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The week in fintech: Partnerships and a potential US 'sandbox'

This weekly recapfeatures updates on bank technology, payments, online lending and other news inthe financial technology space. Send tips, ideas and chatter to kate.garber@spglobal.com. For other recent fintechnews, click here.

For financial technology companies operating in thedynamic, U.S. regulatory environment, partneringwith traditional financial institutions seems to be a viable option.   

ChimpChange Founder and CEO Ash Shilkin createda digital bank that collects deposits on behalf of . He saidworking with a licensed bank allows his company to comply with regulationswhile focusing on technology development, design and marketing. To "boltonto" a well-established business also allows ChimpChange to avoid hiringmore staff, Shilkin said in an interview.

For banks, this sort of partnership adds revenue anddeposits without the expense of building out new technology, he added. Shilkinsaid the arrangement requires ChimpChange to stay accountable to its partner,because regulators will punish the bank for the fintech company's misconduct.

ChimpChange aims to provide a better banking experiencewithout reinventing the banking system, Shilkin said. He pointed out thatalthough the U.S. is not an environment where independent digital banks areeasily created, partnerships work well.

"There are some really great benefits to testing thewater with a product with an established bank," Shilkin said.

Aimed at promotingfintech innovation, a bill in the U.S. House of Representatives proposed byRep. Patrick McHenry, R-N.C., emulates the U.K.'s "sandbox" program,which pairs fintech companies and regulators to test products and services, accordingto The Wall Street Journal.

Yet some individuals still question the fundamental businessmodels of certain fintech companies. On Sept. 18, money manager Steve Eismantold a crowd of investors to be careful with digital lending startups, Bloomberg News reported.

Payment solution provider Ripple has created an focused on global payments usingdistributed financial technology, according to a Sept. 23 .

More broadly, globaldigital payment volumes are increasing and could be over 10% for the firsttime, according to a Sept. 22 report published by Capgemini and .

From Sept. 15 to Sept. 22, the SNL U.S. Financial TechnologyIndex rose 0.63%.

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