Crypto wallets and e-wallets serve distinct yet complementary roles in managing digital assets and transactions. While both are digital tools designed to facilitate the storage and transfer of funds, they cater to different needs within the digital and financial ecosystems.

Crypto wallets and e-wallets serve different purposes, what are the key differences between the two?

Purpose

Crypto wallets are specialized tools for storing, sending, and receiving cryptocurrencies like Bitcoin, Ethereum, or other tokens. According to Kane Pepi from Techopedia, there are several different crypto wallets, including hardware, software, and paper wallets. Selecting the best wallet comes down to your goals, supported cryptocurrencies, and experience. These wallets also store private keys, which are crucial for accessing and managing blockchain-based assets. They serve as the gateway for users to interact with blockchain ecosystems. Many modern wallets support multiple cryptocurrencies, making them versatile tools for users managing diverse crypto portfolios.

Designed primarily for fiat currency (such as USD and EUR) transactions, e-wallets are used for online shopping and peer-to-peer payment. Popular e-wallets include PayPal, Apple Pay, and Netteller, which streamlines the payment process for online and in-person transactions by storing payment details such as credit/debit card numbers or bank account information. Users can make payments with a single tap or click, avoiding repetitive data entry. An e-wallet, or digital wallet, is designed to store and manage payment information securely and facilitate digital transactions.

Asset types supported

Crypto wallets handle cryptocurrencies and sometimes non-fungible tokens (NFTs). They are tailored to blockchain-based assets, which can vary depending on the wallet’s compatibility. Wallet compatibility depends on the specific blockchain or token standard, so users must select a wallet suited to the assets they intend to manage.

On the other hand, an e-wallet supports a range of digital and financial assets, primarily focused on enabling convenient and secure payment options. They deal with fiat currencies and support payments for goods and services. They may also store loyalty cards, tickets, or boarding passes. These features make e-wallets versatile for managing a variety of everyday and digital financial needs.

Use cases

Crypto wallets are ideal for crypto enthusiasts, investors, and those engaging in decentralized finance (DeFi) or blockchain-based activities. The primary function of crypto wallets is securely storing private keys that grant access to cryptocurrencies like Bitcoin, Ethereum, and altcoins.

Users can send, receive, and manage cryptocurrencies for payments, remittances, or transfers across the globe with lower fees and faster processing compared to traditional methods. Wallets enable access to DeFi platforms where users can lend, borrow, or earn interest on their crypto assets. Many wallets support NFTs, allowing users to buy, sell, and store digital art or collectibles.

E-wallets are suitable for everyday digital payments, online purchases, and transferring fiat money among individuals. It allows users to securely pay for goods and services on e-commerce platforms, simplifying the checkout process. With contactless technology, users can make instant payments at physical stores using smartphones or wearables. Many e-wallets allow users to pay utility bills, subscriptions, and even taxes directly from their wallet balance, streamlining regular payments.

E-wallets enable individuals to send money to friends and family quickly. For instance, PayPal or Revolut enables users to send money across borders, often with lower fees and faster processing times compared to traditional banking methods. Services like Venmo or Zelle make it easy to split bills, pay for shared expenses, or send money internationally.

Decentralization

Crypto wallets are often decentralized, meaning users have full control over their funds without relying on intermediaries. The ownership and management of funds are directly under the user’s control, adhering to the principles of decentralization. Most crypto wallets are non-custodial, meaning that the wallet provider does not have access to your private keys or funds. However, custodial wallets (e.g., wallets provided by exchanges) are centralized.

A custodial crypto wallet is a type of digital wallet where a third-party service provider manages the storage of private keys and assets on behalf of the user. In other words, the provider has control over the user’s crypto funds, unlike non-custodial wallets where users hold their own private keys. Wallets like MetaMask, Trust Wallet, or hardware wallets like Ledger store the user’s keys locally and let the user interact directly with the blockchain without needing a trusted third party.

Traditional e-wallets are generally more centralized, meaning they depend on a third-party service provider to hold and manage your funds or payment information. With these wallets, the service provider has access to the user’s account data, and transactions often occur through the provider’s network.

Most e-wallets are custodial, where the service provider holds your funds in a centralized database, effectively controlling your funds until you choose to use them. These wallets offer convenience but at the cost of giving up some control and security. PayPal, Venmo, and Google Pay store your money in their centralized systems and facilitate transactions through their platforms.

Transaction speeds and costs

Transaction times depend on blockchain networks, which can range from seconds to hours, with fees varying based on network congestion. Speeds also vary based on the blockchain. For example, Bitcoin transactions can take 10 minutes or longer due to their block confirmation time, while Ethereum processes transactions in about 12-15 seconds. Other networks like Solana or Binance Smart Chain offer near-instant transactions.

Fees are determined by the blockchain network, not the wallet itself. Bitcoin and Ethereum fees can fluctuate widely depending on network demand, sometimes reaching significant amounts during congestion. Blockchains with lower costs, like Polygon or Solana, offer cheaper alternatives, often costing fractions of a cent. Crypto wallets may also charge additional service fees, especially if they are custodial or integrated with exchanges.

E-wallet transactions are typically instantaneous or near-instant for most use cases, such as transferring money between users or making payments. For bank-linked transfers, processing can take longer (1-3 business days) depending on the financial institution involved. Fees are usually minimal or non-existent for peer-to-peer transactions within the same e-wallet ecosystem (e.g., PayPal to PayPal or Venmo to Venmo).

Cross-border or currency conversion transactions may incur higher fees, which vary based on the e-wallet provider and the amount transferred. Some e-wallets charge fixed transaction fees or a percentage of the transaction amount for payments involving linked cards or banks. e-wallets are designed to minimize friction in transactions, offering fast and cost-effective solutions for digital payments.

Technology and security

These wallets are heavily reliant on blockchain technology. Security is paramount because private keys stored in these wallets give access to funds. They may be software-based (hot wallets) or hardware-based (cold wallets). Some wallets support multi-signature or biometric authentication for added security. Wallets interact with blockchain networks to record transactions, ensuring that all transfers are secure and transparent. By combining blockchain-based cryptographic principles and robust user-focused protections, crypto wallets ensure the safe and efficient management of digital assets.

Often linked to credit cards or bank accounts, e-wallets rely on traditional banking infrastructure. They also rely on advanced technology and security measures to provide a safe and convenient way to manage digital payments. Security measures include encryption and two-factor authentication, but they don’t involve private keys. E-wallets often partner with banks and payment networks, ensuring compliance with stringent security standards.

Conclusion

Crypto wallets are for managing cryptocurrencies and interacting with blockchain technology, while e-wallets cater to fiat currency transactions and traditional online payments. The choice between them depends on the type of assets you wish to manage and the purpose of your transactions.

The primary purpose of a crypto wallet is to securely store and manage the private keys required to access and control cryptocurrencies. Unlike traditional wallets that hold physical money, crypto wallets interact with blockchain networks, enabling users to send, receive, and manage digital assets.

Featured image credit: Coinhako/Unsplash

Why is Jasmy soaring? Could it be due to rumors linking Apple-Jasmy? Japan’s Prime Minister has sparked excitement with the news that the My Number Card function will be added to iPhones next spring. That’s where Jasmy coin comes into the story. There has been speculation for a while that the “Japon’s Bitcoin” might use it on My Number Card because of its decentralized data democracy tech and Jasmy IoT Platform. Although there is no official announcement yet, just this news makes Jasmy coin the top gainer in the largest 100 altcoins with a 27 rise.

Disclaimer: Nothing on this site should be construed as investing, financial, trading, or any other kind of advice. No cryptocurrency is recommended for purchase, sale, or storage by Dataconomy. Before making any investing decisions, you should do your own research and consult with a financial professional.

How did Jasmy-Apple rumors start?

The Jasmy-Apple news began to swirl when Japan’s Prime Minister announced that the My Number Card function would be integrated into iPhones next spring. This announcement followed a video conference between the Prime Minister and Apple CEO Tim Cook, during which they discussed the integration.

本日（5/30）、米Apple社CEOのティム・クック氏とテレビ会談を行い、来春、iPhoneにもマイナンバーカードの機能を搭載することを確認しました。
皆さんのスマホで様々なサービスが受けられるデジタル社会に向け、利便性の向上の取組みを進めてまいります。 pic.twitter.com/UUnOlmZdpo

— 首相官邸 (@kantei) May 30, 2024

JasmyCoin (JASMY), often referred to as the Bitcoin of Japan, had already been linked to the My Number Card iTrust authentication service, enhancing the card’s security and transparency through blockchain technology. The Prime Minister’s announcement makes the people believe that this technology would be part of the My Number Card’s integration into iPhones, sparking speculation about a deeper collaboration between Jasmy Coin and Apple.

The immediate market reactions and the bullish sentiment among the crypto community further fuelled the rumors. JASMY’s price saw a significant spike, and crypto analysts predicted continued gains, suggesting that the integration could lead to wider adoption and utility of JasmyCoin.

$JASMY Bulls are Back in the Town, Next Bullish Rally incoming..!!#Crypto #JASMY #JASMYUSDT pic.twitter.com/0FlGJYovIh

— Captain Faibik (@CryptoFaibik) May 30, 2024

Additionally, the Prime Minister’s emphasis on improving digital services and making them more accessible via smartphones, combined with Apple’s involvement, naturally led to speculation about a potential partnership. The buzz around JasmyCoin’s role in Japan’s digital ID system and its collaboration with Apple created a fertile ground for these rumors to flourish.

Besides rumors, one thing is sure Japon’s My Number Card is coming to iPhones. But what does it mean?

My Number Card & Apple

Japan’s My Number Card is a digital ID system for Japanese citizens and residents. It includes a unique identification number and stores personal information, which is used for various administrative and commercial purposes. The card aims to streamline government and business services, making them more efficient and secure.

The connection with Apple comes from a recent announcement by Japan’s Prime Minister that the My Number Card function will be integrated into iPhones next spring. This integration means that users will be able to access their digital ID and related services directly through their iPhones, enhancing convenience and security.

According to recent Apple-Jasmy news, the technology behind this integration involves Jasmy Coin (JASMY), which will help secure and manage the data on the My Number Card using blockchain technology.

AI may fuel the next bull run

A closer look at Jasmy’s IoT Platform to understand Apple-Jasmy rumors bettter

Jasmy’s IoT Platform is like a toolbox for businesses diving into the world of smart devices. It provides step-by-step help, from planning to product launch, making sure companies are on the right track. With Jasmy, managing all the data from these devices becomes easy with its secure platform. It’s like a control center where everything can be monitored and handled efficiently.

But Jasmy doesn’t stop there. It also offers the actual devices needed for building these smart solutions, like communication modules and wearables. This means businesses don’t have to hunt for compatible gadgets; they’re all provided in one place.

And it’s not just about tools; Jasmy offers hands-on support too. From consulting to community engagement, they’re there to guide businesses through every stage of their IoT journey.

Plus, Jasmy’s platform doesn’t just store data; it analyzes it too. Using special technology, it can sift through all the information collected from smart devices, making it easier for businesses to understand and use that data effectively.

You see their whitepaper by clicking here.

Featured image credit: Jasmy

Forex trading, also known as foreign exchange or FX trading, involves the buying and selling of currencies and is one of the most actively traded markets in the world. With a daily trading volume exceeding $6 trillion, it offers high liquidity and numerous trading opportunities. In this comprehensive guide, we’ll cover the basics of Forex trading, explore platforms like easyMarkets, and briefly touch on investment opportunities in other sectors, such as the 5 best consumer durable stocks in India.

What is forex trading?

Forex trading is the exchange of one currency for another at an agreed-upon price. It is conducted over-the-counter (OTC), which means transactions are made directly between parties via a global network of banks and financial institutions, without the need for a centralized exchange. This decentralized nature of forex markets allows for continuous trading, 24 hours a day, five days a week, with access from anywhere in the world. The major trading centers are located in major financial hubs like London, New York, Tokyo, and Sydney, which facilitates a seamless transition of trading activity from one timezone to another as the day progresses. This global setup not only enhances liquidity, making it easier to buy and sell without causing significant price changes, but also allows traders to react to news and events that may affect currency prices as they occur in real time, thereby offering opportunities to capitalize on price fluctuations that arise from geopolitical and economic developments.

Key concepts in forex trading

• Currency Pairs: Currencies are traded in pairs, such as EUR/USD or USD/JPY. The first currency listed (EUR) is the base currency, and the second (USD) is the quote currency. The price represents how much of the quote currency is needed to purchase one unit of the base currency.
• Major, Minor, and Exotic Pairs: Majors involve major world currencies like the US Dollar, Euro, and Japanese Yen. Minors include less traded pairs that do not include the US dollar, and exotics typically involve currencies of emerging economies.
• Leverage: Forex markets are known for the use of leverage, which allows traders to control large positions with a relatively small amount of capital. However, while leverage can magnify profits, it also increases the potential for significant losses.ü
• Spread: The spread is the difference between the buying price and the selling price of a currency pair and is effectively the cost of trading.

How to trade forex

1. Choosing a Broker: Platforms like easyMarkets offer traders access to the forex market along with various tools to help manage their trades. Choosing a reputable broker that offers competitive spreads, low fees, and strong regulatory compliance is crucial.
2. Analysis: Successful forex trading involves thorough analysis to make informed decisions. This can be technical analysis, using charts and mathematical indicators to predict future movements, or fundamental analysis, assessing economic indicators and news events that may affect currency values.
3. Risk Management: Implementing effective risk management strategies is vital. This includes setting stop-loss orders to automatically close out positions at a predetermined price level to limit potential losses.
4. Trading Plan: Developing a comprehensive trading plan that includes when and how you will enter and exit trades, how much you will risk per trade, and how you will evaluate performance is essential for sustained trading success.

Trading platforms and tools

Selecting the right trading platform is crucial for accessing real-time market data, executing trades efficiently, and managing risk effectively. Platforms like easyMarkets provide traders with a robust set of tools designed to enhance their trading experience. These platforms often feature advanced charting tools, economic calendars, and even options for social trading, where traders can copy the trades of others.

Investing beyond forex

While forex trading offers ample opportunities for profit, diversifying one’s investment portfolio can reduce risk. For example, investing in stocks of durable consumer goods companies is popular in rapidly growing economies. The 5 best consumer durable stocks in India represent a potential opportunity for growth, as these companies tend to benefit from rising consumer spending and economic growth in the region. These stocks are often seen as stable investments because consumer durables—items like appliances, electronics, and automobiles—are in constant demand, regardless of economic fluctuations. Furthermore, these companies often have strong brand loyalty and pricing power, which can lead to higher profit margins and more robust financial performance. By investing in such stocks, traders can hedge against the volatility inherent in forex markets and gain exposure to different economic cycles, enhancing the overall resilience of their investment portfolios.

Conclusion

Forex trading requires a clear understanding of market dynamics, a disciplined approach to risk management, and continuous learning and adaptation to market changes. By utilizing platforms like easyMarkets and diversifying investment strategies to include stable sectors like consumer durables, traders can enhance their potential for success and ensure a balanced investment portfolio. Whether you are a novice just learning the ropes or a seasoned trader, the world of Forex offers significant opportunities for those who are well-prepared.

Featured image credit: m./Unsplash

Everyone is waiting for the SEC ETH ETF approval time now. The cryptocurrency market is buzzing with anticipation as the Securities and Exchange Commission (SEC) is poised to make a pivotal decision on spot Ethereum Exchange-Traded Funds (ETFs). With major players like Fidelity, Bitwise, and Grayscale in the fray, the outcome of this regulatory verdict could significantly impact the trajectory of Ethereum’s value and the broader crypto landscape.

Ethereum’s price has mirrored the anticipation, surging 25% over the past seven days to over $3,850 at the time of writing.

The prospect of a spot Ethereum ETF approval has sparked speculation of a further price surge, akin to Bitcoin’s historic rally following ETF approvals. However, experts caution that Ethereum’s price action post-approval remains uncertain, underscoring the volatile nature of cryptocurrency markets.

Disclaimer: Nothing on this site should be construed as investing, financial, trading, or any other kind of advice. No cryptocurrency is recommended for purchase, sale, or storage by Dataconomy. Before making any investing decisions, you should do your own research and consult with a financial professional.

Last touches before the SEC ETH ETF approval time

In a whirlwind of developments, the SEC has unexpectedly engaged with prospective Ethereum ETF issuers in recent days, hinting at a potential approval looming on the horizon. SEC ETH ETF approval time is getting closer! This sudden shift in momentum has sparked speculation and excitement among investors, who eagerly await the SEC’s decision.

🚨NEW: Hearing that conversations concerning the S-1’s have now started happening between @SECGov staff and issuers with the conclusion being that there’s “work to do” on those.

— Eleanor Terrett (@EleanorTerrett) May 22, 2024

Unlike the lead-up to Bitcoin ETF approvals, which saw weeks of constructive dialogue between the SEC and issuers, the Ethereum ETF saga has taken a different route. Until the eleventh hour, there was little to no engagement between the regulatory body and applicants, leading analysts to initially dismiss the possibility of approvals. However, reports emerged on May 20th indicating that the SEC had commenced discussions with Ethereum ETF hopefuls, catching many off guard.

Factors influencing the SEC ETH ETF approval time include regulatory considerations and market dynamics.

As ETF issuers rushed to submit amended 19b-4 filings earlier this week, anticipation reached a fever pitch. Bloomberg ETF analyst James Seyffart suggested that, with concerted effort, S-1 applications for spot Ethereum ETFs could see resolution within a few weeks. However, the SEC’s rigorous review process may extend the timeline, potentially delaying trading commencement.

S-1 filings serve as comprehensive documents detailing a company’s financial status, business model, risk factors, and management team—an essential requirement for ETF filings with the SEC. Approval of these filings is pivotal for ETFs to transition to trading on the stock exchange.

Ether ETF company executive speaks: “Now, we’re starting”

Hours before the SEC’s decision on Ether spot ETFs, companies applying for S-1 documents were contacted by the SEC, causing surprise and urgency among applicants. An executive from one of the filing companies remarked, “With the last-minute policy change, the SEC was also caught off guard… So to put it simply, we are starting now.” S-1 filings, crucial for ETF trading approval, may delay the process despite today’s focus on 19b-4 filings. Industry insiders suggest a potential scramble for approval, highlighting uncertainty in the regulatory process.

Everyone is waiting for the SEC ETH ETF approval

The clock is ticking as the market awaits the SEC’s verdict, with Bloomberg analyst Eric Balchunas suggesting a potential announcement around 4:00 PM ET. The decision holds immense significance for investors and stakeholders alike, poised to shape the future of Ethereum and the broader crypto ecosystem.

My best guess is we hear from the SEC around 4pm tomorrow. For spot btc they dropped it at 3:45pm, some others in past were slightly after 4pm. Anything poss tho https://t.co/MzTOcsmTnJ

— Eric Balchunas (@EricBalchunas) May 22, 2024

As the crypto community braces for this landmark decision, the implications of an Ethereum ETF approval extend far beyond price movements. It represents a pivotal moment in mainstream adoption, potentially opening the floodgates for institutional capital and ushering Ethereum into a new era of legitimacy and accessibility.

In conclusion, the impending approval of Ethereum ETFs stands as a watershed moment for the cryptocurrency market, poised to redefine its landscape and pave the way for greater adoption and innovation. As the SEC deliberates, all eyes remain glued to the outcome, awaiting the dawn of a new era in Ethereum’s journey.

What could change if SEC ETH ETF is approved?

If the SEC approves an Ethereum ETF (Exchange-Traded Fund), several significant changes could unfold in the cryptocurrency market and beyond:

• Increased accessibility: An approved Ethereum ETF would provide traditional investors with a regulated and accessible avenue to gain exposure to Ethereum’s price movements without directly owning the cryptocurrency. This accessibility could attract a broader range of investors, including institutional players and retail investors, potentially leading to increased liquidity and trading volumes in the Ethereum market.

• Market expansion: The approval of an Ethereum ETF could signal a maturing of the cryptocurrency market and further its integration into traditional financial systems. This move could pave the way for additional cryptocurrency ETFs and financial products, expanding the market and providing more options for investors interested in digital assets.
• Price impact: The approval of an Ethereum ETF could have a significant impact on the price of Ethereum itself. Historically, the introduction of ETFs in traditional markets has often led to price rallies in the underlying assets. A similar scenario could occur with Ethereum, as the increased accessibility and legitimacy provided by an ETF approval could attract new investors and drive up demand.
• Regulatory clarity: The approval of an Ethereum ETF by the SEC would provide regulatory clarity for the cryptocurrency industry. It would establish a precedent for how cryptocurrencies like Ethereum can be traded within the confines of existing securities laws, potentially alleviating regulatory uncertainty that has hindered institutional adoption and investment in the past. The SEC ETH ETF approval time could serve as a catalyst for renewed interest in digital assets among institutional investors.
• Market integration: An Ethereum ETF approval could further integrate cryptocurrency markets with traditional financial infrastructure. This integration could lead to increased collaboration between traditional financial institutions and cryptocurrency exchanges, as well as greater acceptance of digital assets within mainstream finance.

Overall, the approval of an Ethereum ETF by the SEC would mark a significant milestone for both the cryptocurrency industry and traditional finance. It could open the doors to new investment opportunities, drive market growth, and provide greater legitimacy and regulatory clarity for Ethereum and other digital assets.

Featured image credit: DrawKit Illustrations/Unsplash

Did RBI ban Paytm in India? Even small regulatory changes can have big impacts and India’s top digital payment platform, Paytm, recently hit this regulatory roadblock. The Reserve Bank of India (RBI) put restrictions on Paytm’s banking arm, Paytm Payments Bank Ltd. (PPBL), due to compliance issues. This not only affected Paytm’s stock prices but also sparked a debate on balancing innovation with rules in India’s fintech world.

It is crucial to understand why RBI acted and what it means for Paytm and digital banking. Let’s explore this regulatory twist and its implications for the future of digital finance in India.

Did RBI ban Paytm in India?

The Reserve Bank of India (RBI) did not outright ban Paytm but imposed restrictions on its subsidiary, Paytm Payments Bank Ltd. (PPBL). These restrictions were a response to concerns raised by an external audit report regarding persistent non-compliance issues and material supervisory concerns within the bank. As per the RBI’s instructions, PPBL is mandated to adhere to the following directives:

• Halt in new deposits and transactions: Effective February 29, 2024, PPBL is prohibited from accepting new deposits or conducting credit transactions, including top-ups, in any customer accounts, prepaid instruments, wallets, FASTags, National Common Mobility Cards (NCMC), etc. However, interest, cashbacks, or refunds may still be credited to customer accounts.
• Unrestricted withdrawals and utilization: Customers are permitted to withdraw or utilize balances from their accounts, including savings bank accounts, current accounts, prepaid instruments, FASTags, NCMC cards, etc., without any restrictions, up to the available balance.
• Limitation on banking services: Except for withdrawals and balance utilization, PPBL is prohibited from providing any other banking services, including fund transfers (such as AEPS, IMPS, etc.), BBPOU, and UPI facility, effective February 29, 2024.
• Termination of nodal accounts: PPBL is instructed to terminate the Nodal Accounts of One97 Communications Ltd. and Paytm Payments Services Ltd. at the earliest, no later than February 29, 2024.
• Completion of pipeline transactions: All pipeline transactions and nodal accounts, initiated on or before February 29, 2024, must be settled by March 15, 2024. No further transactions shall be permitted thereafter.

Let’s delve into the reasons behind RBI’s actions in detail:

Paytm Payments Bank Ltd. (PPBL) has had a history of regulatory compliance challenges since its inception in 2017. As the country’s central banking authority, the RBI mandates strict adherence to regulations to ensure the stability and integrity of the financial system. Instances of non-compliance, such as violations of Know Your Customer (KYC) guidelines and account creation suspensions, undermine the trust and confidence in the banking system.

The RBI supervises and regulates banks to safeguard depositor interests and maintain financial stability. The external audit report likely highlighted significant supervisory concerns within PPBL, indicating lapses in governance, risk management, or internal controls. Such lapses can expose the bank to operational, financial, and reputational risks, necessitating regulatory intervention to mitigate potential harm.

Regulatory oversight aims to protect consumers from financial fraud, misconduct, and systemic risks. Any lapses in compliance or supervision within a banking institution can jeopardize the interests of depositors and users of financial services. By imposing restrictions on PPBL’s banking services, the RBI seeks to address concerns related to consumer protection and ensure that the bank operates in accordance with regulatory standards.

The RBI’s regulatory actions are also aimed at mitigating systemic risks that could threaten the financial system’s stability. Non-compliance issues within a bank, particularly one as prominent as Paytm Payments Bank, could have broader implications for the banking sector and the economy as a whole. By addressing these issues proactively, the RBI aims to maintain the resilience and soundness of the financial system.

It’s important to note that regulatory actions like the imposition of restrictions are often part of a broader process of dialogue and resolution between the regulator and the institution. While the restrictions may seem stringent, they serve as a mechanism to prompt corrective action and improve compliance standards within the bank. Paytm and PPBL are likely engaged in discussions with the RBI to address the underlying issues and restore full banking services in compliance with regulatory requirements.

Did RBI ban Paytm in India? Now you know the RBI’s decision to impose restrictions on Paytm Payments Bank Ltd. stems from regulatory compliance, supervisory oversight, consumer protection, and systemic risk mitigation concerns. These actions underscore the central bank’s commitment to maintaining the integrity and stability of the financial system while promoting the interests of depositors and users of financial services.

How to close Paytm Postpaid & What to do if Paytm PostPaid not working?

What is Paytm payment?

Paytm Payments is a digital payment service provided by Paytm, an Indian fintech company. It enables users to conduct a wide range of electronic transactions, including mobile recharges, bill payments, online shopping payments, peer-to-peer transfers, and utility bill payments. Paytm Payments operates through digital wallets and linked bank accounts, offering users a convenient and secure way to manage their finances digitally.

With this article, you can learn how to close Paytm Postpaid. Paytm has emerged as a versatile platform, providing users with a convenient way to manage expenses and transactions. A key feature Paytm offers, known as Paytm Postpaid, has gained popularity as a flexible credit option for users, allowing them to make purchases and payments easily.

Paytm Postpaid is an innovative offering that acts as a digital credit account within the Paytm ecosystem. Users can avail themselves of instant credit for various transactions, making it a handy tool for managing their financial activities seamlessly. However, as the Paytm PostPaid not working issues evolve, you may find yourself considering the closure of your Paytm Postpaid account.

In this guide, we’ll walk you through the steps of closing your Paytm Postpaid account, ensuring a smooth transition. Whether you’ve experienced a change in financial preferences or are exploring new avenues, our step-by-step instructions will assist you in wrapping up your Paytm Postpaid journey. Plus, there are alternatives that are waiting for you to try!

Did RBI ban Paytm in India?

How to close Paytm Postpaid in 7 steps

If you’ve decided to part ways with your Paytm Postpaid account, rest assured we’re here to guide you through the process. Paytm Postpaid offers a convenient way to manage your expenses, but circumstances can change.

Before you begin: Make sure your Paytm Postpaid account balance is settled before initiating the closure. If you have an outstanding balance, clear it by making a payment through the Paytm app.

Closing your Paytm Postpaid account is a straightforward task, and here’s a step-by-step guide to close Paytm Postpaid:

• Navigate through the familiar login process to access your account for the last time.
• Hit on “☰.” Access the menu options to unveil the tools needed for account closure.
• Seek assistance in the dedicated help section, ensuring that you have all the guidance you need. Visit 24×7 for help.
• Locate and select the ‘Profile Settings’ option, a crucial step in initiating the closure process.

• Select ‘I need to close/delete my account.’ Signal your intention clearly, making it known that you’re ready to close your Paytm account.
• Choose ‘I don’t use this Paytm account.’ Provide context for your decision, ensuring a smooth and efficient account closure.
• Select ‘Message us’ to raise a request. Initiate the final step in the process by sending a closure request. Paytm team will verify and process your request promptly.

By following these simple steps, you can smoothly close your Paytm Postpaid account.

Now you know how to close Paytm Postpaid. However, what to do now?

Best Paytm Postpaid alternatives you can try

If you’re exploring alternatives to Paytm Postpaid, there are several other digital financial services that offer similar features and convenience. Here are some notable alternatives to consider:

• Amazon Pay Later: Amazon Pay Later allows users to make purchases on Amazon and select partner merchants on credit. It offers a flexible repayment period with no interest charges if repaid within the specified timeframe.
• LazyPay: LazyPay is a Pay Later service that enables users to make instant payments and settle the bill at a later date. It’s widely accepted across various online platforms, providing flexibility in managing expenses.
• Flipkart Pay Later: Similar to Amazon Pay Later, Flipkart Pay Later offers a credit facility for users to shop on Flipkart and pay at their convenience. It often comes with attractive discounts and cashback offers.
• Slice: Slice is a credit card alternative designed for young professionals. It offers a virtual card for online and offline transactions, along with features like easy EMIs and rewards for spending.
• ZestMoney: ZestMoney provides digital EMI options for online shopping. It partners with various e-commerce platforms to offer affordable and transparent financing options for a wide range of products.
• Simpl: Simpl simplifies online transactions by allowing users to make purchases and settle bills later. It offers a ‘buy now, pay later’ model with a single monthly bill.
• PayU Credit: PayU Credit offers a Pay Later solution for users to make online purchases and pay within a stipulated period. It integrates seamlessly with multiple online platforms.
• Ola Money Postpaid: Ola Money Postpaid offers a credit service for Ola rides as well as online and offline transactions. Users can pay for Ola rides and other expenses and settle the bill later.
• Freecharge Pay Later: Freecharge Pay Later allows users to make purchases and pay at a later date. It is widely accepted across various online platforms.

When considering an alternative, evaluating factors such as interest rates, repayment terms, acceptance at various merchants, and any additional perks or rewards offered is essential. Choose the one that aligns with your financial preferences and provides a seamless experience for your transactions.

You just learned how to close Paytm Postpaid and alternatives you can choose afterward. Consider exploring other digital credit options, prepaid services, or traditional banking solutions to find the perfect fit for your financial journey.

Featured image credit: Paytm

Block layoffs in 2024 are the latest fintech layoffs of this year. Block, the fintech conglomerate synonymous with brands like Square, Cash App, and Afterpay, recently made waves with a strategic decision that’s sending ripples through the tech industry—a significant reduction in its workforce. In an internal memo, CEO Jack Dorsey outlined the reasoning behind this move, shedding light on the intricacies that led to this pivotal decision.

As articulated by Dorsey, the crux of the matter lies in the staggering pace of Block’s overall growth, which, paradoxically, has outpaced the growth of its business and revenue streams. This misalignment prompted a meticulous evaluation of the company’s structure, culminating in the decision to streamline its workforce.

Block layoffs 2024 explained

The Block layoffs 2024, executed with a surgical precision that affected staff across various arms of Block, including Cash App, foundational, and Square divisions, impacted approximately 1,000 employees – constituting a substantial 10% of Block’s overall headcount. In the internal note, Dorsey justified the swift and comprehensive action, stating, “We decided it would be better to do at once rather than arbitrarily space them out, which didn’t seem fair to the individuals or the company.”

While the Block layoffs weren’t entirely unforeseen, given Block’s prior commitment to reducing its headcount from 13,000 in Q3 2023 to an “absolute cap” of 12,000 by the close of 2024, they add a layer of complexity to the broader narrative of challenges faced by the fintech and tech sectors. Recent announcements of workforce reductions by major players like PayPal and Brex underscore the pervasive uncertainties in the industry.

Delving into the specific challenges Block encountered over the past year provides a nuanced understanding of the decision. The revenues from its flagship Cash App, a peer-to-peer payments service, witnessed a notable decline. Afterpay, a significant acquisition made by Block in 2021 for a whopping $29 billion, reported substantial losses. Block’s Bitcoin revenue mirrored the tumultuous ride of the cryptocurrency market, facing a decline in tandem with the broader trend – though recent market improvements have injected a measure of optimism. Meanwhile, Square, Block’s subsidiary, grapples with intensifying competition from formidable rivals such as Fiserv’s Clover, Toast, and Stripe.

Investor sentiment has mirrored these challenges, with Square’s stock experiencing a notable retreat of around 30% from January 2023 to October, coinciding with Dorsey’s transition to the helm from ex-Square head Alyssa Henry.

Block’s proactive measures to reinvigorate its business amid these headwinds include integrating generative AI features into Square, acquiring the music-focused fintech startup Hifi, and launching Bitkey, a self-custody Bitcoin wallet available in both mobile app and hardware storage formats.

In the face of these challenges and strategic adjustments, Block reported $5.62 billion in revenue for the third quarter of 2023, accompanied by a $44 million profit from its Bitcoin holdings. As the company navigates these intricate waters, the emphasis remains on striking a delicate balance between innovation and resilience in a continually evolving tech landscape.

Latest fintech layoffs

2024 has emerged as a pivotal year marked by strategic shifts, challenges, and a notable recalibration of workforce dynamics. Fintech, renowned for its rapid innovations and disruptions, now finds itself at a crossroads with the announcement of significant layoffs across various key players, such as:

• The Paypal layoffs 2024 continue with 2,000 employees of the company, announced by the company same day with Block.
• Salesforce is reportedly reducing its workforce by approximately 700 employees, constituting roughly 1% of its global staff.
• Cova, a Nigerian fintech startup, is said to be closing its operations on February 10, 2024, attributing the decision to “several factors.” Co-founders Oluyomi Ojo and Yomi Osamiluyi communicated to users through email, assuring them that subscription refunds will be completed by February 13, 2024, according to Benjamindada.
• Despite notable successes for its business during the instability of the 2023 banking crisis, fintech startup Brex is reducing its workforce by 20 percent, amounting to 282 employees.

Featured image credit: Block

The Paytm PostPaid not working issue has been a frequent concern for users who appreciate the convenience of buying now and paying later. This service offers an instant revolving credit line for seamless transactions up to a certain limit, eliminating the need for immediate bank transfers or credit card processing. To maintain these services, users are expected to regularly clear their dues. Instances of the Paytm PostPaid account becoming blocked or malfunctioning are not unheard of.

Recently, there’s been a notable increase in complaints regarding the Paytm PostPaid not working, with users experiencing declined transactions. This article aims to explore the potential causes of these problems. Let’s delve into these reasons.

Several factors might contribute to the failure of Paytm PostPaid transactions or the service’s overall malfunction. Below are some common reasons.

A primary cause for the Paytm PostPaid not working could be an incomplete KYC verification. Paytm mandates a one-time KYC submission for activating and utilizing its Postpaid services. Failure to complete this process might result in your account being suspended. Neglecting to settle your Paytm PostPaid obligations, such as bill payments, EMIs, and recharges, might lead to a temporary account suspension. As a precaution, Paytm freezes accounts with overdue payments.

How to close Paytm Postpaid: Explore alternatives

Recent media coverage has highlighted a public interest litigation in the Delhi High Court against Paytm PostPaid, alleging non-compliance with RBI guidelines. The court is seeking responses from the concerned parties. This situation, if validated, might prompt orders to suspend Postpaid services. Finally, technical difficulties, including Paytm app crashes, server downtime, or software bugs, can also disrupt Paytm PostPaid services. Such interruptions are occasionally expected with digital services.

How to fix the Paytm PostPaid not working issue?

Addressing the Paytm PostPaid not working issue can be straightforward if you follow these recommended solutions:

• Finalize KYC verification
• Settle outstanding bills and payments
• Engage Paytm customer support
• Update the Paytm app
• Await resolution of external issues

Did RBI ban Paytm in India?

Solution 1: Finalize KYC verification

Incomplete KYC verification is a common reason for the Paytm PostPaid not working issues. To complete this process:

• Navigate to your Profile and select the ‘Complete KYC’ option.
• Opt for a verification method such as Aadhaar, PAN, or Passport.
• Enter your details accurately and upload clear document photographs as required.
• Submit your documents and agree to the terms and conditions.
• Monitor the status over the following days and inquire if it remains unresolved.
• Upon successful verification, your Postpaid account should be reactivated.
• Regularly updating your KYC ensures continuous access to Postpaid services.

Solution 2: Settle outstanding bills and payments

Unpaid dues are a major cause of account suspension. To resolve this:

• Review your Passbook for any unpaid bills or dues linked to your Postpaid account.
• Clear all outstanding amounts as soon as possible.
• Once the dues are settled, your account restrictions should be lifted, restoring normal functionality.

Solution 3: Engage Paytm customer support

For direct assistance, contact Paytm’s customer service through in-app options or email. Provide a clear description of the issue, along with your registered mobile number and relevant account details. Here are some guidelines:

• Utilize in-app support channels such as email, chat, or phone calls.
• Describe the Postpaid issue succinctly, including your account information.
• Mention your registered mobile number, account number, and any relevant transaction IDs.
• Request a prompt resolution and be cooperative during troubleshooting.
• Follow instructions given by customer support to rectify the issue.
• Email Paytm at care@paytm.com or use the chatbot for rapid assistance.
• Be prepared to provide additional information like KYC status or outstanding dues if requested.

Solution 4: Update the Paytm app

Occasionally, the issue may stem from using an outdated version of the Paytm app:

• Visit the Play Store or App Store to check for updates to the Paytm app.
• If an update is available, select ‘Update’ to install the latest version.
• New app versions often resolve bugs that may cause Postpaid problems.
• Regularly updating apps is a good practice to ensure smooth operation.
• After updating, check if the Postpaid service issue is resolved.
• Updated versions often address underlying technical issues.
• Sometimes, reinstalling the app can also be effective.

How to pay onboard contractors internationally

Solution 5: Await resolution of external issues

In cases involving technical disturbances or legal challenges, patience is key:

• For Paytm PostPaid not working isssues related to technical failures or legal proceedings, it may be necessary to wait until the problems are resolved by Paytm.
• Keep an eye on official communications from Paytm for updates regarding service restoration.

Final remarks

Issues such as delayed KYC completion, unpaid dues, or technical problems can disrupt Paytm Postpaid services. Steps like finalizing KYC, clearing any outstanding amounts, and reaching out to customer support can effectively resolve such issues. Regularly fulfilling your repayment obligations ensures the smooth operation of Paytm Postpaid services.

FAQs

Can Paytm PostPaid be used for online purchases?

Absolutely, Paytm Postpaid’s credit limit can be utilized for transactions on online shopping platforms that support Paytm payments.

Are there fees for signing up for Paytm PostPaid?

No, Paytm Postpaid does not charge any sign-up or annual fees. The only charges incurred are interest on the credit used.

What’s the maximum credit limit with Paytm PostPaid?

The maximum credit limit for Paytm Postpaid can reach up to ₹60,000, depending on your creditworthiness and transaction history with Paytm.

How can I close my Paytm PostPaid account?

To close your Paytm Postpaid account, navigate to Profile > Paytm Postpaid and select the ‘Close account’ option. Ensure all dues are paid off prior to closing the account.

Featured image credit: Towfiqu barbhuiya/Unsplash

Is Google Wallet not working? We know how it can be frustrating! Imagine facing an awkward moment at the checkout or holding up a line due to a glitch in your favorite payment app. These fixes aim to restore the magic, ensuring Google Wallet remains your go-to for swift and secure transactions.

And if you’ve tried it all and still face challenges, we’ve got one more trick up our sleeves—introducing the best Google Wallet alternatives. From Samsung Pay’s compatibility to PayPal’s versatility, these alternatives cater to diverse preferences, making your financial transactions a breeze. Explore this guide to keep your digital wallet in top-notch condition.

How to fix Google Wallet not working

Google Wallet’s contactless payment system is a marvel of convenience, but what happens when the magic falters? If you find yourself facing issues with Google Wallet not working, fear not. These workarounds can troubleshoot and fix common problems, ensuring your contactless transactions remain smooth and hassle-free:

• Update your Google Wallet App
• Verify your phone number
• Verify your cards in Google Wallet
• Clear your cache
• Check your Internet connection
• Uninstall and reinstall the app
• Check for system updates
• Review app permissions
• Contact Google Support
• Check for account issues
• Review device compatibility
• Check for app conflicts

Whether it’s a quick tap of a card or a smartphone interaction using near-field communication (NFC), the process eliminates the hassle of PIN pads and streamlines transactions. Google Wallet, a popular payment app for Android users, leverages the power of NFC to provide a seamless payment experience. However, as with any technology, hiccups can occur, and here are step-by-step introductions for the Google Wallet not working fixes.

Update your Google Wallet App

If your Google Wallet app isn’t performing as expected, it might be due to an outdated version. An outdated app can be a significant culprit in Google Wallet malfunctions. Ensure you’re running the latest version:

• Open the Google Play Store.
• Search for the Google Wallet app.
• If an Update button is available, click it to ensure you have the latest version.

Verify your phone number

Your phone number plays a crucial role in confirming your identity during transactions. If it’s incorrect or outdated, payment issues may arise. Follow these steps to check and update your phone number:

• Open the Google Wallet app.
• Click your profile picture in the upper-right corner.
• Navigate to Wallet settings > Payments profile.
• Verify and update your phone number as needed.

Verify your cards in Google Wallet

Google Wallet relies on your connected credit and debit cards. Ensure your account is fully functional by verifying your card details:

• Open the Google Wallet app and click on each card.
• Click the Details button to verify the information at the bottom.
• Add a card if necessary by clicking “Add to Wallet.”

Clear your cache

Technology can get jumbled with regular use, affecting the app’s performance. Clearing the cache can resolve this issue:

• Go to your phone’s Settings.
• Select Apps and find Google Wallet.
• Click on Storage & cache and then Clear cache.

Restart the app, and you should be good to go.

Check your Internet connection

A strong internet connection is vital for contactless payments. Follow these steps to ensure a reliable connection:

• Go to Settings > Network & internet > Internet.
• Tap your network connection and ensure it says “Connected.”

Using Google Wallet with a strong data or Wi-Fi connection enhances the likelihood of successful payments.

Uninstall and reinstall the app

Sometimes, a clean slate is the best solution. Uninstalling and reinstalling the Google Wallet app can resolve underlying issues:

• Find the Google Wallet app on your phone and uninstall it.
• Visit the Google Play Store, find Google Wallet, and click Install.
• Set up your accounts once again.

Check for system updates

Outdated operating systems may lead to compatibility issues with the Google Wallet app. Ensure your device is running the latest software:

• Navigate to your device’s “Settings.”
• Look for a new software update.
• If an update is available, install it and restart your device.

Keeping your device up to date ensures it can seamlessly support the latest features of the Google Wallet app.

Review app permissions

Google Wallet relies on specific permissions to function correctly. Ensure the app has the necessary access to your device features:

• Open your device’s “Settings.”
• Select “Apps.”
• Find and click on “Google Wallet.”
• Navigate to “Permissions” and ensure all required permissions are granted.

Granting the necessary permissions allows Google Wallet to interact smoothly with your device’s hardware and software components.

Contact Google Support

If all else fails, reaching out to Google’s support can provide personalized assistance for your specific issue.

Check for account issues

Ensure that there are no issues with your Google account, as this could impact the functionality of Google Wallet. Follow these steps:

• Open your device’s settings.
• Scroll down and select Google.
• Verify that your Google account is active and properly synced.

If there are any issues, such as a sign-in problem or syncing error, addressing them can contribute to resolving Google Wallet-related issues.

Review device compatibility

Ensure that your device meets the necessary compatibility requirements for the Google Wallet app. Some older devices may not fully support the latest features, leading to performance issues. Here is Google Wallet’s compatibility requirements:

If your device falls short, consider upgrading to a more compatible device for an optimal Google Wallet experience.

Check for app conflicts

Other installed apps on your device could potentially conflict with Google Wallet. Investigate if there are any conflicting applications causing disruptions:

• Go to your device’s “Settings.”
• Select Apps.
• Look for any recently installed apps or those known to cause conflicts.
• Uninstall or disable apps that might be interfering with Google Wallet.

Resolving conflicts between apps can contribute to a smoother overall experience when using Google Wallet for contactless payments.

Do you still face problems? There is one thing you can do more!

Best Google Wallet alternatives that worth trying

Several robust options offer convenience and security if you’re exploring alternatives to Google Wallet for your contactless payment needs. Here are some noteworthy alternatives worth considering:

Firstly, Samsung Pay is a compelling alternative, compatible with a wide range of Samsung devices. Notably, it features Magnetic Secure Transmission (MST) technology, allowing it to work with traditional magnetic stripe card readers.

For a versatile digital payment platform, consider PayPal. It facilitates both online and in-store transactions, widely accepted across various merchants, and integrates with numerous online platforms.

Venmo is known for its social payment features, making it a popular choice for peer-to-peer transactions. Users can easily split bills, share payments, and engage in a social feed.

Square Cash (Cash App) offers a straightforward and user-friendly interface for peer-to-peer and merchant transactions. The platform includes features like the Cash Card for physical transactions and supports Bitcoin.

In the realm of financial services, Revolut is a notable option. Alongside contactless payments, it offers fee-free currency exchange for international transactions.

Internationally, Alipay has become a leading digital payment platform, originating in China and expanding its services globally. It offers a broad spectrum of financial services beyond simple payments.

Similarly, WeChat Pay dominates the digital payment scene in China, integrated into the WeChat messaging app. It supports various transactions, including in-store, online, and peer-to-peer payments.

For those focused on peer-to-peer transactions, Zelle enables users to send and receive money directly from their bank accounts. Many major banks in the U.S. offer Zelle integration within their mobile banking apps.

Is Google Wallet not working? Now, you don’t have to be afraid! When choosing an alternative to Google Wallet, consider factors such as device compatibility, security features, and availability in your region. Each option mentioned has unique strengths, ensuring there’s a suitable alternative for every user.

Featured image credit: Google

The challenge of the blockchain trilemma remains a prominent issue within the cryptocurrency field, with even Bitcoin – renowned for its decentralization and security – facing this same predicament. Although Bitcoin has set the precedent for all crypto endeavors, its limited scalability renders the BTC blockchain unfeasible for Web3 applications.

By implementing a new layer to Bitcoin, Stacks endeavors to alleviate this situation and present an alternative resolution. Dive into the world of Stacks Layer-2 technology and discover how it synergizes with Bitcoin in our article. We’ll also introduce you to Quantumator, an online trading platform that’s reshaping the landscape.

What is Stacks?

Rather than immediately discussing Stacks, it may be beneficial to first examine the differences between Layer 1 and Layer 2 blockchains. The former, exemplified by the likes of Bitcoin and Ethereum, function as primary blockchains that prioritize robust security and decentralization. However, due to their scaling limitations, these blockchains struggle with low throughput, constituting a so-called blockchain trilemma. Only after fully grasping these distinctions can we move on to exploring Stacks.

As a result, Layer 2 blockchains are now a solution to improve the scaling as well as efficiency of Layer one networks. These blockchains act as one more layer over the principal blockchains and help with transactions. Ethereum is a level 1 blockchain, for example, and Polygon offers Layer 2 options. Layer two solutions are much less widespread for Bitcoin as compared to Ethereum.

Stacks is one of many platforms that developed a layering process for Bitcoin. It possesses numerous parallels with Layer Two alternatives, though the significant difference is in utilizing BTC as an anchor while working along with it. Stacks allow the inclusion of smart contracts to the blockchain of BTC, enabling possibilities for distributed programs (DApps) on the system. The stack tokens (STX) enhance the protection of the system as well as leverage Bitcoin’s security functions.

How does Stacks function?

The blockchain of Stacks works utilizing the Proof of Transfer (PoX) consensus method, enabling it to link with the Bitcoin community. The PoX system is derived from the Proof of Burn (PoB), in which miners add blocks on the chain by burning up their tokens to be able to get bonuses through the system. In much the same manner, PoX verifies blocks by transferring tokens rather than burning crypto coins. Individuals associated with verifying the blockchain L2 shift their tokens to a different participant’s address. These transactions take place with the indigenous tokens of L1 inside the L1 network.

Transactions play an important role in confirming new blocks in this method. L2 – blockchains are meant to check the status of the L1 – system every twenty-four hours and validate each transaction between L2 – users. In this procedure, most L2 members get rewards for supplying indigenous tokens to L2.

What is the difference between Stacks and Ethereum?

Although they work similarly, there are two key differences between Stacks and Ethereum.

Efficiency and Security

Stacks is founded upon the blockchain security of BTC, which possesses a good history of protection. Stacks utilizes methods such as macroblocks as well as subnets to boost its effectiveness while keeping the security of BTC.

On the flip side, Ethereum is renowned for its secureness and it is favored by programmers across the globe. Ethereum’s native throughput is restricted, however, it may be enhanced by utilizing scaling alternatives to support further transactions without compromising on efficiency or security.

Tools for developers

Ethereum is famous for its developer-friendly environment due to the Ethereum Virtual Machine (EVM) as well as the commonly used Solidity programming words. Stacks, however, provides a helpful development ecosystem that includes resources and tools that could be utilized to learn from.

Stacks’ advanced contract language, Clarity, is intended to be simpler to study as well as use, while simultaneously prioritizing effectiveness as well as protection.

Featured image credit: Traxer/Unsplash.

Crypto exchanges have become central in the modern finance landscape, serving as the major face of the crypto industry. However, establishing a crypto trading platform can be daunting and costly. It requires practical experience, substantial financial resources, specialized knowledge, and a team of skilled crypto exchange developers.

In our exploration of white-label solutions for crypto exchanges, we’ve come across https://bitcode-ai.live/, an online trading platform that adds a unique dimension to the industry.

To simplify and expedite entry into the market, white-label crypto exchange solutions have emerged as market-ready models. These solutions help streamline the setup process and detract from the complexity concerned with building a crypto exchange.

Antier Solutions offers a highly motivated blockchain development team with expertise in constructing advanced crypto trading platforms for businesses with forward-thinking aspirations. Their solutions aim to address the challenges and provide a competitive edge in the emerging crypto market.

What is white-label crypto exchange software?

With white-label crypto exchange software, businesses can brand the exchange with their own design and logo, creating a seamless user experience. Moreover, white-label solutions often come with built-in protection features to protect against hacking and fraud.

Businesses can avoid spending time and resources on development and maintenance by choosing white-label cryptocurrency exchange software. By doing this, they can continue to provide their clients with a safe and dependable crypto trading platform while concentrating on other facets of their business. For companies wishing to enter the cryptocurrency industry without requiring a lot of technical know-how or development work, crypto exchange software offers a beneficial and cost-effective solution.

Types of white label crypto exchange software

There are several types of white label crypto exchange software, including:

• White label exchange software
• Multi-currency exchange software
• Cloud-based exchange software

White label exchange software

With white label exchange software, individuals can hastily launch their own branded crypto exchange platform sans the required coding skills or extensive development. This software provides a turnkey solution that includes essential features such as order matching, liquidity management, and user authentication. White label exchange software allows users to customize the platform according to their distinct requirements.

This type of software is prevalent among startups, financial institutions, and entrepreneurs who want to enter the crypto exchange market with a unique and tailored platform. It offers cost-efficiency, flexibility, and faster time-to-market compared to building an exchange from scratch.

Multi-currency exchange software

White label exchange software empowers users to trade several digital currencies in multiple fiat currencies, such as USD or EURO. This flexibility enables swift and seamless trading among digital assets and fiat currencies, bypassing the conversion fees typically charged by traditional exchanges.

By offering multi-currency trading options, these exchanges develop user convenience and provide a more efficient and cost-effective manner to engage in crypto trading with distinct fiat currencies.

Cloud-based exchange software

White-label crypto exchange software that is hosted in the cloud has a number of advantages over self-hosted alternatives. By leveraging cloud infrastructure, it allows for faster deployment times and reduces the need for extensive hardware investments.

While cloud-based solutions offer convenience, they still require some technical expertise for setup and ongoing management. Users may be required to configure the software and ensure proper security measures are in place. However, the cloud-based approach offers scalability and flexibility, allowing businesses to easily adjust resources based on demand.

Advantages of white label crypto exchange software

There are various benefits of using white-label crypto exchange software over building a crypto exchange from scratch:

Established reputation

Utilizing established vendors’ white-label cryptocurrency exchange software offers the benefit of capitalizing on their reputation and domain knowledge. Businesses can gain from the credibility and trust that comes with the vendor, which can help them establish their own brand in the marketplace.

They also offer opportunities for customization, enabling businesses to adapt the platform to their specific requirements and branding.

Time and cost-saving

Using a white-label solution for a crypto exchange saves businesses time and money compared to developing from scratch. The pre-built and tested core software eliminates the need for research, design, development, and coding.

Businesses can launch their exchange more quickly with a white-label solution, reducing time-to-market and letting them concentrate on other areas of their business like marketing and customer acquisition.

Featured image credit: Traxer/Unsplash.

The story of Bitcoin and the suspense behind its success is not hidden from anyone. In the last decades, several documentary makers got inspired and started to make their own short stories about the most popular cryptocurrencies in the world. Although many of these are available on social media platforms such as YouTube, Facebook, Twitter, etc.

Among all ko most popular documentaries are here to follow up! If you want to get a better understanding about the crypto trading concepts and make informed decisions, check out this platform named Altrix Edge and start learning.

First documentary: The Bitcoin Gospel

Bitcoin Gospel is featured with Jesus Roger Ver. This documentary includes a great overview for Bitcoin rookies where we can see the benefits availed from Bitcoin and its origin as well. In 2009 the whole world was facing the biggest financial loss in decades. In that situation, the alternative means to all-encompassing supervision the transnational banks had on people’s finances.

The Bitcoin Gospel catalogs how the concept attained traction and establishes the case for how Bitcoin can be a possible mainstream option to conventional procedures of payment.

Second documentary: Survived on Bitcoin for 14 Days

While the Coin Telegraph attempted to live off Bitcoin for 14 days, the documentary stated above followed a video journalist from the Coin Telegraph. He spent the night in the city of New York which is popularly known as the financial hub of the world.

And if it is possible to succeed anywhere, it would be a great deal to provide a summary of the current state where matter relates to the adoption of Bitcoin and it gives a concept of how things can come out in the future.

Third documentary: Bitcoin: Beyond the Bubble

Bitcoin is always considered as digital gold but many people are not aware of its working. However, this documentary on Bitcoin explains all means of gold intrinsic value in the initial space and also why Bitcoin probably takes control over it.

However, it also provides detailed information on Bitcoin and explains its proof of work blockchain works and how transactions got verified on it.

Fourth documentary: 10 million Dollar Bitcoin End Game

The question always strikes in the mind of what prices will Bitcoin satisfy in other words, we can say that it is difficult to fetch $10 million but due to a foolish YouTuber laid out his statement as to why he got worried about the realistic target of it.

Moreover, it is important to note that on what basis the documentary is shifting is its motto and how it represents the market and market strategies.

Fifth documentary: Unmasking Satoshi Nakamoto

The individuality of presumed Bitcoin creator Satoshi Nakamoto has long been encircled in mystery. That’s the way that he/she wanted it of course, but it hasn’t stopped the crypto society over the years from endeavoring to translate who they are, or at least assuming their individuality.

As the name of the documentary indicates, anonymous Satoshi Nakamoto examines the mystery and proposes their take on who the someone person behind the (assumed) alias may be.

Sixth documentary: Banking on Bitcoin

Netflix presents a documentary based on Bitcoin that is popularly known as “Banking of Bitcoin”. It includes the basics of technology, its enormous potential, and its working scenario in earlier times.

There is a lot of stuff included in the documentary regarding early players in the crypto space. Sometimes crypto seems infinitely wide and too quickly growing up to keep up speed with it.

Conclusion

The best version of these documentaries is that the information about crypto ce is gained entertainingly. If the film is good it will look like a reality. Some people got hooked on documentaries like Free Solo, Meru, etc. Although these stories are of humans who achieved their target over the crypto business and gained a lot of courage, power, and strength as well.

If we talk about a good documentary, it blends reality and fiction to inspire us to overcome our limitations. However crypto is different from traditional banking and financial systems in that it’s decentralized, providing power instantly to traders themselves.

Featured image credit: Art Rachen/Unsplash.

In today’s rapidly evolving investment landscape, staying ahead of the curve is crucial for venture capital firms, private equity firms, investment companies, and family offices. That’s where Rundit – a portfolio management and monitoring solutions provider – wants to make a difference and bring the investment industry up-to-date. Ironically, the investors that are funding the future still wrestle with outdated tools like Excel spreadsheets, LP portals, and static PDF reports.

Rundit has long been committed to reshaping the way investment reporting is done. Founded in 2017 in Helsinki, Finland, by a team of entrepreneurs with expertise in fintech, funding, and finance, it has $3 million in funding and customers in over 30 countries.

Today, Rundit has launched its LP Report Builder, designed to give investors seamless reports and enriched insights. Instead of cumbersome spreadsheets or static documents, it offers an automated and visually appealing web-based presentation. But it’s about more than providing easier access or better-looking dashboards.

Investment regulations are continually evolving to enhance transparency and protect investors. The U.S. Securities and Exchange Commission (SEC) recently introduced new rules under the Investment Advisers Act of 1940. These rules require registered private fund advisers to provide investors with detailed quarterly statements covering private fund performance, fees, and expenses.

While these regulations are relatively new in the United States, they have long been in place in Europe. The company claims that its LP Report Builder makes it easier for firms to comply with these regulations, bridging the gap between regulatory environments.

Crucially, it adheres to EIF-Invest Europe-ILPA compliance standards, fostering trust and credibility between fund managers and their limited partners (LPs).

EIF-Invest Europe-ILPA compliance standards refer to guidelines and best practices that private equity and venture capital firms adhere to when reporting to their investors, particularly limited partners (LPs). These standards are designed to enhance transparency, accuracy, and consistency in reporting, ensuring that LPs receive comprehensive and reliable information about the performance of their investments.

By simplifying the reporting process, Rundit’s solution allows professionals to focus on what truly matters: analyzing data, identifying trends, and making strategic moves.

“Our goal is to empower investors with real-time insights that drive better decision-making while freeing them from the burden of consolidating information from multiple data sources,” Jori Karstikko, CEO and co-founder at Rundit, said.

It might not be as sexy as augmented reality or Web3, but by providing an innovative, automated, and visually appealing solution, Rundit allows investors to stay ahead of the curve. In an industry where time is money, this tool streamlines the reporting process, fosters trust between fund managers and LPs, and ultimately enhances decision-making in the fast-paced investment landscape.

This news was originally published at ArcticStartup and is reproduced with permission

Cryptocurrency, also known as digital or virtual currency, has taken the world by storm since its introduction in 2009 with the creation of Bitcoin. It is a decentralized digital form of currency, which means it operates independently from banks and governments and is not backed by any physical asset. Cryptocurrencies use blockchain technology, a secure and decentralized system, to record and verify transactions.

The advent of cryptocurrency has created a buzz in the financial world due to its potential to revolutionize traditional financial systems. It has attracted a lot of attention and investment from individuals, businesses, and even governments. Today, there are over 5,000 cryptocurrencies in existence, with a total market capitalization of over $2 trillion.

One of the key reasons why cryptocurrency is considered one of the best investments in today’s world is its high potential for growth and return on investment. Since its inception, the value of cryptocurrencies has seen significant growth, making early investors millionaires. For example, Bitcoin’s value skyrocketed from less than $1 in 2009 to over $60,000 in 2021, making it one of the most lucrative investments in recent history. Other cryptocurrencies such as Ethereum, Litecoin, and Ripple have also seen tremendous growth in value, making them attractive investment options.

Another reason why cryptocurrency is seen as a great investment is its decentralized nature, which eliminates the need for intermediaries like banks and other financial institutions. This removes barriers to entry and allows for more open and equal participation in the market. It also leads to lower transaction fees, faster settlement times, and increased security, making it an attractive alternative to traditional financial systems. These reasons are also one of the supporting factors that makes crypto use cases grow rapidly. There are various industries trying to utilize this perk, such as the betting industry. Crypto betting is a thing now and it offers a better security and overall better experience compared to regular online betting that still uses credit cards or e-wallets.

