FinTech in Focus - January 25, 2021



FinTech in Focus - January 25, 2021

Kate Goldman
Kate Goldman
FinTech Associate, Center for Financial Markets

In this FinTech in Focus

Industry Headlines»
International Developments»

COVID-19 and FinTech

Vaccine distribution has certainly been top of mind in the latest cycle of COVID-19 related news. While in the United States state legislatures have expressed their unique interpretations of CDC vaccine distribution guidance, one thing they can all agree on is the need for an organized way to monitor who has received the vaccine and who has not. According to CNBC, a number of startups and major tech companies like Microsoft, Apple, and Google have shown interest in developing vaccine passports or certificates to help reopen the economy. The World Health Organization (WHO) has also created a working group to establish global standards for digital vaccination certificates. Though startups and large tech companies can likely develop a workable vaccine passport, many believe these conversations are premature as there is still insufficient data on the efficacy of the vaccine, and the majority of the population has not received one yet. For now, these conversations and technical assessments are being framed as an investment for the near future. 

 Industry Headlines

Data Security 

As the federal government and state legislatures place a concerted focus on consumer data protection, New York Governor Andrew M. Cuomo has introduced a comprehensive law that aims to provide New Yorkers with greater transparency about and control over their personal data by enhancing privacy protections. Governor Cuomo introduced this proposed law as part of the 2021 State of the State address and, if passed, the law will mandate that companies that collect information on large numbers of New Yorkers disclose the purposes of any data collection and collect only data needed for those purposes. According to the Governor's press release, Governor Cuomo will also establish a Consumer Data Privacy Bill of Rights, similar to recent data protection legislation in California, that will guarantee residents of New York the right to access, control, and erase the data collected from them, as well as the right to nondiscrimination from providers for exercising these rights. In regards to this legislation, Governor Cuomo stated, “New Yorkers appreciate the value and convenience that technology has afforded their lives, but progress does not come at the expense of basic privacy.” As interstate commerce expands and more states are enacting their own data privacy frameworks, the need for a federal standard becomes increasingly urgent.


Early this month, Walmart announced it will launch a FinTech startup with Ribbit Capital, one of the investment firms backing Robinhood. As a big-box retailer, Walmart serves millions of customers, some of whom do not have a formal relationship with a bank or financial services firm. According to CNBC, Walmart did not share the company's name or when services will be available, but stated that it will develop unique and affordable financial products for Walmart employees and customers. Walmart US CEO John Furner stated in a press release, “For years, millions of customers have put their trust in Walmart to not only save them money when they shop with us but help them manage their financial needs.” For the underbanked, Walmart already offers a Walmart MoneyCard, a prepaid debit card that can be loaded with cash for purchases and is especially targeted towards people who may have a challenged credit history. Although Walmart has not officially announced what their FinTech startup will offer, this announcement follows a patent filed in early 2019 by the company for a “system and method for digital currency via blockchain.” 

These partnerships are not exclusive to US-based FinTechs. TransUnion and South Africa’s biggest financial marketplace, Fincheck, announced plans to collaborate to make the credit application process more seamless and less complicated for customers. Since Fincheck’s platform is grounded in making the process of finding a suitable bank, lender, or insurer for consumers a seamless experience, its partnership with TransUnion would help enhance its capabilities by providing a comprehensive picture of each applicant, according to Finextra. CEO of Fincheck Michael Bowren stated, “Being able to access affordable credit and valuable information in the same place will help South African consumers during these challenging times. Checking the information held on you is accurate before making an application can be an invaluable tool that can help you understand your financial options more clearly.” Through the Fincheck platform, consumers can access a free TransUnion credit report prior to using the platform to compare insurance, lending, and banking offers to make a more informed financial decision.

While some partnerships flourish, others unfortunately wane. Recently, Visa announced it had scrapped its highly-publicized $5.3 billion planned acquisition of FinTech firm Plaid Inc. amid a Justice Department antitrust lawsuit that labeled Visa as a monopoly, according to The Wall Street Journal. The Justice Department argued that Plaid, although a newer company, was an important competitive threat to Visa, and the acquisition would lead to a higher cost of entry into the online debit services space. Makan Delrahim, one of the Justice Department’s top antitrust officials, stated, “Plaid and other FinTech innovators are free to develop potential alternatives to Visa’s online debit services,” and continued, “With more competition, consumers can expect lower prices and better services.” Only time will tell how Plaid and Visa move forward after this but it can be expected that Visa, and large firms like it, may find it harder to acquire competitors in the future. 


