FinTech Friday is our regular check-in here at Spreckley, where we share all the most interesting and useful financial services and financial technology news, innovations and trends.
This week we deep-dive into the trending FinTech topics that are prominent in the news. We start this review by exploring more about how banks are taking on risk analysis, to mitigate disasters in a time of uncertainty. We then venture on to discover more about the gaps in the tech market that have become ever more blatant as money management turns digital. Finally, we’ll look closely into the profitability of digital banking in the midst of a crypto-crisis with the chief executive of Revolut, Nikolay Storonsky.
Everything banks think they know about risk is wrong
“The pandemic proved banks need to rethink their methods and start using real-time data to avoid lending mistakes in turbulent times,” according to Wired.
“The risk models that banks use to help inform their commercial-lending decisions have been dealt a blow by Covid-19. The pandemic has presented a crisis where historical correlations do not hold. In 2021 we will find new ways of assessing risk that use forward-looking as well as backward-looking data. This will make lending smarter and better for everyone”.
This was a really eye-opening article that has the ability to change perspective and approach of dealing with risk in banking. By scrutinising the manner of which banks are dealing with risk will allow analysts to fill in the missing parts of this puzzle.
Feel free to read over the full article by clicking here.
Lockdown exposes looming tech gaps as money management does digital
Elsewhere in the Fintech scene as reported by the Independent, “a fifth of Britons now open accounts without any human contact”.
“Two-thirds of UK adults now rely on mobile and online banking technology to manage their money, as lockdown prompts the wholesale shift to digital financial management.”
“Since March, a study of thousands of British adults has found almost 90 per cent check their accounts, 80 per cent transfer money, and 35 per cent even withdraw investment funds using fintech”.
This article really shows the transformative approach of banks and the willingness to implement new systems in line with the technological era. In addition, it reiterates the fact that times are really changing, thus highlighting the impact that tech is inevitably having on our day-to-day lives.
Revolut boss expects digital bank to remain profitable
Lastly the Financial Times has claimed that the “British fintech ramps up spending on new staff and invested in areas such as compliance.”
“Revolut’s chief executive said the digital bank expected to remain profitable despite falling enthusiasm for cryptocurrencies after buoyant markets helped offset the negative impact of the pandemic”.
This was a really interesting insight that was provided to us by chief executive of Revolut Nikolay Storonsky. Given the turbulent times of the cryptocurrency market, it’s ever more interesting to gain a valuable perspective on how this is impacting the profitability of digital banks.