Grow Advisors FinTech Minute: Why the Wells Fargo debacle should worry many banks

Grow Advisors (a Grow VC Group company) publishes its daily insight into the world of alternative finance and fintech. Here are some highlights:

Why the Wells Fargo debacle should worry many banks

In September, Wells Fargo admitted to falsely opening millions of banking and credit card accounts over the course of 5 years, without customers’ consent. The bank fired over 5,000 employees involved in the misdeeds and handed a US$185 million fine.  At the heart of the scandal is the stress managers were under to reach [unrealistic] sales targets. Former employees speak of relentless pressure and increasing quotas as the cause for their actions. Consider an alternative and worrying perspective: one that involves a fast changing landscape, reluctance to change, unmet consumer demands and the resulting revenue declines.

The world’s financial centres regulate emerging fintech

Technology and financial services firms developing fintech services face similar hurdles presented by old regulatory frameworks that were not designed to support digital business. Compliance is a fundamental and immovable base on which to successfully grow the fintech sector. At the same time, central banks and regulators realise they play a vital role in enabling innovation. While regulatory authorities maintain dialogue with counterparts around the world, it has been suggested that cooperation is limited as each country competes to attract business

Online Lending – The Fintech Chimera

The Chimera was, according to Greek mythology, a monstrous fire-breathing hybrid creature of Lycia in Asia Minor, composed of the parts of more than one animal. Innovation, like evolution, takes on many forms. Though always present in financial and investing services, in the last ten years the pace of innovation in all industries has quickened due to technology, regulation and customer needs. And when it comes to online lending, we are beginning to see an evolution in business models, as in-market experience begins to shape how businesses operate. The innovation will result in evolved organisations that take the best of both worlds.
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Read more at Grow Advisors Blog.