High Five! The top 5 fintech stories we’re following today

5 trends we're tracking in finance

[alert type=yellow ]Every week at Tradestreaming, we’re tracking and analyzing the top trends impacting the finance industry. The following is a list of important things going on we think are worth paying attention to. For more in depth trendfollowing, subscribe to Tradestreaming’s newsletters .[/alert]

1. How Wells Fargo launched online loans in 9 months
It took Schwab 6 months to launch its entry into roboadvisory, the Schwab Intelligent Portfolios. It did it by pulling together a multi-functional team from across the company, getting people excited about the project by positioning it as the future of the firm. It was a great demonstration how an incumbent financial institution can counter what’s going on in fintech startup land with its own form of innovation.

Now, here’s how Wells Fargo launched its own online lending product using similar tactics. It took Wells Fargo 9 months to launch its own online lending product. Here’s how the firm went from zero to everything to create a competitive offering.

2. Walmart Pay and the overcrowding of the mobile payment market
With the success of the Starbucks app (21 percent of all its transactions — some 16 million consumers use the app), many retailers are busy working on their own form of payments. Walmart, certainly, showed interest as a big driver behind an industry consortium (MCX) that intended to do an end-around of the credit card companies.

So, people were genuinely surprised when Walmart launched its own payment app through 600 of its stores. Are we entering an era where every retailer will have its own payment app? Maybe but Tradestreaming’s Hadas Tayeb breaks down what’s happening in retail payments land and what that may mean for the consumer.

3. Alibaba now 3rd largest money market fund in the world

It took less than a month for Chinese ecommerce leader, Alibaba’s money market fund to grow larger than the average US fund. Now, after a year, it’s grown so much that it would rival the 3rd largest US MM fund. The power of a big tech firm moving laterally into financial services is transformative – that’s why the biggest competition to some core banking functionality and services will come from the Apples, Googles, and Amazons (and, yeah, Alibabas).

4. Tradestreaming’s list of top resources about the marketplace lending industry

So much has happened over the past couple of months in marketplace lending. From massive changes in the supply/demand equation to the ouster of Lending Club’s CEO, it’s hard to stay on top of it all. It’s an industry that’s dealing with its own growth pains and there are some really good resources out there to help investors, borrowers, and industry professionals make sense out of it all. We’ve assembled them into one easy-to-use list. Go get ’em, Tiger.

5. Why fintech influencers don’t pay to play

Funny thing happened this week in fintech land. Here’s the brief summary of what went down:

  1. Create a list of the top 100 fintech influencers
  2. Share it
  3. Ask the influencers to pay for inclusion
  4. Tweetstorm ensues

So, here’s a word of advice — don’t publish a list of fintech influencers of any kind and then ask the people on the list to pay for their listing. It doesn’t look good, is kind of a shady practice, and will probably be shared with an audience of hundreds of thousands of industry professionals.

High Five! The top 5 fintech stories we’re following today

5 trends we're tracking in finance

[alert type=yellow ]Every week at Tradestreaming, we’re tracking and analyzing the top trends impacting the finance industry. The following is a list of important things going on we think are worth paying attention to. For more in depth trendfollowing, subscribe to Tradestreaming’s newsletters .[/alert]

1. Competition in hot pursuit, Western Union continues to lead
Western Union may be 165 years old, but don’t make the mistake of thinking them old-fashioned. The cash transfer giant is staying competitive by

  • Maintaining its physical locations – this a big draw for the developing world, in which nearly 75% of all remittances transpire.
  • Embracing the digital shift in the remittance market by adopting do-it-yourself online transfers, developing mobile payments, and even enabling payments in bitcoin.


