The Fate and a Possible Future State of Fintech. A Mass Migration to greener pastures?


The recent news of the federal financial regulator granting ‘Fintech’ companies banking charters has made headlines. The topic remains fluid with speculative outcomes. A new regulation requires agencies to solicit for public comment and decision making is based on evidence. Needless to say, it is a lengthy process.

My optimism lies in the wake which ‘Fintech’ brings with it. It has morphed and matured and into a broad landscape and a massive ecosystem of its own.

‘Innovation from within’ in US regulated industries remains in rapid fire from networking & partnering to investing, inventing, incubating, acquiring, and building MVP’s.

‘Fintech’ companies are seeking independence, due to an oversupply in the US, while demand remains limited, due to regulation limitations on banking charters.

The graphic below sheds a global outlook:

a. Asia-Pacific (‘Fintech’ presents the most opportunity, less of a threat)

b. The United States (‘Fintech’ presents more of a threat, less of an opportunity)

Fintech bank charters related risks are a reality and a cautionary step by step approach by Federal & State regulators is real as well. Tolerance of risk and reward is just one of the factors shaping the future.

Choking the competition, never to see the light of day, has not worked, either.

The US shares a lot of firsts, one of them hybrid and electric cars and is recognized as an early contributory pioneer. However, it was an Asia Pacific country who mass produced it, in 1997.

In a global and shared economy, a containment outcome runs the risk of mass migration of US ‘Fintech’ startups to emerging economies, and/or the Asia-Pacific regions, where regulations are ‘Fintech’ friendly and State funding is readily available.

The Fintech innovation success stories from regulation friendly parts of Europe, and a few APAC countries have not gone unnoticed by the UK’s old guard.

The loosening of some UK financial regulation, has seen successful outcomes. This has possibly tipped the balance in the US.

Behaviour Targeting Targeted

Ok, Behavioral targeting has been in the news and apparently is under further scrutiny as 10 consumer *and privacy organizations* (list below) on September 1, called on congress to enact legislation limiting and preventing behavior targeting and tracking.

What is out there? – There are onsite advertising decision providers like Omniture, Audience Science etc? After all, there are no third party cookies to be blocked, the load time is quicker. Hardly, the third party cookie advertising targeting systems guys like Double Click, Value Click, Tribal Fusion, etc are still the best game in town for ecommerce companies who are reliant on advertising as their core revenue generator, like publishing. Since they serve advertising across a spectrum of sites they have a reservoir of personas and demographics – a great advantage. Additionally, they have a readymade data set.

The onsite advertising decision providers do provide value and an advantage in the authenticated space like financial institutions, online banking, etc. Once a user is logged in, there is a lot more personal information that that can be added on to develop a target dataset. However, to track a user over time, takes time.

Online advertising continues to walk that fine line. Well, let’s see how it all plays out.

*Center for Digital Democracy
*Consumer Federation of America
*Consumers Union
*Consumer Watchdog
*Electronic Frontier Foundation
*Privacy Lives
*Privacy Rights Clearinghouse
*Privacy Times
*U.S. Public Interest Research Group
*The World Privacy Forum