, analysis of Big Data, cognitive computing; are all examples of more efficient financial services.

Shifting from opaqueness to transparency while delivering more complex financial services and products, is another component shyly present in the digitization of financial services, that has resulted as a response to customers feeling entitled to information around the value of paid services.

All responsive digitized financial services are actually some better, cheaper, faster version of existing ones. Even if that entails cannibalization of existing services,

Responsive leadership of a financial business aims to offer a more efficient service than previously available.

Responsive Fintech leadership started with startups but now incumbents are catching up. Regulatory changes have also been responsive to the new trends and the behavioral changes of consumers (i.e. 24/7 digital and mobile).


This part is juicier because it includes two main categories.

  • Responsible Type A: Regulatory Off-springs
  • Responsible Type B: Disruption

In few cases there is an overlap either with the “Responsive” category or between type A and type B of this category.

Type A:

Taking on the responsibility of cyber-security; incumbents are front-loaded with this responsibility, which is heavily coming from the regulatory framework but not only. We are starting to see an overlap with Responsible & Disruptive types of ventures offering immutable, auditable and traceable processes in financial services.

Taking on the responsibility of acting as a fiduciary when offering financial advise or investment management services and at the same time being transparent; in the US this is being imposed from the regulators who have been heavily focusing on the fiduciary duties of advisors (in the UK also). In Europe, transparency will become more the name of the game as PSD2 kicks in.

We are seeing very early signs of overlap from disruptors that offer full transparency in the active investment management space and in response to the broad trend of crowd-sourced actionable insights.

Taking on the responsibility of building the API infrastructure required for PSD2’s full implementation and for the platformification of banking. Examples like Xignite, Kontomatik, or Fidor from the startup ecosystem; Open Bank Project, Capital One, Connet2OBC from the banking system and governments.

Type B refers to all stakeholders that have taken on the responsibility to change things. They maybe filling in a gap, offering a new product, or operating with a different business model.

The standard example would be the application of blockchain technology in capital markets. Imagine the mainstream adoption of a cryptocurrency, like bitcoin, as a currency. In other words, disrupting central banks and governments in their monopoly. Taking on the responsibility of the money supply and its circulation.

Taking on the responsibility of funding SMEs; undertaken by lending marketplaces like Funding Circle. This is an example, of a tech-enabled service that resulted in an economical way to serve a vital but underserved market (banks didn’t know how to analyze the credit profile of SMEs and didn’t have a profitable way to offer credit to them).

Taking on the responsibility of monetizing our personal data; undertaking the responsibility of monetizing our personal data and sharing the revenues while at the same time leveraging our digital assets. Examples are SeccoAura and Experian.

Taking on the responsibility of financial inclusion; whether it is a Digital ID, a basic current account offering to refugees or in impoverished countries, or mitigating wealth or gender inequality through financial empowerment. Examples are ample in Africa, M-Pesa, MyBucks, RainFin etc

“Responsive and Responsible Leadership” in Financial services will evolve. The responsive part is lower hanging fruit compared to the responsible. Tech firms in the West have mainly been involved in the Responsive part and only indirectly in the Responsible part (as infrastructure providers of those taking on the business responsibility). In the Rest of the world, tech firms have earned the “Responsible leadership” role as they are filling in gaps, offering new products, and operating with different business models (e.g. BATs).

The West has been more of a Responsive leader and the Rest has been more of a Responsible leader, in the digitization of financial services.

Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech & operates the Fintech Genome P2P Knowledge Network. Efi Pylarinou is a Digital Wealth Management thought leader.