Fintech Focus For January 26, 2021

Quote To Start The Day: The greatest wealth is to live content with little.

Source: Plato

One Big Thing In Fintech: In financial services, the concept of “know your customer” (KYC) is at the heart of establishing trusted relationships with clientele and strategic partners, while ensuring the integrity of the transaction itself. KYC also ensures that those companies they transact with are not involved with corruption, bribery or money laundering.

The need for a robust KYC process is even more critical in today’s pandemic world where surging customer demand for secure, digital-first transactions is simultaneously amplifying the potential risks of business being conducted without face-to-face checks and balances.

So far, the biggest regulatory fines tied to a lack of KYC have been levied against some of the world’s largest traditional banks. But, with well-funded neobanks entering the global spotlight in recent years, they could easily be caught up in the fray without the proper processes and technology in place to prevent it.

Source: Crunchbase

Other Key Fintech Developments:

• Fintechs likely see $100B in liquidity.
• Miami Mayor pushes fintech, crypto.
• 7Chord expanded Quandl data feeds.
• Raisin patents ‘savings-as-a-service’.
• Aite seeing a surge in bank charters.
• Silicon Valley warns of fintech bubble.
• African pre-seed investing hits highs.
• DriveWealth sets up shop on NYSE.
• Fed intros the FedNow pilot program.
• HKEX eyes company disclosure gaps.
• Coinbase spent $230K to lobby policy.
• KeyBank looks to launch digital bank.
• Flywire eyes offer amid $3B valuation.
• Melio raises $110M for payment tech.
• BIS Innovation Hub targeting CBDCs.
• Goalsetter taps $4M to teach finance.

Watch Out For This: Moderna has said it believes its COVID-19 vaccine is effective against new variants of the coronavirus, although it will test a new booster shot aimed at the strain discovered in South Africa after tests showed the antibody response could be reduced.

Source: Al Jazeera

Interesting Reads:

• Top tech trends Biden could remedy.
• Blockchain in healthcare and fintech.
• Citadel Securities hit $6.7B revenue.
• Biden’s EV push to help create jobs.
• New Twitter tool fights misinformation.
• Robinhood users seek professionals.
• Ally diversification efforts paying off.
• Huntington shuts down MI branches.
• AI could help make healthcare fairer.
• Analysis on Sunlight Financial SPAC.
• Qualtrics validating Utah tech scene.
• Digital transformation moving quickly.

Market Moving Headline: Some 20 years after their 1993 debut, exchange-traded funds had become commonplace. However, several obstacles prevented them from supplanting mutual funds as the Main Street investment. ETFs lacked sales commissions, which limited their appeal to financial advisors. They were almost always passively managed stock portfolios. In addition, several ETFs had behaved erratically during the 2010 flash crash, which raised concerns about the group’s structural stability.

Those roadblocks no longer exist. Consequently, ETFs are positioned to overtake mutual funds. That event won’t happen anytime soon, because mutual funds possess the power of history. Currently, U.S. mutual funds hold $18.2 trillion in assets, as opposed to $5.5 trillion for ETFs. But the outcome appears inevitable. ETFs offer several advantages that mutual funds cannot match, without counterbalancing drawbacks. Eventually, assets will be on their side.

Source: Morningstar