Why Investing In Fintech Is Viable - Nouriel Roubini


Tuesday, January 30, 2018   14.30PM  /  Proshare WebTV 

As the globe continues to witness the evolution of innovative solution in the digital age, one phenomenon that has continued to generate discussions and interests from the media, financial analysts, bankers, regulators, economists and policy makers is the Blockchain technology. 

From this Blockchain which has been described as a pathway to bringing efficiency to inefficient markets and a robust platform for asset management, is the Digital currency with developments like Bitcoin which is a Cryptocurrency and world-wide payment system. 

2017 was a remarkable year for Cryptocurrency with a massive surge till December, till the decline in value ensued. Notable and Globally renowned economist and scholar Professor Nouriel Roubini in a recent article, shared strong views about the Bitcoin and Cryptocurrency which should be a signal to investors and analysts. 

Prof Roubini advocates investments in fintech firms, which he believes is a smart choice
because of the actual business models, which are positioned to revolutionize the financial-services industry.

 Emerging economies in Africa and Asia based on their population, require deep penetration of financial services in what is termed as “
Financial Inclusion” which the Fintech firms have the potentials to drive. 

Speaking on what can perceived as the bubble of Bitcoin, Prof Roubini said in his article “Cryptocurrencies have no intrinsic value, whereas fiat currencies certainly do, because they can be used to pay taxes. Fiat currencies are also protected from value debasement by central banks committed to price stability; and if a fiat currency loses credibility, as in some weak monetary systems with high inflation, it will be swapped out for more stable foreign fiat currencies or real assets”. 

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Roubini also alludes to the concerns of international policy makers that Bitcoin’s only real use has been to facilitate illegal activities such as drug transactions, tax evasion, avoidance of capital controls, or money laundering. Not surprisingly, G20 member states are now working together to regulate cryptocurrencies and eliminate the anonymity they supposedly afford, by requiring that all income- or capital-gains-generating transactions be reported. 

The unique takeaway here is that Professor Roubini believes in the potential of fintech firms in developing that required technology to deepen areas like insurance, banking, financial market, and the capital market. 

This underscores the value of  strengthening and developing the fintech ecosystems, which was one of the key resolutions of the recent 2nd National Fintech Conference in Lagos, Nigeria powered by the Fintech Nigeria Association. 

For Roubini the advent of Fintech solutions, with dozen of online payment services like Paypal, Alipay, Venmo utilizing the wealth of online data on individuals and firms. He believes the data improvements in credit allocation will boost the financial market. 

Professor Nouriel Roubini is part of the growing list of global thinkers, business leaders and policy makers that are acknowledging the role of Fintech in transforming the financial services industry.

According to the 2017 KPMG report on Fintech investments in the US stood at $5bl while Asia received $1bl.

In Africa the investments hit over $150ml and in 2018 wise investors will understand that achieving scale, depth, innovation, disruption, effective collaborations and adoption of robust technology in the financial services, will come through Fintech firms. 

Investing in Fintech, is viable as it will improve customer service delivery, financial inclusion, generate employment and drive innovation. 

It is not surprising that the reputable scholar Prof Nouriel Roubini will make a strong case for investments in the Fintech firms. 

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