Moreover, cryptocurrency offers diversification to investment portfolios. Traditionally, people have invested in stocks, bonds, and real estate. However, with the introduction of cryptocurrency, investors can now diversify their portfolios and mitigate risk. Cryptocurrencies have a low correlation with other traditional assets, making them an excellent hedge against inflation and economic uncertainty. Furthermore, the blockchain technology behind cryptocurrency has many potential use cases, making it a promising investment for the future. It has the potential to disrupt various industries, such as finance, supply chain management, and healthcare, creating new investment opportunities in these sectors.

Crypto as investment

Cryptocurrency has emerged as a popular investment tool, attracting a large number of investors from different walks of life. It has gained attention due to its high returns and potential for growth, as well as its decentralized and secure nature. However, like any investment, investing in cryptocurrency comes with its own set of risks and rewards.

One of the main perks of investing in cryptocurrency is its potential for high returns. Since its inception, many cryptocurrencies have seen massive growth in value, making early investors millionaires. For example, Bitcoin’s value rose from less than $1 in 2009 to over $60,000 in 2021, a return of over 6 million percent. Other cryptocurrencies, such as Ethereum, have also seen significant growth, making crypto a lucrative investment option.

Another perk of crypto as an investment tool is its decentralized nature. Unlike traditional investments, where intermediaries like banks and financial institutions have control over transactions, cryptocurrency operates on a decentralized network, eliminating the need for intermediaries. This increases transparency and reduces the risk of fraud, making it an attractive option for investors.

Cryptocurrency also offers diversification to investment portfolios. With traditional investments such as stocks, bonds, and real estate, investors are limited to certain markets and industries. However, with the introduction of cryptocurrency, investors can diversify their portfolios and mitigate risk by investing in different cryptocurrencies and tokens. This allows for more balanced portfolios, helping investors withstand volatility and market fluctuations.

Moreover, crypto investments have lower barriers to entry compared to traditional investments. Traditional investments often require a significant amount of capital to get started, making it inaccessible to many people. However, with cryptocurrency, you can start investing with as little as a few dollars, making it accessible to a wider range of individuals.

Furthermore, the blockchain technology behind cryptocurrency has many potential use cases, making it not only a profitable investment but also a promising technology for the future. It has the potential to disrupt various industries, such as finance, supply chain management, and healthcare, leading to more investment opportunities and potential for growth.

Investment tactics in cryptocurrency

Before diving into cryptocurrency as an investment, it is important to understand that it comes with its own set of risks. The market is highly volatile, and prices can be subject to significant fluctuations. Therefore, it is crucial to have a strategy in place when investing in cryptocurrency.

One common strategy is to diversify your portfolio by investing in different cryptocurrencies. This helps mitigate risk and balance out potential losses. It is also important to conduct thorough research on the cryptocurrencies you are interested in before investing. Look at factors such as their team, technology, and potential use cases.

Another strategy is to employ dollar-cost averaging. This involves investing a certain amount of money at regular intervals, regardless of the cryptocurrency’s current market price. This helps reduce the impact of market fluctuations and allows for more calculated and level-headed investment decisions.

It is also essential to keep track of your investments and regularly review your portfolio. This can help you identify trends and make changes to your investment strategy if needed.

In conclusion, cryptocurrency has emerged as a highly attractive investment option due to its potential for high returns, decentralization, diversification, and the disruptive potential of its underlying technology. However, it is essential to remember that like any investment, investing in cryptocurrency comes with its own set of risks, and it is important to have a well-thought-out strategy in place.

Final say

Cryptocurrency has changed the way the world sees and uses money. Its potential to revolutionize traditional financial systems, high returns, and decentralized nature make it an attractive investment option. However, it is still a relatively new and volatile market, and investors should approach it with caution and proper research. With the right strategy and mindset, cryptocurrency can be a valuable addition to any investment portfolio.

Disclaimer: Nothing on this site should be construed as investing, financial, trading, or any other kind of advice. No cryptocurrency is recommended for purchase, sale, or storage by Dataconomy. Before making any investing decisions, you should do your own research and consult with a financial professional.

Featured image credit: Kanchanara/Unsplash

In today’s hyper-competitive business environment, the ability to innovate is the key to long-term success and survival. If your business isn’t evolving and adapting quickly enough, you could be at risk of being left behind by your competitors—and even by early adopters who are using new technologies to succeed in their industries. A great way for companies to innovate is by migrating their website over from BigCommerce or another platform to Shopify Plus. In this article, we’ll explore why migrating from BigCommerce is such an important step for e-commerce businesses looking to grow and conquer new markets.

Understanding BigCommerce migration

BigCommerce is a cloud-based e-commerce platform that offers small and medium-sized businesses a secure, scalable, and high-performance e-commerce platform. With BigCommerce you get a comprehensive set of features including inventory management, order management, payment processing, and more. If you’re looking for an all-inclusive solution to run your business from start to finish then BigCommerce could be the right fit for you!

Exploring BigCommerce migration services

BigCommerce migration services are provided by experienced BigCommerce experts at https://gettrusted.io/services/ecommerce-development/bigcommerce/migration/. Our team has the technical know-how and industry insight needed to make your next BigCommerce migration project a success.

BigCommerce migration services can be offered as a standalone service or as part of a more comprehensive BigCommerce implementation project. In either case, we’ll work closely with you to determine the best approach for achieving your goals and objectives in terms of time frame, cost-effectiveness, workflow efficiency, and user experience (UX).

Preparing for a seamless migration

The first step to a seamless migration is to prepare. We recommend that you:

• Prepare your team and customers by communicating with them about the upcoming changes. Let them know what they can expect, when they should expect it, and how they can help (e.g., by taking down old content).
• Prepare your website by making sure that all product pages are up-to-date with accurate prices, descriptions, and images; if there are any missing products or categories on BigCommerce then now’s the time to add them! You don’t want this happening during migration so make sure everything is ready beforehand!

Execution of BigCommerce migration

You are now ready to execute the migration. This is a critical moment, as it will determine whether your business gets off to a good start or struggles during its first few months. A successful BigCommerce migration requires planning, testing, and optimization, so let’s take a look at what each step entails:

• Planning – Before you start planning for the actual implementation of your new platform, make sure that you have all of your requirements laid out in detail. This should include things like integration with third-party software solutions such as order management systems (OMS), payment gateways, and customer relationship management (CRM) tools; data transfer formats required by certain applications; timelines for when certain tasks need to be completed; etc., etc., etc. You’ll also want to spend some time thinking about how this project fits into your overall digital strategy what does success look like? How do we measure it? What resources do we need for us to achieve those goals?
• Testing – Once everything has been planned out and agreed upon by everyone involved in this project (including stakeholders from both companies), then comes testing! It’s important not only because there could be issues with compatibility between different platforms but also because if there aren’t any problems detected before launch then chances are high that something might go wrong after deployment goes live (and this could result in lost revenue).

Post-Migration optimization and growth

Once your new BigCommerce store is up and running, it’s time to optimize the site for maximum growth. The first step in this process is monitoring traffic and conversions. You’ll want to make sure that visitors are landing on your homepage or product pages when they come into the site so that you can target them based on where they’re coming from (e.g., Google search) and what they’re looking for (e.g., shoes).

Next, start looking at keyword density within product descriptions you’ll want to make sure there are no obvious gaps in terms of keywords being used or overuse of single words that don’t provide any value for customers searching online stores like yours!

Realizing business growth with BigCommerce

BigCommerce is a powerful e-commerce platform that provides businesses of all sizes with the tools they need to succeed online. But what makes it so great?

• Powerful e-commerce platform: BigCommerce provides everything you need to sell online, from customizable design templates and SEO-friendly URLs to automated order fulfillment and inventory management. Plus, it’s easy to add new products or categories in just seconds no coding is required!
• Excellent mobile app: The responsive mobile app is built right into your BigCommerce account (and free), so customers can browse products and make purchases on their phones or tablets without any additional steps necessary. This means fewer abandoned carts because people can shop anywhere at any time no matter where they are in the world!
• Great affiliate program: The BigCommerce Affiliate Program lets you earn commissions by referring new customers who sign up for an account through your link. There are no limits on earnings potential either; we’ll pay out up to $100 per referral each month regardless of how many sales were made during those 30 days (or even if there weren’t any). You’ll also receive access to a suite of tools for tracking your affiliate activity, including real-time reporting and performance metrics.

Conclusion

We’ve come a long way since the early days of e-commerce, and today’s merchants have more tools than ever before to help them succeed. BigCommerce is excited about the future of retail and what it means for businesses like yours. We believe that you should be able to focus on what matters most growing your business without having to worry about technology or how your website works behind the scenes.

Featured image credit: Pixabay/Pexels

Is Worldcoin legit? The question on everyone’s mind is whether Worldcoin, a project spearheaded by OpenAI CEO Sam Altman, will live up to its global launch. In a daring endeavor, a groundbreaking initiative has set its sights on dominating the realm of human authenticity verification. This audacious project proposes a unique approach, offering individuals crypto tokens in return for a meticulous eyeball scan. This bold concept is as innovative as it is ambitious. European data protection authorities have expressed interest and raised concerns about the concept.

In recent times, there has been a notable surge in the importance placed on validating our humanity in the digital realm. The emergence of AI-powered tools like ChatGPT, developed by companies like Altman’s OpenAI, seems to be the driving force behind this phenomenon. The rapid progress in this field has led to a growing difficulty in differentiating between content generated by bots and human digital activity. In a bold and innovative move, Altman has put forth a captivating proposition – a cutting-edge eyeball-scanning device combined with a crypto token. This groundbreaking solution holds the potential to restore our individual human identity within the vast realm of the digital landscape.

Is Worldcoin legit?

Worldcoin, a legitimate venture, boasts noteworthy support from reputable figures including Sam Altman, the former president of Y Combinator and current CEO of OpenAI. Moreover, the project has established a solid technological framework.

The Sam Altman crypto project “Worldcoin” is out

Worldcoin has emerged as a revolutionary concept that aims to authenticate the very essence of your human identity. Gone are the days of uncertainty, as this digital innovation serves as a definitive declaration, separating genuine individuals from bots or artificial intelligence. With Worldcoin, the assurance of being a bona fide person is finally within reach. The crucial component in question is referred to as the ‘World ID’, serving as a verifiable proof of one’s individual identity. In the digital era we are currently navigating, Worldcoin emphasizes that the verification of human identity is an essential necessity.

Obtaining your World ID not only provides you with a virtual passport to the global community, but also offers a multitude of benefits. Upon successful authentication, users are granted a specific number of Worldcoin tokens as a reward. The native cryptocurrency of the Worldcoin ecosystem, commonly referred to as tokens, serves as a means of exchanging value within the blockchain economy. As expected, the Worldcoin tokens, also known as WLDs, can be easily exchanged for other popular cryptocurrencies such as Bitcoin.

So, “Is Worldcoin legit?” It appears the answer lies in how the digital world responds to this innovative approach.

How does Worldcoin work?

Pop-up locations have emerged across Europe, including the UK, France, Germany, and Spain, offering individuals the opportunity to obtain Worldcoin “digital tokens” by providing their biometric data to Worldcoin’s unique and somewhat futuristic orbs. Privacy regulators in multiple regions are expressing concern and taking action regarding Worldcoin’s handling of Europeans’ sensitive personal data.

OpenAI and Worldcoin maintain that they promptly remove all images stored on the device as a means to safeguard privacy. A cutting-edge technology called zk-proof is being utilized by them, enabling the sharing of proof-of-personhood and distinct humanness without compromising the confidentiality of the sensitive personal data associated with your World ID. In its pursuit to authenticate humanity in the digital realm, Worldcoin faces the daunting task of addressing privacy concerns and regulatory scrutiny. Despite the company’s claims, these challenges remain evident.

Here are all of the Worldcoin orb locations

Is Worldcoin having legal hurdles?

Recently, the Information Commission Office (ICO) of the UK was asked about the rollout of Worldcoin in the country. Publicly, the ICO declared that it would be “making enquiries”. It reminded all businesses that they need to complete a Data Protection Impact Assessment (DPIA) before initiating any procedures that might lead to high risk, such as dealing with special category biometric data. If an organization identifies high risks that they can’t mitigate, they are obliged to consult the ICO. The ICO also stressed the need for “a clear lawful basis to process personal data”, stating: “Where they are relying on consent, this needs to be freely given and capable of being withdrawn without detriment.”

An important issue comes to the fore here: Can consent truly be freely given when individuals are incentivized to provide their biometrics for a token marketed as a form of digital currency? Can this setup address the question, “Is Worldcoin legit?”

Fast forwarding a few days, the CNIL, the French data protection authority, voiced similar concerns as the ICO and further expressed specific doubts about the lawfulness of Worldcoin’s operations. As initially reported by Reuters, the CNIL is not just questioning Worldcoin’s legality but has also disclosed it’s already undertaking an active investigation into the firm.

“The legality of [Worldcoin’s data] collection seems questionable, as do the conditions for storing biometric data,” a CNIL spokesperson confirmed via email. The spokesperson also unveiled, “Worldcoin collected data in France, and the CNIL initiated investigations.”

The CNIL disclosed that the investigation they initiated has been passed onto the Data Protection Authority (DPA) in Bavaria, Germany. This is presumably because Worldcoin has a subsidiary situated in this German state, making the Bavarian DPA the lead data supervisor for Worldcoin within the European Union. The CNIL clarified that it’s aiding the Bavarian investigation “under the mutual assistance procedure” outlined in EU law.

This prompts us to question, “Is Worldcoin legit?” particularly when viewed in light of the regulations set forth by the European Union’s General Data Protection Regulation (GDPR). The GDPR, which continues to be integrated into the UK’s data protection guidelines, employs a mechanism known as the One-Stop-Shop. This mechanism aims to simplify regulatory supervision when issues span across Member State borders, as is the case with Worldcoin.

In such instances, the data controller only needs to coordinate with a single lead DPA. For Worldcoin, that is the Bavarian DPA. TechCrunch reached out to this Bavarian authority regarding the ongoing investigation but was provided with limited information due to the active status of the proceedings. The authority verified that the obligation to carry out a data protection impact assessment is among the first aspects they’ll scrutinize. This assessment should provide a detailed evaluation of the potential impact of the intended processing operations on personal data protection, as well as the measures to mitigate potential risks.

Under the GDPR, biometric data used for identification purposes, which aligns with Worldcoin’s objective, is categorized as “special category data”. This data, deemed highly sensitive, is subject to the most stringent rules for lawful processing.

A representative for Tools For Humanity, the profit-driven tech company that led the development of Worldcoin and operates the World App, clarified to TechCrunch that they are relying on consent as the legal basis for processing European biometrics data. She highlighted that the project depends on user consent for creating proof of personhood and for opting into data custody. She also pointed TechCrunch towards Worldcoin’s biometric data consent form and privacy notice, documents that combined amount to almost 7,200 words.

Worldcoin, counting on individuals’ explicit consent to process their special category data under EU law, is obligated to provide a crystal clear explanation about what the processing is for. Given the nearly 7,000 words of legal language presented to individuals along with promises of crypto rewards for their scans, meeting this high standard of transparency appears to be a considerable challenge. Thus, the question “Is Worldcoin legit?” particularly in terms of data consent, becomes even more crucial.

Worldcoin’s governance structure, being a decentralized cryptocurrency project, also seems intricate, making it hard for people to identify who is actually receiving their data. When TechCrunch enquired whether Worldcoin operates as a for-profit or not-for-profit organization, a representative for Tools For Humanity (the entity responding to queries sent to Worldcoin’s press email) didn’t provide a clear-cut answer due to Worldcoin’s complex organizational structure and decentralized governance.

The representative did confirm, however, that Tools for Humanity and its German subsidiary (essentially, the developer of Worldcoin) operate as profit-driven tech companies. In contrast, the primary entities involved, namely the Worldcoin Foundation and the Worldcoin Protocol, are assumed to be not-for-profit organizations. Worldcoin’s website indicates that the Worldcoin Foundation operates akin to a non-profit entity and is incorporated in the Cayman Islands, with profit-making subsidiaries.

Queries have been raised regarding who is managing the data and therefore who is legally accountable for complying with EU data protection regulations. According to the Worldcoin biometric consent form, the Worldcoin Foundation, located in the Cayman Islands, is the data controller for the images and biometric data collected via their Orb device. Although the Worldcoin Foundation is now considered the data controller, Tools For Humanity is identified as a data processor for Worldcoin.

The biometric data consent form from Worldcoin implies that once users ‘sign up with an Orb’ and have their biometric data collected, they won’t be able to request the deletion of their personal data afterwards. Worldcoin maintains that the unique Iris Code generated in this process can’t be deleted as it would undermine the proof of uniqueness. This stance seems to be in conflict with GDPR regulations, which grant Europeans extensive data access rights, including the right to ask for data deletion.

While it remains uncertain how quickly regulatory bodies might move towards enforcement if the concerns are substantiated, Tools For Humanity insists that the Worldcoin project adheres to all relevant laws. There are, however, certain exceptions such as specific US states where residents are outright prohibited from being scanned due to local laws restricting biometric data processing.

Worldcoin also claims to have carried out a “rigorous” data protection impact assessment and is committed to collaborating with partners across Europe. Their goal is to ensure that Worldcoin meets regulatory standards and offers a safe, transparent service for verified humans.

Is Worldcoin demonic?

Worldcoin is essentially a tech-finance venture that aims to establish a unique digital identity for each person via biometric data, specifically iris scans. It’s affiliated with the development and use of cutting-edge technology and digital currencies, which may be seen as controversial to some. However, to label it as “demonic” would probably be a subjective opinion and interpretation. We discussed how does the future of WLD coin look here! Also, Sam Altman’s crypto is out but do you know how to withdraw Worldcoin?

Disclaimer: The content provided herein is not intended as investment advice. It is purely a compilation of events and updates related to Worldcoin. This information is designed to inform and educate, not to guide or influence investment decisions. Please conduct your own research and consult with a professional financial advisor before making any investment decisions.

Featured image credit: Worldcoin

Sam Altman’s new cryptocurrency Worldcoin is out, but it requires people to scan their eyes using the company’s own “orbs.” There are 119 different orbs placed all around the world, 18 different countries to be precise. Let’s take a look at all of the Worldcoin orb locations and see if there are any near you where you live!

Cryptocurrency pioneers claim that an eye-scanning physical “orb” is essential for a future in which the advancement of artificial intelligence will make it more difficult to distinguish between humans and robots. Users can obtain one of the company’s tokens after showing that they are not robots. It is now possible to withdraw Worldcoin, a brand-new cryptocurrency that is being given away to individuals all across the world without charge.

Because it is brand-new, there are some questions seeking answers, including how to withdraw Worldcoin. Luckily, there are a couple of guides that answer all of the answers regarding the new cryptocurrency.

The Worldcoin project was created to help build an identity & financial network connecting billions of people in the Age of AI. pic.twitter.com/7XbwCHkt2P

— Worldcoin (@worldcoin) July 29, 2023

How does Worldcoin Orb work?

Worldcoin orb locations: Countries

As mentioned, the Worldcoin orb locations cover 18 countries from all around the world, from North America to Europe, and from Africa to Asia. Here is a full list of all of the countries:

• Argentina
• Brazil
• Chile
• France
• Germany
• Hong Kong
• India
• Japan
• Kenya
• Korea, Republic of
• Mexico
• Portugal
• Singapore
• Spain
• Uganda
• United Arab Emirates
• United Kingdom
• United States

Is Worldcoin legit or a new well-studied scam

All Worldcoin Orb locations

There isn’t only one orb located in all of the 18 countries, but there are multiple of them placed in some of the most crowded and popular places in these countries. Below you will find a list of all of the Worldcoin orb locations, including the city and all of the address information:

Argentina

• San Justo Shopping: Av. Brig. Gral. Juan Manuel de Rosas 3910, B1754 San Justo, Provincia de Buenos Aires, Argentina
• Mendoza – Plaza Independencia: Gral. Espejo 300, M5502 AVJ, Mendoza
• Carrefour Vicente Lopez: Av. Maipú 940, B1638 Vicente López, Provincia de Buenos Aires
• Terrazas de Mayo Shopping: Av. Pres. Arturo Umberto Illia 3770, B1613 Los Polvorines, Provincia de Buenos Aires, Argentina
• Carrefour Belgrano: Av. Monroe 1655, C1428 CABA
• Parque Avellaneda Shopping Mall: Salida Acceso Sudeste, Sarandí, Provincia de Buenos Aires
• Los Gallegos Shopping: Rivadavia 3050, B7600GNT Mar del Plata, Provincia de Buenos Aires, Argentina
• Estación de Trenes ONCE: Av. Pueyrredón 127-199, C1032 C1032ABB, Buenos Aires
• Shopping Paseo Aldrey: Sarmiento 2685, Mar del Plata, Provincia de Buenos Aires
• Boulevard Shopping Adrogué: Av. Hipólito Yrigoyen 13298, B1846 Adrogué-34.80800812706844, -58.400759530688475
• Av. Aristides Villanueva: Av. Aristides Villanueva 400, Mendoza
• Paseo del Buen Pastor: Av. Hipólito Yrigoyen 325, X5000 Córdoba
• Nuevo Quilmes Plaza: Av. Caseros 1750, B1876 Don Bosco, Provincia de Buenos Aires
• Sportclub Parque Caballito: Av. Rivadavia 4893, Caballito
• Subte – Galería Norte Obelisco: Carlos Pellegrini 401-449, C1054 CABA, Argentina
• Norcenter: Esteban Echeverria 3750, Munro, Provincia de Buenos Aires, Argentina
• Bariloche Shopping Terrazas Catedral: Shopping Las Terrazas, Local 25, Base, Cerro Catedral, R8400 San Carlos de Bariloche, Río Negro
• Patio Olmos: Av. Vélez Sarsfield 361, X5000JJD Córdoba, Argentina

Brazil

• Campus Party em São Paulo: Av. Olavo Fontoura, 1209 – Portão 38 – Santana, São Paulo – SP, 02012-021
• MaacHub: Av. Brigadeiro Luiz Antônio, 4553 – Jardins São Paulo – SP, 01401-002
• Akasa Itaim: Rua Sader Macul, 96 – Itaim São Paulo – 04542-090
• Club Co-working: Av. Pres. Juscelino Kubitschek, 1327, 4 andar, Sala 17 – Itaim Bibi, São Paulo – SP – CEP: 04543-011

Chile

• Galeria Edificio Plaza 712: Arturo Prat 712, 4791248 Temuco, Araucania
• Mall Plaza Vespucio: Av. Vicuña Mackenna 7110, 8240000 La Florida, Región Metropolitana, Chile
• Mall Apumanque: Av. Manquehue Sur 31, Las Condes, Región Metropolitana, Chile
• Mall Plaza Norte: Av. Américo Vespucio 1737, 8600036 Huechuraba, Región Metropolitana, Chile
• Arauco Estacion Central: Lib. Bdo. O`HIGGINS 3156, Santiago, Estación Central, Región Metropolitana, Chile
• Subcentro: Av. Apoquindo 4411, Las Condes, Región Metropolitana, Chile
• Mall Plaza Alameda: Av. Libertador Bernardo O’Higgins 3470, 9160000 Estación Central, Región Metropolitana, Chile

France

• Level Coworking Café: 11 Rue de l’École Polytechnique, 75005 Paris

Germany

• h5: Allee am Röthelheimpark 41, 91052 Erlangen, Bavaria, Germany
• ALEXA Berlin: Grunerstraße 20, 10179 Berlin

Hong Kong

• Cyberport 3: Cyberport 3, Telegraph Bay
• 66 Shanghai Street: 66 Shanghai St, Yau Ma Tei
• MG Tower: 133 Hoi Bun Rd, Kwun Tong

India

• Sikanderpur Metro Station: Sikanderpur Metro Station, A Block, DLF Phase 1, Sector 28, Gurugram, Haryana 122022
• Noida Sector 52 Metro Station: Noida Sector 52 Metro Station, Sector 52, Noida, Uttar Pradesh 201301
• MG Road Metro Station: MG Road Metro Station, Maruti Housing Colony, Sector 25, Gurugram, Haryana 122022
• Nirman Vihar Metro Station: Nirman Vihar Metro Station, Veer Savarkar Block, Block D, Nirman Vihar, Preet Vihar, New Delhi, Delhi 110092
• Laxmi Nagar Metro station: Laxmi Nagar Metro, Vikas Marg, Veer Savarkar Block, Block D, Laxmi Nagar, Delhi, 110092
• Mantri Square Mall Bangalore: 1, Sampige Rd, Malleshwaram, Bengaluru, Karnataka 560003, India
• Vegacity Mall: Vegacity Mall, Bannerghatta Main Rd, Dollars Colony, BTM 2nd Stage, J. P. Nagar, Bengaluru, Karnataka 560046
• Vaishali Metro Station: Vaishali Metro Station, Madan Mohan Malviya Marg, Gaur Ganga 2, Phase 1, Sector 4, Vaishali, Ghaziabad, Uttar Pradesh 201010
• Anand Vihar metro station: Anand Vihar metro station, ISBT, Anand Vihar, Delhi, 110092
• Noida City Center Metro: Noida City Center, Sector 39A, Sector 32, Noida, Uttar Pradesh 201303
• Noida Sector 51 Metro Station: Metro Station, Block E, Sector 51, Noida, Uttar Pradesh 201301
• Hauzkhas Metro Station: Hauz khas metro station, Jia Sarai, Gamal Abdel Nasser Marg, Block F, Deer Park, Hauz Khas, New Delhi, Delhi 110016
• Noida Sec 18 Metro Station: Noida Sec 18 Metro Station, Captain Vijyant Thapar Marg, Noida Sector 18, Pocket E, Sector 27, Noida, Uttar Pradesh 201301
• Iffco Chowk Metro Station: Iffco Chowk, Sector 29, Gurugram, Haryana 122002
• Kaushambi Metro: Kaushambi metro station, Kaushambi, Gaziabad, Uttar Pradesh, 201010
• The Galleria Mall: Galleria Mall, opposite Yelahanka, Ambedkar Colony, Bengaluru, Karnataka 560064
• V3S Mall: V3S Mall, Vikas Marg, Laxmi Nagar Commercial Complex, Swasthya Vihar, New Delhi, Delhi 110092
• Chattarpur Metro Station: Metro Station Chhattarpur, Andheria Mor Village, Vasant Kunj, New Delhi, Delhi 110070

Japan

• EDGE off: 〒150-0034 東京都渋谷区代官山町１３−５ 135ビル 1F
• Tokyo Tower: 2-chōme-1 Shibakōen, Minato City, Tokyo 105-0011, Japan
• NOX Gallery Ebisu: 〒150-0021 東京都渋谷区恵比寿西２丁目５−1, Saison Daikanyama
• NOX Gallery Tomigaya: 〒151-0063 東京都渋谷区富ケ谷２丁目４４−12 1F
• Crypto Lounge GOX: 〒160-0021 東京都新宿区歌舞伎町２丁目１９−１５ てなむタウンビル 6階. 6F, 2-19-15 Kabukichō, Shinjuku City, Tokyo 160-0021

Kenya

• Sarit Centre: Pio Gama Pinto Rd, Karuna Rd, Nairobi, Kenya
• Imaara Shopping Mall: Mombasa Road, Nairobi, Kenya
• Signature Mall: HXM3+59P, Pridelands
• Garden City: Thika Rd, Nairobi
• The Nextgen Mall: Mombasa Road, Nairobi, Kenya
• Greenspan Mall: Lower Savanna Dakar Rd Greenspan Mall Embakasi East, Kenya
• Maasai Mall: Bus Stop, Magadi Rd, Ongata Rongai
• Imaara Mall: Mombasa Road, Nairobi
• The Hub: Dagoretti Rd, Nairobi, Kenya
• Unicity Mall: RWFR+73 Nairobi
• Spur Mall: Thika Super Highway Exit 12 / 13, Ruiru
• Southfield Mall: Airport North Road, P.O.Box 18628-00500, Nairobi, Kenya, Eastern Bypass, Nairobi
• Camp Toyoyo Stadium: Camp Toyoyo Stadium
• Ananas Mall: Ananas mall, makongeni, Garissa Rd, Thika
• Crystal Rivers Mall: Athi River

The Sam Altman crypto project “Worldcoin” is out

Republic of Korea

• 수호아이오 (SOOHO.IO): 서울특별시 강남구 126 테헤란로 B1 (B1, 126 Teheran-ro, Gangnam-gu, Seoul)
• 하이드 미 플리즈 (Hide Me Please): 서울특별시 중구 을지로11 길 33 (33 Eulji-ro 11-gil, Jung-gu, Seoul)
• 메르깟 (Mercat): 서울특별시 종로구 세종대로 169 (169, Sejong-daero, Jongno-gu, Seoul)

Mexico

• Roland Coffee Bar (Monstera The Coffee Bar): Francisco Javier Mina 914, Barrio Antiguo, sur, 64000 Monterrey, N.L.
• Chez-Vous #Timecafé Cervantes: Blvd. Miguel de Cervantes Saavedra 41, Granada, Miguel Hidalgo, 11520 Ciudad de México, CDMX, Mexico
• Hagamos Composta Café Comunitario: Coahuila 164, entre Medellín y Monterrey, (frente Lumen, Roma Sur, Cuauhtémoc, 06760 Ciudad de México, CDMX, Mexico
• Chez-Vous #Timecafé Coyoacán: Av Miguel Hidalgo 70, San Lucas, Coyoacán, 04030 Ciudad de México, CDMX, Mexico

Portugal

• Aqua Portimão: R. de São Pedro 72, 8500-448 Portimão, Portugal
• Parque Nascente Shopping: Praceta Parque Nascente 35, 4435-182 Rio Tinto, Portugal
• Gare do Oriente: Av. Dom João II, 1900-233 Lisboa, Portugal
• Ubbo: Av. Cruzeiro Seixas 7, 2650-426 Lisboa
• Costa da Caparica – Praia da Saúde: Rua Praia da Saúde
• CascaiShopping: Estrada Nacional 9, 2645-543 Alcabideche
• Alegro Sintra: R. Alto do Forte IC 19, 2635-018 Rio de Mouro
• Almada Fórum: R. Sérgio Malpique, 2810-354 Almada, Portugal

Singapore

• OGBC Office: 20 Cecil Street #04-09 PLUS Building, Singapore 049705
• Vega Solutions Office: 88 Market Street, CapitaSpring, #23-03

Spain

• La Gavia: C. Adolfo Bioy Casares, 2, Madrid, Spain
• Plaza Norte 2: Pl. del Comercio, 11-12, 28703 San Sebastián de los Reyes, Madrid
• La Maquinista: Paseo Potosí, 2, 08030 Barcelona
• Príncipe Pío: P.º de la Florida, 2, 28008 Madrid, España
• Parque Corredor: Ctra. Ajalvir Centro Comerci, s/n, 28850 Torrejón de Ardoz, Madrid, Spain
• Diagonal Mar: Av. Diagonal, 3, 08019 Barcelona
• Plenilunio: C. de Aracne, s/n, 28022 Madrid, Spain
• Splau: Av. del Baix Llobregat, s/n, 08940 Cornellà de Llobregat, Barcelona, Spain
• Maremagnum: Moll d’Espanya, 5, 08039 Barcelona
• La Vaguada: Av. de Monforte de Lemos, 36, 28029 Madrid, Spain
• FAN Mallorca Shopping: Carrer del Cardenal Rossell, s/n, 07007 Palma, Illes Balears
• Gran Plaza 2: C. de los Químicos, 2, 28222 Majadahonda, Madrid
• X-Madrid: C. Oslo, 53, 28922 Alcorcón, Madrid, Spain

Uganda

• Nakivubo Stadium: Office U013, Hamis Kiggundu Road (Nakivubo Stadium), Kampala, Uganda
• Junction Mall: 8JWX+VPV, Namugongo Road, Kampala, Uganda
• Pioneer Mall: Kampala, Uganda
• Akamwesi Shopping Mall: Gayaza -Kampala Rd, Kampala, Uganda
• Acacia Mall: 14-18 Copper Rd, Kampala, Uganda

United Arab Emirates

• Crypto Oasis: Innovation Hub, Gate C, Floor 1, Office 176, DIFC

United Kingdom

• Techspace Shoreditch: 25 Luke St, London EC2A 4DS, United Kingdom
• Techspace Worship Street: 25 Worship St, London, EC2A 2DX

United States

• MIA | The Canvas Miami: 215 NW 24th St, Miami, FL 33127
• NY | Ludlow House: 39 Ludlow St, New York, NY 10002, United States
• SF | Mindspace: 575 Market St, San Francisco, CA 94105
• NY | Betaworks: 29 Little W 12th St, New York, NY 10014, United States
• NY | The Canvas: 185 Greenwich St, New York, NY 10007
• LA | Blankspaces Santa Monica Pier: 1450 2nd St, Santa Monica, CA 90401
• NY | The Brass Factory: 185 Wythe Ave f2, Brooklyn, NY 11249
• SF | SHACK15: Ferry Building, 1, Suite 201, San Francisco, CA 94111

Featured image credit: Worldcoin

Sam Altman recently announced its cryptocurrency project Worldcoin, and it became available all around the globe with a couple of tweaks and improvements. Now, you can buy the token online, and today we will show you how to withdraw Worldcoin on the supported platforms.

Worldcoin, a new cryptocurrency that is being distributed for free to people around the world, is now available to withdraw. Because it was recently released, not everyone is aware of how to withdraw Worldcoin, and people are hitting Google to find an answer. Luckily, you found us, and we will show you everything you need to know about the process!

How to withdraw Worldcoin

Just like any other cryptocurrency, it is not very hard to understand how to withdraw Worldcoin once you get the logic behind it. It is not very hard, and you don’t have to do any complicated tasks in order to withdraw it. Pay close attention to our step-by-step guide and withdraw your money:

1. Make sure you have a verified World ID in order to access your account.
2. Go to “Withdrawal.” (Worldcoin is available on Binance and OKX)
3. Currently, you can exchange Poloniex, Bitz, and XT.COM on your Worldcoin wallet.
4. Select the Worldcoin token you want to withdraw and put the necessary WLD value once you’re on the withdrawal screen.
5. Confirm your withdrawal.
6. Wait for the service to process your transaction.

Withdrawing Worldcoin is a simple process. Once you have a verified World ID, you can follow the steps above to withdraw your Worldcoin to a variety of wallets.

How to convert Worldcoin to M-Pesa

M-PESA is the biggest fintech platform on the continent of Africa and the most popular mobile money service. Due to its safety and unrivaled convenience, M-PESA is the favored method of payment across the continent for both banked and unbanked individuals. Millions of people who own mobile phones but do not have bank accounts or simply have restricted access to banking services are also given financial services by it. Here is how to convert Wordcoin to M-Pesa:

1. Create a Binance or OKX account.
2. Deposit your Worldcoin.
3. Sell Worldcoin for Kenyan Shillings.
4. Withdraw your Kenyan Shillings to M-Pesa.
5. Confirm your withdrawal.

The Sam Altman crypto project “Worldcoin” is out

How to buy Worldcoin

Now that we know how to withdraw Worldcoin let’s take a look at how to buy it. Binance and OKX are two of the markets that you can buy Worldcoin on. The method is not different from any other cryptocurrencies as you will have to have an account and meet a couple of requirements, like the age restrictions. As long as you have access to Binance and OKX, you will be able to buy Worldcoin without any issues.

Sam Altman's Worldcoin salespeople/volunteers/whatever have reached the neighborhood. 25 tokens for your retina scan. One of the pamphlets: pic.twitter.com/eXuUztNKVO

— Manish Singh (@refsrc) March 1, 2023

Developers can now use the Worldcoin software development kit (SDK), which was previously only accessible in beta mode, in order to create tools and programs that make use of the project’s identity system, the World ID. Orb must be used to scan the irises of users in order to authenticate them properly.

The company claims that Orb is a uniquely designed device that originates a unique identifier from human irises without any associated data being processed or stored locally.

What is Worldcoin?

The business with offices in Berlin and San Francisco announced a couple of weeks back that 35 locations in 20 countries will now have access to its technology, including its Worldcoin token. This cryptocurrency can be tracked on the blockchain but requires users first to prove their identity.

According to Worldcoin, improvements in artificial intelligence have made it harder to distinguish between human- and AI-generated online activity, language, digital artwork, and other online content. The company suggests using a kind of digital passport based on what it refers to as “proof of personhood” to help clear up this mistake.

How does the future of WLD coin look

The creators of cryptocurrencies contend that an eye-scanning physical “orb” is necessary for a time when it will be harder to differentiate humans from machines as artificial intelligence technologies advance. After proving they are not robots, users can claim one of the company’s tokens. We hope you enjoyed reading our “How to withdraw Worldcoin” guide!

Disclaimer: Nothing on this site should be construed as investing, financial, trading, or any other kind of advice. No cryptocurrency is recommended for purchase, sale, or storage by Dataconomy. Before making any investing decisions, you should do your own research and consult with a financial professional.

Is Worldcoin legit or a new well-studied scam

Featured image credit: Worldcoin

The development of banking and financial software is essential to the banking sector’s digital transformation. Banks and other financial organizations may simplify operations, boost security, and provide clients with better services thanks to these software solutions. We shall examine the key characteristics and specifications of banking and financial software development in this post.

Security options

When banking software services and financial software, security comes first. To safeguard sensitive customer data and stop illegal access, it is essential to use strong security measures including encryption, access limits, and authentication procedures. Secure user login and transactions are made possible by two-factor authentication, biometric authentication, and secure communication protocols.

Account administration

In banking software, account management functions are essential. Customers may establish and manage accounts, check account balances, examine transaction histories, and change personal information using these capabilities. Multiple account types (savings, checking, etc.), account linkage, and joint account administration are services that banks may provide.

Transfer of funds and payment

Banking software must have effective payment and money transfer features. Customers may execute transactions seamlessly because of features including online payments, bill payments, peer-to-peer transfers, and wire transfers. Financial transactions are made easily and securely thanks to integration with payment gateways, national payment systems, and real-time payment networks.

Management of credit and loans

Loan and credit management tools have to be included in banking software. The program allows users to manage loan repayments, monitor loan status, and apply for loans. Customers may use calculators to estimate loan eligibility, interest rates, and repayment plans to help them make well-informed choices. Features including risk assessment, credit limit management, and credit score help to manage credit effectively and lower risks.

Financial planning and investments

Customers looking for financial planning and investment services may benefit from wealth management and investing features. Tools for portfolio management, investment monitoring, and investment advice may be found in banking software. Customers may get helpful insights for choosing investments thanks to integration with stock market data, real-time financial news, and investment research tools. The experience of wealth management may be further improved by features like tax minimization, retirement planning, and automated investing techniques.

Analytics and reporting

Banking institutions may get important insights into client behavior, financial trends, and operational performance thanks to reporting and analytics services. Banks are able to measure key performance indicators, gauge client happiness, and pinpoint areas for development thanks to customizable dashboards, graphical representations, and data visualization tools.

Regulations and compliance requirements

The creation of banking and financial software must adhere to industry norms and regulations. Data protection laws, anti-money laundering (AML) standards, and know-your-customer (KYC) requirements should all be followed by software. The creation of regulatory reports is made possible by robust reporting capabilities, which also aid audit procedures. Interoperability with other financial systems is ensured by adherence to international financial standards, such as ISO 20022 for payments.

Capabilities for integration

To provide a smooth user experience, banking software has to interact with several other systems and services. Integration with payment gateways, customer relationship management (CRM) systems, core banking systems, and third-party APIs is essential. Through cooperation with fintech partners, open banking initiatives allow banks to provide improved services and promote safe data sharing.

Scalability and effectiveness

For banking and financial applications, scalability and performance are essential criteria. The program must provide concurrent user access, manage a large number of transactions, and remain responsive even during busy periods. Load testing, database optimization methods, and scalable design make guarantee the product can accommodate rising demand without degrading performance.

Conclusion

Strong security features, effective account management tools, connectivity with other systems, and support for mobile and omnichannel are all necessary for the development of banking and financial software. Software developers may design strong and secure solutions that satisfy the changing demands of banks and financial institutions while providing excellent client experiences by including these elements and taking into account the particular needs of the banking sector.

Featured image credit: Unsplash

WLD coin (Worldcoin), a fascinating blend of cryptocurrency and digital identity, has been garnering worldwide attention. With an impressive current price of $1.99 and a remarkable 24-hour surge of over 17 %, many enthusiasts are eagerly speculating on its future potential.

Let’s delve into a comprehensive analysis to predict the trajectory of this intriguing digital asset in our WLD price prediction.

To make an accurate prediction, we must first grasp the present situation. Worldcoin has been on a positive trend lately, boasting a significant 24-hour increase of over 17%. This bodes well for its investors, sparking interest across the globe with its innovative approach that aims to provide universal access to the global economy.

The Worldcoin project is now live. pic.twitter.com/xZXG4w56Ps

— Worldcoin (@worldcoin) July 24, 2023

What sets WLD coin apart from conventional cryptocurrencies is its distinct mechanism for identifying and distributing tokens, which could have a profound impact on its price. A higher adoption rate would likely result in increased demand, ultimately driving the price upward. However, it’s worth noting that the token’s nature of being freely distributed may lead to a substantial increase in supply, which could potentially impact its price dynamics.

The Sam Altman crypto project “Worldcoin“

Looking ahead, the future trajectory of Worldcoin remains an exciting topic of discussion. Its unique features and widespread appeal have positioned it as a promising player in the ever-evolving world of digital assets. As more investors and users embrace its vision, Worldcoin’s journey in the crypto space is sure to be a captivating one. So, keep an eye on WLD – it could be the coin that reshapes the way we think about cryptocurrencies and digital identity!

WLD coin price prediction

Considering the inherent volatility of cryptocurrency prices, making precise predictions about the future price of WLD coin can be quite challenging. However, we can attempt to estimate its potential based on key factors like adoption rate, overall trends in the global cryptocurrency market, and advancements in technology.

At its current growth rate of 17% per day, if sustained for a month, the price of WLD coin could theoretically soar to around $29. But it’s important to keep in mind that such exponential growth rates are typically not sustainable in the long run, as market corrections are likely to occur.

Assessing the market sentiment surrounding WLD coin in comparison to other cryptocurrencies is no easy feat, especially with limited data available on the sentiment of individual crypto assets. Nevertheless, by thoroughly examining the information at hand, we can gain valuable insights into the potential trajectory of this intriguing digital asset.

Predicting cryptocurrency prices accurately remains a challenge due to their inherent volatility. However, by considering its recent performance, we can make an educated estimate of its potential trajectory.

Is Worldcoin legit or a new well-studied scam

With WLD coin witnessing an impressive 24-hour increase of 17% and its current price standing around $1.99, a continuation of this trend at the same rate over the next month could result in a significant price surge.

Nevertheless, it’s essential to acknowledge that such exponential growth is often unsustainable in the long term. Therefore, let’s adopt a more conservative approach and assume a daily growth rate of 5%, which still represents substantial growth, albeit at a slower pace.

Here’s a simplified calculation for this scenario:

• Day 1: $1.99 * 1.05 = $2.0895

By applying this 5% daily increase over 30 days:

• Day 30: $2.0895 * (1.05^29) = Approximately $12.08

Indeed, it’s crucial to emphasize that the estimate provided is a very rough approximation, based on the assumption of constant growth every day, which is not the norm in the highly volatile cryptocurrency markets.

Furthermore, numerous other factors can significantly influence the price of WLD coin and any other cryptocurrency. These factors may include shifts in overall market sentiment, regulatory developments, technological advancements, changes in adoption rates, and unforeseen events, making accurate price predictions highly challenging.

As with any investment, it is always prudent to conduct thorough research and seek advice from a qualified financial advisor before making any investment decisions. Cryptocurrency investments come with inherent risks, and individual circumstances and risk tolerance should always be carefully considered before investing in any digital asset.

Factors influencing WLD coin

When considering the factors that could influence WLD coin’s price, several key elements come into play:

• If WLD coin gains widespread adoption and proves to be highly useful in real-world applications, it is likely to experience increased demand, which could drive its price higher.
• Regulatory news and decisions related to cryptocurrencies can significantly impact Worldcoin’s price. Favorable regulations may have a positive effect, while restrictive measures could lead to a decline in its value.
• Overall market sentiment and trends in the cryptocurrency space will also have an influence on Worldcoin’s price, as it is part of the larger crypto market ecosystem.
• The continuous development and improvement of WLD coin’s underlying technology and ecosystem can instill confidence in investors and users, leading to increased demand and a potential rise in price.

What to consider in crytpo investment?

When investing in cryptocurrencies, traders often utilize various technical indicators to analyze price trends and make informed decisions. These indicators serve as valuable tools in understanding market dynamics and assessing potential entry and exit points.

One widely employed indicator is the Relative Strength Index (RSI), which acts as a gauge of momentum, oscillating between 0 and 100. It helps traders identify overbought or oversold conditions in the market. When the RSI rises above 70, it suggests that the asset may be overbought, while a reading below 30 indicates an oversold scenario.

Another popular momentum indicator is the Stochastic Oscillator. This indicator compares an asset’s closing price to its price range over a specified period. Like the RSI, it aids in pinpointing overbought and oversold states. An oscillator reading exceeding 80 indicates overbought conditions, while a reading below 20 suggests an oversold condition.

Traders also rely on the Moving Average Convergence Divergence (MACD) indicator, which follows price trends by reflecting the relationship between two moving averages. The MACD is instrumental in identifying shifts in momentum and changes in trends, providing valuable insights for investors.

10 best AI crypto projects that can make you rich

Bollinger Bands are another set of indicators that measure market volatility. Comprising three bands – upper, middle, and lower, they assist traders in identifying potential entry and exit points. When the price consistently touches the upper band, it may indicate a strong uptrend. Additionally, if the price reverses but does not break below the middle band before reverting to the upper band, it confirms the robustness of the uptrend.

For assessing buying and selling pressure on a specific cryptocurrency, traders often turn to the On-Balance-Volume (OBV) indicator. This technical tool anticipates price movements based on volume flow. The OBV is known as a cumulative indicator, adding volume on upward days and subtracting volume on downward days, providing valuable insights into market sentiment.

While these indicators offer valuable insights into market trends, it’s essential to remember that they are just a portion of the tools available for analyzing cryptocurrencies. Price predictions in the dynamic crypto market can change rapidly, and comprehensive research, combined with wise investment decisions, are always advisable for anyone venturing into the world of digital assets.

WLD coin price

At the time of writing, according to Binance, the current price of Worldcoin stands at $2.0243343 per unit when trading against the US Dollar (WLD/USD). The total market capitalization for Worldcoin is $217.45 million USD, while the 24-hour trading volume amounts to $641.46 million USD. The WLD to USD price is continuously updated in real-time. Over the last 24 hours, WLD coin has experienced a decline of -28.28%, and its circulating supply amounts to 107.42 million units.

Final words

It is important to reiterate that the information presented here is for informational purposes only and should not be considered as investment advice. Cryptocurrency markets are highly volatile and subject to various unpredictable factors that can influence prices. Making investment decisions involves inherent risks, and individuals should conduct their own research, seek professional financial advice, and carefully assess their risk tolerance before investing in any digital asset, including WLD coin. Remember, the cryptocurrency landscape is constantly changing, and sound judgment and due diligence are essential when navigating this dynamic and evolving market.

Featured image credit: Kerem Gülen/Midjourney

Payroll can be a burden. It’s time-consuming, complex, and error-prone. But it doesn’t have to be. With payroll automation, you can take the stress out of payroll and let the software do the work for you.

Traditionally, processing payroll involved numerous manual tasks, from calculating employee wages to withholding taxes, issuing paychecks, and filing tax reports. These processes demanded significant time and effort, often leading to delays, inefficiencies, and increased risk of errors. Fortunately, payroll automation has emerged as a game-changing tool, enabling businesses to streamline and simplify their payroll operations.

By implementing payroll automation, businesses can free themselves from the burden of manual payroll tasks. The software takes on the responsibility of performing calculations, ensuring accurate wage calculations based on pay rates, hours worked, and overtime. This is particularly beneficial for businesses with complex pay structures or a large number of employees, where the potential for errors and discrepancies is magnified.

What is payroll automation?

Payroll automation refers to the utilization of software to streamline the various tasks involved in managing payroll. These tasks encompass the calculation of employee wages, deduction of taxes, issuance of paychecks, and filing of payroll tax reports.

Implementing payroll automation can yield considerable time and cost savings for businesses by eliminating the need for manual data entry and processing. Moreover, it helps mitigate the risk of errors as the software can be programmed to adhere to specific rules and regulations.

Payroll software also proves instrumental in accurately and consistently computing employee wages based on factors such as their pay rate, working hours, and overtime. This proves especially beneficial for businesses with a substantial workforce or intricate pay structures.

Another area payroll can help your business is tax witholding. Payroll software facilitates the withholding of taxes from employee paychecks in accordance with their respective tax bracket and filing status. Such compliance with tax regulations is indispensable, and payroll software ensures accurate withholding.

Through payroll software, businesses can conveniently issue paychecks either electronically or by mail. This streamlines the process, saves valuable time and resources, and eliminates the need for manual printing and mailing of paychecks.

What kind of data is needed for payroll automation?

The data needed for payroll automation can vary depending on the specific needs of your business, but some common data points include:

1. Employee information such as names, addresses, Social Security numbers, tax filing status, and pay rates
2. Timekeeping data of employee hours worked, overtime hours, and any other relevant timekeeping information
3. Benefits information such as employee benefit elections, such as health insurance, Roth retirement plan, and 401(k) contributions
4. Tax information that includes federal, state, and local tax withholding information
5. Payroll tax information about payroll taxes that are due to the government, such as FICA, FUTA, and SUTA

In addition to these data points, you may also need to provide other information to your payroll automation software, such as your company’s payroll frequency, pay dates, and direct deposit information.

The specific data that you need to provide to your payroll automation software will depend on the specific features and capabilities of the software. However, the data points listed above are some of the most common data points that are needed for payroll automation.

Once you have provided the necessary data to your payroll automation software, the software will be able to calculate employee wages, withholding taxes, issue paychecks, and file payroll tax reports. This can save you a significant amount of time and effort, and it can help to ensure that your payroll process is accurate and compliant.

How can your business benefit from payroll automation?

Payroll automation brings a range of benefits to businesses, revolutionizing the way payroll management is handled. One significant advantage is the tremendous time and cost savings it offers. By automating payroll processes, businesses can eliminate the need for manual data entry and calculations, which are not only time-consuming but also prone to errors. This translates into reduced labor costs and allows employees involved in payroll management to focus their efforts on more strategic tasks that contribute to the overall growth of the organization.

How does AI disrupt HR management?

Another key benefit of payroll automation is the enhanced accuracy it brings to payroll calculations. Manual calculations and data entry are susceptible to human errors, leading to discrepancies in employee wages, tax withholdings, and deductions. With automation, these processes are carried out consistently and precisely, adhering to specific rules and regulations. This ensures compliance with legal requirements, reduces the risk of penalties or fines, and instills confidence in both employees and stakeholders.

In addition to time and cost savings, payroll automation significantly improves efficiency. Manual payroll tasks, such as wage calculations, tax withholdings, paycheck issuance, and tax reporting, can be time-consuming and prone to delays. By automating these tasks, businesses can expedite the entire payroll process, resulting in prompt salary payments and timely tax filings. The streamlined and efficient workflow not only benefits employees by ensuring timely and accurate compensation but also allows the HR and finance teams to allocate their resources more effectively.

Compliance and regulation adherence are critical aspects of payroll management. Payroll automation software is designed to stay up-to-date with the latest tax laws, regulations, and reporting requirements. This ensures that businesses remain compliant and avoid potential penalties or legal issues arising from non-compliance. The software can automatically incorporate changes in tax rates, deductions, and other regulatory updates, enabling businesses to navigate complex payroll regulations with ease.

Data security is another vital aspect addressed by payroll automation. Manual handling of sensitive employee payroll information can pose security risks, including data breaches or unauthorized access. Payroll automation systems employ robust security measures, such as encryption and secure databases, to protect employee data and ensure confidentiality. These systems provide a secure platform for storing and managing payroll information, giving businesses peace of mind and safeguarding sensitive data.

Furthermore, payroll automation offers scalability, making it an ideal solution for businesses of all sizes. As companies expand and their workforce grows, manual payroll processes become increasingly complex and time-consuming. Payroll automation systems can easily accommodate a larger number of employees without compromising efficiency or accuracy. This scalability feature allows businesses to adapt and handle payroll operations seamlessly as they grow, avoiding the need for disruptive and costly transitions to new systems.

When should you automate your payroll?

Deciding when to automate your payroll is an important consideration for businesses. While the specific timing may vary depending on individual circumstances, there are several key indicators that can help determine when it is the right time to implement payroll automation.

One crucial factor to consider is the size of your business. As your workforce grows, manual payroll processes can become increasingly burdensome and time-consuming. If you find that managing payroll has become overwhelming or is taking up a significant amount of your HR or finance team’s time, it may be an indication that automation is warranted. Automating your payroll can help streamline processes, handle calculations more efficiently, and accommodate the needs of a larger employee base.

The complexity of your payroll is another important aspect to evaluate. If your payroll involves intricate calculations, such as varying pay rates, complex tax structures, or multiple deductions, automation can be particularly beneficial. Manual handling of complex payroll tasks increases the likelihood of errors, which can lead to compliance issues and financial discrepancies. By implementing payroll automation, you can ensure accuracy and consistency in your payroll calculations, reducing the risk of errors and improving compliance with tax regulations.

Consider your company’s growth trajectory as well. If you anticipate rapid growth or have expansion plans on the horizon, implementing payroll automation early on can help establish a solid foundation for managing payroll as your business scales. By automating payroll processes from the outset, you can avoid potential pitfalls associated with transitioning from manual systems to automated ones at a later stage.

Additionally, if you find that your current payroll system is causing inefficiencies, delays in salary processing, or difficulties in generating accurate reports, it may be a clear sign that automation is needed. Payroll automation software offers streamlined workflows, faster processing times, and comprehensive reporting capabilities, enabling businesses to optimize their payroll operations and enhance overall efficiency.

Leave it to the experts

There are many different payroll automation softwares available, each with its own strengths and weaknesses. Here are some of the best payroll automation softwares out there:

• ADP Workforce Now
• Rippling
• Paychex Flex
• Gusto
• QuickBooks Payroll
• OnPay

ADP Workforce Now

ADP Workforce Now is a cloud-based payroll automation software that provides an extensive array of functionalities, such as time tracking, tax compliance, and reporting.

It caters to businesses of all sizes, particularly those grappling with intricate payroll requirements. ADP Workforce Now stands out for its robust features and seamless integration with other ADP products.

Rippling

Rippling stands as a cloud-based payroll automation software, offering a diverse range of features including time tracking, benefits administration, and HR management.

It presents an ideal choice for businesses, regardless of their size, seeking a comprehensive solution to address all their HR needs. Rippling is widely acknowledged for its user-friendly nature and its ability to seamlessly integrate with other HR and payroll software.

Paychex Flex

Paychex Flex, a cloud-based payroll automation software, delivers a broad spectrum of functionalities encompassing time tracking, tax compliance, and reporting.

It caters to businesses of all sizes, particularly those in search of an economical and conventional payroll solution. Paychex Flex is recognized for its affordability and its dedicated customer support.

Gusto

Gusto is a cloud-based payroll automation software offering an extensive range of features, including time tracking, benefits administration, and HR management.

It serves as a favorable choice for businesses of any size, especially those desiring an easy-to-implement and user-friendly payroll solution. Gusto distinguishes itself with its intuitive interface and its focus on the needs of small businesses.

QuickBooks Payroll

QuickBooks Payroll, seamlessly integrated with QuickBooks accounting software, functions as a cloud-based payroll automation software.

It proves to be a suitable option for businesses utilizing QuickBooks, particularly those seeking an affordable and user-friendly payroll solution. QuickBooks Payroll is renowned for its user-friendly interface and its seamless integration with QuickBooks.

OnPay

OnPay, a cloud-based payroll automation software, encompasses an extensive range of features comprising time tracking, tax compliance, and reporting.

It serves as an advantageous choice for businesses of all sizes, particularly those searching for an affordable payroll solution accompanied by reliable customer support. OnPay is acclaimed for its affordability and its commitment to customer satisfaction.

The six payroll automation softwares mentioned in this article offer a variety of features and benefits, so businesses of all sizes can find a solution that meets their needs. If you are looking for a way to save time, money, and get rid of the headaches of complicated business life, then payroll automation softwares are great options for you.

Featured image: Photo by Igal Ness on Unsplash.

Digital transformation is making data more accessible across industries, increasing transparency, and improving customer experiences. New technologies allow legacy systems to be opened up to startups and third parties and, in some cases, give consumers direct access to data.

In the financial sector, BaaS platforms have emerged as a key part of open banking, where companies offer more financial transparency options by making their APIs available for third parties to develop new services. Fintechs and digital banks are challenging traditional banking institutions, but legacy banks can use BaaS to turn this potential threat into an opportunity.

What is Banking as a Service (BaaS)?

Banking as a Service (BaaS) is a platform that allows third-party companies and developers to access a financial institution’s core banking infrastructure and services via APIs (Application Programming Interfaces). This enables them to build and offer financial products and services to their customers, such as payments, lending, and account management, without having to invest in and maintain their own banking infrastructure. Banking as a Service is a key component of open banking, which aims to increase financial transparency and innovation by providing more access to banking data and services to third parties.

Understanding the Banking as a Service market

The Banking as a Service market is a rapidly growing financial services industry segment. It allows non-traditional players, such as fintechs, digital banks, and other businesses, to offer financial products and services to their customers by leveraging the infrastructure and capabilities of traditional banks.

This is made possible through the use of APIs (Application Programming Interfaces), which enables third-party companies and developers to access the core banking services of a financial institution. The Banking as a Service model enables these companies to offer services such as payments, lending, and account management, without the need for significant investment in their own banking infrastructure.

This can lead to increased competition and innovation in the financial services industry. With open banking regulations in place, it is expected that the BaaS market will continue to grow as more financial institutions open their APIs to third parties.

Why is Banking as a Service crucial for fintech?

Banking as a Service is vital for fintech companies for several reasons:

Access to core banking services

Banking as a Service enables fintech companies to access the core banking services of traditional financial institutions through APIs. This allows them to offer their customers financial products and services, such as payments, lending, and account management, without having to invest in and maintain their banking infrastructure.

Cost-effective

Building and maintaining a banking infrastructure is a costly and time-consuming process. Banking as a Service allows fintech companies to sidestep these costs and focus on developing their own value-added services and customer experiences.

Compliance and security

Banking and financial services are heavily regulated industries. By leveraging the banking infrastructure of traditional financial institutions, fintech companies can ensure compliance with regulations and provide customers with the same level of security and protection as traditional banks.

Faster time to market

Banking as a Service enables fintech companies to go to market faster, as they can leverage the existing infrastructure and services of traditional financial institutions. This allows them to focus on developing and marketing their own products and services.

Increased competition and innovation

BaaS can lead to increased competition and innovation in the financial services industry, as non-traditional players are able to enter the market and offer new and innovative products and services.

The importance of Banking as a Service startups

Banking as a Service startups play a significant role in the financial services industry by providing a platform for non-traditional players to enter the market and offer new and innovative products and services.

BaaS providers mainly concentrate on just one or two stages of the value chain, in contrast to traditional banks that own the full value chain. Successful Banking as a Service companies nowadays tend to follow one of four patterns:

• For use by aggregators, other banks, and non-financial businesses, providers make their banking license, goods, operations, and/or technology available (NFCs).
• In addition to acting as providers, providers-aggregators combine their own capabilities with those of other suppliers to create a comprehensive “out-of-the-box” solution.
• Distributors use their connections with end customers to offer distinctive financial service offerings.
• Distributor-aggregators improve their offerings by including fresh goods or cutting-edge technologies from various suppliers.