2. BofA targeted by top female banker in ‘bro’s club’ lawsuit
Equal pay for women has been getting a lot of coverage in the entertainment industry of late. Patricia Arquette’s rousing 2015 Oscar speech demanding equal pay and equal rights for women has allegedly already cost her acting jobs, but has also been linked to concrete change on the ground; specifically, with the passing of the California Fair Pay Act in January 2016.
Women are now bringing the equal pay fight to the finance industry. However, in lieu of a gala evening that affords actresses the chance to broadcast their message of equality to millions of viewers around the world, women in finance are turning to an equally effective, if less glamorous, awareness-raising tool: lawsuits.
Most recently, a senior female fixed-income banker at Bank of America Corp filed a lawsuit accusing the bank of underpaying women, and retaliating against her for complaining about illegal or unethical business practices by her colleagues.
In a complaint filed on Monday night, managing director Megan Messina said she is a victim of “egregious pay disparity” relative to male peers, and has been paid less than half the man who shares her title as co-head of global structured credit products. Should Messina win, this lawsuit could trigger similar lawsuits throughout the industry, forcing incumbents to rethink their payment models. Stay tuned.

3. Walmart Pay and the overcrowding of the mobile payment market
Walmart just launched its mobile payments platform, surprising not a few people in the industry. What are the benefits and dangers retailers can look forward to facing in a world in which every single retailer has its own mobile service?

Read more: RIP MCX, the retail industry consortium that was going to take on the credit card companies (Tom Noyes)

4. The impact of blockchain goes beyond financial services
In an article for HBR, futurist Don Tapscott and his son Alex Tapscott scout out the potential disruptive impact of blockchain on all industries as we know them:
“[Blockchain is] the first native digital medium for value, just as the internet was the first native digital medium for information. And this has big implications for business and the corporation.”
As blockchain is increasingly incorporated across industries, we’ll get a better idea of where blockchain is really a superhero, and where it’s merely Clark Kent.
For more on blockchain mania, read on about Thunder, an open source network that wants to make bitcoin a viable alternative to credit card networks like Visa.
5. How DailyWorth turned a newsletter into a roboadvisor for women

Walmart Pay and the overcrowding of the mobile payment market

The release of Walmart Pay, Walmart’s new mobile payment service, on May 16th came as something of a shock to the retail industry. Up until then, Walmart had been working with other major retailers in the US – under the umbrella organization MCX – to create CurrentC, an alternative mobile payment service that was supposed to enable retailers to avoid credit cards fees and to have direct access to their customers’ shopping data.

A number of news sources have documented the drama behind Walmart’s decision to go solo and analyzed the problems leading up to CurrentC’s apparent demise. Allen Weinberg, a partner at Glenbrook Partners, a payment strategy consulting firm based in San Francisco, CA., cautioned Tradestreaming that it’s premature to mourn MCX or CurrentC, given that Walmart has not formally abandoned the initiative. Nevertheless, with MCX declaring its intention to focus on bank deals, it seems likely that many other retailers and shops will jump on the mobile payment service bandwagon by developing their own offerings.

Below, we examine how the proliferation of mobile payment services could impact the entire retail industry.

The Good

As customized mobile payment systems could become the norm at various retailers, consumers are unlikely to have the patience, inclination, or even phone storage space to download each and every mobile payment app.

This is an opportunity for retailers to strengthen their brands and their client bases by building on their existing forms of what Paul Kemp-Robertson, cofounder and editorial director of Contagious Communications, calls ‘branded currency’.

In a highly entertaining 2013 TED Talk, Kemp-Robertson posits that

“brands literally stand or fall on their reputations. And if you think about it, reputation has now become a currency. You know, reputations are built on trust, consistency, transparency. So if you’ve actually decided that you trust a brand, you want a relationship, you want to engage with the brand, you’re already kind of participating in lots of new forms of currency.”

When asked how mobile payment services will affect already existing forms of branded currency, Kemp-Robertson replied: “The trajectory of the mobile wallet trend is only going to get steeper as mass adoption starts to kick in,” he wrote Tradestreaming via email. “The brands that will benefit the most are those who move beyond mere convenience and offer tangible rewards and utility in exchange for people’s sustained loyalty. That’s why Walmart has ring-fenced its Pay system, presumably as a way of locking customers into its retail ecosystem. In other words: ‘Stay loyal and reap some exclusive, premium perks.’”

