How You Can Start Rebuilding Your Credit Today

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No one wants to have bad credit, but that is the harsh reality for millions of people around the country today. Every individual on the planet has their own circumstances in life, and their own situations to face. While everyone may want to keep their credit scores in tip top shape, sometimes it can be hard to manage everything going on, and if emergencies arise, folks may have difficulty paying certain bills. 

This is a harsh reality, and something we all face. Maybe you took out a loan when you needed it and then lost your job, not being able to keep up the payments like you thought you would. Maybe you had a family emergency or had a medical problem that is costing you money. Whatever the problem, you aren’t alone. People everywhere face challenges every day and may not be able to make all their payments right on time, which can adversely affect their credit score. 

Does this sound familiar to something going on in your life? Have you been worried about having a low credit score and no real options to build it back up so you can get a line of credit? 

What Can You Do About It? 

There is actually quite a bit you can do about it, actually. Your main goal will eventually be to get your credit score back in the high range, so you will be able to get some of the best credit card options available. But when you’re just starting to rebuild your credit after a hardship in life, there are still options available to you to help you bring that score back up. 

  • Try getting new accounts

While you might be under the impression that getting another credit card might be detrimental to your rebuilding of your score, it could be one of the best things to help you. If you can’t get approved for a credit card, consider a secured credit card. 

Major financial companies such as American Express offer secured credit cards that you put a small cash deposit on and then pay off, just as you would a normal credit card. You can use these cards in stores and online, like any other credit card, and it comes with all the benefits of a regular American Express credit card. 

  • Try not to apply for too many credit lines at once

The problem with applying for a lot of cards at the same time is because each pull on your credit report can affect your score. This can make it difficult to get approved for a new account when you find a suitable card issuer for you. 

  • Watch out for “bad credit” credit cards with high interest rates

The companies that issue these cards know how desperate people can get in a time of crisis with a low credit score, when they need money right now. People end up getting them and using them for a while, only to end up with another card they can’t pay off. 

  • Watch out for prepaid credit cards

While these are certainly an option in a pinch, they are not a reliable method for rebuilding credit. Unlike secured credit cards, these companies do not report to the credit bureaus, which means you won’t be building your credit score using them. 

Emergencies happen, and sometimes you just have to take out a loan or do whatever you need to do to get by. If financial problems inhibit your ability to pay your bills on time and your credit score is affected, the time will come when you’re back on your feet and ready to rebuild your credit score. 

When that time comes, avoiding some of these mistakes will be a big help in achieving your goal of a higher credit score. The important thing to remember is not to fall trap to some of the “bad credit” credit card schemes you may hear about. 

Many reputable online financial resources such as Nova Credit advise simply finding a secured credit card with a limit that works for you. You can find one through many financial companies such as American Express, with low deposits, allowing you to focus on rebuilding your credit and getting things back on track. 

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1 in 4 Spend Over Half Their Income on Payday

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Research from KPMG UK finds 23% of people in the UK spend more than half their income on the day it is paid into their account. Utility bills, housing costs, and credit card or debt payments make up the top three most common payday outgoings for the UK public at large.

Perhaps unsurprisingly, over half (52%) of people in the UK are forced to source extra cash to see them through to their next payday with most turning to credit cards (21%), overdrafts (13%) and borrowing from their partner (12%).

Lisa Fernihough, Head of Financial Services Consultancy, KPMG UK says: 

“With over half of the people in the UK forced to rely on extra cash to keep them afloat for the month, clearly either income, lifestyle or financial literacy is far from where it needs to be. For 14% of the UK, one of their biggest expenditures in the month is paying off loans. Fintechs are currently offering solutions that can help consumers avoid or manage debt. As consumers gain confidence with this sort of technology I hope to see these numbers improve.”

Millennials are the worst affected with 29% spending more than half their income in one day. Further, whilst the average person in the UK spends around 31% of their earnings on payday, millennials are spending 37%.

Those aged 18 – 24, so likely to be just entering the work force or heading to University, are five times more likely to end payday in the red than the national average. Nine percent of this age group also say a ‘payday treat’ makes up one of their most significant expenditures within 24 hours of getting paid, nationally just 2% of people said the same.

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Bitcoin Suisse and Worldline to Offer Crypto Payments Acceptance in Switzerland

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Worldline, the European leader in the payments and transactional services industry, and Bitcoin Suisse, the oldest and largest crypto financial-services company in Switzerland, have signed a letter of intent for a partnership to offer cryptocurrency payment services to Swiss merchants and consumers both in-store and in web-shops.

The cooperation will leverage the existing nationwide payments infrastructure of SIX Payment Services, which is part of Worldline since the end of 2018, and the cryptocurrency expertise and experience of Bitcoin Suisse to make payments with cryptocurrencies a reality across a wide range of businesses and industries.

At the upcoming Swiss Payments Forum in Zurich, Worldline and Bitcoin Suisse will present further details about the partnership between the two industry leaders. The goal of the partnership is to augment the existing payment service network of Worldline with cryptocurrency payment capabilities and – vice-versa – endorse the use of cryptocurrency in the country through its acceptance as payment currency on a large-scale both at the Point of Sale and in e-Commerce.

Dr. Arthur Vayloyan, CEO of Bitcoin Suisse, commented: “Our partnership with Worldline is an incredible step forward on the journey to bring crypto payments into broader adoption. Bitcoin Suisse is proud to serve as the processor of cryptocurrencies in Worldline’s payment service system. We applaud them for their pioneering spirit in taking this monumental step and pointing the way forward for others.”

Worldline and Bitcoin Suisse sign letter of intent for a partnership to facilitate cryptocurrency acceptance for payments both at the Point of Sale and in e-Commerce

Marc Schluep, CEO of Worldline in Switzerland, added: “As a market leader we have a reputation to introduce latest payment functionalities that enhance the customer journey as well as boost efficiency and profitability for our merchants. Through the cooperation with Bitcoin Suisse, merchants can benefit from an entirely new offering without taking any conversion risk.”

Wider adoption of cryptocurrencies, beginning in Switzerland

The partnership between Worldline and Bitcoin Suisse aims at  reinforcing the leading position of Switzerland as a strong center in the crypto-financial services industry. With over 800 companies currently developing solutions or offering services to crypto and blockchain companies, Switzerland’s Crypto Valley has already grown into a well-known location for forward-looking innovation in the space. Bitcoin Suisse has developed extensive in-house technical and crypto-financial expertise through its more than 6 years of experience in trading, brokerage and storage for cryptocurrencies.

