Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Fintech Opinions
Chris Woolard’s Insights 1 Year After 2023’s Banking Turmoil
Banking Insights | March 7, 2024
Image from Christopher Woolard's Linkedin profile
Reflecting on the Banking Sector's Resilience and Regulatory Evolution
A year after the Spring 2023 banking turmoil, triggered by the failures of major institutions like Credit Suisse and three US regional banks has set the stage for a significant supervisory shift. With the Basel 3 Reforms at the forefront, financial institutions worldwide are implementing stronger capitalization and more rigorous risk management practices to ensure stability and resilience of the global banking system. In this LinkedIn pulse article, Christopher Woolard, Partner at EY, EMEIA lead financial services regulation, Chair EY Global Regulatory Network, sheds light on regulatory trends that every financial institution should be aware of.
Select Quotes and What It Means for Fintechs and Investors
"Almost a year has passed since the financial markets’ volatility was triggered by the failures of Credit Suisse and three US regional banks."
This quote highlights the interconnectedness of global financial markets and the domino effect that the failure of significant institutions can have. For fintechs, it underscores the importance of robust risk management and the need for a contingency plan. Investors should be aware of the systemic risks and consider the stability of the financial institutions within their portfolios.
"Implementation of the final part of the Basel framework, Basel 3 Reforms, updated in light of the 2007–08 global financial crisis, will be key to ensuring banks are well capitalized."
The Basel 3 Reforms represent a comprehensive set of regulatory standards designed to strengthen the regulation, supervision, and risk management within the banking sector. For fintechs, especially those in lending, payments, and regulatory technology (RegTech), this quote underscores the importance of aligning with or facilitating compliance with these enhanced capital requirements.
See: KOHO’s Strategic Push Towards A Banking License
It signals a need for innovative solutions that can help banks meet these standards efficiently. For investors, the implementation of Basel 3 Reforms is a critical factor in assessing the risk profile and stability of banks. Investments in banks that are proactive in adopting these reforms may be seen as more secure, given their strengthened capital positions and reduced risk of failure. This focus is on capitalization to ensure financial institutions are more capable of withstanding future financial stresses.
"Supervisors are increasingly acting on previous warnings and action points asked of their supervised firms, closely monitoring banks’ efforts to remediate known risk management weaknesses."
This quote suggests a shift towards more proactive and stringent regulatory oversight. Fintechs should anticipate and prepare for increased scrutiny, particularly in areas of risk management and compliance. For investors, this could mean that banks and financial institutions are becoming safer investment options, albeit possibly facing higher compliance costs.
"The 2023 banking turmoil showed that central bank support is crucial during a bank run."
The role of central banks in providing liquidity support during crises is crucial. Fintechs, especially those in the payments and lending spaces, should consider the implications of central bank policies on their operations and liquidity management strategies. Investors might see central bank readiness to support the banking sector as a safety net that mitigates some of the risks associated with bank runs.
See: From Collapse to Reinvention: The Emergence of a Decentralized Crypto Banking Ecosystem
"The European Banking Authority (EBA) Chair Campa echoed the growing regulatory concerns of the linkages between banks and the non-banking financial institutions (NBFIs), including hedge funds, private equity, and cryptocurrencies."
This highlights the growing importance of NBFIs and the crypto sector in the broader financial ecosystem. Fintechs operating in or with these sectors should be mindful of the evolving regulatory landscape and its implications for their business models. Investors should consider the potential for regulatory changes to impact the valuation and risk profile of their investments in these areas.
Why It Matters
The events of Spring 2023 serve as a crucial reminder of the interconnectedness of global financial systems and the importance of robust regulatory frameworks. The focus on implementing Basel 3 Reforms and enhancing liquidity risk management practices is to safeguard financial system against future crises.
See: Open Banking Insights: Decoding Canada’s Financial Future
Understanding these events helps stakeholders prepare for future challenges, ensuring a more resilience banking sector against unforeseen crises.
