The China Banking Regulatory Authority has mandated that all P2P lenders work with a custodian; a month after the requirement was announced, the majority of industry platforms have still not partnered with a custodian; most Chinese custodian banks do not offer P2P custodian services so the partnerships require added deliberation and communication; a number of new regulations are affecting the industry and it appears Chinese custodian banks will have a significant impact on the future of the industry given the online lenders they choose to partner with for P2P custodian services. Source
The House Financial Services Committee has scheduled a hearing for March 28 with a panel of banking executives to gain greater insight into how Dodd-Frank has affected lending in the banking industry; the House Financial Services Committee works within the House of Representatives and is the main group governing regulation of the financial services industry; the hearing will help to gain insight into the effects on bank lending from Dodd-Frank which will help in directing Trump administration reform; the House Financial Services Committee is led by Jeb Hensarling who has previously reported the Financial CHOICE Act which is presented as a replacement for Dodd-Frank. Source
Customer facing technology is a high investment priority for traditional banks seeking to upgrade their operations to meet increasing market demand for more modern technology; many banks across the industry have reported enhancements and upgrades in their branch locations with remodeled branches integrating technology portals to replace human banking representatives; American Banker provides examples of newly designed banking sites from seven traditional banks. Source
Banks have previously been known for their slow service in providing small business loans however the success of small business online lenders is helping to increase their interest and banking models; with banks expected to begin broadening personal and business lending in the current environment, small businesses appear to provide the best market opportunity; American Banker details some specific areas where banks can upgrade their technology for better competitive positioning in the small business lending market including: online applications, electronic documentation, increased online disclosure and optimized lending processes based on targeted borrowers. Source
Ernst & Young has released its EY Global Banking Outlook 2017 report which provides insight on incumbent bank investments; says approximately 60% plan to invest in new technologies and reports that banks have the highest priority on customer facing technology; the survey report includes data from approximately 300 banks across Europe, the Americas, Africa and Asia-Pacific. Source
Kristin Lemkau, chief marketing officer at JPMorgan, says the bank has limited its web ads to 5,000 from 400,000 in an effort to improve the quality of ad displays; marketers have taken a programmatic advertising approach which features ads across the web based on browsing habits versus investment in individual sites; the new limitations for JPMorgan use a more customized white listing approach and are also the result of fewer ads on YouTube following recent issues. Source
Europe is leading the global market in challenger banks and also providing examples for the future of banking; as digital banks increasingly gain market share a number of Europe's large banks have announced branch closings including Lloyds, RBS and NatWest; AltFi discusses the ideal bank of the future reporting on the growth of challenger banks and their potential to open physical branch locations. Source
Fifth Third has announced a $112 million investment in a five year project that will upgrade its technology and help it to partner with fintech firms; enhancements involved with the upgrade include video conferencing with remote experts, Wi-Fi in branches, distance learning and real-time data feeds to fintech partners; following the investment the company will be driven more by its new web-services and APIs; it also plans to more openly partner with fintech companies for data sharing. Source
Traditional banks are increasingly investing in financial technology in a number of different ways; banks are developing innovation labs and partnering with fintech companies for new solutions; Digiday provides insight on factors influencing fintech investment at banks in five charts; the chart above shows the areas where banks are most interested in partnering for new developments. Source
Former founder of Capital One and current managing partner at QED Investors, Nigel Morris has expertise in connecting banks and fintech companies; in an interview with American Banker he talks about his career experience and current market influence at QED Investors; also discusses the investment strategy at QED Investors and some of the fintech market's leading investment opportunities. Source