Fintechs

RG2015

The following question was asked on another thread.

I wanted to answer but not on that thread because it was off topic.

OceanSound said:

Off topic: 

Does anyone know how we should refer to the likes of Wise (formerly transferwise) and revolut on these forums ? I mean, they are not banks.

I've seen many instances where someone (including my good self) has talked about wise or revolut when talking about banks, and the next reply has been 'yeah, well wise/revolut is not a bank'.

I'm sure I've seen some finance articles call these fintech's. However, if you search online for fintech then the result is 'financial technology'.

Is 'fintech' an appropriate classification for wise and revolut or not? If no, then what would be?

I favour Financial Institution or FI to cover all bases such as Banks, Building Societies and any other financial providers.

Wise use Electronic Money Account.

 "Wise is a non-bank payment provider. This means your Wise account is an electronic money account."

https://wise.com/help/articles/2736035/how-does-wise-hold-my-money

https://www.fca.org.uk/consumers/using-payment-service-providers

RG2015

I also got this on a Google search

Fintech, a portmanteau of "financial technology", refers to firms using new technology to compete with traditional financial methods in the delivery of financial services. Artificial intelligence, blockchain, cloud computing, and big data are regarded as the "ABCD" of fintech. Wikipedia

Hence it can be a type of organisation as well as a description of a method of manipulating data.

eskbanker

'Fintech' is an unhelpfully vague term but is increasingly used to denote online-only financial institutions without branch infrastructure and offering smaller ranges of services (rather than the underlying technology itself) - however these ultimately still fit within the categories defined by the FCA (bank, payment service provider, e-money institution, etc), based on the activities they're authorised to conduct, so to my mind it's always important to cross-refer back to the regulatory definitions:

https://www.handbook.fca.org.uk/handbook/glossary/

So, I suppose my question would be 'do we actually need a collective term for "the likes of Wise (formerly transferwise) and revolut"?' and what useful purpose does this serve, when it's still necessary to differentiate between those that are authorised to accept deposits versus those that aren't, for FSCS purposes, and other such distinctions?

OceanSound

eskbanker said:

'Fintech' is an unhelpfully vague term but is increasingly used to denote online-only financial institutions without branch infrastructure and offering smaller ranges of services (rather than the underlying technology itself) - however these ultimately still fit within the categories defined by the FCA (bank, payment service provider, e-money institution, etc), based on the activities they're authorised to conduct, so to my mind it's always important to cross-refer back to the regulatory definitions:

https://www.handbook.fca.org.uk/handbook/glossary/

So, I suppose my question would be 'do we actually need a collective term for "the likes of Wise (formerly transferwise) and revolut"?' and what useful purpose does this serve, when it's still necessary to differentiate between those that are authorised to accept deposits versus those that aren't, for FSCS purposes, and other such distinctions?

Aren't all banks FSCS protected?

RG2015

eskbanker said:

'Fintech' is an unhelpfully vague term but is increasingly used to denote online-only financial institutions without branch infrastructure and offering smaller ranges of services (rather than the underlying technology itself) - however these ultimately still fit within the categories defined by the FCA (bank, payment service provider, e-money institution, etc), based on the activities they're authorised to conduct, so to my mind it's always important to cross-refer back to the regulatory definitions:

https://www.handbook.fca.org.uk/handbook/glossary/

So, I suppose my question would be 'do we actually need a collective term for "the likes of Wise (formerly transferwise) and revolut"?' and what useful purpose does this serve, when it's still necessary to differentiate between those that are authorised to accept deposits versus those that aren't, for FSCS purposes, and other such distinctions?

I take your point.

My interest is not so much a term for the likes of Wise, rather a collective term for institutions paying interest.

As I say, I favour FI but as yet this would not be universally understood.

I seek brevity and to have to say Banks/BSs/others is a bit of a mouthful.

RG2015

I wonder if my search for a collective term for institutions that pay interest may be more problematic. HMRC have the following on one of their pages (relating to the personal savings allowance).

Note that there is no mention of fintechs. 