In 2016 the city of Zug became a pioneer in accepting Bitcoin for public services. With the growing interest in cryptocurrencies around Switzerland and beyond, the next step towards wider adoption through existing industry leaders makes logical sense. Using Worldline’s network of more than 65.000 merchants in Switzerland, businesses will be able to accept cryptocurrencies for payments simply and securely. The service will be intuitive and straightforward both for sales staff and online shoppers. Payouts to merchants will be made in Swiss francs or Euros and the transaction figures will be fully integrated into the merchant reports like any other card or wallet.

After a successful launch in Switzerland, Worldline will roll out its new cryptocurrency payment service across Europe.

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£67,625 is the Amount UK People Would Need to Invest Before Seeking Financial Advice

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New research from Nucoro, the Fintech company providing bespoke white-labelled technology, focused on delivering wealth management solutions to third parties, reveals that on average people would need to invest a minimum of £67,625 before seeking support from a financial adviser.  For some 28% of retail investors, the sum is over £100,000.

How much would you need to invest before seeking financial advice from an adviser Percentage of UK retail investors
Less than £5,00011%
Between £5,000 and £10,00012%
Between £10,000 and £25,00014%
Between £25,000 and £50,00018%
Between £50,000 and £100,00017%
Over £100,00028%

When asked which investment advisory service would provide the best returns on their money, 28% of retail investors said an independent financial adviser, but 27% thought that they could achieve the best returns if they managed the money themselves. Some 14% said another type of financial adviser accessed through their bank, or work for example would deliver the best returns, and 8% said using a robo-adviser would do this.

However, Nucoro’s findings show that retail investors expect financial advisers to work hard for their fees.  When asked what they would expect to pay in fees on a £50,000 investment, 68% said less than £500. One in five (20%) said between £500 and £999, and 12% said over £1,000.

Alarmingly, Nucoro’s research reveals that some retail investors are finding it hard to secure access to advice, with 6% saying they have been turned away in the past by financial advisers because they did not have enough to invest.

Nikolai Hack, COO Nucoro said: “Our research shows strong demand for financial advice when it comes to people managing their investments. However, the growing regulatory and compliance costs means that some financial advisers are having to insist on larger minimum levels of investments from investors before agreeing to take them on as clients. 

By outsourcing much of their technological and digital requirements to a specialist third party like us, wealth managers can not only reduce their costs but also improve their levels of efficiency and service, enabling them to take on more clients.”

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MAS Helps Develop Blockchain-based Prototype for Multi-Currency Payments

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The Monetary Authority of Singapore (MAS) has led the successful development of a blockchain-based prototype that enables payments to be carried out in different currencies on the same network. 

This prototype network, developed by MAS in collaboration with J.P. Morgan and Temasek, has the potential to improve cost efficiencies for businesses. It is currently undergoing industry testing to determine its ability to integrate with commercial blockchain applications. The applications that were tested successfully will be showcased at the Singapore FinTech Festival and Singapore Week of Innovation and TeCHnology (SFF x SWITCH) 2019. 

This development marks the latest milestone for Project Ubin which is into its fifth phase. Building on the work of Phase 4 of Project Ubin, the payments network will provide interfaces for other blockchain networks to connect and integrate seamlessly. It will also offer additional features to support use cases such as Delivery-versus-Payment (DvP) settlement with private exchanges, conditional payments and escrow for trade, as well as payment commitments for trade finance. 

“Blockchain technology has great potential in transforming businesses and opening up new business opportunities.”

Beyond technical experimentation, the fifth phase of Project Ubin sought to determine the commercial viability and value of the blockchain-based payments network. To date, MAS and its partners have engaged more than 40 financial and non-financial firms to explore the potential benefits of the network. 

John Hunter, Global Head of Clearing and Interbank Information Network (IIN), J.P. Morgan, said, “J.P. Morgan is excited to be an infrastructure partner of MAS and Temasek for Phase 5 of Project Ubin. By leveraging our key learnings from building the Interbank Information Network® (IIN) and the JPM Coin, J.P. Morgan is well-positioned to support the development of a blockchain-based payments network and operate at scale.” 

Chia Song Hwee, President & Chief Operating Officer, Temasek, said, “Blockchain technology has great potential in transforming businesses and opening up new business opportunities. To better understand the impact and value of blockchain technology, we are pleased to have partnered with MAS and J.P. Morgan for the Ubin platform. The inclusion of non-financial services companies has demonstrated applicability of blockchain technology beyond capital markets and trade finance. We look forward to deeper collaboration and support for Singapore’s pioneering efforts in the blockchain space.”

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Consumer Mixed Reality App Installs to Reach 10 Billion by 2024, Driven by Social Media & Games

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A new study from Juniper Research has found that the number of consumer mixed reality app installs will reach 10 billion by 2024; rising from 3 billion in 2019. Mixed reality overlays interactive digital images and videos onto the real world through a smartphone, tablet or smart glasses.

The new research, Consumer Mixed Reality: Emerging Opportunities, Vendor Strategies & Market Forecasts 2019-2024, identified social media and games as the key app categories that will drive adoption. It forecasts that these categories will account for over half of the global mixed reality market value by 2024.

In-App Purchases Key to Monetisation Success

The new data shows that 75% of the consumer mixed reality market, by value, will be attributable to in app purchases by 2024. However, the research warns that these apps will suffer from high app abandonment rates similar to the wider app market. In response, app developers are urged to continually update offerings over the lifecycle of the app to ensure that the user proposition is maintained.

Research author Sam Barker noted, “Despite temptations to continually grow the app user base, app developers must have a primary focus on retaining existing users. Successful mixed reality app developers, Niantic and Snap, have continued to leverage their significant user bases by ensuring that app content is consistently refreshed, therefore benefiting from continued user spend”.

Consumer Mixed Reality App Installs to Grow by 170% over Next 5 Years

$11bn from Advertising Content

The research predicts that advertising spend over consumer mixed reality apps will reach $11 billion by 2024; rising from $2 billion in 2019. In order for advertising over mixed reality content to become appealing to high spending advertisers, the research recommends that advertising processes must mirror advertising processes in the wider market..