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, artificial intelligence, 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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United Efforts to Expand Access to Private Markets
Advocacy | March 5, 2024
Image: Crowdfund Insider, SBCFAC meeting Feb 27, 2024
SBCFAC, SBIA, Peirce, and Uyeda Push for Inclusive Accredited Investor Criteria
As featured by Crowdfund Insider, the Securities and Exchange Commission's (SEC) Small Business Capital Formation Advisory Committee (SBCFAC), the Small Business Investor Alliance (SBIA), Commissioner Hester M. Peirce, and Commissioner Mark T. Uyeda have collectively voiced strong opposition to the current restrictive wealth thresholds for accredited investors. Advocating for a more inclusive definition, these entities and individuals are against raising the current wealth thresholds for accredited investors, and are aiming to lower the barriers to investment opportunities, emphasizing the importance of knowledge, risk awareness, and the potential for broader economic participation over financial benchmarks alone.
- On February 27, 2024, the Securities and Exchange Commission's (SEC) Small Business Capital Formation Advisory Committee (SBCFAC) met and voiced strong concern against raising the wealth thresholds for accredited investors. This recommendation aims to keep the door open for a broader spectrum of investors to participate in private securities offerings, challenging the traditional wealth-based criteria. The committee's approach reflects a shift towards inclusivity and opportunity in the investment landscape, emphasizing the importance of knowledge and risk awareness over mere financial benchmarks.
See: AOIP Advocates for Enhanced Capital Formation and Investment Opportunities for SMEs
- Prior to the SBCFAC meeting, the SBIA submitted a comment letter advocating for the expansion of the accredited investor definition to include more individuals based on understanding risks and rewards, rather than just wealth metrics.
- Commissioner Peirce highlighted the importance of not restricting Americans from investing in private markets, noting the potential devastating impact on local angel networks and the broader principle of individual freedom to invest.
- Commissioner Uyeda suggested a more nuanced approach to the accredited investor definition, proposing investment caps based on a percentage of an individual's securities investments, promoting a more inclusive and flexible framework.
Why It Matters
The collaborative push by the SBCFAC, SBIA, and Commissioners Peirce and Uyeda to expand the definition of accredited investors challenges the traditional wealth-based criteria, aiming to open up new avenues for wealth accumulation among a broader group of investors, reduce economic inequality, and provide early-stage companies with a wider pool of potential backers. This initiative reflects a shift towards a more democratic financial system.
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, artificial intelligence, 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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Conservative Backlash Leads to DEI Retreat on Wall Street
DEI | March 4, 2024
Image: Freepik/rawpixel.com
Wall Street Pulls Back on DEI Initiatives Due to Growing Conservative Backlash and Internal Pressures
Wall Street has begun to quietly pull back from its Diversity, Equity, and Inclusion (DEI) commitments, marking a corporate shift in America's approach to diversity. This retreat is attributed to a growing conservative backlash and internal pressures, leading to a reevaluation of DEI strategies across major financial institutions.
- Goldman Sachs has notably opened its "Possibilities Summit" for Black college students to White students, reflecting a broader trend of inclusivity. Similarly, Bank of America and Bank of New York Mellon are rethinking their DEI-focused programs and diversity metrics, respectively, under legal advisories to avoid accusations of reverse discrimination.
- The retreat is partly in response to legal challenges and the potential for lawsuits alleging reverse discrimination. This cautious approach follows the U.S. Supreme Court's rejection of affirmative action in colleges, fueling concerns over corporate diversity initiatives' legality. There's an undercurrent of resentment among some White employees, contributing to the reassessment of DEI efforts. This internal pushback is a quiet yet significant force influencing corporate decisions.
See: Fast Company Survey Finds Capitalism at Crossroads
- Despite efforts to improve diversity, the representation of Black senior executives in major banks like Goldman Sachs (3.7%), JPMorgan Chase (5%), and Citigroup (8.7%) remains low compared to their overall U.S. population percentage (about 14%).