Some of the key ways in which BaaS startups are important are the following:

Disruption of traditional banking

BaaS startups are able to challenge traditional banking models by providing customers with more cost-effective, transparent, and accessible financial services.

How AI revamps financial services and banking experiences

Innovation

Banking as a Service startups are often at the forefront of new technologies and business models in the financial services industry. By leveraging the capabilities of traditional financial institutions, they can develop and offer new and innovative products and services.

Greater competition

BaaS startups increase competition in the financial services industry, which can lead to better products and services for customers.

Greater financial inclusion

Banking as a Service startups can provide greater financial inclusion by making financial services more accessible to underbanked populations and small businesses.

Meeting customer demands

BaaS startups are able to meet changing customer demands by providing digital-first, seamless, and personalized services.

Building a sustainable future

Banking as a Service startups are not just focused on short-term profit but also on building a sustainable future for the financial industry.

What’s the role of Banking as a Service in Europe?

As consumer preferences change and new technologies emerge, more companies are offering Banking as a Service, and new players are entering the European market. It is important for bank executives to take advantage of their position and enter the BaaS market now before they fall behind.

Recent technological developments have led to an increase in demand for Banking as a Service. In order to meet this demand, BaaS providers are offering an API-based suite of banking solutions that can integrate deeply into their partners’ operations, including sharing data and revenues. While many fintechs have been at the forefront of this trend, traditional banks have also begun to take advantage of this opportunity and are increasing their market share.

One example of a bank leveraging partnerships to enter the Banking as a Service space is a leading European bank that formed a partnership in 2020 with an international marketplace in Germany to offer two lending options that are seamlessly integrated into the marketplace platform. Analysts predict this strategic partnership will result in a 30% increase in the value of the European bank.

Another example is a US bank that partnered with a leading technology company in 2019 to launch a fully embedded credit card with no fees, daily cashback, and seamless integration with mobile devices. As a result of this partnership, the bank received the highest customer satisfaction rating in the Midsized Credit Card segment in 2021, according to a McKinsey study.

Best Banking as a Service companies

These are some of the best Banking as a Service providers you can find right now:

Railsr

Railsr, a London-based provider of Banking as a Service, operates in the U.K., Europe, and the U.S. The company has built its own proprietary infrastructure, which is not built on top of older software, unlike some of its competitors. Railsbank offers a range of Banking as a Service products, including the ability to make fast payments by connecting directly to payment rails and the ability to offer Buy Now Pay Later (BNPL) functionality. The company has been funded through debt and venture capital rounds with notable investors such as Visa and is seeking to raise an additional $100 million in financing in 2022.

Finastra

Finastra is a Banking as a Service (BaaS) provider that offers FusionFabric.cloud, an open developer platform, and an app marketplace through its FusionStore. Headquartered in London, the company has operations worldwide, including in the U.S. Finastra serves 90 of the top 100 global banks, and has launched Finastra Managed Services (FMS) on Amazon Web Service (AWS).

Marqeta

Marqeta is a provider of physical, virtual, and tokenized credit cards, debit cards, and prepaid debit cards that offer customized rewards, card controls, and customer preferences. Additionally, it serves as a payment processor for many industries, using its modern, embedded, open-API BaaS platform to serve digital bank and non-bank customers. The company has established strategic partnerships with several well-known brands, including Uber, Uber Eats, and DoorDash, to serve as their card-issuing partner.

BBVA

BBVA is a pioneer bank in the BaaS space. BBVA Open Platform is a BaaS platform serving U.S. and global customers. It was integrated into the Uber app in Mexico, providing Uber drivers and delivery partners with a Driver Partner debit card which allows them to access their earnings, loans, and gas discounts. The BBVA Open Platform, a BaaS system created by the bank, powers digital-only banks and non-bank applications in the U.S.

Open banking vs Banking as a Service

Open banking refers to the practice of allowing third-party companies to access a bank’s customer data and account information through the use of Application Programming Interfaces (APIs). This enables customers to share their financial data with authorized third-party providers, such as fintech companies and other financial institutions, in order to access new and improved financial products and services. Open banking aims to increase competition in the banking sector and provide customers with more choices and convenience.

However, Banking as a Service is a business model where third-party companies, such as fintechs and other non-bank entities, can offer banking services to their customers without becoming a bank themselves. BaaS providers offer a range of services, such as account opening, compliance, and lending, and can use these services to create their own financial products and services.

The concepts of open banking and BaaS are often confused as both involve banks connecting to non-banks through APIs. However, the two models serve different purposes. BaaS allows non-bank companies to integrate full banking services into their own products, whereas open banking allows non-bank companies to access and use the bank’s data for their own products. These non-bank companies are referred to as Third Party Service Providers (TPPs) in the financial industry.

Final words

In conclusion, the “as a service” model, of which Banking as a Service is a prime example, is becoming increasingly prevalent in today’s business landscape. BaaS allows non-bank companies to offer a range of banking services to their customers without having to become a bank themselves. This enables them to create more comprehensive and customized financial solutions, which can be integrated into their existing products and services.

The BaaS model is particularly important in today’s data-driven and digital business environment. It allows companies to access customer financial data and use it to create more personalized and targeted products and services while also enabling them to offer digital-only banking services that can help them reach a wider customer base and increase their market share.

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The “as a service” model, in general, enables companies to focus on their core competencies and outsource non-core functions, such as banking, to specialized providers. This allows companies to reduce costs, increase efficiency, and stay competitive in a rapidly changing business environment.

Overall, Banking as a Service is a powerful tool for companies looking to stay competitive and relevant in today’s business landscape. The “as a service” model, of which BaaS is a prime example, is becoming increasingly prevalent and allows companies to outsource non-core functions to specialized providers, reducing costs and increasing efficiency.

• Digital currency proponents have long contended that cryptocurrency and other blockchain-based tokens, such stablecoins, are preferable to traditional finance.
• According to a new investigation by the research group SSRN, the rise of cryptocurrencies has significantly aided in the creation of a “entire criminal ecosystem” that has been built on top of them.
• The authors cite hacking, money laundering, con games, ransomware, “sextortion,” and a flourishing trade in illegal goods as examples of crimes and state that “obviously the data on these crimes are pretty murky.”

The latest statistics show that there are almost 14 million transactions connected to crypto-enabled cybercrimes. Advocates of digital currencies have long argued that crypto and other blockchain-based tokens, such as stablecoins, are a better alternative to conventional finance. Unaffected by geopolitics, national banks, wealthy financiers, insider deals, cartels, fraudsters, and other criminals, this financial system would be owned by the people and accessible to anybody with a phone or computer.

Nearly 14 million transactions related to crypto-enabled cybercrimes are detected

While others have long argued that the purported transparency and inviolability of blockchains would make it more difficult to commit fraud, theft, and financial crime, some even claimed until this year that cryptocurrency would be immune to the drops in value of fiat currencies that frequently occur in financial crises.

While no one disputes that blockchain has its own (boring) uses and that digital tokens have their own good applications, such as programmable money, financial inclusion, tech innovation, and faster, cheaper cross-border transactions, advocates’ loftiest assertions have generally been bunkum. In fact, the lofty rhetoric surrounding cryptocurrencies has frequently served more as a smokescreen for the conceit of currency speculators than as a manifesto for the future.

However, in today’s world, who can blame someone for wanting to gamble or make a fast buck? or to be wealthy enough to have food and heat their homes? The cost of energy is skyrocketing during a time of conflict, multinational corporations are making record profits, and our oceans are clogged with trash and waste. Fewer individuals today can afford to live in cities. So why not create a superior, more equitable capital system?

Unfortunately, years of gains for many crypto coins were lost relatively instantly in the spring. Even several stablecoins lost their links to the dollar, in one instance losing all of their value. A market with about two-thirds of all miners in that nation, many of which were powered by coal, is hardly free of geopolitics, especially before China tightened its controls on Bitcoin last year. (It is still the second-most popular location in the world for cryptocurrency mining.)

Also, millions of loyal followers on social media have allowed multibillionaires to use the platform as a legal kind of networked insider trading, allowing them to tweet about their holdings in niche coins with what appears to be impunity.

A fresh chance for criminals

In this brave new world, the small guy doesn’t stand a chance. But what about cryptocurrency fraud and other financial crimes that, in theory, will be permanently stopped?

According to a recent analysis from the research organization SSRN, the cryptocurrency explosion has in large part contributed to the development of a “entire criminal ecosystem” that has been constructed on top of it.

The authors note that “obviously the data on these crimes are pretty murky” citing hacking, money laundering, con games, ransomware, “sextortion,” and a booming trade in illegal commodities as examples of crimes.

The report states that:

“While the advent of cryptocurrencies and digital assets holds promise for improving and disrupting financial systems through offering a cheap, quick, and secure transfer of value, it also opens up new payment channels for cybercrimes.”

The researchers conducted “the first detailed anatomy of crypto-enabled cybercrimes” and highlighted the economic concerns that they give rise to by assembling a broad combination of public, proprietary, and hand-collected data, including dark web discussions in Russian.

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“Our analyses reveal that a few organized ransomware gangs dominate the space and have evolved into sophisticated, corporate-like operations with physical offices, franchising, and affiliation programs. Their techniques also have become more aggressive over time, entailing multiple layers of extortion and reputation management.”

“Blanket restrictions on cryptocurrency usage may prove ineffective in tackling crypto-enabled cybercrime and hinder innovations. Instead, blockchain transparency and digital footprints enable effective forensics for tracking, monitoring, and shutting down dominant cybercriminal organizations,” the authors explain.

But what exactly is a “crypto-enabled cybercrime,” the report’s main topic?

“Decentralization, privacy, and anonymity have been the building blocks of the cryptocurrency movement since its inception over a decade ago. While the technology has spurred many innovations, cybercriminals’ adoption of cryptocurrencies has become a central issue in the crypto-regulation debate.

Ransomware attacks, money laundering activities, and various crypto-based scams have recently surged, prompting the US president to issue an executive order requiring agencies to establish a course of action. According to the Federal Trade Commission, cryptocurrency is the most reported payment method in frauds – surpassing bank transfers, wire transfers, and credit cards – accounting for $728.8 million (33.5%) of the 2022 year-to-date reports,” the report states.

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It goes on to say that the rise of cryptocurrency has given crooks entirely new chances. For instance, to steal money, hackers take advantage of flaws in decentralized algorithms or centralized organizations like crypto-exchanges. But they must exercise caution, the report continues:

“In these types of attacks, coins are transferred to a blockchain address. Given that these transactions and addresses do not require real names, the attackers are initially anonymous. Indeed, the exploit is available for anyone to see, given that the ledger of all transactions is public here.

[However] while the original exploit is completely anonymous (assuming the address has not been used before), the exploiter needs to somehow ‘cash out’. Every further transaction from that address is also public, allowing for potential deployment of blockchain forensics to track down the attacker”.

Notice the mention of blockchain forensics’ “potential deployment.” Keep in mind that these are almost always transnational operations that may be utilizing phony IDs and networks of networks.

“Beyond stealing cryptocurrency via exchange and protocol exploits, traditional cybercriminal activities are now also enabled with a new payment channel using the new technology – the second opportunity our research focuses on. The use of cryptocurrencies replaces potentially traceable wire transfers or the traditional suitcase of cash, and is popular for extortion.

Criminal organizations also use cryptocurrencies to launder money. According to Europol, criminals in Europe laundered approximately $125 billion in currency in 2018 and more than $5.5 billion through cryptocurrencies,” the report says.

According to the authors, growing bitcoin acceptance also encourages other types of cybercrime, escalating the issue:

“Information about crypto-enabled cybercrimes is typically dispersed, private, and incomplete. Out of the 21,650 reported addresses [BTC addresses linked to criminal activities], sextortion leads the cybercrime report counts (33.8%), followed by blackmail scams (32.3%), and ransomware (23.9%). These three types of cybercrime jointly account for 94.4% of all reported entries on the Bitcoin Abuse system.

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The number of reported related transactions provides a different picture concerning the most active type of cybercrime on the Bitcoin blockchain. Out of the total of 13.6 million crypto-crime-related transactions, ransomware leads most of the on-chain activity (42.5%), followed by Bitcoin tumbler [dispersing Bitcoin in multiple transactions and addresses] (32.0%) and others (22.4%),” the report states.

Nearly 14 million transactions related to cryptocurrency crime! What, though, can be done about it in reality? Government actions are made considerably more difficult by the nature of cryptocurrency markets and blockchains as a distributed, worldwide, people’s financial system. The report continues:

“A one-size-fits-all solution, such as restricting or banning cryptocurrency usage by individuals or organizations, is problematic for three major reasons. First, this is not a national problem. Blockchains exist across multiple countries and harsh regulations in a particular country or jurisdiction have little or no effect outside that country. As we have seen from other global initiatives (e.g. carbon tax proposals), it is nearly impossible to get global agreement.

Second, while an important problem, cryptocurrency plays a small role in the big picture of illegal payments. Physical cash is truly anonymous and, indeed, this may account for the fact that 80.2% of the value of US currency is in $100 notes. It is rare the consumers use $100 bills, and it is equally rare that retailers are willing to accept them.

Third, and most important, expunging all cryptocurrency use in a country eliminates all of the benefits of the new technology. Even further, it puts the country at a potential competitive disadvantage. For example, a ban on crypto effectively eliminates both citizens and companies from participating in Web 3.0 innovation.”

In other words, your money is gone once thieves convert digital bits into analog notes. But there is some optimism, according to the authors:

“The analysis in our paper points to a different tactic. While addresses are anonymous initially, funds are often transferred from one address to another in order to ‘cash out’. All transactions are viewable and immutable – a key feature of blockchain technology.

This opens the possibility of deploying forensic tools with a focus on tracking, monitoring, and identifying the crypto transactions attributed to criminals. Indeed, our research provides a glimpse of what is possible given the transparent nature of blockchains.”

Cryptojacking is the illegal use of another person’s computing power to mine cryptocurrencies. One of the most crucial skills a security team may possess is the capacity to identify dangers and take action as soon as possible. The level of disruption and operational effect will be reduced the quicker they can react to a data breach.

This is more easily said than done, which is the issue. When using manual administrative methods, it might be quite difficult to detect harmful behavior in the environment and start a response.

However, the detection and response efforts of an organization may be accelerated by technologies like artificial intelligence (AI) and machine learning.

Sysdig, a supplier of a unified container and cloud security, today at the Black Hat Conference announced the release of a new machine learning-driven cloud detection and response (CDR) solution to counter attempts at cryptojacking.

According to Sysdig’s statement, machine learning is a crucial technology that businesses and other decision-makers may use to scale up their efforts to find and fix vulnerabilities.

Dealing with cryptojacking 

The amount of malicious crypto mining attacks increased by 30% to 66.7 million between January and June, according to the 2022 SonicWall Cyber Threat Report, even though the cryptocurrency market has taken some substantial hits in recent months.

Cybercriminals will try to leverage a target’s computing resources to mine cryptocurrencies while staying undiscovered for as long as feasible. This offers unique issues for enterprise security teams. The financial gain of the attack increases with the length of time they go unnoticed.

In decentralized cloud environments, despite these efforts to escape discovery, technologies like machine learning have the ability to identify and address cryptojacking attacks quickly.

“Sysdig gives real-time visibility at scale to address risk across containers and multiple clouds, eliminating security blind spots. We use context to prioritize security alerts so teams can focus on high-impact security events and improve efficiency. By understanding the entire source to runtime flow and suggesting guided remediation, we shorten time to resolution,” stated senior product marketing manager at Sysdig, Daniella Pontes. 

In essence, Sysdig’s ML-powered solution helps security teams to find and prioritize fixing software anomalies and vulnerabilities before it’s too late.

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The solution operates with deep container visibility, the ability to examine process activity and other system behaviors, and a specialized ML model specifically trained to recognize crypto miner behavior running in containers.

The company claims that this strategy is so successful that 99% of the time, its threat engine and detection algorithms successfully prevent efforts at cryptojacking.

How does the cloud security posture management market look?

In the cloud security posture management (CSPM) market, which analysts predict will expand from a value of $4.2 billion in 2022 to a total of $8.6 billion by 2027, Sysdig is one of the biggest competitors.

CrowdStrike is one of Sysdig’s main marketplace rivals. With integrated threat intelligence, its Falcon Horizon solution can automatically discover cloud-native assets and identify configuration errors, security vulnerabilities, and security threats.

With InsightCloudSec, Sysdig competes against companies like Rapid7. This solution provides real-time analysis and automation capabilities to help security teams safeguard workloads during runtime with vulnerability assessments and automated remediation to eliminate misconfigurations and vulnerabilities.

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The fact that Sysdig is shifting away from utilizing machine learning for more general anomaly detection and toward using it for more specialized objectives or use cases, such as identifying crypto mining, is one of the fundamental distinctions between Sysdig and other providers, according to Pontes.

“Our solution is based on an ML model trained to recognize the anatomy of crypto miners from the processing activity in running containers. We use our deep visibility into containers at runtime to collect the necessary type of data to identify crypto miners’ behavior,” Pontes explained.

Despite the war and its awful challenges, the Ukrainian fintech industry is working to enhance the nation’s infrastructure and rules to attract credible companies and institutional investors from various backgrounds.

Undoubtedly, many investors think it’s dangerous to invest in Ukraine right now. But for regional fintech companies, business continues as usual. Notably, 90% of Ukrainian IT companies are working since they have proven their resilience in unfavorable situations.

State-backed regulations for the fintech industry

President of Ukraine Volodymyr Zelenskyy approved a law in March, creating the country’s cryptocurrency regulatory framework. The law prohibits using digital assets as a form of payment but intends to provide the ideal conditions for a thriving cryptocurrency market. Cryptocurrency exchanges can now seek a license to run legally within the country. Crypto businesses can open bank accounts and select from various licenses according to their specific needs.

The IT sector, which generated export revenue of $3.2 billion in the first five months of 2022, a 27% increase over the same period in 2021, accounted for nearly half of Ukraine’s entire services export volume. One of the main goals of the Ukrainian government is to increase the IT sector’s GDP contribution from its current rate of 4% to 10% by 2024. Together, the government’s backing and the industry’s strong growth provide a loud and obvious signal that the IT sector is prepared for investment.

International businesses’ support for Ukraine contributes to the sector’s continued growth. Early this month, the Ukrainian Ministry of Digital Transformation introduced Digital4Freedom, a global initiative that will be the main route for philanthropic donations from the digital sector to Ukraine.

With the help of Digital4Freedom, anyone can contribute money to the nation’s economic rehabilitation as part of the global UNITED24 project. The program comprises nine ideas presented to 40 businesses, most of which have agreed to provide financing or technological solutions.

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For instance, Amazon reportedly plans to invest more than $100 million in cloud storage services for Ukrainian state documents and is purportedly working to develop solutions for incorporating artificial intelligence in courts. To offer training programs in finance, IT, and web 3, the cryptocurrency exchange Binance will formally collaborate with Ukraine’s Ministry of Digital Transformation.

With the Ministry of Digital Transformation’s collaboration, Meta has launched a $1.5 million aid effort to help the Ukrainian economy recover by providing small and medium-sized businesses with a specialized training center.

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Tech entrepreneurs are working hard to expand the industry in Ukraine

The conflict is harming the production of goods and services in Ukraine. The business leaders also expect inflation and a decline in the value of the hryvnia the following year. Ukrainian tech entrepreneurs are working nonstop to expand the industry. They are in a good position to act as the lynchpins of a new wave of technology businesses that will greatly strengthen the economy.

The legal framework for the Ukrainian fintech sector, including payment services, will be improved by the Law of Ukraine on Payment Services (LPS) introduced this year by Ukrainian MPs. Additionally, the Ukrainian Association of Fintech and Innovation Companies (UAFIC), the first non-EU member, joined the European Digital Finance Association (EDFA). Both organizations are cooperating to enhance the climate for fintech in Ukraine.

We believe that the determination of Ukraine in the face of Russian aggression and the tremendous growth of the fintech sector despite the crisis have shown why investors shouldn’t be scared to engage in the quickly developing sector. Despite the difficult conditions in the country, the industry is still expanding.

Understanding the cloud banking dynamic may help businesses seeking to scale take advantage of significant funding possibilities. The ways that banking, finance, and technology converge at London Tech Week provide a wealth of information about the U.K.’s economic environment.

Cloud banking is the future of FinTech

Data show that U.K. tech firms have raised an outstanding £12.4 billion ($14.8 billion) in venture capital (VC) funding thus far this year, according to Culture Secretary Nadine Dorries and Chancellor of the Exchequer Rishi Sunak in their respective keynote addresses at the beginning of the ongoing London Tech Week.

Local businesses Checkout.com ($1 billion in Series D investment), Paddle ($200 million), Starling Bank ($131 million), and Thought Machine ($224 million) are notable benefactors.

From all appearances, the focus on highly flexible system architectures and a financial technology strategy that puts the cloud first is what London’s high-flying FinTechs have in common.

With programmability at its heart and a distributed design, the most recent generation of cloud-native banking and payment platforms can handle transactions more quickly and effectively than older banking systems.

Thought Machine announced the release of Vault Payments earlier this month. According to the company, the new platform “will support any payment type, card, or payment scheme, [and] enable banks to create powerful payment flows, consolidate disparate systems, and dramatically reduce the cost and complexity of executing cards and payment processing.”

In other words, Vault Payments develops answers for today’s issues while still being adaptable enough to address PayTech that doesn’t even exist.

The emerging industry of cloud banking also has similarities to the early days of cryptocurrency, when the fledgling Ethereum network was a similarly avant-garde distributed computing experiment.

The entrepreneurs creating cloud-based financial services have no way of predicting the industry’s future, just as the early Ethereum supporters who anticipated the vibrant ecosystem recognized today. Instead, companies will need to put their faith in the technology’s inherent adaptability and scalability to meet difficulties as they come up.

Even previously different settings may now be connected owing to interfaces like Vault, as words like “cross-chain,” “platform-agnostic,” and “open metaverse” are more frequently used to characterize technology that rejects being bound to a closed system.

The sustainability aspect of cloud banking

Although cloud computing, in general, is only as efficient as the way it’s utilized, cloud banking has the potential to reduce the sector’s carbon footprint because it’s often more efficient than traditional financial systems. For instance, Schneider Electric research shows that the sector professionals don’t meet IT sustainability promises.

A monolithic financial system won’t receive any of the benefits of a microservice-based design by being moved to the cloud. And a study of the carbon emissions linked to Bitcoin mining reveals that there isn’t much about the distributed approach that is inherently efficient.

Thought Machine creates solutions for challenger banks that are not exclusively digital-first to address this issue. The organization is also assisting older banks to effectively shift to cloud-based alternatives due to their aged system architectures.

In the end, more work will need to be done to construct tomorrow’s cloud banking infrastructure, and neobanks matching Starling’s severe position in the fossil fuel business might be a starting point. This is true if UK entrepreneurs truly support environmental causes. We were discussing if banks are ready for the Payments Services Directive, and today we are talking about the future of cloud banking.

The two critical steps taken in the most challenging times show how crypto helps Ukraine, brings support it needs during the invasion and turn into the digital country it dreams of.

Two days ago, Ukraine launched a crypto donation site to collect crypto and fiat money to help with their fight against Russia, which started an invasion on the 24th of February. The country’s president Volodymyr Zelenskyy also signed a bill on Wednesday, making bitcoin and cryptocurrencies legal in the besieged country.

How do donations work?

Ukraine was working on digitalizing most government services before the invasion, and the current donation initiative and the crypto law show great promise on this front.

The Ukraine Ministry of Digital Transformation, FTX, and Everstake is behind the crypto donation project. And according to the site, assets of more than $55M have been collected. The project first started with support for BTC (Bitcoin) and ETH (Ethereum) and now supports 12 currencies, including Bitcoin (BTC), Ethereum (ETH), Tether (USDT), Polkadot (DOT), Solana (SOL), Dogecoin (DOGE), and Monero (XMR). The Ukrainian government also accepts donations in fiat currencies like USD, EUR, GBP, AUD, and CAD.

How will Ukraine use the funds?

The money will be used to assist the Ukrainian military and civilian populations in need of humanitarian assistance.

How to donate money to Ukraine using cryptocurrency?

• Open your browser and go to the official donation site.
• You will see the list of cryptocurrencies supported on the right-hand box. Click on the desired currency.
• Now the crypto wallet address will be shown to you. Copy the address and send money through your crypto wallet or crypto exchange.

How to donate money to Ukraine using cash/fiat currency?

• Open your browser and go to official donation site.
• To donate to Ukraine using fiat money, click on Send Cash from the top menu.
• You will be taken to the account list, click on the currency.
• Using the bank information shown, you can make a transfer to related accounts.

What about Ukraine’s new crypto law?

On the other hand, the new legislation is called “On Virtual Assets” and was signed by the president on Wednesday. It will allow foreign and Ukrainian cryptocurrency exchanges to operate lawfully in Ukraine. The officials called it a significant step toward establishing a legal market for virtual assets in the nation. The law draft was first passed in an almost unanimous vote from the parliament in September 2021. Zelenskyy first vetoed the bill in October, saying creating a new regulatory body for cryptocurrencies would bring recent hardships. After some changes, Zelenskyy signed the bill, which the parliament backed by a majority. It is expected that an open crypto market will be formed in Ukraine for the first time.

Ukraine’s Vice Prime Minister and Minister of Digital Transformation, Mykhailo Fedorov, said the new law would “bring the crypto sector out of the shadows” in a Telegram post.

What will change with the ‘On Virtual Assets’ law?

With the new law, Ukrainian banks can open accounts for crypto companies, and the National Bank of Ukraine and the National Commission on Securities and Stock Market will be regulatory bodies for the sector. Crypto exchanges and companies providing services in Ukraine will now have to register with the government. The ministry said the law would protect cryptocurrency holdings of the Ukrainian citizens with the same legal force as its fiat currency, the hryvnia.

Why can’t crypto be used to avoid sanctions?

When many countries and companies started imposing sanctions on Russia and their currency, the ruble tanked. The crypto scene got ideas about how Russian people and companies would turn to cryptocurrencies to handle day-to-day business. Especially Russian oligarchs were thought to protect their wealth, and they would convert their assets to crypto, which would make the crypto prices hike again. This did not happen to Russia, but many Ukrainians bought crypto assets, afraid their currency would also tank. Kuma, the Ukrainian crypto exchange, witnessed a 200 percent surge in trades as Russia invaded Ukraine.

But let’s go back to the original question in the light of the latest developments. Is it possible for Russia to use bitcoin and other cryptocurrencies to avoid sanctions?

Because bitcoin and other digital currencies are frequently decentralized, they aren’t controlled or issued by a central authority like a central bank. When crypto is transferred to others, it doesn’t follow the usual financial plumbing route.

Blockchain allows tracking the movement of funds

Because the technology that underpins bitcoin, blockchain, is a public ledger of activity, it’s straightforward to follow transactions from one account to another.

More liquidity is needed for oligarchs to convert assets to crypto

A tremendous amount of liquidity is needed to move the wealth of Russian oligarchs and companies to crypto. And since liquidity in crypto is still limited compared to other assets in the world, it would be very hard.

Many exchanges follow the rules

One would quickly say a situation like this would put cryptocurrency exchanges on high alert, especially for those functioning in the US. Sanctions laws apply to all US people and businesses. That is why sanctions would also help people who are using from Russia can be blocked on IP address level.

This week, a group of lawmakers asked the US Treasury Department to make sure that the crypto companies comply with Russia’s sanctions.

Other countries that regulate cryptocurrency

The most famous one is El Salvador. The government legalized bitcoin as a payment method and is attempting to make the country a crypto hotbed.

This month, US President Joe Biden signed an executive order, directing federal agencies to adopt a coordinated approach to digital assets regulation and oversight. The executive order is not a piece of legislation that would govern the cryptocurrency industry.

In certain nations without specific cryptocurrency legislation, such as Ukraine, governments have attempted to bring bitcoin and other digital asset businesses under the purview of financial authorities.

In the United Kingdom, cryptocurrency exchanges must register with the Financial Conduct Authority and are subject to existing laws regarding money laundering. In contrast, Ukraine’s approach was to develop legislation specifically tailored to the digital asset sector.

Cryptocurrency regulation is essential since it protects investors from market manipulation, internet fraud, and cybersecurity risk. It also allows governments to monitor criminal activities such as money laundering.

The Australian government has taken a favorable approach to Bitcoin, whereas Japan and other nations have established cryptocurrency exchanges. Commonwealth Bank in Australia has already launched cryptocurrency transactions. Banks, including NatWest, have already started doing so in other countries, such as the United Kingdom and Canada.

On the other side, several countries, including India and China, have yet to legalize cryptocurrencies like Bitcoin and Ethereum. Still, they have started taxing them, putting cryptocurrencies in a grey area.

Talent recruitment without data is drought with challenges. Hiring managers may find themselves at a disadvantage when determining how much they need to pay their employees. Offer them too little, and they’re unlikely to work for you. Pay them too much, and you’re not utilizing your resources effectively.

Compensation management and salary benchmarking are, therefore, critical parts of the hiring and employee retention process.

Paying close attention to your payroll analytics helps to solve any issues that might arise from these processes. It’s also possible to automate many of the decisions that managers routinely make. By having the right tech stack in place – including solutions for payroll management, data collection, and analytics – and running reports to surface the information you need when you need it, businesses run smoothly and make the right compensation-related decisions.

Here are three benefits that executives can see by including payroll considerations in their data-driven management scope.

BETTER WORKFORCE PLANNING

You can’t investigate every hiring decision manually and determine the exact figure to satisfy a new hire. Analytics packages allow you to personalize payroll decisions to your employees. As Sean Manning, founder of Payroll Vault, says, “Few aspects of business are more personal than when you pay your employees the money they have earned and by which they live, so it makes sense to have personal care on the payroll management side as well.”

Offering your employees optimal salaries needs to balance against your company’s budget. With business environments constantly changing, companies need to keep an eye on their costs. Salaries are among the most significant expenses that companies incur, accounting for anywhere from 40 to 80 percent of revenues.

Payroll analytics solutions allow you to not only benchmark salaries. They also help you model the impact that the new hire will have on your organization’s costs on multiple levels. “Because of the sensitive nature of payroll, even small mistakes can cost money in employee turnover and deteriorate trust among the workers who remain,” notes Alex Margolin of Papaya Global.

“At the same time, having access to accurate and precise BI data can help you spot areas of your business that need improvements, such as excessive overtime pay in one department when an additional worker would ultimately cost less, or a budget shortfalls in another department.”

If you’re dealing with a global workforce, it’s likewise essential to remember that you pay your employees a lot more than just their salaries, depending on where they’re based. The structure of local benefits packages plays a vital role as well. Locations that require high insurance benefit contributions might be better served by hiring contingent workers instead of full-time employees.

Alternatively, you can compare the cost of training new employees against the cost of losing confidential business data when an employee moves on. Your data might indicate that investing in a full-time team might make more sense, despite more generous benefit contributions.

Payroll data can also help you retain key employees by understanding what their values are. While satisfactory compensation leads to better work performance, the amount of money you pay an employee isn’t the only factor motivating them. For example, younger workforces might value flexible work hours more than excellent health insurance packages. An older workforce might appreciate remote work possibilities more than an open office environment.

Analytics helps you tailor compensation to your employees in better ways and build loyalty amongst your workforce.

BETTER COMPLIANCE FOR GROWING BUSINESSES

As businesses grow and retain team members overseas, compliance knowledge and internal audits become more critical, highlighting the value of a centralized database for all talent contracts and salaries. For example, in some countries, it’s illegal to email employees after work hours.

Companies based in the United States tend to have it easier than their global counterparts when it comes to labor regulations. They can terminate employment contracts for any reason other than discriminatory ones. In some countries, worker councils, labor laws, and work contracts make this situation more complicated.

For example, in The Netherlands, the period of notice for an employee is one calendar month. Still, it isn’t as simple as that – if you give notice to an employee that they’ve been terminated on any day other than the first of the month, the notice is legally considered to have been issued on the first of the following month.

Local labor laws can change quickly, as well. Because of all the global trade taking place in Saudi Arabia, authorities have instituted a complex system of “Nitaqat” laws, requiring foreign companies to employ Saudi nationals in specified percentages of their workforces. What categories of companies are bound to which Nitaqat quotas are somewhat dynamic, and the laws continue to evolve, making it harder for growing companies to plan headcounts and related expenses.

These days, payroll analytics need to go beyond merely providing great visualization tools and the ability to create ad-hoc reports. You need to use your payroll data as a single source of truth that you can reconcile with updates on regulatory considerations.

BETTER CASH MANAGEMENT AND PROJECTION

What was your global workforce spending last month, and why was it higher? What are your employer cost differences over time and by category in Spain and Italy? What does your net pay waterfall look like? Which contracts are expiring at the end of the month, and how will they impact your cash flow? How can you offset the business loss with new hires?

These are some of the critical questions that hiring managers deal with daily. Astonishingly, many companies choose to answer these questions using complicated spreadsheets backed by gut instinct on the manager’s part. With employment practices changing, trusting your instincts isn’t enough.

For example, the gig economy is growing every year, and many companies find themselves increasingly relying on freelancers. Unlike salaried employees, freelancers generally get paid on an ad-hoc basis. Even if they’re paid in advance, your company needs to project work demands in advance to ensure you’re deriving maximum benefit. Data analytics can help stakeholders identify seasonal cycles and other trends that they might overlook independently.

“Slow payments and poor communication about payment processes are one of the biggest headaches for gig-economy workers,” asserts Robert McGuire, publisher of Nation1099. “In many companies, line managers handle these relationships much the way they handle purchasing of software and supplies.”

Inaccurate cash projection is often behind these snafus, and culturally, management needs to approach gig worker commissions differently from other vendors. With the help of the right analytics workflows, you cannot only evaluate upcoming cash outflows but also spot trends that traditionally drain cash and plan to mitigate them ahead of time.

Global organizations need to take a wide variety of factors into account before hiring new employees. Aside from cultural fit, evaluating the risks that the business faces on a local basis is critical. Analytics can help you view payroll costs at multiple levels, from a business unit to a branch and even on a regional level. You can plan your workforce better and make better cash management decisions.

BETTER ANALYTICS EQUALS HAPPIER WORKFORCES

Payroll analytics can help yield insight into not only your cash flow but also what drives your employees. By staying compliant and anticipating trends through the power of data analysis, you’ll create a culture of satisfaction amongst your employees. This boosts your bottom line and allows you to separate your company from the competition.

App-only challenger banks have risen to try and push incumbents off their financial perch, and in this battle, content marketing has been a valuable tool in their repertoires. Have you ever wondered how they do it?

If you’ve never heard of Monzo, it’s a UK-based challenger bank that has grown to 4 million customers over 5 years with a growth rate that hit 55,000 new customers a week in 2019. 

Interestingly, the company appears to have increased their organic traffic by 144 % within the last 12 months; a growth spurt that gives us the perfect opportunity to uncover what’s cooking in their content kitchen. 

Hopefully, the insight uncovered can help you improve your content marketing, and give you ideas on what to look for when digging through your own marketing data.

Monzo launched as Mondo in 2015 but had to rebrand in 2016. The name came from suggestions by their user community. This focus on community is the foundation that appears to  have governed their approach to content over the last 5 years; keep it in mind throughout this post.

Organic Traffic

Monzo more than doubled their organic traffic from 106,723 in May 2019 to 260,631 in April 2020. With the company’s high customer acquisition rate, this traffic represents an important step of their customers’ journey; that’s what we’re going to dig into.

The three main signals that could tell us how Monzo grew their traffic within the last 12 months are their keywords, backlinks and social media activity.

Monzo’s Keyword Game

The number of Monzo’s keywords that rank at position 1-3 increased by 370 % between May 2019 and April 2020, while those ranking at position 4-10 quadrupled.

At first glance, it’s easy to assume that this was probably—with Monzo selling a financial product—a result of putting out more content aimed at solving broad financial pain points.

This is not the case with Monzo. When you go through their blog you’ll find a few exceptions but performance-wise, Monzo’s top 5 keywords by traffic are brand keywords. 

Since I’m using third-party tools for this research, I decided to confirm with a second data source (always approach third party data tools with a ‘give or take a few hundreds’  attitude).

On this alternative data source, the keywords bringing traffic to Monzo are still brand terms. The keywords “get paid earlier” appear to be an exception but on closer inspection, the destination is a page about one of Monzo’s products. 

If the challenger bank was truly focusing on SEO,their top content would be on general financial topics that rank for keywords like, “ financial management for spendthrifts”,  “saving when broke”.

So, either Monzo is totally ignorant of current blogging trends and prefers content that focuses on them (doubtful), or they’re intentionally charting a different path.. 

Monzo’s Marketing Philosophy

To solve this conundrum, we have to step away from content snooping and look at their overall marketing ideology.

From the onset, the challenger bank has focused on building a community of loyal fans instead of the traditional way of incentivising users to switch banks through offers and heavy advertising.

When I say loyal fans, I mean LOYAL (if any particular popular song comes to mind that was not my intention). Take a look at the screenshot below, it is a response to a TechCrunch announcement of Monzo and TransferWise’s partnership. 

Does this look like anything one of your customers might say or does it remind you of something your brother (put appropriate person) might tell you when they learn via social media, that you got married to the girl next door without telling them?

This is what a loyal and engaged community looks like. It is also my best guess for why a company’s most trafficked keywords are those that mention them.

This is in line with an interview by Mediatel where Tristan Thomas, Monzo’s VP of marketing, says that the company’s marketing approach is to intimately engage its community. With this approach, 80 % of Monzo’s customers came from word of mouth by 2018, however, this might change as they appear to be intensifying other forms of marketing.

When we translate this insight into Monzo’s keywords rankings, we can conclude that many people who land on their blog from Google are those that have heard of them elsewhere and are trying to find more information.

How is this relevant to you? Well, if you don’t happen to have a big and loyal user community hidden somewhere, don’t copy their approach to blog topics.

Traffic Analysis

58.2% of Monzo’s traffic comes from Google search (higher than the 43.2 % average of its competitors: Monese, Revolut, N26 and Starling bank), while 35.7% is direct traffic.

Direct traffic can appear to come out of thin air but is often a result of brand building efforts through ads (online and offline), content (users engage with your content but visit the site on a different day/device ) and conversations going on in communities.

With this in mind, you can use direct traffic as an indicator of your company’s  brand-building activities.

However, for Monzo, since their top keywords are brand terms, a significant chunk of their search traffic may also be brand-driven. This is a big differentiator from companies whose top-ranking keywords have no connection to their brands.

Despite having a loyal community, Monzo still puts effort into storytelling through their blog.

Below is some of Monzo’s top content based on engagement on Reddit and Twitter. 

Blog

Let’s dive deeper into Monzo’s blog posts going back 5 years. 

Firstly, by comparing Monzo’s blog posts in their first year of operation to Bó-another challenger launched by Natwest Bank- we get to see the shift in how new companies’ viewed blogging 5 years ago versus now. 

Monzo had 35 articles in their first year while Bó published 56 blogs within 8 months of existence (Bó was closed down in May 2020). 

Considering how eager new market entrants often are, to let everyone know of their existence, this is a glimpse into the rising popularity of blogging in the marketing arsenals of fintech companies.

Also, compare the blog topics of the two challenger banks in their first year.Do you see the different content strategies?

Monzo’s Content Volume, Consistency and the Lessons 

What can you learn from the table below?

The obvious insight is that Monzo started ramping up their blogging 2 years ago. However, when you connect that to their 144% increase in organic traffic between May 2019 & April 2020, you’ll see that search engine marketing is a compounding long term game.

For context, a study by SEO tools company, Ahrefs, found that only 5.7% of websites ranking in the top 10 Google search results were less than a year old. Out of this group, only 0.3% of those that competed for high volume keywords (in competitive industries) ranked in the top 10.

Finance is an extremely competitive niche, so ideally, a majority of the traffic boom Monzo experienced in the last year would not be from the 277 articles published in that period but from the preceding timelines.

On the other hand, since Monzo’s blog acts as a tool to engage with their loyal community, they’re not necessarily competing with the rest of the industry for a majority of the keywords,hence—in theory—they should be able to rank faster. 

Should they change tact and put out more content that competes with the rest of the financial industry, then a different strategy will be needed.

According to the Ahrefs study mentioned above, websites competing for high-volume keywords take an average of 2+ years to appear in the top 10 search results of Google. If you want to rank higher quicker, you’d have to put in more work.

That includes conducting keyword research before writing, running paid campaigns for strategic pieces of content and engaging in link building campaigns (more on that ahead).

There was concern last year about how the CMO role was under threat because it lacked financial accountability. One reason for this is because inbound marketing results can be slow and hard to measure. Chances are, that the SEO efforts of those fired last year are only now starting to bear fruits for the Chief Commercial Officers (ironically-also initialised as  CMO) that replaced them.

Link Building

In tandem with their organic traffic growth, the number of websites referring traffic to Monzo also increased, and studying them reveals interesting insights.

The image belows shows how Monzo’s referring domains increased from 4.7k  to 6.9k within 12 months—an increase of 47 %..

It’s not clear whether Monzo’s marketing team actively reached out to build these links or if they happened organically. 

Analysis of Monzo’s  top 5 Links

The first link here was a complaint (outside Monzo’s official Reddit community) by a cryptocurrency owner, who’d been informed to stop using their Monzo account for cryptocurrency trading.

Conversations about your brand⁠—even if they’re customer complaints—on social media and forums, could provide valuable links that drive you referral traffic and influence your website’s ranking. Better still, if you can track these unofficial conversations and engage.

There’s been a lot of buzz around Europe’s challenger banks, and one of the links here is from the New York Times with an interview of Monzo’s founder.

If authoritative sites like the New York Times are not itching to write about you (don’t worry, many of us are in that boat), then connecting with the journalists covering your industry could be a door in. 

For instance, if you read a piece about insurance that you feel is missing a unique perspective, which you can provide from your experience in the trenches; find the writer and offer your insights—even if it’s already published.

Pay particular attention to the last link in the image above. It’s a case study by Amazon Web Services about how Monzo is powering an online bank using their products. 

Amazon is a high authority site and appearing here exposes Monzo’s brand to potential customers.There’s also another case study published by Google Cloud (Google BigQuery) that does the same.

From my experience, I’ve found that case studies and testimonials work better if you make the reader trust the company you’re featuring. The images below show Amazon and Google building trust in Monzo by introducing them with bold statements and quoting big numbers.   

Imagine the brand impact of industry leaders heaping praise on your company like this and then linking to you.

The elephant in the room however, is that for many of us, Google wouldn’t put us in a case study even if we owned the garage that Sergey Brin and Larry Page built the search engine company from. 

So what can you do?

Part of the reason why this is possible for Monzo is because of its strong brand, thus the bigger companies also benefit from the association. 

Weaker brands or smaller businesses need to find an angle/story that makes them valuable or relevant to a bigger brand.

For example, one of Monzo’s ads shows that they’re promoting a new business account feature. For small businesses who’ve already signed up—and can tell a compelling story—isn’t this an opportunity to appear in a case study?

Looking at ad data is a great way to find out what products are a high priority for companies (and where they might be looking to build trust and awareness with case studies), Facebook’s Ad Library is a valuable resource.

Insights from Monzo’s Links

One of Monzo’s referring domains is a UX podcast that links to an article by one of the bank’s designers— it’s among Monzo’s top 50 most organically visited pages.

Designing a product with mental health issues in mind.

Lesson?

Insights from your skilled employees could be popular among their community. If you hire the best, don’t you think their peers would want to learn from them?

 If intentionally and consistently done, this could be a great way to establish authority as well as humanise the company.

Lastly, there’s a link from Nuzzel⁠—a news & newsletter discovery platform with a domain score of 82/100 (the higher this number is, the higher the authority and the harder it is to get them to link to you).

I traced the link’s path to an article of Monzo’s that had appeared in someone’s newsletter  curated on Nuzzel. If people are not finding and putting your content in newsletters on their own, be intentional about it?

Try searching for popular newsletters in your niche on Nuzzel or any other newsletter aggregator, and send them a link whenever you put out authoritative content. Zero in on ‘authoritative’, Monzo’s ‘What an HMRC scam looks like’  article ended up in the newsletter because it was valuable.

Social Media

With 117.2k Twitter and 54.1k Instagram (IG) followers, social media is an important part of Monzo’s content machine. Generally, Monzo is putting more effort into Twitter. For instance, between 8th April and 7th May 2020, they published 1,816 more posts on Twitter than IG.

The image below shows that they had more engagement on Instagram than on Twitter. However, take this with a grain of salt due to the small number of IG posts. Should Monzo ramp up IG posts into their thousands as is on Twitter, engagement is likely not to be as high.

Monzo’s choice to focus on Twitter, put a little effort into IG and even less into Facebook organic posts, aligns with today’s marketers’ struggle: of either stretching themselves across many channels or sticking to a single/few channels that work well.

Which social media strategy do you lean towards, single or multi-channel?

Monzo repurposes content to fit both their IG and Twitter audiences, this is a useful technique that you can also adopt when testing how different social channels fit your company.

This post had higher engagement (likes, retweets and comments)  than both profiles’s average engagement per post. It’s effective because it taps into Monzo’s understanding of their users, is relevant to the current Covid-19 times and incorporates humour.

A quick glance at the comments section and you’ll see how well it resonates.

A Tip from Monzo’s Ad 

Monzo introduced a business account offering in March 2020; this was featured in a Wired article in the same month. 

Since Monzo is going after customers who might not be part of its existing demographic, it piggybacked (image below) on Wired’s 27-year credibility among businesses, and ran an ad against the article. The same principle can be used to boost content that is popular among your existing audience or when influencers comment/like your content.

Conclusion

Hopefully, you’ve seen what Monzo is doing well and what can be improved. Ideally, all marketers should be analysing their own data to refine their content marketing strategy, do you?

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SMEs are the unsung heroes of any economy- producing numerous jobs, the backbone to big corporates to scale up and still struggling to sustain themselves. They are unable to innovate as fast as younger companies and lack the funds that larger corporations have. 

As we enter a new decade, over half (58%) of small businesses in the UK anticipate a plateau, or for their business to struggle in the year ahead. Only one in four predict to see growth.  

A recent report by takepayments limited surveyed 1,000 small business owners and sole traders across the country including decision-makers taking a snapshot of the current UK small business landscape. Here is a look at the key challenges for small businesses in 2020 and tips on how to approach these challenges. 

Financial challenges are the biggest concern for businesses in 2020 

Small businesses listed finance and tech issues at the top of the list, followed by changes in society. Finances are a major challenge, with 63% of small business owners being “self-taught” about taxes and invoicing. When asked in more detail, pricing and cash flow came up as key worries in this area. 

1. Financial challenges 36%  
2. Technology risks 21%  
3. Societal changes 13%  
4. Talent and people 12%  
5. Supply and logistics 5%  

“Pricing structure and cash flow are both key to driving a business forward and yet for small businesses, many have had no or very little training. There are plenty of online courses available but, it’s not just training that can help. 

Technology such as Electronic Point of Sale (EPOS) systems can be beneficial in giving key insights real-time to business performance, saving time on accounts and getting a true reflection of what products and services achieve the best margin.” 

Sandra Rowley, Head of Marketing at takepayments Limited

The study revealed that 49% of small businesses have seen a decrease in consumer spending and so implementing technology to improve your business could be a smart step to help overcome a variety of finance related challenges.

Is there a small business tech gap? 

Technology-related challenges are the second biggest challenge for small businesses – 1 in 5 named it their main concern for 2020. Keeping up with technology was a key issue, as was cybersecurity, compliance and online marketing. 

All three of these areas are specialist skills and a small business won’t always have the resource available to be “experts” in each. Social media marketing, in particular, stands out as a key area where small businesses could see quick wins in 2020…   

• 45% want to try more  social media marketing but lack the knowledge and the same percentage say they are worried about keeping up with social media marketing  
• 52% say social media has helped their business grow and gain new customers, proving the potential of this marketing strategy 

Focus on sustainability is here to stay

51% of small businesses have noticed that their clients/customers are caring more about sustainability over the past year. This trend is set to grow further in 2020 and businesses need to make it a consideration in all areas, from supply chain to décor, employee wellbeing, and product packaging. 

How to cope in a cashless society? 

Currently, 42% say that a move towards a cashless society would be “bad news” for their business, despite the benefits that can come with this. This is likely because they do not have systems in place to support the trends.  

More than five million people lead a close to cashless lifestyle  according to a BBC  report and so making sure businesses are prepared for cashless technology will be crucial for the year and beyond. 

There will be plenty of change over the year following Britain’s exit from the EU, so make sure to stay up to date with news. Especially if your business is reliant on imports and exports. 42% are worried about potential changes to rules regarding this. 

From the Cambridge Analytica scandal to GDPR and data breach headlines, the idea that consumers should know how their data is used is gaining traction with governments and consumer groups. What does this trend mean for companies that rely on consumer data for their business model?

Right now, consumer data is the fuel that powers the information economy. Online banking, shopping and other services use personal data to authenticate customer identities and prevent fraud. Many companies use personal data to target ads to their audience, find prospective hires and more. These functions offer safety or convenience benefits to consumers. Without personal data, mobile banking wouldn’t be possible, and online advertising would be random and unhelpful. But handling personal data is a big responsibility. And over the past couple of years, there’s been story after story in the media of consumer data being stolen, mishandled or used in ways that consumers didn’t realize they’d agreed to. 

Rising concern over how consumer data is collected, stored and used

Data breaches are so common that a quick search turns up breaches at city transit services, health care systems, universities, federal agencies and the entire nation of Ecuador, just in the past couple of weeks. The website haveibeenpwned.com has identified more than 8.4 billion accounts that have been compromised by data breaches, and that number is always rising. These breaches can lead to identity theft, credit card fraud, account takeovers and a slew of other negative consequences for victims. 

Even if consumer data isn’t stolen, it’s sometimes used in ways that consumers don’t approve of. The biggest example is the Cambridge Analytica scandal, in which that company used Facebook data to build psychological profiles of US voters to target some of them with political advertising. Many Facebook users didn’t realize their data could be used this way and some left the platform as fresh revelations about Cambridge Analytica’s activities during the 2016 election kept coming out.

The future of data regulation: GDPR, CCPA, PDPB and more

Breaches and a lack of transparency have eroded the public’s trust in companies and agencies to keep their personal data safe. To address the problem, governments are enacting their own data-protection rules. The best-known of these rules is the EU’s General Data Protection Regulation (GDPR), which took effect in 2018. Under GDPR, companies with customers in the EU can collect only the personal data that’s “absolutely necessary” to transact business. They also face severe financial penalties for breaches. In July, British Airways was fined $230 million and Marriot $123 million for breaches that exposed their customer data. 

Meanwhile, California this year passed its own data privacy law, after much pushback from tech companies based in the state. The California Consumer Privacy Act (CCPA) takes effect in January. Like GDPR, it allows consumers to see what data companies collect about them. Consumers will also be able to request that companies delete or not sell their personal data. The CCPA’s penalties are capped at $7,500 per consumer, and the potential fine is that high only in cases where the company deliberately violates the law.

India is also overhauling the way its laws handle data rights and privacy. The Personal Data Protection Bill (PDPB) has been in the works since 2018, and it diverges from GDPR and CCPA in a couple of significant ways. The bill doesn’t allow consumers to request that their data be deleted, which seems like a win for companies that want to hold on to that information. 

But PDPB may impose a new kind of data restriction: localization. Under the law, data collected about Indian citizens cannot be moved outside the country for storage or use. This part of the law has prompted complaints from global businesses like Visa, Mastercard and Amazon, who have lobbied for changes to the bill. 

Community pushback on data collection

As other governments look for ways to protect their citizens, companies may face an increasingly complex web of data rules. But lawmakers aren’t the only ones trying to set data boundaries. 

When Toronto partnered with Google’s Sidewalk Labs in 2017 to develop a “smart neighborhood,” the plan included sensors to collect “urban data” to make the neighborhood more responsive to residents’ need. Community members raised concerns about whether individuals can retain privacy in such a heavily monitored area, and whether they can meaningfully consent to such monitoring. Then came questions about how the data would be used and who would have access to it. Then came a lawsuit. The entire project could be tossed out at the end of October if Sidewalk can’t satisfy concerns about its plans. 

It’s clear from the Sidewalk situation and the new laws to protect consumer data that the public and governments are realizing how valuable and sensitive that data is. They are raising their expectations of how the companies they do business with will safeguard that data. And they increasingly expect to have a say in how their data is used. To maintain public trust—and to avoid penalties in regions with data privacy laws–companies that run on consumer data need to seek permission to use that data, secure it against theft or loss and be transparent with customers about how they intend to use that valuable resource.

With ecommerce sales skyrocketing, the options for online transactions are manifold. But what are the problems that come with these many choices to pay? Find out. 

Global e-commerce sales hit $29 trillion in 2017 according to data released by the United Nations Conference on Trade and Development (UNCTAD) early this year. Here are three e-commerce payments trends you should be concerned about.

Mobile Wallets and Fraud

The pervasiveness of smartphones has sparked the growth of payment methods such as Alipay (1 billion users) and Apple Pay (383 million users). However, the growing popularity of these payment methods makes them a security target as well. 

Convenience is a selling point of some of the most popular mobile wallets like Apple Pay, Samsung Pay and Google Pay. Once linked to a card, payment information is turned into random numbers/tokens that are transmitted every time someone wants to pay.

In 2016, Salvador Mendoza, a security researcher outlined a potential flaw with Samsung Pay, showing that hackers could intercept the security tokens generated by a Samsung phone when making a payment. However, Samsung responded to the presentation, saying that they had deemed it an acceptable risk. For a hacker to actually pull off such an attack, they’d need to be next to someone right when they were making a transaction and use the code before the transaction is completed.

Here’s another loophole in mobile wallets; wallet users load money into them by enrolling a debit or credit card into the system. What happens when a fraudster gets hold of your credit card information and tries to load their mobile wallet with it?  

David Dewey, the director of research at Pin Drop Labs did an experiment where he was able to load credit cards from volunteers into Apple Pay. 

He used a loophole in the card enrollment process between Apple Pay and the card issuer. Ultimately, the credit card holder’s bank decides the authentication procedures for linking new cards to Apple Pay. In his experiment, David went around one issuer’s Knowledge-based authentication (KBA) questions by Googling information about the credit card owner, while in another, the card was verified with zero obstacles. 

The experiment was repeated 4 months later and most of the loopholes had been plugged, however, with the ingenuity of fraudsters, issuers will have to be on top of their game.

Measures to Prevent Mobile Wallet Fraud

In a recent interview,  Mark Sands CEO of HRMA-LLC, a company that specializes in high-risk credit card processing and credit card fraud prevention said, “Many new mobile wallets are implementing SMS Phone Verification to minimize credit card fraud. This technology identifies the person making a purchase with an instant verification code sent to their cellphone and that code is required to complete a transaction”

In this case, unless they steal your phone too, credit card fraudsters have an insurmountable security wall to climb. “The introduction of this technology was made a few years ago and companies seem to be embracing it rapidly in the transaction process,” Mark says. “Hopefully soon, it will become integrated as an industry standard.”

Alternatively, some mobile wallets like Alipay have integrated AI into their security systems. Alipay uses a risk control engine named Alpha Risk, which utilizes an active learning risk identification algorithm that scans various transactions to verify accounts and ensure that the information has not been hijacked.

PSD2 and Instant Payments

New payment methods have a tendency to open up new industries or shake up existing ones.  

The Payment Service Directive (PSD2) that requires banks in the EU to provide access to their customers’ accounts via open APIs, has stipulations that could potentially transform e-commerce payments. 

Under the PSD2, third party providers can register as Payment Initiation Service Providers (PISPs) who will be able to initiate payments on behalf of their customers. 

What this means is that a retailer like Amazon or Alibaba can register as a PISP and initiate payments from buyers’ bank accounts to theirs (with the buyers’ consent), cutting out the-middle-men-card associations and associated fees.  

To put things into perspective, whenever a customer makes a purchase from an e-commerce website using a credit card, their bank (acquiring bank) reaches out to the customer’s bank (issuing bank) and asks them to initiate the payment. Unless it’s the same bank, the acquirer pays an interchange fee (set by the card associations i.e. Visa, Mastercard etc.) to the issuer. Eventually, merchants pass down this transaction cost to their customers. 

However, with instant payments where these costs are cut, the big question remains; will merchants pass down the savings to their customers? I think not but time will tell.   

Under PSD2, third parties can also register as Account Information Service Providers (AISPs) and aggregate data in addition to being PISPs. This opens up room for customers to use third-party apps to make purchases, pay bills and check account balances without the need for logging into a bank account. As more innovations sprout out of these capabilities, the more probable it is that instant payments will transform more industries.

Friction in Payments Due to Strong Customer Authentication (SCA)

Among other factors, a customer’s shopping experience is affected by the speed and the number of payment steps that have to be completed. According to Amazon, each additional click made by the customer increases basket abandonment rates by 15%. 

However, the PSD2’s Strong Customer Authentication (SCA) requirements will see businesses counter fraud by using at least two authentication elements to verify electronic payments. This is likely to create more friction. 

According to a 2019 study by the Emerging Payments Association (EPA), the SCA requirements will increase transaction decline rates to 25%-30% from today’s 3 %. Merchants are fully aware that any extra steps unless seamlessly implemented, will see customers abandon online purchases and reduce their revenue. 

Credit card associations will also be opened up to competition due to the SCA. Traditionally, an e-commerce site that accepts card payments will require shoppers to fill in details including name, address, card number, expiry date and security code. A 2016 survey by the Baymard Institute found that the top-performing e-commerce sites had 7 form fields in their checkout system, yet the average checkout system in the US had 15 form fields.

For European merchants with the same numbers, adding extra authentication steps will only frustrate customers further. Unless care is taken, the SCA can make credit card payments unable to match the customer journeys offered by quicker mobile wallets.

As the e-commerce industry continues to evolve, so will the demands for a better user experience (UX) in payments. The companies that strive to innovate in this area will have a potent weapon in their ecommerce repertoire that separates them from competition.

In an increasingly competitive market, how are fintech companies adapting to improve their decision making? In industries such as insurance, capital markets, cryptocurrency, wealth and asset management — alternative data is proving to be a valuable source of insight.

Like a broken leaf to a hunter or a change of wind direction to a sailor, alternative data, though seemingly unrelated, is now providing tiny crumbs that act as clues to those in fintech.

Any data used to evaluate and make decisions about a company or an investment that is outside traditional sources i.e. financial statements, press releases, Securities and Exchange Commission (SEC) filings etc is regarded as alternative data.

Alternative Data and Cryptocurrency

Cryptocurrency prices are sensitive to speculation-a factor that you don’t expect to find in any financial record.  So how do investors gain predictive insight into a cryptocurrency like bitcoin? 

Well, at the root of it, Bitcoin appeals to three  groups of people; technology enthusiasts/computer programmers interested in crypto-mining or blockchain technology, speculators using it as a store of value and hoping to sell at a higher price, and criminals conducting illegal activity and using bitcoin as an anonymous means of transacting.

Data relating to the behaviour of these user profiles are the bread crumbs that form insights used to predict bitcoin price changes.

One of those data sources, which are based on people’s online behaviour is Google Trends; a free tool that allows people to track the most popular search terms across the world. A 2015 study by Aaron Yelowitz and Mathew Wilson used Google Trends information to establish a relationship between searches on Google (that were not directly related to bitcoin) and bitcoin interest. 

The study tracked search terms related to illegal activity and computer programming and found that increased interest in illegal activity and computer programming (bitcoin miners) on Google increased interest in bitcoin. 

Additionally, a previous study by researcher Ladislav Kristoufek shows a positive correlation between bitcoin searches and prices at exchanges. Thus, the two studies together show that if one was to track alternative  data from the three bitcoin user-profiles mentioned earlier, then they would find a way to predict cryptocurrency prices.

