- Today’s main news: CFPB fines Experian $3M. Marlette Funding closes $333M securitization. EU considers passporting for fintechs. CreditMonk makes user reviews relevant for SMBs.
- Today’s main analysis: Recent securitizations. MFT 2017-1.
- Today’s thought-provoking articles: RateSetter provides update on wholesale lending. China the new leader in fintech worldwide. IT Consortium CEO calls for reg postponement on fintech.
- CFPB fines Experian $3M for lying about consumer credit scores. AT: “This is a good move to protect consumers, but it will be interesting to see what will become of the fate of the CFPB as the Trump Administration continues its challenge on the agency.”
- Marlette Funding closes $333M securitization transaction.
- A comparison of recent securitizations.
- MFT 2017-1.
- Honeymoon’s over for P2P lending. AT: “You can’t fault a company for recognizing that a business model isn’t working and taking up another one. Maybe the new business focus will fare better for DigiFi. It’s certainly a more lucrative, and more useful, niche in my opinion.”
- Does MPL offer greater transparency for your investment? AT: “I think so.”
- Alt-lending reshuffles and auto loan alarm bells. AT: “Nothing really new here.”
- Competing with fintech on business loans isn’t rocket science.
- BlackRock, Vanguard call for delay on fiduciary rule.
- Fifth Third invests in 5-year network upgrade.
- Important fintech terms. AT: “Good for those new to the industry.”
- What do you want to ask SoFi CEO Mike Cagney?
- House committee schedules hearing on state of bank lending.
- RateSetter provides update on wholesale lending.
- How Landbay co-founder Gray Stern got started.
- How an IFISA can help save taxes.
- EU considers passporting for fintechs. AT: “If anything could threaten London’s lead in fintech services, it would be an all-out front by the EU to engage companies to attract them to move to any EU country. Passporting would be a good start.”
- RBS mulls mortgage robo-advice service, shuts 158 branches.
- China is new leader in fintech worldwide.
- Fintech helps Chinese SMEs get loans.
- WeiyangX Fintech Review.
- Can CreditMonk make user reviews relevant to small biz?
- Mobetize expands B2B data top-up service to India with Small Change.
- Lufax plans online platform as part of transformation from P2P to wealth management. AT: “Digital wealth management has the potential to be huge in Asia.”
- United States
- CFPB fines Experian $ 3 million for lying about consumers’ credit scores (Housingwire), Rated: AAA
- Marlette Funding Closes $ 333 Million Securitization Transaction (Yahoo! Finance), Rated: AAA
- Recent Securitizations (Orchard Platform), Rated: AAA
- Marlette Funding Trust 2017-1 (MFT 2017-1), (PeerIQ), Rated: AAA
- Honeymoon’s Over for Peer-to-Peer Lending (Bloomberg), Rated: A
- Does Marketplace Lending Offer Greater Transparency for Your Investment? (NREI Online), Rated: A
- Alt-Lending Reshuffles, Auto Loan Alarm Bells And HHGregg Goes Bust (PYMNTS.com), Rated: A
- Competing with fintech on business loans isn’t rocket science (American Banker), Rated: A
- BlackRock and Vanguard call for delay to fiduciary rule (Financial Times), Rated: A
- Fifth Third invests in 5-year network upgrade as part of $ 112M contract (American Banker), Rated: A
- Important Fintech Terms to Help You Understand the Fintech Industry (TechBullion), Rated: A
- What do you want to ask SoFi CEO Mike Cagney at Disrupt NY? (TechCrunch), Rated: B
- House Committee Schedules Hearing on the State of Bank Lending (Crowdfund Insider), Rated: B
- United Kingdom
- RateSetter provides update on wholesale lending (P2P Finance News), Rated: AAA
- HOW I GOT STARTED: GRAY STERN OF LANDBAY (BQ), Rated: A
- How An IFISA Can Help You Save Tax (iexpats.com), Rated: A
- European Union
- In blow to London, EU considers passporting for fintech services (Reuters), Rated: AAA
- RBS mulls mortgage robo advice service, shuts 158 branches (AltFi), Rated: A
- China is new leader in fintech worldwide with 39% of global volume (e27), Rated: AAA
- Fintech helps Chinese SMEs get loans (Straits Times), Rated: A
- China: WeiyangX Fintech Review (Crowdfund Insider), Rated: A
- Fintech Tracker: Can CreditMonk Make User Reviews Relevant To Small Business? (Bloomberg Quint), Rated: AAA
- Mobetize Expands B2B Data Top-Up Service to India with Smart Charge (Korea IT Times), Rated: AAA
- Lufax plans online platform as part of transformation from P2P to wealth management company (SCMP), Rated: A
- IT Consortium CEO calls for regulatory postponement on Fintech (Ghana News Agency), Rated: AAA
CFPB fines Experian $ 3 million for lying about consumers’ credit scores (Housingwire), Rated: AAA
Experian, one of the nation’s three major credit reporting bureaus, misled consumers by telling them that the credit scores they purchased from the company were the same ones that lenders used to make credit decisions, the Consumer Financial Protection Bureau said Thursday.
