To what extent are the banks and other incumbent financial institutions in your jurisdiction carrying out their own fintech development / innovation programmes?


Bermuda Small Flag Bermuda

As mentioned in Questions 3 and 7, the Government of Bermuda announced its plans to amend the Banks and Deposit Companies Act 1999 to establish a new class of bank that will be able to render services to Bermuda-based fintech businesses. However, as of the date of writing, the Bermuda-based banks have not publicly announced any fintech development or innovation programmes.

Cayman Islands Small Flag Cayman Islands

As noted above, there have not been significant developments in the domestic market however there are numerous businesses based in the SEZ involved in fintech development/innovation.

Cyprus Small Flag Cyprus

There has been an increasing amount of both banks and incumbent financial institutions in Cyprus which organise their own programmes with a view to support the successful development of emerging business ideas, in particular with regards to big data/ open data, artificial intelligence, blockchain, cybersecurity etc.

A few examples would be Hellenic Bank’s “Cyprus Fintech Expo” and Deloitte’s “ARIS Programme” both of which focused on fintech development and innovation programmes in general.

Denmark Small Flag Denmark

The majority of the major Danish banks and insurance companies are under-taking their own fintech development by why of hosting hackathons and es-tablishing self-sponsored incubators or hubs. Others choose a more coopera-tive approach and invest in promising compatible fintech startups.

The largest bank in Denmark, Danske Bank, has had its own independent in-novation hub called Mobilelife for several years. Mobilelife counts around 150 people and its purpose is to challenge status quo within Danske Bank. The most well-known product of Mobilelife is the successful payment app Mobilepay, which today has around 3.8 million Danish users.

Tryg, the largest insurance company in Denmark, has launched their own in-cubator co-working space called 'the Camp' with room for up to 300 entre-preneurs.

Finland Small Flag Finland

Most of the major Finnish banks have not watched the fintech development from sidelines.

Many banks have their own mobile banking applications (such as Pivo by OP Bank, MobilePay by Danske Bank and Siirto by Automatia), and services related to payments are being developed.

Finnish banks have taken steps also towards open banking (such as Open OP and Nordea Open Banking) and many have initial APIs in place. In summer 2018, Danske Bank launched an account information service, and with it was the first Finnish bank to take a major leap towards new services offered under PSD2.

France Small Flag France

Please see above.

Germany Small Flag Germany

There is no general answer to this question and can only be assessed on a bank by bank basis. The largest German Bank Deutsche Bank has focused its re-sources with regard to FinTech on Digital Banking, in order to provide all its ser-vices digitally. Furthermore Deutsche Bank just recently bought 10 % of the FinTech ModoPayments, a digital payment service provider. The second largest German bank Commerzbank founds, invests und cooperates with FinTechs through its subsidiary the “main incubator”.

Gibraltar Small Flag Gibraltar

We are starting to see a number of banks in Gibraltar partnering with fintech companies in order to enhance their offering and some are also carrying out their own fintech development program.

Malta Small Flag Malta

Large banks have developed their fintech products which have proven to be largely accepted by consumers. One example are mobile applications through which users can bank and transfer money through the phones. Furthermore, the vast majority of banks operating locally have often communicated their respective banks' intention to keep developing fintech in the years to come. In addition, there have also been initiatives by financial institution aimed at creating safe spaces within which fintech start-ups can grow. The Malta Stock Exchange is sponsoring a fintech accelerator programme which aims to develop an ecosystem within which fintech companies can be supported. One of the largest financial services firms in Malta has recently launched its cryptocurrency trading platform, built upon on the model of their trading platform, while offering 24/7 customer support.

Israel Small Flag Israel

See answer to question 20 – the large banks in Israel have development, digital and high-tech divisions that both invest in existing high-tech and fintech company and develop their own independent products and services in this field. In addition, some international financial institutions (such as Barclays and Citi) have opened accelerators in Israel in order to reach local start-up companies.

Japan Small Flag Japan

As noted above, financial institutions have a strong interest in blockchain technology. For instance, it is reported that one of the largest Japanese banks has considered to issue its stable coin fully or preponderantly pegged to the price of Japanese Yen (“JPY”). A stable coin can be used to pay unspecified persons or entities for goods or services provided by them, can be transferable to unspecified persons or entities and can be converted to JPY.

A stable coin, fully pegged to the price of JPY(“JPY-pegged coin”) does not fall under the PSA's definition of "Virtual Currency". Such a coin is likely to be considered a "Currency Denominated Asset". Meanwhile, a JPY-pegged coin, being a tool for fund transfer, is likely to be considered electronic money. In order to issue JPY-pegged coins, the issuer must be a bank, a financial institution that is permitted to handle deposits under applicable laws or a fund transfer business operator registered with the relevant Local Finance Bureau under the PSA.

Mexico Small Flag Mexico

Please refer to question 17 above regarding digital transformation.

Additionally, Fintech companies in Mexico have already been acquired by big traditional banks (such is the case of Openpay, a payment platform that allows accept payments on websites or apps acquired by BBVA Bancomer in 2017).

British Virgin Islands Small Flag British Virgin Islands

From our vantage point, banks and other incumbent financial institutions are also already in the process of, or gearing up to, develop their own fintech programmes. By way of example, the most recent bank to be licensed by the BVI FSC, Bank of Asia, is in fact a digital bank. It is currently immersed in a Beta testing environment and is expected to be fully operational within a few months. Embracing the digital age, Bank of Asia will also be using electronic identification and client on boarding solutions in fulfilling its BVI AML obligations as regards knowledge of its customers.

