Insight, analysis and news about Fintech topics
By now, you should know who are the top European startups (more like big companies actually) in fintech. And you probably have heard of a few other well-known fintechs outside Europe like Stripe or the gigantic Ant Group (that is or is not going to have the biggest IPO of all time, mystery remains). Where do they tend to be based or start off from? Where are the top fintech hubs in the world?
When Fintech first really emerged as an industry 15 years ago, it was all about how it would replace banking and existing financial services. As an aside, “ really emerged” meaning that in the purest sense, technology has been deployed in financial services for a while. Post-crisis, the new kids on the block (not the actual NKOTB) were here for disruption. It was Banks vs Fintechs. Us against them. However, the great replacement never happened, and so began the era of collaboration and partnerships. But are partnerships between banks and fintechs really a good idea?
The Coronavirus outbreak is disrupting lives across the world and is having a significant impact on the global economy. The damages are expected to be long-lasting and the recovery very slow, most likely over a number of years. It could accelerate the death of cash as a form of payment. By some accounts, it could be the worst economic crisis in 300 years. This would mean a much bigger impact on businesses around the globe than the Great Financial Crisis or even World War II. Fintech was born out of the last economic crisis, but how is this crisis going to impact the industry? Will fintechs wiped out by Coronavirus or will it come out stronger?
Everybody has heard the motto “Cash is King” right? But is it really? Or is it slowly dying and Covid-19 will be its final blow? The King is dead, long live the King.
As the fallout from the Covid-19 pandemic takes its toll on economies around the world, central banks are cutting their base (or discount) rates to new lows. This is the rate at which a commercial bank can borrow from a central bank, like the Fed in the USA or the ECB in the Eurozone, when it needs to. These rates were already significantly lower than before the Great Financial Crisis. Some central banks are even going negative, which is particularly uncommon. A monetary policy experiments from economics books. Are low interest rates any good for banks and fintechs? Or is a low interest rate environment negatively impacting financial services?
There is a lot of hype around blockchain technology. Some of it is driven by crypto, and more notably Bitcoin (if you have not heard about it yet, you are living in a bubble). Some of the hype comes from the potential applications of the technology in several industries. However, these two things are quite different. Let’s have a look at how blockchain might transform financial services.
It seems that when it comes to funding for Fintech startups, sky is the limit… According to data released by international consulting firm KPMG, fintech companies in the UK have attracted a record $48.5bn (£37.4bn) of investments in 2019, up 91 per cent from $25.4bn a year earlier. That’s quite a big jump, even in the Fintech world. Volumes were also up, as the number of deals reached a six-year high. You can see similar trends across other European countries, Asia, and the USA.
Let’s clear a common mistake. Probably the biggest misconception in technogy and finance that there is nowadays. There tends to be lots of confusion between blockchain and crypto (abbreviation of cryptocurrency). The confusion stems from the fact that the former powers the latter. You need to know the difference though: many people use these two terms interchangeably, which is absolutely wrong!