Earlier this month, President-elect Joseph Biden announced that long-time Washington and Wall Street veteran Gary Gensler will be his nominee to lead the Securities and Exchange Commission (SEC). Gensler, who led the Commodity Futures Trading Commission during the Obama administration and played a central role in 2008 financial crisis recovery efforts, will likely play a pivotal role in reframing the commission’s enforcement philosophy and building financial technology expertise. After serving as a regulator for years, Gensler began developing his expertise on digital currencies like Bitcoin and taught a course on financial technology at MIT Sloan School of Management, according to The New York Times. He has also been working with Biden’s transition team, advising on financial regulatory oversight. With cryptocurrency and financial technology being an integral part of the SEC’s regulatory mandate, Gensler will be in a position to put his expertise in financial technology to good use. 

Digital Banking 

Earlier this month, the Office of the Comptroller of the Currency (OCC) conditionally approved Anchorage Digital Bank’s application for a national trust charter, making it the first federally regulated digital asset bank. According to Forbes, following an indication from the OCC last year that there was a path forward for crypto banks, Anchorage announced last November that they were seeking a national trust charter. In their announcement post, the bank stated that “as a federally chartered bank with fiduciary powers, Anchorage Digital Bank will unequivocally meet the definition of Qualified Custodian, giving institutions a straightforward way to meet their obligations under federal law.” This decision on the part of the OCC brings clarity to the future of digital asset services within our innovative financial system.  

As digital banks continue to compete with more established banks for digital market share, investment banks are joining in on the fun. Recently, FinTech startup Marqeta was tapped by Goldman Sachs to power digital checking accounts for its Marcus platform, according to In Marqeta’s blog post published on January 14, the company stated that Goldman Sachs “will leverage our modern issuing platform” to introduce digital checking accounts to Marcus customers, likely later in 2021. This announcement was made at an opportune time, as Marqeta is reportedly planning to file for an initial public offering this year with a valuation of about $10 billion, as reported by Omer Ismail, global head of consumer business at Goldman Sachs, stated that “integrating with Marqeta’s platform will allow us to create a personalized, feature-rich banking experience for our checking customers.” Marqeta has quite the lineup of partnerships, including Afterpay, Mastercard, Uber, and now Goldman Sachs. With the successful launch of Marcus and the recent optimization of its Marcus Insight tool, it will be interesting to see how Goldman’s digital checking measures against FinTech competitors like Chime. 

 International Developments


In the wake of failed merger discussions with Indonesian technology firm Gojek, Singapore-based FinTech Grab is considering a US initial public offering with a valuation of at least $2 billion, according to Grab Financial Group is a popular payments and financial servicer with offerings that include lending, insurance, and retail wealth management throughout Southeast Asia. Interestingly, when it was founded in 2012, it was most known for its ridesharing and delivery services. Earlier this month, the company announced it was one of the FinTechs selected by the Monetary Authority of Singapore to set up a digital bank and has raised $300 million in a Series A funding round led by Hanwha Asset Management. reported, “Grab is looking to take advantage of the red-hot IPO market in the US'' though the pricing, sizing, and timing of the deal have yet to be determined. Although many US-based FinTechs have either expressed interest in an IPO or have recently filed, if Grab chooses to proceed, it could make history as one of the largest market debuts made by a Southeast Asia-based company on a foreign exchange market. 


While FinTechs headquartered in the UK have largely been scrambling to establish charters and licensing in EU countries post-Brexit, many industry insiders have identified a silver lining of the UK’s departure from the bloc: new freedom to define its own regulation on FinTechs and cryptocurrency. According to S&P Global Market Intelligencethis could not only spur innovation but could also help the UK reinvent itself as a hub for crypto and decentralized finance. Additionally, these comments follow the UK financial services regulator opening consultation on cryptoasset regulations, with a focus on stable coins, which will go on until March 31. In July 2020, the UK launched a government-backed FinTech review to facilitate recommendations on how the government can help support its budding FinTech industry following Brexit. Given that the UK FinTech sector accounts for an estimated £7 billion in the economy and employs around 60,000 people, according to government data, Britain’s move to embrace innovation within the FinTech space is likely a sound investment. Simon Briskman, partner at law firm Fieldfisher, suggested that UK regulator Federal Conduct Authority (FCA) has a reputation of leaning progressively in terms of FinTech innovation and “using the UK as a springboard before taking on the heavier regulation the EU imposes may well attract FinTech and crypto investment in the UK” This optimistic framing of post-Brexit conditions for FinTech firms definitely differs from the recent less than optimistic commentary around Brexit implications, but are the beginning of a new chapter for UK FinTechs. 

For more information on FinTech in Focus or the Milken Institute’s FinTech program, please contact Kate Goldman at

Published January 25, 2021