- While public declarations remain supportive of DEI, internal adjustments suggest that companies are reworking recruitment programs and reviewing diversity targets to address the evolving legal and social landscape.
Why It Matters
This shift in Wall Street's DEI approach signals a broader reevaluation of corporate diversity strategies amidst changing legal interpretations and societal attitudes. The retreat from previously ambitious DEI commitments reflects the complex interplay between legal risks, internal dynamics, and external pressures.
See: McKinsey Report: Diversity in Global Private Markets 2022 and Institutional Investors as Catalysts for Change
The future of workplace diversity and inclusion efforts remains uncertain. There's a need for a balanced approach that addresses legal concerns while striving for genuine inclusivity.
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, artificial intelligence, 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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EU Advocates Against Big Tech’s Market Control
Policy | Feb 23, 2024
Image: Unsplash/Christian Lue
Urgent Call for Reform Against Big Tech's Grip in EU Digital Markets
In a letter to the Financial Times, Sebastiano Toffaletti, Secretary-General of the European Digital SME Alliance, is highly concerned about the state of the European Union's digital markets, dominated by a handful of tech giants. Toffaletti's letter, published on February 20, 2024, responds to the EU's chief competition official, Olivier Guersent, and critiques the European Commission's current stance on competition enforcement. He argues for a totally new approach to tackle the monopolistic practices of Big Tech, emphasizing the existential threat they pose to small businesses and startups.
- Despite the European Commission's efforts, the digital market remains under the control of a few large corporations, stifling competition and innovation.
- Big Tech's reluctance to comply with the Digital Markets Act by the March 7 deadline exemplifies the industry's resistance to change. Apple's criticized compliance measures, imposing significant financial burdens on app developers, serve as a case in point.
See: The Impact of Big Tech in Finance
- Toffaletti advocates for a shift in focus from consumer welfare and price indices to the broader economic and societal impacts of Big Tech's power accumulation. Highlighting the "fierce sense of urgency" noted by Lina Khan, chair of the US Federal Trade Commission, Toffaletti calls for immediate and decisive action to protect the welfare of small businesses and startups.
Why It Matters
Toffaletti's call for a revolution in EU's digital market enforcement is an urgent wake-up call to address the monopolistic dominance of Big Tech. This dominance not only stifles competition but also hampers innovation and growth among European digital SMEs. By advocating for a broader consideration of the impacts of Big Tech's power, the letter urges the European Commission to adopt a more aggressive stance in fostering a fair, competitive, and innovative digital market. Stay tuned for more to come.
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, artificial intelligence, 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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BoC Consultation: Draft Supervisory Guidelines for PSPs
BoC Payments Consultation | Feb 21, 2024
Seeking Feedback: Bank of Canada Drafts Supervisory Guidelines for Payment Service Providers (PSPs)
The Bank of Canada has recently announced a consultation phase for its draft supervisory guidelines under the Retail Payment Activities Act and its regulations. This legislative framework requires PSPs registered with the Bank of Canada to adhere to specific operational standards, including the management of operational risks, incident response protocols, safeguarding of end-user funds, and mandatory reporting of certain incidents and significant changes to the Bank. These requirements are set to take effect on September 8, 2025.
See: Canada’s New Retail Payment Regulations: Registration and Compliance
The draft supervisory guidelines prepared by the Bank of Canada delineate the Bank's expectations for PSPs in meeting these obligations. The guidelines are designed to ensure that PSPs operate in a manner that is safe, efficient, and in the best interest of their end-users. They cover a broad spectrum of operational and risk management practices that PSPs are expected to implement.
Your Input Is Required
This consultation represents a critical opportunity for stakeholders within the fintech and payment sectors to review the proposed guidelines and provide feedback. The Bank of Canada is seeking input on how these guidelines can be refined and improved to better serve both the industry and the consumers who rely on these services.
