Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Research
CPAs and the New Social Contract: The Rise of the Warrior Accountant
Investment Executive | Jan 20, 20201
The pandemic has highlighted companies’ social risks, CPA Ontario says. We didn’t see it coming.
Covid-19 has resulted in increased scrutiny of companies’ social impact, ushering in a new era of “warrior accountants,” says a new report from CPA Ontario.
The pandemic, along with growing global demand for social justice, has “accelerated demand for impact investing strategies,” according to the report.
“Responding to pressure from shareholders and customers, more companies are beginning to report on social metrics and set targets for social change beyond what the law requires,” the report said.
The report suggested social-impact reporting will require accountants to shift their position on environmental, social and governance (ESG) risks.
See: Capitalism must be saved by capitalists, argue these pioneering ESG investors
For the most part, accountants have taken a defensive position on ESG risks to guard against reputational risk, the report said. Warrior accountants must take an offensive position that “is more assertive in putting organizational ESG performance in the public domain.”
The report noted that ESG reporting has become a “strategic imperative” for companies, with chief financial officers now signing off on ESG reports alongside financial statements.
“‘Purpose over profit’ has become the mantra of a stakeholder-capitalist movement that seeks to widen the scope of company value to encompass employees, customers and the broader community,” the report said.
A global pandemic, rolling economic crisis and worldwide protest movement combined to make 2020 an epoch-defining year.
Emerging from these dramatic events into 2021, a consensus is building about the need for a new social contract that will see government, citizens and the private sector working together to tackle inequality and achieve justice.
See:
Banking Must Take A Stand On Tough Social Issues
Social equity must be central to urban tech innovations
The role of the corporation and the responsibility that businesses have to their employees, customers and the community is increasingly up for debate. Discussions of shareholder primacy have been superseded by solemn promises of stakeholder consultation. Milton Friedman is turning in his grave. CPAs have long had the ability to shape businesses: now they have the capacity to drive real social change.Business leaders are being asked to consider myriad social issues.
From racial pay equity to work from home conditions, from data privacy to tax transparency and human capital—in the post-pandemic era, investors, regulators and the community will increasingly expect companies to measure and improve their impact on society. CPAs are in a unique position to help them do this in a way that is rigorous, thoughtful and bold.
Download the 62 page PDF report --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Final Report: Ontario Capital Markets Modernization Committee Recommendations
Ontario Capital Markets Modernization Committee | Walied Soliman Taskforce Chair | Jan 22, 2021
Job creation and economic prosperity. Fundamentally, these are the most important outputs of a successful capital markets regime. Ontario first enacted its capital markets laws in 1928. For decades, Ontario has been at the forefront of investor protection and market efficacy. We cannot fall behind. Late last year, former Minister Rod Phillips formed the Capital Markets Modernization Taskforce to review the current status of Ontario’s capital markets. By February 2020, Rupert Duchesne, Wes Hall, Melissa Kennedy, Cindy Tripp, and I were appointed to conduct this review.
Since the financial crisis in 2008, the global financial system has undergone significant changes. The ongoing COVID-19 pandemic has highlighted the need to be adaptive and forward-looking in developing a modernized capital markets. The Taskforce aimed to address the issues of tomorrow’s capital markets with bold and innovative recommendations that will make Ontario one of the most attractive capital market destinations globally.
See:
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Ontario’s Capital Markets Modernization Task force report draws criticism
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CSA Provide Comments on the Ontario Capital Markets Modernization Taskforce Consultation Report
The Taskforce worked diligently for ten months, through the COVID-19 pandemic. We met over 110 different stakeholders in our preliminary consultations, meeting with some repeatedly, and received over 130 stakeholder comment letters in response to our consultation report released in July 2020.1 The consultation meetings and formal feedback told us that the time for change is now.
