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The number of African fintech startups grew from 311 in 2019 to 564 in 2021, and accounted for 61% of the $2.7 billion deployed across Africa in 2021, according to a MasterCard study. While its share of global fintech funding is just over one percent, the continent's fintech sector still recorded one of the highest year-on-year growth rates globally. Nigeria, which is home to some of the continent's fintech unicorns, was not only the leading fintech hub in Africa, but across the Middle East and Pakistan. https://newsroom.mastercard.com/mea/press-releases/fintech-emerging-as-africas-most-vibrant-sector-finds-mastercard-study/

The Middle East has seen a rapid rise in fintech in recent years, transforming the region's financial services landscape. Fintech makes the playing field increasingly dynamic and diverse, with various players, including financial institutions (FIs), offering innovative solutions across areas such as payments, lending, and wealth management. Governments in the region are actively supporting the development of fintech through regulations, investments, and initiatives to promote cashless payments. The region has also seen a boom in fintech investment, with several large deals and funds established to support startups. There is also a growing trend of collaboration between traditional banks and fintechs, as well as partnerships between regional fintechs and global players, to bring new solutions to the market.

The IMF published a paper that examines how the growing presence of Fintech firms affects the performance of traditional financial institutions. The findings point to a negative impact on profitability, primarily due to a reduction in interest income and a rise in operational costs. Although established financial institutions have tried to diversify their revenue streams, these efforts have proven inadequate to offset the losses associated with increased competition from Fintech firms. The study also reveals that various Fintech business models, such as peer-to-peer (P2P) lending and balance sheet lending, have varying effects on financial institutions. Cooperative banks experience more significant profit deterioration under both models, whereas (larger) commercial banks appear to benefit from partnerships with P2P platforms, as evidenced by an increase in non-interest income. Furthermore, the findings suggest that Fintech presence has a disproportionately larger adverse effect on banks in countries with more competitive, profitable, and developed financial systems. Interestingly, however, traditional financial institutions in countries with stronger regulatory frameworks appear to benefit from the expanding influence of Fintech firms.

The IMF published a paper that investigates how fintech activities influence risk taking by traditional financial institutions (FIs) using a curated databased covering over 10,000 FIs and global fintech activities. It finds that greater fintech presence is associated with heightened FI risk taking, although higher capitalization and liquidity ratios as well as greater income diversification can reduce this effect. Importantly, there is suggestive evidence indicating that in certain cases, greater fintech presence may be associated with less FI risk taking amid stronger domestic institutions. Hence, the paper concludes that robust institutions combined with strong policy frameworks and rigorous supervision can help reap the benefits of growing fintech activities while safeguarding financial stability.

Swisscom released the new Swiss Fintech Startup Map for October 2019. Four new Startups joined the map since last month. The new Swiss Fintech ecosystem map counts now in total 341 Swiss Fintech Startups.

Based on survey responses from around 30 jurisdictions, this paper provides a cross-country overview of policy responses to fintech developments. In addition, building on the work by global standard-setting bodies and other international organisations, the paper proposes a conceptual framework through which to analyse policy responses to fintech, referred to as the "fintech tree". The fintech tree identifies three categories: fintech activities, enabling technologies and policy enablers.

In a chapter in the April 2022 Global Financial Stability Report and an accompanying blog post, International Monetary Fund staff argue that, while Fintech can increase efficiency and competition and broaden access to financial services, the fast growth of fintech firms into risky business segments-and their inadequate regulation and interconnectedness with the traditional financial system-can have financial stability implications. The chapter explores three key types of fintech to illustrate these risks: digital banks ("neobanks"), long-established fintech firms in the US mortgage market, and decentralized finance ("DeFi"). The chapter argues that policies targeting fintech and traditional financial firms proportionally are needed. In the case of DeFi, regulations should focus on the elements of the crypto ecosystem that enable it, such as stablecoin issuers and centralized exchanges.

Mastercard launched Fintech Express. Rapyd, a B2B Fintech-as-a-Service provider, is the first partner in the program. The Fintech Express program can quickly onboard partners and provides immediate access to a cross-functional team of experts to support multiple work streams.

2019 was an excellent year for fintechs in terms of exposure and raising awareness among the majority of the population about what fintechs are and what potential they hold for the regular citizens. In 2019 we saw a major spike in the number of fintech, in the funding of these fintechs and the collaborations between these startups and the larger, more traditional institutions.

The default of Wirecard highlights several problems in the regulation and supervision of Fintech companies, with regulatory holes in investor protection, customer protection, and financial stability. This column argues that since Fintech companies can be very complex, their oversight requires understanding their business model and combining regulation and supervision based on both entities and activities. The global reach of Fintechs also calls for better coordination at the European level and beyond, but the authors do not see the need for new regulatory body to oversee Fintechs in Europe.

