Analysts at asset manager, Bernstein, believe the future is bright for robo advisors; in a recent client memo the firm concluded that BlackRock and Fidelity will eventually incorporate them into their business and technology giants Google and Facebook could be their main competition; though the current disruption from robo advisors is minimal, the largest one has $60 billion AUM as compared to Fidelity with $5.1 trillion AUM, the technology is what will be most useful for the wealth management industry; you have already seen big names like Deutsche Bank and UBS launch robo advisors, while BlackRock and Invesco have made acquisitions of the technology. Source
The new startup, 10X Future Technologies, partners with challenger bank Virgin Money to build a new digital banking platform; the new deal comes to light just one day after 10X Future Technologies was launched to the public; Virgin Money is listed on the FTSE 250 and will count on 10X to build a cloud-based core banking system that will deliver new products in a more cost efficient manner. Source
The UK Treasury has announced it will allow crowd bonds in innovative finance individual savings accounts (IFISAs); crowd bond investors will invest in bonds of companies through crowdfunded platforms with their investments held in a tax sheltered account facilitated by the crowdfunding platform; the expansion of crowd bonds in IFISAs makes the crowdfunded investments more attractive because of the tax shelter, also providing greater benefits for an investment that's not secured by the government's FSCS protection. Source
The Ontario Securities Commission has issued a request for high-level experts to join its newly-formed Fintech Advisory Committee; to begin with, the panel is expected to assist with the launch of an innovation sandbox called "Launch Pad;" other expertise at play includes crypto-currencies, fintech platforms, venture capital for fintech, AI and data analytics for finance. Source
Ripple has announced the appointment of a new CEO; Brad Garlinghouse, previously president and chief operating officer, will take over the role as of January 1, 2017; Garlinghouse will replace Chris Larsen who will become Executive Chairman of the Board of Directors; the fintech blockchain payments company has been significantly expanding in 2016 with its network now including 15 of the top 50 global banks; much of the company's growth has been attributed to Larsen who will now take more of a strategic adviser role. Source
Bank holding company, CRB Group Inc., has received venture capital investment of $28 million from Battery Ventures LP, Andreessen Horowitz and Ribbit Capital; the large investment in a bank is unusual for venture capitalists which have mainly been known for early stage financing in new fintech startups; CRB Group however has been considerably growing its digital banking capabilities making the investment attractive for fintech venture capitalists; New Jersey-chartered, Cross River Bank, was founded in 2008 and has since partnered with numerous fintech startups to offer industry leading services for lending and payments; the bank is expected to use the investment to continue building on its industry leading fintech services; because the bank is FDIC regulated the VC investors will be limited in some of their investment activities. Source
A new study entitled the World FinTech Report (WFTR) from Capgemini and LinkedIn finds that half of the banking customers worldwide use at least one fintech service or product; the report shows that younger customers and emerging markets adopt fintech more frequently, as China and India lead the way with 75% of customers using fintech; other important statistic from the report show that 17.4% of investment management customers rely on fintech solely, 46% of banking customers use more than one fintech firm and 60% of traditional financial firms view fintech companies as long term partners. Source
Facebook's data and privacy rules have slowed business development plans for insurtech firm, Admiral; many fintech firms have sought to use social media profiles in crowdfunding with little success for various reasons; insurtech firm, Admiral, will now be forced to end its plans to use Facebook social media posts and likes for consideration in auto insurance underwriting; Facebook says use of the information is a violation of its data privacy rules. Source
Square's CEO, Jack Dorsey, explained on this week's earnings call why he puts its subsidiary, Caviar, on a silver platter; Square's payment-handling service is used by many restaurants, while Caviar's food delivery-enabling platform allows those restaurants to reach a customer base eating at home; the key for Dorsey is cross-selling services that grow their customers' businesses, even if the synergies aren't apparent at first bite; on CNBC's Squawk Box the day after the earnings call, CTO Sarah Friar said that Square has been "executing on all cylinders." Source
Crowdfunding platform, Abundance, has launched the UK's first innovative finance individual savings accounts (IFISAs) for investors in crowd bonds; the investment offering follows an announcement from the UK Treasury that it will extend qualified investments in UK IFISAs to crowd bonds; platform offers bond investments from renewable energy companies; the company is able to offer the IFISAs because of its status as an investment-based crowdfunding platform. Source