 

Interest covered by your allowance 

Your allowance applies to interest from:

• bank and building society accounts
• savings and credit union accounts
• unit trusts, investment trusts and open-ended investment companies
• peer-to-peer lending
• trust funds
• payment protection insurance (PPI)
• government or company bonds
• life annuity payments
• some life insurance contracts

https://www.gov.uk/apply-tax-free-interest-on-savings

Section62

OceanSound said:

eskbanker said:

'Fintech' is an unhelpfully vague term but is increasingly used to denote online-only financial institutions without branch infrastructure and offering smaller ranges of services (rather than the underlying technology itself) - however these ultimately still fit within the categories defined by the FCA (bank, payment service provider, e-money institution, etc), based on the activities they're authorised to conduct, so to my mind it's always important to cross-refer back to the regulatory definitions:

https://www.handbook.fca.org.uk/handbook/glossary/

So, I suppose my question would be 'do we actually need a collective term for "the likes of Wise (formerly transferwise) and revolut"?' and what useful purpose does this serve, when it's still necessary to differentiate between those that are authorised to accept deposits versus those that aren't, for FSCS purposes, and other such distinctions?

Aren't all banks FSCS protected?

https://www.fscs.org.uk/check/check-your-money-is-protected/cant-find/

eskbanker

OceanSound said:

eskbanker said:

'Fintech' is an unhelpfully vague term but is increasingly used to denote online-only financial institutions without branch infrastructure and offering smaller ranges of services (rather than the underlying technology itself) - however these ultimately still fit within the categories defined by the FCA (bank, payment service provider, e-money institution, etc), based on the activities they're authorised to conduct, so to my mind it's always important to cross-refer back to the regulatory definitions:

https://www.handbook.fca.org.uk/handbook/glossary/

So, I suppose my question would be 'do we actually need a collective term for "the likes of Wise (formerly transferwise) and revolut"?' and what useful purpose does this serve, when it's still necessary to differentiate between those that are authorised to accept deposits versus those that aren't, for FSCS purposes, and other such distinctions?

Aren't all banks FSCS protected?

Yes, that was my point - banks, or other types of institutions with regulatory permissions to accept deposits, are protected, but companies like Wise aren't.  The loose term 'fintech' is too vague for this sort of differentiation, as it encompasses both those with such protection and those without, so I'm trying to understand how it actually helps anyone to lump dissimilar institutions together, whether labelled as 'fintechs' or any alternative term....

OceanSound

eskbanker said:

OceanSound said:

eskbanker said:

'Fintech' is an unhelpfully vague term but is increasingly used to denote online-only financial institutions without branch infrastructure and offering smaller ranges of services (rather than the underlying technology itself) - however these ultimately still fit within the categories defined by the FCA (bank, payment service provider, e-money institution, etc), based on the activities they're authorised to conduct, so to my mind it's always important to cross-refer back to the regulatory definitions:

https://www.handbook.fca.org.uk/handbook/glossary/

So, I suppose my question would be 'do we actually need a collective term for "the likes of Wise (formerly transferwise) and revolut"?' and what useful purpose does this serve, when it's still necessary to differentiate between those that are authorised to accept deposits versus those that aren't, for FSCS purposes, and other such distinctions?

Aren't all banks FSCS protected?

Yes, that was my point - banks, or other types of institutions with regulatory permissions to accept deposits, are protected, but companies like Wise aren't.  The loose term 'fintech' is too vague for this sort of differentiation, as it encompasses both those with such protection and those without, so I'm trying to understand how it actually helps anyone to lump dissimilar institutions together, whether labelled as 'fintechs' or any alternative term....

Well, it's useful to have a pronoun to refer to a financial institution such as Chip that offers FSCS protection (albeit indirectly). This is so that we can then refer to it in posts with that name. Using 'bank' is a no go, because as soon as one does, there'll be one or more forumites (part of the 'x is not a bank' police) straight on the case. 

see: https://forums.moneysavingexpert.com/discussion/comment/80023699/#Comment_80023699

we have forumite worriednoob saying 'I thought, as a bank [chip] would have been financially stress-tested to ensure that they wouldn't go bust and leave customers out of pocket?'

Reply by jimexbox is 'Chip are not a bank.'. I presume what they are saying is as CHip is not a bank therefore they (Chip) is not stress-tested?

What useful purpose does the distinction serve here (apart from picking on semantics)? Being part of the FSCS is what is relevant in that thread/post and that attracts stress-tests (not just being a bank).