It urges the ecosystem to adopt advertising attribution platforms and fraud prevention tools, in order to attract high advertising spend. However, the research also warns that over-exposing users to advertising content will lead swiftly to high disengagement levels.

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Following Blockchain from Cryptocurrency to Corporate Enabler

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By Kate Voller

Toward the end of 2017, the value of Bitcoin reached almost $20,000. But within a year, prices had dropped by more than 80 percent, a decline so dramatic it led many to believe the cryptocurrency bubble had finally burst. While its value has continued to fluctuate since then, it has never come close to reaching such dizzying heights. Bitcoin is long past its glory days. 

Kate Voller

Despite this, the number of applications for patents related to blockchain, the public transaction ledger that underpins cryptocurrencies, have continued to grow. There has been increasing interest from large corporations including Mastercard, IBM and Bank of America, each of which has applied for patents for the use of blockchain in applications such as data storage, smart contracts, and biometric security solutions. 

These patent applications can be read as good indicators of investment. After all, the R&D and legal fees involved in filing a patent are not insignificant. There may be a future for blockchain after all, just not one related to cryptocurrency as originally planned. 

Rising interest

Blockchain has been “the next big thing” ever since it was introduced more than 10 years ago. However, Gartner, among others, was largely unconvinced. Just last year the analyst house suggested the hype wasn’t justified, and that the technology wasn’t yet sufficient for mission-critical use within the enterprise. 

The enterprise world appears to see a potential in blockchain where others do not, though. Regardless of high-profile reservations, the number of patent applications relating to blockchain almost doubled between 2017 and 2018, with most coming from large international corporations.

Blockchain has been “the next big thing” ever since it was introduced more than 10 years ago.

Interestingly, the majority of these applications aren’t related to cryptocurrencies. Indeed, some organisations are even pursuing such applications while warning the public against cryptocurrencies. The Bank of America, for example, even banned its customers from buying cryptocurrencies using its credit cards. As one of the top five global holders of blockchain-related patents, there appears to be a vast gap between the bank’s attitude toward cryptocurrency and its private intentions for the technology that underpins it. 

Questioning motivation

Blockchain is popular with some very big businesses indeed. In addition to the Bank of America, the list of top five international patent holders is made up of IBM, Alibaba, Mastercard and China Union. With so many patent applications being filed by such large corporations, there is a risk that blockchain could be monopolised by a select few – ironic when you consider that the technology was originally praised for its potential to decentralise control away from the banking giants. 

There are questions around the motivations of these companies, too. It’s possible, for example, that they are securing these patents with a view to licensing the technology to other companies. Indeed, this could prove highly lucrative should their blockchain application successfully address a market need.

it’s important to track blockchain’s journey from a public tool into corporate hands – it’s a journey that will undoubtedly shape its future. 

Alternatively, and perhaps of greater concern for those who see a bright future for blockchain, there is the possibility that these large organisations are filing patents in an effort to stop “disruptors” from developing the technology. Some companies will file several patents and never develop the corresponding products or services, knowing that no-one else can without risking infringement. It’s likely that, as blockchain becomes more popular, so too will this technique.

Following blockchain’s journey

In less than ten years, blockchain has moved from a public technology, with an apparently inseparable relationship with cryptocurrency to being increasingly perceived as an enabler for business. Organisations across a wide range of industries are exploring how it can be applied to specific use cases, many of which are likely to result in the development of innovative new products. 

The filing data reveals that the greatest interest in blockchain comes from some of the world’s largest corporations. As yet, their motivation is not entirely clear. It remains to be seen whether these companies genuinely want to pursue innovative applications of the technology, or whether they want to prevent others from doing so, and prevent disruption to their own established business models.

Whatever the motivation behind the current interest, it’s important to track blockchain’s journey from a public tool into corporate hands – it’s a journey that will undoubtedly shape its future. 

Kate Voller is a patent attorney at GJE

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Advisers Sceptical of the Role of Technology in Closing Advice Gap

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New research from VitalityInvest has found almost half (44%) of advisers do not believe technology can play a role in helping to close the advice gap – the gap between those with and without access to affordable financial advice.

In a poll of 207 advisers, the research revealed 29% of advisers feel cashflow modelling is the tool that could make the most difference, suggesting there are fans of this generally well-regarded adviser software. The robo-advice or self-service route was unsurprisingly less popular, endorsed by just 10% of those advisers surveyed as having a role to play in closing the advice gap.

In a follow-up question on how they use technology, advisers were asked ‘What’s most important to you when using a provider pension portal?’ Answers to this question were more mixed as 32% highlighted an ‘intuitive user-friendly design’ as the top requirement, followed by ‘Ease of onboarding/transferring clients’ at 26%. ‘Speed of service’ was less important at just 12%, suggesting that quality is the priority.

Cash flow modelling found to be the most important adviser technology

Mark Dennison at LightBlueUK says: is: “Clearly many advisers see the full-scale application of technology as a potential threat to their existing business models. Technology can help advisers deliver more profitable services to more clients, including the next generation of investors, but there is some way to go before the wider adviser community embrace this opportunity for their business.”

Justin Taurog, Deputy CEO of VitalityInvest, said: “The right technology has the potential to significantly streamline advisers’ administrative processes, freeing up time for them to focus on the areas where they can add most value – namely offering bespoke, relevant advice. Building a platform that does the basics well is what we believe is key. This backs up our own experience and our VitalityInvest platform has received excellent feedback from advisers on the speed and simplicity of ISA and Pension transfers.”

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Cover Genius Raises $10 Million to Fuel Ongoing Global Expansion

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Cover Genius, the global insurtech whose insurance distribution platform provides protection for the customers of some of the world’s largest online companies, has raised US$10 million in a Series B funding round. The funds will support the company’s investment in talent and its continued global growth across the UK, the US and into Asia.

The round was led by King River Capital, the Sydney & California based venture capital firm and includes participation by London-based, investment professional Jasper Tans, the New York-based Belfer Family, the Australian-based pre-IPO fund, Regal Funds Management, and Marinya Capital. 

The company’s insurance distribution technology provides regulated insurance policies that integrate seamlessly into online point of sale and signup paths, in more than 60 countries and 50 U.S states. Cover Genius pays approved claims via its instant payments platform in more than 90 currencies. Since 2014, the company, founded by Angus McDonald and Chris Bayley, has enabled millions of customers worldwide to purchase insurance from their favourite online brands, such as Booking Holdings.