One of our main objectives is to amplify growth “The recommendations we have made are and competitiveness in Ontario’s capital generational in their impact on the Ontario capital markets. The decline in new issuers and initial markets.” public offerings in Ontario is alarming. The real Walied Soliman consequences of this trend are fewer head offices, fewer entrepreneurs, and fewer growth investment opportunities, all of which could drive Ontario to become a “branch plant” economy. To address this, the Taskforce proposes recommendations to incubate junior issuers in this province by reducing the regulatory burden, providing new opportunities for capital-raising through the expansion of prospectus exemptions, and streamlining disclosure requirements, among others.
The recommendations we have made are and competitiveness in Ontario’s capital generational in their impact on the Ontario capital markets, Walied Soliman
Recommending proposals designed to spur the growth and establishment of independent dealers will increase the number of intermediaries who focus on connecting capital with smaller companies. Smaller companies, in particular, rely heavily on the independent dealer community to raise capital.
To give more choice to Ontario investors, we put forward recommendations to ensure that wealth management distribution channels provide greater access to competitive and independent wealth management products. Competition among product manufacturers leads to better and more innovative products, resulting in greater choice for investors.
Read:
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The OSC’s New Innovation Charter: Is this really a ‘new model’?
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NCFA Response to the Modernizing Ontario’s Capital Markets Consultation Taskforce
Although developing recommendations to foster growth and innovation is important, all of our recommendations were made through the lens of investor protection. Instilling confidence in our capital markets is critical and investors need to feel safe. One way that confidence is instilled in our capital markets is through a transparent and effective corporate governance framework. Changes are being recommended to modernize governance standards and the proxy voting framework for Ontario’s public companies to make it easier for companies to address stakeholder concerns, increase transparency, and encourage shareholder participation.
Our recommendations also support enhanced enforcement powers to protect investors and ensure a fair playing field for all market participants, while providing enhanced certainty and clarity on the enforcement process. We have also recommended new ways for funds to be returned to harmed investors.
In all, we have made over 70 consequential recommendations. The Taskforce was incredibly honoured to have had the confidence of , and encouragement from former Minister Rod Phillips in this endeavor. I would also like to thank the OSC for their support throughout this process. Ontario is privileged to have the hardworking individuals at the OSC working for us. They are talented, global capital markets leaders and we hope these recommendations will give them enhanced tools to help drive our capital markets objectives.
On behalf of the Taskforce, I would like to thank the stakeholders who have provided input during the preliminary consultations and submitted detailed, written comment letters. We are encouraged by the enthusiasm displayed by all stakeholders to work towards enhancing Ontario’s capital markets.
This report is a result of a dedicated team effort and I extend my greatest gratitude to my fellow Taskforce members, Rupert Duchesne, Wes Hall, Melissa Kennedy and Cindy Tripp for their tremendous dedication and commitment to public service throughout this process. I want to thank Eric de Roos, Deputy Minister Greg Orencsak, Assistant Deputy Minister David Wai, Assistant Deputy Minister Sunita Chander, Shameez Rabdi, Jeet Chatterjee, Luc Vaillancourt and Diane Yee at the Ministry of Finance. I would also like to thank my partners Heidi Reinhart and Rowan Weaver, and my colleagues Abigail Court, Daniel Weiss and Scott Thorner from Norton Rose Fulbright, f or their pro bono assistance to the Taskforce. Lastly, I would also like to thank members of the Expert Advisory Group for their advice and feedback throughout this process. The Government of Ontario is committed to modernizing our capital markets regulatory framework. The recommendations we have made are generational in their impact on the Ontario capital markets. Together, these changes will make our province more prosperous, entrepreneurial, competitive, and help position us as a global leader.
Respectfully submitted in December 2020, with thanks for this opportunity.
Walied Soliman Taskforce Chair
Download the 115 page PDF Recommendations Report --> Now
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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How Banks, Fintechs, and Customers Win Together
Fintech Confidential | Michael King and Richard Nesbitt | Jan 21, 2021
In our recently published book The Technological Revolution in Financial Services: How Banks, Fintechs, and Customers Win Together, a group of expert contributors from North America and Europe share their insights on how the financial services industry will evolve in the coming decade. The context is the ongoing transformation in the financial services industry, which is being driven by three structural forces: heightened regulation that followed the 2008-2009 Global Financial Crisis (GFC), innovation fueled by new technologies and entrepreneurial fintech startups, and demographic trends with the rise of millennials and the retirement of baby boomers.