A real-life example of this phenomenon at work is a 22 % reduction in bitcoin price in 2013 after the FBI had unravelled an online criminal marketplace called Silk Road; where products including guns and ecstasy were exchanged for bitcoin.

Using the bank accounts that were attached to the bitcoin transactions, the FBI was able to work backwards and arrest some of the account owners; thereby thwarting the anonymity factor that attracted criminal entities to the cryptocurrency and affecting its price.

Twitter Sentiments

Social media, particularly Twitter, has shown a strong correlation to cryptocurrency prices; Nasdaq’s Analytics Hub, which provides data used by thousands of investors, is exploring cryptocurrency datasets that include social media sentiments and fund flows from crypto exchanges.

A 2014 study by Ciaran McAteer from the University of Dublin found a positive correlation between bitcoin exchange rates and twitter sentiments. This analysis evaluated the volume of tweets connected to the subject as well as retweets. It was discovered that the opinions expressed on twitter about bitcoin affected prices and this manifested after 24 hours. 

It’s a chain reaction where twitter sentiments affect investors who in turn affect prices. Using machine learning techniques and twitter reports one can get insights on price changes and act early.

Alternative Data and Capital Markets

Capital markets and data have always been in the same boat; market data, bank transactions etc. have been traditionally used to provide insight. However, when it comes to alternative data this sector does not disappoint.

Ever heard of Foursquare? The app that lets you share when you are at your favourite restaurant by checking in online. The company anonymises this data and provides it as a service to other companies who can find value in it. 

The power of this type of data was evident in 2016. Using data from foot traffic in 1,900 Chipotle stores that its users had checked into, Foursquare predicted that Chipotle’s 2019 first quarter sales would drop by nearly 30%; which was confirmed when Chipotle reported a 29.7% Q1 drop in sales.

Another source of alternative data used for capital markets investment is satellite imagery. Images of supermarket parking lots are taken daily by satellites; the number of parked vehicles on those images are analysed to come up with estimates for shopper traffic. Investors can then make moves before financial records even have the chance to show the changes. 

Sample this:  Orbital Insights, a company in this field, identified a 5.4% quarterly decrease in traffic at Walmart before the company’s 2019, Q2 earnings call. The range of satellite data used includes real estate traffic, ship movement that indicates shipments of commodities as well as manufacturing shifts.

Asset and Wealth Management

In 2019 alone, hedge funds are estimated to spend in excess of $1 billion on alternative data and close to double the amount in 2020,  according to web intelligence company YipitData- Alterntivedata.org.

Some of this alternative data includes geospatial data that shows the proximity of competitors, credit card transactions, supply chain & logistics data, all of which can be used to evaluate new and existing investment opportunities.

The attitude towards alternative data is positive among asset managers.  A survey commissioned by IHS Markit, a business information provider, found that 71 % of asset managers believe that they get an edge over competitors due to non-traditional data. The 2019 study also showed that institutions’ yearly alternative data expenditure stood at about $900,000.

Subsequently, this interest has trickled down to other industries such as insurance where companies are selling anonymised data for additional revenue streams. This is how it works :  Say insurance company A has issued 100 policies on a single day. If these have been issued to new car owners, that data is valuable to an investor who is evaluating their investment options in the automotive industry.

The same extends to real estate insurance where if a buyer takes out insurance on their new house, data that includes the number and nature of the policies-even when anonymised-could reveal insights about house demand as well as the things bought for those homes. Quandl, a company that brokers such deals has over 400,000 people using its alternative data according to its website.

Insurance

Above selling data to other industries, the insurance sector has also embraced the revolution by incorporating alternative data into its day-to-day processes. One such use case involves telematics, which combines telecommunications, electrical engineering and computer science technologies to facilitate communication and control of devices: then incorporating that into insurance.

For instance, to determine car insurance premiums rates, UK’s Aviva has a mobile app that monitors a driver’s skills i.e. braking, cornering and acceleration. And just like in a video game, drivers earn points that earn them better premium prices. Additionally, in case of accidents, drivers can opt for a dashboard camera connected to the app that acts as an eye witness.

On another front, the US is experiencing growing adoption of private flood insurance, which is separate from the government-provided National Flood Insurance Program (NFIP). This shift has brought about challenges in measuring flood risk appropriately. 

Since the NFIP hadn’t released  flood claim data to the public until August 2019, data which  private insurers can use in models. Alternative data such as flood-related social media posts, land-soil moisture and ocean salinity levels; which are detected by a radio telescope in space that senses microwave emissions from the earth and uses them to predict flooding, have come into play.

Alternative data has shown a lot of potential for the fintech industry, as the capabilities of artificial intelligence and big data continue to improve, more applications areas should open up.

Banking as a Service (BaaS) is the democratisation of financial capabilities that have fiercely been protected, isolated and hidden in silos for hundreds of years by banks.

The fact that BaaS opens up banks’ capabilities and essentially empowers anyone to be able to create their own financial products, goes against every fabric of the traditional banking industry.

Disruption of Banking by Fintech

Publishing, advertising and manufacturing are just a few  industries that have been disrupted by technology. Banking is no different, high tech start-ups have managed to bring innovation into the finance industry. With the click of a button, consumers can now perform all the functions that would have traditionally required a visit to a physical branch; from checking account balances to initiating payments. 

These digital-first challenger institutions like Germany’s N26-a purely online bank that has amassed 3.5 million customers in  Europe in four years and recently launched in the US market-have posed the biggest threat to incumbents. For a while, the mood in the financial industry has been that of David vs Goliath, new tech-savvy competitor vs old school incumbent. 

For some, however, the prospect of collaboration has been more alluring. For instance, France’s BPCE purchased challenger bank Fidor Bank in 2016 fo EUR 140 million in hopes of enhancing its digital growth strategy. 

Nevertheless, two years on, the partnership is breaking up over reasons that include a culture clash. Banking as a Service, on the other hand, provides a way for banks to collaborate with third parties with less risk.

Banks open up specific functionalities such as international money transfer, Know Your Customer (KYC) or account data, and allow third parties to manipulate these functionalities to build new or related services. Therefore, making banks marketplaces or aggregators of financial solutions.

Furthermore, this open banking revolution has been exacerbated by new regulations like the Payments Service Directive II (PSD2) in Europe.

How Banking as a Service (BaaS) Works 

Take your typical bank and break it down into its various functions;  holding money, remittance processing, card and payment processing. 

Banks put in a lot of investment to build out the infrastructure that supports these functionalities, including obtaining licenses and maintaining compliance measures. Because of the bottlenecks that these represent, fintechs and non-bank institutions interested in offering financial solutions find it easier to collaborate with banks instead of building their own from scratch.

BaaS allows third parties to tap into existing banking systems through application development interfaces (APIs) that allow communication between banks’ software and the third parties’. These open APIs expose the banks’ functionalities to anyone intending to access them, which includes independent developers, fintechs, non-financial institutions like restaurants and welfare clubs; enabling them to build their own features on top of the banks’.  

On the other hand, the Banking as a Service relationship does not always work one way, banks can also tap into the unique capabilities of fintechs. For example, remittance company TransferWise’s tech works not by sending money from one country to the next but by rerouting money from a bank account within the receipt’s country so that it doesn’t have to cross the border. This makes its international money transfer service cheaper, UK’s Monzo bank partnered with TransferWise to integrate the service into its banking app.

Furthermore, as open banking becomes industry standard, you should be able to plug and play different financial capabilities like lego pieces to birth a new service without ever having to own the infrastructure behind it. For example, to cook up a PayPal-like service, you’d just plug in mobile wallet capabilities, sprinkle in a little electronic virtual card functionality and season it with Peer to peer cross-border transfer features, ideally, BaaS should make it that easy to cook up a PayPal.

Impact of PSD2 on Banking as a Service

The European Union set 14^th September 2019 as the deadline for financial companies to comply with the Payment Service Directive II (PSD2); which forces banks with online accounts to provide access to their customers’ account information to registered third parties. However, the account holder has to give consent first.

Additionally under the PSD2, a fintech company (third-party provider) can be licensed as an  Account Information Service Provider (AISP); who is permitted to access and consolidate account information from a user’s different banks accounts, or/and as a Payments Initiation Service Provider (PISP): who can initiate a payment request from a user’s bank account at their request. This broadens the range of services they can create out of the access they receive.

How Does This Affect Banking? 

Well, just imagine your favourite bank being forced to avail information to a company that can use it to launch a competing product. A great example of such a product is Mint, a financial planning an app where you can read all your information (and make payments) from different bank accounts instead of going into each bank individually. Such a service reduces the amount of contact between banks and their customers.

According to a 2018 report by Roland Berger, banks risk losing 25-40% of their income from the disruption. Additionally, banks that previously invested little in IT infrastructure will have to ramp up their budget to avail the open APIs needed to provide customer information to third parties. 

One way for banks to tackle the revenue drop will be to embrace BaaS and avail more of their capabilities to third parties under revenue-sharing deals. In such a circumstance, PSD2 will eventually become an accelerator of Banking as a Service making it a necessity rather than an option.

BaaS in Action

Notable financial institutions embracing BaaS include US bank Bancorp, which has leveraged the BaaS model to a point of supporting 75 million prepaid cards and over 100 non-bank partners who use it to provide financial services.

Fidor, a German online bank founded in 2015 supports an open banking model (Fidor Operating System), which makes it possible for developers and other banks to use its API to create services off its core functionalities. Other banks with services running off of Fidor include mobile-native bank O2-based in Germany and Netherland’s Van Lanschot Bank. 
solarisBank, a tech company that received a German banking license in 2016 also avails banking capabilities through its suite of APIs to companies that include online SME bank Penta, Insha as well as freelancers’ banker Kontist.

Another notable mention is Mastercard’s Partner Wallet API, which allows any retailer to build upon the company’s Masterpass payment network. This feature enables merchants to bring Mastercard’s in-app and website checkout security capabilities, fraud detection and authentication to their own service.  

Hopefully, after the dust has settled on PSD2, more companies will have benefited through the Banking as a Service model rather than been disrupted.

How to implement an Algo Order in Cybex Dex？Yes, this is one of the challenges for the second Blockchain Hackathon (part of LongHash Cryptocon Vol2) in Berlin on May 18-19 this year. More details here.

As an advantage to all developers, Blockchain enthusiasts and Crypto geeks who are aching to solve this challenge, here is an interview with YanFeng Chen: Co-Founder of Cybex.io where he defines Algo-Trading in detail and its benefits, and shares a few tips that might help in cracking this challenge.

Cybex.io is a blockchain based decentralized exchange that supports crypto trading. When a user has an intention to perform a large trade, it is useful to have an algorithm to split the order into smaller slices and trade it over a longer period. This feature is referred to as ‘Algo Order’ and is widely adopted in regular exchanges. In a decentralized exchange, each sliced order must be signed by the user’s private key. This provides a new challenge to Algo orders. In order the place orders automatically while keeping the private key safe, a user typically has to write its own program and run it in its own machine. This makes it difficult for normal users to use Algo orders due to the lack of programming skills. The challenge expects you to “Design a solution that allows a normal user to execute and manage Algo orders.” Below are edited excerpts from the interview:   

What is an Algo Order and why do you use it? Examples of regular exchanges?

Algorithmic trading uses a computer program that follows a defined set of instructions (an algorithm) to place a trade. The trade, in theory, can generate profits at a speed and frequency that is impossible for a human trader. We call this kind of orders ‘Algo Order’.

Algo-trading provides the following benefits:

• Trades are executed at the best possible prices.
• Trade order placement is instant and accurate (there is a high chance of execution at the desired levels).
• Trades are timed correctly and instantly to avoid significant price changes.
• Reduced transaction costs.Simultaneous automated checks on multiple market conditions.Reduced risk of manual errors when placing trades.
• Algo-trading can be backtested using available historical and real-time data to see if it is a viable trading strategy.
• Reduced possibility of mistakes by human traders based on emotional and psychological factors.

An example for Algo Trading in regular exchange:

Suppose a trader follows these simple trade criteria: 

• Buy 50 shares of a stock when its 50-day moving average goes above the 200-day moving average. (A moving average is an average of past data points that smooths out day-to-day price fluctuations and thereby identifies trends.)  
• Sell shares of the stock when its 50-day moving average goes below the 200-day moving average.

Using these two simple instructions, a computer program will automatically monitor the stock price (and the moving average indicators) and place the buy and sell orders when the defined conditions are met. The trader no longer needs to monitor live prices and graphs or put in the orders manually. The algorithmic trading system does this automatically by correctly identifying the trading opportunity.

Why did you choose Cybex.io as the blockchain base?

At present, more and more decentralized exchanges come out. How should a trader choose the trading platform? Normally we should consider about:

• The security level about assets.
• If the liquidity is good enough.
• What kind of reward for the market maker.
• If there is a set of easy-to-use API.

Cybex is positioned as ‘a highly efficient decentralized trading system’ that provides organizations, teams, and individual users with various easy-to-use trading scenarios and business logic implementation.

Cybex also includes a special realtime-order-matching-engine. It can provide real-time market data, the fastest placement and cancellation of orders and an instant notice of confirmed transactions, making the highest trading performance in the industry, which catches up with that of centralized exchanges.

Why do you want normal users to use Algo orders?

Algo-trading can give users many benefits than they trade manually. If we can provide suitable tools for normal users, we can attract more user into the ecosystem.

Does this challenge requires front-end or back-end developers?

It may need front-end or back-end developers, we may need to provide user-friendly front-end tools, or develop components to implement some typical Algorithm on different developing platforms.

What is the current status quo of Algo trading? Are there no user-friendly solutions?

There is centralized solution, i.e., the centralized exchange takes control of your money (including the private key).  But very few decentralized solutions, hence the challenge.

What programmatic skills are required for Algo orders?

The program skill is not the most important one — any program is fine. The key problem to solve is how to come up with a program that can send order on behalf of the user, while keeping it includes. See the ‘security requirement’ answer below.

Why is Longhash interested in this challenge?

LongHash is a platform for accelerating the development and understanding of blockchain technology. We are interested in all new technologies and solutions in blockchain area. We think if there is a good way to invite normal users into Algo-Trading area, there will extremely push forward the whole industry development. Market will have good liquidity; normal users may gain more profit from the trading process.

What are the security requirements?

We’d like to have a program that is only accessible to the user. As the program owns the private key of the user, it is critical that no one else can access it. E.g., a straightforward solution involves running a program on a linux server, which normally involves a system admin therefore not as ideal.

What is an example of a good Framework Coding quality and why?

Configurability–key params are configurable. Modularity–the separation of sub modules. Extensibility–new modules can be extended with few change of core part. Security–keep private key safe.

Does this challenge interest you? Apply here for the Hackathon before the 12th of May – the event is free for all developers who apply. Also, there is more. If you are a developer or aspiring entrepreneur in the blockchain/crypto space and  want to know about the investment perspectives from Top Asian & European Funds in the Blockchain segment or business use cases in real word adoption, get your free tickets for Hash Talk which will be an afternoon-long summit focused on discussions and creating insights on investment, business, and tech in blockchain curated and brought by LongHash Germany. More details here.

No longer considered the “future of work,” AI is infiltrating industries and job roles at impactful rates.

Across the U.S. economy, one-third of the U.S. workers are interacting with some form of AI in their jobs today – even if many of these interactions are still in a limited capacity. And although much attention is directed toward industries that are easy to visualize (think driverless cars or robots on factory floors), the data indicates that the financial services industry may see the greatest change.

Financial services is already an advanced adopter of AI; it ranks third behind only the information industry – which includes the software subsector –  and the manufacturing industry in terms of the percentage of workers exposed to AI, and it dwarfs U.S. averages in both breadth and depth of AI adoption. (See the table below for AI exposure rates.)

In the coming 12 months the financial services industry will outpace average U.S. investment in AI by more than 50%; the securities, commodities & investments subsector will invest at twice the average. But the rate of investment is not the only thing that makes the financial services industry unique when it comes to AI.

Portion of U.S Financial Services Workers Using or Exposed to AI by Subsector, 2018

Financial services is different because AI can affect all three elements of its revenue model. AI is effective at generating new fi-serv business, effective at automating back-office processes, and in many cases – as with programmatic trading or portfolio management – AI is the product.

An “AI Preparedness Survey” explored this difference by asking workers about very specific tasks they performed in their jobs. The data showed that a greater percentage of fi-serv employees’ weekly work hours could be eliminated via automation (15.0%) than of those for workers in the manufacturing industry (12.0%) or in the professional services industry (12.6%).

Financial services workers are seeing these effects through the deployment of specific technologies. For example, in the consumer & business banking subsector, the deployment of voice recognition technology to automate facets of customer interaction nearly doubles the deployment of that technology in U.S. industry at large. Not surprisingly, the data shows an even greater deployment disparity for programmatic trading tools in the securities, commodities & investments subsector. Injecting automation into customer service tasks and transaction processing may be seen as essential progress that frees up valuable human capital to perform more complex tasks, but it should be noted that the financial services industry’s deployment of scenario-planning AI – i.e., “thinking software” – is also quite accelerated (more than 10% of fi-serv firms will deploy scenario planning tools this year, versus only 5.9% of U.S. firms in general).

Source: Optimized Workforce, 2018

What does all this mean from a talent strategy perspective? The financial services workforce – and the tasks the people in it perform – are likely to experience more change than in other sectors of the U.S. economy. Financial services leaders will need to perform very granular task-based audits and skills assessments to understand and redefine their company’s talent needs. And workers in the industry should be aware that the talent pool the financial services industry will need following these audits may get smaller.

When these changes will take place is hard to say. Nearly 20% of financial services employees today report spending so much time on tasks AI could automate that they are missing key business goals – an indication that in today’s economy, the demand for financial services labor is still quite strong (a finding also supported by the current unemployment rate). The timeframe is also dependent on when fi-serv leadership begins reassessing their workforce in earnest.

Note: The article content is inspired by a recent report by Optimized Workforce.

FICO scores will be soon improved by predictive analytics. This new approach is more accurate and can extend to the entire debt management process.

Badly assessed financial risks were at the core of the financial crisis in the late 2000s. Banks and credit companies used faulty models which did not highlight the real threat of the mortgages granted. When the housing bubble burst, it led to the collapse too big to fail financial institutions and the recession of the entire economy for a few years. All these problems could have been avoided with proper risk hedging tools.

Imagine if a piece of software could tell you the repayment probability both for current, but also for future clients. Of course, that is what the FICO scoring model aims to do, but as we’ve seen, it has not been entirely successful. FICO stands for FI (Financial Accounting) and CO (Controlling). Models based on predictive analytics which use big data could have a better chance of foreseeing repayment chances. Yet, most companies have not adopted these tools yet.

Let’s go through a brief presentation of the applications for predictive analytics in the debt collection business.

Risk assessment: client scoring

As mentioned before, since the late 80s the FICO score has been the gold standard for evaluating loan application and creditworthiness. It even comes in a few different flavours, including auto FICO, and healthcare FICO.  

Machine learning and specifically predictive analysis can take this process beyond a simple number and create a 360-degree portrait of the client, taking into consideration more than just the credit history and current debts. Now, it can include data from social media, spending patterns and more.

Such a tool would be great for foreign clients who have no previous FICO score but would be great business partners, like foreign investors. It would also offer a fair chance to recent college graduates or other young people.

By taking into consideration a broader array of input data, the accuracy of the prediction improves consistently, and it can also be refined to a very personal level. The new outcomes can go as far as setting an individual credit score limit to minimize potential damage.

Compute pay or default propensity

Using survival models, each client account can be evaluated for its likeliness to become a potential loss. If an account is in a continuous downward trend regarding its motivation or ability to pay it should be treated as a potential risk before it actually becomes one.

Predictive analysis models can determine the payment patterns which indicate that a client is struggling. For example, it could start with being just a few days late, or paying two instalments at once. Any variation from the usual payment schedule should be a red flag for the system.

A mechanism could be put in place which self-triggers when an unwanted pattern emerges. The system could reach out to the client and ask them if they need help if they are going through a difficult financial moment to offer solutions before debt starts build up.

Forecast cash flow

Any business wants to know what they can expect regarding future cash flows. Financial institutions are no different and predictive analysis can help them make more accurate projections when it comes to expected receivables.

Since in the risk assessment part the model was able to identify those clients who have the potential to be late or default completely, it follows that it is foreseeable to say which clients will pay.

Debt collector’s business models depend on the ability to predict the success of collection operations and evaluating outcomes at the end of each month even before the billing cycle begins.

This helps redirect the workforce from focusing on clients who were going to pay anyway towards those who are most likely not to meet their obligations.

Enhance the client relationship

Not only can predictive analysis tell you which clients are the highest risks for your business, but it can also identify when it’s best to get in touch with them for maximum results. For example, if they work in shifts, it’s best to call them whey they are not at work or resting, which could be outside regular business hours.

Showing your clients that you care about their habits and lifestyle improves your chances of them listening to your call agents and ultimately raising the collection rates. Of course, to train the system, you need the logs of past conversations.

Predict call value

As in any business, debt collectors aim to maximize their ROI by letting the call agents focus on the most promising accounts instead of just following a list approach. By using predictive analytics as described before, the model can allocate a likelihood score to each potential call and rank them in the company’s CRM.

The model usually works by computing the repayment probability, taking as a modifier the event “call”. That means, in fact, calculating the likelihood when the client is not called and the probability when it receives a call. This is a very simplistic approach, yet it highlights the way such models could make a difference for the bottom-line.

Possible challenges

As in all models related to big data, the primary problem is related to data cleaning. Since it’s a matter of garbage in, garbage out, before making any prediction, the company dealing with this task needs first to build the pipeline to bring in the date, clean it and use it for training the neural network.

Another challenge might be related to various personal data protection regulations and privacy matters.

Ready, set, predict

To put it all together, it’s worth mentioning that predictive models can make a difference when it comes to revenue for debt collection agencies. It can boost conversion rates by targeting the right people, at the right time. Of course, an in-depth analysis could go as far as identifying the message which would influence the client the most.

Targeting the right clients also means more productivity for call centre agents and less wasted work hours. Having a mathematical model behind the decisions eliminates bias and makes the process fair.  

It’s been one month since GDPR, General Data Protection Regulation, a policy set in place to address the digital age’s ever increasing flow of personal data, went into effect for European industries. GDPR is meant to give consumers more control over their personal data usage by companies, and this shift in data control is causing a ripple in European marketing strategies. Let’s look at how GDPR is impacting marketing strategy and what that means for you as a customer.

Lesser Quantity of Data, But Targeted Audience Profiles

According to Chad Wollen, CMO of Smartpipe, higher customer control of personal information restricts access to the information marketers rely on to target audiences. Wollen further says ad tech vendors may find themselves starved of data as consumers chose to opt-out of sharing their personal information. Marketers have lesser access to information about their audiences, thereby also losing information they need to target similar types of customers. Despite the loss of larger quantities of information, the quality of information will dramatically increase due to, as comments from the director of OpenX Ryan Eney points out, businesses only collecting information they need, setting time limits on data storage, and gaining a legal basis to process consumer data. CTO of Crownpeak expands on what these processing bases are, mentioning that companies need a compelling legitimate interest to process and use data. Overall the stronger customer hold on personal data creates restrictions to marketing companies building target audience profiles, resulting in less quantity of data, but more quality information and deeper consumer trust.

Deeper Consumer Relationships

Consent policies are evolving to adapt to GDPR guidelines and consequently, companies need to make sure their customers feel comfortable giving personal data to corporations. With stricter rules set in place to protect the consumer, winning over the consumer will now be the primary aim of brands, “and they will only do this if they go beyond having a legal right to operate, ensuring their data practices are socially acceptable to”, adds Chad Wollen. Consumers need to feel as though they can trust the companies with their personal information enough to grant consent to use their information for marketing and analytics purposes. Consent policies will need to evolve to include the policy guidelines of GDPR and therefore companies will need to evolve their practices to finesse the trust and establish deeper relationships with their customers.

The Future of Consumer Data   

Moving forward, marketing and compliance strategies practiced by companies will evolve around deeper customer relationships and more in-depth consent policies. Management of consent will evolve to consider the compliance and relationships of the consumer. Without these adaptive marketing measures, it will be difficult for companies to flourish in light of GDPR. As a consumer, you should expect more transparency from corporations about your data usage and more meaningful conversations and interactions from organizations to gain your trust.

Social platforms such as Quora, Reddit or Stack Overflow are gaining popularity as users can easily exchange information within the social community without any barriers. How and why can blockchain make these platforms more credible? Ralph Tkatchuk finds out.

The internet and the rise of social media has significantly changed the way we interact with information. Learning something new today is as easy as unlocking a phone and typing in a query. It has replaced the  slow and deliberate research people were forced to do in the past to find answers to their most pressing questions.

One of the biggest outcomes of the social platform revolution is the emergence of services dedicated to asking and answering questions from anywhere in the world. These started off as web forums where communities would gather, but quickly morphed into full-fledged services that became hubs for millions of people to ask anything from the most basic questions to complex queries. Even so, their popularity was for some time usurped by search engines like Google, which quickly cornered the search market and rapidly became entrenched.

These Q&A platforms have become immensely popular again due to the speed at which information can be exchanged as well as the community-based approach which inspires confidence among users. Even so, there are some signs that the systems created aren’t necessarily ideal for all purposes. However, adding blockchain to the equation could prove to be an intriguing solution.

Thanks to the technology’s many benefits—especially in terms of democratization and tokenization—Q&A platforms could be approaching a new renaissance which could deliver more transparent and reliable interactions.

GREAT QUESTIONS, OKAY ANSWERS

Getting an answer to a question today is easier than it has ever been. Google’s search engine dominance remains unbroken, but instead of simply asking the company’s algorithm, users are increasingly turning to their own online communities for answers.

The result is a significant bump in the popularity of crowd-sourced Q&A platforms. Services like Quora, which lets users ask any question, regardless of topic or complexity, allows others to answer with what they believe is the correct answer.

These question-and-answer threads are generally not moderated or regulated, though the company does maintain centralized control to enforce its conduct policy and terms. On threads, users can vote in terms of how helpful answers are, with the most popular responses rising to the top. The method seems straightforward enough, but it does highlight one major problem. In many cases, the most popular answer is not the correct one. This makes them less valuable as information centers than Google, which generally offers high-value and accurate answers near the top of its results.

For a long time, this informational disparity meant that Quora and its contemporaries were seen as lesser than Google and other more “reliable” information sources. In the years since, websites like Stack Overflow, the academic hub for Q&A forums, have returned much of the legitimacy to the sector, but the challenge remains an issue of perception.

Even on Quora itself, there are doubts about informational accuracy. Worse still, policies in place for “self-policing” of factually incorrect answers is rarely taken seriously or even carried out. Most importantly, however, the problem stems from the fact that there is no incentive to provide correct answers, instead, just to be the most visible answer.

BLOCKCHAIN REBOOTS THE MODEL

Nevertheless, the social Q&A model holds enormous promise. What was missing, until now, was a tangible way to incentivize better behavior and more reliable responses. With blockchain, these platforms may finally have an answer. One of the technology’s biggest benefits is the ability to create application-specific tokens that have real-world value. When users are not incentivized to provide accurate information, but rather popular answers, there is no real way to prioritize correct answers. Instead, those users who understand how to game the system tend to have their answers lifted to the top spot, while information is left behind.

Blockchain-based tokens can be used for a variety of needs in an ecosystem. In the case of Q&A platforms, however, they create a clear incentive to offer better information, instead of simply looking for financial gain from external sources.

ASKfm, a popular Q&A platform, is making such a leap with its upcoming ICO. The company is already one of the largest platforms in the world, with millions of users and a proven ecosystem. However, by adding blockchain, ASKfm aims to create a smart-contract-based system that lets users decide whether the information they’re receiving is accurate and satisfactory. Users will be able to vote with their tokens and incentivize better responders to participate within the community.

Others are taking a more democratic approach, like blockchain-based Q&A service Tip. The company will award tokens to users who have the most upvotes on their answers, with the hope that this will incentivize the best available information to rise to the top.

Another important aspect of blockchain is its power to disintermediate and democratize. Currently, Quora, Reddit, and even the popular Stack Overflow, are aimed at rewarding one group of stakeholders—investors. Despite the vibrant communities they’ve developed, most of the decisions made relate to the entrenched interests of those individuals at the top. This creates serious conflicts of interest and questions of censorship. Reddit, one of the most popular sources of information on the web, has faced serious pushback because of this, and it has damaged its credibility among users.

With blockchain, these problems become obsolete, as centralized authorities have significantly less influence over networks that are distributed and peer-to-peer. Power in this case is returned to the community, which can more freely interact, and rest assured there are no external interests involved in their interactions. More importantly, it limits the influence marketers, advertisers, and other similar actors have on networks alongside their ability to rig answers and game the system.

A MORE DEMOCRATIC DEBATE

Q&A platforms are not going anywhere, especially as their popularity continues to gain traction. However, for them to truly reach their potential as democratic sources of information, they must clean up their act. By embracing blockchain, the sector is taking a very real first step towards forming a model that incentivizes better, has more factual answers while proactively working to block out those actors that distort information for personal gains.

The arrival of the first pillar of the Payments Services Directive, Part 2 (PSD2) in January this year laid the groundwork for a more open banking system. It is set to transform the financial services industry in the European Union (EU) by putting the customers in control of both their accounts and the personal data that banks hold to complete transactions.

Under the new directive, banks must share access to their customers’ account data with third parties who have a legitimate payment purpose, meaning their monopoly over payment services is at risk, as established internet giants and innovative fintech startups vie to offer a superior online experience and beat the services traditionally offered by banks. As PSD2’s introduction sparks increased competition in both business and retail financial services throughout Europe, it raises a broader question: are banks well equipped to create compelling digital experiences for their customers and ward off the competition from these new challengers?

A challenging context

PSD2 comes at a time when banks are already under pressure to create a more modern service for their customers. New technologies such as crypto currencies, e-wallets and mobile payments are flourishing due to consumer demands for greater convenience and connectivity, and banks must keep pace.

To stay relevant in the lives of consumers and remain competitive under PSD2, banks must improve the digital experiences they offer. By doing so, they’ll be able to leverage their trusted status with customers and avoid the ultimate pitfall of becoming mere utilities, destined only to support other companies’ customers facing payment solutions and sacrificing the most tangible aspect of the retail banking relationship. 

A digital paradigm shift

Maintaining customer relationships will mean finding better ways to deliver the seamless, personalised experiences consumers demand, and will necessitate a change of mindset. Banks will need to pay less attention to analysing specific customer interactions, such as individual marketing campaigns or email open rates, and instead think in terms of injecting convenience, value and utility into their customers’ experience. They will need to embrace a bigger world, understanding the broader relationship customers have with non-financial brands through touchpoints as varied as social media, touch and voice interfaces, industry influencers and smart bots. This sequence of touchpoints is vastly different for each individual customer and, with use of connected devices growing, may be spread over a greater variety of channels and platforms.

A technological solution

To collect and tame the data from this increasingly complex customer experience journey, banks must create a more holistic view of the customer. They must gather ambient, behavioral, form-based, or third-party data and combine this with data from existing tools, such as Customer Relationship Management (CRM), Enterprise Resource Planning (ERP) and Marketing Automation Platform (MAP) information, to create the most detailed picture possible, understanding the types of products customers are interested in from analytics data, when they are likely to do their banking and what their preferred communications channel is – all within the confines of the new General Data Protection Regulation (GDPR) statute, of course.

Once banks have a complete picture of their customer, they can target them with personalised, engaging content. Digital eXperience Management (DXM) platforms help address this challenge, as they allow marketers to roll out tailored content across a variety of channels, such as social media, webpages, online banking portals and mobile apps. Each of these can be quickly personalised to the customer and adapted to the device on which it is being viewed. Many of these platforms have a ‘What You See Is What You Get’, or ‘WYSIWYG’ style interface, meaning they can be used without deep technical skill. These powerful yet simple tools empower banks to deliver consistent yet tailored experiences.

Although it is simple to execute, the personalisation process will not be linear. Rather, perfecting online experiences requires marketers to employ a trial and error approach using Web Content Optimisers. When marketers use these platforms, A/B testing can be carried out to test different variants of a single digital touchpoint to gauge how audiences react to small tweaks. Although considered technologically tame by today’s standards, A/B testing seems set to see a resurgence in popularity against more modern artificial intelligence-driven approaches as a result of the GDPR prohibitions against automated profiling in the absence of the high standards of explicit consent. By experimenting with different banners, layouts, calls to action, styling and other content, marketers can discover which performs best and deploy this over the hundreds of digital touchpoints audiences may encounter. For example, banners may be appropriate on the main pages of a bank’s website, but lead to high bounce rates when featured on customer portals.

Once all content across different channels has been personalised, it’s important to keep control of it by using quality management systems. These systems examine all forms of digital content to identify issues such as broken links, misspellings, accessibility issues and compliance risks, and allow them to be fixed. Smoothing the customer journey in this way enhances customer trust, as individuals perceive the bank as more understanding of their needs, more reliable for key banking operations, and more consistent in its communications.

Understanding customers and delivering relevant, timely, compliant interactions across different touchpoints won’t just improve customer experience. The integration of data siloes, such as CRM and form data, will also help banks comply with GDPR, helping them to determine which customers have already shared their data, streamlining the consent process and ensuring communications align with individual expressed preferences.

It’s time to put user experience first

PSD2 is here, and it’s up to banks to see beyond the letter of the law and understand the importance of digital experiences in remaining competitive and maintaining their customer-facing status. Digital experience platforms can take banks into the 21st Century, improving understanding of the customer, creating consistent, yet personalised, communications and assisting compliance with regulations such as the GDPR. Only by making user experience their utmost priority can banks stay competitive with the invaders that threaten their traditional place in consumer lives.

It’s impossible to discuss cryptocurrency without at least mentioning Bitcoin. It is, after all, the functional forefather of the cryptocurrency space. It’s the currency that everyone thinks about when you mention crypto, and the one by which virtually every other contender in the field is measured.

It also has a pretty serious, currently unresolved problem – one that’s getting progressively worse as time goes on.

Bitcoin’s big problem

Simply put, ​Bitcoin was never designed to become as popular as it has​. It’s grown exponentially since its inception in the late 2000s, from a few groups of enthusiasts to tens of millions of concurrent users. This growing user base has consequently increased the number of daily transactions by an exponential rate, as well – to the extent that the Bitcoin network can no longer cope with the strain.

The issue is largely tied to Bitcoin’s block size limit. For the uninitiated, Bitcoin works on something known as the blockchain. This is a public, enduring ledger of every single transaction that’s ever taken place on the Bitcoin network, right from the beginning.

That “chain” is made up of “blocks.” Each block is itself an encrypted ledger of every transaction that’s taken place on the network in the past ten minutes, and each transaction is used to validate each other transaction. Here’s where the problem lies. 

In 2010, Bitcoin’s creator, Satoshi Nakamoto, introduced a one megabyte block size limit as a security measure. Any block that was over that size limit would automatically be rejected by the network and deemed invalid. Unfortunately, we’re rapidly approaching the point at which that size will be too small – and it’s only getting worse.  

Finding a solution

Hoover, Tannoy, Jacuzzi and Onesie. Some brand names become so popular that they become household names beyond their own product. Now, we can add Bitcoin to that list. The coin’s rise from $1,000 to $20,000 in value during a crazy 2017 has catapulted it into the public eye.

While it’s understandable that Bitcoin attracted major headlines in the past year, it would be wrong to ignore the potential of other cryptocurrencies – especially since Bitcoin has dropped in value since its 2017 peak.

Whether you are a beginner just learning how to trade forex, or a veteran investor with in-depth knowledge of the bond market, the last year might well have sparked your interest in cryptocurrencies as a potential investment.

This begs the question: who are the Bitcoin rivals that are making a name for themselves, and what do you need to know about them?

Ether

If Bitcoin is the king of the cryptocurrency jungle, Ethereum is definitely second in the pecking order. Launched in 2015, Ether is, on the surface, very similar to Bitcoin – especially in the way the currency is mined, bought and sold.

Ethereum, however, has a broader scope than Bitcoin. It offers a platform through which Ether tokens can be used, as well as an entire open source, decentralized platform for the creation of smart contracts – a form of automated transaction instruction – and distributed applications.

At the beginning of 2017, Ether was worth less than $10; by the end, it was $1,400 – demonstrating a rate of growth that would ordinarily have attracted more headlines were it not for Bitcoin.

Ripple

Ripple is a cryptocurrency focused on speed, offering near-instant financial transactions at a rate of 1,500 transactions per second. By comparison, Bitcoin handles 3-6 and Ethereum 15.

Its protocol (XRP) does not need to be mined, which helps avoids the negativity surrounding energy uses for Bitcoin. Ripple doesn’t operate on blockchain, relying instead on a network of independently validating servers and a persistent data structure called a hash tree.

Litecoin

Like Ripple, speed is a big selling point for Litecoin. While Litecoin is based on a similar technology, it generates blocks about four times faster than Bitcoin. There can be a maximum of 84 million Litecoin (LTC) created. By comparison, Bitcoin’s upper limit is 21 million.

In 2017, Litecoin’s market value shot from a little under $4 to more than $250. While this has dropped at the start of 2018 – in line with all cryptocurrencies – Litecoin still offers major potential for investors who feel they missed out with Bitcoin. This has led it to be labelled as “the silver to Bitcoin’s gold.”

Dash

Dash, originally known as Darkcoin, offers even more anonymity than Bitcoin, with a decentralized mastercode network that makes its transactions almost impossible to trace.

A 2015 rebrand as Dash (a portmanteau of digital cash) didn’t detract from the features that first attracted fans when it was created and developed by Evan Duffield. Mined by CPU or GPU, Dash jumped from under $12 at the start of 2017 to almost $1,500.

Zcash

Zcash is a relative newcomer – launching at the end of 2016 – with a bold claim: “If Bitcoin is like http for money, Zcash is https.” The claim centers on the added level of privacy and security it purports to offer, with “shielded” transactions to allow content to be encrypted. For example, details such as the sender, recipient and amount can remain private when transactions are recorded and published on a blockchain.

The key takeaway

It’s worth it for investors to keep an eye on these alternative cryptocurrencies. However, we must also note that this is a market defined by drastic change. New currencies are often emerging, and prices can vary wildly from day to day – let alone over the course of several years.

The important takeaway is that Bitcoin isn’t the only show in town. Look beyond it and there are plenty of other opportunities for investing in cryptocurrency.

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Who goes there, friend or foe?

The emergence and development of innovative and flexible financial startups is causing a revolution in financial markets by proving that financial services can be built from the ground up, in response to real user needs. So much so that gaining customers’ trust, along with their investment, is now not the sole concern of banks, but also the aim of these versatile and highly-focused startups.

The prize is tantalizingly clear – customer confidence in both the institution and its products. But the route to this prize is radically different for banks and FinTechs. Whether the players in this game are opponents or partners is a matter still open to question. What is beyond question is that it is the customer who stands to gain.

Contrasting strengths

According to the World Retail Banking Report 2016 from Capgemini and Efma, banks have solid competitive advantages – namely customer trust, a large customer base and experience with regulators.  FinTechs’s strengths are identified as agility, innovation and the ability to attract digitally-savvy customers.

In terms of securing customer trust, banks are second to none. Capgemini’s report Why Banks and Insurers Must Make Customer Data Safer and More Secure indicated that 83% of consumers trust banks and insurers with their data. Furthermore, the EY 2016 Global Consumer Banking Survey showed that 48% of customers have complete trust in banks to keep their money safe, and that globally, 60% of customers agree that the expertise of banks has an important role to play in helping people achieve their life goals.

In contrast, the overwhelming competitive advantage of financial startups is the user experience they offer, often honed to perfection. Their solutions can be unerringly intuitive, responding to real customer expectations – and in many cases far exceeding them.  Banks are very much playing catch-up in the area of UX, although there are a few big players such as BBVA, Santander, DBS and Emirates NBD who are investing heavily in a UX strategy.  Poland, considered to be the home of a great deal of innovation in online banking, has brought players such as mBank and Alior Bank into the spotlight.

mBank has been innovating for many years, gaining in 2013 the title of Most Disruptive Innovation in the Efma Distribution and Marketing Innovation Awards. Their recently-launched mAccelerator is the first fund in Central and Eastern Europe that specializes in developing and commercializing new technologies, aiming to create state-of-the-art technological solutions to help meet the challenges of the FinTech era.

Alior Bank launched its Digital Disruptor strategy for 2017-2020 to become even more innovative and customer-friendly and to strengthen its capital position. Their plan is to implement new digital solutions facilitating online sales of products and services, and invest heavily in IT and innovation, to guide clients through the technological revolution in the banking industry.

Paths to success

Providing customers a high level of User Experience – equal to the levels offered by FinTechs – is now one of the major challenges facing banks. This challenge also touches on other significant areas, such as the improvement of key customer contact points with banks, the redesign of particularly awkward banking processes, and the provision of financial advice to clients in the most accessible and easy-to-understand manner possible.

Emulating financial startups, banks are also striving to spare their clients the stress involved with managing the home budget. This is evident in the example of Credit Data Experience, which has the lofty aim of ensuring positive customer experience throughout even the most stressful credit processes, or at the very least, not discouraging customers from completing them.

FinTechs, for their part, have significantly influenced the management model of financial institutions. Observation of startups has led to the creation of mini-organizations within banks that are responsible for specific areas of business – thus lowering costs and offering much greater development opportunities.

Not every playing field is level

Not all financial markets offer equal chances for startups to compete with traditional banks. This is in part due to differences in customer needs and expectations, often dependent on the maturity of each market. At the MoneyConf 2017 conference in Madrid, data presented by the Spanish headquarters of BBVA showed that on established markets, speed of service delivery is of utmost importance, whereas for developing markets, transparency and clarity of services are key.

An innovation-friendly environment

The legal framework of a market, along with its openness to innovation, has a marked effect on the development of startups. Thankfully, we are seeing an increase in the appetites of governments and regulators to encourage competition and stimulate the development of FinTechs, using the various tools at their disposal. Regulators may, for instance, facilitate the legitimate operation of small financial firms, increase flexibility in their approach to licensing, create sandboxes or establish closer cooperation with even the smallest of FinTech startups.

A prime example of a country that has successfully opened up to financial startups is Brazil. According to data presented at the MoneyConf 2017 conference, new market regulation there has resulted in increased consumer confidence, in turn leading to greater customer investment in FinTech. Furthermore, Brazil is now considering launching a special license for financial businesses operating only in the digital space, in order to further streamline procedures and spur the dynamics of innovation.

In the end, the customer benefits

So what changes are waiting for us in the future and who will gain most from the proliferation of modern and highly innovative FinTechs on the financial market?

FinTechs are dramatically changing the perception and function of banking. Banks find themselves having to transform into trusted brands and get to know their customers anew by getting close to their needs and understanding their working style.  They also need to start providing real help in their areas of greatest need. Also, besides merely focusing on meeting the customer’s financial needs, they should additionally offer real-time, on-demand financial troubleshooting.

Banks have started to take over not only the operating templates of financial startups, but often the startups themselves, in order to acquire their know-how. This umbrella approach seems to be leading to the best kind of win-win situation: According to the World Retail Banking Report 2016 from Capgemini and Efma, 65% of banks perceive FinTechs to be partners to them, not competitors. Banks see opportunities for collaboration and have different strategies for it – with 46% declaring existing collaboration, 44% investing and 18% acquiring. In contrast, 43% declare that they are competing with financial startups.

The ultimate winner of this bromance between banks and FinTechs is the customer, who benefits from an innovative solution with honed customer experience, backed up by the sense of security provided by a trusted institution.

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Whatever your field expertise, it’s a near guarantee that a handful of nimble, data-driven technologies have changed the game for you and everyone you work with. Stay up to date on how industry leaders are responding by checking out these four panels (among many more) taking place at Data Natives 2017.

THE FUTURE OF MOBILITY

On one hand, automation is literally driving the faster, safer and more efficient vehicles of tomorrow. On the other, trillions of dollars are potentially up for grabs as AI and other technologies change the ways in which people and products move across the globe. Our mobility panel brings together Holger Weiss – CEO of German Autolabs, Silvan Rath – CEO of Predict.io and Elena Petrova – Data Scientist at Auto1 to discuss many of the biggest coming changes to how we all get from point A to point B and what role data science plays in shaping the new business climate for mobility.

BLOCKCHAIN

 The worlds of FinTech, cryptocurrency and beyond have all recently been rocked by blockchain. The technology’s clever use of cryptography not only builds bitcoin wallets, but can also improve cyber security and protect identities. To see what industries are on track to be altered next, join IOTA Project Developer Andreas Osowski, LHoFT CEO Nasir Zubairi, and BigchainDB CTO Trent McConaghy for an in-depth discussion about what the future holds for business leaders who properly wield the best aspects of the blockchain.

HEALTH TECH / HEALTH INSURANCE

 Imagine if a your health insurance rate changed daily and could be impacted by a jog in the park or eating a salad. From reimagining insurance plans to diagnosing illnesses before they become dangerous, HealthTech tools like Fitbit and other body-monitoring devices are making this possible. See Dr. Torsten Hecke – Head Analytics & Insights at Techniker Krankenkasse, Christoph Wülfing – Business Development Manager at Qunomedical and Vadym Vorobiov – Chief Technology Officer at Solve.Care Foundation discuss not only data science’s industry-shattering implications for the healthcare industry, but also what devices are letting patients take more charge of their own health.

PANEL: GDPR

With 20 million euro fines on the line, you can’t know too much about the Europe’s upcoming data regulations. Sit down with Alexandra Deschamps-Sonsino – Founder at Designswarm & Goodnight Lamp, Katharine Jarmul, Founder and Data Scientist at kjamistan, Sebastian Weyer, Venture Development Manager at WATTx , Johannes Klausch, Lawyer & Senior Associate at Luther Rechtsanwaltsgesellschaft GmbH and Gordon Grill – Data Privacy Expert at Deloitte Digital to see how industry leaders are getting ready for what’s coming.

To learn even more about GDPR, also don’t forget to sign up for the GDPR workshop!

You can of course also still get your Data Natives ticket here.

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Last year was full of exciting events. As soon as solarisBank received its banking license, a new
chapter was opened for the company, as well as for me. We faced a tough but an exciting challenge:
as a tech company with a banking license, we needed a strong BI team to provide the company with
a vehicle to drive business strategy with data. As the Head of BI, this meant that I needed to create this
department from scratch.

Throughout the year, I had a chance to attend several conferences where I met interesting and
inspiring individuals who were as driven by data as I am. Back then, I was looking for a teammate
who would help me with establishing the BI Department and creating processes that would help
transform the data collected into scalable and valuable knowledge.

In October, I attended the Data Natives conference here in Berlin, where I met Ofer Kulka. We had a
successful first meeting at the conference and we were both excited to have the same BI mindset, so
we decided to get to know each other better, have a more detailed exchange at our office, where he
would get to know more about the company, team and our mission.

And what can I say: It all worked out. In November, Ofer joined me at solarisBank to push our work
within the Business Intelligence Department forward. We have accomplished a lot in the past year;
we managed to create and develop workflows and processes to structure the company’s most
important data, in order to identify potential challenges as well as strategic opportunities.

We work closely with a wide range of stakeholders at solarisBank, therefore, it was important for me
to create a reliable and transparent team that manages to collaborate with stakeholders and support
the company in its development and evolution. With Ofer on my team, we managed to achieve this.
Despite our contrasting backgrounds, competences and our problem-solving approaches, we always
manage to find the best possible solution.

Exciting times are ahead of us as solarisBank is aiming to expand into Asia. Even more exciting is that
we are growing together with the company. We will soon have two more analysts joining our BI
team, who will help us overcome the new challenges that might come up along the way.

The Data Natives Conference last year was a great opportunity for me, in many ways. Ofer has been
a strong asset to solarisBank. Furthermore, I managed to not only expand my network with others in
the industry but also create a long lasting and strong partnership.

To learn more from Mari, get your Data Natives ticket here.

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Data Natives speaker Nasir Zubairi is the CEO of LHoFT Foundation (The Luxembourg House of Financial Technology), a public-private sector initiative that drives technological innovation for Luxembourg’s Financial Services industry and Luxembourg’s hub for FinTech startups. With two decades of experience in Financial Services, he has been particularly involved in the world of FinTech for the last six years. The entrepreneur has founded multiple and successful Fintech businesses and has served on an array of advisory boards for both government and the private sector. We spoke with Nasir about where Finance is headed, what companies are on the rise and how both banks and FinTech startups still have much to learn from one other.

1. How did you come to be the CEO of LHoFT?

I was appointed as the CEO of the LHoFT Foundation on 1st December 2016. I spent the first 13 years of my career working within Capital Markets at RBS, ICAP, HSBC and EBS across Europe, US and Asia. I have been immersed in the European FinTech and startup sector for the past seven years; ideating, building, selling, fundraising, pitching, pivoting, leading, mentoring, networking and just generally learning a lot! I moved to Luxembourg in March 2016 to be with my family, having previously commuted between Berlin and Brussels for 18 months. I felt that Luxembourg presented great opportunities in Fintech and I have been proven right. Luxembourg’s business environment is very friendly and powerful. Indeed, Luxembourg is the number one financial services center in the Eurozone. It is an EU hub and international competence center in banking, capital markets, investment funds, and insurance. It is Europe’s largest fund management center, and second in the world only to the US. Finally, Luxembourg has a long track-record of innovation and is ranked among the top 10 innovative countries in the world. Couple all that with Luxembourg’s accessibility – both to Europe and to senior decision-makers in financial services firms, talent pool, funding assistance such as The Luxembourg Future Fund, Luxinnovation and the Digital Tech Fund, strong community engagement and government support, and trilingual capability in business meaning that you can speak and apply to the Regulator in English, do business in English and contract in English (or French or German), and you have an ideal foundation to build an exciting and thriving Fintech ecosystem.

2. How receptive is the Financial Community in Luxembourg to new technologies and business models?

The community is key to what I believe drives Luxembourg forward. It is like no other; the access to senior decision makers and stakeholders is incredible and they are genuinely engaged and driven to make change happen.

3. What should startup founders focus on understanding about traditional banking that can help them improve their FinTech services?

I think the current barrier for startups is their lack of understanding of bank procurement processes. In their quest to partner with or service traditional financial institutions, they fail to address the needs of the institution and become frustrated with the process. “They just don’t get us” is the comment I hear from many a startup who are failing to make in-roads with the established players. Yes, banks have a lot to do in terms of adapting their process, but they have already done much. The startup can help a little more by understanding what the bank needs. One good example is financials. A startup will not have 5 year history, and will likely be far from profitable. A bank is looking to work with firms that will still be around in the next 3-5 years to provide continued service. Stating that you will raise venture capital next year is not good enough – it is a risk for the bank in terms of the startup’s solvency. The startup could try and present their numbers in a different way; strip out growth-related costs and demonstrate that their firm is financially robust and able to remain solvent and effectively service the bank they are trying to partner with.

4. What do traditional banks most commonly get wrong about FinTech?

That innovation is easy. Yes, ideas are two a penny, but execution is key to FinTech and being competitive in the world of tomorrow. Innovation in today’s world is a fast moving process and most banks are not set up to execute effectively, be it their procurement processes in partnering with fintech startups, or their own internal technology processes and incentive schemes to innovate effectively themselves. The ones that can adjust and speed up their processes will gain a competitive advantage that will be telling in the years to come.  

5. What needs do you see most rapidly growing in the financial services sector in the coming years?

The focus for several years will be on cost reduction. Too many Banks have eye-poppingly bad ROE and efficiency ratios, largely due to high costs in compliance and back-end processes. Implementation of solutions related to automation, big data and AI in the context of Regtech will be key. Also related to regulation, GDPR and PSD2 throw up interesting challenges and opportunities around open banking as well as blockchain, areas which are already hyped, but will attract even more attention as ideas become reality and value is delivered. The impact of FinTech on financial inclusion is also becoming a hot topic – technology is providing rapid access to the underbanked all over the world and presents a tremendous opportunity for new and existing players using technology to reduce costs in order to service new market segments.

6. Are there any particular companies or projects happening at LHoFT that you are particularly excited about at the moment? 

 There is a lot going on! We are very excited to be delivering a financial inclusion bootcamp for 12 incredible firms from developing markets – partnering with a great social impact fund manager, Finance in Motion, and with Village Capital from the US. Early next year we will move into a new 2,500m² facility where we can host around 30-40 startups as well as larger workshops and seminars. We will also look at hosting accelerator programs, potentially in Regtech, which we see as a core area of competence for Luxembourg given the prevailing industry. The startups we currently host are scaling very fast and winning customers (and awards!), adding value to the financial services industry and the Luxembourg economy through employment and innovation. We are driving a number of Industry projects, working with the community, which we hope to announce in 2018. We also look forward to doing more with our international partners in the US, Europe and in particular Asia. We are the only initiative in the world that has signed a collaborative agreement with NIFA (National Internet Finance Association) and have also signed an agreement with Tuspark Ventures, a subsidiary of Tsinghua University, expanding on the close relationship between China and Luxembourg.

7. What industry or technology would you be most interested in learning more about if you had the time?

 EdTech. Schooling is no longer fit for purpose. My kids learn the same things in the same way that I did 35 years ago. Kids today are very different, having been molded by an environment containing much more technology. They have shorter attention spans, need more engagement, and expect more from the learning process. There has to be a better way to prepare them for the future.

To hear more from Nasir, you can see him at Data Natives in Berlin this November. Serving as a judge at the Data Natives unconference, startups who apply on time will have the chance to pitch their ideas directly to him.

The financial technology field is rapidly expanding, but remains in flux and continues to be unpredictable. Fintech’s use of AI, algorithms, and modern technologies can transform traditional banking, but still faces some resistance. 

Some fintech companies are finding billion-dollar markets in the gaps left by outmoded banking services. Nevertheless, there are still many obstacles in the road before a complementary system is created that makes room for them both.

Should Banks be Scared?

 Banks are slow to come around to innovation, but with a little effort they can remain more competitive than ever. Newer digital standards and transparency laws even the playing field, and the institutions quicker embrace of new technology can position themselves better for success. Not all fintech startups are out to hurt banks, and in fact, many services use legacy platforms to bring them more customers.

One such example is ezbob, a new platform that has partnered with multiple leading banks, including the Royal Bank of Scotland. Ezbob’s platform sorts through data from over 25 sources in real time to create a seamless, automatic lending process for banks’ customers. The platform is not the first to streamline an old process using new tech, but it seems to be positioned to lead the Lending-as-a-Service (LaaS) industry.

Tomer Guriel, ezbob’s CEO, believes that LaaS is the future as bank need not be the only lender in town.

“Working with the banks is no easy task. I can tell you that we were trying for 4 or 5 years to partner with banks and luckily enough we decided to lend money ourselves using our platform. The company wouldn’t have been able to survive if we sat around waiting for a contract with a bank.”

 LaaS is one of the many ways that banking has been transformed very recently, and should show banks that all partners can benefit when efficiency is improved. Making real time decisions can cut overhead and help bankers to focus on the big picture while technology runs the show. In terms of LaaS specifically, some new startups are looking to use their peers’ modern lending services to enter the space without sacrificing equity to investors.

Swimming Against the Current

New fintech startups must be wary. Even as they aim to disrupt existing industries, new firms must be wary of regulations. Companies still need to be compliant with advertising, reporting, and product rules or risk potentially catastrophic fines and sanctions. Traditionally, the regulatory system has little to no patience for those who skirt the rules. Thus,
it is vital to build transparency and methods for ensuring that the data is infallible. Startups that consider these compliance issues from the outset have a big advantage in a fast-changing ecosystem.

Fintech companies that deemphasize this focus on regulations could face serious repercussions down the line. Founders must budget long waiting periods as regulators handle paperwork, spend time cultivating relationships with industry players, and prepare to exercise patience. The iconic, my-way-or-the-highway founder with tunnel vision on their ‘idea’, is hardly suited to fintech. Instead, the fintechpreneur is halfway between radical and traditional. A solid ability to navigate the currents of the conventional system is a must for new financial moguls.

Though technology is quickly moving to decentralize and disrupt the institutional banking industry, fintech startup founders should remain patient with regulation while the market embraces this evolution. Banks are still reluctant to embrace these startups, but fail to realize they can gain much more from adopting these technologies. Recent legislation in the European Union has shown that at least some countries have started to come around to fintech’s potential for innovation.

The Changing Horizon

In the wake of the 2008 financial crisis, new banking regulations have been steadily adopted in the EU and abroad. The mistrust that the financial crisis fostered in the public made strict, equitable guidelines necessary in order to repair the damage done to the industry’s reputation. These rules have made it easier for fintech companies to be compliant, and for existing banks to become more accountable.

One of the newest regulations involves e-invoicing and requires that all corporations sending digital invoices commence using a common system. This will purportedly help save billions for businesses and governments alike and is just a single step among the many that companies must take.

Others reforms that have passed in recent years include the PSD2, which standardizesmobile and internet payments, and the AMLD (Anti Money Laundering Directive), which hurts those who would avoid reporting income for tax avoidance, or worse, terrorism.

These rules are tough on old banks that had previously relied on a closed-ecosystem model for complying with lawmakers and maintaining decades or centuries’ worth of files.

The new laws that force them to open their books and processes make this information available to fintech firms, for use with APIs and other accessibility tools. However, it also puts new fintech businesses at the mercy of state government. Without a body of sensible legislators to reform old decrees, entrepreneurs and fintech startups must maneuver a narrow space.

Moving On

Whether their employer is slow or fast to pivot, ex-bankers who know the way the wind is blowing are flocking from big banks in droves. Some are intrigued by the technology, and some just want a piece of the venture capital flooding the fintech industry. All of them have one thing in common: knowledge of the old systems is priceless for a new contender.

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Financial markets offer countless ways of making (or losing) money. A key distinction among them is the investment horizon, which can range from fractions of a second to years. Previously, I sat down to talk about investing and data with co-founders of new investment management firms representing the high-frequency and low-frequency extremes: Walnut Algorithms and Global Systematic Investors. This time, I am speaking with Alexandru Agachi, COO of Empiric Capital, a data-driven asset manager whose stockholding horizon averages one month.

YOUR FOUNDERS HAVE A SATELLITE COMMUNICATIONS BACKGROUND. HOW COME?

Alexandru Agachi: Well, they are radio frequency engineers by training, so their core skillset is signal processing. These are people who spent their lives designing hardware and software that ultimately aims to deal with increasing the information-to-noise ratio in the tools that they use. In their case, these used to be antennas and satellite communication systems on airplanes and in the maritime industry as well as in defense systems. That whole field gives you exposure to a wide range of signal processing and pattern recognition techniques that can then be extrapolated to working with financial time series and financial data.

GIVEN THIS HIGHLY TECHNICAL BACKGROUND, WHY FOCUS ON STOCKS AND NOT, SAY, FINANCIAL DERIVATIVES?

AA: Our founders were creating this investment solution for themselves first, which is a reason you’d start with equities – the S&P500, the STOXX 600, large companies, liquid stocks, low turnover. They give you enough breadth that you can apply quantitative solutions and the idea behind everything we’ve done to date was also to do something original, because obviously, we’re not the first quant fund. When you’re asking that question, I imagine you’re looking at futures, at CTAs, and there are so many firms doing this very well. So we wanted to start everything from scratch. We started with proprietary pattern recognition models rather than factor models. It was not easy but it ultimately paid off because we ended up with much more original research than otherwise, and it’s starting to show.

IN THE FORM OF HIGH RETURNS?

AA: Well, in the form of quality of returns and therefore investor interest, I would say. In the form of being able to add something to investors’ portfolios, something that diversifies them, something that is not that correlated to everything else they already have in their portfolios. If you look at the CTA space, the top 20 CTAs tend to have an intra category correlation of around 70% from what I see, which is why you keep hearing more and more that the CTA space has been commoditized.

