The Bank Advantage


Traditional banking head honchos met in secret to move digital money, one Silicon Valley company looks to create … a bank, and FinTech firms are banding together to brace for the watchful eye of Washington regulators. That’s the bank advantage in this week’s links.

Inside the secret meeting where Wall Street tested digital cash

Last month, a group of execs from Visa, Fidelity, Citigroup, Nasdaq,  Pfizer and other met to experiment with turning U.S. dollars into digital assets, according to Bloomberg. “We created a digital dollar” to show the group at Nasdaq an instant debit and credit on a blockchain, said Marc West, chief technology officer at Fiserv, a transaction and payments company with more than 13,000 clients across the financial industry. “This is the first time the money has moved.”

Fintech Firms Splintered in D.C. as Regulatory scrutiny heats up

Prominent FinTech firms including OnDeck Capital Inc., Kabbage Inc. and PayPal Holdings Inc. have formed the Electronic Transactions Association, an alliance created in response to the U.S. legislators turning their attention to FinTech companies, Bloomberg reports. Lawmakers are questioning the promise and potential pitfalls of financial technology to determine whether the companies are “falling through the cracks” of federal regulators and protect consumers from possible predatory lending practices and other abuses.

A look inside Stripe’s API platform

In an interview on Medium, Cristina Cordova, head of business development at Stripe, offers insight into the emerging payments company’s mission, API development, its data partnerships and more. “We don’t just build documentation, we build guides early on in the process—even for our first beta users,” Cordova says.

Silicon Valley looks at something new: starting a bank

Warburg Pincus has raised funding to start its own bank charter; it’s also seeking to partner with a bank to provide accounts, according to The Wall Street Journal, which is a shift within the sector that has steered away from traditional banking with its heavy regulations.

Insurance 2.0: P2P and Structural Innovation

In a post on Medium, Kyle Nakatsuji asserts that peer-to-peer and private investor backed insurance are the two sectors to watch. “At the end of the day, we’re looking forward to finding out how companies are able to use structural innovation to create unique and differentiated value for customers.”

Techstars vet Henrichs on FinTech 2.0: Regulation poses challenge

Jason Henrichs, managing director of Startup Institute, talks with Upstart about what excites him about being an angel investor, why FinTech firms won’t displace banking and why the visibility from regulators poses a challenge for startups.

Money Transfer Startup Turns to Banks for Boost

TransferWise, an international payments company known for allowing users to bypass banks and their fees, is now turning its attention to banks for potential partners. Why? To scoop up U.S. customers who send payments abroad, according to American Banker. Though the company hasn’t stopped promoting its “Bye Bye Banks” rhetoric, it needs partners in order to make the disruptive impact it desires.