Speaking on the announcement, Cover Genius CEO and Co-Founder, Angus McDonald said, 

“The insurance industry has been held back by legacy systems and a lack of global coordination and customer-centricity for decades. We sought to change that and create simple, yet useful, policies, streamline the claims process and enable the world’s largest online companies to protect their global customers.”

“Customer needs have evolved and today they want protection for a variety of items like sports equipment, pets, electronics, contracting work, jewellery, flight tickets, and cars. We are evolving the insurance experience to cover all of the things they care about and purchase online,” he said.

“The insurance industry has been held back by legacy systems and a lack of global coordination and customer-centricity for decades.”

Chris Barter, Partner at King River Capital said that Cover Genius had tapped into the growing need for more customer-centric insurance solutions on a global scale. “Their extraordinary growth over the past few years is no surprise when you look at the many friction points for customers that they have resolved and the opportunities they provide for partners to offer protection to all their worldwide customers and increase customer loyalty. We are pleased to support their ongoing growth and continued international expansion.”

This latest funding round follows small Seed and Series A funding rounds. The business has largely been bootstrapped and profitable since its founding in 2014. 

“Early on we bootstrapped the company and since then have built a highly profitable global insurtech business in just over five years. This latest round of funding will help us build out our European and Asian operations, bi-coastal US presence, and expand in half a dozen new countries in line with the needs of our global partners and customers,” said McDonald. 

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Confidence in Service Providers Critical to Open Banking Adoption, Says Study

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The overwhelming majority of consumers would prefer their main bank, as opposed to other banks or third-party providers (TPPs), to be their primary source of open banking services, a new pan-European study from Mobey Forum and Aite Group has revealed.

The report, entitled ‘Open Banking: Open Minds? Consumer appetites for open banking services’, draws on a survey of over 1000 consumers in Finland, France, Germany, Spain, and the United Kingdom. It highlights the opportunity for banks to create new open banking services and emphasises that the window during which consumers are hesitant to share account data with other banks and TPPs will close as the category quickly evolves.

“It’s crucial that banks act on their short-term advantage quickly to avoid disintermediation by TPPs as the open banking market evolves,” comments Elina Mattila, Executive Director, Mobey Forum. “Consumers trust their banks because no-one else does data security and privacy like they do – it’s a cornerstone of their success. Consumer confidence in third party banking services, however, continues to grow.

“The real winners in open banking will be those that can provide superior customer experiences under a trusted brand”

Open banking is the next chapter in the digitalisation story and a new generation of agile, specialist TPPs is forming to capitalise on API-based payment and data services. If banks want to protect their place at the forefront of the industry they need to act now, either to offer TPP services under their own brands, or to create their own. Either way, they need to move before the TPPs can establish an independent base.”

Despite open banking’s infancy, the study reveals that already approximately one third of consumers are either ‘very interested’ or ‘extremely interested’ in five open banking enabled use-cases: account information services (32%), pay by bank (33%), purchase financing (25%), product comparison (35%), and identity check (35%).

Security and privacy, however, are cited as the main factors inhibiting adoption among those consumers expressing concerns. The report contends that banks should pay strong attention to these differentiating factors when launching open banking services, as competition for consumer trust increases.

Survey confirms that banks are preferred suppliers of open banking services, but must fight to maintain position as TPPs evolve the category

The report also explores under which circumstances consumers might be willing to de-prioritise trust and, instead, favour convenience and usability. When questioned over their willingness to adopt a new payment method, for example, 91% respondents indicated that they could be tempted to switch either by financial incentives or the promise of greater convenience. 

“Trust alone is not enough,” adds Mario Brkic, co-chair of Mobey Forum’s Open Banking Expert Group, George Labs. “Banks must also focus on developing services with convenience and usability in mind. People are already willing to give huge amounts of their personal and financial information to brands like Google, Amazon, Facebook and Apple.

When the services deliver real value, they are ready to share data. Many open banking TPPs can respond to consumer demand faster than traditional banks can, so the race is on. The real winners in open banking will be those that can provide superior customer experiences under a trusted brand.”

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UK Ahead of the Curve in Financial Services but China is the One to Watch

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By Gina Clarke

Financial services in the UK have been acknowledged by leading FinTech companies as world leading. CEOs of Plaid and banks Revolut and Starling have all credited the country with forward thinking regulatory laws and an innovative climate.

In a conversation on stage at Web Summit in Lisbon on Thursday, Zach Perret the CEO of Plaid, Founder of Revolut Nikolay Storonsky, and Anne Boden, the CEO of Starling Bank were at the tech conference to talk about the future of banking. Cash was declared dead, and online banks were given kudos for bringing the price of ordinary banking down now that the industry has been forced to allow online financial products to interact with traditional banks. Open banking (PDS2) came into force in the UK on 13th January 2018 and made the leading nine banks release data in a secure form that can now be used by other online products. 

Nikolay Storonsky

According to the trio, this innovation has sewn seeds across the globe, from the US to China. Storonsky spoke on the increase in personal loans in the US vs traditional credit cards. He said, “Banks never used to give out loans because they made much more money issuing credit cards, and so now you get to borrow money for less. That was driven by FinTechs coming into the market and saying, we will lend you money for much less than it costs to hold a credit card.”

He also discussed problems with regulation in the country that made it difficult for new businesses to enter the market, essentially holding prices at unfair levels. He compared this with the evolution of regulation in the UK, saying: “In the US, there’s a lot less clarity as there are no banking charters being issued hundreds of years ago. But the regulator in the UK saw the opportunity. First came the Payment Services directive then in Europe there was an iteration of money licenses which gave rise to a lot of businesses in the UK. Now we have the second wave which is the new banks.”

However, while the panel were quick to credit the UK, the excitement in the room came from further East, mainly China. Boden of Starling said, “When we look at China we think it’s an exciting place. The question is, how do these two worlds coexist? Are we going to be all of a sudden woken up overnight and realise that Europe and the UK is living in the dark ages compared to what people are experiencing in other parts of the world?” 

While Boden credits the freedom of technology in the UK, she is worried that regulatory concerns are only being developed for tech that is available now. With the rapid increase of technology in China, there is perhaps an ability to create something for a growing infrastructure. She continued, “The difficulty is the pace of FinTech innovation and non regulation can fully keep up. Although certainly the UK is doing a really good job of pushing it out.”

