Mueller Jackson
Jackson Mueller
Associate Director, Center for Financial Markets
Jackson Mueller is an associate director at the Milken Institute's Center for Financial Markets. He focuses on fintech, capital formation policy and financial markets education initiatives. Prior to joining the Institute, Mueller was an assistant vice president at the Securities Industry and Financial Markets Association (SIFMA), where he focused on...
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FinTech in Focus

By: Jackson Mueller
July 19, 2016

Developments in China & India

Chinese authorities are cracking down on fraudulent peer-to-peer lending. Nearly 250 Chinese P2P lenders were shut down or stopped operating during the first six months of this year, leaving the country with 2,349 “functioning” P2P platforms. Pressure on online finance executives is coming from other directions, as well, including draft rules put in place in 2015, and a program that gives executives a first-hand glimpse at what life behind bars might feel like. Chinese authorities are also looking into complaints against Tencent Holdings — best known for its WeChat app — for not following security regulations regarding mobile payments. On a lighter note, Starbucks launched its mobile payment application across its 2,200 stores in the country and KPMG recently published China FinTech 50, profiling 50 of the country’s top FinTech firms.

The Reserve Bank of India has established an Inter-regulatory Working Group on FinTech and Digital Banking. According to the press release, one of the six "terms of reference" of the working group would be to "chalk out appropriate regulatory response with a view to re-aligning/re-orienting regulatory guidelines and statutory provisions for enhancing FinTech/digital banking associated opportunities" while managing evolving challenges and risks. According to the National Association of Software and Services Companies, around 400 FinTech firms operate in India.

Payments Developments

New figures from PYMNTS and InfoScout find Apple Pay adoption and use have plateaued in 2016, as seen in the figure below, with figures barely moving in the right direction for a number of reasons. Apple Pay is just one of the plethora of mobile payments methods offered by banks, tech firms and retailers. And the mobile payments landscape continues to expand with the latest announcement from MasterCard that its Masterpass platform will now allow users to make in-store payments. According to its press release, the company “is the first network to deliver an omni-channel, all-digital payment service for consumers, issuers and merchants leveraging the most advanced methods of payment security available today.” Masterpass users will be able to use the enhanced service in 5 million store locations across 77 countries.

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Online Finance

Roughly two weeks after I mentioned the debate surrounding Betterment’s decision to halt trading as a result of volatility stemming from Brexit, the firm announced that it had become "the first independent robo-advisor to reach $5 billion in assets under management." Meanwhile, the state of Massachusetts released a policy statement on state-registered investment advisers' use of third-party robo-advisers. Listed among the evaluation criteria, “if the state-registered investment adviser will have no ability to access, select, change or customize the portfolio structure or investment products at the third-party robo-adviser, it must also make that clear to the client through appropriate disclosure.”

Separately, American Express has decided to jump into the online small-business lending space later this year. The platform called Working Capital Terms will offer small business credit of up to $750,000 with fees between 0.5 percent and 1.5 percent for a 30-day or 90-day loan, respectively. Meanwhile, online small business lender Kabbage has curtailed its activity in the consumer-lending space, while Prosper received good news from Moody’s when the ratings agency said it would not downgrade asset-backed securities backed by loans serviced by Prosper, despite threats to do so earlier this year.

Other Developments Worth Mentioning

IBM has launched a platform allowing companies focused on supply chain management to "build and test blockchains in a secure cloud using a version of the company's LinuxOne system." The company also partnered with the government of Singapore to launch a blockchain innovation center.

There are two new reports worth mentioning. First, the U.S. Office of the Comptroller of the Currency National Risk Committee released its Semiannual Risk Perspective, which includes the use of virtual currencies as ransomware and bank partnerships with marketplace lenders. Separately, Financial Innovation Now, a coalition backed by Intuit, Google, Apple, Amazon and PayPal, released a report that "summarizes the regulatory environment" for online lending and emerging payments technologies. As noted in the summary, the paper "seeks merely to provide policymakers with a brief overview of the current regulatory landscape confronting new financial services providers."

Another Week, Another Blockchain Report

A report by Bain & Co. finds that banks’ do-nothing approach to distributed ledger technology “no longer is a viable option.” The report finds that the spread of distributed ledgers “likely will not be linear” and will instead come in two distinct waves: the development of specific systems focused on international payments and broader disruption of domestic payments triggered by digital fiat currencies supported by central banks. The report notes that international correspondent banking and trade finance "have the strongest potential for distributed ledgers" as the figure below shows. 

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FinTech in Focus compiles all the must-read stories about the role technology plays in the delivery of financial products and services. Get a sampling of the week's top domestic and international stories about this innovative, fast-growing sector all right here. For questions or inquiries, contact Jackson Mueller at


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