We encourage all NCFA members and stakeholders to participate in this consultation process. Your insights and expertise are invaluable in shaping a regulatory environment that supports innovation while ensuring the safety and integrity of payment services in Canada.
See: BoC Update for PSPs: New Registration Guide and Supervisory Policies Available
To participate, please visit the Bank of Canada's website to read the draft guidelines and share your feedback and contribute to a dialogue that will help shape the future of payment services regulation in Canada.
This is an important moment for the fintech community to come together and ensure that the regulatory framework aligns with the realities of modern payment services and the needs of consumers. Let's make our voices heard and contribute to the development of guidelines that promote a secure, competitive, and innovative financial services sector. For more information, please visit the website and learn more about the Retail Payments Supervision Consultation.
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, artificial intelligence, 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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Open Banking Insights: Decoding Canada’s Financial Future
Survey | Feb 20, 2024
Survey Abacus Data Feb 2024 Satisfaction with current banking system
Insights into Banking Satisfaction, Financial Literacy, and Readiness for Open Banking
A recent nationwide survey conducted by Abacus Data, encompassing 2,199 Canadians aged 18 and above, offers invaluable insights into the country's financial literacy, banking satisfaction, and the burgeoning interest in open banking. Below we break down and analyze each of the six survey findings and their implications for Canada's financial services sector.
1. Digital Literacy and FinTech Knowledge
- 38% feel confident in their digital literacy.
- 30% claim proficiency in financial literacy.
- 15% demonstrate familiarity with financial technologies.
- Younger Canadians (18-29 and 30-44) show higher levels of digital literacy (51% and 47%) and FinTech knowledge (23% and 21%) compared to older Canadians (60+), where only 25% exhibit digital literacy and 9% possess FinTech knowledge.
See: Feds Promise Open Banking Laws in 2024 and to Broaden Access to Payments Canada
2. Banking Satisfaction
- 72% are satisfied with their personal banking.
- 70% trust their financial institution.
- 69% feel their financial needs are being met.
- 60% believe their institution delivers personalized services.
- Younger Canadians report lower satisfaction and trust compared to older demographics.
3. Perceived Effectiveness of the Canadian Banking System
- 51% believe the system adapts to changing customer needs.
- 45% feel it addresses the financial concerns of the average Canadian.
- 44% perceive it as open and transparent.
- Only 27% agree that the system prioritizes customers’ best interests over profits.
4. Challenges in Canadian Banking
- High fees (32%) and unfavorable interest rates (30%) are the top concerns.
- 17% express frustrations over limited branch availability or hours.
- 16% cite poor customer service and security concerns.
- Younger Canadians face unique challenges such as limited operating hours and security apprehensions.
See: Open Banking Regulation in the U.S. Strikes a Chord
5. Open Banking Awareness and Adoption
- 57% of Canadians are unfamiliar with open banking.
- 12% claim to be familiar with the concept.
- Awareness is higher among younger Canadians (18-29: 17% aware; 30-44: 19% aware) and current users of online banking (24% aware).
- 1 in 4 Canadians express likelihood in adopting open banking once familiar.
6. Customization and Personalization in Open Banking
- 41% are willing to share data for real-time fraud detection.
- 24% are interested in tailored loan offers.
- 20% are intrigued by simplified loan approvals, personalized financial guidance, and automated savings options.
- Interest in open banking benefits is limited, indicating a need for increased awareness and education.
Insights and Analysis
- The survey results reveal a significant generational divide in digital and financial literacy, with younger Canadians being more adept and older Canadians showing lower levels of familiarity and confidence.
- While overall satisfaction with banking is high, there are notable demographic differences and concerns about fees, interest rates, and the adaptability of the banking system to customer needs.
See: BoE Report: Open Banking Boosts Productivity, Competition
- Challenges such as high fees, unfavorable interest rates, and limited branch availability highlight areas for improvement in the banking sector.
- There's a clear gap in open banking awareness and adoption, with potential interest once Canadians become more familiar with it.