AREN’T THE SIGNAL PROCESSING TECHNIQUES YOU USE ALSO BECOMING COMMODITIZED?

AA: Absolutely. I think that you see a democratization of finance in general, including quantitative finance, but the barrier to entry is still very, very high. We estimate, for example, that we spent eight, nine years just building our back-test machine and we think that that’s the first thing a quant team should do because, without that, you’re blind.

BUT THE PATTERNS IN STOCK RETURNS THAT YOU EXPLOIT ARE LIABLE TO CHANGE AS A RESULT OF TRADING BY QUANT FIRMS SUCH AS YOURS…

AA: I think you’re absolutely right. So that’s one of the fundamental truths in investing. The markets are dynamic. They keep evolving, and that is part of why it’s such a challenging industry to be in, and we often say in the quant space that you judge a quantitative firm by its research program, not by where it is today. This also proves to be one of the main challenges for scientists and engineers who come into finance from deterministic universes – finance is a probabilistic universe and the structure of the data itself regularly changes, unlike in many other fields. So that’s why you obviously need to believe in your research program, in your ability to keep abreast with these changes in the market. I think these new strategies are certainly getting more and more popular, but we’re still far away from a place where the quant hedge fund space, which is now at about 930 billion dollars, changes the overall S&P500 market structure. It’s still tiny compared to the overall investment base of the S&P500.

DID YOU HAVE TO WORRY ABOUT OVERFITTING YOUR MODELS TO THE DATA?

AA: Well, to us it was simple because we started by spending nine months doing just theoretical research – experience based, but nonetheless theoretical, without any data. Once we came up with our first pattern recognition algos, we started testing them with market data and then refining and optimizing them. But we didn’t have to worry about overfitting because we didn’t start by doing data mining. So it was a very clean approach. Now, obviously, a lot of quant teams look for patterns in the data. Then, of course,  overfitting becomes increasingly important and you have to look into how they approach the problem and what patterns they find and how they come up with them in order to know just how worried you should be about overfitting. When we compare our backtest outputs with actual performance, it’s of course not perfectly matching, but it’s extremely close over the almost two years since we started live trading. So that’s why we have very good confidence that what gets output by our backtest machine is very close to what will happen in reality.

CAN YOU TALK ABOUT YOUR ACTUAL STOCK SELECTION PROCESS?

AA: We approach the problem entirely from an automated stock-picking perspective. So far, we have about 60 stocks on the long side at any point in time and then we have about a dozen stocks on the short side and that also is what drives our net exposure to the market. The idea is that the long arm is independent from the short arm, so each one of them scans our investment universe of 1,100 stocks every day and only invests where and if it sees an opportunity. And then the stocks in our portfolio every day compete among themselves and with the stocks outside of our portfolio.

TELL ME ABOUT THE DATA YOU USE

AA: The only data that we use in our investment system right now is end-of- day price data. It’s the most available and transparent data out there and the reason we’ve done this is because when you’re working in investment management, ultimately you’re trying to predict two things: returns and covariances. So that’s why we started working with hard data, which is the daily price data for all the instruments in our investment universe. The way we view it, you start with hard data and then you enter the realm of soft data, which includes accounting and sentiment data. What we’re going to start doing towards the end of this year, I expect, is to add these fundamental quant models and sentiment models, but these will be in our system as filters – for example, to tilt the portfolio or to eliminate certain stocks from a risk management perspective. That’s how we view the data world: you start with hard data, and then on top of it you add the soft data and you keep building up.

YOU SOUND CAUTIOUS ABOUT ALTERNATIVE DATA SOURCES…

AA: What you hear a lot with this soft data that get sold to funds is that there’s a very fast alpha decay with it. And you can easily notice a flurry of alternative data companies trying to sell data to investment firms, yet very few of the latter – none to my knowledge – have managed to build highly successful investment systems with alternative data at their core yet. But it will certainly be a key area of research for the industry in the years to come. Like the application of machine learning to investing, it is not an easy problem, but with enough time and work it can certainly be implemented successfully. Ultimately, to generate sustainable alpha you can look at data that no one else has or you can look at the same data as everyone else but in a different way, and these are the two ways that we explore in our quantitative investment system.

WHY DID YOU SETTLE ON PYTHON AS YOUR DEVELOPMENT TOOL?

AA: It was a very easy decision. If you go to things like C++ or Java, you’ll have software engineers specialized in those languages and they’re going to be perfectly fluent and comfortable with them, but they’re not at all as widespread as Python in academic departments. What we find is that you can go to a mathematics department, a statistics one, a machine learning one and people tend to be comfortable with Python and so are software programmers. If you go for other languages, you’re going to start having problems in terms of harmony inside the team. And as several of our team members have academic backgrounds rooted in research, and we also have academic partnerships in place, a versatile language that crosses from academia to industry was the right choice for us when we started.

IN ORDER TO ATTRACT INVESTORS, DON’T YOU HAVE TO SELL THEM A BLACK BOX?

AA: The human brain is by far the blackest darkest box out there, I think a lot of people overlook this. It’s such a fallacy to think that because you meet a fund manager once a year, which is a typical industry model, you know how they think – and especially how they think under stressful, on-the-job situations, and in a consistent manner over time, which is what really interests you when you judge a human versus a model. It’s important to put this in the context of the research done for the past couple of decades by experts, whether psychologists or behavioral economists, who specialize in studying the use of models versus experts. As the Nobel Prize Daniel Kahneman concluded after decades of research in this area, “Hundreds of studies have shown that wherever we have sufficient information to build a model, it will perform better than most people.” I always frame the debate in that framework. And what happens in the quantitative space, is that people who are comfortable with quant teams and with quant investment solutions always judge the research team, the people behind the models. And this is the right way.

WHAT’S YOUR TAKE ON THE FUTURE OF HUMAN ANALYSTS?

AA: Any part of investing where you have large amounts of publicly available data will be automated. Whether that’s going to be driven by a higher alpha from quantitative systems or whether it’s going to be driven by cost pressures at the industry level, I see automation coming. Automation is expanding from the two ends of the value-add spectrum in investing. – It is coming from the low- level end – passive, smart beta, and factor models, where quantitative systems have become the norm in recent years. And it is coming from the high- level end, with strategies exhibiting very high Sharpe ratios and uncorrelated return streams. If you look at the risk/ return profile of the top quantitative products in the world, and what they accomplished over often two decades of investing, they are unbeaten in the investment universe to my knowledge. And this is why the majority of them are closed to outside investors at this point. However, there are two caveats to that. One is data. Any subfield of investing where you lack large amounts of reliable data cannot be automated, and quants typically don’t even try to do that; without reliable data, quants do not see. The other one is the concentrated style of investing, which again is not suited to statistical frameworks and quantitative systems. Quantitative funds make small gains on large numbers of investments. The concentrated style where you have a ten-to-one leverage on one investment hypothesis and then it really works or really doesn’t work, it’s not something that quants do.

AND HOW WOULD YOU DESCRIBE THE EVOLUTION OF THE QUANT SPACE?

AA: It’s a fast-growing field that’s still in its infancy. I meet our peers all over the world and so many times you’d meet people who have been building firms for 20 years now with amazing academic reputations and they tell you, “Every week we still learn something new.” In the quant space we all feel that we’re still in the early days of quantitative investing. And what a lot of people don’t realize is that quantitative firms have come up with a whole new way of building an investment firm from the ground up. When you visit these quantitative firms, they are more akin to technology firms than to traditional investment firms. They’ve reinvented everything: the way they source the data, the way they do pre-trade compliance, post-trade compliance, risk management. It’s a whole new way of approaching investment, much leaner and in some ways much healthier. Many of these firms are bringing real teamwork to investing. The hedge fund space used to be dominated by the star manager model. When you look at quantitative firms, it’s completely different: even if you wanted to measure someone’s impact specifically, it would be very difficult because it’s all teamwork and incremental improvements every single day.

DO DATA SCIENTISTS NEED A FINANCE BACKGROUND TO SUCCEED AT AN INVESTMENT FIRM?
AA: Many quantitative firms have a bias for hiring people entirely from outside of finance. You hire scientists and engineers, with diverse experiences in machine learning, astrophysics, healthcare. Working with data is what they all have in common. They never worked in investing before, and once you hire them, they need to understand the problem set and the domain knowledge in finance, this is part of the challenge, of course. But once they do, it is amazing how quickly they start thriving with financial data.

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Now that business is moving nearly as fast as data does, the tech world is constantly forging new and exciting professional paths in a range of different industries – that is, if we know where to look for them. Timing is everything and disruption is still stronger in some areas than others. If you’re working in one of the industries below, Data Natives 2017 will be unpacking the major trends – and opportunities to come – in these fields and more.

FinTech: Bitcoin

There is always something new to touch on these days about Bitcoin.  Be over great successes or huge scandals, the cryptocurrency has been making waves in the news as much as in the FinTech world.  But if you’re seeking solid insights that sift out reality from underneath the sensationalism, we suggest sitting down with our expert Bitcoin panel, featuring Nasir Zubairi and Trent McConaughy. They will be discussing key aspects of Bitcoin’s success, as well as commenting on what the future holds for blockchain’s biggest financial story.

Learn more of the latest on Bitcoin by getting your Data Natives ticket here.

HealthTech: Public Data in Hospitals

Publically Generated Hospital Data (PGHD) was once limited to patients reporting their lifestyle choices, disease and treatment history.  Nowadays, advances in data science and a surge in wearable device sales has led the amount and the quality of patient data to skyrocket – reporting information to doctors at the same pace that people live their lives.  Also on the rise is AI’s capacity to process that data for the betterment of primary care. To shed light on this and other pressing topics in the field, expect a fascinating talk from  Bart Dewitte, director of Digital Health DACH at IBM Germany and Hannes Dahnke Head of Data Analytics at Philips Healthcare DACH based on anonymous public PGHD defining the future of diseases, hospitals and the patient/doctor relationship.

For these and other helpful insights into HealthTech, get your Data Natives ticket here.

Mobility: Data-Driven Businesses

Data is literally driving the future of mobility.  Everywhere you look, data science is reshaping car models as much as it’s reshaping business models – and German engineers and automakers have taken notice. With that in mind, Data Natives has set up a robust panel of experts from Porsche, Audi, BMW and Bosch to discuss “How to build a data driven business” for those seeking to satisfy both their inner engineer and their inner entrepreneur.  Startups like predict.io and German Autolabs  will also have much to discuss – including AI’s relationship with the automobile.  Reaching skyward, Fabian Werner and Stanlislaw Schmal from Lufthansa’s adept data analytics team will be exploring what many of those same ideas look like up in the air.

See what else is in motion at Data Natives.  Get your ticket here

GovTech: GDPR

General data privacy regulation will have a huge impact on an array of companies in the coming years.  Will you be ready when it’s rolled out in May, 2018? As the European parliament’s largest effort yet to protect the privacy of individual citizens, there is a lot to unpack, as well as a lot of opportunity for those who understand how to move forward. Those interested in what’s coming up for GDPR and other fascinating corners of GovTech should check out the Data Natives content from the impressively prolific Alexandra Deschamps Sonsino and Katharine Jarmul.

These are, (of course), only a few of the many game-changing trends out there.  To discover more,  get your Data Natives ticket here.

The rise of financial technology and digital payment solutions is helping the world go cashless. Cashless payment methods now cover a wide range of technologies – there are physical cards, online gateways, mobile apps, and digital wallets. Blockchain-enabled payments and cryptocurrencies are also on the rise.

Methods are enjoying varying rates of adoption but one thing is for certain – more people are willing to go cashless.

A Gallup poll showed that only 24 percent of Americans are using mainly or mostly cash. Another poll showed that 62 percent of people in the US think that they may see the death of cash within their lifetime.

Among these methods, it’s blockchain that’s driving the major disruption of financial services. At its core, blockchain is an immutable record book. It keeps a record of all transactions made on the system making it a fantastic tool for financial services.  With regard to payments, these developments are creating new ways for people to pay for their transactions.

Cryptocurrencies

Cryptocurrencies have emerged to challenge fiat currencies. Bitcoin is worth nearly $3,000 and those who have dismissed it as a fad might be feeling a tinge of regret not investing in it when it was just starting. A $50 investment in bitcoin in 2010 is worth millions today. Other currencies are on the rise as well. Ether and bitcoin cash, the second and third biggest cryptocurrencies, are worth around $270 and $380 respectively.

As more people invest and acquire these cryptocurrencies, merchants would do well accepting them for payments. More countries are declaring them legal. As such, cryptocurrencies are now finding use even in brick-and-mortar retail. In a major move, Japan declared bitcoin legal which prompted major retailer Marui to start accepting bitcoin for payments.

Mobile Wallets

Plastic cards remain relevant and not just because of how established they are in brick-and-mortar retail. They are also widely used as funding sources for many of today’s online payment gateways and digital wallets. For instance, PayPal, Apple Pay, and Android Pay are still funded mainly by credit or debit cards. Blockchain, however, can change this. Cryptocurrency-backed wallets don’t need to be linked to any other account which adds to their ease-of-use compared to these card-funded wallets.

In addition, blockchain mobile wallets could even serve as comprehensive platform for money management. UK-based bitcoin bitcoin wallet and debit card provider,Cryptopay offers a mobile wallet that lets users store and manage their bitcoin.

Users are able to send and receive bitcoin through their account and even sell bitcoins for euros or pounds. As an added option, they also offer users debit cards that are linked to their accounts. Thus, users can readily use their bitcoin to pay even if a merchant only accepts plastic cards and fiat currencies.

The company has big plans as the following illustrates.

“Many developments have already taken place that has accelerated the awareness and adoption of Bitcoin across the world. ATM’s, new currency exchanges, Bitcoin debit cards, educational programs, financial products being launched en masse and sensible regulations are all playing big roles in ramping up Bitcoin’s adoption.”

Companies like Cryptopay are truly banking on bitcoin and other cryptocurrencies as the de facto currency of global commerce. This type of radical futurism might indeed be the only way to drive mass adoption.

Cross-border Transactions

Blockchain and cryptocurrencies are also becoming valuable mechanisms for cross-border transactions and remittances. As blockchain technology matures, platforms are able to process virtually real-time transfers. Unlike traditional transactions that are often routed by payment processors through banks and clearing houses, blockchain transactions happen within the system so transactions complete quicker.

As a decentralized and distributed infrastructure, blockchain also costs less to maintain and operate allowing service providers the ability to charge less for their services. Bitcoin and blockchain remittance are proving to be popular in countries with deployed migrant workers. For example, the Philippines has an estimated 2.2 million overseas workers. Blockchain remittance services such as SendMoney.ph and Rebit.ph allow these workers to send money back home more affordably.

In addition, blockchain transfers can retain their full value in the cryptocurrency they were sent in. This is opposed to transfers in fiat currencies which are often converted to the destination country’s currency often with disadvantageous rates for the receiver.

Security

Among the appeals of going cashless is how it lets people avoid mishaps like getting their money stolen or physically losing bills and coins. In those cases, cash is often lost forever. Cashless users may also lose their phones but digital wallets are protected by several layers of security including the phone’s security and the app or service’s security measures so their money is kept safe.

One of the concerns regarding blockchain’s security is that it allows for pseudo-anonymity. Bitcoin users need not divulge their full identities in order to send or receive bitcoin. However, the great thing about blockchain is that all transactions are traceable. In addition, blockchain services are starting to be regulated by governments.

They have to comply with know-your-customer (KYC) and anti-money laundering regulations so using these platforms offer increased levels of security. Blockchain startup Civic even focuses on using blockchain to offer identity verification for businesses allowing for safer and verified transactions for everyone.

A Blockchain Payment Future?

Blockchain is set to change the way we handle money. Cryptocurrencies are currently enjoying a boom which means services can ride the high and gain traction. It only takes one service to reach critical mass in order to legitimize a technology and many of these startups are already showing promise. Consumers may have yet to fully warm to these blockchain services but the potential is truly there.

The money in your pockets has three basic traits – it’s tangible, centrally regulated and easy to counterfeit. Bitcoin is the exact reversal of it. Bitcoin is a cryptocurrency that operates independently without banking institutions and the government meddling into its affairs. There’s nothing physical about it – it’s all virtual!

It’s non-tangible, but renders gains for real. It flows freely, without anyone/anything controlling and tracking its footprints. And everyday monetary influences, be it either inflation or deflation, don’t regulate it, as its value is totally determined by market demand.

More importantly, Bitcoin transactions are irreversible. Once initiated, there’s no way to retract. Bitcoin transactions bear no costs, and can be done with absolute anonymity. Gradually, it’s becoming as regular as other monetary values in the market. However, with no government backing, Bitcoin holds relevance as long as online merchants accept it.

The History of Bitcoin

Bitcoin is the brainchild of Satoshi Nakamoto, who published a white paper on the invention on October 31, 2008, namely “Bitcoin: A Peer-to-Peer Electronic Cash System”, describing what Bitcoin is. It was on January 2009 when Version 0.1 of Bitcoin was released. And, soon, Satoshi and Hal Finney, a cryptographic activist, transacted in bitcoins.

During October 2009, an exchange rate for the bitcoin was established, which was US$1 = 1,309.03 BTC. This rate was decided after framing up an equation as to how much is the cost of the electricity to run a computer, generating bitcoins.

Bitcoin’s Journey into the Financial Mainstream Has Already Begun

In terms of worth, Bitcoin’s come a long way from its early days. Who would have thought that from US$1 = 1,309.03 BTC in 2009, the worth of internet’s favorite currency would shoot past US$2,900 in June 2017? The History of Bitcoin is not an easy one, and the infographic below will help you get an understanding of where it all began.

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Fintech is becoming an increasingly competitive market. A KPMG analysis saw investments decline in 2016 and investors are now more cautious about betting on segments that are becoming saturated. Lending and payments are two segments that saw increased participation over the past two years.

Competitors come in all forms. We now have traditional institutions, tech giants, and startups all competing for the same market. Despite this growth, fintech is still largely considered a “Wild West.” Governments are scrambling how to come up with new laws to regulate the industry. In addition, the jury is also still out for many of the fintech pioneers as some new business models such as peer-to-peer lending have yet to be proven successful.

Companies should leverage all possible sources of competitive advantage. Business intelligence (BI) and analytics are emerging to be ideal sources. Much has still yet to be made sense of in fintech and the first companies to be able to do so will surely have a definitive advantage over the competition.

Here are 3 ways BI is changing the game for fintech.

Monitor user behavior and market trends

Fintech is still in a state of flux. Traditional institutions are aggressively trying to cope and many of the new services have yet to reach critical mass. It is in these early stages where BI is crucial for fintech efforts. BI helps track usage and market trends. Data analysis can limit uncertainty and uncover trends that could guide companies to improve their strategies early on.  What’s more, many online trading platforms are looking into sophisticated BI solutions.

Robo-advisor startups like Wealthfront and Betterment came into the scene looking to disrupt the investment segments through their easy-to-use apps. Yet, investment mainstay Charles Schwab was able to compete against these upstarts by offering their own robo-advisor service. Schwab Intelligent Portfolios now has over $10 billion in assets under management. A key part of how Charles Schwab took on the project was relying on speed and early feedback and testing in order to come up with a viable service.

In another recent development, end-to-end BI service provider CoolaData announced its integration with trading platform MetaTrader. This integration allows brokers access to enterprise-level BI and behavior analytics. Through analytics, traders can get valuable insights on what market conditions are affecting their performance.

“With Cooladata and the new MetaTrader integration, the ability to unify all trader activities and get any insight as to how market scenarios are impacting the company performance is finally here,” said Mr. Daniel Kibel, CEO of CMTrading.

Improve user experience

One of the supposed advantages of tech firms over traditional banks when it comes to fintech is the expertise in crafting superior user experience. Traditional banking isn’t exactly known to offer a pleasant experience. The convenience brought about by online and mobile apps and services is expected to be a key point of disruption in the financial services industry.

Amazon’s rise as a digital retail giant is due to its superior user experience. 1-Click or the functionality that allows customers to check out with a single click of a button is considered an innovation worth billions. This innovation was largely made possible by studying data on user behavior during the purchasing process and creating a way to trim down on the time spent checking out.

We could expect user behavior data in fintech applications and services to be gathered extensively for similar purposes. In the case of stock trading, for example, most experienced traders consider stock trading as a multi-screen activity hence their reluctance to jump on to exclusive mobile trading. Those new to trading, however, benefit from a streamlined and intuitive interface. Free stock trading app Robinhood targets the 18-24 demographic which is composed mostly of users who are starting out in stock raiding for its service. Its easy and intuitive onboarding experience has been key to its appeal and initial success.

Increase security

Another area where BI and analytics is seeing much use is in security and fraud detection. Fraud has been a major issue in ecommerce payments. A report from Radial reveals that overall fraud is up 30 percent year on year. Just this year, there has been a 200 percent increase in “testing” or when fraudsters try small purchases to check the validity of stolen credit card numbers.

Behavioral analytics plays a huge role in determining fraudulent behavior. Analytics can track and identify patterns which could reveal fraudsters’ modus operandi. This way, merchants and payment processors could put up safeguards against such attempts. The data can also be used to refine automated fraud prevention protocols to minimize instances of legitimate transactions being flagged as fraudulent. Legitimate users who encounter such issues often consider it poor user experience to be denied and can eventually become a lost customer for the business.

Other fintech segments need to be ready with such measures as well. Fintech services will be a prime target for cybercriminals due to the wealth that they are managing. The proper implementation of BI and analytics can guide prevention strategies.

Fintech companies must consider investments in BI and analytics early on. Implementing analytics across all facets of the fintech service has several benefits. Analytics could help reveal better ways to engage the market, create a superior customer experience, and safeguard the business and its clients. The insights that a business could get from its data efforts and the consequent decisions it makes based on these insights could very well determine its success in a highly competitive environment.

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Image: Fintech, Technology and Finance, by CafeCredit, CC BY 2.0

As your business succeeds, there will come a point when you have to expand your market. A research by Accenture predicts that B2C ecommerce will reach $3.4 trillion globally as more people around the globe prefer purchasing online. Forrester also expects more B2B purchases to shift online as well. Because of this, you may consider going cross-border in your region or even global to grow sales for your standout product or service.

However, before taking this big step, you need to make improvements to your ecommerce platform and even your business processes to ensure that everything works for your new markets. Aside from figuring out logistics, pricing, and localization, you should also be reviewing the payment methods that you offer. Payment methods are critical to getting cross-border ecommerce to work.

Preferred Payment Methods Vary

Much like there is no universal currency, there is no definitive payment method that is accepted by all consumers and merchants worldwide. Each region or country would have their own preferred payment method.

In the US, cards dominate payments. Despite the rise of payment service providers (PSPs) such as PayPal, digital wallets such as Apple Pay and Android Pay, and even brand loyalty cards, most of these services still require the use of credit or debit cards as funding sources. What these technologies essentially provide is a layer of convenience for users so they don’t have to manually input their credentials to pay for online purchases.

European countries are leading the world in going cashless. Take Sweden’s case for example. Due to cooperation between their banks and an evolving financial technology scene, the Swedish can use their bank accounts for most financial concerns such as receiving salaries, savings, loan applications, and payments. This focus on bank accounts is shared by other European countries.

“The use of online banking is on the rise throughout Europe, due to the increasing convenience and simplicity for consumers to access their bank accounts via the online channel. As a consumer the online bank account is your primary funding source, your true digital wallet,” said Johan Nord, Chief Commercial Offic of Trustly, a Swedish Payment Services Provider (PSP), commenting on Europeans’ money habits.

Lack of Payment Methods Leads to Lost Sales

Nearly half of online shopping carts are abandoned at the payment stage. According to a Baymard study, among the reasons for abandonment isnot having enough payment methods available.

In less developed countries such as some in Asia, cash remains king. Despite having high rates of technology adoption, countries such as the India continue to be cash dependent. Banking and card penetration remains low so even with online purchases, merchants are compelled to provide cash-on-delivery (COD) payment options.

Amazon, which generally accepts credit cards and even has its own gift card in the US, had to accommodate cash-on-delivery as means of fulfillment when it expanded to India. A staggering 83 percent of Amazon India transactions are COD which represents a significant part of market Amazon could have lost if COD wasn’t available. Other ecommerce players Flipkart and Snapdeal also had to do the same.

PSPs Enable Cross-border Payments

Clearly, failing to cater to the generally accepted payment method in a particular market can be detrimental to your cross-border efforts. However, even payment processing can be complicated depending on the market’s preferred payment method. This is where PSPs can help out.

Trustly rides on Europe’s debit-centric mindset to enable merchants to accept payments through customers’ bank accounts for online transactions. This financial mindset is prevalent in Europe, allowing Trustly to expand their presence to 29 other European countries.

Elsewhere, a huge part of the appeal of partnering with processors like PayPal is that they provide means of accepting credit card payments. Enabling your ecommerce site to directly accept card payments requires considerable effort to comply with Payment Card Industry (PCI) standards. Using payment processors, you can readily accept payment from major card companies. In some jurisdictions, PayPal can also draw from bank accounts as funding source.

PSPs also simplify administration. Without a provider, you may be looking at directly creating agreements with banks and other entities in order to handle payments from abroad. Since they handle all the integrations with banks and card companies, you only have to deal with them in order to be able to accept these payment options.

Security and Chargebacks Are Concerns

But aside from allowing a variety of funding sources, the providers can also offer security for you and your customers.

Security continues to be a growing concern in today’s ecommerce. Because of the amount of customer information contained in ecommerce sites, they become prime targets for data breach attacks. By using a PSP, you can add the layer of security for your service.

Chargebacks and fraud become even more pressing concerns in cross-border ecommerce, both of which are risks when you accept cards for payments. Fraudsters particularly prey on retail since they effectively get their score through the value of the item they buy using stolen credit card numbers. In cases of chargebacks, merchants risk losing not only the cost of the item but also shipping and other logistics costs as well.

Among the appeals of the use bank accounts and fund transfers is that, unlike credit cards, chargebacks aren’t a concern with fund transfer. It also uses two-factor authentication and uses the bank’s system to verify purchases to ensure that the payment attempts are legitimate.

PSP Choice is Crucial

Going cross-border requires much preparation. As money habits vary per region, making sure that your ecommerce platform accommodates a wide range of payment options is key to serving these different markets. It is important to partner with PSPs that not only allow you to accept payment methods preferred by your new prospects but also has features that simplify the process. By avoiding the worry of payments, you can focus on working on other things that matter such as localization and pricing strategies. If all things go well, expanding your market would only help your company grow.

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In 2016, global market uncertainty seemed to make investors somewhat more cautious, thanks to the results of the votes in the UK and the USA. However, fintech’s stellar run did not come to a halt. According to the February report by KPMG, venture capital investment in the space rose 7%, totalling $13.6 billion. Overall investment in fintechs hit $24.7B, thanks to evolving technologies, and the success of companies focusing strongly on providing outstanding user experiences.

The only one among all regions, Europe saw its fintech venture investment grow in volume. It grew from 230 financings in 2015 to 242 in 2016. While 2016 almost amounted to a “golden age” for attracting venture capital investment, 2017 is expected to be even more impressive. This time, however, the focus lies in cooperation. Traditional banks, financial institutions and insurance companies seem to recognize the importance of being efficient and customer focused. However, more often than not, these institutions lack the knack for UX and innovative design that fintech thrives on. Many of these ‘traditional’ institutions have realized they cannot make this transition alone. Instead, they have started partnering with fintechs in order to advance their own capabilities.

The desire to innovate versus the ability to do so

Banks are highly regulated and usually unable to offer fast, customer-oriented service. But banks have been the backbone of modern economies and count with large sales and customer service forces. Fintechs, on the other hand, are flexible and generally successful at focusing on specific segments with unmet needs. Most banks see AI & machine learning as a way to to reduce costs. They are targeting promising fintech companies as a means to expand globally.

Case in point: Santander doubled investment in its fintech fund. Goldman Sachs invested in startups ranging from financial product comparison platforms  to commercial real-estate investment startups. Creamfinance, a European alternative lender, has recently managed to snap an impressive €21M investment from the third biggest South African bank. Once ranked as the fastest growing fintech in Europe, the company capitalizes on machine learning and advanced smart data algorithms to evaluate and score personal loan applications in an individualized manner.

The early bird gets the worm

Matiss Ansviesulis, co-founder & CEO of the Poland-based Latvian company, announced that the recently concluded €21 million deal was part of a series B financing with Capitec Bank Holdings Limited. This sizeable investment in just one company serves as a sort of confirmation of KPMG’s prediction that slower funding in the online lending space could be a sign of market consolidation. A select group of companies is already emerging as winners.

“Given their expansion and focus on operational excellence, Creamfinance has emerged as a leading personal finance provider in Europe.” said Gerrie Fourie, CEO of Capitec. “We are impressed by Creamfinance’s focus on Smart Data scoring.  Their business model was developed in such a way that new countries can be entered swiftly and efficiently. This requires limited investment in local infrastructure”.

Using the power of fintechs to go global

The motivation behind the bank’s investment becomes a little more evident. Creamfinance’s business model is a very attractive one. Besides, the long-term interests of both companies converge in a very simple point: Capitec wants to integrate cutting-edge financial technology in its worldwide operations. The biggest incentive for banks to join forces with their more agile counterparts is getting to test different solutions quickly and cost-effectively. This, in turn, accelerates market entry throughout the whole process –  from idea to execution.

“We believe that Creamfinance will provide Capitec’s management the opportunity to gain experience in entering and operating in foreign countries. Specifically, in advancing credit in the international and online environment and to work with a foreign partner to manage an international business,” Capitec said.

Creamfinance anticipates that the investment will allow the company to expand faster. This will facilitate their global mission to make finance more accessible.

“We are excited about this investment from a leading bank that emphasizes technology and operational efficiency, and that acknowledges our ability to scale fast”, said Matiss Ansviesulis. “This investment also marks a potential new beginning in fintech and banks cooperation, especially since so many hold opposing views“

Banks and fintechs, instead of Banks versus fintechs

Ansviesulis’ point is but a clear sign of the current climate in fintech. The most important implication of the Capitec investment in Creamfinance for financial service providers and consumers is that it attests to the growing momentum that bank-fintech cooperation is gaining, after years of perceived rivalry.

Working with startups positions banks as more innovative. Such partnerships create value for banks as the solution is often designed around model innovation and operational excellence. For startups, the union brings stability and financial backing. It’s rather a win-win partnership where both sides add value. Collaboration in Europe has seen many different iterations. We’ve read constant news about new fintech accelerators, the acquisitions of promising companies, and direct investments in startups through corporate funds. “There’s a lot of potential for even more significant changes”, Ansviesulis says. “Building effective partnerships between banks and fintechs will create a new, re-invented digital future”.

We can expect this digital future to reach us sooner rather than later. The ongoing trend of banks and fintechs instead of banks versus fintechs has already started yielding results for adopters. As Business Insider reports, 54% of incumbents in the UK reported increasing revenues and decreasing costs. They also reported an overall boost to their brand after forming partnerships with fintechs. Research by Finextra shows similar sentiment rising in the Nordics. There, 74% of banks have set their sights on collaborating with fintechs in 2017. The possibilities for innovation seem endless. The majority of interviewees for the 2017 Fintech Disruptors report agree that this phase of increased collaboration is creating a “virtuous circle of technology adoption.” This will increase profits and help define new technology standards.

The outcome will be a win-win-win

In the end, the biggest winner is the consumer. Further collaboration will bring forth better, faster, simpler, user-centric service. This will offer consumers new possibilities to improve the way they approach personal finance.   

Fintechs seeking investment could learn a thing or two from Creamfinance and other bank-friendly startups. For banks and fintechs, cooperating instead of disrupting each other’s business seemed unfathomable a few years ago. Now, it increasingly looks like a match made in heaven.  

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Financial markets offer countless ways of making (or losing) money. A key distinction among them is the investment horizon, which can range from fractions of a second to years. Walnut Algorithms and Global Systematic Investors are new investment management firms representing the high-frequency and low-frequency sides, respectively. I sat down to talk with their founders about investing, data, and the challenges of starting up. Part 1, my interview with Guillaume Vidal, co-founder and CEO of Walnut Algorithms ran last week. Below is my talk with Dr. Bernd Hanke, co-founder and co-Chief Investment Officer of Global Systematic Investors.

What is the origin of Global Systematic Investors?

Bernd Hanke: It came from all of our backgrounds. I did a PhD in finance and then worked for two systematic asset managers. In other words, managers who use systematic factors in order to do individual stock selection, quantitatively rather than using human judgment. Obviously, human judgment goes into the model when you select factors to forecast stock returns, but once you’ve built your model, the human element is reduced to a necessary minimum in order to try to remain disciplined. So that was my background. Both of my partners used to be in a portfolio management role at Dimensional Fund Advisors and one of them has always been very research-oriented. They both come from the same mindset, the same type of background, which is using systematic factors in order to forecast asset returns, in our case, stock returns.  

How has your strategy evolved over time and how do you expect it to evolve in the future?

BH:  We’ve worked on the strategy for quite some time, building the model, selecting the factors, working on the portfolio construction, on basically how you capture the systematic factors in an optimal, risk-controlled manner that is robust and makes intuitive sense. We developed the model over several years and we will keep enhancing the model as we continue to do more research. We are not making large changes frequently, but we gradually improve the model all the time, as new academic research becomes available, as we try to enhance some of these academic ideas, and as we do our own research.

There is a commonly held view that in today’s markets, investment strategies are increasingly short-lived, and so they stop working quickly. You don’t share this view?

BH:  We are using a very low frequency model, so the factors we are using have a fairly long payoff horizon. I think when you talk about factors having a relatively short half-life in terms of usability, that is mostly true for higher frequency factors. If you back-test them, they sometimes look like there’s almost no risk associated, just a very high return, and then obviously as soon as people find out about these factors that almost look too good to be true, the effects can go away very quickly. Instead, we are looking at longer-term factors with a payoff horizon of several months or sometimes even a year. We recognize that there’s risk associated with these factors, but they have been shown to be working over long periods of time. In the US you can go back to the 1920’s studying these factors because the data is available. In other regions, there’s less data, but you have consistent findings. So as long as you are prepared to bear the risk and you diversify across these long-term factors, they can be exploited over long periods of time.

What kind of long-term factors are we talking about?

Our process is based on a value and a diversification component.  When people hear “value”, they usually think about a book-to-price ratio. That’s probably the most well-known value factor. Thousands of academics have found that the value effect exists and it does persist over time. It has its drawdowns, of course, the tech bubble being one of them, and value actually worked very poorly, but then value came back strongly after the tech bubble had burst. We’ve broadened the definition of value. We also use cash flow and earnings-related factors, and we are using a factor related to net cash distributions that firms make to shareholders.

We are also using a diversification factor. We are targeting a portfolio that is more diversified across company sizes and across sectors than a market weighted index.

And the advantage of being more diversified is lower volatility?

BH:  Not necessarily. Stock-level diversification actually increases volatility because you’re capturing a size effect. You’re investing in smaller companies than a market-weighted index would. But smaller companies are more risky than larger companies. So if you tilt more towards smaller stocks you actually increase the risk, but you also increase returns. On the sector side, the picture is quite different. By diversifying more across sectors than the market-weighted index does, you get both lower risk and higher returns.   

Does the fact that your factors are longer-term and riskier mean that it could take you longer to convince an outside observer that your strategy is working?

BH:  Yeah, that’s true. That’s one of the luxuries that high frequency funds have given that their factors have such a short payoff horizon. They only need relatively short periods of live performance in order to demonstrate that the model works, whereas someone who uses a lower frequency model needs a longer period to evaluate those factors.

So what are the benefits of going with such a slow-trading strategy compared to a fast-trading strategy?

BH:  One big advantage is of course that these long-term factors have a much higher capacity in terms of assets that you are able to manage with these factors. It is more robust, in the sense that even if liquidity decreased and transaction costs increased, it wouldn’t really hurt the performance of that fund very much because the turnover is so low. Whereas for high-turnover, short-term strategies, transaction costs and liquidity are obviously key, and even slight changes in the liquidity environment of the market can completely destroy the performance of these strategies. Another advantage related to that is that with lower frequency factors you can also go into small capitalization stocks more. You can tilt more towards small cap because you’re not incurring much turnover even though small cap is more costly to trade. And in small cap there are often more return opportunities than in large cap, presumably because small cap stocks are less efficiently priced than large cap stocks.  

Once you settled on your investment strategy, was it obvious to you how you would monetize it, that you would go for the fund structure that you have today?

BH:  The fund we have now is a UCITS fund. We were looking at different legal structures that one could have. It also depends a little bit on who you want to approach as a client or who you might be in contact with as a potential client. If you’re talking to a very large client for example, they might not even want a fund. They might want a separate account or they may have an existing account already and then they appoint you as the portfolio manager for that account. So then the client basically determines the structure of the fund. If it’s a commingled fund as ours, then there are a couple of options available. Some are probably more appealing to just UK investors and some are more global in nature. The UCITS structure is fairly global in nature. It tends to work for most investors except for US investors who have their own structures that differ from UCITS.

What would be your advice to people who think they have a successful investment strategy and are thinking about setting up their own fund?

BH: Well, my advice would be, find an investor first. Ideally, a mix of investors. So if one investor backs out, then you have someone else to put in. That’s obviously easier said than done. But I think that this is quite important.  

How dependent is your strategy on getting timely and accurate data?

BH: For us, timeliness is not as crucial as for high frequency strategies. Obviously, we want to have the latest information as soon as possible, but if there was a day or perhaps even a week delay in some information coming in, it wouldn’t kill our strategy.  

But data accuracy is very important. Current data that we get is usually quite accurate. The same cannot necessarily be said about the historical data that we use in back tests. In the US, data is fairly clean, but not for some other countries. All of the major data vendors claim that there is no survivorship bias in the data. But it’s hard to check, and accuracy is often somewhat questionable for some of the non-US data sources in particular. We’re not managing any emerging markets funds, but even in developed markets going back, there tend to be many problems even for standard data types such as market data and accounting data.

And the data sources that you are using now are mostly standard accounting data?

BH:  Yes. There are some adjustments that we could make and that we would like to make. For example, one fairly obvious adjustment would be to use more sector-specific data. If you are just thinking about a simple value factor which some people measure as book-to-price, it’s basically looking at the accounting value of a company relative to the market value of the company. You could call the accounting value the intrinsic value of the company. You could measure that differently for different industries. For example, if you think about the oil and gas industry, you might want to look at the reserves that these companies have in the ground rather than just using a standard book value. For metals and mining companies, you could do something similar. Other industries also use other sector-specific data items that could be relevant for investors. Most accounting data sources now incorporate quite a lot of sector-specific data items. One issue is that the history is usually not very long. So if you want to run a long back test using sector-specific data, that is usually not feasible because that type of data has typically only been collected over the last few years.

What role do you see for data science and data scientists in investment management now and going forward?

BH: Right now there is a huge demand for data scientists. That, however, is mostly in the hedge fund area. It is much less for long-only funds. We are managing a long-only fund. There are some quantitative asset managers, that manage both long-only funds and hedge funds, and they might be using a similar investment process for both. So these managers may hire data scientists even to work on the long-only portfolios, but it’s mostly systematic hedge funds and it’s mostly the higher frequency hedge funds. Different people refer to “high frequency” in very different ways, but what I would call “high frequency” would be factors with a payoff horizon of at most a couple of days, maybe even intraday factors. So those types of hedge funds seem to be the ones hiring the most data scientists at the moment.  Also, new service providers keep popping up that employ data scientists and they then sell services to hedge funds, such as trading strategies or new types of data sets.

How valuable are these non-standard or “alternative” data sources?

BH:  The data is there and we now have the computational power to exploit it. So I think it will become more useful, but it’s a gradual process. Everybody talks about big data, but I think right now only a small minority of funds have successfully employed non-standard or unstructured data sources (commonly labeled “Big Data”) in their strategies in a meaningful manner. For some types of non-standard data, I think there there’s an obvious case for using it. For example, credit card payment data can help you see whether there are particular trends that some companies might be benefitting from in the future, or looking at the structure of the sales and trying to use that in forecasting, and so on. And there are other data types where it’s probably more doubtful whether the data is useful or not. There is some tendency at the moment, I think, to be over-enthusiastic in the industry about new data without necessarily thinking carefully enough about formulating the right questions to investigate using the data and doing thoughtful data analysis.

Where do you see investing heading, in terms of passive versus active strategies?

BH:  One trend is away from traditional active. Most institutional investors have come to the conclusion that traditional fundamental active long-only managers have underperformed. So, many institutional investors have moved to passive for their long-only allocation, or if not passive, then to what is often referred to as “semi-passive” or “smart beta” strategies. These are mostly one-factor strategies, where the assets, often in an ETF, are managed according to one factor such as a value factor. For example, fundamental indexing uses a value factor composite and that is the only factor. There are other strategies, such as minimum risk and momentum. Everything that is not a market weighted strategy is active, strictly speaking, but often investors refer to strategies that use fixed rules that are made publicly available to every investor as semi-passive.

And then at the other end of the spectrum, you have hedge funds, and it used to be the case that systematic or quantitative fund managers, both long-only as well as long/short managers, mostly used similar factors. That became very apparent in August 2007 during the “quant liquidity crunch”. Basically what happened was that most quantitative investors were betting on the same or very similar factors, and once more and more quant investors had to liquidate their positions, that caused the factors to move against them in an extreme manner. So most quant factors had huge drawdowns at the beginning of August 2007. Then after 2007-2008, hedge funds attempted to move away from these standard factors to more proprietary factors as well as to non-standard data sources, and at the same time more and more data became available. I think systematic strategies used by many hedge funds now are actually more different than they used to be in 2007. However, the opposite might be true for many smart beta strategies. So, hedge funds are often trying to limit their portfolios’ exposures to standard factors used by the smart beta industry. Whether they are able to do this successfully remains to be seen. If there is going to be another quant crisis, that might be the acid test.

So that’s been a fairly significant change over the last 10 years.  If you had a crystal ball, what would be your prediction of how things will be different 10 years from now?

BH:  One prediction I would make is that smart beta is not going to remain as simplistic as it often is at the moment. Most likely, it will be developed into something that we had before 2007 in quant strategies. People will probably combine fairly well-known smart beta factors like value, momentum, low risk into multi-factor strategies rather than offering them separately for each factor and so that then investors have to combine the strategies themselves to diversify across factors. It is more efficient if the investment manager combines factors at the portfolio level because these factors, to the extent that they have low correlation, often partially offset each other. This means that trades based on different factors can be netted against each other and this saves trading costs. That is happening to some degree already. Several managers have started offering multi-factor smart beta portfolios.

On the hedge fund side, I think the prediction is going to be more difficult. It remains to be seen how successful artificial intelligence and machine learning strategies turn out to be, and it also remains to be seen to what extent new data types are exploitable in terms of predicting subsequent stock returns and risk. My suspicion is that there are going to be many disappointments. Some new data types will be worthwhile but many probably won’t be. Similarly for machine learning and artificial intelligence. It is likely that only a small subset of today’s tools turn out to be useful.   

Do you see fintech companies making headway in investment management, either as asset managers or as suppliers to the industry?

BH:  Oh, definitely, on all sides. Robo-advisors being one of the big ones, I guess, that could change a lot how the asset management industry operates. And it’s in all areas, also other service providers, portfolio analytics providers and so on. There’s a lot of development in this area currently, which is probably a good thing. In terms of data vendors, for example, there is still a strong oligopoly consisting of Thomson Reuters, FactSet, Bloomberg and S&P who sometimes charge inflated prices for their data. And the data often isn’t particularly clean. Even worse are some of the index providers like MSCI, FTSE and S&P. They are offering very simple data at exorbitant prices. They are not really charging clients for the data. Instead they are charging them for usage of their brand name, for example, for the right to use the MSCI name in their marketing material. Now there are more and more fintech companies that are offering the same service, except for the brand name, at much lower cost to the client.

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Image: Michael Dunn, CC BY 2.0

Financial markets offer countless ways of making (or losing) money. A key distinction among them is the investment horizon, which can range from fractions of a second to years. Walnut Algorithms and Global Systematic Investors are new investment management firms representing the high-frequency and low-frequency sides, respectively. I sat down to talk with their founders about investing, data, and the challenges of starting up. Below is my talk with Guillaume Vidal, co-founder and CEO of Walnut Algorithms. Stop by next week for Part 2, my interview with Dr. Bernd Hanke, co-founder and co-Chief Investment Officer of Global Systematic Investors.

Why did you call the company “Walnut Algorithms”?

Guillaume Vidal:  Because walnuts look like small brains, and from a startup perspective, it was fun, like Apple and Blackberry. It also shows that we were a bit like a walnut tree created out of intelligent algorithms and we felt that it’s important to put “algorithms” on the back of that. So we thought that mixing “walnut” and “algorithms” was fun and it was a good image.

And how would you summarize what you do?

GV: We apply the latest advances in artificial intelligence to systematic investment strategies.

Was that the idea from the beginning, or did you pivot at some point?

GV: I think it came quite naturally. The six co-founders’ backgrounds in artificial intelligence, investment management and finance made us think there’s definitely something to do there. We looked at a lot of AI startups and many of them wonder what they should be doing with AI, as we realized. One of the best AI startups in France is called Snips and even they had a hard time coming up with a product. We focused from the outset on financial services and investment management and that for us was very amenable to AI. We did take a bit of time to find the right business model, which for us now is actually managing capital and advising capital depending on the regulatory definition. But in the beginning it was really a bit naïve saying, “okay, we want to apply AI”. We want to do what DeepMind did with their reinforcement learning or AlphaGo. They are incredibly powerful algorithms and we want to apply that to investment management, and these are algorithms that are four, five years old at most. They are made possible by improvement not only in the AI but also in access to data, coding languages with the right libraries, as well as computing power via Google Cloud or Amazon cloud. It’s a sort of a mix of things that allows this. I would say the most difficult, maybe the luckiest part for us was to be able to have that combination of skills. I think that the biggest barrier to entry is actually that combination of AI, computer science, quantitative finance and business skills.

What financial instruments do you focus on?

GV:  We focus on liquid equity index futures in the US and Europe, because we need both liquidity and low trading costs, you can go long or short without extra cost.

How did you look for your business model?

GV: We started by saying that AI for finance works. It will work. There is no doubt about that. The question is, who is going to make it work? And it will be very, very valuable. If it’s just research, if it’s just one big sale kind of product or if it’s research fees from selling into hedge funds, or you partner with a hedge fund, would you be absorbed by a hedge fund, would you provide signals, would you do consulting work, would you create your own hedge fund, all of those were potential business models that we looked at. When we applied to Startup Bootcamp and when we went through the selection stages we were actually telling them that we didn’t really have a business model and they were fine with it.  Now we are starting with separate managed accounts. This is quite standard in finance. A lot of CTAs do that. The fund structure might be something at a later stage, as it involves heavier compliance and regulatory issues, and is costlier and time consuming.

So what is innovative about generating trading signals with machine learning?

GV: Traditional systematic strategies are rule-based. A systematic strategy that you would code, for example, on Quantopian, you would say, “oh, if these three moving averages cross and I’ll have my yearly pivot at this level, or if my relative strength index is above a particular threshold, then I buy or sell”. And these are fixed rules. What we’re building, is a machine that does not have fixed rules,they are more flexible. A machine learning algo can continuously evolve and actually look at market configurations, classifying buy or sell signals with confidence levels. It’s a bit like a trading floor where you have a number of traders, and in our case it’s a number of robo-traders which are individual AI algorithms, and we have a portfolio manager which is the cash allocator which uses those underlying signals provided by the different AI algos and optimizes the capital to allocate to those individual signals based on the risk constraints and the exposition constraints, long and short and per instrument, per geography et cetera.

It seems that your clients have to be sophisticated enough to appreciate what you do but not so sophisticated that they can do it themselves.

GV: There’s more than 80,000 funds worldwide. Of course a portion of that is interested in it and the people we talk to are even hedge funds themselves. But sometimes they just have a global macro strategy or a credit strategy or some other form of non-systematic strategies. I would say that internal quant teams sometimes are not necessarily staffed enough to do what we’ve been doing.

We coded everything from A to Z with 12, now reaching 15 people soon, all scientists, and we have to code the entire infrastructure and we have to do research, we have to do all of that. A number of those more traditional funds, sometimes they will hire one PhD and say, “let’s let him work on one problem and let’s let him try to enhance one of our systems with machine learning”. It doesn’t necessarily work because maybe you need a collaborative and creative culture, often found in startups, rather than just having one PhD doing some data science on the side working in collaboration with one of their quants. We really work in a tight group, brainstorming all the time, bringing computer scientists, mathematicians, AI scientists, all these skills together to think what actually works, what should work, how should we code this, how should we design this. It requires an innovation mindset.

Established hedge funds have been running with their own systems for 20 years maybe and they have their strategies, long-term systematic or long-term trend-following or whatever, and coming up with something completely new, hiring new people, bringing in internal research in-house is difficult. Some try it. I would say the most sophisticated succeed and these are hedge funds like Renaissance Technology, Two Sigma, Winton. It’s very opaque, we don’t necessarily know exactly who’s doing what, but probably they have some of that.

And these hedge funds’ algorithms will interact with yours in the markets. Do you have a line of defense against that?

GV:  I think there are two main things. One is that for now we’re a lot smaller, and we don’t necessarily focus on the same asset classes. The larger ones have to be in very deep, very liquid markets. These funds have very different investment strategies on multiple timeframes so they can invest from high frequency to yearly trend following, very probably. When you have 60 billion under management, you have no choice but to actually scale to every asset. As we have very minimal assets under management to begin with, we create intraday strategies on specific assets.

The second part is this. When you look at all the systematic trend following CTAs, they typically have an 80 to 90 percent correlation, because they’d be following the same trends on the same weekly and monthly basis. When you start using more complex machine learning strategies, there are many, many ways to actually do machine learning. And we think in modules, so we have our data gathering, data cleaning, feature engineering, entry points, exit policies, we have allocation, and we have market impact – and all these for us are machine learning enhanceable, and machine learning automatable, and there are so many ways to do it, so you end up with a very different system than they have. We come up with some new ways of investing, some signals that we come up with are not the signals that everyone has. It’s not a golden goose. It’s not like you created a machine that just makes money. It has a risk adjusted return, it has drawdowns, it has inherent risk, but from the portfolio management strategy, it does outperform some of the other absolute return strategies, and it is uncorrelated to them. That’s the part that people are interested in.

Do you worry about overfitting your models, so they work for the time periods you used for model development, but not afterward?

GV:  Trying to minimize overfitting as much as possible is really at the core of what we do. There are many ways. First of all, there is data dimensionality, so this is why we are intraday, and we try to have as many data points as possible. When we do our classification, we try to minimize feature vectors so that’s really about trying to reduce the input dimension, and using human expert knowledge is important in that regard. We also do a lot of robustness tests, we designed robustness modules. And we paper trade as well, before it goes live. But there’s always overfitting in a sense.  Because you use historical data and you fit your models on historical data, overfitting is there. Some is useful as you have to make sure the algos are actually fitted to the current market regime, but they have to generalise.

Do your algorithms recognize when the regime has changed or do you need humans for that?

GV:  Yes, we automate that. We try very hard to automate that at multiple levels of the decision making, in the allocation portion, in the entry signal portion. So maybe the underlying algo itself understands that the market has changed and gives us higher or lower confidence on its signal. But on the allocation as well, maybe you say, “that particular algo sent me that particular signal but I’m going to discard it because they are not in the right regime”. So at multiple levels we can actually take into account regime changes. There is no human intervention unless there’s something very critical, a big financial crisis or a big flash-crash, and we might decide, the algo probably won’t work right now and we should shut everything down.

Do you see investment management becoming dominated by AI in the future?

GV:  It’s difficult to see the future, but portfolio managers or heads of hedge funds will probably switch from being traders, economists, business guys into data scientists, mathematicians, into people who are capable of using data, understanding data and managing teams of scientists and teams of engineers. Since AI is becoming more accessible, data is becoming more accessible, computing power is becoming more accessible, you’re probably going to have firms like us coming and disrupting the larger hedge funds out there and they will have to, in a sense, defend their position against those players, or buy them out, or find a way to innovate themselves, because currently they are not really doing it.

Do you think that somewhere down the road, AI for investments could become commoditized?

GV:  AI is not automatic, AI is not a monolith. It’s not one big “I do AI”. I don’t see it becoming something completely commoditized. It’s not like “I have an AI algo and I’ll plug it into data and then it works.” It’s a lot more complicated than that. You have to do a lot of feature engineering, you have to have trading experience, market experience, there are many different parameters and many different ways of doing it. Maybe you’ll have some form of commoditization, for example Quantopian managed to commoditize in a sense the way of writing a systematic algorithm in a platform and it has attracted a lot of people. But maybe someone who uses a different platform will have an edge over people who are all using the same platform with access to the same features and the same data.

This brings us back to the ideal team composition for AI trading.  

GV: You need people with trading experience, data scientists, computer scientists. The infrastructure, code optimization, the execution, for all that you need strong IT people. Data science and AI is more or less the same for us, but there is a difference between an AI practitioner and an AI researcher. So a data scientist knows how to code, how to use machine learning libraries, but a researcher can understand the real underlying principles of a neural network and maybe he will work on getting a better cost function and these kinds of things that are not a data scientist’s job.

And what happens when these people with their different backgrounds disagree on how to move forward?

GV:  That’s huge. I think that’s what makes us what we are, having a team of people who are open minded and capable of just debating all day long, and the best idea wins. It’s creativity management. It’s trying to get all these people to disagree in the beginning and agree in the end. And also to agree on what to prioritize, because we always have a pipeline of ideas that could take a thousand people a hundred years to implement, but we have to decide, what’s the low-hanging fruit? What can we do right now to improve the results as much as possible?  And then you also have the more technical guys who say, “okay, I can code this”, or “it’s too long to code this”, or “how should we code this?”

How do you feel about non-traditional data sources, big data?

GV:  We make a distinction between AI and big data, and people tend not to. AI is a way to let you make sense of big data. But we focus on the improvements that AI made.  When, for example, Google came up with AlphaGo or the Atari games, these are really algorithmic improvements. It’s small data sets or fairly limited data sets, but the improvement is really in the AI itself. We focus on strong AI rather than on alternative data sources. One of the reasons is data dimensionality issues that I mentioned. We’re looking for statistically robust strategies.

There is a lot of demand for data scientists in other industries. How do you attract data scientists to work in finance?

GV:  First of all we market ourselves as a technology company, and all the successful firms and funds that do that, do the same. If you look at the marketing of Two Sigma, Winton, or Renaissance Tech, they really say “we are a technology company, a research company, that happens to be trading”, and this is very important to attract the right people. If you are just another hedge fund, mainly because of the crisis and because of the reputation of the hedge fund industry, people don’t really want to work there. But the work in-house is actually quite interesting. You’re working on very complex datasets. You’re researching, and there’s a very straightforward application. The results are right there, black and white. When you optimize code, do some data science on new data sets, new strategy, new markets, new instruments and do that work day to day, it’s actually quite interesting, maybe even more interesting than doing that in a media company.  On the long-term perspective, let’s say five to ten years’ vision, we would like to expand to other areas. Renaissance Tech, which is a New York-based hedge fund, is considered one of the best theoretical physics labs in the world, and similarly we would like Walnut to be one of the best AI labs in the world.

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As humans, we were born to trust and form social connections. When we enter the world, within an hour we will draw our heads to seek the eyes or face of the person gazing at us. The Oxford Dictionary defines trust as “a firm belief in the reliability, truth, ability, or strength of someone or something”. This means trust is a form of nurturance – the parent-child bond, community cooperation and other social connections.

At the same time, trust is also the lubricant that greases the wheels of our economy, making the trillions of everyday transactions possible around the globe – between strangers, organizations and businesses.

The biggest hurdle to trust and financial inclusion is the moving of personal information around the planet. Fundamentally, the data exists for us to build trust – between companies and people, and people and people, but leveraging that in a privacy-centric way that enhances society as a whole makes this delicate balancing act a key barrier to financial inclusion. The key question is – how do we build trust online to enable financial inclusion and how do we do that with information in today’s environment where trust is all too fleeting?

In Dodd (Frank) We Trust

The essence of our sharing economy is steeped in a framework of trust. From Uber driver and rider ratings, Airbnb hosts and guest ratings, to Yelp business ratings. But in corporate America, trust has descended to an all time low in the last couple of decades. The Enron scandal and the worst upheaval in the global economy since the Great Depression shook trust in bedrock financial corporations and the agencies that were supposed to regulate them.

Post 2008 economic meltdown, policy makers knew they had to tighten the restrictions on financial institutions. Since then, over $235 billion in fines have been levied, new laws such as Dodd-Frank Act was enacted, and rigorous compliance rules are increasing the breadth and depth of data reporting, aggregation, and analysis. From almost no oversight 20 years ago, and within 10 years, the bar was raised so high that it almost slowed industries to a grinding halt.

Building a Layer of Trust for the Unbanked

For businesses, figuring out who is trustworthy is a minefield to navigate. Businesses have a battle on multiple fronts – preventing suspicious transactions or fraud from entering their system, meeting compliance obligations and appeasing regulators, all while fighting for customer dollars, and winning public confidence. The challenge becomes even greater for cross-border commerce; every country, state, jurisdiction presents its own sets of barriers and hurdles – the regulations, infrastructure, cultures and financial markets it needs to cross.

We are global citizens, existing in a digital global economy, and in a mere seven years, we could become the first interplanetary species, yet, opening a bank account at home, much less abroad remains a pipe dream for many; a recent survey by the FDMC showed that 15.6 million adults in the U.S. are considered unbanked. Globally, there are currently 2 billion adults are unbanked, meaning they don’t have or use any financial services of any kind.

Mobile as a Gateway to Financial Inclusion

Mobile financial services have the potential to offer a path to financial inclusion given that 1.7 of the 2.5 billion unbanked own mobile phones. Mobile adoption is growing in even the remotest regions of the world. In Sub-Saharan Africa, where there is the highest percentage of unbanked in the world, there’s also one of the highest rates of adults – 45 percent – saying that they only have a mobile money account and nothing else, versus only just 1 percent of adults globally. Why? We only need to look at a mother in Africa who would need to walk a long way to pay their bills; now they can use mobile minutes to pay a bill. Now, when that same mother wants to open a scarf business online, we should have a system in place to trust her so she can participate in the world economy.

Unlocking the Power of Information

People have two identities – physical and digital identity. The mobile device is what will connect them both. As the world’s population expands their mobile digital footprint, mobile providers will have more access to data that will pave an alternative pathway in determining trust for those in developing countries.

The mobile is an extension of us today, and captures essential information about us that allows us to be verified, such as the device ID, GPS location, biometrics, mobile number identification, 2-step Login and social media data. However, this won’t be a cakewalk; there are challenges in the industry that need to be addressed carefully, such as privacy, interoperability, infrastructure, adoption, and security. The Post-Snowden era has accelerated the requirement for technology to be flexible and innovate the way we move information around in a privacy-centric way.

But we can certainly learn a thing or two from Sub-Saharan Africa; if a mother can pay her electricity bill with her mobile minutes, we can use the same model to build a layer of trust online to allow us to open a bank account online without going to a bank branch, or as a U.S. citizen move to a new country and be able to open a bank account without providing a hard copy of a utility bill or 1000 points of ID.

There’s a world of opportunity to tap into the power of mobile data information to fuel the next generation of online experience – sending money, setting up a merchant account, a bank account, peer to peer account – to drive financial inclusion around the world, and, to borrow from Ronald Reagan’s favourite quote – “To Trust, but Verify”.

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Did you doze off and miss the digital banking revolution?

