FinTech is under the global spotlight because of its promise – or threat – to ‘disrupt’ traditional
financial activity. One of FinTech’s fastest growing areas is the ‘blockchain’ protocol, which could enable the clearing and settlement of securities such as stocks and bonds without the need for intermediaries such as banks.
More broadly new products emerging from this sector seek to offer customers cheaper, faster and easier-to-use services, and to offer financial access to people who don’t or can’t currently use the banking system.
The sector has until now developed in a somewhat disjointed manner, as the incumbents of the financial services sector rush to compete with innovative start-ups by offering new services such as mobile instant-payment apps. Many start-ups have struggled to access clients outside their domestic markets.
Innotribe, the innovation arm of financial communications provider SWIFT, and Innovate Finance, the trade body for Britain’s FinTech sector, who have together set up the federation, believe that it will enable global hubs to share business knowledge, give start-ups access to new markets, and provide the the sector with a global voice.
“It’s a group of equals,” Fabian Vandenreydt, global head of Innotribe and the SWIFT Institute, told Reuters. “It’s a group of people that globally support innovation for the benefit of the banks and the start-ups.”
Development has accelerated in the last few years as smartphones have become widespread and as the global financial crisis shook consumers’ belief in banks and sent them in search of alternatives.
Global financial and technology centres such as London, New York, Silicon Valley and Singapore have been competing for supremacy in the fast-emerging sector.
But Innotribe and Innovate Finance say the new federation – which will be formally launched at next month’s Sibos banking conference in Geneva – will be cooperative rather than competitive.
The federation will, however, rank the FinTech hubs according to various criteria, such as the ease of doing business, the amount of capital and talent available, and the regulatory environment, so that those centres can see where they need to make improvements.
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