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

Will Brexit Cause a Techxit? 10 Ways Britain’s EU Exit Will Affect Technology

Britain has voted to leave the European Union by 52% to 48% in a historic referendum – but what does that mean for the UK’s technology industry?

Industry experts weigh in on the top 10 outcomes of Britain exiting the EU: 1) there will be a devasting blow to tech firms, 2) it is the end of the road for fledgling firms, 3) volatility is ahead, but it is not doomsday, 4) operations will scale down, 5) GDPR compliance will still be required, 6) inevitable exit for fintech firms, 7) hope for a digital single market are diminished, 8) its bad news for IT and digital skills, and 9) IT outsourcing will be implicated.
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‘Data Wants To Be Free’: Why Banks Should Open APIs To Others

“The biggest problem banks have is that they’re run by bankers, not software engineers,” said Dan Kimerling, head of APIbanking for Silicon Valley Bank, to a room full of bankers at American Banker’s Digital Banking 2016 conference in New Orleans last Wednesday. “Banking will eventually become a software business because all they do is move bits. They call it money, but it’s just bits.” Silicon Valley Bank was one of the first banks to offer APIs to its commercial clients, which include some of the largest tech companies in the world.

For community banks, Chris Thompson, chief architect at Orrstown Bank of Shippensburg, Pa., the oligopoly of core financial technology vendors gets in the way of fully exploring an API strategy, but he added, “Customers are going to share their data whether you enable it or not. They could do it in a comfortable way that you understand and support.”
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What Can Banks Offer in the Debate Over Digital Identity?

There needs to be a transition from what’s happening now,” said Karen Gifford, a former counsel to the Federal Reserve Bank of New York. “Frankly, everyone recognizes there’s way too little cybersecurity around people’s personal information, the regulatory community has been pushing for things to change, and consumers are impatient with how identity is being managed. So there’s a lot of impetus from many different places to change.”

But how identity should be managed, and who should manage it, are shaping up to be hotly debated questions.

The United Nations has set a goal of providing a legal identity to everyone on the planet by 2030. At a conference at the UN headquarters in New York last month organized by ID2020, a “startup NGO” seeking to further this goal, one of the most discussed concepts was “self-sovereign identity” — essentially, giving individuals control over their information and allowing them to transport it.
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The Rise of Fintech in Supply Chains

A new type of services company could transform global supply chains: Financial technology companies that act as intermediaries in facilitating transactions between a company and its suppliers. They enable both the buyer and supplier to improve their working capital by making it possible for the former to extend its payables and at the same time accelerate payment to the latter. This provides both sides with benefits, including greater liquidity and less variability in the timing of payments.

Multinational corporations such as Apple, Colgate, Dell, P&G, Kellogg’s, and Siemens are using these “FinTech” companies to tap previously inaccessible capital in their supply chains to help finance growth in new and emerging markets, develop and support new products, strengthen their financial positions, and increase the capital available to the whole supplier ecosystem. (The use of FinTechs allows suppliers to access funding at the multinationals firm’s lower cost of capital.)
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Goodbye, Password. Banks Opt to Scan Fingers and Faces Instead.

The banking password may be about to expire — forever.

Some of the nation’s largest banks, acknowledging that traditional passwords are either too cumbersome or no longer secure, are increasingly using fingerprints, facial scans and other types of biometrics to safeguard accounts.

Millions of customers at Bank of America, JPMorgan Chase and Wells Fargo routinely use fingerprints to log into their bank accounts through their mobile phones. This feature, which some of the largest banks have introduced in the last few months, is enabling a huge share of American banking customers to verify their identities with biometrics. And millions more are expected to opt in as more phones incorporate fingerprint scans.
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AI Drives Better Business Decisions

A 2015 Tech Pro Research survey indicated that 24 percent of businesses across industries are currently using AI or had plans to do so within the year. While the health-care sector has been among the leading adopters of AI, financial services, and automotive companies are also increasingly turning to assisted, augmented, and autonomous intelligence. These organizations hope those three types of AI will help improve their efficiency and effectiveness, enhance their innovative capabilities, and better enable them to seize opportunities such as expanding into new markets.
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Finance Is The Master Technology—and It’s Funded the World

William N. Goetzmann, the Edwin J. Beinecke professor of finance and management at Yale, is shooting for the big game in his new book, “Money Changes Everything: How Finance Made Civilization Possible.” His goal is to explore the consequences of the invention and growth of finance for whole societies. As his title suggests, his conclusion is that they are firmly positive. Financially advanced societies, he argues, are very different from financially primitive ones — and not just in that they have more money.
The idea that dominates this magnificent history of money and finance, and brings order to the erudite survey of modern research that Goetzmann has marshaled, is that finance is a “technology of civilization” — a way of thinking about and doing things that has been the central facilitator of the material, artistic and cultural accomplishments that we call civilized life. Indeed finance, Goetzmann argues, is a sort of master technology, from which an astonishing range of our most basic habits of mind derives.
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