And for that deception, the CFPB is fining Experian $3 million.
According to the CFPB, Experian developed its own proprietary credit scoring model, which it calls the “PLUS Score.” Experian then took that “PLUS Score” and applied it to information in consumer credit files to generate a credit score it offered directly to consumers.
Experian then marketed and sold the PLUS Score to consumers.
According to the CFPB, Experian violated Dodd-Frank from at least 2012 through 2014 by “falsely representing that the credit scores it marketed and provided to consumers were the same scores lenders use to make credit decisions.”
Additionally, the CFPB said that Experian also violated the Fair Credit Reporting Act, which requires a credit reporting company to provide a free credit report to consumers once every twelve months.
Until March 2014, consumers getting their annual report through Experian had to view Experian advertisements before they got to the report. This violates the Fair Credit Reporting Act prohibition of such advertising tactics, the CFPB said.
Marlette Funding Closes $ 333 Million Securitization Transaction (Yahoo! Finance), Rated: AAA
Marlette Funding, LLC, a provider of online consumer lending platforms and services, announced today it closed its second proprietary “MFT” securitization. Approximately $333 million of Best Egg collateral was financed via three classes of Notes and one class of Certificates with certain loan sellers retaining risk on a portion of the Notes and/or Certificates.
The transaction was significantly oversubscribed and successfully priced which was based upon Marlette’s differentiated product offering and superior credit trends. Underwriting the transaction were Goldman Sachs, who served as the structuring agent, Deutsche Bank and Citi. The Class A, B and C fixed-rate Notes were rated A (sf), BBB (sf) and BB (sf), respectively, by Kroll Bond Rating Agency (KBRA).
The “MFT” securitization is yet another significant milestone for the company, and a cornerstone of its long-term capital strategy. The transaction involved the sale of loans by Marlette and four other whole loan buyers who accessed the securitization markets via Marlette’s effective creation and management of the MFT shelf. The transaction was also notable for complying with the Dodd-Frank Act’s risk-retention requirement by utilizing a jointly sponsored entity comprised of Marlette and the originating bank, Cross River Bank.
Recent Securitizations (Orchard Platform), Rated: AAA
Data extracted from Finsight’s US ABS Market Overview.
Marlette Funding Trust 2017-1 (MFT 2017-1), (PeerIQ), Rated: AAA
Financing headlines dominated the news cycle this past week. OnDeck, an SME lender, amended its asset-backed revolving credit facility with Deutsche Bank to extend the facility’s maturity date to March 2019 and increase the borrowing capacity to $214 Mn. Further, Fundation, a leading credit solutions provider for small business, secured an asset backed credit facility from MidCap Financial.
Marlette has a strong capital market team led by ex-DB banker Karan Mehta and uses securitization as a funding channel. Citi Held for Asset Issuance 2016-MF1 (CHAI 2016-MF1), closed on March 4, 2016, was the first deal from the Marlette Platform which executed in challenging market conditions; Marlette Funding Trust 2016-1 (MFT 2016-1), closed on August 2, 2016, and was the second deal and first under the MFT shelf. MFT 2017-1, backed by $333 Mn of consumer loans, represents its third and the largest ABS transaction (Exhibit 1), led by Goldman Sachs, Deutsche Bank and Citigroup. Due to high demand, MFT 2017-1 was upsized by 18%, from $257 Mn to $304 Mn before pricing last Friday.
In a sign that regulatory uncertainty continues, the Marlette transaction did not include any loans from Colorado. Most recently, in February, Colorado state regulators filed a complaint against Marlette and demanded various remedial actions including refunding any excess charges to Colorado residents. Originators relying on the partner-funding bank model to impacted markets (such as NY, CT, VT) are structuring transactions to mitigate regulatory risk.
Besides credit supports, senior tranche investors have additional structural protection in the form of cumulative net loss rate triggers, which lead to accelerated repayment of principal in the event of worse-than expected collateral performance.
