This is something I knew was coming and now that it is there I am happy about it. I like the concept of alternative currencies but never felt quite comfortable with them being entirely outside the regulation – or beyond anyones control rather. This has filled the gap now. And I believe there is much more to come.
Forbes.com reports about Bitstamp to have obtained the license in Luxembourg which allows it to operate in 28 European countries.
FinTech is booming, no doubt – and latest developments like with the UK unicorn Powa cannot change that picture much or at all. But repeatedly the question of quick enough user adoption of fancy new stuff in the world of financial services has been raised – and rightly so. I personally always had the point of view that the good new things will be there for good when a broad cross-section of the society is adopting them. Not only in the big cities, not only the early adopters, hipsters and novelty hunters in urban environments – the young crowd of Metropolis.
A new study by Ernest & Young seems to show that yes, FinTech is booming and yes, the early adopters love it: Today, according to the study (which you can find here), 15.5% of the digital users have adopted FinTech in one way or the other – with a projection for this possibly to double within the next twelve months. When you look closer, they found, its more interesting: When you look at high-income individuals the adoption rate is north of 40% . EQ concludes, that „that some of the most economically valuable customers for banks and insurers are already FinTech customers“. For traditional banks this means that they should open their eyes a bit wider, I believe.
But when we look at this: all the people with less of a mobile or digital affinity are apparently less likely to adopt FinTech offerings – which is not surprising. They are most likely still going to their banks branch to get a loan or call their insurance broker for an updated coverage. For me, it is still a very valid and interesting question how long it will take until we have that broad acceptance of FinTech throughout the society which is necessary to make it a lasting mass phenomenon and to raise from being a (very strong, promising) trend to something to really revolutionize how the people in general do their business in finance matters of any form and shape. Many FinTech businesses, if not most, build on an economy of scale which requires just that: broad adoption of the service across all parts of the society. If this takes long, its actually looking much brighter for the banks as they will have time to pick and select and swallow. Which ultimately, lets be optimistic, would make their very traditional offering better.
It will stay an interesting industry to be in. 🙂
Call Levels has published an interesting outlook for FinTech in 2016 with the intriguing head-line „20 Amazing Facts You Need To Know About FinTech“. Its pretty high level – but very interesting nevertheless. Worth spending these 20 seconds for sure.
@Credits: Call Levels
I am not the biggest fan of the EU parliaments decision on payments as I believe the effects will be quite different than expected and not make payments cheaper or easier for Consumers – but in fact will lead to a much more clustered market and increasing cost, as more players have the share the market, leaving each of them with the overhead cost for the highly regulated business. Payments, as I see it, is a business of scale. Too much clustering prevents scale and leads to increased cost.
But anyway: The EU parliament has decided and here is a link to the EU parliaments ITV channel, explaining the decision. Interesting in any case.
The Computer Business Review CBR released today an overview of the five regions investing most in FinTech. Who would have guessed? 🙂 Interesting nevertheless.