A more useful response would be 'Chip wouldn't be stress tested as it's neither a bank (which undergoes stress-tests to become and stay a bank) or have FSCS protection itself. However, the bank (ClearBank) is a bank and would've been stress tested when getting their banking license (and I presume periodically?) and that is the bank that Chip uses to hold your funds. 

eskbanker

OceanSound said:

eskbanker said:

OceanSound said:

eskbanker said:

'Fintech' is an unhelpfully vague term but is increasingly used to denote online-only financial institutions without branch infrastructure and offering smaller ranges of services (rather than the underlying technology itself) - however these ultimately still fit within the categories defined by the FCA (bank, payment service provider, e-money institution, etc), based on the activities they're authorised to conduct, so to my mind it's always important to cross-refer back to the regulatory definitions:

https://www.handbook.fca.org.uk/handbook/glossary/

So, I suppose my question would be 'do we actually need a collective term for "the likes of Wise (formerly transferwise) and revolut"?' and what useful purpose does this serve, when it's still necessary to differentiate between those that are authorised to accept deposits versus those that aren't, for FSCS purposes, and other such distinctions?

Aren't all banks FSCS protected?

Yes, that was my point - banks, or other types of institutions with regulatory permissions to accept deposits, are protected, but companies like Wise aren't.  The loose term 'fintech' is too vague for this sort of differentiation, as it encompasses both those with such protection and those without, so I'm trying to understand how it actually helps anyone to lump dissimilar institutions together, whether labelled as 'fintechs' or any alternative term....

Well, it's useful to have a pronoun to refer to a financial institution such as Chip that offers FSCS protection (albeit indirectly). This is so that we can then refer to it in posts with that name. Using 'bank' is a no go, because as soon as one does, there'll be one or more forumites (part of the 'x is not a bank' police) straight on the case. 

see: https://forums.moneysavingexpert.com/discussion/comment/80023699/#Comment_80023699

we have forumite worriednoob saying 'I thought, as a bank [chip] would have been financially stress-tested to ensure that they wouldn't go bust and leave customers out of pocket?'

Reply by jimexbox is 'Chip are not a bank.'. I presume what they are saying is as CHip is not a bank therefore they (Chip) is not stress-tested?

What useful purpose does the distinction serve here (apart from picking on semantics)? Being part of the FSCS is what is relevant in that thread/post and that attracts stress-tests (not just being a bank).

A more useful response would be 'Chip wouldn't be stress tested as it's neither a bank (which undergoes stress-tests to become and stay a bank) or have FSCS protection itself. However, the bank (ClearBank) is a bank and would've been stress tested when getting their banking license (and I presume periodically?) and that is the bank that Chip uses to hold your funds. 

All that is a separate point from what this thread is about - the subject of this thread is whether or not 'fintech' is a useful catch-all term for a variety of financial institutions, some of which are FSCS-protected and some aren't.

It would seem that you're looking for a catch-all term for institutions offering FSCS protection on deposits, some of which will be banks and some of which won't, but that's a different subject....

OceanSound

eskbanker said:

OceanSound said:

eskbanker said:

OceanSound said:

eskbanker said:

'Fintech' is an unhelpfully vague term but is increasingly used to denote online-only financial institutions without branch infrastructure and offering smaller ranges of services (rather than the underlying technology itself) - however these ultimately still fit within the categories defined by the FCA (bank, payment service provider, e-money institution, etc), based on the activities they're authorised to conduct, so to my mind it's always important to cross-refer back to the regulatory definitions:

https://www.handbook.fca.org.uk/handbook/glossary/

So, I suppose my question would be 'do we actually need a collective term for "the likes of Wise (formerly transferwise) and revolut"?' and what useful purpose does this serve, when it's still necessary to differentiate between those that are authorised to accept deposits versus those that aren't, for FSCS purposes, and other such distinctions?

Aren't all banks FSCS protected?

Yes, that was my point - banks, or other types of institutions with regulatory permissions to accept deposits, are protected, but companies like Wise aren't.  The loose term 'fintech' is too vague for this sort of differentiation, as it encompasses both those with such protection and those without, so I'm trying to understand how it actually helps anyone to lump dissimilar institutions together, whether labelled as 'fintechs' or any alternative term....

Well, it's useful to have a pronoun to refer to a financial institution such as Chip that offers FSCS protection (albeit indirectly). This is so that we can then refer to it in posts with that name. Using 'bank' is a no go, because as soon as one does, there'll be one or more forumites (part of the 'x is not a bank' police) straight on the case. 

see: https://forums.moneysavingexpert.com/discussion/comment/80023699/#Comment_80023699

we have forumite worriednoob saying 'I thought, as a bank [chip] would have been financially stress-tested to ensure that they wouldn't go bust and leave customers out of pocket?'

Reply by jimexbox is 'Chip are not a bank.'. I presume what they are saying is as CHip is not a bank therefore they (Chip) is not stress-tested?

What useful purpose does the distinction serve here (apart from picking on semantics)? Being part of the FSCS is what is relevant in that thread/post and that attracts stress-tests (not just being a bank).