These forces are changing the competitive landscape of financial services, lowering barriers to entry and increasing competition from both inside and outside the industry. Our book outlines what we see as the successful strategies for financial technology (fintech) companies and incumbents, namely banks, insurance companies, and asset managers.
While there is much to learn from our contributors, this article shares our main conclusion and a few key takeaways.
We argue that the winning strategy for the coming decade will be for banks, insurance companies and asset managers to partner with fintech startups to deliver a superior experience to end-customers.
The media has portrayed fintechs and financial incumbents as rivals. But the real threat over the coming is coming from outside the financial services industry – from large technology companies such as the Chinese techfins (Alibaba and Tencent) and North American bigtech companies (Amazon, Apple, Facebook, Google, and Shopify). These global players have platform ecosystems with large and loyal customer bases, massive datasets on customer behavior, and well-known brands. Techfins and bigtech are bundling financial services with non-financial products to provide end-customers with the delightful, easy, convenient and lower cost experiences they desire.
See: Why Partnerships Are the Future for Fintech
Faced with these new entrants, we argue that incumbents need to partner with fintechs, combining their respective strengths to provide a better customer experience.
- Banks, insurance companies and asset managers are product-centric. These incumbents have millions of customers, expertise in risk management and compliance, funding and scale. But they view the world in terms of deposits, loans, payments, and investments. They see technology as a tool to reduce costs and increase profitability while meeting increased regulatory requirements. They are more focused on their shareholders than on understanding their end-customers.
- Fintech companies are customer-centric. Fintechs are better at understanding the customer’s needs and their financial journey. Fintechs leverage technology to solve customer pain points and offer a better value proposition. They have access to talent and are employing design thinking to develop innovative solutions that provide a delightful user experience.
So, the technological revolution highlighted in the title does not refer simply to the emergence of new technologies or the disruption from new entrants. It refers to a paradigm shift in financial services that refocuses on the end-customer, their experience and their lifetime journey.
Briefly, here are three more takeaways:
Technology is not a strategy, it is a tool for the execution of strategy.
Strategy is the answer to three questions: where is the organization today, where does it want to go in the future, and how will it get there. Technology can provide better tools for pursuing this strategy, but technological innovation is not the end goal of strategy itself. Technology does provide a sustainable competitive advantage; it is widely available and can be copied by competitors who are fast-followers. The biggest barrier to entry in banking is not technology or even regulation, but access to customers.
See: Does FinTech Substitute for Banks? Evidence from the Paycheck Protection Program
Trust in banking is paramount, supported by data security and privacy.
The loss of trust in incumbents following the GFC opened the door to new entrants including fintechs. But trust in financial services is intertwined with cybersecurity and data privacy. Cybersecurity has clearly become the biggest operational risk. The approach must be a shift in mindset from “if we are hacked” to “when we are hacked”. Finding it fast, disclosing it and dealing with it immediately, and minimizing the impact on customers will be critical. Data privacy is a second critical issue. Consumers and privacy advocates are acutely aware of the mixed incentives created by the advertising- based business models of Facebook and Google. This is one area where technology (such as blockchain) and new services (such as digital identity) can promote trust, by protecting customer data, privacy, and identity.
Open banking sits at the nexus of these concerns. We argue that the adoption of open banking -- in Canada and globally – will increase data security by putting in place a secure system for the transmission of data using application programming interfaces (APIs).
Regulation and risk management remain pillars of financial services.