Cash was declared dead, and online banks were given kudos for bringing the price of ordinary banking down

The panel also touched upon the possible role for blockchain in financial technology, and using solutions where current problems exist. 

For Perret, CEO of Plaid, he believes that there is a defined success where blockchain and cryptocurrencies can make an impact, but they are not dependent on the success of each other. He added, “I think one of the points we have touched upon is this concept of delivering consumers better products. We want to increase the quality and availability of products delivered to consumers to help people live better financial lives. And that’s why we’re seeing this big boom in FinTech products right now.”

When asked on where the future might take traditional banks, Boden was quick to answer that they will continue to copy new financial products launched by online financial services, but essentially, they will always be two or three years behind. 

Photo credit: Harry Murphy, Web Summit. 

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Worldline Integrates WeChat Pay

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Worldline is adding WeChat Pay to its payment solution in Switzerland. Visitors from China can now pay using their smartphone in Switzerland just as easily as they can at home.

For many Chinese tourists the choice of payment options at a merchant influences their purchase decisions. Worldline, the European market leader which SIX Payment Services belongs to since late 2018, is integrating WeChat Pay, one of China’s most popular mobile payment systems, into the payment solution at its POS-terminals. Therefore, Chinese tourists, who spent almost CHF660 million in Switzerland in 2018, are now more likely to make additional purchases  in Swiss stores using WeChat Pay which has 800 million users.

Any merchant accepting WeChat Pay payments are at a distinct advantage when it comes to Chinese tourists as WeChat Pay is extremely popular among its Chinese user base. Accepting Chinese mobile payment brands increases their propensity to spend by 91%.

Any merchant accepting WeChat Pay payments are at a distinct advantage when it comes to Chinese tourists as WeChat Pay is extremely popular among its Chinese user base.

WeChat Pay compatibility also boosts the chances of impulse purchases. “Merchants would like to offer their customers the smoothest user experience. We support them in achieving this. Since the integration of Alipay and WeChat Pay, Chinese customers in Switzerland can pay just as easily as they can at home”, commented Marc Schluep, CEO of Worldline Switzerland. A prime destination for tourists, Switzerland can now pride itself in offering the latest mobile payment technology.

Chinese tourists are becoming more and more important for the Swiss economy. In 2017, they spent an average of several hundred Swiss francs per day, plus another CHF1,300 in retail stores. Next year, the number of nights that visitors from China spend in Swiss hotels is forecast to grow by a further 13%.

WeChat Pay is part of WeChat, a product of the Chinese internet group Tencent. WeChat began as a messaging service akin to WhatsApp and today has approximately one billion active users. Meanwhile, a whole raft of other features have been added to the application.

Worldline is WeChat Pay’s preferred Acquiring partner in Europe, and so merchants using Worldline’s services can seamlessly add this proven payment system to the options they offer their customers. No additional steps are required to pay using WeChat Pay – scanning the QR-Code is all that is needed. The necessary technology is already integrated in Worldline’s payment solution and the software update is automatically rolled-out to the terminals.

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Finance Professionals Confident Gender Pay Reporting Will Work, But Only a Third See The Gap Close

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The majority of the finance sector is positive that gender pay reporting is the best way to bring equality despite only 30 per cent saying equality has improved since reporting was brought in a year ago, a survey of senior finance professionals has revealed.

The research of almost 600 senior finance professionals by Reed Finance, found that 58 per cent of those asked believe gender pay reporting is the best way to bring about better equality in the workplace, and more than half (51 per cent) are confident that Generation Z (those born between mid 1990s to mid 2000s) will close the gender pay gap.

John Forword, Reed Finance expert, said: “This latest research shows that there is optimism within the sector and that the whole industry is pushing towards equality.

Those we spoke to were well aware of what the gender equality situation at their firm is and are keen to help drive best practice for the future. From our conversations with those in finance we know that there is a widespread belief the greater attention of the scale of the issue has been integral to closing the gender pay gap. But it will take time and seeing more women in senior positions will help move us forward.”

This latest research shows that there is optimism within the sector and that the whole industry is pushing towards equality.

More than half of respondents (55 per cent) said there is now a woman on their board demonstrating progress. This is more positive when considering that 10 per cent of those asked didn’t have a board.

Rob Russell continues: “With the likelihood of at least one women being on the board there is greater chance that the next generation will see that leadership is possible regardless of gender. Those just entering the workplace will be the leaders of tomorrow. We have seen their ambition and their willingness to change with respect to environment, sustainability, good causes and equality, so it seems there is little doubt that the way the sector looks in the future will be very different to what we see today.

It is a changing world and efforts made by the finance sector, such as a large number of firms in the city issuing ‘etiquette’ guides, are sending out clear messages in support of women. There is certainly progress being made and if Generation Z can continue to make strides towards gender pay equality, as those we asked hope, then we will undoubtedly see a better, brighter future for women in the sector.”

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How to Pick the Right Fintech Provider – Top Tips for Financial Institutions

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By Martijn Groot, VP Strategy, Asset Control 

Partnerships between established financial services firms and new fintech companies are becoming increasingly common as banks and other financial services firms look to improve their services and battle back against increased competition from innovative new rivals in banking and investment management.

Martijn Groot

In an age where data volumes, regulatory scrutiny and, above all, consumer expectations are growing, the ability of innovative new businesses to provide a very high-quality customer service at much lower fixed cost represents a major threat to the established players. Established firms find it difficult to deliver the innovation they need to compete purely using in-house resources. They typically have a complex legacy IT landscape to support with a very crowded change agenda. They therefore increasingly look to fintech providers to help them fight back and deliver a better customer experience, improved insights and optimised business operations.

Fintech is a broad space and, within financial data management, we are primarily talking about streamlining data sourcing, mastering and integration into internal and customer workflows. This is about improving the access to data to support every other business function including customer analytics, behavioural insights, risk exposures and operational streamlining.

But, with so many fintech partners to select from, it’s easy to make the wrong choice. Here we outline some key tips financial institutions can follow to help ensure that they opt for a partner that is right for them.