A more useful response would be 'Chip wouldn't be stress tested as it's neither a bank (which undergoes stress-tests to become and stay a bank) or have FSCS protection itself. However, the bank (ClearBank) is a bank and would've been stress tested when getting their banking license (and I presume periodically?) and that is the bank that Chip uses to hold your funds. 

All that is a separate point from what this thread is about - the subject of this thread is whether or not 'fintech' is a useful catch-all term for a variety of financial institutions, some of which are FSCS-protected and some aren't.

It would seem that you're looking for a catch-all term for institutions offering FSCS protection on deposits, some of which will be banks and some of which won't, but that's a different subject....

Well, my post which was originally posted elsewhere on another thread was moved here by a senior forumite on the premise that this was the appropriate place for it.

Now that it has been moved, I'm being told this is not the the correct place for the question either - by the forumite who moved it in the first place I might add! 

Seems seeking a home/thread for my post/question is proving to be nay impossible. Perhaps I should've created my own thread with the original question. 

As it is, I'm not quite sure who the OP is on this thread. I asked the original question. That's been posted as a new thread but the senior forumite creating the thread has added his/her/their own interpretation of the question. i.e. 'to do with a collective term for institutions paying interest.'. Well, this ought to have been mentioned in the OP for a start.

to respond to your question in this post:

eskbanker said:

OceanSound said:

eskbanker said:

'Fintech' is an unhelpfully vague term but is increasingly used to denote online-only financial institutions without branch infrastructure and offering smaller ranges of services (rather than the underlying technology itself) - however these ultimately still fit within the categories defined by the FCA (bank, payment service provider, e-money institution, etc), based on the activities they're authorised to conduct, so to my mind it's always important to cross-refe<blockquote class="Quote">

  <div><a rel="nofollow">eskbanker</a> said:</div>

  <div><blockquote class="Quote">

  <div><a rel="nofollow">OceanSound</a> said:</div>

  <div><blockquote class="Quote">

  <div><a rel="nofollow">eskbanker</a> said:</div>

  <div>'Fintech' is an unhelpfully vague term but is increasingly used to denote online-only financial institutions without branch infrastructure and offering smaller ranges of services (rather than the underlying technology itself) - however these ultimately still fit within the categories defined by the FCA (bank, payment service provider, e-money institution, etc), based on the activities they're authorised to conduct, so to my mind it's always important to cross-refer back to the regulatory definitions:<br><br>https://www.handbook.fca.org.uk/handbook/glossary/<br><br>So, I suppose my question would be 'do we actually&nbsp;<i>need </i>a collective term for "the likes of Wise (formerly transferwise) and revolut"?' and <b>what useful purpose does this serve, when it's still necessary to differentiate between those that are authorised to accept deposits versus those that aren't, for FSCS purposes</b>, and other such distinctions?</div>

</blockquote>

Aren't all banks FSCS protected?</div>

</blockquote>

Yes, that was my point - banks, or other types of institutions with regulatory permissions to accept deposits, are protected, but companies like Wise aren't.&nbsp; The loose term 'fintech' is too vague for this sort of differentiation, as it encompasses both those with such protection and those without, so I'm trying to understand how it actually helps anyone to lump dissimilar institutions together, whether labelled as 'fintechs' or any alternative term....</div>

</blockquote>

<br>r back to the regulatory definitions:

https://www.handbook.fca.org.uk/handbook/glossary/

So, I suppose my question would be 'do we actually need a collective term for "the likes of Wise (formerly transferwise) and revolut"?' and what useful purpose does this serve, when it's still necessary to differentiate between those that are authorised to accept deposits versus those that aren't, for FSCS purposes, and other such distinctions?

Aren't all banks FSCS protected?

Yes, that was my point - banks, or other types of institutions with regulatory permissions to accept deposits, are protected, but companies like Wise aren't.  The loose term 'fintech' is too vague for this sort of differentiation, as it encompasses both those with such protection and those without, so I'm trying to understand how it actually helps anyone to lump dissimilar institutions together, whether labelled as 'fintechs' or any alternative term....

How come you assume that they are always lumping 'dissimilar institutions together'?

This anyone could be an editor of a financial news publication writing an article. They are comparing the likes of Chip, Plum, and Cleo. They could say something like 'as far as fintech's go...Chip has taken the impetus to introduce ......', or 'as far as challenger bank's goes....'. 

Okay, so how about challenger bank as a catch-all term? Any thoughts, ideas on that?