See: The future of European payments: Strategic choices for banks
Regulation is not going away, nor should we want it to. Leading financial players – whether fintechs or incumbents – support higher regulatory requirements to weed out bad actors. We argue that maintaining a level playing field and avoiding regulatory arbitrage are important. Effective risk management will continue to be a driver of success in financial services. Incumbents possess this expertise. Fintechs and other new entrants will inevitably need to invest in risk management and compliance to be successful.
Authored by:
- Michael R. King, Lansdowne Chair in Finance, Gustavson School of Business, University of Victoria
- Richard W. Nesbitt , CEO, Global Risk Institute in Financial Services
This article appears as a featured article in NCFA's digital magazine, Fintech Confidential (Issue 3 Dec 2020). Click to read the latest thought leadership, insights and trends about Fintech in Canada:
Checkout NCFA's digital magazine, Fintech Confidential (Issue 3, Dec 2020) --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Is Digital Money (Legally) Really Money?
IMF Blog | Catalina Margulis and Arthur Rossi | Jan 14, 2021
Countries are moving fast toward creating digital currencies. Or, so we hear from various surveys showing an increasing number of central banks making substantial progress towards having an official digital currency.
But, in fact, close to 80 percent of the world’s central banks are either not allowed to issue a digital currency under their existing laws, or the legal framework is not clear.
To help countries make this assessment, we reviewed the central bank laws of 174 IMF members in a new IMF staff paper, and found out that only about 40 are legally allowed to issue digital currencies.
Not just a legal technicality
Any money issuance is a form of debt for the central bank, so it must have a solid basis to avoid legal, financial and reputational risks for the institutions. Ultimately, it is about ensuring that a significant and potentially contentious innovation is in line with a central bank’s mandate. Otherwise, the door is opened to potential political and legal challenges.
See: The Good, the Bad and the Ugly of Central Bank Digital Coins (CBDCs)
Now, readers may be asking themselves: if issuing money is the most basic function for any central bank, why then is a digital form of money so different? The answer requires a detailed analysis of the functions and powers of each central bank, as well as the implications of different designs of digital instruments.
Uncharted waters?
Digital currencies can take different forms. Our analysis focuses on the legal implications of the main concepts being considered by various central banks. For instance, where it would be “account-based” or “token-based.” The first means digitalizing the balances currently held on accounts in a central banks’ books; while the second refers to designing a new digital token not connected to the existing accounts that commercial banks hold with a central bank.
From a legal perspective, the difference is between centuries-old traditions and uncharted waters. The first model is as old as central banking itself, having been developed in the early 17th century by the Exchange Bank of Amsterdam—considered the precursor of modern central banks. Its legal status under public and private law in most countries is well developed and understood. Digital tokens, in contrast, have a very short history and unclear legal status. Some central banks are allowed to issue any type of currency (which could include digital forms), while most (61 percent) are limited to only banknotes and coins.
See: Lagarde Says Her ‘Hunch’ Is That ECB Will Adopt Digital Currency
Another important design feature is whether the digital currency is to be used only at the “wholesale” level, by financial institutions, or could be accessible to the general public (“retail”). Commercial banks hold accounts with their central bank, being therefore their traditional “clients.” Allowing private citizens’ accounts, as in retail banking, would be a tectonic shift to how central banks are organized and would require significant legal changes. Only 10 central banks in our sample would currently be allowed to do so.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Fintechs score highest service quality on comparison metrics for personal banking current accounts 2021
FCA | Jan 14, 2021
This performance scorecard highlights some of the information available on personal current accounts (PCAs), and can help customers choose their provider by highlighting:
- good and poor performers
- how easily they can carry out day-to-day banking activities
- the reliability of the service they receive
These metrics should also increase the incentive for firms to offer better service, helping customers to get the most out of their personal current accounts.
Detailed below are 3 sources of data consumers can use to compare personal current account providers. These metrics only relate to service and not to the quality or price of products.
Personal current account service quality metrics
These independent league tables show customers how the 19 largest personal current account providers rank on quality of service and online and mobile banking services, making it easier to compare providers. This is information required by the Competition and Markets Authority (CMA).