Prevent lock-in

The fintech space is very crowded and competitive. Given that, it is likely that many fintechs will not survive over the long-term, no matter how good their ideas are. So, while financial institutions should never be discouraged from benefitting from smart innovative advice delivered by a fintech, they should be wary of putting all their trust in a start-up organisation where they are not 100% sure of their viability and long-term sustainability as a business. In other words, they should not go into a fully-fledged partnership, if they are not sure their target partner has the necessary longevity to support them over the long-term.

Look for specialist, complementary skills

It is important when opting for a fintech partner not to go too broad-based in terms of the skill-sets they have to offer. Opt for a partner that has proven specialist skills in the required area of expertise.  That would typically include specialist knowledge of industry requirements or industry models. In the world of data management that would generally include expertise in financial data products. data management and data exploration.  

Ensure the fintech firm understands your business and can deliver on that understanding

Its important to ensure that any fintech partner, especially one delivering a managed services option both understands your business and will be able to translate what you want to get out of that service into meaningful KPIs and SLAs.

Make sure they don’t lock you into a proprietary approach

It is important that any proposed partner uses open source technologies. Providers using a proprietary database or proprietary languages likely require a highly specialised skillset, probably only supplied by the vendor themselves, which you may have to pay for indefinitely. Using open source databases makes it easier to get your own staff to work on the approach or hire third-party help. In addition, open source components tend to be widely supported and may be more future-proof. And as a business, you are immediately part of a wider community.

De-risking the chosen method

It makes sense to opt for a provider that combines expertise in a particular market with a robust and reliable infrastructure. In terms of managed services, it has become easier for smaller to medium-sized businesses to offer a de-risked approach because they are able to rely on the vast infrastructure resources of Oracle, Google, Amazon or AWS. Of course, alongside this there also has to be a support criteria in the service and agreed escalation levels, for example.

Other areas you can look at include: the customer product, is it properly documented? Do they have a larger installed base? Is there a user group that regularly meets? Is there a customer community?  You can consult other people. What is the ecosystem in the marketplace? There may be some of your peers that use the system and you can consult them.

Positive Prospect

Today, fintech partnerships are becoming increasingly attractive to many financial services organisations for a variety of reasons discussed earlier in this article. But for firms in the financial services space, with the choice of partners wide and getting wider all the time, it can be difficult to make the right selection. Financial institutions that follow the top tips outlined above should, however, be better placed to get it right.

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Buy-Now-Pay-Later Schemes Encourage Half of Workers to Spend Money They Don’t Have

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Buy now pay later schemes are luring people into living beyond their means according to a recent survey by Hastee. Half of respondents said buy now pay later options encourage them to spend money they don’t have and this rises to 59% for millennial respondents (those aged 18-35).

Buy now pay later schemes have become a popular interest bearing option where retailers allow consumers to delay payments on their purchases for a specified period. More than a quarter of respondents (27%) said they have experienced difficulties after using buy now pay later schemes. The same percentage of respondents said they have experienced problems after using payday loans which have come under increased scrutiny in recent years, resulting in the Financial Conduct Authority (FCA) stepping in to apply limits on daily borrowing.

Millennials are the worst-hit age group when it comes to experiencing difficulties after using buy now pay later schemes – over a third (36%) said this has been the case. Financial stress has impacted their social lives (50%), relationships (40%), health (39%) and work (38%).

The survey revealed that workers across all salary bands agree that the schemes encourage them to spend money they don’t have. The figure tends to rise in the higher salary bands, highlighting that this issue is not exclusive to lower paid workers:

  • Up to £20k salary: 45%
  • £20-30k salary: 49%
  • £30-40k salary: 52%
  • £40-50k salary: 43%
  • £50-27k salary: 50%
  • £75-100k salary: 59%
  • Over £100k salary: 77%

“Buy now pay later schemes might seem an attractive option for consumers but they’re proving to be as problematic as more traditional forms of credit,” says Hastee.

CEO James Herbert. “While they seem like a good short term solution, they can cause consumers issues in the longer term. Missed payments can impact credit scores, cause longer term debt problems and could create an unhealthy reliance on credit cards and overdrafts as users struggle with repayments.

Our advice for anyone tempted by one of these schemes is to make sure you’ve weighed up the affordability of the purchase and explored all options before making any commitments. If you can’t afford the repayments, consider whether you really need the item or work out another way of paying for it that won’t cause you long term financial difficulty. There are plenty of digital money management tools that work together to help people live comfortably and within their means, such as challenger banks, earnings on demand solutions and budgeting apps.”

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GoCardless and TransferWise Partner for New Vision to Collect Recurring Payments

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GoCardless, the fintech for recurring payments, has created the first global network for bank debit, bolstered by a partnership with TransferWise, the global technology company for international payments. 

The new network is the only simple, predictable and transparent way to collect recurring payments such as subscriptions, invoices and instalments via bank debit – a method which reduces failure rates by up to four times when compared to cards. GoCardless customers can collect payments via multiple bank debit schemes around the world, without the need to navigate the specific rules for each, through the GoCardless API, dashboard or partner integrations. 

By integrating directly to the TransferWise API, businesses can benefit from low cost, convenient and completely transparent pricing no matter what the currency, without leaving their account. This cuts out the pain of having to open a new bank account in every country where the business collects payments, as well as eradicating hefty receiving fees for foreign currency transactions.

With the ability to collect and pay out in over 30 countries worldwide – representing 70 per cent of the global recurring payments volume – the new network will be available to all GoCardless customers via a phased roll-out starting mid-November 2019. Businesses will receive payments at the real exchange rate in GBP, USD, EUR, SEK, DKK, CAD, AUD and NZD.

Partnership empowers businesses to easily collect payments from all over the world, at the real exchange rate

Hiroki Takeuchi, CEO and co-founder of GoCardless, said“Businesses today have global ambitions, but an antiquated, fragmented and opaque payments system is holding them back. 

Our new network represents a major milestone in our mission to fix this broken system. Companies of all sizes can now tap into the only global network for recurring payments, built on the tried and trusted method of bank debit, with real exchange rates powered by TransferWise. This will take the pain out of getting paid and enable every business to operate in a way that’s truly borderless.”

Taavet Hinrikus, chairman and co-founder of TransferWise, said: “GoCardless shares our passion for bringing fairness and transparency to the business banking sector. With GoCardless customers trading internationally in over 30 countries, giving them the ability to collect payments in currencies all over the world is a major step change for businesses trading across borders.

