Open Banking
Even in England, one of the countries that implemented open banking in the most planned and systematic way, the proportion of the population using open banking services has increased by 5 percent in three years. under This finding shows that new actions are needed to increase prevalence. In this context, the European Banking Authority’s call to local regulators to eliminate bank-related obstacles was followed by the proposal of Tide, one of the new generation banks. Tide recommended switching to a model where banks can generate revenue in exchange for data sharing, so that they do not see open banking as a threat. In order for open banking to be successful in countries, it seems like a valuable suggestion that banks should be able to create a business model.
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Buy Now Pay Later (BNPL)
Another important issue in the FinTech field is Buy Now Pay Later, which means “buy now, pay later” in Turkish. So that; It has become one of the most frequently encountered expressions in the FinTech field with news of proliferation, innovation and investment. Swedish startup Klarna, the pioneer in this field, recently made headlines with the investment it received at a valuation of $31 billion. This news showed us once again how great investors’ belief in BNPL’s potential is.
Digital Bank
One of the most exciting developments in financial technologies is undoubtedly digital (branchless) banking. According to the economic reform calendar announced by the Ministry of Treasury and Finance, the issuance of the regulation allowing digital banking licensing in Turkey will be completed by December 31, 2021. New news comes every day about the digital bank business model, where we see successful application examples in all geographies around the world. Square, which made card collections simpler and easier with a magnetic reader installed on smartphones in the USA about 10 years ago, has entered the digital banking business this time. After a long process, the company named Square Financial Services was established in the USA within the scope of the license it received. Square, which enables hundreds of thousands of businesses across the USA to accept payments, will initially provide banking services to SMEs. It should not surprise anyone that the FinTech giant, which has such a wide network, will make its name among the big banks in the coming years.
Regulations (RegTech)
Australia is a market worth watching as a seminal example of a country that always pursues different strategies in the fight against technology giants. Australia, which has made a rapid breakthrough with its digital banking brands, has been on the agenda with negative developments recently. The termination of operations of Xinja, one of the country’s first digital bank brands, and the acquisition of another digital bank, 86 400, by National Australia Bank (NAB) suggest that there may be such possibilities in the future.
These developments raised questions in the Australian regulatory authority, APRA. APRA is preparing to tighten the criteria for granting digital banking licenses in order to create a sustainable environment. This development shows that the balance between being FinTech friendly and creating a healthy FinTech ecosystem should be carefully observed and caution should be taken.
Digital Assets / Cryptocurrencies
With the influence of their rapidly increasing values, individuals’ interest in digital currencies / assets is increasing. This interest also led the financial world giants to accelerate their efforts to position cryptocurrencies as a means of payment. In recent weeks, Visa and Mastercard announced that they have started working on payment with cryptocurrency at workplaces. First of all, card payment giants, which announce their work with assets defined as stable coins, especially emphasize the issue of complying with the expectations of the regulators. For this reason, we can say that it will be possible to use fixed currencies that meet the specified criteria in payments, even if not all digital currencies. We will see how this approach, which is considered to offer individuals a new option, will be received by individuals and regulators.
CBDC (Central Bank Digital Currencies)
While these developments are taking place in the cryptocurrency world, central banks’ digital currency (CBDC) efforts continue to mature. It would not be an exaggeration to say that China, which is progressing unabated in CBDC tests, is far ahead of other countries in the world in this field. The European Central Bank predicts that it will take 4-5 years for the digital euro to be implemented. News from other regions and countries indicate that we will witness many innovations in this regard by the end of this year and that the issue will become a new subject of international competition.
In summary; 2021 started with important FinTech developments around the world and it seems that it will continue without slowing down until the end of the year.
Source: FinTe6 prominent topics in the ch world – Bloomberg HT – Tuesday, 06 April 2021