Quality of service is determined by how likely customers would be to recommend their provider to friends and family. Online and mobile banking services is determined by how likely customers would be to recommend their provider’s online and mobile banking services to friends and family
In August 2020, the survey showed Monzo (86% score) as the top ranked bank for overall service quality, and Tesco Bank as lowest ranked (44%). Chart 1 shows the results from all 19 banks.
For online and mobile banking services, the survey showed Monzo (89% score) as the top ranked bank and Tesco Bank as lowest ranked (59%). Chart 2 shows the results from all 19 banks.
As well as overall service quality and online and mobile banking services, this survey also covers:
- overdraft services
- services in branches
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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US Crypto: 2020 Year in Review
HSE | Sarah H. Brennan | Jan 9, 2021
2020 US Summary
If we put the last quarter of 2020 aside, this year could be marked by the sheer number of SEC enforcement actions and settlements in the crypto space, with more rumored to be in the works. However, the U.S. ended 2020 with a bang in the form of a flurry of proposed crypto regulations in Q4 with varying degrees of controversiality. Notably, the proposed STABLE Act and Mnuchin's midnight rulemaking on self-custody have caused a bit of an uproar, which we touch on in more depth below.
See: Vitalik’s 2020 Year End Thoughts from Singapore
Absent these recent rulemakings, there has been an unevenness in the Trump administration’s approach to the space and the last four years at the federal level haven’t been marked with any significant level of regulatory coordination or cohesive policy at the federal level.
However, to pick upon some themes that we will talk about in this year-end review, regulators have vacillated between: (i) a focus on enforcement vs. prescriptive guidance, (ii) a tech specific vs. tech agnostic approach, (iii) aggressive views of jurisdictional reach vs. deference, and (iv) state, federal, and global coordination and cooperation vs. a more insular agency-specific approach.
These last minute rulemakings marked the last acts of an administration with what could be characterized as an ambivalent view of the crypto space, neither friendly nor particularly enabling. Although the IRS 2014 guidance (Notice 2014-2) classifying cryptocurrency as property was pivotal in pushing the predominant use case (use case follows tax treatment) for Bitcoin and other currency-like crypto assets toward a commodity-like store of value as opposed to a medium of exchange (think gold bar as opposed to dollar bill), other U.S. regulators have doubled down on labeling, and regulating, crypto as a currency-like instrument, among other things.
With Bitcoin crossing $34,000 to hit an all-time high (“ATH”) in early January, Ethereum's native cryptocurrency, Ether (“ETH”), trending close to its ATH from 2018 and the proliferation of stablecoin projects, the U.S. government may now be rethinking previous pronouncements that crypto does not pose a significant threat to the U.S.’s fiat hegemony worthy of addressing.
See: The Decade in Blockchain — 2010 to 2020 in Review
The most activity on this front is taking place at the U.S. Department of the Treasury, and the Financial Crimes Enforcement Network of the U.S. Treasury (“FinCEN”) (see proposed rulemakings here and as discussed below) as well as Department of Justice (“DOJ”) (see the DOJ Enforcement Framework released in October 2020), as U.S. authorities continue to bring anti-money laundering (“AML”) compliance, sanctions compliance, and terrorist financing concerns to the forefront.
We have also seen significant enforcement actions against BitMEX as discussed below, John McAfee’s arrest for tax evasion related in part to his activities in crypto and the recently announced settlement between the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) and BitGo, Inc. for violations of sanctions programs.
Continue to the full article --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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The Rise in Big Tech and Fintech Credit
NCFA | Samuel He | Jan 13, 2021
As a Gen Z, technology has played a big role in my everyday life ever since I was young and now as a remote intern at NCFA, I’m excited to share some research and insights on Big Tech and Fintech credit markets.