If so, here is your indispensable guide to choosing a digital banking platform

The innovative nature of the financial services industry calls for constantly introducing new solutions to the market. Nowadays, implementing digital banking platform is a must, and should be thought of as a continuous evolutionary process, and not as a project with a beginning and an end.
Banking customers are insistent in their demand for modern banking platforms, and banks are falling over themselves to provide innovative solutions. Those banks that did not keep pace with the development of platforms in recent years may find themselves having to board a moving – or in some cases, speeding – train. True, the first wagons have left the station, but late adopters may make use of the experience of entities that have already ridden this track. Although no implementation process of innovation can pass without a hitch, you can and should avoid the errors made by the early pioneers.

User Experience is the key

In times of very strong competition, when all manner of bank fees and charges have been trimmed, banks no longer compete on price. The importance of the parameters of banking products has been reduced, outweighed by the increasing demand for enhanced user experience, and paving the way for a properly designed interface for internet and mobile banking to take centre stage. Financial products have always been perceived as somewhat complicated, but the right kind of user experience can ensure that a customer’s dealings with a bank are convenient, comprehensible and rewarding. The kind of user experience that turns tedious tasks into a pleasant experience, at the same time reflects the specifics of the banking brand (brand personality, brand communication, tone of voice), will also go a long way in turning ordinary customers into loyal brand ambassadors. In this sense, every single cent spent in properly designed customer experience is an investment with a potentially huge rate of return.

Personal Finance Management must be simple

The fact that a large proportion of banks still cannot offer a fully online or mobile account opening process shows that there is still a great deal to do in facilitating the digital customer journey. But banks should also tread carefully and not push blindly ahead. The previous experience of banks which first implemented a Personal Finance Manager (PFM) as part of their platforms showed that inadequate integration of this element into the customer journey can be counterproductive. Instead of assisting customers by presenting clear reports and recommendations, the PFMs discouraged them through over-complicated interfaces.

Thankfully, modern data-driven PFM can be integrated throughout the whole digital banking platform. Categorization should be accessible from every level of the transaction history. Budget management and savings targets should be instinctively available in places where the customer is monitoring the state of their finances. PFM tools should prepare forecasts for bank customers and support them in the automation of payments. Such solutions are a real help for users, and increase the usability of the application..

Bots and data are the fuel powering innovation

Bots are one of the trends seeing explosive growth. These conversational mechanisms with elements of artificial intelligence can hold a conversation with the customer using natural language. These solutions reinforce the fundamental role of the bank as a friendly customer advisor in the complex world of finance.
Information is the fuel driving the digitization of all processes. In banking, this is particularly true. Bank customers are willing to provide detailed information about themselves and their needs, expecting in return to be offered specifically tailored solutions. This is where self-learning conversational mechanisms come into play, becoming invaluable tools to understand the needs of bank customers, and target the right kind of offers to them. Financial institutions other than sophisticated relationship-based private banking institutions are rarely able to acquire this knowledge.

Context matters

Banks should naturally aim at varying the channel and context of their services according to the product. There is a tremendous difference between the process of taking out a mortgage, which is of occasional interest to customers, and everyday payments like buying coffee or a public transport ticket. Each of these everyday activities involves interaction with the bank, and can be implemented using a range of devices. Nowadays, users are more likely to access content on the Internet using mobile devices, and banks must take this into account – mobile banking tools are much more powerful than desktop-based platforms.

Another looming revolution in banking is associated with the European PSD2 directive. External entities will be able to access a customer’s banking data, making it possible for such an entity to aggregate all banking products the customer holds, regardless of where the products are held. Furthermore, the entity giving access to these banking products does not have to be a bank itself, meaning that banks may lose out to independent operators that build up a client base by offering better user experience. The bank in this situation is reduced to being merely the supplier of the product, losing direct access to the client, severely limiting any opportunity for upselling or for active management of the bank-customer relationship.

The bottom line

Banks need to adapt to these changes. Only interfaces that can integrate data from other banks, and allow management of all financial products from many financial institutions, will give banks a key to maintaining customer relationships and building loyalty.

Any process of implementation today of a modern, user-centred digital banking platform must take into account the experience of competitors, and current trends. However, merely cherry-picking the best solutions is not a set recipe for long-lasting success.

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Financial data finally starting to pay off

If you are in Finance, you would have read at least one of the many predictions articles that poured from all directions on the internet in the past month. This is not trying to be yet another one but focus on the CX angle of one of them.

Most of the FinTech forecasts herald the advent -or victorious prevalence depending on the knowledge level of the author- of a few technology trends: blockchain, chat bots, robo-advisory and AI, PSD2 and data analytics in 2017.

This last one is perhaps the most interesting one from a customer experience perspective because if we are to be honest, this is in no way a new idea such as blockchain, and not even one that needed to “cook” and be developed as AI. The ability to collect, slice and dice data has been around at this very level, for a good few years already. So why haven’t financial institutions “made bank” on it yet?

While retailer have gotten savvier and savvier at squeezing every bit of relevancy of every piece of information we give them to strengthen their brand, in banking, we’ve seen excitement around terms such as “big data”; “customer analytics and segmentation” and even the (now completely defunct) lofty goal-phrase of “single customer view” come and go and nothing intrinsically changed in the way data is used.

Proverbial Target anecdote aside, no bank targets the newly pregnant mother with an offer for cots and no one clearly buying various elements of a vacation is being reminded of getting (or even already owning) a travel insurance.

One could argue that the very fact that this famous Financial Times personal data monetisation evaluation tool (which allows consumers to verify what their information is worth to retailers) simply doesn’t include Financial data is telling.

When asked, banks cite a desire to protect the consumer’s privacy as one of the reasons why they have not started digging into their data – but that’s a lie. They also claim the consumers absolutely do not want them to give them actionable advice depending on their spend and this too, is at a minimum a gross generalisation as report after report have shown.

The real reason why we as consumers didn’t see any of the benefits of handing over so much data is two fold: one is bank culture and the second one is technology impotence. The do not want to use the data and they can not use the data.

The cultural part is fodder for a much larger discussion, but suffice it to say it is what you’d expect: banks are huge organisations with obscenely complicated internal dynamics and a resulting inability to make courageous changes at fundamental business model level, which means they are stuck in the status quo and sadly, this status quo involves rigid age-old products and no peeking into the consumer data chest.

As for technology impotence it’s much simpler: they can’t use data they don’t understand.

Yes, bank may store every byte of information possible but it’s an incomprehensible byte before basic mechanisms such as categorisation engines and data analytic dashboards are in place. In other words, they can see Mr. Smith has spent £ -221.50 they only knew it went to gnerguk0001 and that it had the transaction ID 2UK170802G2110116 and the reference No. 55542763846387652450981 but evidently none of that is enabling the bank to tell Mr. Smith he is paying twice as much as the average consumer of his age and income bracket in energy bills and suggest 1-2 alternative providers while showing him what making those savings would do for his savings in a few years’ time.

The only way that 2017 is going to be the year where Data will finally be taken seriously, is if both of these two reasons are removed and while the former is still in question, in my opinion, the latter is thankfully changing across the board as many more banks have now become technology potent in this area.

“Cross Sales” vs. “Life Assistance”

Transactions already tell banks what your family looks like, and what you need in terms of next, extra or better financial and non-financial services. Buying a size 12 plimsole in M&S can only mean you have a 5-7 year old to raise. All the bank has to work out is “when and how” not “if,” they should tell us about their “goHenry” equivalent card and the junior ISA.

Making regular payments to a care agency can only mean you have an elderly relative. All that banks need to decide is “when and how” not “if”, they should engage us about the pension top-up product or even a burial service insurance.

Put into perspective, the mere fact that comparison sites, financial advisors, insurance brokers and the likes have developed as a parallel industry to banking, is a sign that banks have spectacularly failed at their job if we agree their job is to not only to store and move money, but offer the consumer all the information and actions connected to their money as services.

The beauty of it is that “doing the right thing by the consumer” by giving them the experience they deserve through attaching meaning and intelligence to their data, is that it’s a win-win – as much a moral imperative as a means to drive business and banks are in a uniquely insightful position to do so.

It’s not business – it’s personal

Lastly, and to me most importantly, making use of data is good Emotional Banking™ practice. Customers instinctively feel that there is great intrinsic power and opportunity in transactional knowledge and, if employed for the good, they will not perceive it in a creepy “I know what you did last summer” fashion. They simply know they have offered slices of their lives in information and that feels intimate, it is arguably why they develop Irrational Bank Loyalty ™ towards their financial services provider.

Giving away so much of our data is emotionally connecting in a way banks need to be courageous enough to explore to become beloved brands. It puts them at the forefront of helping consumers achieve a better financial standing by helping them save and spend more intelligently and that can very well be addictively important.

Consumers attach so much of their identity to their financial success –this article in the Economist wonders which came first happiness or money- that it follows they would be delighted with their bank contributing to it. Not to mention utterly surprised if they did.

An ad for a savings account on the side bar of a current-account-only-customer’s incomprehensible transaction list, may have been what passed for cross-sales, customer insight and marketing in most banks until now, but keeping in mind it will from hereon be “anyone’s game” with the arrival of PSD2, challengers and big brands who will build smartly, it simply won’t cut the proverbial P&L mustard anymore.

Blockchain and AI may well need a few more years before making a difference but my transactional data and yours is already in our banks, they now know what it means, so all they need to do in order to make 2017 the year they really became relevant to their customers, is be willing to help us act on it to become a smarter consumers and convince us they’re a brand worth banking on.

Financial institutions have become data hoarders

Banks, hedge funds, and asset managers have become data hoarders. However, many of these firms find it difficult to make use of all of this data. They need tools that can be used to extract information from various internal unstructured content and to democratise its use: legal documents, emails, instant messages, news archives, analyst reports etc.

An increasing number of firms are now embracing the cloud making it easier for vendors to come in and analyse proprietary content on their behalf. This new trend is primarily driven by the more sophisticated hedge funds and assets managers, since banks are often more restricted by their compliance.

But it is challenging to make use of that data. Big data craze inspires firms to save every possible bit of data, with the misconception that the more data you have, the better. Firms must keep data (for compliance purposes) or often aren’t sure what information they need to keep. Having more data is not necessarily a good thing when you are not sure how it is going to accumulate or how to manage the data. There is hope that data hoarding, however, will eventually bear fruits when it comes to alpha generation – with the right help that is!

Catching the Alternative Data Wave

Much of the data hoarding actually comes from alternative data sources. The proliferation of social networks, mobile devices, IoT, low-cost sensors, and image-processing have led to an explosion of new and potential data sources. It is creating some interesting opportunities and new ways of harvesting signals for investors. A lot of this information is new. Financial institutions have been used to building models based on market and fundamental data. Alternative sources now offer a new way of getting insights into fundamentals – often on a real-time basis.

But, what are these alternative data sources?

News & Social Media – traditional news, microblogs, or unstructured data firehoses to understand what’s happening in the world. The most mature of these alternative datasets. It’s been around for awhile. Machine readable news and social media has already made its way into the quantitative process as a proven source of alpha

Credit Card Transactions – anonymous aggregate transaction data to capture trends in consumer purchasing habits that can offer a daily reading on (expected) company revenues

Satellite Data – image data from orbiting satellites to do things like measure farm health based on the color of crops, how many people are purchasing at Wal Mart or other retail stores as a result as counting the number of cars in a parking lot

Internet of Things (IoT) – collected data from smart grids, smart cities, and shipping/transportation systems to measure in real-time supply and demand of resources or services

Crowdsourced data – opinions from large groups of people especially from online communities/specialized social networks offering insights from the “wisdom of the crowd”

Location/Foot Traffic Data – where consumers shop by measuring foot traffic via check-ins, mobile phone traffic, video analysis, etc.

Local Prices – what’s happening to prices and inflation by aggregating data from measurements by people on the ground, specifically useful in remote areas where it’s more difficult to get data for crops or prices of specific services

Peer lending data – lending/borrowing transactions for a more timely view of supply of capital or overindebtedness

App Data – data from web/mobile to understand how people are interacting with their devices

Weather Data – information utilizing sensors to measure how weather will influence our daily lives and choices, sensors are even placed inside of buildings to know how it really feels to be at certain places

Alternative Data comes with its challenges

It’s NOT about finding that one Big Data factor that you can simply plug into your model and you’re good to go. There are basically 3 challenges to overcome:

Value: is there value in the data?

• Some of these datasets are so new that there is no professional or academic research, we don’t know if they work
• A lot of the information is at the product or service level, and not easily mapped to tradeable securities

Relevance: can you use it as part of your investment process?

• The data is unstructured, hence requires NLP for text; or images require special processing through AI
• The history of these datasets is limited (even if we started to hoard data) so historical archive is not always large enough to make proper backtesting.
• We need to wait/accumulate until it’s testable
• Content integrity, providers were not contemplating selling it and we need to normalize datasets and put it into a format that is useful

Capacity: does the data have capacity to be used, how much can you actually trade?

• Niche data, covering only limited number of stocks (ex: twitter only for stocks that people speak about), or retail / healthcare / tech focused
• Value erosion: the more users on these niche datasets, the more likely their basic value will be arbitraged away: need of sophisticated models

But there are also many opportunities with Alternative Data

It gives a way to:

• Innovate and develop differentiated portfolios, improve scalability and avoid crowded trades
• Explain things that we can’t understand at present with market data and fundamentals which we all have
• Measure new and interesting estimates, to create new factors or economic indicators
• Connect the dots between different data points by looking at what people are saying about an event, a competitor, a supplier, i.e. contagion effects across an entire network of tradeable securities
• And most importantly, predict more accurately than we do today

This post appeared originally here

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The term ‘Fintech’, applies to a very broad range of innovative solutions for the financial sector. Because this term is so broad, it doesn’t just impact financial businesses. All kinds of companies must make financial decisions, accept payments, and pay invoices. Since new and cutting-edge financial tools may impact the way that almost every company handles money, it’s important to consider the fintech essentials that could help a company like yours.

What Businesses Must Know About Fintech

Whether you operate within the restaurant industry or work in trucking, you will likely be in need of funding to start or grow your business at some point in time. Fortunately, fintech is geared towards helping these types of businesses, and all others, in the financial situations they face. Because of the way fintech solutions are capable of accessing various data points, they can look at all small business more objectively prior to making a financing decision.

So, how exactly can your company benefit from the disruptive innovation taking hold of the financial services industry? Check out these 4 simple ways in which your business could use FinTech solutions in its favor:

1. Take Payments from Anywhere

Companies like Stripe allow merchants to take credit card payments from their cell phones. This makes it easy for businesses to sell anywhere and at any time. The card reader works with both iOS and Android phones. Moreover, payment information can be uploaded into other software to make accounting, CRM, and other tasks much easier.

PayPal is another established company that offers merchants the ability to accept mobile payments through their mobile app. Any company that needs a flexible and affordable way to accept payments should consider some of these fintech payment processors.

2. Obtain Business Funding with Fewer Hassles

Online lending platforms offer easy access to business funding. These lenders accept online applications twenty-four hours a day and seven days a week. In addition, they can obtain the information they need to verify a business automatically, and they do not require an established business credit score. Business owners also appreciate rapid approvals and quick funding to their business accounts. Funding with these high-tech platforms offers a convenient experience, especially when compared to long applications and waiting periods at traditional financial institutions. For example, access to an online line of credit can help ensure that businesses can manage cash flow, take advantage of opportunities, and handle minor bumps in the road.

3. Pay Employees in a Better Way

There are new, exciting fintech solutions that help companies pay their employees in a better way. For example, in cases where employees may have waited for a long period of time to collect their earned payments because of the processing costs of writing checks. With new technology, some businesses find it easier to switch to semi-monthly or even weekly electronic payments. Most employees appreciate getting paid more often instead of having to wait for weeks for money that they already earned.

Another novel solution even lets employees draw against their earned wages before payday. If an employee has to visit the dentist or get a car fixed, this ability to get an advance on their own income can help them save money in credit card interest or payday loan fees. The benefit can help workers manage their financial lives better. At the same time, it costs their employers very little. Some employers may find that this benefit helps alleviates worker stress and also helps retain good workers.

4. Manage Business Cash Flow

If you ask the majority of small business owners about their most common concern, they will probably tell you that they think about managing cash flow just about every day. No matter how much money a company receives in revenues, that company will fail if expenses continue to exceed income. A recent American Express survey found that 27 percent of respondents admitted that their own company had experienced serious cash flow issues during the last three months.

Some fintech solutions like Wealthfront can help business owners and managers view the potential impact of different money management decisions. Other solutions, such as TrueAccord, ensure that companies collect money due on time by sending out automated invoices and scheduled reminders. Accounting software can interface with both payment and receivables systems to make sure it’s easy to know just how much cash a company has in reserve. Business owners and managers will probably always consider cash flow management one of their most critical issues, but fintech can make it easier.

Which Fintech Solutions Can Help Your Business?

No company wants to implement new technology just because it is new. However, if your company is wrestling with a problem in the way it receives payments, makes payments, or manages its finances, it’s good to know that there might be an innovative solution out there.

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Image: Tax Credits, CC 2.0

This article was written in collaboration with Kabbage.

Interest in fintech disruption is at an all-time high, but who will be the winners and who the losers is far from clear. Banks themselves have been sending mixed messages. As a particularly high profile example, JP Morgan Chase CEO Jamie Dimon famously raised the alarm when he said in 2014 that fintech challengers “all want to eat our lunch. Every single one of them is going to try”. This year, however, he sounded more sanguine: “It will be a challenge for anyone to be better, faster, cheaper than us.” In the meantime, PWC reported that 95 percent of the bankers that it surveyed “believe that part of their business is at risk of being lost to standalone FinTech companies” – although we do not know which are the concerned banks, how exactly they think their business will be affected, and what they plan to do about it.

Individual bankers’ opinions are one thing, but if a publicly held bank is sufficiently concerned about the fintech threat, it arguably has a responsibility to inform its shareholders about this. In particular, U.S. listed corporations discuss competition in their electronic annual reports (also known as Form 10-K) which are mandated by the Securities and Exchange Commission. So, what do U.S. bank holding companies – of which there are over four hundred – actually say in their 10-Ks about competition from fintech? This is the question my co-authors Sinziana Bunea at the University of Pennsylvania and Benjamin Kogan at FinTxt and I set out to answer. The results surprised us.

First, given that fintech has been increasingly in the news since the financial crisis, we were surprised that the earliest mention of it was only this year – specifically, on February 17th, early on in the filing season. The identity of the first fintech-mentioning bank was also unexpected: Huntington Bank, an important regional bank headquartered in Ohio, but hardly a household name. The subsequent dozen or so filers kept mum about fintech. But on February 23rd, JP Morgan itself acknowledged competition from fintech, and this appears to have opened the floodgates. Over the following week a full ten banks mentioned fintech in their filings for the first time. By the time the dust settled, a group of 14 U.S. banks had explicitly informed their investors that they regarded fintech as a potential threat.

The composition of this 14-bank group is also puzzling. It includes three of the nation’s top-ten  banks (JP Morgan, BNY Mellon, and PNC) together with nine regional players with assets in the billions (Beneficial, First Interstate, Horizon, Huntington, Iberiabank, SVB, UMB, Umpqua and Zions) and even two minnows with under a billion dollars in assets (Hamilton and CSB). What do these banks have in common other than being the first ones to officially register their concern over fintech? On the surface of it, not much. To investigate further, we looked at what these banks actually say about fintech in their filings.

In fact, six of the banks merely mention fintech in a list of different competitor types including other banks, brokerages, insurers, credit card companies, and so on. The list includes five types of competitors for CSB and Umpqua, six for Beneficial, seven for BNY Mellon and Zions, twelve for First Interstate, and an impressive eighteen for JP Morgan (the banks’ wide disagreement about the number of distinct competitive threats they are facing is interesting in itself).

Three of the banks go beyond a simple mention of fintech, although what they say about it is not particularly insightful. Thus, PNC, SVB and UMB go on to note that fintech competitors offer services such as payments and lending.

More intriguingly, two banks evoke less obvious aspects of a possible fintech threat. Horizon appears concerned about “the migration of bank personnel” away from traditional banks and toward their fintech competitors, while Iberiabank warns that competing with fintech on technology “would result in significant costs and increased risks of cyber security attacks”.

Of the remaining two banks, Hamilton Bancorp, by far the smallest and the most recent filer, is almost gushing in its praise of fintech: “They offer user friendly front-end, quick turnaround times for loans and other benefits. While Hamilton is evaluating FinTech companies with the possibility of developing relationships for efficiency in processing and/or as a source of loans and other business, we cannot limit the possibility that our customers or future prospects will work directly with a FinTech company instead.” We may never know what prompted such an outspoken assessment, but the frankness is certainly refreshing.

The prize for the depth of disclosure would have to go the pioneer. Huntington Bancorp, the first-ever U.S. depository institution to mention fintech in its annual report, also goes the furthest in discussing its competitive strategy in this regard: “Financial Technology, or FinTech, startups are emerging in key areas of banking.  In response, we are monitoring activity in marketplace lending along with businesses engaged in money transfer, investment advice, and money management tools. Our strategy involves assessing the marketplace, determining our near term plan, while developing a longer term approach to effectively service our existing customers and attract new customers. This includes evaluating which products we develop in-house, as well as evaluating partnership options where applicable.” It will be interesting to see what fruit this strategy will bear – and whether other banks will become as open about their fintech strategies as Huntington.

So, are these fourteen banks indeed particularly vulnerable to fintech competition, as taking the disclosures at face value would suggest, or are they simply more familiar with fintech than their non-fintech-mentioning peers? Looking at the banks’ actions, we find that at least five fall squarely into the latter category, led by the three giants. For example, JP Morgan has launched a residency program for fintech firms, invested in fintech firms such as Motif, and formed a partnership with OnDeck; BNY Mellon has set up fintech innovation centers; and PNC has invested in Digital Asset Holdings, a blockchain technology company. Of the smaller banks, SVB (which stands for “Silicon Valley Bank”) has made equity investments in Lending Club and Nvoicepay and hosts a fintech conference, while Umpqua is establishing a fintech subsidiary in Silicon Valley.

What about the other nine? It’s harder to tell. Which brings us to the question, why is such a disparate group of banks suddenly talking about fintech in their official filings? One possible answer is, in the words of 2016 Nobel Laureate Bob Dylan, “Because something is happening here, but you don’t know what it is”. It is plausible that, uncertain about what is happening and what to do, banks were taking cues from one another, a phenomenon economists colorfully refer to as “herding”. Under this interpretation, once Huntington went first (perhaps prompted by its acquisition of FirstMerit, a 171-year-old rival and neighbor, certainly a thought-provoking event), JP Morgan may not have wanted to be left far behind. Others would then have followed in reaction to JP Morgan’s filing, given that bank’s stature in the industry. However, once it became clear that only a few of the largest banks chose to mention fintech, the others’ proclivity to do so would have been greatly diminished. I stress, though, that the above is only a possible interpretation of what happened.

So what will happen in the next filing season? Will the number of fintech mentioning banks stay the same? Will it double or quadruple? Will the disclosures become more informative? Will some banks copy their wording from others? How will banks’ words correlate with their actions? And, most importantly, will banks’ fintech-related disclosures become a leading indicator for the bank-fintech dynamic?

Watch this space.

The study, titled “Banks vs. fintech: At last, it’s official” was published in the 44th volume of Journal of Financial Transformation, and can be downloaded here  

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Image: Chris Brown, CC By 2.0

Patrick Koeck is a Chief Operating Officer and a previous Chief Risk Officer in European Smart-data powered lender Creamfinance. Before coming to Creamfinance he tested his mettle in companies such as Alkoe GmbH, the Coca-Cola Hellenic Bottling Company and KPMG Austria, where he focused on database management and Financial Controlling. At the moment he is responsible for improving automation and development of all 5 countries where company is located – Latvia, Poland, Czech Republic, Georgia and Denmark.

Patrick, please tell us a little bit about yourself

My name is Patrick; I work as a COO in the fastest-growing European Fintech Creamfinance in Latvia but I tend to spend a lot of time across all the operating countries. At the moment I’m responsible for improving operational development in all 5 countries where company is located – Latvia, Poland, Czech Republic, Georgia and Denmark. We’re also now about to open an office in Mexico, which is exciting. Before coming to Creamfinance I worked in Alkoe GmbH, the Coca-Cola Hellenic Bottling Company and KPMG Austria, where I focused on management reporting, customer behavior databases and controlling.

What topic will you be discussing during Data Natives Berlin?

I will be talking on Smart Data and its benefits. I believe the topic is both relevant and interesting to the great majority of Fintech startups and scale-ups along with anybody using data sources. If you miss the speech you will not know about the benefits that Smart Data can bring for the company and, believe me, there are many!

What is Smart Data? How does it compare to Big Data?

We all probably have heard of Big Data, which is usually defined by four key elements – data volume, velocity, veracity and variety. Whereas volume and velocity refer to data generation process, veracity and variety deal with quality and type of the data overall. Since the amount of data is huge, one can make conclusions that not all of it is valuable. Smart data starts by collecting data mostly from internal sources which are highly related to the outcome. Therefore, veracity is highly reduced and also the variety is reduced as you gather on your own terms. Overall it results in highly trustable and stable data sources with low level of noises generated by unrelated data.

How is Smart Data being applied to FinTech? What other approaches to data are being applied to create change in this field?

I would say that Smart Data is actually the future of Fintech: it minimizes the effect of data leakages events, focuses on quality (disregards and filters noise) and overall, is a lot more economical. Generally speaking, Fintech is changing very rapidly as technology develops, so companies need to adapt to changes and be flexible to accommodate these occurring changes (e.g. privacy terms of social media, etc.). Generation and aggregation of that data is what the finance industry needs, and that’s where Smart Data delivers.

What do you hope to gain/learn during Data Natives Berlin?

First of all, I want to get acquainted with great minds working in the industry with data, meet like-minded people and expand my network. I am open for new ideas and want to absorb as much news and ideas as possible. In addition that, I’m excited to share my experience working with Smart Data on the big stage during the conference and I’ll be more than happy to spark some discussions! So drop by and say hi if you’re nearby 🙂

What data-driven technologies are of particular interest to you and why?

Homepage analytics (specifically mouse movements/individual behavior) and statistical methods, especially with R. That’s just my personal and professional interest.

Do you believe that Germany is a strategic market for showcasing data-driven technologies?

Yes, I do. It’s a high-technology market, so it’s natural that the country is cultivating and showcasing data-driven technologies.

How is data driving the FinTech revolution?

Data is the main element within the Fintech revolution. The biggest difference comparing Fintech players to other financial institutions is the ability to change and adapt fast to changes, and generation, aggregation and analytics of the data.

Can you offer advice for others wanting to get involved in this particular field?

Be active & proactive – read, explore, attend conferences, meet experts & try to broaden your knowledge. Start by doing what is necessary, then do what is possible, and suddenly you are doing the impossible.

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Image: Tech In Asia

Meet the people at the forefront of Big Data and world changing technology

Where: Rise Tel Aviv, Tel Aviv, Israel

When: September 25th 2016

datanatives.io

Taking place in one of the world’s largest startup nations, Data Natives Tel Aviv celebrates four areas of technology that are driving business innovation and the next wave of billion dollar startups. Join industry leaders specializing in Big Data, IoT, AI and Machine Learning.

Amongst 30 of the brightest minds, we are proud to be joined by thought leaders from across the globe:

Aldo de Jong: Co-Founder at Claro Partners, the #1 accelerator in Europe

Crystal Valentine: VP of Technology Strategy, MapR Technologies

Thomas Renault: Université Paris, Ph.D. Student and Research Assistant

Four key areas of innovation – IoT, AI, Machine Learning and Big Data

Taking place in one of the world’s largest startup nations, Data Natives Tel Aviv focuses on four key areas of innovation: Big Data, IoT, AI and Machine Learning. Data Natives Tel Aviv is a vibrant, innovative and international daylong conference for the data-driven generation. The conference is hosted by Dataconomy, Europe’s leading media and events platform in data science, with a loyal community of more than 32,000 data enthusiasts online and offline.

Inspired by the successful 2015 Data Natives conference in Berlin, Germany, Data Natives Tel Aviv was created to spur the interaction between startups and businesses within the growing fields of Big Data, AI, Machine Learning and IoT – on a truly international scale within a country built on innovation and startups.

Data Natives 2015 attracted some of the world’s greatest Big Data influencers and industry leaders. Now is your chance to come and learn from theleading data scientists, startup founders, analysts, investors, economists and other industry thought leaders from across the globe.

Big Data – Data natives are complex.

Big Data technologies – particularly machine learning – are at the heart of much of the innovation we see today. At Data Natives we will host industry experts discussing how data science is disrupting a variety of industries, and the business value of data.

IoT – Data natives are hyperconnected.

The growth of the Internet of Things ensures that every aspect of our lives, on personal and industrial scales, is trackable and optimizable. This technological evolution represents a huge opportunity for business.

Machine Learning – Data Natives can predict certain outcomes.

Machine learning algorithms are being applied more frequently to predict certain outcomes and behaviors. At Data Natives Tel Aviv, we will demonstrate and discuss how machine learning is being applied to technology to predict user behavior and business intelligence.

AI – Data Natives rely on smart technologies.

AI enables the development of computers to take on human tasks, particularly those associated with human intelligence. Self-driving cars, smart homes and other revolutionary technologies rely on AI to function. Learn more about how AI is driving technology during Data Natives Tel Aviv.

Join us for Data Natives Tel Aviv 2016. Save your spot by registering today!

About Dataconomy

Dataconomy is the leading portal for news, events and expert opinion from the world of data-driven technology. Founded in Berlin, a hub for data science innovation, we provide a global network of industry-renowned contributors and local communities all across Europe. We focus on industry giants and disruptive startups alike, looking at only the most interesting applications of data technology. A top 100 Big Data brand according to Onalytica, and a top 5 Berlin startup as rated by Mattermark.

Image: Sebastian Geisel

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FinTech is easy to get wrapped up in. It’s an exciting field that’s taking power away from traditional, bloated banks and giving the industry a much needed facelift. It’s helping the underbanked (as any FinTech enthusiast will tell you a hundred times), and many popular FinTech technologies are becoming integrated into everyday life. But what’s with all the lingo? Despite the excitement, understanding exactly what’s happening in the field can be hard. There’s banking terms, tech lingo, and pure FinTech jargon. Here’s a primer to get you ready for the next time you encounter FinTech.

AML: Anti-Money Laundering (AML) refers to existing laws or procedures meant to reduce illegally obtained income.

API: Application Programming Interface (API) represents the functionalities of a certain program. These are important because they enable other programmers to use components of existing software, allowing for faster and more reliable software development—a major component of the FinTech movement!

Cryptocurrency: A digital currency using cryptography for regulation and security. It’s a decentralized system, meaning no central entity exists to oversee the processes. Instead, it uses a blockchain. There are several different kinds of cryptocurrency, including Bitcoin, Ethereum, and Ripple.

Bitcoin: The most popular cryptocurrency, generally deemed the first of its kind. The open source software comes with an elusive and mysterious history. No one is really sure who made it.

Blockchain: Where cryptocurrency transactions get recorded. It operates like a public ledger where information, once entered, can’t be altered. Blockchain technology also has several non-cryptocurrency applications including smart contracts and the recording of digital assets.

Collaborative Consumption: An economic model based on the sharing, swapping, and renting of services. The “Sharing Economy” or “Collaborative Economy” can be seen in platforms like Airbnb or Kickstarter and is growing in FinTech solutions via solutions like peer-to-peer lending.

Digital Native: A person raised in the age of digital technology. This demographic is vital to the growth of FinTech as they are more likely to expect their banking services to be technologically advanced and always online.

DRAAS: Disaster-Recovery-as-a-Service, the hosting of servers by a third party in case of a disaster. This means all that vital data can stay safe no matter what happens to us.

EMV: Represents the global standard for credit and debit cards. The title comes from its original developers, Europay, MasterCard, and Visa. Many cards already feature the EMV chip designed to fight card fraud.

Encryption: The process of encoding messages. Encryption is vital to FinTech, the blockchain, and anything else that needs to be secure. Data, like names and numbers, is turned into a code using algorithms (mathematical formulas). A key is required to turn that code back into useful data.

FinTech: Financial Technology, an industry known for championing software and technology in the financial sector. They’re also popular for generally challenging traditional banking and incumbent institutions.

FinServ: An abbreviation that appears largely on Twitter, referring to anything in the Financial Services industry.

KBA: Knowledge-Based Authentication aids is used for fraud prevention. Consumers probably know this as the “secret question” users must answer before being granted access.

KYC: Know Your Customer also revolves around authenticating users. Requirements of thorough identification checks and due diligence information seem to have grown more powerful in recent years to fight fraud by requiring users to prove their integrity.

Messaging Commerce: Where messaging apps meet point of sale. This trend is currently largest in Asia but will likely continue growing. This kind of commerce lets users make purchases with something as simple as messaging apps.

On-boarding: Includes all the steps to get a new customers integrated into a new program. Exactly what counts as on-boarding varies from company to company, but it refers to all the steps that get users up and running. Streamlined on-boarding processes are often considered one of FinTech’s advantages over traditional banks.

Payment Gateway: A service provider that authorizes credit card payments. They act as an intermediary between a payment portal, like a website, and a bank.

PCI Compliance: Payment Card Industry Compliance is a set of security standards designed to protect card information during and after financial transactions. All card brands are required to comply to these industry standards, and, though not always explicitly required, many FinTech companies are being pushed into PCI compliance in order to assure a certain security standard.

POS: Point-of-sale is that important step where customer payment information is taken at a physical location when making a purchase. Several popular FinTech startups have created apps and services to expedite this process and keep it safe.

P2P Lending: Peer-to-peer lending, or Social Lending, involves lenders loaning money directly to borrowers without the traditional processes and structures. Online platforms match lenders and borrowers where the services can usually be provided at a lower cost than traditional institutions.

Robo-Advisors: Automate investment advice. Though they sound like metal robots in ties, they are primarily rooted in algorithms. Robo-advice comes from online platforms and limits the need for human interaction when managing a portfolio.

SSO: Single Sign-On authentication saves users from the barrage of IDs and passwords by allowing one set of login credentials to sign in for multiple applications.

Smart contracts: Computer programs that automatically execute a contract. These automated and often blockchain-based contracts could save time and reduce costs in common transactions.

SaaS: Software-as-a-Service is a common tool utilized by startups. A vendor is paid to hosts applications on a cloud for users to access online. As a result, many startups are faced deciding whether to position themselves as SaaS or FinTech.

Tokenization: Replaces sensitive data with unique symbols. These “tokens” allow users to retain essential information about their credit cards and transactions without compromising security. It also turns complex information into short, useful codes.

Underbanked: People who don’t have access to proper banking or services offered by retail banks. They might have a banking account, but rely largely on alternative methods. The ability to serve the underbanked is considered one of the most important facets of FinTech.

image credit: Susana Fernandez

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As CTO, Peter leads the tech team of solarisBank. He’s the former CTO of HitFox Group and software engineering company Zweitag. Peter is experienced in building tech-heavy startups and fintechs.

Tell us about the mission of SolarisBank  and why you chose Berlin as your headquarters?

We’re offering a horizontally-integrated Bank as a Platform (BaaP) with the sole purpose of enabling the actual products and services that people want to have. We’re essentially saying to all types of companies, “we’ve done the hard work of getting a banking license so you don’t have to.” If you partner with SolarisBank it’s really simple to enable a financial solution, so come build on our platform and realize your vision.

Berlin is the obvious choice for a tech company for three reasons. First of all, you’re close to all potential partners – from fintechs, to early stage startups and established digital players. Second, we love the inspiring entrepreneurial atmosphere you can only get in Berlin. Since the majority of people at solarisBank are entrepreneurs by heart, we wouldn’t want to build our company elsewhere. Third, as a tech company you need the best developers out there and need to offer them an enticing and enriching environment to work in.

What type of tech problems are you trying to solve at SolarisBank?

We’re helping digital companies invent and build business models in the financial sphere and technology is our enabler. Currently many fintechs and businesses who would like to offer financial services need a banking partner. That partner is often technologically inept and hails from an archaic mindset completely different to that of respective startups or digital businesses. Our goal is therefore straightforward: make a partnership with us as simple as as possible. And since we’re a tech partner with a banking license this has to start with our technology. We’ve built a state of the art API, which means less complexity for the engineers of our partners and a fast, straightforward integration with their systems.

What are significant shifts you have seen in the industry?

The most obvious and well discussed shift is the unbundling of banks. Customers these days are looking for the best financial services out there rather than a specific bank offering financial services. They simply expect the best digital service to be found via Google. Whatever institution offering that solution is no longer a priority. Traditional banks rely on business models which have been around for decades. Banks did not see the relevance of the digitalization of society for quite some time. This is where we come in, we use the business models of traditional banks but offer them on a platform with additional solutions to serve the digital society. This of course is the first step, our medium term goal is to provide services that exist in the current finance world and to make these accessible to digital companies. But we are also doing research on innovative concepts like blockchain because they will disrupt the networks and the way transactions are done in the future.

As the CTO, if you could tackle any technology-solvable challenge existing today, which would it be and why?

I know that this sounds quite practical but it’s true: I’m striving to build a scalable environment in an organizational as well as technical way.

What technologies do you use at SolarisBank?

We are mostly based on pure Ruby as a programming language, pretty independent from frameworks. In addition we use Grape to create APIs. Elixir which is quite a modern programming language and complimentary to Ruby complements the picture. So the idea is basically that whenever Ruby is not suitable, Elixir is a good addition. We have a polyglot mindset and want to create a mix of technologies – if we stick to one language we don’t have innovation inside the tech stack. If you introduce new technologies you increase your speed and agility and you attract the right staff – good developers want to use new technologies and have new challenges, so when you stick with modern tech you also attract good people.

What do you think the future of FinTech looks like 5 years from now?

From my point of view, FinTech won’t exist as a stand alone industry but will be integrated or connected with every business model on the internet. FinTech firms can be part of any company and serve a share of it. There are big opportunities for B2B companies to improve processes and define new products. I think FinTech is a bit of a buzzword, but to be honest it has always been there – for example, banks have been using computers for decades and were basically also just a company serving a service. What might be new and is way more important from our side is the ‘tech’ part of FinTech. Chris Skinner has been using the term “TechFin” as he says the emphasis should be on the tech component which is more important than the financial element and I completely agree with that sentiment.

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Serial entrepreneur Georg Ludviksson co-founded Meniga in 2009in the wake of the global financial crisis in Iceland. Georg has spent 20 years founding, building and managing global software start-ups. Georg holds an MBA degree from Harvard Business School with emphasis on Entrepreneurship and Finance. He also holds a BS degree in software engineering from the University of Iceland.

WHAT IS YOUR MISSION STATEMENT?
Helping people become smarter consumers by transforming the way banks and advertisers use data.

WHERE ARE YOU HEADQUARTERED & WHY?
Meniga was founded in Reykjavík, Iceland but is headquartered in London, UK. We chose London because it is Europe’s central hub for the retail banking & FinTech industry as well as a thriving, creative and innovative environment. Geographically it is closer to our current clients and gives us greater access to potential prospects and partnerships.

WHAT TYPE OF PROBLEMS ARE YOU TRYING TO SOLVE AT YOUR COMPANY?
Banks sit on a huge pile of personal finance data that contains information that is mostly not being utilized to create value. By applying data science techniques, Meniga enables banks to drastically improve their customer experience, create new revenue streams and cut costs.

One of the biggest problems in the FinTech industry is in accessing the data required to properly test and measure the success of solutions around the world. Meniga is in the unique position of having 25% of all Icelandic households registered in our stand-alone platform. We therefore have the freedom to try, test and measure as much as we want in Iceland with a significant population. We feel this gives us an edge when it comes to understanding what people like and what people don’t like which we take into consideration when moving forward. We also work in more than 17 markets and there are great differences in the availability, quality and structure of data between different countries.

Meniga consolidates and enriches personal finance data with data science from multiple sources, including accounts, transactions, assets, liabilities, bills and CRM to create personal finance management tools and personalized relevant messaging for banks. Meniga’s Card Linked Marketing solutions also use data science to allow merchants to send personalized offers to relevant group of bank customers.

WHAT ARE THE SIGNIFICANT SHIFTS THAT YOU SEE IN THE INDUSTRY?
We have been observing a great number of FinTech companies arising from all over the world in the last years. They will often start off with one solution or one purpose but if they manage to firmly establish themselves and continue grow they will quite often move towards using big data to advance their product offering. This is an indication of the true magic that his hidden in understanding and properly using big data. However it takes great deal of experience and skill to properly work with data science to create real value and insight.

IF YOU COULD TACKLE ANY TECHNOLOGY-SOLVABLE CHALLENGE EXISTING TODAY, WHICH WOULD IT BE – AND WHY?
We would tackle exactly the one we are working on currently. That challenge is to use big data to optimize the customer, bank and merchant relationship, this will drastically improve the financial lives of people globally. It will also help banks improve their customer engagement with a personalized experience, create new revenue streams and cut costs, and finally help merchants reach the right customers and stop wasting money on aimless marketing.

WHO DO YOU THINK WILL BE THE MOST INFLUENTIAL FIGURES (OR COMPANIES) IN FINTECH IN 2016?
We believe Meniga will definitely make some noise in 2016 with our data-driven solutions. Then there are many very interesting companies working on cool things all over the world. Betterment — a New York City-based startup that provides automated investment services and personalized advice, Affirm — a San Francisco based installment loans company helping users finance large e-commerce purchases, Transferwise — a peer-to-peer money wire platform and Swedish online payment business Klarna are all examples of companies that might influence the industry with their solutions.

WHAT ARE SOME KEY HURDLES IN THE FINTECH INDUSTRY THAT YOU’RE EXPERIENCING? AND HOW DO YOU SEE DATA SCIENCE APPLICATIONS HELPING SOLVE THESE HURDLES?
One of the key hurdles we see in the FinTech industry is that banks often don’t know how to properly consolidate and enrich their data to start creating valuable insights for decision making and improved services. This is where we believe data science applications are game changers by providing a powerful solution suite that can do this for them along with insightful consultation.

Data science is fact-based instead of intuition-based and therefore superior for financial decision making and cutting edge solutions. We also use it internally a great deal to improve Meniga as a company by measuring our performance and testing our products.

CAN YOU TELL US WHAT YOU THINK THE FINTECH INDUSTRY WILL LOOK LIKE 5 YEARS FROM NOW?!
The FinTech industry will only continue to grow as understanding of the industry and the technology continues to grow with new companies emerging every year and from all over the world. There are a lot of opportunities and issues that can be solved with clever solutions. However there will likely come a point where we will have too many FinTech companies. Most of the main industry issues have been ironed out and then it will really come down to the ones that know how to use big data to broaden their product portfolio, offer something new and eventually succeed. Good data sets will help banks improve their customer experience, create new revenue streams and cut costs.

We believe that “personalization” is the key word for FinTech this year. Customers want a personalized experience and in this day and age we believe they deserve just that! All our solutions provide a personalized experience for customers; we believe that in the instance of banks this will separate those who prevail from those that might become obsolete. Banks need to realize that they are not just competing against each other anymore but rather against the FinTech companies of the world which are squeezing themselves between the bank and their customers. If banks don’t take action by providing a superior, above all personalized, customer experience, then they might start bleeding customers if they aren’t already.

image credit: Yodlee NEXT

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Cosmin Ene is an entrepreneurial founder with an excellent first-hand understanding of the life cycle of entrepreneurial ventures, which he has accumulated over 18 years. Between 2005 and 2009, Ene was co-founder and managing director of DELUXE Television. Prior to this, he was analyst and associate at TecVenture Partners. In 2010 Ene started LaterPay, a micropayment enabler.

The idea of LaterPay started over sushi, when Cosmin Ene realized that people like to “cherry-pick” and he thought this need was not yet introduced on the internet where you have to pay for everything at once.

And so LaterPay was born in Munich, Germany with a mission of being a one-click solution to enable digital purchases, making it easy for people to purchase content without registration and cost, initially. By doing so LaterPay empowers the paid content businesses across every open ecosystem on the internet.

What type of problems are you trying to solve at LaterPay? 

To make people purchase paid content in an easy and convenient way. No one else is currently doing this, everyone is adopting a “safe solution” for themselves. Where as we are trusting people first to consume content and pay later.

What are the significant shifts that you’ve seen in the industry? 

Plain and simple, subscriptions as the one and only model for publishing doesn’t work. Given the fact that they are not working, companies like us are coming up with new ideas – most users don’t want traditional subscriptions and so you can start offering content to them in different packaging, e.g. as individual content.

If you could tackle any technology-solvable challenge existing today, which would it be and why? 

I would tackle the problem of the annoying upfront registration and payment processes, which is exactly what we do. We want to make it super easy for users to consume content. People don’t have a problem paying for content, they are just annoyed to register and pay up front for content. People want to be treated as they are in the real world where they get served first and pay later – after receiving and accepting the benefits. Bringing this behavior to the Internet world is a challenge that I am addressing in order to make a difference!

Who do you think will be the most influential figures (or companies) in FinTech in 2016? 

Companies that are democratizing investments, for example companies like Scalable Capital that make investment services affordable for everyone. And other companies that offer services that were previously reserved for banks. These previous exclusive services are moving from behind the walled gardens of banks to the backyard of startups and tech companies who speak the language of the customers and offer benefits that are appreciated by the customers. FinTech companies are painfully showing big banking brands that it’s all about benefits and less about the brand.

What are some key hurdles in the FinTech industry that you’re experiencing? And how do you see data science applications helping solve these hurdles?

Mainly the acceptance of innovation by merchants for companies that need the innovation. Sometimes you may not be a solution that your B2B customer want but a solution that they need. So, you need to create proof of concept and illustrate the gathered business intelligence, in order to get them to accept innovation. And this is a longer process.

Can you tell us what you think the FinTech industry will look like 5 years from now? 

More democracy for banking services, smaller companies solving both large and small problems that are not being addressed. We will move to an environment where big companies will no longer have a monopoly but rather where many smaller boutique firms will populate the market. This will be a little bit like the USP of craft beer breweries which are offering all kinds of cool or strange blends of beer instead of having only big beer giants.

I expect the market to become much more fragmented as some areas of FinTech are not yet defined. The insurance industry for example will see a significant changes over the next 10-15 years. There will be more atomized insurance options that will have customized solutions for what you need. They will address the needs of the Facebook generation, which is more interested in individual offers then only one option that covers all. For example, imagine going on a skiing vacation and easily booking an insurance policy covering you and your skiing equipment, for just that single instance.

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Despite some ups and downs over the years, Bitcoin is still hanging round as an alternative currency. There are those who still believe that the future is bright, and that Bitcoin may just represent the future of money. Indeed, we’re still pretty early in the life of the leading cryptocurrency. As more companies begin accepting it and more consumers begin using it, it’s becoming less of a concept and more of a reality.

There are a lot of specific reasons for the continued presence and potential of Bitcoin, and many would point first to foreign nations because their treatment of Bitcoin has been newsworthy. From Greece to Argentina, there have been rumors about nations with struggling economies turning to Bitcoin as a national alternative to save citizens from crippling regulatory restrictions. And while such a maneuver is still a long shot in any national economy, we have seen citizens in such countries turning to Bitcoin on their own. Most notably, when ATM withdrawals were capped in Greece, people began investing in Bitcoin so they could access their finances how and when they needed to.

For the most part, however, the continued relevance of Bitcoin comes down to a simple increase in the number of companies and stores that are treating it like currency in the U.S. Indeed, the largest proliferation of Bitcoin-friendly merchants remains in the U.S. despite rising numbers of such merchants in Europe as well. From independent, local shops, to massive online retail chains, we’re simply seeing more and more companies growing comfortable with the idea of these tech-based transactions. And this certainly bodes well for at least the short-term future of Bitcoin.

Despite all this, there are still many skeptics who don’t view Bitcoin as a long-term solution for those looking for alternative currencies. Historically alternative currencies tend to either fizzle out or gradually be treated as commodities, and many view the latter as the logical path for Bitcoin. Recently, concerns have even been raised that the energy costs of mining and using Bitcoin may ultimately be the cryptocurrency’s undoing. But if it does die out or succumb to commodity status, it won’t do so without leaving a monumental impact on society. That impact comes in the form of the blockchain, which has already become far more than a digital ledger on which Bitcoin transactions are tracked.

The blockchain is not a specific software used by Bitcoin, but rather a concept that can be recreated and adapted by most any financial institution, industry, or even individual. The basic concept, as many know, is that it’s a public registry of transactions that cannot be altered or erased; every relevant transaction is marked down in permanent ink, so to speak, for every involved party to observe. Not long after Bitcoin became a mainstream phenomenon, people around the world—primarily, those in charge of financial institutions—recognized the game-changing potential of this technology. And so, regardless of what happens with Bitcoin, the blockchain wars have begun.

Many who are working on developing new forms or applications of the blockchain view it as possibly the most impactful technological development since the Internet, as it holds the potential to change the ways in which pretty much every type of market or industry operates. We’ve seen banks adopting forms of the blockchain, either for their own record-keeping purposes (so, a private version of the technology) or to keep consumers at ease via transparency, and thus keep them from seeking alternatives. We’ve also seen the real estate industry flirt with blockchains as a means of eliminating title fraud. And more surprisingly perhaps, we’ve even seen a company emerge with the sole purpose of cleaning up the diamond trade by tracking and recording the origins and transactions regarding individual stones.

Most exciting of all, it appears that these adaptations are only the beginning. As simple as it seems in practice, the blockchain holds enormous potential to disrupt all kinds of industries and transactions. While Bitcoin’s future remains a hotly debated subject, there appears to be no logical reason for blockchain growth to be held back.

image credit: Craig

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Money 2020 Europe took place over three days in Copenhagen, Denmark ( April 4 -April 7). With more than 3,500 attendees, 420 speakers, 200+ sponsors and 100+ media partners representing over 70 countries, the conference shaped up to be one of the biggest Fintech events of the year. Europe was showcased as a place where innovation and creativity are in abundance.

Notable Trends

The main theme carried through the conference was companies changing their approach to focus more on customers or consumers. The financial industry showed a craving for services that have identity and authentication in them as every booth and brochure included customization. Through processes and new solutions that are specifically tailored to a customer’s needs, companies are trying to change the industry to benefit individuals.

Neobanks, a mobile-first banking experience that believes in moving away from traditional banking, were deemed another major trend at the event. Fidor Bank, a neobank based in Germany explained that the future of banking lays within the online market. Through innovative online banking, neobanks challenge the old-fashioned financial industry and make banking solutions easily-accessible and integrated.

Fintech hubs were another surprise at Money 2020. Cities that were originally thought of as hubs for the Fintech industry showed little dominance, showing that places all over the world are open to innovation and development of financial services. The difference between hubs and other places, however, remains – not every city has the capabilities to sustain the fast-growing, dynamic Fintech world. Thus, the top five locations emerged to be London, New York, Hong Kong, Tokyo, and the Silicon Valley with Singapore, Berlin, and Sydney running close behind.

Bitcoin and blockchain were also greatly supported as the Fintechs in those sectors try to tackle newly emerged issues with financial fraud and security.

Interesting External Events

FinLeap, a Fintech company builder based in Berlin, hosted an exclusive Fintech dinner on Tuesday night of the conference to discuss FinTech in Berlin and also create an opportunity where influencers within the Fintech realm could meet and discuss new ideas in an intimate and open setting.

The startup pitch at Money2020 Europe was also a huge success and was won by a Portugal startup:Crowdprocess. The contest featured 12 of the best startups across Europe and a panel of expert judges chose three companies to pitch on the stage on Tuesday and compete for 22,000 euro prize.

Biggest news at the conference

As mentioned above, Money 2020 provided a stage for those who wanted to announce news. From collaborations and mergers to general Fintech updates, many companies took part in the initiative to spread the word. US online lender Kabbage, for example, announced its deal with Santander to help them out with fast online loans for small businesses. Another company, TransferWise, announced the integration of the largest bank in Estonia LHV and Berlin-based company Number 26. JP Morgan reported on a collaboration with OnDeck. Atom Bank just launched their iPhone and iPad app while AliPay, China’s leading third-party online payment solution provider, is launching its services in Europe.

As for the banking industry, BBVA is beginning work with various Fintech providers to improve the customer onboarding experience by verifying more customers faster and more securely. The announcements however did not end with just companies. One of the biggest statements did not concern a merger or a collaboration but rather a list of of the 2016 Fintech 50. This list comprises of 50 European businesses that are leading the transformation in the Fintech world. The fourth edition of the list included Berlin companies Barzahlen, Mambu, Number 26, Raisin, and SpotCap. The rest of the Fintechs in the list were from the UK, Netherlands, Israel, Switzerland, Iceland, Germany, Ireland, and Sweden. In another section of the Fintech 50 ranking, the panel of judges named ten companies to look out for including Berlin’s Savedo and OptioPay. Fintech 50 also featured India and Hong Kong as the plan is to launch a The Fintech50 Asia later in 2016. The list was constructed based on year-long research and included expertise from over 30 industry experts across Europe.

What we learned from the conference

At Money 2020, Fintech showed its matureside. The growing industry is no longer the hype it used to be, but instead, focuses on execution and quality. With big figures in investment, Fintechs are ready to collaborate with others in the industry, including banks to make their product not only scalable, but also sustainable. Through collaborative discussions, young startups gained insight from experts in the financial industry with useful feedback on how to develop, innovate, and succeed. However, still only a handful of banks truly understand what digitalization means. Some of the standout banks at Money2020 included BBVA, Deutsche Bank, HSBC, and Barclays. Those banks showed willingness to combine their financial expertise with the drive of the younger generation to change the financial industry.

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Start-up admiration and entrepreneurship are alive and well outside of Silicon Valley. Check out Berlin, London or Amsterdam and you’ll be met with a striking number of founders, start-up hoppers, and entrepreneurs. Silicon Valley does reign supreme, but the tides are continuing to turn outside of the California-bubble. In fact, 6.9 billion USD was raised in the first half of 2015 in Europe—that’s 86% higher than the same period in 2014. There seems to be few signs of slowing down, especially in the FinTech industry. If industry insiders foresee an imminent burst in the Silicon Valley tech bubble, what’s to stop European start-ups from getting ahead?

American and European start-ups operate on very different playing fields. It’s not that Europe simply has less talent or interest; rather, they have a different set of hoops to jump through. The most notable is funding.

Finding Funds in the EU

The problem is not that the EU has proved unprofitable. With funding largely focused in the US, many European start-ups are quite simply strapped for venture capital: “There have been 24 billion dollar plus exits in Europe in the last five years,” explains Venture Capitalist Fred Wilson. “When you take all of that and combine the fact that there is probably a hundredth of the VC dollars at work in Europe vs the US, you get a great market to invest in.”

The American start-up style is often “go big or go home.” They launch with a fury of marketing campaigns, and reach in every direction manageable. They have to penetrate the market if they ever want to gain an advantage and grow. VC’s fund explosive campaigns in hopes of getting a slice of a unicorn pie. When that fails, there are still plenty of other projects. Europe, however, does not excel at late-stage funding. If a start-up wants to succeed, they need revenue, not market penetration. Perhaps that’s another reason so many are flocking to Berlin, whose unofficial motto “poor but sexy” sums up the financial mind set of many inhabitants. This understanding of start-up growth may also be the culprit behind the lack of exits in the EU.

One reason Silicon Valley seems to take the cake over Europe is the number of exits and acquisitions. It seems obvious: if Europe had better start-ups, more corporations would buy them out. European unicorns are completely dwarfed by those in America. Whereas Europe boasts an estimated value of roughly $110 billion, US Unicorns estimate at $700 billion. Despite the growing hubs and interest in Europe, those numbers are tough to accept.

Europe is, however, growing. Seven companies completed successful IPO’s in 2014. They aren’t all explosive companies like Facebook, but they are powerful players, nonetheless. Consulting firm Roland Berger suggests that we “think of German start-ups such as Sociomantics and Rhode-codes: There may be more sexy companies out there, but their business models plug important gaps in the market.”

The Double-Edged Sword of Language and Borders

There’s another interesting set-back for Europe: language. Many start-ups blossom in their home country. They might become big fish in a comparably small pond. While start-ups in the US can expand all across the country with relative ease, even into Canada, the UK, and markets that accept English as the working language, expansion is much more difficult. While some start-ups can operate entirely in English, others have a more local focus. Even for a continent with relatively high English language penetration, the mother tongue aspect is important, especially in privacy-heavy areas like FinTech. Start-ups may start in German, French or Spanish, and translating everything into another language is a huge step. Basic “Google Translate”-styled localization won’t do. Terms, buzzwords, marketing all has to be perfectly translated into multiple other languages. Customer service has to be immediately expanded into several different language divisions. It’s not only a matter of legal borders in Europe, but linguistic ones.

This has been a blessing in disguise for several start-ups. While american start-ups gain traction quickly, they seldom understand the art of expansion. Having made it in Silicon Valley, the assumption is that the product will boom elsewhere, and the intricacies of expansion are over-estimated. European start-ups that have already dealt with the legal, operational, and hidden fees of expanding across borders have necessarily already learned much more about markets and strategies than their American counterparts.

The Powerful Role of FinTech

One field that is really blossoming in Europe is FinTech. London has become a hub, and it continues to grow. However, the style of innovation in Europe differs greatly from across the pond. They haven’t adopted the “fail fast, fail often” attitude of Silicon Valley. Instead of risking failure and stigmatization, companies who do “make it” often prefer to work within the U.S.’s existing start-up machine. They are built to sell and exit to American companies, because that is a safe route. The result is that they exit quickly, preferring security to fully developing their product and company.

Hopefully they are ready to fill some big shoes, because London’s FinTech sector is projected to continue climbing, and even to surpass that of Silicon Valley. Accenture and CB Insights have found that, while the majority of funds still go to the US, London’s five-year trajectory has outpaced the competition. FinTech investment is growing worldwide, but Europe experienced the highest growth rate, with an increase of 215 percent to $1.48 billion in 2014, 42% of which was in the UK and Ireland, alone.

As prices in Silicon Valley soar and many expect its tech bubble to burst, the scene is changing in Europe. With more capital, and the push of the FinTech industry, US and EU start-ups may find themselves on somewhat closer footing. Still, despite plans to build the world’s largest incubator in Pairs, and significant growth in hubs like London and Berlin, Europe will not simply replace Silicon Valley. They must continue to take advantage of Europe’s unique opportunities, and set themselves apart from the American system.

image credit: TechEU

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Wladimir Huber (29) worked several years as a professional trader in a German investment bank, founded an eCommerce startup and holds a M.A. in Finance from Leuphana University. Since he graduated from the university, he constantly developed internet business models. He especially enjoys the data-driven and analytical approach to business. Wladimir knows Python and has experience in machine learning. He enjoys developing trading algorithms and travelling the world.

WHAT IS YOUR MISSION STATEMENT?

Our mission is to develop the simplest mobile Social Trading App to solve the problem of new traders to enter the financial markets. We want to develop the most transparent mobile social trading community worldwide, giving everyone the possibility to make profits while trading.

WHERE ARE YOU HEADQUARTERED & WHY?

SwipeStox is headquartered in the financial center of Frankfurt, Germany. We see Frankfurt as a perfect location in terms of access to strategic partners, labor and knowledge. Further, the city is known for its focus on capital markets and has further a big international airport which gives a solid base for a global expansion.

WHAT TYPE OF PROBLEMS ARE YOU TRYING TO SOLVE AT YOUR COMPANY?

SwipeStox is the first mobile social trading application that allows everyone to trade Forex, Indices, and CFDs (we will also offer the possibility to trade physical stocks) simply by copying single trades. Everyone can swipe (Tinder-style swiping) through the trades other experienced traders have created and profit from their knowledge about the markets. By connecting traders from all over the world in one network, users can see live trades and copy them – rather than relying on fundamental or technical trading decisions alone. As a trader you can either leverage this information to execute own trades or simply follow and copy other traders and their trades. We want to bring trading to the masses and allow everyone to trade the financial markets without having many years of experience. We solve the problem of people who do not have any experience nor the time for trading successfully.

