Boom-Bubble Blues


In what turned out to be a prescient post–one of several on whether FinTech is in a boom or a bubble, Joi Ito suggested that the rush into blockchain shared public ledger technology is “a bit over its skis.” Mr. Ito, a long-time internet analyst who heads the MIT Media Lab, suggests that the focus be on building the infrastructure in a way that works for everyone. Looking at this week’s Blockchain Watch it’s difficult to disagree, and I do not.

Yet it will take years to build a means of exchanging and accounting for value in a way that, to use the terms of groups working to upgrade the U.S. payments infrastructure, is ubiquitous, interoperable, and secure. In the meantime, the market likely will look like a free for all, with investors, developers, and entrepreneurs wanting to get ahead of a frenzied curve. And make it pay. Stay tuned for more on that.

Now for this week’s links:

Boom, bubble or bust for FinTech?

Is there a FinTech bubble upon us? Signs of a boom are popping up, especially with traditional finance executives leaving for tech jobs. But whether there will be a bust has yet to be determined, according to TechCrunch. Instead of building apps, there needs to be a focus on infrastructure, according to Joi Ito, to provide a single standard for future financial innovation.

Sheila Bair on the FinTech startup boom, student debt and saving for retirement

Those looking to invest in financial startups, she explained, should be asking, “How are they going to perform in a downturn, not just how would they do when times are relatively good or benign?” advises Sheila Bair, former head of the FDIC and president of Washington College. She talks with Inc. about why regulators must pay closer attention to FinTech firms, why companies must embrace greater transparency with customers and why cutting debt could help more Americans save for their futures.

OCC’s Curry: Limited-Purpose Charter for FinTech is Possible

Can the office of the Comptroller of the Currency offer limited-charters to FinTech firms? It’s looking into doing just that, according to American Banker. “Whether that works for the business model of a FinTech firm is something that sector needs to think through,” said Thomas Curry, Comptroller of the Currency.

Digital newcomers push traditional banks to improve

Traditional banks may be slower and more thoughtful when it comes to change, but they have the benefit of stronger security systems, a substantial customer base, and established delivery channels and expertise. Despite all of this, FinTech firms are the best thing that has happened to the financial sector, argues Sonny Singh in a post for BAI Banking Strategies.

20 FinTech companies to watch

Among the top companies to watch as FinTech continues to evolve are Ripple, Feedzai, MoneyThink and Zenbanx. See American Banker’s full list of the FinTech sector innovators who are changing personal finance, banking, currency exchange and more.