Rocky Transitions


I know it’s difficult to believe but transitions in technology and updates to regulatory regimes do not necessarily put the consumer’s point of view first. The digitization of money and banking is inevitable, but the ability of FinTech to empower individuals and community institutions is not.

This week’s links provide some examples. And also some hope for outcomes that work for everyone.

The chip card transition in the U.S. has been a disaster

“They’re confusing to use, painstakingly slow, less secure than the alternatives, and aren’t even the best solution for consumers.” That’s because most of the decisions and all of the tech battles had nothing to do with consumers and everything to do with processors, merchants, hardware manufactures, and their respective bottom lines, Quartz reports. Maybe it’s a bit of an overstatement, but the experience of standing at the register waiting and wondering if I’m to swipe or dip, use a PIN or sign, or hand the card to the clerk is not what I expect from today’s financial technologies.

Credit unions and community banks both face “shrinkage”

In March 2016, the number of federally insured credit unions dropped below 6,000 for the first time in American history, National Credit Union Administration (NCUA) figures show. Fewer than 600 are expected to survive by 2021. The main culprit, according to the Bank Lawyer’s Blog, is federal regulations, which are pushing out community banks and credit unions that are “too small to survive.”

FinTechs can help incumbents, not just disrupt them

About three-fourths of FinTech firms focus on lending, retail banking, payments, and wealth management, McKinsey’s latest research shows. The report also shows a budding number of B2B offerings at FinTech firms and points to a growing trend toward FinTech partnerships.

The “platformication” of banking

With more banks and FinTech firms partnering with one another, the definition of a platform and the increased use of platforms across the financial services sector has become more muddled. Thankfully, the Financial Brand has a simplified, comprehensive breakdown of the phenomenon.

Infographic: the evolution of bank technology

Modeling its graphic after the New York Times’ FinTech breakdown, FinTech News developed an interactive infographic outlining the evolution of banking technology since the 1800s.