WHAT ARE THE SIGNIFICANT SHIFTS THAT YOU SEE IN THE INDUSTRY?

In the last few years, Blockchain and bitcoin were always a hot topic. Further, we saw that robo advisory was emerging. When taking a look at the financial industry as a whole, I see that more people need to take the responsibility for their financial situation since banks do not hold the holy grail anymore and FinTechs with alternative solutions are showing a stronger presence. I think that over the next years the whole finance industry will become dynamic without relying on the advice of banks and financial institutions. Accompanied by that we will also see an increasing emphasis on data security protecting customer sensitive data.

IF YOU COULD TACKLE ANY TECHNOLOGY-SOLVABLE CHALLENGE EXISTING TODAY, WHICH WOULD IT BE – AND WHY?

From my perspective it would probably have to do with a – regulated – renewed money model allowing individuals to exchange money with each other, cutting the middlemen. The challenge would be to match individuals and to give especially underbanked people the access to virtual money. An underlying solution might be the Blockchain technology.

WHO DO YOU THINK WILL BE THE MOST INFLUENTIAL FIGURES (OR COMPANIES) IN FINTECH, IN 2016? WHAT KIND OF YEAR DO YOU FORESEE FOR YOUR COMPANY?

Fintech has been booming recently and in general there are many finance sectors in need for a disruptive new approach. For the past few years the term FinTech became a synonym for basically everything that was related to banking or finance. However, many companies out there just developed a better frontend without really changing underlying process or without tackling more “fundamental” problems such as giving underbanked people a possibility to enter the financial markets for instance. As for ourselves, this will be our year for global expansion, which we need to manage operationally and strategically. Further, we will push the development of our API, allowing us to onboard every broker and bank worldwide. It will be extremely important for us to strengthen our partnerships and to develop a good reputation.

WHAT ARE SOME KEY HURDLES IN THE FINTECH INDUSTRY THAT YOU’RE EXPERIENCING? AND HOW DO YOU SEE DATA SCIENCE APPLICATIONS HELPING SOLVE THESE HURDLES?

I see mainly regulatory issues as the main problem in the industry. An idea alone is often not enough if you don’t have the necessary licenses and/or lobby behind you. Further, traditional finance is still conservative and so are the customers. With more solutions coming into place, the typical customer becomes more interested in alternative services and investment and savings possibilities. Data science will bring better products to the market and give everyone the feeling of actively influencing the return on an investment.

CAN YOU TELL US WHAT YOU THINK THE FINTECH INDUSTRY WILL LOOK LIKE 5 YEARS FROM NOW?!

On the one side I believe that we will see a consolidation of FinTech companies and that we will also see the development of really big players that might be backed by banks and other big institutions. Furthermore, big banks will continue to lose ground to, or partner with, FinTech players which will require them to buy new markets players in order not to maintain market share. Perhaps by the end of 2021, FinTech will no longer be a buzzword at all and will become the new standard in finance and banking.

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Brands utilising big data are cultivating an ‘insight economy’ where every business move is mapped out with pinpoint accuracy thanks to the internet of things (objects that send and receive data) building a connected world. Businesses are leaping at the chance to embrace ‘cognitive computing’, a process where coding, tools and data are combined to achieve artificial intelligence (AI), reasoning and learning. Now, more than ever, analysts and data scientists in the financial services have the capacity to deliver concise, data-driven predictions based purely on data and performance, and unleashing lucrative returns. But, that’s not happening.

Flawed financial services

Credit scoring has stagnated since its birth in the late fifties in the Merchant Associations and small Credit Bureaus. Based on the borrower’s financial behavior, such as frequency and reliability of repayments, plus more surprising factors such as a ‘gut feeling’ assessment of the borrower’s personality, likes and reputation, lenders created a score unique to an individual borrower. The system eventually matured into the contemporary factual credit scoring system, however inaccurate data and grinding processes still haunt the scoring.

Compared with the accuracy of the internet of things, which, according to IBM, generated 2.5 billion gigabytes of data in 2012 and is expected to be collected from an astonishing 75 billion internet-ready devices by 2020, the uncertain credit scoring system feels about as reliable as a chocolate teapot.

Unsurmountable sluggishness and inaccuracies

The credit scoring process, while established, is flawed. Lenders consult Experian, CallCredit and Equifax about one borrower, tripling their workload even though the traditional methods of calculating a credit score are employed by all three agencies. Why? Because although their databases overlap, the information recorded differs across financial packages. If a loan application is rejected by one bank, the same information could be used to fuel another rejection, trapping consumers in a cycle of unsuccessful applications.

Unfortunately, the traditional data won’t reveal the applicant’s intent to pay, their affordability, and how likely they are to make repayments on time. Trustworthy applicants that could easily afford the loan repayments are missing out due to the lack of data that lenders rely on. While these customers are slipping through lenders’ fingers, questionable applications are passing checks with flying colours only to burn lenders further down the line.

Borrowers, advisors and lenders are languishing in a lethargic and sluggish routine of inaccurate data and never ending loan and mortgage applications. Their frustration is at fever pitch. The Mortgage Market Review (MMR) has come under particular scrutiny and criticism for this inaccuracy, citing that while the affordability criteria is rigorous the application process now takes in excess of 40 days, with brokers spending significantly more time caught in bureaucracy when mistakes are made.

Big data for the financial services industry

Currently, the information collected and analysed by big data systems such as IBM’s Watson is unmeasured by the credit reference agencies. Unsurprisingly, advisors and lenders are looking longingly at such solutions in the hope they’ll be incorporated into the credit score calculation, because such a time saving and contextually aware tool would change the financial service industry beyond recognition.

The emergence of social media has contributed to the data revolution. By simply overlaying social data onto traditional data, lenders are afforded the context otherwise lacking in their decision-making. What’s more, lenders will be able to take on new financing accounts with confidence. The financial services industry are looking for actionable solutions to bring those numbers to life, but the truth is that such technologies are in existence, either made by tech giants or FinTech startups.

Social media data can be incorporated to enrich reliable credit scores by delivering deeper insight into each customer as an individual, instead of a number. Unlike traditional credit scoring, it reveals recorded events and phrases that businesses can analyse to discover what is going on “behind the scenes” financially. It echoes the original methods employed by the Merchant Associations and small Credit Bureaus, where a part of the credit score looks at personality, and what’s actually going on in a borrower’s life. Social data offers that same insight, minus the one-to-one visit, and brings personalisation into the equation. Affordability assessments will become more detailed and bespoke than ever before and still maximising efficiency, thanks to automated data analysis.

Borrowers that invest in a new boiler, for example, or whether they choose to shop at Lidl or Waitrose, and even if they have just been on holiday, got engaged, or had a new baby, will all be revealed by overlaying social data to usual credit checks. Social data reveals these personality snapshots of overwhelmingly significant insights, so businesses can draw their own conclusions about the financial stability and commitment of the borrower.

A business that correctly leverages Big Data boasts a staff of engaged, sophisticated thinkers

Big data fundamentally changes how staff and computer systems interact. The lengthy and frustratingly repetitive process of manual data entry is eliminated, instead absorbed by systems. Advisors are focused on interpreting data, strengthening their ability to diagnose the borrowers reliability. In another instance, employees engaged in overly complex customer service tasks, that perhaps involve natural language questions, are relieved of Q&A sessions (or phone calls, or emails clearing up mistakes) because systems can ascertain the same information by overlaying social data.

Big data gives financial services back the human touch. Overlaying social data and analysing information beyond pockets of niche data tells lenders a picture of who they are, what they do, what they spend money on and their personality traits. But most importantly, it tells them what the borrower can actually afford.

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Berlin seems to be the perfect climate for entrepreneurs. From the newly launched FinTech startup solarisBank to increasingly popular Number26, startup culture in the German capitol is a powerful force. Despite London leading the pack in FinTech, Berlin is emerging as a real competitor, whose FinTech sector continues to grow at rapid speed. Though the self-titled “Silicon Allee” is no doubt blossoming, there seems to be uncertainty as to why. What’s driving FinTech in Berlin and will it make it to the number one spot?

The Banking Atmosphere

It’s almost a surprise to see Berlin grow in the FinTech scene. Unlike London or New York, Berlin doesn’t host any major banks or stock exchanges. It doesn’t even have a large—or medium—number of venture capital firms. Still, Berlin is home to several successful FinTech companies. One of the biggest is online bank Number26, which has accumulated over $10 million in funding. They reached 80,000 clients in only ten months, and have received a lot of love in their home country. Other players, like Bitbond, Raisin, and Zencap are still only the tip of the iceberg. Local Berlin-based FinTech builder Finleap has also grown, employing over 100 people in eight FinTech businesses—and it only started a little over a year ago.

While traditional banks in the US are, to an extent, still fighting to keep up, German banks have a certain instability that make the financial climate of Germany perfect for FinTech. Regional banks lack IT competency and are struggling to get with the technological times. The result is a population willing to look to alternatives, and also major companies willing to enlist outside help. Commerzbank, German’s second largest bank, has a Main Incubator (located in Frankfurt), as well as CommerzVenturies entities, which focuses on FinTech. Deutsche Bank, on the other hand, has opted to create incubators in London, Silicon Valley, and Berlin. Companies like Deutsche Bank have been hit hard lately for not being ready to go digital, and their response has been increasingly favorable for FinTech endeavors in the country.

While banks are scattered across Germany, Berlin is deemed the German FinTech capital—even by Deutsche Bank. They wrote a paper repeatedly saying so, with a host of statistics to back them up. Berlin hosted 139 FinTech firms in 2014, followed by Munich, who had less than 20. Frankfurt claimed only 11. They found that 56% of German banks collaborated with FinTech firms for strategy, and a whopping 80% were satisfied with that partnership. Perhaps the question isn’t simply “what makes Berlin so great for FinTech.” Rather, Germany as a whole is embracing the movement, and Berlin has proven the perfect city for startups to enter the playing field.

Money in the “Poor but Sexy” Capitol

How did Berlin get here with so little funding and an obvious lack of structure? Many believe this “lack” may be exactly why startups and FinTech are succeeding in Berlin. Mathias Ockenfels, investment associate at Berlin Point 9 Capital explains “there is no old-fashioned industry in Berlin, but some of the tech companies are the largest employers here.” Many point to the fall of the wall and the missing business infrastructure as a real cause for the appearance of startups. Moreover, Berlin boasts one of the most multicultural scenes imaginable. Unlike Paris or other EU cities, internationals are the norm, and all kinds of languages are spoken.

The famous, unofficial motto of Berlin, “poor but sexy,” may also lend insight. Berlin is a hotbed of young internationals. It attracts artists, travelers, and even techies. Of course, if Berlin the embodiment of “poor but sexy,” that’s exactly where love for FinTech would be expected to grow. The “underbanked” and tradition-wary are exactly the type of individuals who make up Berlin. The city is even known for its strong cryptocurrency community. Bitcoin may not be thriving, but the community and love for digital currency is burgeoning rapidly. Berlin is home to Bitcoin startup incubator Bitcoins Berlin, the world’s first bitcoin-accepting bar, popular bitcoin podcasts, as well as strong meetup groups and many members of the Federal Association of Bitcoin.

The place where Berlin truly struggles is funding. Germany is known for being very averse to risking money, and venture does not simply flow in and out of startups the way it does in Silicon Valley. That’s likely why money has to be found elsewhere, which seems to be working. A study from FinTech Forum found that Germany was barreling ahead in FinTech funding, raising between $300 and $350 million, again second to the UK with $540 million.

Though Berlin remains “second” in Europe, it is making a huge name for itself, attracting much more venture capital out of foreign investors, and prompting some to relocate or establish new businesses in the capitol. Their famed know-how even brought one Irish minister of state to seek advice from the Berlin FinTech scene. A published 54-page strategic report on Ireland’s international financial sector (IFS) hinted at trouble in Ireland, so Simon Harris, Ireland’s Minister of State at the Department of Finance, hoped that empowering the local FinTech startup scene would be help remedy it. For advice, he went to Berlin digital venture capital firm Earlybird, and other local FinTech players. By seeing what makes Berlin such a powerful FinTech hub, he hoped to help boost Ireland’s own startups.

Hopefully the influx of big name incubators and a better flow of venture capital will push FinTech in the German capitol ahead even faster. Though Berlin continues to attract attention, it will also fight some of its own home-grown problems—including copyright and data protection laws. Still, many FinTech companies are fighting through the muck and making Berlin into one of the biggest hubs for financial technology. London may be larger, but growth in Berlin is massive. According to Roland Berger, startups in the German hub have grown almost 7 times faster than that of London. The winds in Europe may be changing—or at least slowly evening out.

image credit: Jörg Schubert

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Talking about FinTech can be a bit tricky. Even when we think outside of the box, leaving behind California, London and Stockholm, many will still forget one of the biggest FinTech contributors today: Israel. Despite having four Israelis listed among HotTopic’s recent “100 Most Influential FinTech Leaders,” and a large pool of successful start-ups in Tel Aviv, Israel is very often forgotten. Perhaps this is because it’s not as trendy, or it is quite simply farther away. Their news and information sources are not as accessible on this side of the pond.

One possible reason is simply the type of technology coming out of Israel. There might be thousands of great start-ups, but many of them aren’t the cool, trendy ones being splashed across a friendly “Top 10” list. Payoneer may have grossed some $500 million in its early years, but it is a payment solution for large companies, not little guys. Another possibility is that these companies morph into “international” companies, rather than Israeli companies.

When these companies relocate to far west locations, their Israeli identity is often left behind or merged to create something new. Famous names like Fundbox, or the mega-hit BillGuard have Israeli roots—though you wouldn’t guess that when reading about them. Whether it’s “based in San Fransisco,” or “headquarters located in New York,” the origin of such companies are often ignored as they are absorbed into the North American and European markets. Of course, that doesn’t keep the industry in Israel from booming.

Numbers Don’t Lie

How is Israel FinTech growing so quickly? Some suggest it’s simply the environment of innovation. When successful innovators found or fund other innovations, the results are rapid development and, more importantly, continued success. It seems outside companies are also seeing the build in FinTech innovation coming out of Israel, the ultra famous TechStars Accelerator announced it would open a FinTech-specific branch in Tel Aviv. MassChallenge, the massive accelerator, also announced its second foreign location: Jerusalem. Stepping outside of the US and the UK, MassChallenge will be setting up in Israel in 2016. Why Jerusalem? As described by Israeli innovation website NoCamels, MassChallenge perceived that Tel Aviv was already a powerhouse of opportunity; whereas Jerusalem has the innovators, but not the means and resources. With great universities and untapped venture capital, Jerusalem may be the next FinTech boom.

If you need real proof that Tel Aviv is booming, the latest IVC-KPMG Survey revealed Israeli start-ups raised $1.1 billion just this quarter. Not to mention, they have raised $3.2 billion this year, compared to to $2.2 billion at this time last year. NoCamels also noted that not only are many of these start-ups FinTech-specific, but the occurrence of large funding deals (over $20 million) are on the rise.

The Perfect Climate for Innovation

With plenty of big cities, thinkers and innovators around the world, what is that makes Tel Aviv, and Israel in general, so powerful on the tech scene? One major factor must be the general personality and climate of the country. Moshe Hogeg, managing partner and chairman of Israeli VC Fund, Singulariteam is quoted as describing Israeli innovation as “a question of survival.”

“We must continue to innovate. Israel is surrounded by enemies and we don’t have natural resources. This means that our number one commodity is the brain. Israelis have also understood that success is not served on a silver platter: you will only win if you are better.”

The role of immigrants in Israel may also play a key role. For example, some of the more memorable immigrants include Soviet Jews moving in the late 1980’s. Many of these folks would have been at the top of scientific and engineering fields. Bringing their knowledge to Israel may be a very special ingredient in the country’s tech success.

In a climate where self-reliance is hailed as a vital trait, and strict observance of rules always left on the back burner, innovation and creativity becomes natural. It also seems that the diversity within Israeli society leaves many doors open, and also means that judgements are based on veracity rather than nepotism. A system that rewards merit and real ingenuity doesn’t only lead to good inventions, but also to a healthier and more productive environment. It creates the environment where successful innovators turn around and help other innovators is vital to growing the FinTech start-up scene exponentially.

The Special Case of FinTech

The fact that Israel has one of the highest percentages of scientists and engineers per capita does not necessarily mean that Israel will become a FinTech hub. However, the Israeli financial environment has some very specific attributes that make it ideal for start-ups and innovators. With a unique combination of high smart phone penetration—even higher than the U.S.—and a relatively small size, Israel has the very special chance to reach people, to test markets, and engage more personally with customers. Another strange aspect is the often referenced, big-data-heavy army intelligence units, which almost on accident produces brilliant start-up founders (including BillGuard’s Raphael Ouzan). For many, Israel’s Intelligence Unit 8200 is almost synonymous with Israeli start-up culture.

The financial regulations of Israel also offers a unique backdrop for creating and testing. One shining example of Israel’s willingness and ability to adapt new technologies is the rise of bitcoin and cryptocurrencies. Even Bitcoin says Tel Aviv is one of the leading cities for Bitcoin. The size of the country, the flexibility of the financial system and the mental openness to new tech all make Israel a tech hub ready for FinTech.

The microcosm of Tel Aviv allows innovators to create, test and grow their companies before branching out across the world. The addition of a TechStars FinTech department in Israel is both a great opportunity and a sign. It’s impossible to ignore the fact Tel Aviv is near the top of the FinTech field. Fundbox, Payoneer, eToro, Zooz—so many innovative and successful start-ups are coming out of Israel. That’s why Carmel Ventures (also Israeli) created this amazing infographic.

featured image credit: Yoni Lerner

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We have already learned the basics of the blockchain cryptocurrencies (like Bicotin) in WTF Is The Blockchain? A Guide for Total Beginners. Cryptocurrency exists solely in digital, and the chain is completely decentralized, enabling it to never just “go down.” Transfers are verified by the hard work of miners, who add up all the numbers and solve mathematical equations to prove that the transfer is valid. Blocks of transactions are strung together, and include a summary, a time stamp, and proof of work. Thanks to the complicated equations and keys, the “public ledger” styled chain can never be wrong, and solved blocks can never be altered.

How are bitcoin transactions really sent?

Rather than including a SWIFT, routing number, bank address and oodles of other information, all a user really needs is their “key.” A private key is a slew of numbers that is both incredibly secure and unusually delicate. Changing one tiny number or letter renders it useless. Stranger still, these private keys must be made public in order to be used. Much like a password, a user must be able to provide the real key to the location of their money in order for their transaction to be validated. The private key is not, however, used in its entirety. Instead, a public key is created that includes a portion of that private key. Sounds dangerous, doesn’t it? If part of that secret key is put out into the world, couldn’t this network of mathematic problem solving and souped-up computers crack the secret key? Luckily, no. The public key is formed in such a way that is necessarily only refers to the transaction created. If you want to send your mother five bitcoins, that information is inherent in the generated key. It cannot be removed. Even the slightest change would require an entirely new number. For bitcoin, a private key is a 256-but number (though some wallet vary from 128 and 512 bits).

What does that look like? An example shows us that it may look like this: 16qT2iLQ7d5MiEkKWYau6mfRNHUFZ3NzHz. Trying to crack such a number, though theoretically possible, is really implausible. It is often compared to finding a certain grain of sand or counting atoms. However, poorly chosen private keys are just like poorly chosen passwords. While choosing “1234” or “sausage” generates a slew of numbers that looks, at first, like any other slew of numbers, it is much more likely to be targeted and cracked.

Keep keys and money safe

As the spirit of blockchain and cryptocurrency is founded on bankless and borderless transactions, there is no one to ask for help if a key is lost. If a hard drive crash erases all of your keys, say goodbye to that money. Much like coins jostling around in pant pockets and cup holders, cryptocurrency often needs a safe place to stay. Wallet software helps generate, use and store private keys. They are not, however, 100% flawless, and can malfunction just like anything else on a computer. Before diving head first into a wallet, make sure to understand the program as well as how keys are imported and proper backup procedures.

The blockchain system is founded on the idea that users should trust no one. It is also designed to completely remove “trust” from the equation, and replace it with mathematical proofs. Of course, there are always tricksters, especially in the highly anonymous cryptocurrency world. Luckily, there is only so much they may be able to do. While we won’t go into detail, there is a basic rule of thumb when it comes to transactions. Blocks further back on the chain (those that are older) are more secure. As the chain is decentralized, a fraudster could try to jump in and replace one transaction with another. The chain is always being updated, and the block that is processed first is found to be the valid one. The chain that is the longest also always takes precedent over other, shorter chains. This means that is possible for a transaction to be overrun with another. How can fraud like this be avoided? Simply by waiting until a block is far enough down the chain to be considered solidly embedded removes possibility of its removal. As one block cannot simply be changed without affecting the others, a fraudster must change all subsequent blocks. This becomes more and more difficult with time. After about ten minutes, the block is validated and the money is considered moved; however, you may want to wait six blocks to consider the transaction truly safe. This should take about one hour to complete.

Cryptocurrency and infinitely faster computers

The system has already exploded in recent years. People are content to purchase and build powerful mining-machines from scratch. Serious miners are capable of doing much more than the average person would even consider possible, and it causes fear. There are several valid fears about blockchain technology being vulnerable or dangerous, but the rise of powerful computers and faster processing times should not be one of them. Perhaps the most important part of the technology (apart from being at the heart of “digital anarchy”) is how it was very carefully and specifically designed. It was designed to respond to faster processing speeds and to adapt for the future.

Using machine learning to create a computer that learns from each and every process would make mining infinitely easier. Theoretically, it could eventually take no time at all. This could be dangerous, allowing those with access to great computers the ability to effectively “run the show,” and do so with impossible speed. This is why the difficulty level is constantly being recalibrated. When users refer to the “10 minute” waiting period for a block to be confirmed, they mean 10 minutes yesterday, today and tomorrow. Though it’s impossible to always be the exact same speed, the program is always ready to change the difficulty level of mathematical equations to keep the process running at the same speed.

The perhaps biggest concern about bitcoin, specifically, is when it will run out. There is not, in fact, an infinite amount of bitcoin. Every four years, the number of bitcoins generated per block are cut in half. It will eventually cease to offer rewards, and no new bitcoins will be created. The final number available is expected to cap out at 21 million. One of the bigger cryptocurrency fears is how deflation could affect bitcoin. For some, the fact that bitcoin will one day simply stop growing means the cryptocurrency will soon be dead. For others, the exact number of bitcoins is irrelevant, as the world will continue to deal in dollars, euros and other currency, using cryptocurrency solely as the payment system. This has been a common debate in recent years, with a growing number of commentaries, but save that argument for another day.

image credit: Zach Copley

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There are rules every start-up abides by, and the FinTech arena has its own special set. These new companies simply must understand the start-up game as well as the legal quandaries specific to finances. Taking a walk through the FinTech graveyard provides educational, eye-opening, and sometimes fun new information.

Respect Supporters and Partnerships

A young start-up needs money to find its way. As a result, much focus goes toward raising funds and making deals. This seems obvious and logical; you can’t make money without spending money. Unfortunately, without the right plan, start-ups may just be throwing money at an idea. Founders need to be asking who will pay money for their final product. After they burn through their initial funds, where will they find more? While some freemium programs seem to work, the term “freemicide” wasn’t coined without reason. The goal is real customers and knowing what they want. Of course, not all of these customers will be typical, average Joes and Janes.

FinTech is one of the most interesting, and maybe inspiring, areas for tech disruption. “Down with the old and in with the new,” right? Except, many FinTech start-ups will be fulfilled through partnerships. As Houston Frost of Akimbo Financial explains, Dwolla, Simple, Moven, Akimbo, and other famous start-up heroes aren’t going it alone. The relationship between the disruptor and disrupted is completely different in the FinTech field in many ways.

“Even the big payment startups like Square, ISIS, and Google Wallet, require not only financial institution partnerships but also partnerships with big processors like Fiserv. Regardless of the product, the financial startup likely requires a partnership with an established company in the same sector the startup is likely trying to shake up.”

Respect Complex Regulations

Every tech field involves legal complexities. While big corporations have their own lawyers to maneuver complicated legal regulations, start-ups are on their own. And it’s a big deal. While some financial technologies may be far less intrusive, some could face intense quagmires. GoCardless, a UK-based online direct debit provider, has been sponsored by RBS (Royal Bank of Scotland) and handles $1 billion of transactions a year. Even their founder, Hiroki Takeuchi, has noted the difficulty in understanding regulations, as well as penetrating the bank-owned financial infrastructure. “To get access, you need to set up some sort of arrangement with a bank that moves at a glacial pace.” They didn’t go it alone, and it took a lot of work to work with the famed glacial pace of traditional banks.

Then there is the tale of Zenefits, an incredibly hot start-up dealing with employee insurance benefits—among other things. Having thoroughly annoyed insurance companies in the area, Zenefits was attacked with legal battle after legal battle. Angering brokers and regulators is often the last thing FinTech start-ups intend to do, but that doesn’t mean trouble won’t come looking. Throwing curveballs is almost to be expected in the financial world, much like Prosper and Lending Club saw back in 2008 when they were hit with legal claims they weren’t operating in accordance with regulations—the result of simply not grasping the legal jargon and what it really means.

Finances are very complicated market, legally and socially. While a humble start-up may have the consumer’s best interests at heart, that doesn’t mean society will see it that way. TandemMoney was marketed as an “emergency fund for the underbanked,” and as swiftly as they appeared they were slapped with legal papers. Rather than garnering immediate sympathy from on-lookers as a poor start-up cornered by big banks, there were debates on whether their product was socially and financially healthy. They caused worries that their tech would be exploited to avoid payday lending laws. It was also termed “payday lending in disguise” by watchdogs. In the end, TandemMoney joined the other FinTech start-ups in the graveyard. Their missteps remind that social and legal regulations in the financial sector can be far more dangerous than in other areas.

Respect Marketing and Your Markets

90% of start-ups fail. Websites, incubators and founders honor founders’ post-mortem words, because, frankly, nearly everyone knows the sting of start-up death.

One of the biggest reasons start-ups fail is that they simply make a product that no one wants. Models and apps that don’t engage customers don’t gain traction. The fact that Starbucks is able to kick Apple and Google to the curb with their payment app should highlight how tricky customers can be. If customers care about the product and are engaged, then they will be a great friend. Mobile payment system M-Pesa was able to succeed in Kenya because they made the right partners. Their audience seemed to love them from the start, simply because they were tied to the right companies. Soon after, hundreds of other companies would try to market almost the same product and end up completely ruined. It was M-Pesa’s partnerships that created serious traction with users and even the government. They knew their market and how to use it.

Conversely, the story of failed personal finance management site Wesabe offers a stern warning. Marc Hedlund, Wesabe founder, described the tale of how his company effectively lost to Mint in a blogpost, here. One of his biggest realizations is that, while they had a great product, they didn’t get quite get their audience. “Mint focused on making the user do almost no work at all… we completely sucked at all of that.” It’s important to recognize each start-up as one of many. Wesabe may be great; but if consumers don’t love it in those first few keystrokes, they may just move on to something better. Yes, there is probably something better.

Deceased start-up Blippy also thought they knew their customer. They’ve stated that “the big question that Blippy answers is ‘What are your friends buying?” and it sounds convincing. It’s great that they’re answering a question; unfortunately, it was a bad one. Blippy wanted to let you share your purchases with friends, and make the act of buying a social event. It took a long time and several iterations before Blippy released the real question was “who cares?”

In the end, 90% of start-ups will still fail. A FinTech graveyard of post-mortem words should serve as a wealth of information and support for founders and employees. Startupbootcamp Berlin has even hosted Failure Lunches celebrating dead start-ups. There is a lot to be learned from lost start-ups, so take advantage of the wealth of knowledge before dooming your own company to join the graveyard.

A nice chart/study from CBInsights. It’s not a necessary photo, but could be nice if you wanted some visual data

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image credit: feature: Robert-Couse Baker, body: CBInsights

The Fintech revolution powered by Smart Data is happening. Startups are disrupting financial technology that remained unchanged for decades. The new non-bank lenders adapt to emerging technologies and manage to integrate them into risk management, customer relationship management and pricing in order to enhance the service. The Fintech revolution is not about killing the banks, it’s rather about significantly improving the long-existing service by focusing on ever-growing customer needs for speed and inclusivity. And, due to increasing customer expectations and the ability for Fintech entrants to match the demand, there is no doubt that it will reshape personal finance and the way we look at it.

Better risk assessment

The new technology-enabled Fintech entrants are not afraid to experiment with technology when it comes to underwriting. They come up with new, clever ways to assess the risk. Data-driven lending has clear advantages: the service in many cases is supported by self-learning algorithm, which minimizes the need of human interference in decision making. That translates into better risk assessment and decision making. By utilizing self-learning technology in risk assessment, companies become more automated, disrupting existing banking and credit systems. That’s why Fintech is sometimes referred to as algorithm-based banking.

Cost-cutting

Fintech disrupters are not burdened by legacy IT systems or branch networks, giving them an advantage over banks. The new entrants are also not overwhelmingly big which makes them flexible for change whenever needed. Such tendency to promptly adapt to changes and integrate technology into risk management and customer service is reflected in service level of companies and overall economic efficiency. The outcome – cheaper, faster and better quality personal finance services resulting in a larger population of satisfied customers.

More diverse credit landscape

Banks usually position themselves in one location before they expand, whereas Fintech firms can start lending despite their initial placement. The lack of geographical concentration allows the new Fintech disruptors to expand into a more diverse credit landscape and scale. Simply put, the new players have an opportunity to offer credit products to parts of the market that have been underserved by the big banks.

Higher customer reach

Online presence of the new Fintech businesses makes service more accessible, quick and user-friendly since customers can easily navigate, choose and compare the offers online regardless of location or time. Keeping in mind the efficient use of technology, decreasing costs of web-based technologies and an ability to match ever-increasing customer expectations on speed of service, attracts even greater amount of customers. Trouble-free and straightforward process of non-bank personal lenders is yet another favourable addition that sways a great number of customers, out of whom a large chunk is underbanked.

Matching ever-changing customer expectations

The changing way of doing business with the help of technology shapes customers’ expectations: they expect that anything can be done online through mobile devices and are seeking for personalized products with a simple application that can be performed in a speedy manner, such as a “one-click” loan. E-commerce and digitalization of services have shaped customer expectations and therefore has put pressure on banks to match the offer. Big organizations, however, are usually too big to change, whereas the new entrants are both able and willing to adapt to changes to meet customer demands for speed and access. It’s obvious that Fintech revolution is changing the way personal finances are being handled and such change affects both businesses and customers. Fintech companies are successfully implementing the change, the main question is – will the banks keep up?

Responses to refugees this year have been dramatic, to say the least. Denmark has even run advertisements in Lebanon describing how terrible life would be for a refugee in their country. Support is, however, coming from one of the most unexpected places.

FinTech evangelists are all about getting banking services to the underbanked, and the refugee crisis has caused an eruption in that field. Moreover, the world of bitcoin and the blockchain have turned the situation into a chance to not only showcase how useful their technology is, but to put it to good use. This crisis is incredibly complex and has even been termed an exodus of biblical proportions. However, there are several statistics that might paint refugees in a different light. Almost one in five of small business owners in the US were born abroad. Many refugees do possess employable skills and real money. Of course, when they leave their country they leave behind everything.

That’s why they receive aid, and that’s why people make donations. Unfortunately, the vouchers commonly used in refugee camps are very often exploited. Agencies are known to take much of that money for themselves. According to Sibos 2015 speaker Christine Duhaime, founder of the Vancouver-based Digital Finance Institute,“By the time you have donated one dollar something like only 10¢ ends up in the hands of a refugee. This is where FinTech comes in. First and foremost, the goal is put power and confidence back into the hands of the refugees. For some time, contactless credit cards have been the preferred method. It grants the user the ability really get the full bang for their buck. Now, blockchain and bitcoins are playing a new role.” It’s FinTech that is helping make the tough transition for refugees a little easier.

Bitnation and Blockchain Were Basically Born For This

Bitnation is a tad difficult to understand; they’re a decentralized Organization (DO) that offers “Governance 2.0” services. They essentially decentralize governance by using blockchain technology. Recently, they created three specific methods to help refugees: Emergency Blockchain IDs, International Bitcoin Visa Cards and Bitcoin Refugee Aid.

While the influx of refugees has been going steadily for several months, the effects will last much longer. Without identification, it will be a long battle for refugees and locals, alike. Given the complicated political and social climate, it’s no surprise a third party like Bitnation is raring to go. They’re trying to spread the Blockchain Emergency ID. This acts as a very rudimentary form of identification. It allows users to prove their existence and relations via a blockchain ledger. They’ve already issued dozens of ID’s and hope to make that number grow once they can organize workshops within camps and spread the word. Plus, bitcoin and bitcoin cards are completely borderless. Anyone anywhere in the world being able to directly help refugees, and the refugees have much more control over their funds.

Creating A Digital Bank For Refugees From The Ground Up

Digital Finance Institute, a Toronto-based non-profit, has stated they will be launching pilot project “Refugee Bank.” By using blockchain-technology, they address identification problems, improve the delivery of relief efforts and provide financial inclusion. The name “Refugee Bank” does, of course, sound a bit idealistic. Luckily, DFI’s founder, Christine Duhaime, is actually a financial crime lawyer with plenty of experience working for profit and non-profits. The Refugee Bank was born after much deliberation and research. Realizing that many more ordinary options were hindered by sanctions, identification requirements and countless legal, social and political factors, DFI went for the radical.

Their goal is to help refugees help themselves by offering financial inclusion. They put emphasis on how servicing refugees will actually service future countries and economies. Not surprisingly, refugees that are, in fact, given access to money and the chance to work often helps not only those in trouble, but the economy. The digital bank is still in the making, but has been garnering traction. The group also had a second idea, though whether it will see daylight remains unknown. The Refugee FinTech Lab would involve bringing the question of “how to use FinTech to best serve refugees” to the refugees. As many activists have already noted, the ubiquitous Steve Jobs was actually the son of a Syrian political refugee. DFI recognized that refugees know what they need more than anyone else. With Facebook pushing to connect camps with internet, it is possible an unexpected solution could come from the refugees, themselves.

Updating Traditional Aid For The Modern Age

On top of these more extreme examples, it seems modern technology has put a FinTech spin on traditional aid relief. The bitcoin platform Cubits has released a relief service for refugees. By partnering with Aktion Deutschland Hilft, Islamic Relief Fund Deutschland, Pro Asyl and CARE, the Cubits Refugee Relief takes the traditional system of donating money and makes it streamlined. By donating in bitcoin, transactions and intermediary fees are avoided, hopefully getting the hands into those who actually need it.

Truthfully, all of this can sound a little absurd. Who thinks about bitcoin in the middle of a crisis? Why should having a bank account even be the so important? One of the key points most non-profits will make again and again is how these refugees are people. There has been backlash over images of refugees using cell phones. The assumption being that because refugees have the money for a phone, they don’t actually merit outside help. These phones, much like having the right to a bank account, are equal parts symbolic and practical. Without them, it’s hard to fully exist in modern society. By giving individuals an amount of dignity (for example, by proving identity via the blockchain) and also power (having access to a bank account) a small but notable differenec is made. Clearly the refugee crisis will not be solved by FinTech alone, but it is making an impact. If nothing else, the situation highlights the scene’s commitment to the underbanked. In reality, is it a surprise that blockchain and bitcoin advocates are jumping in to help those in need?

(image cred: Photo Unit)

With McKinsey projecting fintechs to take as much as 60% of banks’ retail profits in the future, it’s not surprising that the financial industry is scrambling to retain customers every way it can. However, traditional financial institutions still expect consumers to come to them: fintech’s great strength is to adapt to consumers.

But who is fintech adapting to? A close look at the burgeoning industry’s many-faceted interest groups not only gives us an idea of who is benefitting from fintech right now, but also the industry’s most likely growth areas in the future.

Entrepreneurs

Massolution’s 2015 CF report estimated that the global crowdfunding market will grow to an enormous $34.4 billion in 2015. Fintech companies can streamline and develop this into new funding avenues for entrepreneurs. Fundingtree, for example, is a crowdfunding platform that provides real-time evaluation of pitches by experienced business professionals.

A variety of fintech companies also focus their services on the needs of MSMEs and early stage entrepreneurs. Traditional financial institutions cannot provide loans to MSMEs easily due to high charges and inefficient processes. Capitalizing on automated credit scoring technologies, fintech companies can lend to MSMEs more efficiently, which will foster a much more positive culture around entrepreneurship.

The off-the-gridders

Fintech will enable people who, for structural, legal or political reasons, are off-the-grid, to get on it. bKash allows people who are not formally connected to the banking sector to send and receive money via mobile phones. This is a highly effective solution, since 70% of Bangladesh’s population live in rural areas without ready access to financial services.

Similarly, immigrants and refugees are often excluded from mainstream banking systems. That’s where companies like Monese come in. Monese allows immigrants and refugees to open current accounts via their mobile phones, and provides them with a Visa card – overcoming some initial problems of settling in a new country.

The send-money-abroaders

Fintech will benefit individuals, companies and charities; anyone who needs to transfer money abroad. To this date, sending money abroad still largely relies on antiquated business models involving hidden charges and high remittance rates.

Fintech companies have been able to work around traditional charges and horn-in on the transfer industry (with over $500 billion sent abroad each year by individuals). Peer-to-peer exchange benefits from charging a fraction of the typical 5-8% in fees that transfer giants like Moneygram and Western Union conceal inside their advertised exchange rate. British charity Comic Relief stated in 2014 that communities in Sub-Saharan Africa were being “hurt” by transfer remittance fees; reducing fees helps overcome financial exclusion, as more money reaches recipients.

Likewise, SMEs aren’t catered for; complex processes and hidden charges applying specifically to them when making transfers. Money Mover, a fintech startup in this area, calculates that SMEs make an incredible $5.6 trillion in international payments and monetary transfers annually – an enormous market fintech can cater to.

Finance professionals

Fintech services for finance professionals can be found, for example, in the field of property and hedge-fund management. Add to that the growth of tools like Planwise which provides detailed analysis of proposed housing investments to aid decision-making, and the fintech market becomes more than the sum of its parts; it becomes a substantial addition to current forms of financial operation.

Fintech leverages technology to limit the amount of investment risk. This will foster the development of companies using data to provide investing and risk expertise. FutureAdvisor, for example, provides private clients and financial professionals with a data-based analysis of their investments. The trend to turn to tech companies for financial expertise means we can expect major disruption in this area, and the adoption of more reliable fintech data and expertise by finance professionals and institutions.

Early adopters

Fintech and digital natives were made for one another. Young people are more amenable to innovations in technology, especially at a time when they are increasingly more careful with their finances. The most likely reason for their financial scrupulousness is the global recession of the past few years.

Fintech startups like Number 26 serve this demographic by offering a fully-fledged bank account on smartphones, which not only clusters spending in beautiful visuals, it assists young people in thinking more clearly about their financial management. Services which cater specifically to the needs of young people will grow significantly with online insurance and student tuition being two areas for future growth. Companies like Tuition.io are already making headway in the latter. This combination of fintech with digital native desire to become more financially conscious means the technology will play a vital role in shaping young people’s perceptions and management of their money.

Cyber-security experts

Fintech involves money and technology: two things hackers and criminals love. Cryptocurrencies such as Bitcoin are so popular with these groups because of the significant gains and anonymity offered. A total of more than $1 billion was stolen in bitcoins in 2014 alone, including the infamous attacks on Mt. Gox and Flexcoin. Additionally, analysts from the Southern Methodist University, Dallas estimate that a quarter of all Bitcoin exchanges were subject to fraudulent activities.

These scary-sounding facts have an upside: criminal interest in fintech will mean greater investment in cyber-security in the future. Expect the emergence of a meta-fintech sector, dedicated to protecting the privacy and wealth of customers, as well as the tools used in exchanges like wallets. Cyber-security firms like Digital Shadows will continue to grow, providing threat analysis as well as tools to prevent hacks. Thus, fintech will play a vital role in securing the integrity and safety of online markets.

Blockchain: the single most confusing term since Bitcoin. Everyone has a vague idea of what it does. It’s either the ultimate evolution of financial technologies, or a silly fad that can be summed up in the disconcerting phrase: “dogechain.” In reality, major companies around the world have already shown favor to the burgeoning money exchange system and it may become harder and harder to stay away from the financial dark art.

In reality, it is all relatively easy to understand. The Blockchain is a public ledger where transactions are recorded and confirmed anonymously. It’s a record of events that is shared between many parties. More importantly, once information is entered, it cannot be altered. So, if the blockchain is the public record, what is being recorded? What are all of these “transactions”?

Cryptocurrencies, like bitcoin, are currencies that exist solely in digital. There are no physical golden coins with a big “B” on them. Moreover, owning these non-real coins entails a new idea of “ownership.” You don’t literally have it in your hands, or even in your bank account, but you have the ability to transfer “ownership” to someone else simply by creating a record in the blockchain. Rather than using bills, your transfer is pure data.

Where exactly is this chain located? Due to the open nature of cryptocurrencies, and the importance of the public having access to other blocks, the blockchain isn’t located on just one guy’s large computer. For example, the bitcoin blockchain is actually managed by distributed nodes. These nodes all have a copy of the entire blockchain. Nodes will forever come and go, synchronizing their own copies of the chain with those of other users. By distributing copies and access, the chain can’t simply “go down,” or disappear. It’s a decentralized system that is both sturdy and secure.

All of your dogecoins are in a row, but what do you do with them? Whether you’re using them IRL or online, the blockchain makes it happen. There are many reasons people are falling in love with cryptocurrencies: it’s anonymous, decentralized, and there are no fees or third parties trying to grab a percentage. However, if there were absolutely no regulations in place, the new currency would quickly become a greedfest of users trying to screw each other over. The public nature of the blockchain means that anyone can check it. It is effectively anonymous, yet public, simultaneously, and it is in the best interest of users if it remains so.

You can accept and trade coins, or you can mine for them. Miners can spend thousands of dollars on the right equipment just to mine coin. But what do they really do? What miners do is quite similar to real-world miners in that they are actively looking for something. Their computer repeatedly works through complex calculations to find a very specific answer.

Miners solve problems, but how in the world is that helpful? Short story, miners are actually verifying that transactions posted by other users are legitimate, and the numbers all add up. Long story…

Miners collect transactions and put them into a single block. A block generally contains four pieces of information: a reference to the previous block, a summary of included transaction, a time stamp, and Proof of Work that went into creating the secure block. The blocks are strung together into a chain—a fluid chain that does not allow for any inconsistencies; this means there are no “bad cheques” in the system, and transactions entered are necessarily valid and can be processed. By checking the blockchain and confirming transactions, the entire system is effectively self-regulated and fully secure. No, that doesn’t mean some kid cooped up in a basement can just click “okay” and confirm a billion dollar transfer. Blocks generally need numerous independent confirmations, and the equations are intended to be hard to crack. Not to mention, the hardware required is far more specialized than the average laptop. Finally, what’s to stop someone from simply going back and editing existing blocks? Each block is securely hashed—meaning it is rendered into seeming gibberish and nearly impossible to invert or undo. Once it’s in the blockchain, it’s there forever.

So, why waste time and resources helping other people, or the blockchain? Why not let someone else do all that “confirmation stuff,” while you just mine? Because, you don’t necessarily have a choice. Confirmation of the blockchain is central to mining. It’s part of the actual mining process; however, miners are generally given incentives. For example, after solving a problem (and creating a new hash) they are rewarded with coins.

Will you be seeing a blockchain-styled ledger in your future? Short answer: oh yes. Blockchain and cryptocurrencies have caused quite a stir over the past years. However, it seems their real importance has yet to be fully realized. The future isn’t just in businesses around the globe sporting happy “Now Accepting Bitcoins” signs, but rather emerging companies (and revolutionary existing ones, too) finding new uses for the cutting edge technology. VC firms and investors are placing their bets on the blockchain because there is untapped potential. Identity management, international contracts, and all sorts of complicated bank transactions can be greatly altered with the public ledger system. The process could (in an ideal world) work seamlessly, crossing boundaries where banks, logistics or a plethora of other obstacles once existed. They could be combined with the Internet of Things to create a more connected and automated world. Future companies may be able to absorb mountains of new data, or even digitize real-world things that are hard to quantify. Unfortunately, many big companies are remaining mum on the studies in the blockchain field for obvious reasons.

However, it is public knowledge that nine major banks (including JP Morgan and Goldman Sachs) recently joined a partnership to develop blockchain technologies. That’s not to say major companies are getting in on the cryptocurrency game; rather, they realize that the blockchain system, itself, could be a powerful tool for efficiency. With a system as versatile and secure as the blockchain, there may many unexpected innovations in the coming months and years.

image credit: BTC Keychain, CC2.0)

• An Introduction to Lean Analytics – Presented by Alistair Croll, Founder at Solve For Interesting, Author of Lean Analytics

• Python for Financial Data Science – Presented by Dr Yves J Hilpisch, Founder of The Python Quants

Startups seem to jump from lofty ideas to global megastars overnight. In order to keep you from being left in the dust, we’ve compiled a list of the most funded new FinTech startups. Focusing on companies formed in 2014 and 2015, we can take an inside look into what will be helping to evolve the sector next.

Get ready, because this is going to be fun:

Able

More than a loan ($12.5M)

The Texas-based “collaborate lender” has raised $12.5 million, including $6 million in August. They’ve already begun making a name for themselves, and have a wide breadth of investors, including Blumberg Capital and FLOODGATE. They work by utilizing both their own network and the customer’s. In other words, they expect your family and friends to make sure you pay back your loan. This model of lending will create a highly unique situation that is just as likely to succeed as inspire a dystopian novel.
They market specifically to business owners. When taking out a loan, the borrower’s friends, family and associates will contribute 25% of the loan, and Able will do the rest. Able founders expect the responsibility of borrowers to repay friends will not only ensure that loans are paid faster, but they will achieve better rates and happier overall results. In a recent article we talked about the need for FinTech to integrate social interactions and relationships. Able is one of the many companies realizing that money is, in fact, social. This may help usher in a new, more interactive kind of financing.

Grouplend

Save money by analyzing the details ($10.2M)

Grouplend raised 10.2 million in August, alone, with the goal of bringing good loans to middle-class Canadians. They use new softwares and powerful analytics to cut out the typical costly overheads. Unlike traditional banks, they rely heavily on technology and its capabilities. The company was launched a year ago, and is already taking huge strides towards success.

It’s worth noting that their funding comes primarily from Markus Frind, founder of PlentyOfFish. Frind called Grouplend “one of the most promising and innovative startups in Canada.” Considering that PlentyOfFish recently sold for $575 Million, we’re just going to have to trust him on this one. While Grouplend is hardly the first of its kind, it has been quick to move and has plenty of users…Why? It may be their real commitment to low rates. It seems, after surpassing $30M in loans, Grouplend actually went back and reduced costs, actually passing savings along to their customers.

Mighty

The first plaintiff marketplace ($5.25M)

The creators of Mighty have certainly found a niche. Mighty is all about getting money to unfortunate individuals bombarded with legal fees. No matter how strong a case may be, it’s incredibly tough for “the little guy” to emerge victorious from a court room. Time-consuming and frustrating, the justice system doesn’t always play fair. By connecting those awaiting settlement with the money they need to keep living their life, everyone wins.

The noble idea is incredibly practical, given how stressful (and sometimes life ruining) legal fees can be. Plaintiffs should never accept lowball settlements just because the fees are too high. Mighty works only with clients who are already represented by an attorney, and the loan is intended only for basic living expenses. Their investors come from an array backgrounds, including Tribeca Venture Partners and FinTech Collective.

It’s hard to disapprove of this startup, especially when they only collect money after you win your legal battle.

“If you win, you pay the investor back plus a return. If you don’t, you keep their investment.”

PeerIQ

Risk management for P2P credit ($8.5M)

PeerIQ is all about credit risk analytics, and helping investors asses loans and performance. Using industry data from top P2P platforms, they help investors make better decisions, and become more efficient. Based in NY, they’ve raised a total of $8.5 million largely from Wall Street names, including John Mack.
The growing popularity in P2P lending is really hitting wall street, and this startup is one of many being pushed and funded by big names. As described by Andy Lam, Managing Partner at Uprising, what sets them apart is their dedication to “technical depth” and “market sophistication.”

“By addressing the investment requirements for many large lenders, PeerIQ will enable efficient capital to enter the sector, create new opportunities for P2P platforms, and generate substantial impact by helping more borrowers achieve their financial goals.”

Stash

Why let old guys have all the fun? ($1.5M)

Stash was founded in February of this year and in August, they quickly secured $1.5M in funding. What is it that makes the investment advisor so intriguing? Is it their curated investments? The support and continual advice? Maybe it’s the tagline, “Start with $5,” and their incredibly small $1/month fee. The personable brand is all about you, average person who wants to invest but doesn’t know where to begin.

Stash will succeed because it understands exactly what people these days want: everything, and they want it cheap. Stash wants to inspire, teach, and advise customers on their investments, without charging commissions or secret fees for moving money in-and-out of accounts. They treat customers as individuals, asking users to invest in ways that reflect their personal beliefs. Stash will be launching soon, and is currently offering Early Access.

Trunomi

Know your customer ($5.3M)

The KYC problem revolves around “knowing your customer.” It’s the process of verifying a client’s identity, and is sure to be a big question as FinTech continues to boom and evolve. Trunomi provides the software that let’s users manage personal information or documents, and financial institutions deal with on-boarding and dealing with Personally Identifiable Information (Pii). Trunomi boasts numerous different outlets for their clients: TruHub helps reduce regulatory risks, and improve reporting; TruMobile is designed to be highly customer friendly, and keep the user happy and engaged.

Trunomi addresses the growing need to not just integrate tech into the financial sector, but to make it user-friendly. Customers don’t just want FinTech, they want intuitive apps that are a genuine pleasure to use. With the $3M raised by Saturn in August, Trunomi will investigate how to unlock the full potential of data within their project, and make the game even more exciting for companies and users, alike.

WealthArc

All-in-one wealth management solution ($300k)

Wealth managers and companies have their own set of needs. BBVA Open Talent finalist and Microsoft BizSpark member, WealthArc was founded to not only combat analysis and security problems, but to make the whole process more automated. Their flagship product, the SaaS solution, uses AI to manage portfolios, and cyber-security measures to keep cloud data safe, all with the end goal of helping managers form real bonds of trust with clients.

Members of the team have all worked at top-tier firms, and experienced the ups and downs of tech in the financial sector first hand. With the help of Microsoft Azure Cloud, they bring higher computing potential to their customers. With the money raised by U.S.-based venture capital firm Novit LP, WealthArc has expanded their team and research, and intends to tackle problems of compliance requirements.

These startups don’t just highlight how FinTech is growing at a rapid pace, but how the entire sector is developing and evolving. With disruptions at every turn, it is easily one of the more exciting fields to follow. Keep your eyes peeled, because you’ll be seeing these startups again.

Data Natives is coming soon! The conference focuses on three key areas of innovation: Big Data, IoT and FinTech. The intersection of these fields is home to the most exciting technology innovation happening today.

Whether it’s for individual consumers or multi-billion dollar industries, the opportunity is immense. Come and learn more from leading scientists, founders, analysts, investors and economists.

Early bird tickets are still available – don’t miss out on a great opportunity for yourself, your colleagues or your employees! If you need a little more convincing:

Data Natives has 7 Key Goals

We will leave you:

1 – Inspired for the future

Data Natives focuses on real-world applications of cutting edge technology to paint an exciting picture of the future. We aim to help attendees understand either the potential impact of the technology they are creating as technical professionals, or the scale of the opportunity that technology is providing for the rest of us.

When technological advancements are shaping the way we work in fundamental ways, it’s important to stay inspired, optimistic, and open-minded about finding more effective ways to operate.

2 – Empowered to seek business opportunities

This conference is a chance to look at some of the most innovative applications of technology, and the business value they have unlocked. Whether it’s hearing how an industry giant leveraged data to increase their margins, or how a scrappy startup is using connected devices to offer something revolutionary – you will leave the conference looking at problems in new ways, inspired to solve problems that previously you were resigned to simply coping with.

There will be plenty of opportunities to network with companies offering – or looking for – innovative solutions, or experts who could help add value to your business.

3 – Encouraged to be data-driven

As more and more data is available to us, an analytical mindset is a more and more valuable mindset. Whether you’re in marketing, HR, product design, project management or a technical field, chances are you work with data every day. Learning to ask the right questions and how to interpret data correctly is key to success.

By looking at how industry leading companies are using data in all aspects of their business, you will come away from Data Natives with a clear picture of how your companies processes may be improved. There will also be a workshop available from Alistair Croll on Lean Analytics.

4 – Learning from other industries

It is easy to exist within a bubble, networking and knowledge sharing within your own industry, when an exciting and crucial development may be happing in an adjacent industry. Don’t miss the chance to broaden your mind.

Our speakers will describe the transformation of major verticals, as well as the horizontal applications of data-driven technology. Whether your background is advertising, e-commerce, finance, transportation… There are valuable lessons to be learned from how other industries are finding value in their data, utilizing connected devices, or managing their finances.

5 – Experienced with hands-on workshops and expert guidance

In additional to a packed schedule of insightful talks from 50 guest speakers, we will also be hosting four workshop sessions with experts, covering key areas of interest and giving our audience a chance to get hands-on with the subjects that matter to you.

See the full schedule for details on those workshops as they are announced!

6 – Enjoying the ultimate curation of data driven content

The schedule of Data Natives has not been pulled out of thin-air – it comes from the lessons learned from >1,800 articles, and >100 past presentations at our events all over Europe.

Not just a standard, boring industry conference, it is a curation of the most valuable and interesting content we have found over the last two years. Many of our speakers come from long standing relationships and past collaborations, with talks that have been applied and refined over multiple events.

7 – Absorbing diverse input and fresh perspectives

This is not a conference to come and hear the same talking heads saying the same things you’ve been reading about online for months already.

We are hosting talks from data scientists, investors, analysts, consultants, academics and economists. It is our aim to provide a complete view of the technology innovations and opportunities. Inspiring, informative and accessible. Most of all, useful.

See the schedule (so far) and get your tickets here:
datanatives.io

(image credit: Christian Scholz, CC2.0)

Every five minutes a new FinTech start­up materializes, connecting us to better mortgages, showing us how to invest, or explaining what to do with our Bitcoins. It begs the question: what makes a FinTech Start­up memorable, and garner widespread success?

Usefulness. If FinTech is going to replace traditional financial services, start­ups must understand what people need on a daily basis. What apps are consumers really desperate for? It seems many companies are stuck in the traditional banking mindset, as though FinTech exists simply to cut, copy and paste old patterns onto new technologies. There is so much untapped potential for the FinTech world, and the start­ups doing the real, mental innovation are going to be heralded as heroes. There are more than a few things that developers need to understand…

Money is social

It is impossible to ignore just how social and connected humanity is in 2015. People expect their money to move just as fast as their news, gossip and internet trends. The peer­-to-­peer payment platform Kashmi made waves this summer in Singapore by making money sharing easy and social. Slowly branching across Asia, the app enables users to transfer funds immediately via smartphone with no extra fees. It makes the process easy and streamlined, just like users expect.

Combining the money­-sharing process with social media features, it’s as easy as selecting a friend from your Facebook list (literally). No more splitting a restaurant bill five ­ways. No more IOU’s. It is simply not enough to be able to send money online; it should be instantaneous, user-­friendly and integrated to other social outlets.

Humanity’s social needs don’t just end with the easy day­-to-­day transactions. ShereIt, another trending Asian start­up, is giving investing a new, social makeover. This is, perhaps, the social trading network of the future. Rather than just listening to friends, family, and your uncle’s advisor for tips, you can enter a whole social world of profitable investing. If you follow your favorite actresses’s web presence, why not a top investor? Mimicking trades and patterns add an incredible new level of possibility to the old art form. Moreover, when this succeeds, that will certainly signal unforeseeable changes in the entire system.

Making money social doesn’t necessarily mean the world needs a “Financial Facebook.” It means realizing how people use money to interact with one another. Start­ups need to see and harness the need to combine financial resources with the social, political, and emotional interactions people make everyday.

Keep users safe, so they don’t have to

Most tech ­users don’t follow the rules and use highly complicated passwords or change them regularly. Passwords get written on slips of paper, or shared with friends. People don’t quite know what to do with all the power associated with their online accounts. Not many of us respect or appreciate how important our passwords are. If start­ups want to get attention, they may consider appealing to the lazy side of all tech ­users in simplifying these unnecessary steps.

PixelPin does just that. Rather than lots of words and numbers and symbols no one wants to remember, it uses an image. By allowing users to select their own image and four points to act as keys, the simple but useful app can be seamlessly interwoven into daily life. Similarly, Logrr let’s users to have a single sign-­on to all enterprise cloud applications. This means no passwords, and conserving time by not signing into every single app one at a time. Even the most organized of person gets tired of passwords and codes. Everyone wants to feel secure online, without having a trail of twenty­digit passwords kept under lock­and­key.

Further inspiration: TSWG and their eyeSafe app.

International Globe-­Trotting and New Markets

It was much harder twenty years ago to pick up and move to a new country, or hop on a plane and weekend on a foreign shore. When traveling it can seem impossible to maneuver all the red tape of international money transfers. It’s expensive, exhausting and sometimes downright infuriating. When given banks are deemed “foreigner­ friendly” because their international transfer fees are less likely to enrage customers, it’s time for entrepreneurs to find a better way. FinTech start­ups are just the people to tackle all of these forgotten (and often exploited) markets. Money Mover has the beautiful motto, “Moving money shouldn’t be shrouded in mystery.” They recognize that traditional banks have overlooked these vital markets and face the problem with a more consumer ­oriented POV. They help customers maneuver that impossible red tape, and transfer money with ease. It’s no surprise that Money Mover is moving forward at a rapid pace and (hopefully!!) bringing us along with it.

Similar Start­ups: Stellar, Toast

Help people who suck at money

Not everyone wants a social investing network; many just want to make it to payday. Millenials, as already discussed, are giving a huge push to the FinTech revolution and they have very specific needs. Many aren’t able to save money, and living life paycheck-­to-­paycheck is far from easy. Apps like Qapital are trying to get practical information and tools in the hands of those who need it. Rather than being particularly high ­tech, the app relies on “If This Then That” logic.

It can tell a user exactly how much money it will save by not buying this coffee, or by walking the two kilometers to work. It’s a common sense app; there’s no cutting edge technology involved, yet it addresses a serious, daily problem with finesse and clarity. Furthermore, its audience is huge, and growing each day.

Apps for making life easier: Ringpay, Squirrel

Banking evolved

If FinTech is signaling the slow downfall of traditional financial services, what will take their place?

The Berlin startup Number 26 is a good example of twenty ­first century banking. The “European Simple” realizes that modern ­day finance woes need a progressive modern­-day remedy. Everything happens online, and users are given a traditional debit card to use (free of charge) at Mastercard-­friendly ATM’s and shops. Number 26 CEO, Valentin Stalf, had some great words on the future of his product and start­up:

“The broad vision is to build one bank for the European market. Because I think that is what the lives of young people look like. They don’t care about boundaries within Europe, they are living European lives. It makes no sense to have an English bank and a German bank anymore.”

Much of modern finance simply does not make sense. Traditional banks have failed to see the untapped needs of the modern consumer, and that’s where start­ups come in. By showing the world what they’ve been missing, consumers just can’t say no to innovative new financial services.

(image cred: Michael Davis-Burchat)

The global securities market is worth more than $100 Trillion. Any technology that would add efficiencies to the exchange, settlement and reporting of transactions happening in this market should be welcome. Blockchain has been in the news recently because, it has the potential to disrupt this industry through the use of crypto securities. With the advent of the internet we saw seamless exchange of information, and with the advent of blockchain we see exchange of value (bitcoins/crypto securities), and possibly exchange of risk (P2P Insurance).