Big Tech and its expanding dominance
Lending institutions such as banks and credit unions have traditionally been the chief sources of finance in most economies in the world, however large technology firms are uniquely positioned to capitalize on a technology-focused alternative to financial services. Their advanced AI and machine learning capabilities allow these companies to utilize the swaths of data that their user base generates to tailor prices, determine creditworthiness, and screen loans. Amazon’s e-commerce sales for example, reached a staggering $416.48 billion in 2020. As online channels expand due to general trends and the global pandemic, they pose an existential thread to traditional brick and mortar models. UBS analysts estimate that 75,000 brick-and-mortar stores could be forced into closure by 2026.
See: Walmart to launch fintech startup with partner Ribbit Capital
Companies like Walmart have seen their supply-side economies of scale diminished by competing and efficient online marketplaces that operate with lower overheads forcing them to integrate more technology into their business model. Walmart has already taken several steps in the Fintech credit direction. One is the creation of Walmart Pay, a payment app that enables shoppers to transact at the register via QR code. Other methods adopted include a prepaid card plan with Walmart MoneyCard and a money transfer service with Walmart2Walmart.
Global Alternative Credit Trends
As illustrated in the chart below, there has been a surge in popularity in Fintech and Big Tech credit – collectively known as alternative credit – reaching an estimate of 795 billion USD globally in 2019. While alternative credit has been on rise collectively, the data shows that global Fintech credit volumes have declined between 2017-2019 from an estimate of 410 billion to 223 billion USD. One major factor for this decline is due to the greater regulatory developments in China. In the same period, Big Tech credit growth has surged at a more rapid pace than the previous years, rising from an estimate of 197 billion in 2017 to 572 billion USD in 2019.
P2P Lending and Fintech Credit in the U.S.
Interestingly while Big Tech seems to be the dominant player globally in recent years, Fintech credit is much more prevalent in the US, accounting for nearly 89% of the total US alternative credit. Research shows that the Fintech credit market in the US is primarily made up of P2P/marketplace consumer lending with investment coming predominantly from institutional investors rather than individual lenders.
Fintech credit describes credit activity facilitated by online platforms that are not operated by commercial banks. One popular form of Fintech credit is peer-to-peer (P2P) lending, where borrowers are matched directly with investors through a lending platform.
See: Google Pay’s massive relaunch makes it an all-encompassing money app
Traditionally, one's FICO score has been the gold standard of credit bureaus in determining one's ability to open a bank account, obtain a loan, or get a credit card. Now, with the ability to process lots of data at high levels of efficiency thanks to machines, Fintech companies are creating more holistic creditworthiness rating systems that help alternative lenders better assess risks and serve up loans to a segment of the population that traditionally has been shut out of markets.
Prediction for Future
Given Big Tech and Fintech’s competitive advantages with machine learning and AI, I believe that they will play an inevitable role in the future of financial services. This type of competitive edge that Big Tech companies have make them ideally positioned to serve the role of a Techfin, a term coined by Jack Ma describing tech companies that provide financial services with a more customer & technology centric approach.
The COVID-19 pandemic has only exacerbated the paradigm shift in the financial technology space. Growing numbers of people consider the adoption of contactless payment as a basic need to prevent the spread of the virus, and I predict the rise of many forms of Fintech innovations like mobile wallets replacing physical wallets.
See:
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House Lawmakers Condemn Big Tech’s ‘Monopoly Power’ and Urge Their Breakups
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China Stops Jack Ma’s $35 Billion Ant IPO From Going Ahead
Given the size, resources and efficiencies of Big Tech and the increasing potential of Fintech, incumbent institutions are likely feeling the heat to re-align their products and services to benefit tech-savvy consumers across the board, not just us Gen Zs. Incumbents like Chase have already taken steps in this direction by investing heavily in their digital space to offer a more unified experience for the customer. As a passionate technology user, I am eager to see what the future has in store.
This article appears as a featured article in NCFA's digital magazine, Fintech Confidential (Issue 3 Dec 2020). Click to read the latest thought leadership, insights and trends about Fintech in Canada:
Checkout NCFA's digital magazine, Fintech Confidential (Issue 3, Dec 2020) --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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