Together, we’re setting the new standard for business banking, using new technology to offer cheaper, faster, more transparent services that truly meet the needs of today’s businesses.”

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Surveilling the Cyber Security Landscape

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By Charley Brooke Barnett (Digital Editor)

It’s an ongoing pursuit for financial institutions to counter the threat of cyber attacks. There’s no formula for immunity. A process of constant refinement, learning and testing of security protocols is required to ensure the fraudster remains in your rearview mirror instead of hijacking the driver’s seat.

Charley Brooke Barnett

Today’s cyber criminal demands more than just your lunch money. With advanced tools at their disposal, the entire network is up for grabs.

A recent Carnegie Endowment paper by BAE systems titled: “The Cyber Threat Landscape: Confronting Challenges to the Financial System” highlights the predicament:

“Attackers have taken advantage of technological enablers (connectivity, complexity) and have developed new tools and techniques (capabilities) to conduct their attacks. These three key factors, and their importance to the threat landscape, present critical challenges for the sector in the battle to combat the threat.”

Hackers aren’t limited by geographical location. As long as they have the necessary skill sets and a computer with an internet connection, they have the potential to create chaos from their living room. Physical bank robberies have become redundant.

Today’s cyber criminal demands more than just your lunch money. With advanced tools at their disposal, the entire network is up for grabs.

There’s the danger of cyber criminal groups forming like businesses and generating healthy revenues in the process, aiding the facilitation of money laundering. Some groups even have round the clock customer service lines, because even in this business, the customer comes first!

Nation-state groups pose an additional security challenge. Take for example, the recent 5G debate. Huawei are currently one of the world leaders in high-speed technology, however the firm’s connection to the Chinese state is raising questions over espionage.

Theoretically, spies could tap into communications or shut a network down altogether. But is this a likely scenario or just something out of a James Bond film?

Woody Johnson, the US ambassador, warns:

“If we let untrustworthy countries in the heart of our economies, and infrastructure, what could they do? We have to decide that.

I’ve always said it’s like letting a kleptomaniac into your house, and then you’ve got to hire three people to follow them around all day.” 

Some groups even have round the clock customer service lines, because even in this business, the customer comes first!

Huawei recently filed a lawsuit against the US government, who have placed restrictions on the Chinese firms products. Ren Zhengfei, Huawei Founder, told the BBC he’s unfazed by a US power cut: 

“If the lights go out in the West, the East will still shine.”

The genie is out the bottle though, and failure to embrace the technology could have unfavourable consequences.

In June 2019, Future of Finance published a review on the outlook for the UK financial system. The report states one of the greatest weaknesses of UK cyber defence is “an industry response to a data wipe at an institution.”

In the US, Sheltered Harbor was set up to handle such a scenario to ensure financial organisations and customers are protected with a critical back up. The not-for-profit is only available for US firms right now, but it’s an encouraging initiative to see.

Whether the attacker wants user data or money, ransomware is one method that has the potential to catapult company’s into despair. This is the practice of commandeering a computer system and demanding a ransom be paid in order to regain access. 

Norsk Hydro became victim to ransomware earlier this year, when 22,000 computers were compromised in 170 sites across 40 different countries. 

The aluminium producer refused to entertain the perpetrators’ demands and carried on, business as usual. Although the firm lost millions, they’ve earnt tremendous respect for their show of strength and integrity.

Jo De Vliegher, Norsk Hydro CIO, commented:

“I think in general it’s a very bad idea to pay…it fuels an industry and it’s probably financing other sorts of crime. It goes against our company values and we have good foundations and good people.”

For some however, paying up can seem like the only option for survival. It’s a dirty secret where organisations pay off the hackers, and remain silent in order to save face. 

This head-in-the-sand approach is detrimental to, not only the organisation (who’s to say a repeat attack is off the cards?), but also to the industry, which deserves transparency.

Financial institutions face significant obstacles on the cyber security battlefield, which shouldn’t be underestimated. Encouraging a collaborative culture, where incidents are reported, shared and learned from, is critical for the sector to build resilience. 

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Calibra Boss Acknowledges Facebook Privacy Concerns

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By Gina Clarke

“It’s OK to not use Calibra,” that was the message from Kevin Weil, vice president of product at Facebook who oversees the Calibra digital wallet unit, as he spoke on the opening day of Portugal’s WebSummit.

In a conversation with Financial Times global technology correspondent Tim Bradshaw, Weil told a packed Altice Arena that he wanted businesses and entrepreneurs to build alternatives and apps using the open-source Libra software.

Tackling the issue of Calibra, the wallet made by Facebook built on Libra, he said: “There are going to be people who are not comfortable using a financial product build by Facebook,” before calling on members of the conference to get involved and create solutions to help lower the financial burden of sending money that is often faced by the poorest in society. 

The former Instagram CEO, who admitted that he dabbled in cryptocurrency before Libra’s announcement and was a big Bitcoin fan, said that he became attracted to the altruistic properties of the payment currency. He said, “It was the most ambitious thing I’d ever heard of. I should have been thinking of Instagram but instead I was waking up and thinking of this project instead.” With Mark Zuckerberg’s commitment to the issue, Weil was soon on board full-time.

Calibra was launched as Facebook’s own wallet that would avoid the volatility of cryptocurrencies while providing a global way to transfer money within a social network

His aim? To make Calibra accessible to the unbanked as well as society as a whole. He spoke of hard working families who often have to wait days to receive remittances and pay fees of as much as 7% per transaction. “That husband and wife are probably already having a conversation in WhatsApp” he said, “So why can’t they transfer money through the same platform, and instantly. No matter where they are.”

He reiterated the stance from Calibra to launch the application within WhatsApp and Messenger alone, allowing users the ability to send money across borders, but only when all regulatory concerns have been addressed. The Libra Association has been criticized recently as backers such as Visa and MasterCard have withdrawn, however, Weil said that regulators were still on board with the idea.

Addressing the issues of privacy, Weil made the announcement that all transaction details made through Calibra will be kept private from personal Facebook profiles and will not be included in a users advertising preferences. While he appreciated that some consumers may have a distrust of the platform, he reasoned that this was why the Libra Association was determined to make the software open source, so that other wallets and apps may emerge.