Such CNL trigger profiles represent the first order approximation of loss timing curve. If the CNL triggers are set too tight, the triggers have elevated risk of being breached, leading to reputational hazard to the issuer; if too wide, the original bond rating may be challenged and the senior bond holders may not receive the structural protection they expected.
Honeymoon’s Over for Peer-to-Peer Lending (Bloomberg), Rated: A
If they were, perhaps Promise Financial would still be making loans to finance wedding dresses and cakes and bad DJ’s. This relatively young firm was offering to make unsecured loans of around $10,000, typically for weddings, and charged interest rates that went up to nearly 30 percent.
But it stopped making loans at the end of January, according to a Bloomberg News article on Friday by Matt Scully. Instead, it’s changed its name to DigiFi and will provide technology to bigger banks.
And second, it makes more sense for many smaller online lenders to team up with larger financial operations rather than try to go it alone in an unforgiving and complex world.
This is yet another sign of the slow abandonment of the original vision of peer-to-peer lending in the U.S., where individuals lend to one another in a decentralized, Internet-based platform. The largest online lending firms, such as LendingClub and Prosper Marketplace, finance loans through securitizations, money from institutional investors and banking relationships. Promise, for example, raised around $100 million of funding agreements from investors including Greg Lippmann, a legendary mortgage-debt trader.
Does Marketplace Lending Offer Greater Transparency for Your Investment? (NREI Online), Rated: A
Companies that do the bulk of their business online are in many ways more accessible than traditional brick-and-mortar establishments, and that’s particularly true when it comes to marketplace lending.
Marketplace lending, also known as peer-to-peer lending, refers to the practice of matching borrowers and investors through online platforms. These transactions can be based on a number of consumer- or industry-driven needs—anything from student loans to commercial real estate deals. Taking advantage of advanced technology, data-driven algorithms and innovative credit models, these platforms may frequently better serve their client base. They have broad options in terms of asset class and geography, quick response times and lower overhead costs, which can translate to an overall better value for both borrower and investor.
Digital technologies provide greater transparency and actionable intelligence to the marketplace, allowing investors to better understand loan performance and, in many cases, to research potential loan transactions directly and thoroughly from the convenience of their desktop or mobile device.
Digital technologies also allow for better consistency of reporting standards, loan origination data and portfolio performance, which leads to better decision-making by investors.
These digital technologies enhance the speed and efficiency of a transaction, many times providing real-time data afforded by the ability to better monitor information associated with a particular deal.
Alt-Lending Reshuffles, Auto Loan Alarm Bells And HHGregg Goes Bust (PYMNTS.com), Rated: A
Alt lending, particularly marketplace lending, looks like it is about to become a much smaller neighborhood. The auto-lending market continues to kill canaries in those coal mines at an alarming rate. And the retail death cycle mows on with HHGregg officially declaring bankruptcy and Sears more or less admitting to its shareholders that the same fate may soon befall them.
All in all, Prosper lost $118.7 million last year, up from $26 million in 2015. According to the in-house explanation, those losses are primarily derived from lower loan volumes, higher costs that are also attributed to legal settlements and restructuring efforts.
And Prosper isn’t alone in losing money in marketplace lending — OnDeck reported $85.5 million in annual losses for 2016, and LendingClub is looking at $146 million.
The latest data out of Ally Financial indicates that growth in the auto lending segment will come in between 5 percent and 15 percent of adjusted earnings in 2017.
The National Automobile Dealers Association indicates that its used-car price index has dropped 8 percent from a year ago and now sits at its lowest level in seven years.
Back on March 6, HHGregg filed for Chapter 11 bankruptcy, and, without a buyer in line, it has no choice but to move forward with the filing.
Competing with fintech on business loans isn’t rocket science (American Banker), Rated: A
If you’re a business, applying for a loan from a bank is not a fun experience. For most borrowers, it’s as bad today as it was 20 years ago. Banks in 1997 required borrowers to meet in person with a banker. They asked for piles of paper documents like tax returns and articles of incorporation. They took their time getting back to the business with an answer. And all of that’s true in 2017.
One reason is that fintechs are figuring out ways to win on their own or with large partner banks. These firms give business borrowers a world-class user experience: Websites are beautiful, minimal data is required to start and a loan request can be answered immediately. Fintechs will continue to get better and better, and borrowers will end up pursuing the path where it is easier to borrow. After all, business owners are consumed on a daily basis with simply running their business; in many cases, they’d rather pay a higher interest rate than spend scarce time on a lengthy process with an unsure outcome.