Indonesia Small Flag Indonesia

SSEK: One of the biggest state-owned banks in Indonesia has started to replace its tellers with machines and re-training workers to become salespeople. Other banks are attempting to innovate by easing their policies and procedures (e.g., letting customers open bank accounts without having to visit the branch office, using chatbots to provide general banking information, etc.) or by establishing or participating in venture capital companies that invest in fintech companies.

Portugal Small Flag Portugal

The current status of fintech development by banks and other institutions in Portugal can be described as being in a very early stage. There are some banks, mostly those whose business model is based on remote/web-based services with a more younger and tech-savvy target that are currently developing some fintech-related projects.

United States Small Flag United States

Many banks have large internal development groups working to compete with non-bank fintech offerings, notably in the area of online banking, mobile payments and lending platforms. See also response to Question 20 above.

UAE Small Flag UAE

Many banks and other incumbent financial institutions in the UAE are active in the authorities’ accelerator programs and provide their services and support to participants. Additionally, these financial institutions are prospective investors for start-ups and their presence facilitates the provision of pitches to them.

Many banks and other incumbent financial institutions in the UAE, particularly in Financial Free Zones, have also launched a variety of initiatives to carry out their own fintech development or innovation programmes, e.g. Emirates NBD established the Future Banking Lab as a key initiative of its digital strategy, it is through this program that it developed and launched the “Cheque Chain” mentioned under question 16.

Ukraine Small Flag Ukraine

For the current year the competitions among fintech-startups have been implemented by a number of the Ukrainian banks for selection, development and further implementation of the most innovative solutions as a part of a bank. The implementation of the above mentioned projects is expected in the nearest future.

Switzerland Small Flag Switzerland

The major banks and insurance companies have their own research and development departments, but also work together with start-ups. Smaller banks entered into formal co-operation with fintech startups or buy their products.

India Small Flag India

Numerous banks and other incumbent financial institutions in India are focusing on innovation in areas, such as artificial intelligence (AI), data analytics and blockchain. Institute for Development and Research in Banking Technology (IDRBT), is the research arm of RBI experimented with blockchain for various trade applications and published the results in a white paper titled “Applications of blockchain technology in banking and financial sector in India”. The white paper, concluded that blockchain is indeed a disruptive technology that can potentially revolutionize the financial industry. Amongst private players, ICICI bank had announced the development of a Stellar-based blockchain application for transactions in a closed network. Axis Bank has partnered with Ripple, to enable cross-border payment services. Thirty banks and NBFCs in India including State Bank of India, ICICI Bank, Axis Bank and Yes Bank have agreed to share corporate KYCs through Primechain Money, which is a blockchain consortium set up by financial technology firm Primechain Technologies.

United Kingdom Small Flag United Kingdom

A number of incumbent financial institutions (including both banks and insurance companies) are actively involved in running fintech programmes and accelerators. Barclays has for some years run an accelerator in partnership with Techstars, with a number of notable success stories, and today most of the major retail banks run an innovation or accelerator programme of some kind, often teaming up with tech consultancies. In addition, many of the banks and insurance companies now have their own specific innovation function which is tasked with finding and partnering with fintechs that will be useful for their business.

The Netherlands Small Flag The Netherlands

Dutch banks and other incumbent financial institutions have invested heavily in own fintech development and innovation programs, such as the introduction of (mobile) payment apps, further enhancement of online banking , the use of AI and blockchain technology and so on. More and more, banks are offering a secure open banking platform for financial services by using APIs and are becoming a marketplace to other fintechs.

China Small Flag China

The incumbent financial institutions are carrying out their own fintech development in difference areas: wealth management, internet financing, payment, credit research, supply chain financing, online securities, online mutual fund, online insurance, P2P lending, crowdfunding, information platform and etc. However, these institutions have been slower to adopt new methods, due in large part to the potential switching costs as they migrate to new systems or new processes. Most of the incumbent financial institutions have established fintech department to carry out their own fintech development, form customer analytics, risk management, automated processing, to AI customer service robots and so on.

Taiwan Small Flag Taiwan

Taiwan banks and financial institutions have been embracing fintech, either through technology or business model, and devoting many efforts and resources in adopting new technologies, although the developments are not as apparent or prominent as in other jurisdictions, such as China or Singapore. The main reason for this is that banks and the other financial institutions are subject to strict regulatory scrutiny. In Taiwan, financial institutions are required to obtain prior approvals for almost all of their business activities, including adopting new technology or engaging services providers. Another reason may be that the traditional financial products and services have been well developed in Taiwan and hence, consumers do not seem to be particularly enthusiastic about using new financial products or services. Currently, many banks already allow their customers to access their accounts via the Internet, including offering on-line ATM service. Many financial institutions also launched “Robo-Advisor” services. To extend their business, several financial holding groups joint different consortiums to compete to win the “Internet-only” banking licenses.

Malaysia Small Flag Malaysia

As mentioned above, it can be seen that the financial institutions in Malaysia considered fintech as an innovation rather than a threat. There are several instances to show that Malaysian financial institutions are carrying out their own fintech development and innovation programmes. For instance, RHB has launched an application known as RHBMyHome mortgage app which enables users to apply for mortgage loans, submit their documents and check the status online. Alongside with that RHB has also launched the RHB Rider Service. It is an account activation service that allows RHB customers who have opened an online account, to request for a bank’s staff to visit their office or home for KYC and account activation.

Another example that can be illustrated in which Maybank has launched their Maybank Fintech Sandbox. It is a platform which aims to provide opportunities for start-ups and innovators to develop and test new ideas by leveraging on the banking group’s internal digital and technology expertise. The sandbox will also provide fintech companies with the environment, tools, simulated data, APIs to experiment around. Maybank was recently known for being the first bank to launch a digital wallet called MaybankPay and their recent soft launch for Maybank QRPay.

Updated: February 26, 2019