“Payments should be like email,” he said. “It doesn’t matter what platform you are using you should still be able to receive that money, right now that isn’t possible. If you are using Venmo but your friend isn’t then that’s a problem. Anyone with a smart phone will be able to access Calibra.”

Initially announced in June, the Switzerland-based Libra Association will aim to work with regulators and key partners, including Facebook, to put forward a consortium that would oversee the digital currency. Calibra was launched as Facebook’s own wallet that would avoid the volatility of cryptocurrencies while providing a global way to transfer money within a social network.

However, Weil ended his conversation by saying that the company were not trying to build Calibra into a new social network, but rather enhance the current offering. He added, “This is the work not of years, but of decades.”

Gina Clarke
www.ginaclarke.media

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IT Security Budget Growth is Slowing in UK Businesses, Says Research

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Research from Databarracks has found that over half (55 per cent) of UK businesses have seen their IT security budgets either stay the same or decrease in the last 12 months, with just a third (33 per cent) seeing an increase.

This is down on last year, when 36 per cent reported a growth in budget, and bucks a trend of continuous growth over the previous four years.

The findings were taken from Databarracks’ annual Data Health Check survey. Further cyber security figures include:

  • Cyber incidents were the biggest cause of IT downtime for 12 per cent of respondents, doubling from 6 per cent in 2016
  • 17 per cent of respondents named cyber attacks as a cause of data loss, up from 9 per cent in 2016
  • The prevalence of ransomware has almost doubled in in the same period, affecting 28 per cent of businesses in 2019, compared to 16 per cent in 2016

Peter Groucutt, Managing Director at Databarracks, said: “In previous years, we’ve seen a steady increase in security budget growth. This time it’s different.

After strong progress in recent years, organisations must ensure they continue to invest in cyber resilience

Cyber incidents are becoming more prominent as a cause of both IT downtime and data loss, and attack types like ransomware are causing significant disruption – particularly for manufacturing and the public sector. These developments underline that now is not the time to reduce investment in cyber resilience. We are adjusting to a new reality. This is a cyber-arms race and unless we continue to match the investment and commitment of the cyber criminals with a corresponding investment of our own, we will lose the battle.

The types of safeguards businesses invested in this year stayed largely the same as the year before. Employee Awareness Training is the top action again. Less than 10 per cent of organisations increased their cyber security headcount.

Dealing with the cyber challenge can seem overwhelming. New, high-profile breaches or strains of malware are being reported continually and it can feel like swimming against the tide. Improving an overall security posture is possible, but it takes work. It demands commitment from the highest levels of the organisation and the resources to deliver – both budget and time.   

We recommend greater representation at board-level with a board member responsible for cyber security to drive the culture. This year, less than half (48 per cent) of organisations we surveyed reported having a board member responsible for cyber security. We also need joined-up responses from IT Operations, Security and Business Continuity teams both in planning and incident response. Although we need specialists, cyber security is now everyone’s responsibility.”

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Banking On It: EU Directive to Offer Frictionless Finance For All?

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As the EU’s Open Banking Directive takes hold, John Powers, CSO of Findora, a confidential network protocol that enables the seamless, secure, and fully compliant transfer and verification of financial assets, explores how it will change the global financial experience.  

Four years in the making, a key piece of EU financial regulation the revised Payment Services Directive, came into effect last month. The legislation known as PSD2 was adopted by the European Parliament with the goal of creating safer and more innovative European payments. The new rules aim to better protect consumers when making online payments, promote the development and use of online and mobile payments, and ensure higher safety when it comes to cross-border European payment services. The development of this legislation was undoubtedly in response to the rapid growth of open banking.

Open banking is open data: the sharing of financial information through open APIs to allow access by third parties, following explicit authorization from the user. In certain legislation, such as the Open Banking Standard in the UK, this data sharing is also mandated to be in a secure, standardized form. The most obvious beneficiaries of this data sharing are financial service users.

PSD2 opens a treasure trove of readily accessible data to developers.

For the end consumer, it’s a complete reversal of the existing paradigm: open banking explicitly empowers account holders with the authority to share their own data, essentially removing the financial institution’s role as gatekeeper. Through third party applications and non-traditional financial service providers, consumers can manage their personal finances better through improved account oversight. They can also easily compare and switch banking services and can painlessly apply for credit products. Open banking offers a user-centric experience with unprecedented agency and access to information.

From a commercial standpoint, open banking has the potential to serve as a catalyst for new products and business models. PSD2 opens a treasure trove of readily accessible data to developers. For fintech companies, this allows them to tap into the existing financial ecosystem and compete with current banking products or provide new services. Spanning a broad range, from payment platforms like Adyen, and point-of-sale credit providers like Klarna, to budgeting apps like Moneyspend, new entrants to the financial market spur competition and innovation. Despite the new challengers, even traditional banks and financial providers have the opportunity to offer new services and improve interactions with clients.

European initiatives like PSD2 provide a template for other jurisdictions around the world to emulate, and the pursuit of blockchain innovation can be a great leveler in this regard. A performant, confidential, global blockchain would be able to provide similar “open data” through a public general ledger for all financial transactions. Sensitive financial information would be kept secure and private through cryptographic technology, while one common financial ledger guarantees standardization and interoperability, much like the UK Open Banking initiative.

Ultimately, our financial experience can become increasingly frictionless and user-centric. 

Privacy would be ensured through state-of-the-art cryptography, and much like PSD2 mandated open banking, any transactions or sharing of sensitive financial information would require user permission and pre-authenticated under strong encryption. Unlike other forms of open banking, financial data never actually needs to be revealed: through Zero-knowledge proofs, users can make complex financial statements without revealing the underlying financial data.

These properties of the blockchain readily foster a robust open banking ecosystem. Confidentiality secures financial information behind cryptographic proofs; meanwhile interoperability substantially lowers the costs and complexity of digital financial services and payment platforms. Reducing the cost of entry allows upstarts to join the space and compete with traditional financial organizations. Newcomers could easily build digital wallets, smart investment funds with selective disclosure to minimize fraud, or even secure and auditable peer-to-peer lending services.

As Johnathan Hill, the former European Commissioner for Financial Stability, Financial Services and Capital Markets Union, said, open banking is “a step towards a digital single market.” In this unified market with free flow of data, consumers are the main beneficiaries as costs for financial services drop across the board and ingenious new products emerge. Ultimately, our financial experience can become increasingly frictionless and user-centric. 

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