The other reason banks need to respond now is that business lending innovation is within reach. Here are a few obvious opportunities.
- Put your application online
- Allow your borrowers to upload required documents
- Eliminate the paper
- Publish your criteria and your process
- Create a fast lane
- Communicate with your borrowers
BlackRock and Vanguard call for delay to fiduciary rule (Financial Times), Rated: A
BlackRock and Vanguard have called on US officials to delay the introduction of landmark rules set to govern America’s $16tn retirement industry just weeks after President Donald Trump ordered a review of the controversial measures.
Mr Trump ordered the DoL to revise or scrap the rule, which the Obama administration predicted would generate $17bn annually in cost savings for American workers and retirees, if it found the measures would limit savers’ access to financial advice or increase litigation against advisers.
The new regime is expected to lead to a rise in financial advisers recommending cheaper passive funds over expensive actively managed products that pay a commission. BlackRock and Vanguard, which have large passive fund ranges, were expected to be among the winners of the measures.
Fifth Third invests in 5-year network upgrade as part of $ 112M contract (American Banker), Rated: A
Fifth Third Bancorp has made a major investment in its electronic network as part of an effort to modernize its branches and partner with fintech firms.
The Cincinnati company discussed the five-year project to upgrade its network Thursday at American Banker’s Retail Banking 2017 conference in Miami. Part of a $112 million renewal of a preexisting contract, the upgrades will allow customer videoconferencing with remote experts, Wi-Fi inside branches, distance learning and real-time data feeds to fintech partners.
Fifth Third has already begun piloting self-service video kiosks in its branches. People tend to be intimidated at first, but once they use a video teller they become comfortable, said Jerry Frederick, chief infrastructure officer at Fifth Third. Wi-Fi in the branches is allowing staffers to help customers using computer tablets.
Important Fintech Terms to Help You Understand the Fintech Industry (TechBullion), Rated: A
According to a report by PwC, the cumulative investments in the fintech sector will exceed $150 billion by 2019. The report also notes that 20 percent of financial services businesses will be taken over by fintech startups by 2020. Here are 10 important terms to help you understand the industry.
Payment Gateway refers to a service provider authorizing credit card payments. It acts as an intermediary between an online payment portal and a financial institution such as a bank.
Coined by the UK Financial Conduct Authority (FCA), RegTech is a combination of two terms; regulation and technology. It refers to the systemic changes taking place in the fintech industry where traditional regulation would not be effective. RegTech makes use of blockchain, big data, cloud technology and artificial intelligence making it a fast and effective method.
KYC is the acronym for “Know Your Customer.” The phrase is widely used in the fintech and financial services sector as a whole. It refers to the procedures that companies should use in identifying their customers and determining the legality of their transactions. The object of KYC procedures is to combat money laundering.
P2P Lending is the short form for peer-to-peer lending. P2P lending refers to a modern development where one can obtain a loan from another individual without involving a financial institution acting as an intermediary. It is a way of obtaining social loans.
What do you want to ask SoFi CEO Mike Cagney at Disrupt NY? (TechCrunch), Rated: B
Today, however, the company is tackling an even wider range of services, from mortgages to personal loans, to wealth management and life insurance. And thus far, SoFi’s business has been a hit, with total equity financing of $1.9 billion.
I’m going to have Cagney on stage in a fireside chat, and I’ll have plenty of my own questions.
But, in the spirit of social sharing and community that SoFi aims to espouse, I’d like to hear what you want to ask Cagney. You can send me your questions anonymously, or by email: remember to put “SoFi Disrupt” in the subject heading.
House Committee Schedules Hearing on the State of Bank Lending (Crowdfund Insider), Rated: B
The Subcommittee on Financial Institutions, part of the House Financial Services Committee, has scheduled a hearing on the state of bank lending in the US. The hearing will take place at 2PM Tuesday, March 28th. Typically these hearings are live-streamed on the HFSC website.
RateSetter provides update on wholesale lending (P2P Finance News), Rated: AAA
The peer-to-peer lender stopped taking on new wholesale partners last December, after it emerged that the City watchdog had concerns about the practice within the P2P sector.
RateSetter added more details to its annual performance table earlier this month, introducing new sub-categories that include a breakdown of how much of the funds are channelled to wholesale lending.
Last month, the FCA confirmed its position on wholesale lending and highlighted that if a lending business borrows through a P2P platform and lends that money to others, it may be “accepting deposits”.