The Bad

In order to keep their customers loyal, retailers will have to become incredibly competitive. Price comparison apps like ShopSavvy already allow consumers to scan a barcode and compare prices at retailers and stores throughout the country. Walmart itself has a Savings Catcher app, which scans customers’ receipts and makes them eligible for a gift card rebate if a local competitor has the same item advertised for less.

In a scenario in which every retailer is desperate to keep customers true to it and its mobile payment platform, it seems very possible that retailers will be forced to become so competitive that they’ll start losing money on some of their sales.

The Indifferent

At present, mobile payment platforms in the US haven’t exactly taken off. According to a recent study, in the last quarter of 2015, a mere 16.6% of people tried Apple Pay after acquiring an iPhone 6/6S. The same study showed a lack of enthusiasm for the product among potential and present Apple Pay users, as 30% of people polled said forgetfulness was the reason they didn’t use the mobile payment platform when they could have, while another 30% simply didn’t realize that Apple Pay was accepted at the store they were shopping.

It’s possible that by incentivizing their clients through discounts and loyalty programs, retailers like Walmart will have more success motivating clients to use their mobile payments systems than Apple, Google, and Samsung are having with their ubiquitous payment platforms.

Even if retailers do offer these incentives, it’s still possible that consumers will rebel against the over-saturation of the mobile payment market. Peter Cohan critiqued Apple Pay in Forbes, pinpointing what would seem to be the trouble with all mobile payment systems: they are a “solution in search of a problem … But the simple reality is that credit and debit cards are not a major consumer pain point — they generally work quickly and painlessly.”

The Different

However, Glenbrook’s Weinberg suggested that there’s an implicit difference between retailer mobile payment services and ubiquitous mobile payment platforms, explaining, “I consider Walmart Pay, Target Pay, and the others to be less of an open-loop payment scheme like Apple Pay and Android Pay, and more of a way to ‘payment-enable’ those merchants’ proprietary apps, somewhat like Starbucks has.”

In other words, retailers’ mobile payment systems aren’t ‘a solution in search of a problem’ but really the next stage in the evolution of proprietary apps. If that’s the case, consumers would be likely to carry around apps from multiple retailers because each app would provide value above and beyond payments.

As more and more retailers join the mobile payment movement, it will be interesting to see just what challenges these emerging payment systems bring, and how retailers will rise to meet these challenges.

Photo credit: MikeKalasnik via VisualHunt / CC BY-SA

5 trends we’re watching this week

5 trends in finance this week

[alert type=yellow ]Every week at Tradestreaming, we’re tracking and analyzing the top trends impacting the finance industry. The following is a list of important things going on we think are worth paying attention to. For more in depth trendfollowing, subscribe to Tradestreaming’s weekly newsletter (published every Sunday).[/alert]

1. Funding Circle’s Sam Hodges on scaling growth by navigating globally (Tradestreaming)
Sam Hodges joins the Tradestreaming podcast to talk about going global, the challenges his firm faced expanding cross borders, and how he’s ramping growth for next year.

2. Swift to launch global payment innovation project (banking technology)
Due to launch early next year, this new platform will “improve the customer experience in correspondent banking by increasing the speed, transparency and predictability of cross-border payments”. Nice.

3. Funding Circle is 3rd biggest SMB lender in UK behind RBS and Lloyds (City A.M.)
Illustrating the power of crowdfunding, the third biggest lender to UK small businesses isn’t a bank or building society but peer-to-peer lending platform.

4. Is Walmart About To Ignite Mobile Payments? (PYMNTS)
Walmart is getting into mobile payments in a big way with Walmart Pay.

5. Fintech M&A climbs to $4B in 2015, data analytics may drive more deals in 2016 (InvestmentNews)
M&A activity totaled nearly $4 billion in 2015, led by SS&C’s acquisition of Advent and marked by smaller deals for services ranging from financial planning software to robo-advisor technology.