OBSERVATIONS FROM THE FINTECH SNARK TANK
The rise in popularity of fintech has brought with it an increase in the number of blogs and newsletters focused on the industry.
Last year, I published a list of eight fintech blogs and newsletters I thought were the best in the industry. It’s time to add some new blogs and newsletters to the list. This new list doesn’t replace last year’s—you should still read last year’s list (especially those from Jason Mikula, Simon Taylor, and Alex Johnson).
Aika Ussenova does financial planning and analysis at Monzo Bank in the UK, and her Substack newsletter offers deep dive analyses into various players on the fintech scene including:
- Klarna. Ussenova explains that Klarna has two businesses that compete for funding: 1) An interest-bearing business based on writing long-term loans and accruing interest of 20%, and 2) A commission business that has high velocity and can’t work effectively if the funding is held up in longer term loans. She concludes that, fortunately for the company, it’s raised a lot of money, has a large customer base, and a capital accretive business—all of which help to solve many problems.
- Square. According to Ussenova, Square’s CashApp has three components to its innovation stack: 1) A peer-to-peer product that gets people to bring their entire networks to it; 2) Customer acquisition at massive scale and low cost; and 3) Adjacent products such that enhance existing ones, increasing the utility of the network.
This Substack newsletter from Paddy Ramanathan, Managing Director of the iValley Innovation Center, has a strong focus on decentralized finance. A recent post on 10 Predictions For The Post-covid Decentralization Decade includes a prediction that virtual and decentralized business ecosystems will lead to digital jurisdictions.
Commenting on the exodus of companies from San Francisco to Austin and from New York to Florida, Ramanathan asks: Is this the beginning of the great decentralization of population and business hubs?
He asserts that it is and that “business ecosystems will be tied together virtually as network graphs with cross-border governance. This will create unique policy and governance challenges that will lead to broad reform on taxation, jurisdiction, and regulations.”
The subtitle of this blog is “thoughts on fintech and decentralized finance” and it’s written by Giorgio Giuliani, the Product Lead at SumUp, a Berlin, Germany fintech that enables small businesses to accept card payments in-store, in-app and online. Giuliani provides in-depth analyses on a range of topics including:
- What if a crypto currency becomes the mainstream payment method? Giuliani addresses questions like: 1) What if a crypto currency or a native digital currency becomes the mainstream payment method? 2) What can be the long-term impact on consumer finance?
- How could tokens revolutionize the creators economy? According to Giuliani, “Creators economy is the new hit in Fintech: VCs are jumping on this wagon, startups are raising millions trying to build for this underserved market.” Giuliani’s thesis is that the sector will be reshaped by the tokenization of creators’ revenue stream and their sale to investors and fans.
I’m not a lawyer, I don’t play one on TV, and I didn’t sleep in a Holiday Inn last night. Thankfully, there’s this Substack newsletter—subtitled “Fintech laws ‘n’ regs…for non-lawyers”—for people like (you and) me.
You’d be hard pressed to figure out that this newsletter is written by Reggie Young, legal counsel at fintech company BlueVine. His Twitter handle indicates that the newsletter is his, but the newsletter itself makes no mention of who the author is.
Young provides insights into regulatory developments that impact the fintech world (and really, banking and financial services in general). Soundbites from recent posts shed regulatory light on:
- Artificial intelligence. The FTC released a blog post on artificial intelligence which indicated that FinTechs could be liable for exaggerating what their algorithms can do, and whether their algorithms are fair and unbiased. What does this mean for fintech? Increased scrutiny and enforcement actions for discrimination in lending.
- Cryptocurrency. Young writes, “Crypto regs are still evolving, but two options have emerged depending on what the token is: securities and commodities.” Young’s analysis of the crypto regulations helps us laypeople realize what a confusing mess of regulatory interpretations there is today.
Each post explains the regulatory landscape for the topic of the day (e.g., payments, robo-advisors, lending). The newsletter subtly and indirectly proves why the unemployment rate for fintech lawyers is going to remain low for a long time to come.
This is a relatively new newsletter with just four posts under its belt as I write this. The authors—Mike Sigal, founder of 20022 Labs and entrepreneur, advisor, and creator Debbie Landa—say that the newsletter is a “curated ‘sports highlights’ newsletter to keep you up-to-date on what’s most relevant.”
It’s a lot more (and a lot better) than that. There are a number of newsletters (that won’t make my list) that just curate the news. Tracking Payments goes way beyond and offers Sigal’s and Landa’s expert and experienced views on what the news means.
Topics and questions addressed in this newsletter include:
- SAP’s move into embedded finance. SAP contributed its core banking customers, IP and staff into a JV with Dediq which invested €500M. According to Sigal and Landa, this leads to two questions: 1) Will the new company really build an end-to-end solution that leverages the same data across all functions? and 2) Is giving up potential revenue growth for a 20% stake and reducing operating costs a good trade?
- Can corporates follow the conscious consumption trend? Sigal and Landa say that there’s is an ESG use case for ISO 20022: “Mastercard and Klarna are offering tools, distributed via banks and merchants to help conscious consumers see how their spending impacts the environment. The tools are based on an index that measures the carbon impact of financial transactions.”
Do you know of other free fintech and cryptocurrency newsletters that should be on this list (i.e., provide analysis and not just curate the news)? Let me know and I’ll update this list.