- The interest in customization and personalization through open banking suggests a pathway for financial institutions to offer more tailored services, although overall interest remains limited.
Outlook
Understanding Canada's financial pulse is more than just a glimpse into data; it's about recognizing the evolving needs and aspirations of Canadians across generations. This insight is crucial for shaping a financial ecosystem that is robust, transparent, inclusive and forward-thinking.
See: DoF Consultation: Financial Competition in Canada
Collectively, it's imperative that we advocate for policies and practices that balance innovation with financial literacy and consumer protection. By doing so, we ensure that every Canadian is equipped to make informed financial decisions in modern times, fostering a culture of innovation, competition, and financial well-being that benefits all Canadians.
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, artificial intelligence, 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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Open Banking Regulation in the U.S. Strikes a Chord
Open Banking | Feb 12, 2024
Image by Freepik
Impending Open Banking Regulation Is Set to Transform Finance in the U.S.
In a recent Forbes article, Alexandre Gonthier, CEO of Trustly, Inc., digs into the transformative potential of open banking regulation in the U.S. This forthcoming regulation, championed by the Consumer Financial Protection Bureau (CFPB), aims to formalize consumers' rights to share their banking data, ensuring the continued availability of innovative financial services that have become integral to modern financial management.
Threat or Financial Innovation and Security Catalyst?
- Open banking levels the playing field by enabling consumers to share their banking data with third-party services, potentially bypassing traditional card-based transactions. Some large banks view open banking as a competitive threat, particularly concerning the revenue generated from credit card interchange fees, which amounted to $100 billion in 2022.
- The promotion of Tokenized Account Numbers (TANs) by big banks as a security measure. However, Gonthier points out that TANs, especially when tied to revocable data sharing, can be exploited by fraudsters, complicating fraud prevention efforts within the banking payments context.
- The CFPB's proposal mandates that consumers renew their data-sharing consent every 12 months. While intended to protect consumer data, this requirement could introduce friction into recurring payment processes, inadvertently boosting card transaction volumes.
See: BoE Report: Open Banking Boosts Productivity, Competition
- Gonthier applauds the CFPB's push for an API-based connection standard but warns of potential consumer harm if a proper transition period is not allowed for fallback to legacy connection methods during API outages.
- Monetization of Data Access: The lobbying efforts by banking associations to impose fees on consumer data access, a move that could adversely affect open banking business models reliant on high volume and low margin economics.
Gonthier believes that while the CFPB's proposal is a positive step towards fostering competition in the payments sector, the final rule must go further to ensure that alternative payment methods, such as ACH, RTP, or FedNow, can compete on equal footing with traditional card-based payments. This competition could lead to lower payment processing costs and, consequently, lower prices for consumers.
FIS's Open Access Platform
FIS recently announced its Open Access platform is set to revolutionize how consumers interact with their financial data. By integrating with leading data networks such as Akoya, Envestnet | Yodlee, MX, and Plaid, the platform offers consumers unparalleled access to and control over their financial information. This initiative not only accelerates the shift towards open banking but also aligns with the Consumer Financial Protection Bureau's (CFPB) proposed Personal Financial Data Rights rule, establishing industry-wide standards for data access and protection.
The Open Access platform empowers consumers to securely share their financial data with a broader array of financial institutions and third-party apps, enhancing their ability to manage finances through their preferred services. This approach not only fosters a more inclusive financial ecosystem but also ensures that consumers can exercise control over their data, with the flexibility to revoke access at any time.
Conclusion
By formalizing the right to data sharing, impending open banking regulation, led by the CFPB, challenges traditional banking paradigms, promising enhanced financial innovation and competition.
See: Feds Promise Open Banking Laws in 2024 and to Broaden Access to Payments Canada
As the industry adapts, initiatives like FIS's Open Access platform exemplify the potential for greater consumer empowerment and control over financial data paving the way for a future where financial services are more accessible, efficient, and aligned with consumer needs.
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, artificial intelligence, 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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