TFU | Sept. 23-29

Leading Off

The House approved a bill mandating FinCEN to study how blockchain and other technologies could improve its operations; Freddie Mac is working with ZestFinance to test AI-enabled mortgage underwriting software; HSBC implemented an automated AML and sanctions screening system; TransferWise launched a service for U.S. banks to allow their customers to make in-app international transfers; and 85 fintech firms have applied to operate in Mexico under the new Mexican fintech law.


In the News

House of Representatives passes FinCEN blockchain study bill.  The U.S. House of Representatives approved the “Advancing Innovation to Assist Law Enforcement Act,” a bill directing the Financial Crimes Enforcement Network (FinCEN) to study how blockchain and other innovative technologies can enhance its operations [full text].  The bill now moves to the Senate for deliberation.

WSJ: Freddie Mac testing mortgage underwriting software.  According to the Wall Street Journal, mortgage finance giant Freddie Mac is working with data analytics and machine learning firm ZestFinance to test new software that could facilitate the mortgage underwriting process and “make mortgages more available for certain applicants.”

HSBC deploys automated AML system.  The  British bank set up an “industry first” “automated anti-money laundering (AML) and sanctions screening system” for its global trade and receivables finance group. HSBC’s system was developed by AI firm Quantexa, in which HSBC is an investor. The new system will compare bank transactions to over 50 different money laundering-related scenarios.

Visa launches an online portal for fintechs.  The payments giant launched Visa Partner, an online portal that “provides fintechs with unprecedented access to Visa’s technologies, network and solutions.” The benefits of the portal touted by Visa include “faster digitized licensing,” a “comprehensive partner directory,” and “helpful ‘How-to’ content.”

TransferWise launches U.S. bank service.  The U.K.-based money transfer service rolled out TransferWise for Banks, making it possible for U.S. banks, credit unions, and other financial institutions to integrate its API directly into their infrastructure, allowing their customers to make in-app international payments.

Fintechs seek authorization to operate in Mexico.  Mexico’s banking regulator said it has received 85 applications from fintech firms seeking to operate in the country now that its new fintech law is in effect. The regulator said that firms which have not sought authorization will no longer be allowed to operate in the country, and will face sanctions if they attempt to do so without authorization. 

Metro Bank shares plunge after pulled bond issue.  The British bank’s shares hit a new low, losing 35% after the bank announced it failed to raise the funding for a planned £200 million bond issuance. Metro, which became Britain’s first new lender in over a century when it was founded in 2010, has seen its share price drop 90% this year following a financial reporting scandal that broke in January. 

China fintech stocks rise ahead of new Chinese digital currency.  Chinese fintech stocks are outperforming the wider market in the run-up to the introduction of China’s Central Bank Digital Currency (CBDC), with the fintech-focused CSI index gaining over 50% so far in 2019. Investors expect that CBDC will generate increased demand for payments and security services in China.

Ant Financial restructuring approved.  Chinese regulators approved plans submitted by the Chinese fintech giant that will restructure its finances and help pave the way for an IPO. The plan, submitted in February 2018, will see parent company Alibaba swap its current rights to 37.5% of Ant’s pre-tax profit in exchange for a 33% equity stake in the company. 

Draghi opines on digital currencies.  Departing European Central Bank (ECB) President Mario Draghi struck a cautious tone on crypto, saying that stablecoins “are not . . . suitable substitutes for money” and that he is not convinced of the public utility of a proposed ECB digital currency. However, Draghi also noted that things could change, given “technological development and business model evolution.”



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