Dear Reader: A Note On Fintech

A NEW LOOK AT FINTECH The New Year starts with a much stronger US dollar and equity markets setting new records as a result of a rate increase by the Fed.

JANUARY 2017 | VOL. 31 NO. 1


The New Year starts with a much stronger US dollar and equity markets setting new records as a result of a rate increase by the Fed. Meanwhile, expectations of strong stimulus and active fiscal policy by the new Trump administration are high.

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We are not going to differ from the consensus forecast in these matters. But we are less convinced that the new American president will be able (and willing) to implement a large part of his economic agenda in the next four years. Weeks after Japan became the largest foreign holder of US debt—overcoming China after many years—it is an open question whether a strong dollar will be compatible with the trade policy of the new administration. Nor is it clear what effect a strong greenback will have on other advanced economies or emerging markets. So far, the reaction of currencies and the financial markets, particularly in North America, has been in anticipation of meaningful moves by the pending tenant at 1600 Pennsylvania Avenue in Washington.

What will the reality be? Will the US Congress approve a massive stimulus and a massive tax cut, ignoring the effects on national debt? Will it encourage protectionist moves on US imports? We suspect that more than one CFO or treasurer is busy evaluating these questions, and preparing for different possible scenarios in the second half of 2017.

This month’s cover story and two related stories on transaction banking reflect our take, here at Global Finance, that the present moment is defined as much by technological advances as by political vicissitudes. Technology develops at its own pace, and the timing of its deployment is only partially affected by the macro picture. We figured it was time to look again, and in depth, at the interaction between fintech and financial institutions—and to spotlight progress in artificial intelligence, the latest frontier.

Andrea Fiano | Editor