If the borrower does so without the correct regulatory permissions, this would involve a breach of the Financial Services and Markets Act (FSMA) and may be a criminal offence.
HOW I GOT STARTED: GRAY STERN OF LANDBAY (BQ), Rated: A
Of course. When I moved to the UK I had a very limited network here. Luckily, I met my co-founder and CEO John Goodall very early on (July 2013). He had just completed his MBA and had been looking at the burgeoning peer-to-peer lending space – so we were both looking at the opportunity from different sides (John as a saver, and me as a property investor). It was a logical step then to launch Landbay as a peer-to-peer funded mortgage lender.
Our equity funding has been split between private individuals and a number of institutional investors, including a hedge fund and the listed company Zoopla Property Group. As a mortgage lender we also have to raise lending capital.
To date, we’ve been funded by retail investors, but over the course of this year we will be complementing this with significant institutional funding. Getting those facilities in place has been a challenge, but we’ve come out the other side with the capacity to rapidly scale our lending operation.
As a mortgage lender we also collect a lot of data, so applying this data to help streamline other processes, say the provision of insurance, tax/accounting, conveyancing, property management – this is the logical next step. A streamlined process saves on time and cost – and my hope is that we can redirect these savings back into the properties themselves, creating better homes for more people.
How An IFISA Can Help You Save Tax (iexpats.com), Rated: A
Many peer to peer lenders offer IFISAs, but if you do not know about them, most do not tell you about the tax saving option.
Any income paid as interest on loans is wrapped in the ISA and remains tax-free. Money paid into an ISA is not taxed and any cash taken out is tax-free as well.
However, lending money online is risky, which is why the return is often between 5% and 7%, compared with the meagre returns from high street banks and building societies.
Expats remaining UK tax resident while on assignment abroad still pick up ISA tax breaks, but non-residents do not.
In blow to London, EU considers passporting for fintech services (Reuters), Rated: AAA
The European Commission could introduce EU passporting and lower regulatory requirements for financial technology firms, moves that could undercut London’s leading position in “fintech” as Britain gets ready to leave the European Union.
The EU executive’s vice president Valdis Dombrovskis said on Thursday that the Commission is considering how to regulate the expanding sector to encourage its development in Europe, while protecting consumers from risks that may emerge.
He said the Commission was exploring new rules that would give fintech companies passporting rights to expand across borders and operate anywhere within the EU’s single market.
That could threaten London’s status as the European hub for fintech companies, because firms based there are likely to lose their passporting rights when Britain leaves the bloc at the end of a two-year divorce process due to start next week.
RBS mulls mortgage robo advice service, shuts 158 branches (AltFi), Rated: A
The Royal Bank of Scotland is testing its robo advice services for mortgage loans and expects to make a decision on whether to roll it out by the end of the third quarter.
The government-owned bank has already cut hundreds of jobs and replaced them with “robo” like advisors, in an attempt to cut costs.
China is new leader in fintech worldwide with 39% of global volume (e27), Rated: AAA
2016 became the first year when the US lost its dominant global leadership in fintech – lost to Asia! Only the previous year, Asian fintech was twice smaller than the US, and just last year, it easily surpassed the US, accounting for 47 per cent of the global volume, as you can find in the new issue of Money Of The Future 2016/2017 fintech report.
While China dominates Asian fintech market by amount of funding, India is number one, in terms of the number of fintech deals (Paytm is the leader).
Fintech helps Chinese SMEs get loans (Straits Times), Rated: A
Mr Li Dongrong, President of the National Internet Finance Association of China, said financial technology, called fintech in short, can help solve the “last mile” problems of delivering banking services to those in remote areas. “In this age of mobile finance, we can achieve a breakthrough in this,” he added.
Indeed, in the last three years, JD Finance, the online finance arm of e-commerce giant JD.com, has lent more than 250 billion yuan (S$50.7 billion) to over 100,000 small business, and given credit worth tens of billion yuan to some 4 million farmers, said Mr Chen Shengqiang, chief executive of JD Finance.
China: WeiyangX Fintech Review (Crowdfund Insider), Rated: A
On March 15, the People’s Bank of China issued a report “Development of payment services in rural areas” to summarize and analyze the payment business in China’s rural areas during this past year.
By the end of 2016, the number of users of online banking has witnessed impressive growth in the rural areas, and online banking transactions also grew significantly.