A joint report by The Cambridge Centre for Alternative Finance, the World Bank and the World Economic Forum, has found that while 12 out of 13 fintech sectors reported year-on-year growth during the first half of 2020, significant discrepancies between sectors and regions remain. Digital banking, digital identity and regtech sectors showed a more modest growth increase of 10% compared to their counterparts in digital payments, digital savings, wealthtech and digital asset exchanges which saw transaction volumes grow in excess of 20%. Procyclical digital lending fintechs saw an average 8% decrease in transaction volumes. Fintechs based in Emerging Markets or Developing Economies saw higher average growth in transaction numbers and volumes (15% and 12% respectively) than those in Advanced Economies. https://www.jbs.cam.ac.uk/faculty-research/centres/alternative-finance/publications/2020-global-covid-19-fintech-market-rapid-assessment-study/

Fintech is being adopted across markets worldwide - but not evenly. Why not? This paper reviews the evidence. In some economies, especially in the developing world, adoption is being driven by an unmet demand for financial services. Fintech promises to deliver greater financial inclusion. In other economies, adoption can be related to the high cost of traditional finance, a supportive regulatory environment, and other macroeconomic factors. Finally, demographics play an important role, as younger cohorts are more likely to trust and adopt fintech services. Where fintech helps to make the financial system more inclusive and efficient, this could benefit economic growth. Yet the market failures traditionally present in finance remain relevant, and may manifest themselves in new guises.

A research arm of the Hong Kong Monetary Authority published a detailed report, based on an industry-wide survey, on overall Fintech adoption and the latest technological advancements in the banking sector. Banks see Fintech development more as an opportunity than a threat to their business operations, with risk management services having the greatest potential. Meanwhile, 86% of banks have adopted or plan to adopt Fintech solutions across all types of financial services. Preliminary results also show that increased cost efficiency and improved profitability are associated with more extensive Fintech adoption by banks.

This IMF paper reviews how central banks have been reacting to the challenges posed by fintech to the legal foundations of their governance. It finds that fintech calls for reconsidering the adequacy of the legal formulation of currency issuance and payment systems functions and powers. Fintech may impact the functional autonomy for some key central bank functions. For example, the role claimed by governments in designing CBDC will be an important issue to consider; the legal framework will need to carefully delineate the respective roles and responsibilities between the government and the central bank. The authors suggest that central bank law reform must be sufficiently broad to achieve appropriate levels of "agility" to provide a "future-proof " legal framework. For instance, legislation (and by extension the legal framework to which the central bank is subject) should to the maximum extent possible be technology-neutral.

The Bank for International Settlements (BIS) published a working paper that explores the characteristics of pre-pandemic (2016-2019) small business lending (SBL) in the United States, using proprietary loan-level data from two fintech SBL platforms (Funding Circle and LendingClub). The results show that fintech SBL platforms lent more in zip codes with higher unemployment rates and higher business bankruptcy filings. Moreover, fintech platforms' internal credit scores were able to predict future loan performance more accurately than the traditional approach to credit scoring, particularly in areas with high unemployment. Overall, fintech lenders have a potential to create a more inclusive financial system, allowing small businesses that were less likely to receive credit through traditional lenders to access credit and to do so at lower cost.

Fintech Saudi published its 2021/22 Annual Report, which showed that the number of active Fintechs in Saudi Arabia has increased by 79% from 2021 to 147, marking a 14.7x increase in 4 years. The report anticipates further growth over the coming year, with the launch of three new digital banks, and the recent publication of the Kingdom's open banking framework, setting out legislation, regulatory guidelines and technical standards. Fintech Saudi was launched by the Saudi Central Bank in partnership with the Capital Market Authority in April 2018 to act as a catalyst for the development of the Fintech industry in Saudi Arabia.

The Hong Kong Monetary Authority (HKMA) announced the results of its Tech Baseline Assessment, a stocktaking of Hong Kong banks' adoption of Fintech, and assessment of whether there may be Fintech business areas and technology types that would benefit from the HKMA's support. Overall, the results of the Assessment indicate that the banking industry is supportive of the HKMA's Fintech drive. And banks are prepared to dedicate healthy amounts of financial and talent investment to Fintech adoption, which is expected to increase across the board.

The IMF published a paper that examines the development of the financial sector in Latin America, focusing on fintech services and regulation. Exploring fintech's macro-critical impact using country- and bank-level data, the paper finds that booming financial technologies in Latin America have helped boost competition in the banking sector and inclusion. Additionally, it demonstrates that fintech firms in Latin America experienced robust growth even during the pandemic supported by external funding. Finally, the paper discusses how regulators are addressing the risks associated with financial technologies and how they are leveraging fintech tools in their supervisory activities.

The US House of Representatives Financial Services Committee has formed a Task Force on Financial Technology to "examine the current legal framework for fintech, how fintech is used in lending and how consumers engage with fintech."

US banks are future-proofing by actively investing in fintech startups. In 2019 YTD, US banks have participated in 24 equity deals to fintech companies. This follows a record 2018, where US banks backed 45 equity deals to fintech startups - a 180% increase from 2017.