Fintech and blockchain developments for the week of 4 July 2016: What you may have missed

Big bank comeback in mobile payments: Payment processing companies such as PayPal have long offered a nimbler and faster payment option to consumers. The downside has been cost as merchants typically pay a fee for using the service which is often passed on to consumers. US bank J.P. Morgan Chase seems willing to challenge nascent players head on with a payment solution of its own. The big bank maintains the upper hand in the battle as it can offer its services at a significantly discounted rate. The winner will be merchants, which have long complained of exorbitant transaction fees.

AmEx ventures into on-line loans: In more news of incumbents challenging new market players, AmEx has announced an on-line lending platform for small-business clients. Popularized by the likes of #fintech companies such as Lending Club, Square Inc. and On Deck Capital, on-line lending offers loans at significantly reduced turnaround times but at rates sometimes greater than those offered by financial institutions. AmEx is seeking to bridge that divide through quick funding and competitive rates.

Russian blockchain consortium sees daylight: Novel technologies face an uphill adoption challenge, comprehension of the concept being a major roadblock. Industry consortiums alleviate these concerns and promote further cooperation among members to accelerate adoption. With this in mind, a group of Russian #banks have announced their intention to form a consortium to explore #blockchain. Among the potential applications the consortium will investigate include KYC procedures as well as joint settlements. The news comes on the heels of a similar Chinese project recently announced and led by 31 financial and #technology firms.

Blockchain based FX clearing: Clearing trades is expensive and timely with the typical settlement time hovering around three days. Blockchain promises to cut that delay to mere minutes, if not instantaneously. As such, the application of distributed ledgers in clearing and settlements has garnered much attention in the past year. Enter FXCH, a startup Irish clearing house. It successfully cleared an fx-spot transaction using blockchain. Said Franck Mikulecz, founder of FXCH: “Streamlining steps to settle FX trades at a fraction of the current costs is brilliantly disruptive.” The successful transaction will surely give credence to the potential of blockchain in clearing and settling trades.

The Instagram bank branch: In an unconventional branding and marketing exercise, the Singaporean subsidiary of Malaysian bank CIMB has launched a new social media campaign to promote its offerings. Dubbed The Small Bank Theory, the bank has created an “Instagram branch” in the hopes of familiarizing potential clients with its products and services and to replicate, to the extent possible, the actual experience of visiting a physical branch.

Please contact me to discuss these and any other related topics. 

Abraham A. Tachjian

[linkedinbadge URL=”https://www.linkedin.com/in/abrahamtachjian” connections=”off” mode=”icon” liname=”Abraham A. Tachjian”] is Legal Counsel at Standard Chartered Bank – FinTech/Blockchain Adviser and Speaker