Industry News: July 2024
From new tokenization projects to potentially high-profile acquisitions and even hefty FINRA fines, our July 2024 fintech news roundup explores top stories financial advisors need to know to stay ahead of the curve.
Goldman Sachs Takes On Tokenization Projects
What happened: Mathew McDermott, the Global Head of Digital Assets at Goldman Sachs, announced that the company will roll out three new tokenization projects in 2024 via private blockchains.
Why it matters: As Goldman Sachs, Blackrock, and Franklin Templeton dive deeper into the world of digital assets, spot Bitcoin ETFs find their place in U.S. markets, and investor interest in crypto continues to grow, it remains to be seen how these companies will set themselves apart from the pack. For Goldman Sachs, a focus on private blockchains (versus its competitors’ use of public blockchains) is the first step in the differentiator direction.
Apple Reverses “Buy Now, Pay Later” Feature
What happened: Just months after rolling out Apple Pay Later in the US, the tech company has announced a switch to third-party-fueled loan services in its stead.
Why it matters: Apple has decided to discontinue its Apple Pay Later service, a “buy now, pay later” (BNPL) offering introduced last year and rolled out to US users in early 2024. Instead, they’ll offer a new installment loan service through partnerships with third-party credit and debit cards. The backtrack reflects a broader period of change in the financial services landscape as interest rates rise, markets shift, and consumer options evolve.
The Crypto Crackdown Continues
What happened: The SEC is suing blockchain tech company Consensys for offering and selling securities as an unregistered broker.
Why it matters: The SEC’s actions against Consensys are part of the regulator’s ongoing focus on decentralized currency, which is still a relatively new scene for advisors and investors alike. While crypto compliance finds its footing, it’s crucial that advisors help their clients to understand the evolving regulatory landscape impacting the crypto industry, so they can make informed decisions.
Vanguard Group Names Salim Ramji as New CEO
What happened: Vanguard’s previous CEO, Tim Buckley, passes the hat to industry veteran Salim Ramji.
Why it matters: Vanguard is one of the largest asset management firms globally, and the leadership change could mean a new vision and direction for the investment management company. Advisors will likely be in the lookout for any shifts in investment strategies, product offerings, and overall market dynamics throughout the transition.
FINRA Fines UBS for Less-than-Stellar Supervision
What happened: A FINRA investigation reveals a registered representative sold unapproved securities to UBS clients for over a decade without raising alarms – resulting in a hefty fine.
Why it matters: UBS’s $850,000 fine underscores the importance of robust supervisory systems to avoid costly penalties and maintain client trust. Advisors should use this as a reminder to regularly review their own compliance procedures and ensure they are meeting regulatory standards to protect client assets. It also offers a solid example of why a keen eye on firm-wide compliance is so critical, even if certain things have passed through previous internal regulatory checks.
That’s a Lotta Yotta Gone Missing
What happened: Following the collapse of fintech company Synapse, roughly $109 million in Yotta customer’s funds have disappeared.
Why it matters: The collapse of Synapse serves as a cautionary tale for the entire financial industry, emphasizing the need for stringent oversight and risk management practices. As regulators, banks, and victims sort through the aftermath of Synapse’s bankruptcy, advisors would do well to carefully evaluate the stability and regulatory compliance of any fintech partners they may choose to work with.
Tesla Loses Their Majority Market Share in the US
What happened: Tesla’s electric vehicle (EV) sales are in a decline, putting their US market share under 50% for the first time ever.
Why it matters: As other automakers like Ford and Kia find more sales success, Tesla’s long-held majority market share slipped to 47.9% – indicating a diversifying market landscape. Understanding these shifts can help both advisors and their clients in making informed investment decisions, identifying emerging opportunities in the EV sector, and adjusting portfolios to potentially capitalize on the growing competition.