1. The Fintech Landscape
1.1 Please describe the types of fintech businesses that are active in your jurisdiction and the state of the development of the market, including in response to the COVID-19 pandemic and ESG (Environmental, Social and Governance) objectives. Are there any notable fintech innovation trends of the past year within particular sub-sectors (e.g. payments, asset management, peer-to-peer lending or investment, insurance and blockchain applications)?
There are many types of fintech businesses active in the U.S., including firms that provide banking, payment, securities, investment, crypto, and insurance services. A notable innovation in the last year that has impacted fintech businesses is the release of ChatGPT-4, a free generative artificial intelligence (AI) tool. With the broad availability of generative AI, fintech businesses, as well as other businesses are finding ways to leverage the technology to provide improved and more efficient services to their customers. For example, generative AI can be used by fintech businesses to more efficiently interact with their clients (e.g., through chatbots and virtual assistants). Generative AI can also be used by fintech businesses to provide more tailored investment advice by analyzing data such as customer preferences, market data, and other factors. Additionally, the relevance of fintech businesses that assist companies with their emissions and other ESG reporting has grown in the past year with the finalization of climate reporting rules by the U.S. Securities and Exchange Commission (SEC) and California. Looking towards 2025, the utility of fintech tools for measuring and evaluating ESG commitments will continue to grow as companies that have made net-zero commitments by 2050 approach a major milestone. The Biden administration's focus on fair lending has also led to growth opportunities for fintech businesses providing alternative credit scoring models, as regulators, banks, and larger financial institutions (FIs) have grown increasingly accepting of their use for populations historically excluded by FICO and other traditional credit scoring systems.
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Originally published by International Comparative Legal Guide (ICLG.com), 11 July 2024
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