1.7 Concluding remarks

This chapter introduced nine different innovation themes in FinTech, including online lending, crowdfunding and crowdinvesting, transactions and payments, personal finance management, digital currency and cryptocurrency, mobile point of sale (mPOS), online financial advisory, and mobile-first banks.

Even though they disrupt the financial sector in a big way, FinTech companies have several roadblocks to overcome before they are serious competition for banks. These road­blocks include the lack of a human interface, the need for banking licenses, and data safety. Nevertheless, focusing too narrowly on single niches in FinTech misses the larger picture. More dangerous for banks is the risk of several niche FinTechs rebundling their services on a plug-and-play banking platform that could offer services to customers identical to those they receive from banks—only with more convenience, transparency, fairness, and at a fraction of the cost.

NOTES

1. Gordon Mills, Karen and McCarthy, Brayden (2014) “The State of Small Business Lending: Credit Access during the Recovery and How Technology May Change the Game” (Harvard Business School Working Paper, 22 July 2014), http://www.hbs.edu/faculty/Publication%20Files/15-004_ 09b1bf8b-eb2a-4e63-9c4e-0374f770856f.pdf.

2. Broderick, Daniel (2014) “Crowdfunding’s Untapped Potential In Emerging Markets” (Forbes, 8 May, 2014), http://www.forbes.com/sites/hsbc/2014/08/05/crowdfundings-untapped-potential- in-emerging-markets/.

3. Markoff, John (2005) What the Dormouse Said: How the Sixties CountercultureShapedthePersonal Computer Industry (New York: Penguin).

4. Paypal (2014) “Q2 2014 Fast Facts,” https://www.paypal-media.com/assets/pdf/fact_sheet/PayPal_ Q2_2014_FastFacts_Final.pdf.

5. M-Pesa (2014a) home page, https://www.mpesa.in, accessed 12 November 2014.

6. Demirguc-Kunt, Asli; Klapper, Leora (2012) “Measuring Financial Inclusion” (World Bank, Policy Research Working Paper 6025, April 2012), http://elibrary.worldbank.org/doi/pdf/10.1596/1813- 9450-6025.

7. Brito, Jerry; Castilo, Andrea (2013) “Bitcoin, a Primer for Policy Makers” (GeorgeMasonUniversity, 2013), mercatus.org/sites/default/files/Brito_BitcoinPrimer.pdf.

8. Ibid.

9. Wealthfront (2014a) “Wealthfront Investment Methodology White Paper,” https://www.wealthfront.com/whitepapers/investment-methodology, date accessed 14 November 2014.

10. Groenfeldt, Tom (2014) “BBVA Makes Banking Simple,” (Forbes, 7 March 2014), http://www.forbes.com/sites/tomgroenfeldt/2014/03/07/bbva-compass-makes-banking-simple/.

11. Knowledge@Wharton (2014a) “The ‘Social’ Credit Score: Separating the Data from the Noise,” http://knowledge.wharton.upenn.edu/article/the-social-credit-score-separating-the-data-from-the-n oise, date accessed 5 June 2013.

12. Davies, Dan (2015) “A Cynic’s Guide to FinTech: Several business models that are bound to fail— and a few that might have a chance,” https://medium.com/bull-market/a-cynic-s-guide-to-fintech- 3cd0995e0da3 (3 April 2015), date accessed 10 April 2015.

13. Some of these business models are inspired by Davies, Dan (2015) “A Cynic’s Guide to Fintech: Several business models that are bound to fail—and a few that might have a chance,” https://medium.com/bull-market/a-cynic-s-guide-to-fintech-3cd0995e0da3 (3 April 2015), date accessed 10 April 2015.

14. Davies, Dan (2015) “A Cynic’s Guide to Fintech: Several business models that are bound to fail— and a few that might have a chance”, https://medium.com/bull-market/a-cynic-s-guide-to-fintech- 3cd0995e0da3 (3 April 2015), date accessed 10 April 2015.

15. FDIC (2014a) “Loans to Small businesses and Farms, FDIC-Insured Institutions 1995-2014,” https://www2.fdic.gov/qbp/timeseries/SmallBusiness&FarmLoans.xls.

16. O’Brien, Matt (2014) “Google’s ‘goofy’ new self-driving car a sign of things to come” (San Jose Mercury, 22 December 2014), http://www.mercurynews.com/business/ci_27190285/googles- goofy-new-self-driving-car-sign-things.

17. Gapper, John (2015) “Software is steering auto industry: This revolution makes it possible for a technology group to be a car company” (Financial Times, 18 February 2015), http://www.ft.com/ cmsZsZ0Zdce10162-b5f1-11e4-a577-00144feab7de.html.

18. Dang, Tri Vi and Gorton, Gary and Holstroem, Bengt and Ordonez, Guillermo (2014) “Banks as Secret Keepers”, National Bureau of Economic Research (NBER), www.nber.org/papers/w20255, date accessed March 10, 2015.

19. World Economic Forum (2011) “Personal Data: TheEmergenceof a New Asset Class,” http://www3. weforum.org/docs/WEF_ITTC_PersonalDataNewAsset_Report_2011.pdf, date accessed 10 April 2015.

20. Jones, Rupert (2013) “Barclays to sell customer data” (the Guardian, 24 June 2013), http:// www.theguardian.com/business/2013/jun/24/barclays-bank-sell-customer-data, date accessed 10 April 2015.

21. Gapper, John (2014) “Technology will hurt the banks, not kill them” (Financial Times, 10 October 2014), http://www.ft.com/cms/s/0/710445c4-52ed-11e4-b917-00144feab7de.html.