What is a crypto security

A security traded on a blockchain based network is a crypto security. Over the last few weeks and months, the distributed ledger topic has been discussed at length, and I wanted to add further content to this widely discussed topic. There are some key benefits that the blockchain technology offers to the highly regulated banking industry.

Transparency

Regulations such as MIFID II, Volcker and Dodd Frank mandate transaction reporting to ensure transparency within capital markets. Blockchain not only offers this transparency but also provides accuracy to transaction reporting because of the hashing mechanism used. The secure hash algorithm used in blockchain (SHA 256) takes the key from the previous block that has already been authenticated. And due to the consensus protocol being followed, one new transaction is agreed across the entire network before getting added there is no need for a central authority – at least not in theory.

Timeliness

The Internet of things, where technology is embedded into various objects that customers interact with and data is shared across the network, when combined with distributed ledgers could make clearing and settlements of securities a near real time process. Consider a security transaction where physical settlement is required, and as soon as the security is handed over to the buyer, the data is shared about it to your settlement systems through IoT, it adds major efficiencies to the post trade lifecycle. If the security exchange process is virtual, it can be done in seconds over blockchain as updates to title of securities happen in real time. Currently this process takes many hours if not days with various manual checks done at various points and inefficiencies in the global collateral management market are estimated to cost banks up to $4 billion annually.

Digital assets and a few other blockchain firms have especially focused on repos and syndicated loans as there are massive efficiencies to be had in the trade lifecycle of these products.

Traceability

Imagine a transaction involving asset backed securities and there is a need to understand the valuation of the assets underlying. There is very minimal opportunity today to get all the information required for valuation, clearing, settlement and disbursement of such complex and niche products. Blockchain solves that problem too. Using blockchain it is possible to hold the entire life of a security or a collateral and see history of valuations (if need be). This provides confidence to investors.

Also, collateral management is quite an important part of risk management and pricing of securities. When there is end to end traceability available on securities/collateral or any underlying used in a transaction, it helps improve risk management by providing more accurate information to price the security. This level of transparency and traceability could potentially make some of these securities more liquid.

Blockchain is also being experimented by various capital market players who are custodians of securities, especially gold. It is important to keep track of the origin and the life of a commodity like gold to be able to price it accurately.

Disintermediation

The first wave of fintech use cases focussed on disintermediation in clusters such as payments, wealth management etc., But the next wave of disruption led by Blockchain will take disintermediation to an unprecedented level. With all transactions happening peer to peer, there won’t be a need for an exchange at all. This will add efficiencies to custodian and prime brokerage services and eliminate or reduce the need for a middleman.

Of the securities that are traded in the market, a lot of them are borrowed. During the 2008 crisis, many market participants were shorting securities without actually owning them. This brought down the price of securities, creating an endogenous cycle that drove the markets down. The regulators have since then kept a close eye on shorting to keep them under check. With a blockchain driven platform, the ownership of securities is pretty clear and reckless shorting of securities can be controlled automatically. Prime brokers, who make a good slice of their revenues in the securities lending market, may lose a big slice of their commission if blockchain had its way.

If P2P transactions of crypto securities became the norm, that would hurt the middlemen making money by facilitating inefficient and time consuming processes. Many players in investment banking may find that highly inconvenient.

In spite of all these bullish features, Blockchain and its use cases in crypto securities have various disadvantages as well. A topic for another day!!

(image credit: Sam Valadi, CC2.0)

Accelerators and Incubators are becoming strangely mainstream in tech, and FinTech especially. Hooking up small names with funding and opportunity, accelerators seem like a great win/­win/­win situation for backers, creators, and consumers. Of course, like everything in business, there is always a dark side. When tech startups get in bed with big banks and corporations to succeed, who really wins? Does that relationship support progress, or undermine it?

Big brands and banks are notoriously unable to get with the times. Due in part to their sheer size, it is far from easy to implement innovative new ideas. Preoccupations with their “legacy” technology, thinking, and processes, often leave them unable to implement the great, new tech that has us drooling. What are big brands to do when they can’t beat start­ups? The answer:

Incubate and Accelerate

Accelerators and Incubators were created to lend office space, funding, and valuable mentoring to start­ups at varying levels of development. Those in charge get a small stake in the start­up, and the start­up team gets the chance to connect, develop, and succeed. Corporate incubators and accelerators take this to a new level: they want these start­ups to not just succeed, but to bring something good back to the parent company.

The Pros of working with corporate pro’s

There are weighty pros that accompany teaming up with big brands. Apart from the great knowledge, money and opportunity, they have perks that can only be given by a major company. They specialize in clearing international red tape, simultaneously easing the many headaches of a start­up, and giving them a leg­-up on competition. They may realize that your start­up is absolute gold, and buy, invest, or send customers your way.

Moreover, folks don’t trust random designers in an office, but they do trust international house­hold names. Corporate accelerators and incubators offer trust and credibility—traits that are beyond vital in the financial industry. In the end, a corporation ties itself to a start­up because they hope an invention will work within real company goals. For start­ups, this can be a god­-send. That corporation doesn’t just want you to finish a product, they want it to succeed.

The Cons, along with a dose of skepticism

There is a vital piece of information FinTech start­ups should know: banks need you. This has even been said by Rhydian Lewis, CEO and founder of the peer­-to-­peer lender RateSetter.

Even the most genuine of corporate accelerators carry baggage. As discussed earlier, large companies cannot simply change and innovate at will. It is the very nature of their business structure. Mentors and advisors impart not only their own specific corporate objectives, funnelling you into whatever direction may most benefit the head company, they will share the same style of business thinking. Rather than an array of business sizes, types, and styles, they will be strikingly similar. There’s no other word for this than indoctrination, no matter how accidental it may be. When you’re learning from one company, you aren’t going to see all of the options.

Many early start­ups might also feel invigorated just to be eyeballed by a major company. They may be willing to forego steps a later­ stage start­up would take. For example, being wary of tying an impartial start­up to a big name. What happens if your start­up parts ways with their accelerator company, or you simply continue innovating in different directions? Other corporates may be wary of taking on a company that is associated with a competitor’s name, processes and ideas.

Bigger is not better for innovation

Large companies inspire ideas of stable work and funding, but that is hardly the case. Rather, their fickleness stems from their position as slaves to the market. They make changes and decisions based on necessity.

Furthermore, choosing a corporate accelerator is almost harder than choosing an ordinary one. With big shiny corporate names and connections attached, it seems like a dream. It’s hard to say “no” to Wells Fargo, Disney, Samsung, or Sprint. It’s also unnecessarily easy for such corporations to set up and back accelerators and incubators. The amount of money and marketing invested doesn’t mean the given accelerator is any good. And these quickly­ created accelerators may close as quickly as they began.

Conflict of Interests

Startups, you have the power. Thanks to the grassroots phenomenon, people are falling head-­over-­heels with the start­up culture. But what happens when innovation doesn’t mean real profit?

Non-­corporate accelerators have much more in common with start­ups than their corporate counterparts. Both are looking for real, cutting-­edge, disruptive innovation that will make money. They aren’t tied down to a massive corporate brand or ­established needs that inherently stifle progress. Droves of start­ups running to corporate accelerators hurts these independent accelerators. Though working with early­ stage start­ups and fostering outside innovation isn’t a core value in big companies, they’re able to coax and rope creators thanks to their money and name.

Lastly, even when a company finds your tech useful, that doesn’t mean they’ll be using it. One participant in a Shell­backed accelerator found that ties to the parent company was not only useless, but hurtful. Matt Bell of Houston ­based GeoDynamics found that other companies were put off by Shell’s slow integration of Bell’s work. When the parent company doesn’t use your technology, potential buyers are left wondering why.

Image and Branding Problems

What do consumers think about start­ups and corporations partnering up? If you aren’t worrying about “selling out” by working with a big company, you may worry about public perceptions of your company. Start­ups hold an allure that is all their own. When Simple, a beloved “anti­-bank” banking system, was acquired by one of the world’s larger banks, the biggest fear was losing customers and engineers who loved Simple specifically because it wasn’t tied to big corporate agendas. The story of Simple is complex and merits an article all its own, but it reminds creators how important branding is. Describing their own corporate accelerator, Coca-Cola VP of Innovation and Entrepreneurship, David Butler, states “we need teen engagement in our brands or we’re done,” hence bringing in outside entrepreneurs and start­ups. Big companies can consume genuine and lovable brands in a heartbeat. This begs the very real question: if corporates are desperate to enlist hip start­ups, why hand over that power?

Summary

People of all backgrounds and intentions are founding tech accelerators. As a start­up, it’s vital to understand what these accelerators want from you. The goal of many FinTech start­ups is to be integrated into big corporate systems; they want to work with established companies, and corporate accelerators will let them do just that. However, that is not a blanket answer to the funding question. Plenty of start­ups will succeed under the watchful eye of their corporate accelerator. We mentioned Barclays in our list of top accelerators, because they’ve had great results and successes. Still, corporate accelerators and incubators should not be seen as elusive golden tickets.

Big companies need disruptive startups. Big banks need FinTech innovators. Without outside brains, many of these companies are done for. Don’t undervalue your start­ups and innovations.

Nothing is better than seeing a lowly start­up succeed. They push the envelop, think outside of the box, and inspire. The game, however, can be tough to play. For innovators and techies who don’t necessarily have experience or funding, breaking through can seem impossible. This is why accelerators and incubators can be vital to success. They teach creators what and who they need to know. They offer money, office space and, of course, the ubiquitous Demo Day

In major hubs like NYC and London, the list of FinTech accelerators and incubators is seemingly endless. Berlin, Tel Aviv, Singapore and Hong Kong and other major cities also boast their own multitude of hubs. We’ve compiled a list of some of the top incubators and accelerators around the world. If you’re a start­up looking for guidance, or businessmen looking for some new connections, here’s who you absolutely must know:

Fintech Innovation lab is based primarily in NYC, but also operating in London, and Hong Kong. Fintech Innovation is an established name, working in conjunction with the Partnership Fund for New York City and Accenture. They held their first lab in NYC in 2010 and haven’t stopped since.

Their 12­week program is meant to share insight on the financial sector as well as get start­ups in touch with would­be clients and industry executives. They combine their leadership program with the chance to refine and test products with partnering firms. The results have been generally positive, including an alumni start­up that would later be acquired for $175 million. Their connections to big banks and names certainly pays off for them and their start­ups.

Alumni: Inktank, BillGuard and Standard Treasury

Barclays. Teaming up with Techstars, a mentorship driven accelerator, Barclays is on its third round and currently accepting applications. The last program saw seven out of their ten companies signing with Barclays. Their contracts and terms vary, but some of their companies have seen real paid contracts worth up to £100,000. The exchange includes six percent equity for £12,500 seed money and office space.

The fact that Barclays has been operating with Techstars since 2013, producing steady results specifically in the FinTech sector is part of the real appeal. Not to mention, showcasing their current startups to an audience of 400 CEOs, CIOs and investors. They have also opened up a NYC chapter, that is already in full­swing, with ten bright eyed start­ups in tow.

Alumni: Everledger, Post­Quantum, Aire

Also based in London, Seedcamp is easily one of Europe’s top accelerator programs. Starting with their Onboarding program, they cover an array of topics to get you thoroughly prepared. With continual Founder Feedback, they meet weekly to discuss and work through problems as well as define goals. They also boast their monthly Academy to follow up. Meaning, even when the program is over, start­ups still have access to workshops and masterclasses. With a US trip and Berlin week, Seedcamp provides a thorough background for start­ups of all kinds. Their portfolio holds over 138 companies and they are backed by over international thirty venture capital firms.

Alumni: TRData, Elliptic, Revolut

Y Combinator has been around since 2005, and is not limited to FinTech. However, being a general tech incubator definitely works to their advantage. They boast countless success stories and are often termed the most important incubator in the field of technology. With names like Dropbox, Reddit and Airbnb on their list of success stories, it’s hard to doubt the incubator giant.

Despite not being fully rooted in the finance­sector, FinTech start­ups from Y Combinator have also flourished. However, with success rates like theirs they are also speculated to have extremely low acceptance rates—perhaps as low as 3­5%. No one ever said getting into top programs was easy.

Alumni: Twitch, Reddit, AirBnB, Dropbox, Weebly, Airbrite, you get the idea…

Another big name in the US is sixthirty, managed by Jim McKelvey, co­founder of Square. Giving start­ups up to $100,000 in funding, this program focuses on a flexible schedule with only two days of proper “class” time per week. Here, you can share exactly what you’ve been up to and schedule to speak to the proper mentor for feedback and planning. So how can they afford to shell out $100,000? They don’t invest in as many companies as other accelerators; rather, they put their money where their mouth is. They prefer working with more mature start­ups that are at the business development stage, and have a working product. They focus mostly on business development, introducing start­ups to connections and potential customers, aiming to create real traction.

Alumni: Gremln, Data Simply, Upside

Tel Aviv is home to numerous accelerators, including a prestigious program from Citi. Then there is Elevator, backed by the Israeli Leumi Bank. They seem heavily focused on honest feedback and seem to become very invested in the start­ups they work with. They can make pretty weighty investments in companies they feel will flourish under their guidance. Acting as full strategic, operational and financial partners, getting chosen by Elevator means a lot more than just courses and lessons.

Alumni: LynxGuard, Moburst, BLender

Perhaps not as colorful as Elevator, Visa Europe Collab announced plans earlier this year to spread to Israel. Planting hubs in London and Berlin, Visa is looking to turn out great new tech and has the money to back it up. They intend to take on a minimum of 20 start­ups, and mature those products into Visa­ready services.

There is one name that repeatedly pops up in Asia: Startupbootcamp FinTech, Singapore. With the chance to collaborate with over 200 mentors, partners and investors, Startupbootcamp offers plenty of exposure. 10 start­ups receive roughly $18,000 to get industry experience. Focused on challenging founders and teams, Startupbootcamp is all about education. From how to work with banks, to being a good leader, and understanding your customer, Startupbootcamp appeals to the whole body, mind and soul of start­ups. Its recent Demo Day boosted some 600 attendees making it easily one of the largest in Asia. Plus, they’re one of the most wide­reaching programs with partners in over 30 countries and programs around the world.

Alumni: Kashmi, SkolaFund, BankGuard

Hold on to your horses, bright­eyed start­ups…

While there is plenty to learn from the great minds and mentors in accelerators and incubators, past participants also warn of being too eager. These programs are sometimes compared to university. The mentoring and networking work great wonders, but teams must be prepared. Don’t just choose an incubator because they’re willing to give you money. A Visa-­run incubator will certainly not be the same as a small, tight­-knit program. Secondly, professors and mentors are not gods. Always hear what mentors are sharing, but don’t expect them to know everything or do the real work. Events and speakers are great for learning, but they aren’t going to get your start­up of the ground: you are.

Almost a year ago, when I was reading about sharing economy and impact investing, I came across the term “collaborative capitalism”. I felt that the world was adjusting itself between capitalism at one end and communism at the other, and now blockchain technology has the potential to take it one step closer to communism.

Until about a couple of weeks ago, I was explaining blockchain as a “decentralized database”. Then the focus was on blockchain as an innovative data store, but the idea of decentralisation is even more powerful. I have researched and discussed some interesting business models based on blockchain that I’ll cover below.

The first Blockchain use case was bitcoin, but the applications go far beyond financial services. Telecommunication, cloud computing,  sharing economy, gambling, internet of things are some of the other industries that could potentially be disrupted by blockchain.

[bctt tweet=”#Blockchain applications go far beyond financial services. -@karunk”]

Financial Services

Firms like SETL and Ripple are trying to disrupt the payments landscape using blockchain by providing a real time settlement and clearing platform, commonly described as DCL (distributed consensus ledger). With the regulators cracking down on financial services firms to provide accurate transaction reporting, blockchain could potentially help bring robustness and transparency to the post-trade environment.

Elliptic is a start up that identifies with a high level of accuracy, the origin and destination of transactions on the blockchain. This could help immensely in anti money laundering.

Everledger are trying to combat insurance fraud by using a fingerprinting process based on blockchain technology. They identify precious metals (for a start), with a view to expanding into all sorts of luxury goods, such as high end watches, designer handbags and fine art. Basically high value items whose provenance might otherwise be reliant on paper certificates and receipts that can easily be lost or tampered with will be centrally identified and tracked using block chain.

Telecommunication

The web which is currently controlled by the Internet Corporation for Assigned Names and Numbers (ICANN), could be potentially disrupted by a blockchain based DNS which would be decentralised, private but most of all more democratic. While this may sound dodgy to a few, it may come as a blessing to many who think their freedom of speech and expression is being affected by the centralised nature of the web.

Cloud Computing

Storj is a start up that uses blockchain and peer-to-peer protocols to provide a secure, decentralised and private cloud infrastructure. To best protect data, files are encrypted client-side on users’ computers before they are uploaded. Each file is split up into chunks which are first encrypted and then distributed for storage across the Storj network.

Applications of blockchain are increasingly discovered by the minute. The concept of decentralisation (via Blockchain) has been used in distributed computing Zennet, and in Internet of Things (IoT) by IBM.

Distributed Autonomous Company (DAC)

The most interesting model with blockchain for me has been Distributed Autonomous Company (DAC). A DAC will not take the form of a company, in the formal sense, meaning it will not be subject to regular company laws, but will instead be governed purely through the alignment of incentives.

For example, Play, a blockchain based casino, claims it offers a third-party verifiable mechanism to ensure true randomness and fairness for gamers by placing the games’ logic on a blockchain. This would remove the need for trust in centralized institutions. The chips used to play are called Playshares (PLS), which are also the tokens of the system. PLS are designed first to be the shares of the PLAY System, and thus the unit in which dividends are paid to PLS holders and delegates of PLAY are paid for their contributions to the system. As the individual players own the system through PLS and play using PLS, if the house wins, individuals win.

A sharing economy firm called La’Zooz are the blockchained version of Uber. It is a Decentralized Transportation Platform owned by the community and utilising vehicles` unused space to create a variety of smart transportation solutions. With this idea, the users are rewarded for sharing information about their usage, and in the process help build the network. In this way, early adopters of La’Zooz network are gaining value and thus being incentivised to take part in the establishment of the network before its technological benefit takes effect and the transport service is available.

Isn’t that a new economic model? Build a network of customers by getting information from them, and getting them to partake in an event and incentivise them for that. Early adopters will get higher incentives, and as the network of users/nodes increase, incentives are harder, but the business is robust and established. The key differentiator is that it is decentralised, data intensive and capital light.

This decentralised model could potentially disrupt the energy, technology infrastructure, food and agriculture and micro finance sectors. While ideas in most of these industries are still being experimented, it feels like a new economic and social phenomenon is brewing, and it most definitely is a step further away from capitalism!!

(image credit: GollyG, CC2.0)

Data Natives focuses on three key areas of innovation: Big Data, IoTand FinTech. The intersection of these fields is home to some of the most significant innovation happening today.

Come and learn more from leading scientists, founders, analysts, investors and economists. Whether you’re from a technical background or not, you will come away with a better understanding of the industry trends, technology driven opportunities and revolutionary business ideas.

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Consumer finance technology company, Kreditech, has raised EUR 82.5 million in Series C financing to fuel the company’s growth. The round was led by J.C. Flowers & Co. LLC, a leading private investment firm dedicated to investing in the financial services industry globally. Peter Thiel and Amadeus Capital Partners (Amadeus) invested earlier this year in a bridge loan that has now fully converted into Series C equity. Existing shareholders Värde Partners, HPE Growth Capital and Blumberg Capital also participated in the round. The company is in advanced discussions for a final closing that could increase the Series C round to over EUR 100 million.

“We are excited to bring these world-class investors on board who will support us in strengthening our integrated financial services platform, bringing us closer to our vision of becoming the ‘digital bank for the underbanked’,” said Kreditech’s Co-Founder and CEO Sebastian Diemer. “We are a technology company, but also a provider of consumer financial services, and we are fortunate to have a sophisticated shareholder group whose experience and network spans both areas.”

“We view the addition of J.C. Flowers, Peter Thiel and Amadeus as a major validation of our business model. They are important partners in building our capital markets story,” added Kreditech’s CFO Rene Griemens. “The company has now raised cumulative equity and debt funds of more than EUR 300 million, of which EUR 160 million are unused debt facilities available to finance further growth.”

Loren Felsman of J.C. Flowers, who will join the company’s board, said, “There are people without access to fair and affordable credit in every market we have analyzed, and technology is enabling new and better ways of offering credit to these customers. Kreditech has developed a remarkably sophisticated approach to real-time consumer banking, and focuses on markets that are relatively less well-served by traditional credit bureaus and financial services providers. Most lenders, including those built on modern technology, may not crack these markets for years.”

“We are very impressed by Kreditech’s speed of execution; its business model, in combination with its innovative scoring and underwriting technologies, has enormous potential to overtake traditional banking models in the future,” said Andrea Traversone, Partner of Amadeus.

Take a look at our interview with CTO Alexander Graubner-Müller to find out more about what Kreditech is doing.

As the founder and CTO of Kreditech, Alexander strongly believes that algorithms and statistical data are the building blocks for the next Industrial Revolution. Kreditech, one of Germany’s most data-driven FinTech companies, is a testament to that belief. Before founding Kreditech alongside Sebastian Diemer, Alexander managed engineering and product development at Rocket Internet and worked in the investment and banking sectors.

We are proud to have Alexander presenting at Data Natives 2015!

5 years ago your career shifted focus from finance to technology – what was the motivation at the time?

I have always been very passionate about technology and have been coding since high school. During the same time I discovered my interest for the stock markets and started experimenting with algorithmic trading approaches. My academic career was mainly driven by collecting all the skills to do that on a professional basis: economics, statistics, financial engineering, IT. During research I also learned to use the power of web-data in that domain, for instance how to build aggregated indicators based Twitter or Google news to predict the economy.

Unfortunately, the financial crisis was in full swing when I was about to start my career. Job opportunities in banking hence were constrained at the time. So instead I decided to become entrepreneur and commercialize the technologies developed during my research. Together with Sebastian Diemer I co-founded a company called PredictX – a prediction-market engine – which we later sold to a financial institution.

Can you describe the journey that led to you co-founding Kreditech, and your major influences along the way?

PredictX brought us into the startup scene and we were hired by Rocket Internet for a venture development project in China. We also started to brainstorm other areas where we can apply our skillsets in predictive analytics based on information which has been collected from the web. Forecast recessions, forecast elections, forecast sovereign default etc. We also looked into the personal context – e.g. recommendations based on algorithms. Predicting credit risk was also on the list but only caught our full attention when we coincidentally witnessed how cumbersome it really is to apply for a loan in a bank. There was not yet a technical solution to make this process fast and efficient. We realized that this is a huge opportunity to innovate a whole industry and were confident that we can build an algorithmic solution. Our goal was to make a loan application as easy as purchasing something on Amazon, an “Amazon for Consumer Finance”. Combining our knowledge, passion and willingness to create something new and amazing, we came up with what then became Kreditech.

What kind problem are aiming to tackle at Kreditech?

In first step it is about solving the inefficiencies of consumer credit scoring. The current approach used by banks is outdated and highly inconvenient for the customer. Just think of branch-visits, physical documents, several days for the loan decision and many more complicated processes.

Banks also fail in another way: Large groups of people, the so called underbanked, are completely excluded from credit given that banks are unable to rate their credit risk. Our technology solves both problems: It enables to handle loan applications completely online in minutes, get a credit decision in seconds and receive a loan payment directly afterwards. Also, it creates a service available for traditionally underbanked customers as well. It is about making credit consumer-friendly and suitable for the 21st century and our broader vision is to build a full digital bank in line with this thinking.

What major milestones changes you’ve seen in the financial sector with the rise of FinTech? What do you think is going to happen next?

In the consumer space most fintech companies have been growing on opportunities where banks have traditionally offer very poor service – online payments or remittances are great examples. Then a wave of companies developed from the fact that banks did not manage to provide viable online versions of their services, such as in the fields of consumer lending, wealth management and banking accounts for the next-generation. The next big step the industry will undertake is context-driven consumer understanding by providing smart, personal and data-driven recommendations for instance.

[bctt tweet=”The next big step is context-driven consumer understanding. #Fintech”]

If you could choose a different problem to tackle, or perhaps the project that will come next, what would it be?

I would think of other areas to use machine learning for building better consumer services. Algorithmic personalization and recommendation services are very interesting. This could be a personalized, digital newspaper or similar.

Of your achievements so far, of which are you most proud?

Many! Building the heart of the company: Kreditech’s unique scoring algorithm is definitely one of them.

Anything you would have done differently?

No regrets.

Which companies individuals inspire you, and keep you motivated to achieve great things?

I am a big fan of people who have continuously excelled in their field as entrepreneurs and innovators: Elon Musk and Steve Jobs are leading examples for sure.

London, Berlin, and Amsterdam are all prominent tech hubs. However, earlier this year, a study from the Stockholm School of Economics revealed that Stockholm is not only rising in popularity in the tech sector, it is easily Europe’s number 2 city for FinTech. Best of all, reviewing the city’s history and analyzing cultural factors doesn’t just shed some light as to why, it gives us great insight into what makes a FinTech environment productive.

A brief history of the “Unicorn Factory”

Stockholm’s market­topping tech sector didn’t just pop out of nowhere; it started decades ago. A financial crisis,housing market and currency crash in the 1980’s would slowly be remedied through foreign investments and a growing ICT sector. These foreign relationships not only meant money, but the ability and preparedness to complete globally.

The spread of tech in the early 90’s was further amplified by a tax subsidy provided by the government for the purchase of personal computers, allowing coming generations to have an unmatched level of familiarity with technology.

By 2000, 76% of homes in Sweden would have a personal computer. For comparison, that rate was 51% in the USA. Much more impressively, they would go on to claim the world’s third highest internet penetration and fourth highest smart phone penetration—surpassing even the US and UK.

Start­ups and that sweet Swedish modesty

These high penetration rates mean a great affinity for tech, how to use it and, and how to be comfortable around it. This may be why the Stockholm region employs 197,000 people, that’s 18% of the population, in high­tech fields. In fact, as of 2014 there were at least 4,600 full­time employees specifically in the field of FinTech. That’s a 44% increase from 2010. US­ native, techie, and “start­up­whisperer” Tyler Crowley frankly told Sweden’s The Local “In terms of the tech scene, Stockholm happens to be the best anywhere on earth right now.” Perhaps it is the Scandinavian Law of Jante, whereby individual success is seen as inappropriate that has developed their peculiar but effective marketing strategy. While American companies are famous for flashy commercials regardless of the product itself, Stockholm does just the opposite. The goal is a product that gets customers talking—a product that markets itself.

While names like Silicon Valley and NYC always manage to get ears prickling, Stockholm has a perfect mixture of the Modest Swede traits and intelligent immigrants. While no country’s immigration tendencies are easy to explain, Stockholm does rely heavily on immigrant workers in tech fields—and many are touting that as part of Stockholm’s reasons for success. With incredibly talented immigrant workers to mix things up, the Stockholm FinTech scene seems to have everything.

Sauna Culture

Multiple studies also point to the Scandinavian management style as a major role in their success. Programmers aren’t just hired to be a cog in a machine, they use their knowledge to design and create valuable products. A bottom-­up structure that focuses on “all for one and one for all,” the atmosphere may be akin to the ubiquitous sauna, where all barriers are released. Thanks to these lower distances in perceived power, the goal of a great product overcomes the goal of keeping the boss happy. In fact, despite long­held perceptions, salaries in Stockholm are relatively lower than those of other major hubs. This allows for a totally different dynamic than you may find elsewhere, in more fragmented companies.

The fact that Stockholm already sounds much more inviting and community­ centric than hubs like NYC is also important. The city itself is small enough to foster a sense of trust, and communication. The FinTech meetup scene is rumored to be friendly, expansive and productive. Rather than seeing successful firms as competition, they serve as real­-life role models.

What’s happening to all these Stockholm start­ups?

Without even noticing, you likely use tech with Sweedish roots everyday. If you Skype, use Spotify or play Candy Crush, you’re looking at Swedish handiwork.

Stockholm’s FinTech Startups raised a total $226 million last year, that’s nearly one­fifth of all investments in Europe. Swedish bank, Nordea, just launched a program to accelerate FinTech startups. We’ve already written about KnCMiner, the bitcoin mining company that raised a cool $15 million. Cyrex secured $10 million in May. Then there’s the unicorn Klarna, who remains of Europe’s leading providers of payment solutions. In fact, they are even eyeing the US market. So where exactly are all these millions of dollars coming from?

As we already discussed, traditional banks in the US are struggling to keep up with the financial sector. Conversely, other companies around the world are getting ahead of the game by investing in FinTech—and they’re investing plenty of money in Stockholm. In the past two years, Intel Capitol, Mastercard and American Express Ventures have invested in one Stockholm FinTech company, iZettle. The mobile payment solution, complete with app and card reader, allows small businesses and individuals alike to complete card transactions with the help of a smart phone. Investments like these and exit payments make up a huge percentage of the Stockholm FinTech finances, and continue to drive Stockholm up the global FinTech­scoreboard.

“But I Don’t Live in Sweden…”

“Good ideas aren’t enough for success.”

Daniel Blomquist, partner at venture capital firm Creandum, explains that Stockholm’s success is also driven by a “high level of execution intelligence.” Workers don’t just focus on writing code, they focus on a marketable, useful product. While strong social security, a history in tech and finance are shaping the FinTech hub, there are many lessons to be learned from the burgeoning city.

There are educated and driven people all over the world. What’s happening in Stockholm is the result of far more complex factors. How do employees and employers interact? How do employees view their work and role? They don’t just churn out decent companies. Stockholm has earned itself the title of tech “Unicorn Factory.” Creating “Unicorns,” start­ups that become so successful that they are mythical, takes a lot more than GPA and money. With a background like theirs, there is no question Stockholm will hold onto their place of reverence atop the FinTech scene…maybe one day they’ll even break first place.

(top image: iZettle)

UK FinTech company Hello Soda has announced its expansion into the United States with the opening of a New York office and recruitment of two new heads of sales.

Hello Soda is expanding its UK business overseas after experiencing huge demand for technology platform PROFILE which helps reduce fraud and improve responsible lending and borrowing.

The cloud-based, unstructured data engine gives organisations insight into a customer by analysing their digital footprint. It takes customer information from social media platforms and blends it with other third-party data sources to create real reputation scores with a human element, helping lenders reduce fraud and make fairer decisions around affordability, pricing and terms. Hello Soda’s new credit scoring methods are helping to transform the credit industry.

Hello Soda has been attracting interest from some of the world’s biggest alternative lenders, banks and insurance companies following its development of the PROFILE platform which helps reduce fraud and improve responsible lending and borrowing using Bayesian Belief Network principles to create 4D data. Plugging a gap in the industry, the technology helps companies understand a person as an individual and aims to take advantage of the fact that traditional credit rating models are based on historical financial performance, and do not take into account a person’s ‘true’ and real-time circumstance.

But it’s not just creditworthiness that Hello Soda’s platform is being used for, propensity to commit fraud, employee vetting, and insurance claimants’ trustworthiness are just some of the issues the technology is being put to use to resolve.

(image credit: Larissa Brown)

Millenials: Often perceived as entitled, high maintenance, and poor. Virtually no one wants to be termed a “Millenial,” because the words that follow are generally negative. However, once the facade is peeled away, there are a host of other traits that Millenials carry—good ones. They’re famous for giving back to the community and striving to find fulfilling, meaningful work.

To say that Millenials have a complicated relationship with big companies (banks in particular) would be an incredible understatement. The generation lives and deals with money in a completely different way than those who came before. There are a plethora of tiny details that draw the generation away from traditional banking and towards FinTech. However, this relationship is also complicated. It’s not that Millenials simply love or prefer the new sector.

Rather, almost everything FinTech stands for is in line with Millenial values, and they work together, forming a dynamic, powerful relationship.

Millenials would rather go to the dentist than listen to banks

Understanding Gen Y’s affinity for FinTech begins simply by taking a walk in their shoes.

An interesting study from Scratch, a division of Viacom, has been garnering attention by revealing that 71% of Millenials would rather go to the dentist than listen to banks. However, it’s not that bankers are simply annoying or off­putting; it’s a very deep­seated distrust towards the industry.

The same study revealed that Millenials rank all four of the big banks among the 10 least loved brands.

[bctt tweet=”Millenials rank all four of the big banks among the 10 least loved brands.”]

While for some of us, the “talk” from our parents included how to build strong credit in order to someday buy a house, or choosing which guy to see about new investment opportunities, Millenials really live a completely different financial life. They are riddled with debt. They came of age during the financial crisis, and had their worldview painted by events like 9/11. Sometimes dubbed “Generation Occupy Wall Street,” Gen Y is taking the bull by the horns and trying to move forward. If big banks aren’t ready to get on their side, the Internet Generation is ready to find their own path.

It’s not just a matter of trust

Scratch’s study on Millenials also revealed that 73% would be more excited over new financial services from tech companies than from their actual nationwide bank. This may be, in part, because the generation grew up with companies like Amazon. They watched as tech adapted, evolved and dominated. Companies that started as underdogs are now some of today’s biggest names. Google, Apple, Paypal, and other companies that may, in fact, be huge, hold a special place in the heart of the millenial generation.

Despite having seem tough times, Gen Y isn’t backing down in the realm of finance. They are simply putting their money, follows and tweets, where their mouth is. They are actively seeking new opportunities, and that energy is helping drive the Fintech sector to blossom.

A paper from Wharton FinTech titled The Millenial Generation and the Future of Finance: A Different Kind of Trust, attempts to sum up the varying types of trust in the financial sector. The generation’s general distrust of established brands leads to three areas that are vital to doing finance with Millenials: technology, networking and social causes. For Millenials, technology isn’t just a pipeline to social media. It’s an incredible, powerful creature. Apps help explore, save time, order our finances and lives. The field is also new enough that only a handful of long ­standing big names exist. Hopes are still high, eyes wide and tails bushy.

What big companies will be taking over?

One thing banks (and the country) needs to understand is that young people want to move on from debt. They might buy a house—if they were financially able. The fact is that banks rarely offer real relief in the student loan department. Instead, innovation is coming from untraditional places, like SoFi, Earnest and Common Bond. Affirm is helping young people find loans. Robin Hood is fighting against stock trading fees. New startups are popping up to deal with the generation’s new problems.

Conversely, banks are often viewed as cookie­-cutter institutions, offering all of the same useless bells and whistles. Startups (especially crowdfunded projects!) operate specifically on the premise that they can bring us something new. Something we need that no one else can give us.

The very nature of these smaller tech companies is part of their charm. It allows for a unique and dynamic relationship. If a blossoming startup loses that original flair and motivation, it’s their own supporters who will dismantle them brick­-by-­brick.

Which companies will flourish under this new order is still hard to determine, but one thing is certain…it won’t be big banks, unless they undergo a massive makeover.

Millenials and the Greater Good

Last of all, millennials are drawn to action in the FinTech industry because these companies tend to have credos people can get behind. It’s not all about money; it’s about values. Common Bond funds a needy child abroad for every loan funded on its platform. GlobeOne requires bank partners to return 50% of interest charged to the customers.

While it remains unfair to say “Millenials love FinTech!” the reality is that FinTech is aligned with many of the positive qualities that make up the generation. It works with the harsh financial realities of being a Millenial, and gives hope for development and innovation. Scratch’s study did say that 68% of Millenials believe that, in five years, the way we access and interact with money will be totally different. Expect FinTech to be part of that change.

(image credit: Omar Bárcena, CC2.0)

With 17 years of Financial Services experience under his belt in places such as London, New York, Tokyo, and Singapore, Nasir Zubairi has brought his own touch of innovation and value to numerous organizations and startups. His current role at FinLeap sees him advising and building the next generation of FinTech companies to ultimately change the face of the financial industry.

We are proud to have Nasir presenting at Data Natives 2015!

How did you make the jump from financial services to FinTech?

It was 2008. I was working in a bank. I recognised that I was not happy waking up in the morning, not happy at the prospect of another day in the office. I decided to make a change. I did not go straight into Fintech, I first went to business school – I was thirsting for new knowledge after a long drought.

Can you describe the journey that led to where you are today, and your major influences along the way?

Sorry to be non-descript, but all my experiences, all the people I have met, all the things I have done, personally and in business, have shaped my direction and brought me to this point. I like to learn something new and useful every day and have been blessed to be able to achieve that.

What major milestones or landmark events have stood out to you during your time in the industry? What are you still waiting for?

Very specifically – the Lehman Brothers bankruptcy and the takeover of ABN Amro by RBS. I think these two events seeded a major change in perspective about banking; not in a positive sense. The knock-on impacts – the credit crisis, regulatory reform, banker bashing, the “99%” movement…. are catalysts for the rise of “Fintech”. More focus on the sector led people to see the cracks in the services being offered and to be proactive in trying to do something about them.

What am I waiting for? I am waiting for the first bank to issue a mobile phone instead of a credit card. That will be game-changing. Right now it is more evolution rather than revolution.

[bctt tweet=”‘I am waiting for the first bank to issue a mobile phone instead of a credit card.’ – @naszub”]

What have been the most significant challenges you have faced while trying to drive innovation in the finance sector?

I set up my first venture in 2010. this was when the Fintech movement was really in its infancy. It was so hard to raise money. Investors did not think treading on the bank’s patch made for a wise business. What could a start-up do against the mighty goliaths in the Industry? Ha!

More broadly, the whole process of starting and building a business, though incredibly exciting, is hard work, especially the first time. No matter what you think you know about it, the reality is very different. Building your network requires a monumental effort – I used to be so exhausted at the end of the week from all the “selling” that I just didn’t want to talk at all over the weekend.

Of your achievements and accolades so far, of which are you most proud?

Being voted “Best Mentor” at the Awards for Enterprise in 2012. I was so happy to find out that I was useful!

What kind of problems are you aiming to tackle in your role at FinLeap?

The opportunities in Fintech are massive, we have barely scratched the surface. I would love to find a way to provide access to credit for the 2 billion people that are unbanked in the world. What a problem to solve.

What advice would you give to the Nasir Zubairi of 20 years ago? Anything you would have done differently?

No. I would not have learnt what I have learnt if I had not done things the way I have and I probably would not have known the alternatives and to advise myself differently. Vicious loop. The key is to try not to make the same mistakes again.

Which companies or individuals inspire you, and keep you motivated to achieve great things?

I am a great admirer of Warren Buffett and his pragmatic approach to investing and growth. Also Soichiro Honda; he took on the giants and won.

(image credit: CGP Grey)

Since its rise in 2008, Financial Technology, or FinTech, has been disrupting the banking industry, reshaping businesses, and transforming the way consumers manage and use money. Innovators and entrepreneurs are storming what was once considered an inefficient, inflexible arena, and plenty of investors are following close at their heels. Investment in FinTech skyrocketed from $928 million in 2008 to $3 billion in 2013; since then, the numbers have soared even further. FinTech’s myriad of advancements signal an increasing momentum for the movement on a global scale.

So, what is FinTech, exactly? The National Digital Research Center in Dublin, Ireland defines it simply as innovation in financial services. More specifically, FinTech companies often use technology to disrupt incumbent financial systems. Let’s examine the last few years in FinTech and consider its potential to shape a brighter future in finance.

FinTech’s first opportunity came knocking in 2008, after the global financial disaster, subsequent bank bailouts, and banker bonus scandals marked a major turning point in the financial services sector.  Industry experts and consumers began questioning the future of traditional banking. Gallup polls now reveal that just 26% of people have high confidence in their banking institutions. As a result, banks are now bleeding their sharpest minds to the rising FinTech sector, as plenty of former banking experts trade in six figure salaries and rigid work structures for freedom to shape the future. In fact, four of the U.S. and U.K.’s largest banks reduced their total headcount by almost 350,000 in the past 7 years.

Johan Lorenzen, CEO of Finnish FinTech startup Holvi, sees this decline as a call to action for FinTech to close the gap between broken banking and the globe’s financial needs. “Banking has become so disconnected from the way we live our lives, the most important opportunity is to change banking to better match the shift in society,” he says.

FinTech offers a host of solutions, and has become increasingly paramount to the evolution and improvement of financial tools previously controlled by banks. Money transfers and merchant credit card payments – once cumbersome processes – now have user-friendly digital interfaces, as companies continue to create attractive alternatives. TransferWise, valued at around $1 billion, has taken the expensive act of transferring money and spun it into a cheaper, less-stressful alternative. And what’s best of all, according to the company’s founders? The process bypasses the banks.

“Banks are really bad when it comes to building consumer-centered products,” says Transferwise co-founder Taavet Hinrikus. “We believe that the future of money is digital.”

Similarly, Stripe and Square have disrupted the merchant payment collection process – the former allowing developers to build credit card payment functionality for e-merchants, and the latter providing hardware for instant credit card payments in the physical realm. Payments is the hottest area of FinTech, and Stripe is at the forefront, aiming to “increase the GDP of the internet.”

But payments and transfers is just one of many booming areas of FinTech. Another is personal finance management. On the frontlines are companies like Wealthfront, who have propelled algorithmic asset management and thus reduced the need for face-to-face wealth advisors. Even traditional financial service giant Charles Schwab & Co. has taken note and isn’t going away quietly; it has launched its own “roboadvisor” to compete. Additionally, popular personal budget management tool Mint has inspired plenty of unique spinoffs including LearnVest and Personal Capital, which all decrease the need for personal wealth advisors. For the average consumer who deals with the daily trials of traditional banking, these products are welcomed alternatives.

In addition to transforming existing sectors, FinTech has plunged into uncharted waters by creating entirely new types of products and services. Crowdfunding has become a household term after Kickstarter perfected an easy method to allow people to raise funds via the internet. Peer-to-peer lending is soaring in popularity thanks to companies like San Francisco’s Lending Club. While there are still risks involved, P2P initiatives offer lower interest rates and fewer limitations than bank loans. People from all walks of society, from students to small business owners to artists, have found a new freedom in peer-to-peer services.

A particularly promising area of FinTech involves big data and data collection. We’re already seeing monumental changes in analytics, data storage, data-driven-marketing, cloud computing and SaaS business models as they relate to finance. BillGuard, for example, has forged a pathway in financial security by using data analytics to identify deceptive or erroneous lines on credit card statements. Kreditech has spun data collection into a different kind of financial beast altogether – one that offers algorithmic banking, big data credit scoring and a final push to say goodbye to your physical banking branch. Hundreds of other companies now have something unique to say with data, and as the amount of information increases in upcoming years, so will the abilities to harness it.

One thing is clear about the past two years in finance: they’ve positioned FinTech for a global takeover. In fact, many believe we’re entering into the golden era of FinTech. A question that had pervaded the landscape was whether or not sufficient capital could keep up with the enormous rate of innovation. 2014’s investment trends taught us the answer: yes, the money is flowing where the ideas are going. According to a report by Silicon Valley Bank, the FinTech market saw 211 acquisitions in 2014 alone. The fourth quarter of 2014 was the busiest time in FinTech history, with $1.27 billion of venture capital invested in 82 deals. Finally, quality venture capitalists are jumping at the opportunity to back FinTech – especially in areas involving lending, personal finance management, payments, and Bitcoin technology.

Another indicator of FinTech’s rapid growth is its blossoming network of entrepreneurs, experts, startup team members, and sponsors. All of these key players are contributing to a number of high quality meetups, conferences, and industry-specific events around the globe. While much activity is still centered in the UK and Silicon Valley, global buzz is evidenced in headlines and meetups in cities around Europe. FinTech’s international boom seems imminent; the key, many believe, is that finance startups must first cater to their specific regions when it comes to developing products and attracting funds.

While these may be your final years at a bank teller window as FinTech innovators gradually repackage bank services into neat little apps, it’s possible that banks will take notice of the digital revolution and adapt accordingly. FinTech need not be used to replace banks, but rather improve financial services as a whole. Chris Skinner, author of Digital Bank, discusses the changes needed for banks to scrap old models and plunge head-on into the digital sphere. In essence, banks must use the latest technology to proactively and predictably serve customers.

“The difference is that the digital bank does not think about devices, but about the capability to have the Internet embedded in everything,” Skinner says. “Walls, windows, chairs, ceilings, headscarves, handbags, jumpers, jam jars. You name it, you can digitally interact with anything today. That’s where the thinking really opens up the mind to the possibilities.”

Will banks move quickly enough to close the gap? They certainly have the resources and the power. But they’ll have to compete directly with the likes of Simple and Number26, companies that have already created an entirely electronic banking experience from scratch. The world is slowly but surely catching on to this simple, ideal model.

As entrepreneurs grow bolder in tackling issues using ever-evolving technology, it’s safe to say that the most impressive transformations will come to fruition before the decade’s end.

“Over the past year we’ve seen FinTech evolve from an exciting buzzword, into a lucrative industry that’s even causing the government to sit up and pay attention,” says Currency Cloud VP of Marketing Todd Latham in our interview. “As transparent, flexible, technology-focused alternatives eat into the margins of traditional players, banks will need to consider their next move carefully – managing the right balance between collaboration and competition.”

[bctt tweet=”What is FinTech? The Story of Broken Banks, Innovation, and the Future of Finance”]

(Photo source: GotCredit via Creative Commons)

The earliest adopters of the Apple Watch are now in possession of the much-hyped wearable, but behind the scenes, companies are still scrambling to be a part of the action. The Apple Watch is expected to do well in sales this year, and it’s sparked an arms race among brands to get their name attached to the latest technology. That being said, the real usefulness of apps on such a small screen tethered to a wrist remains to be seen. An app’s success on Apple Watch depends on its target audience, use cases, and other factors. Not all are a practical fit.

We looked at a slew of FinTech apps currently or soon-to-be available on the Apple Watch, categorized them and rated each category on usefulness. Should you take or leave that budget tracking app? Read on to find out.

Stock alerts

Scutify, NewsHedge, E*TRADE, PortfolioWatch, Call Levels, Charles Schwab, Fidelity

Verdict: Take it

Daniel Chia, co-founder of Call Levels, believes the key to an app’s success on the Apple Watch lies in “properly providing push notifications on the watch to add value to users.” We tend to agree with him. Consider the reasons why you’d want to look at your small watch screen instead of your phone. Important alerts are the obvious answer. Call Levels also claims to be the one portfolio app that’s perfectly suited for the Apple Watch form factor.

If you’re loyal to one of the giants like E*TRADE (pictured below), Charles Schwab and Fidelity, their apps may be worth checking out – however, make note of these others: Scutify adds a social networking emphasis and has amassed a loyal following, calling itself “The #1 Financial Social Network.” NewsHedge is known for its audio broadcasts. PortfolioWatch comes with a fee for personalized portfolio monitoring, but it also allows you to manage your holdings, view charts, and check individual stock performance.

Trading stocks

IG Group Holdings

Verdict: Leave it

Buy, sell, and trade stocks on that tiny little screen? Where’s the fun in that? Admit it – you’d probably be holding your iPhone in your other hand, anyways.

Tracking spending

Unspent, MoneyWiz 2, Pennies, Mint

Verdict: Leave it

While all four of these apps have snazzy interfaces, that won’t matter much when you get annoyed from tapping your wrist all day long.

Take a look at the Pennies introduction video and you’ll see a young woman walking through life counting her spending. Yikes. Who wants to input all that data instead of looking up and out at life? If staring at numbers all day long on a 42mm screen floats your boat, fine – just don’t blame yourself when you miss that love connection because you were too busy inputting your toilet paper expense.

Multi-purpose banking

Citi Mobile Lite, DAB Bank, iBank, BankMobile

Verdict: Leave it

Again, this seems like a bit of a no-brainer. You’ll probably have an easier time with your account balances – and everything else related to banking – on your phone.

The Citi Mobile Lite app will allow Citibank customers to check account balances and view recent credit card transactions. The iBank app (pictured below) will feature account balances, however many of iBank’s current users on other devices are concerned and commenting that existing bugs in the company’s apps won’t be fixed. If BankMobile’s app is anywhere near as counterintuitive as its website, it won’t be a worthy addition to your wrist.

Account security

BillGuard

Verdict: Take it

In an ideal world we’ll know about fraud before it even happens, but until then, Apple Watch alerts will suffice. Bonus points to BillGuard or other security apps if they can get international coverage up and running ASAP.

Paying bills

Prism, Chronicle

Verdict: Take it or leave it

If you’re the kind of person who needs a nag or two about paying bills, then the bill pay apps for Apple Watch will probably serve you well. But for actually making the payment, a phone still seems like the better option.

Both Chronicle (left) and Prism (right) seem to be very similar in terms of features, however the interfaces are quite different.

Credit card rewards

Wallaby

Verdict: Take it

It feels good to know you’re getting some sort of reward when you spend money, and Wallaby will make sure that happens as often as possible. The app will tell you which of your credit cards to use at a particular location so that you get the most benefit. This could be a useful concept for rewards fiends on the go.

The bottom line: The Apple Watch is best fit for very simple tasks or notifications. Everything else takes away from the convenience.

(Photo source: Shinya Suzuki via Creative Commons)

Amidst continuing bank crises and stock market woes, the number of new businesses registered in the UK reached 581,173 in 2014 – a record high. It’s a telling statistic not only for the UK, but for other parts of the world in which advanced technology, startup accelerators, and new funding options are empowering individuals to turn their ideas into companies more than ever before. A closer look at the forces behind this entrepreneurial surge reveals that FinTech – with its innovative options for raising capital, purchasing and payments, cashflow management, and general administrative tools – is a major enabler in the startup ecosystem.

Alternative paths to big funds

Before alternative financing options, founders could fund their ventures using several tried and true methods. Depending on level of traction and organization, they might go through family, friends, angels, bank loans, venture capitalists or some winning combination of them all. FinTech has added crowdfunding and peer-to-peer (P2P) lending to this list, both of which have already empowered plenty of companies to launch successfully.

One such company is Pebble. In 2013, the smartwatch startup made headlines when it raised more than $20 million via Kickstarter, shattering an original goal of $100,000. The company originally had trouble attracting substantial investors, so CEO Eric Migicovsky put his faith in crowdfunding.

“We spent about a month and a half working on the Kickstarter campaign – building a prototype, shooting the video, writing the text, taking photos, and designing the Kickstarter page and pledge levels,” says Migicovsky. “We looked at all the famous Kickstarter projects, the ones that were most successful, and took cues from their videos. Making a video that had a personal pitch and talked directly to your customers and viewers was really important.”

Pebble’s Kickstarter campaign ran for just a month and gathered nearly 69,000 backers. The smartwatch is now retailing in major chains around the world, and the company earned valuable publicity from the fundraising process.

While standard crowdfunding typically involves individuals giving money to a cause in exchange for rewards (in the case of Pebble, the reward was up to 30 Pebble Smartwatches depending on the amount of money invested), equity crowdfunding, another option, works in a similar way – the only difference is that backers receive equity in the company in exchange for their investment. CrowdCube has made a name for itself in the UK as a leading platform, helping young startups earn money and valuable word-of-mouth marketing.

But the list of options doesn’t end there. Founders can also crowdfund prototypes with platforms like LaunchLeader. The website, a “micro crowdfunding” system for raising money from family and friends, is a simple route to financing a minimum viable product.

While not yet a household name like crowdfunding, peer-to-peer lending is a valuable tool for many startups, especially in early stages. P2P lending has the potential to be more flexible and less volatile with lower interest rates than traditional lending from banks and credit card companies. LendingClub in the US and FundingCircle in the UK are leading marketplaces of this type, connecting borrowers and investors. The UK’s P2P lending sector is now worth over £2.1 billion – an incredible figure considering banks have historically controlled who can borrow money and at what rate.

A new standard for payment processing

The FinTech payments space is growing rapidly with over $5 billion invested in the past 5 years, increasing the number of options founders have for processing transactions. Stripe, an especially prolific disruptor offering a suite of APIs, has made a name for itself powering marketplaces (Kickstarter, TaskRabbit, Lyft, and FitBit are among them), SaaS companies, and other businesses of all sizes.

Stripe has also equipped companies with the resources to expand internationally, and was  along for the ride when Lyft and Kickstarter took their services abroad. Stripe successfully managed currency conversions and established central hubs in new countries – two roadblocks that, until recently, had been halting growth for many promising companies. John Collison, co-founder and president of Stripe, made it Stripe’s goal to simplify international payments for rapidly expanding global ventures.

“Before Stripe, Lyft were literally running their own banking department, like a bank of Lyft, with people who were responsible for doing driver payments,” says Collison. “That kind of thing in a fast-growing startup is not efficient.”

The option to pre-order

Sometimes payment processors alone don’t do the trick. That’s where startups like Celery come into play. With its simple, embeddable pre-order checkout page, Celery enables companies to accept orders even when they can’t ship them until much later.

Leaders at Celery believe their interface is particularly suited for crowdfunders who have already finished fundraising and are now moving on to readying their product. “A common solution is ‘Hey, we’ll just collect email addresses and we’ll get back to you with payment collection later,’” says co-founder Brian Nguyen. “We thought that was a really ineffective workaround and that’s why we wanted to push the concept of preordering.”

Using a pre-order tool allows startup to gather information about demand and required amounts of inventory. In the new crowdfunding economy – where businesses have potential to raise large sums of money with very little resources – numbers gathered from a preorder tool can result in important savings early on.

Faster payouts = faster growth

For ad networks, publishers, and app developers who sometimes wait months before receiving revenue payments, FinTech steps in with easier options for cashflow. BillFront, for example, provides its clients with revenue advancements in the form of weekly payouts, enabling them to quickly reinvest in marketing and new projects. Through the BillFront platform, funds can be accessed without setting foot into a bank branch.

Art Lapinsch of BillFront says about the benefit of revenue advancement for app developers, specifically, “You can leverage your existing success from your revenues, reinvest in user acquisition, and in the best case scenario, also profit from organic downloads.”

Administrative hassle, be gone

Startups with small, busy teams can’t afford to get bogged down in administrative tasks, but it happens more often than not. Founders can now take advantage of FinTech to smooth out administration processes and office inner-workings, freeing up valuable time to work on ideas that matter.

For every common administrative issue related to finance, there’s a good chance FinTech has that base covered. Looking for a reliable payroll service that still feels in-house and takes care of everything, including taxes? ZenPayroll is an intuitive, full service option. How about easy expense management? Xpenditure eliminates the need for the classic expense report with its A to Z automated expense management. Tired of time-consuming invoice generation? Countless new services, such as FastBill and Invoiceable, provide quick, easy, eye-catching invoices. Finally, companies such as Wave and FreshBooks bring the ease of cloud accounting to startups and small businesses.

While there may not be a magic formula for startup success, FinTech offers plenty of options to help springboard the process.

(Photo sources: Heisenberg Media, Rocio Lara, World Bank Photo Collection, GotCredit via Creative Commons)

Sheryl Sandberg. Susan Wojcicki. Marissa Mayer. Beth Mooney.

What do these women have in common? They are amongst the most powerful and influential figures in business today, making decisions that influence our daily lives. It goes without saying that these women can be recognised as great role models when it comes to breaking the glass ceiling. But when we go a few rungs back down the career ladder, it’s easy to see there’s still a gender imbalance in startup & tech teams.

According to new projections by the US Department of Labor, the number of jobs in technology is sharply rising. They estimate there will be a staggering 1.4 million computer specialist jobs available in 2020. However, if current trends continue, there will be only 400,000 computer science graduates in the US in 2020- and a measly 12% of them will be female. Although some claim the tide is turning, the number of female Computer Science graduates has actually been steadily dropping since the millenium.

Of course, you don’t have to code like a pro to find a job in tech. But females without a technical background are less likely to consider themselves suitable for a tech-related position than their male counterparts. Many are also dissuaded by the perceived deep-rooted under-appreciation of females in the technology field.

At the same time, tech companies find themselves under (justifiable) pressure to address the gender imbalance in their teams. Countless studies demonstrate that diversity in teams- and not just in terms of gender- is good for business. A study by Catalyst found that for ROI, companies with the highest percentages of women board directors outperformed those with the least by 66 percent.

Many tech teams want diversity. Yet women feel discouraged from applying, for a multitude of reasons. It’s a Catch-22 situation.

A woman well-placed to discuss this Catch-22 is Elizabeth Lumley, Editor of Finextra. Lumley is an expert commentator on the FinTech scene, and one of the 100 women nominated for the female voice in FinTech by Innovate Finance. We reached out for comment about how being woman has shaped her experience in the FinTech landscape:

“I met two CIOs at banks this week who both described themselves as ‘not a techie’. I have been told this on numerous occasions by men who work, and hold senior positions, in what most people would describe as an IT/Tech organisation or department. What they mean is they work or manage IT departments – but they don’t code, or work with building applications or infrastructure, they don’t hold a commuter science degree. I think there are some women who feel, ‘well I don’t have a tech background, so I can’t work in the tech industry’. While men don’t think that way. But, for example, I feel like I’ve been working in the FinTech industry for 20 + years – I don’t have a computer science degree and I don’t know how to code.

Outside of that, I really don‘t think it is fair to women to underplay the role sexism and bias play, not only in our industry, but in society as a whole. What makes sexism at work so hard to deal with or overcome is that it doesn’t come in a Mad Men-style format anymore. Instead it is ‘death by a thousand cuts’. Most women would know how to deal with widely inappropriate behaviour – the metaphorical ‘pinch on the bottom’ so to speak. What is soul destroying is working year after year where:

• You go to full day conferences and see no woman on stage – and no one comments.
• You get talked over by men at meetings.
• Your idea gets ignored by senior management – until a man picks it up and repeats it.
• You find yourself the only woman in the room at events and meetings – over and over again.
• And by being the only woman in the room – you get to hear how some men talk about women in this industry. “Is she the one who dresses like a hooker?” Yes, she is the one who has a master’s degree from MIT and dares to wear four inch heels and lipstick.
• You get told to remember that ‘You can be a bit intimidating’ to the rest of the (younger, and less experienced and all male) team.
• You get told to ‘speak up dear, I have trouble hearing ladies voices’.

All of the above has happened to me, several times, and it can be draining. You can start to think. Why am I fighting? Why did I choose a career where I’m constantly walking uphill – with a big boulder.”

Though Lumley admits, whereas the present may not be an ideal environment for women, the future could be. “I know the above may sound pessimistic”, she admints. “But I think things are changing. The big change is visibility. We need to showcase more women leaders and thinkers in this space. Because a lot of the entrenched sexism in this space is just down to historical practice. Men are used to being in the majority. So an all-male panel at an event doesn’t strike them as strange. (an all women panel- not on a ‘women’ topic- would make the evening news) That visibility of women leaders will help the current and next generation of female workers to demand the appreciation they have long been denied.

And at the end of the day, this industry harps on and on about ‘disruption’ – there is nothing so disruptive as a female voice in FinTech. So, Bring it on.”

Lumley’s thoughts on change were reflected by Adizah Tejani, Head of Ecosystem Development at Level39. I present you with her thought-provoking wisdom for women looking to get into startups- which truly applies to everyone, looking to get into anything:

“Women bring an aspect of diversity to a team. Many studies have shown that a diverse workplace might ultimately create better results. This is crucial for startups.

We believe there are no purely female and male attributes. The best thing one can do, no matter the gender, is to be your own champion. Don’t be afraid to challenge yourself, and to respectfully evangelise about your own talents and aspirations to the right people. If you don’t, who is going to do it for you?“

To celebrate the contribution of heroes that shape the global Fintech landscape in the UK, Innovative Finance gathered voices of women and created a unique list of the key female influencers. One of the outstanding characters on the list is Monika Gestautaite, a Head of Financial Operations at TransferGo.

After only one year at CASS Business School, at the age of 21, Monika was scouted by TransferGo and currently she is responsible for all day-to-day frictionless money flow at the company. “Before TransferGo, I have received an offer from RBS. However, I decided to choose a startup instead of a bank. It was something totally new and challenging for me. Monika claims that this was one of the best decisions she has ever made. “Fintech industry gave me an opportunity to found what really drives me – numbers.”