Overall, in the rural areas, online banking maintained stable growth, and mobile banking continued to grow at a rapid speed. While telephone banking transactions fell significantly.
On March 13, Chunghwa Post announced that it would launch a cross-border payment business in April this year with Alipay.
On March 16，Yirendai released its financial results for Q4 of 2016 and full year of 2016. According to the report, the net income was RMB 1.1164 billion (US$160.8 million), achieving a 305% year-on-year growth. However, the subprime loans accounted for around 90% of the total loans, which would be a severe potential risk for the company’s long term development.
Fintech Tracker: Can CreditMonk Make User Reviews Relevant To Small Business? (Bloomberg Quint), Rated: AAA
That’s the idea behind financial technology firm CreditMonk – an open-source platform that allows businesses to rate each other based on payment behaviour.
The company is creating a database which clients can access to get an idea of the payment track-record of firms they may be dealing with. This is not unlike the information that credit bureaus like CIBIL provide. The difference is that while CIBIL gets its data on repayments of loans from banks and financial institutions, CreditMonk depends on ratings generated by users.
The process of rating a company on the website is similar to rating a hotel on a website like TripAdvisor. A reviewer first has to sign in to the website and disclose which company they represent. A company that is listed on the website can then be rated on a scale of one to five on the basis of various parameters.
The reviewer can choose to post the review anonymously on the website but since a log-in is mandatory to write a review in the first place, CreditMonk can investigate claims of a false review, if such a situation arises, Doongursee said.
CreditMonk is likely to face a challenge in building credibility while it sets up its database, according to Mahesh Murthy, a venture capitalist, and a co-founder at Seedfund.
Mobetize Expands B2B Data Top-Up Service to India with Smart Charge (Korea IT Times), Rated: AAA
Mobetize Corp. in Vancouver Canada, a provider of mobile financial services (MFS) technology for the multi-billion dollar business to business (B2B) segment of the Fintech as a Service (FaaS) sector announced the expansion of its B2B Data Top-up/Gifting service to India with smartCharge from the press release of Globe Newswire on March 24.
Mobile data traffic is expected to increase by 800% on a global basis within five years.
During 2016 alone, India experienced significant growth in mobile traffic – up 76% from last year, and by 2021, consumer mobile traffic in India will grow 7.4-fold at a Compound Annual Growth Rate of 49% year over year. Much of this growth will be fueled by pervasive consumer adoption of smartphones, smart devices and the use of machine-to-machine connections with an estimated 1,380 million mobile-connected devices by 2021.
Lufax plans online platform as part of transformation from P2P to wealth management company (SCMP), Rated: A
Lufax, China’s biggest peer-to-peer (P2P) lender backed by Ping An Insurance, is planning to set up a platform to facilitate global asset allocation for middle income earners in Asia and Chinese investors.
The Singapore-based platform will be launched this year, according to Lufax chief executive Gregory Gibb.
The company will also target middle class Asian investors in countries such as India and Indonesia, who want to invest internationally with smaller amounts down to US$10,000.
The challenge for Lufax is how to communicate with customers using standardised information and tell them of investment risks and opportunities via a mobile phone screen – all in 30 seconds to one minute.
Lufax was valued at US$18.5 billion in a January fundraising and is in talks with four investment banks – JP Morgan, Citigroup, Citic Securities and Morgan Stanley – for a planned initial public offering in Hong Kong.
IT Consortium CEO calls for regulatory postponement on Fintech (Ghana News Agency), Rated: AAA
Mr Romeo Bugyei, Chief Executive Officer of IT Consortium has appealed to government to allow the Financial Technology (Fintech) industry in Ghana to grow and be fully established in order to foster the growth of financial inclusion.
Mr Bugyei, who runs IT Consortium, a Fintech organisation engaged in payment aggregation and enabling the use of systems for financial services, said Fintechs help to make things cheaper by giving alternative ways of banking using digital or technological solutions.
He explained that because Fintechs were currently not regulated, they were required to partner with banks when doingtransactions that required depositing, which meant that the banks indirectly regulated Fintechs.
He said the central bank, at the meeting held with Fintechs, declared its intention to leave the sector unregulated for the time being, but said it would monitor the sector to know the technologies being used and guide where there were problems.
He stated that the Bank of Ghana was one of three central banks globally, including the central banks of Philippines and Mexico, that had been selected by BFA Global, to participate in a programme funded by the Gates Foundation called ‘Regtech for Regulators Accelerator (R2A)’ designed to help pioneer the next generation digital financial supervision tools and techniques