NEW YORK–Wall Street banks are demonstrating that fintech start-ups aren’t limited to Silicon Valley. Companies such as Zelle and Concord are fintechs that have been launched by the nation’s biggest banks as a means of protecting their own turf and growing their businesses.
Zelle, for instance, is the new name for a payments platform between major Wall Street banks allowing users to transmit money between phones, according to The Wall Street Journal. It is being backed by banks that include JPMorgan Chase and it is aimed at emerging competitors such as PayPal and Venmo.
“Zelle represents just one consortium of banks looking to harness popular digital technology before it turns into a real threat to their top line,” the Wall Street Journal reported. “Other banks have banded together in an attempt to harness the disruptive power of the blockchain, the technology underpinning digital currencies including bitcoin.”
Credit unions have launched blockchain initiatives of their own, including efforts being led by CUNA and by CO-OP Financial Services and TMG.
The banks’ blockchain project, called Concord, was developed through a start-up, R3, that was conceived by a handful of big banks but has grown to include a group of 60 worldwide, the Journal reported. Earlier this month, R3 filed a patent relating to its bank technology infrastructure.
The Journal reported a study by KPMG found financial services companies' participation in start-up fintech equity investments rose to 30% in the second quarter, an all-time high. Among those start-ups is Marcus, launched by Goldman Sachs, which is an online lending service, named for Marcus Goldman, one of the bank's founders. Goldman Sachs said the solution will lend up to $20,000 to consumers, similar to the way LendingClub makes loans.