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The week in fintech: Equifax CEO to bring 'fresh eyes' following massive breach

This recap features updates on bank technology, payments, online lending and other news in the U.S. financial technology space. Send tips, ideas and chatter to For other recent fintech news, click here.

With the naming of a new chief executive, Equifax Inc. has taken another major step toward recovering from the massive data breach that has cast a shadow over the company since it disclosed the hack in September 2017.

The company's shares plummeted more than 30% after it announced the breach, which could affect about 148 million U.S. consumers. The breach also led Richard Smith, Equifax chairman and CEO at the time, to retire. On March 28, the credit bureau announced that Mark Begor would succeed interim CEO Paulino do Rego Barros Jr., effective April 16.

Begor faces a major challenge: repairing public trust in Equifax and retaining the bank and lending customers to which Equifax provides consumer credit information. He will join Equifax from private equity firm Warburg Pincus LLC, where he was managing director. Begor also spent 35 years at General Electric Co., including nine years at the helm of its retail credit card business, which became Synchrony Financial.

Stifel analyst Shlomo Rosenbaum said Begor "certainly seems to have the pedigree" needed to run Equifax. He highlighted Begor's "diversified experience" through General Electric as well as a prior role in investor relations.

"You don't normally see a CEO who's had an investor relations role as well in his past," Rosenbaum said in an interview.

Begor also serves on the board of directors at Fair Isaac Corp., an Equifax competitor.

His prior experience and preparedness aside, Begor will have to fully assess Equifax once he starts, Rosenbaum said. Barros, the interim CEO, had been at the company for many years when he took the reins, whereas Begor will step in with "fresh eyes," Rosenbaum added.

Equifax will keep a "maniacal focus" on data security in the wake of the breach, the analyst said, but it is less clear what particular changes Begor should make at the company. Fewer clients have been interested in signing new contracts with Equifax, and the company has had to slow its growth and "focus a lot more on hand-holding with clients," he said. Meanwhile, major competitors like TransUnion and Experian PLC have continued at full speed.

Rosenbaum expects 2018 to be a "pause year," with Equifax regaining some lost momentum toward the end of the year. The company's stock has already rebounded about 25% from its mid-September low of $92.98.

"It's going to be more of a 2019 [to] 2020 kind of story," Rosenbaum said.

In the payments industry, Credit Suisse analyst Paul Condra wrote in a March 29 note that the overall mood of the sector is largely positive as steady, recurring business models help companies sustain high valuations and diversification helps reduce commoditization. Mastercard Inc. currently seems to have a "growth-related edge" over Visa Inc., he wrote.

Payments investors are particularly interested in what M&A activity PayPal Holdings Inc. could pursue in the near future, the analyst said.

In cryptocurrency news this week, Twitter Inc. joined the likes of Facebook Inc. and Alphabet Inc. in clamping down on cryptocurrency ads, rolling out a new policy over the next month to ban ads for initial coin offerings and token sales, cryptocurrency exchanges and cryptocurrency wallet services, unless they are public companies listed on certain major stock markets, the company told Reuters.

Ethereum plunged to its lowest price of 2018, dropping below $400 after mid-January highs above $1,300. It traded at $382.40 as of 12:46 p.m. ET on March 30.

South Korea's leading cryptocurrency exchange, Bithumb, and a mobile payment operator, Korea Pay Services, plan to facilitate virtual currency payment at about 8,000 shops and outlets across the country by the end of 2018, The Korea Times reported.

On the blockchain front, Emergent Technology Holdings plans to digitally encode the gold supply chain using blockchain technology in the first half of 2018, CNBC reported. The company will create a digital token, fully backed by gold, which will digitally record each stage of the gold supply chain on a blockchain-based digital ledger.

From March 23 to March 29, the SNL U.S. Financial Technology Index rose 1.34%.

A recent report from S&P Global Market Intelligence explores how banks and insurers are embracing fintech innovation. The report looks at recent trends and provides outlooks for the insurtech, digital lending, digital investment management, digital banking, payments and distributed ledger technology sectors. Click here to read the report.