A weekly wrap-up from Silicon Valley on what’s making the news in fintech, banking, and disruptive trends

All It Took Was Pokemon to Get People into Bank Branches


The instant popularity of Pokemon Go has taught banks important lessons about engaging customers, rewarding them and getting them in branches. Much like Uber taught the payments industry that the best way to get consumers to spend through their smartphones is to make the process invisible, the smartphone game Pokemon Go keeps players coming back to local landmarks without nudging them to a specific place or even promising them a specific reward.

“Neither the technologies nor commerce took center stage. Instead developers focused on creating an experience that would bridge the physical and online world in order to grip the imagination of its participants,” said Michelle Evans, digital consumer manager at Euromonitor International. Read More

Lessons from a Long-Forgotten ‘Fintech Bank’


American Banker ran a story last month about a former Comerica executive’s plan to launch a nationally chartered digital-only bank. It turns out, there is a precedent. The Office of the Comptroller of the Currency approved a national charter for such a bank — all the way back in 1999. During the height of the dot-com boom, Aerofund Financial, a commercial lender in San Jose, Calif., established AeroBank, an institution that planned to offer business banking solely electronically and wanted to eventually move into the consumer space.

In a June 2000 document, the OCC explained that it granted AeroBank a national charter to “deliver small business-oriented loan and deposit products and services through electronic channels such as the internet and telephone.” It added that the bank would place “deposit-taking ATMs” in major metropolitan areas. Read More

Ethereum’s ‘Smart’ Fantasy World Dies: The Effect On The Banks


What is a commercial bank? The familiar definition is: “A bank is a depository institution.” Banks accept deposits. But that banking function is threatened, likely in its death throes. The fate of our banks cannot be found in quarterly reports. It is found in the rapidly evolving change in financial technology, FinTech. The Swift hack bared the growing vulnerability and cost of secure transfer of funds using our current deposit-based methods. An alternative, developed originally by the bitcoin community, and more generally called blockchain, promises to dramatically change the cost structure of transactions, custody, and securities trading and clearing. Every financial function will be dramatically safer and cheaper in ten years due to this change to what is generically known as distributed ledger technology. Read More

Millennials are ditching financial advisors for apps

appsIt’s time for many technophobic 50-something financial pros to look for another job. That’s because millennials, many of whom are about to inherit considerable assets, are not looking for a sit-down meeting in a downtown office to discuss investment options.

You need to reach them on their ubiquitous mobile devices, which means they are gravitating to financial technology (FinTech) companies, financial services executives say.

Advisers, they warn, risk missing out on the technological revolution affecting their clients and their children, who are expected to inherit trillions of dollars over the next generation despite the slowdown in the economy. Read More 

US Regulator Warns Virtual Currency Enables Cyberattacks on Banks

OCC-300x185The federal agency that oversees national banks in the US has named virtual currencies an operational risk due to their perceived role in facilitating and enabling cybercrime.

Part of its newly released semiannual risk survey, the US Office of the Comptroller of the Currency (OCC) warned that virtual currencies continue to be used as payment in extortion efforts by criminals aimed at banks and other businesses. The comments came amid an overall focus on credit and strategic risk in the US markets, particularly for small- and mid-size banks. Read More

Blockchain-based banking backend Vault OS from ex-Googler emerges from stealth mode

vaultos_featureDespite holding the vast majority of the world’s wealth (or perhaps because of that), banks aren’t exactly hotbeds of cutting-edge tech, often relying on decades-old systems for everyday tasks. ThoughtMachine, a company led by ex-Google engineer Paul Taylor, is looking to change that with a modern, fully integrated, blockchain-based banking operating system called Vault OS.

The bombastic press release announcing the system’s emergence from two years of stealth development makes a lot of promises: the company “has solved the greatest challenge in fintech;” Vault OS is “100% future-proof,” “hugely flexible,” and “fixes broken banking forever.” Read More

Painfully Hip Bank CEO Proclaims Fintech To Be Totes Over


Remember when Fintech was coming to destroy the traditional banking industry? Remember how hundreds of thousands of finance jobs would be made obsolete by technology? Remember banks lining up to spend huge amount on acquisitions and acqui-hires to stave off the impending march of obsolescence?

Well, you can forget all that because fintech is over now thanks to Jamie Dimon who built a nerd bunker and apparently did the damn thing. Read More 

Banking Disrupted