5AMLD and its Effects Over the Crypto World

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By Simone D. Casadei Bernardi, Senior Managing Partner at Blockchain ConsultUs Ltd.

Pressured by the realities of the modern world, with the risk of terrorist attacks higher than ever, new virtual currencies changing the way we think about money, and unprecedented attempts to access to complete financial anonymity, the EU decided to follow US’s lead and enforce new legislation aimed at dealing with these potential threats. It is the first time when an EU-wide directive regarding cryptocurrency entities is adopted, but far from likely to be the last.

How did we get here and why?

Simone D. Casadei Bernardi, Senior Managing Partner, Blockchain ConsultUs Ltd.

As the world evolves and current reality becomes more complex with every passing year, so must the State’s policies. In the past decade, we’ve seen world-changing events and found ourselves dealing with a new order of things. Scandals like the Panama Papers, the horrendous rise of terrorism and its migration into the heart of first world countries, mainly European countries, proved decisive in making EU regulators launch a crackdown on money laundering and terrorism financing.

One of the products of EU’s new “iron fist” policy when it comes to the movement of money on its territory is the creation and adoption of the 5th Anti-Money Laundering Directive or 5AMLD for short. An upgrade of the 4AMLD, its declared purpose is to strengthen EU member states’ grip on money transfers, particularly regarding beneficial ownership, electronic identity, and for the first time, over entities that deal with virtual currencies.

To understand how determined EU regulators are to add as much transparency as possible in the financial world, it worth considers the fact that the first AMLD was introduced in 1991. It took 25 years for two updated versions, the 2- and 3-AMLD, to be introduced, yet in the past three years, we’ve seen the 4th and 5th renditions, while the 6AMLD is already on its way.

The directives of the 5AMLD must be implemented in all EU States by the 10th of January 2020, which might prove unrealistic since a few members have yet to enforce the rules imposed by the 4AMLD, although the deadline for that has already passed.

5AMLD: an overview

The most notable change brought by the latest version is the broadening scope of the affected parties.

In simple terms, what the 5AMLD does is take the 4AMLD’s policies and make them mandatory to more financial actors, or “obliged entities” as they’re referred to in the official text. It also focuses on additional transparency provisions regarding beneficial ownership, heightened security measures surrounding third-world countries that present a high risk for either terrorism or money laundering, and a decrease to 100 Euro of the benchmark at which prepaid card users have to be identified.

It is also the first EU-wide regulatory directive that deals explicitly with cryptocurrencies by including virtual currency exchange platforms and wallet providers into the list of “obliged entities.”

After January 2020, when the 5AMLD will be implemented on State level, both wallet providers and virtual currency exchanges will have to comply with the 5AMLD’s set of anti-money laundering requirements. This means they’ll have to carry out identity checks for clients and beneficial owners, plus report on suspicious transactions. The aim is to reduce the anonymity that comes with using cryptocurrencies in an attempt to cripple criminal organisations by restricting their new-found financial freedom of movement in the virtual currency world.

Change is inevitable though, and a long-term approach is best, both in terms of company policy and the cryptocurrency world as a whole.

How will 5AMLD affect the Crypto-industry?

Although the description used to identify virtual currencies in the official 5AMLD document is broad, as to include as many options as possible (“a digital representation of value that is not issued or guaranteed by a central bank or a public authority, is not necessarily attached to a legally established currency and does not possess a legal status of currency or money, but is accepted by natural or legal persons as a means of exchange and which can be transferred, stored and traded electronically”), not all parties dealing with virtual currencies are subjected to the new directive.

Crypto to crypto exchanges, for example, are exempt of the 5AMLD, whereas fiat to crypto exchanges are specifically targeted for compliance. The reasoning behind it is that the 5AMLD’s role is to limit unlawful behaviour, especially one that can facilitate purchases using fiat currency to do harm. It is a sign that the EU is interested in fighting financial crime rather than stripping virtual currencies of their most valued attribute, that of anonymity. Even so, it is expected that regulations be even more inclusive of further entities in the future.

The same goes with wallet providers, where only custodian wallet providers, identified as those that maintain control using a private cryptographic key over their customers’ wallets, are included in the “obliged entities”. Non-custodian wallets, where just the users hold their private keys, are exempt, which again points to show the EU is interested in controlling the gatekeepers to limit money laundering and terrorism, rather than crack down on the virtual-currency concept.

Crypto significant figures mostly welcome the new regulations and view them as a great tool to bring more professionalism into the industry through heightened transparency and the exclusion of “shady” business.

Parting thoughts

The AMLD is an attempt to tighten the spectrum of the law and set a standard set of rules among EU member states. It is to be expected that some countries, following their own agenda, will either welcome the new changes brought on by the 5AMLD, or they’ll try to push back and delay its effects as much as possible.

Change is inevitable though, and a long-term approach is best, both in terms of company policy and the cryptocurrency world as a whole. Those who will jump at the change to be in line with the latest requirements as soon as possible, while placing great emphasis on making the transition hassle-free for clients and partners, are set to win over new business and position themselves as pioneers.

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OpenFin Raises $17 Million Series C from Wells Fargo and Barclays

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OpenFin, the operating system (OS) of finance, has raised $17 million in Series C funding from major banks and leading Fintech investors. The funding round was led by Wells Fargo with participation from Barclays and existing investors including Bain Capital Ventures, J.P. Morgan and Pivot Investment Partners.

The Series C round brings OpenFin’s total amount of venture funding to $40 million. Proceeds from the financing will be used to make OpenFin OS ubiquitous on financial desktops and to fund further product innovation. This includes OpenFin’s new Cloud Services offering, which enables banks, asset managers, wealth managers and hedge funds to provide their own private app stores for employees and customers out of the box.

The global financial services industry is spending billions in addressing the digital transformation of thousands of legacy desktop applications used for client service centres, front office, operations, risk and compliance. OpenFin’s widely adopted desktop operating system enables financial services firms to build new applications with modern web technology while enabling seamless and secure integration with legacy applications. This allows these firms to modernise and unify the end-user desktop experience while extracting the greatest possible value from their existing technology investments.

“Apple and Google’s mobile operating systems and app stores have enabled more than a million apps that have fundamentally changed how we live,” said Mazy Dar, CEO and Co-Founder of OpenFin. “OpenFin OS and our new app store services enable the next generation of desktop apps that are transforming how we work in financial services.”

OpenFin OS has become a de facto market standard for deployment and interoperability of desktop apps to power digital transformation across the industry. Its customers include most major banks, leading asset management firms and many of the best known vendor platforms in the space. The operating system software runs more than 1,000 applications at more than 1,500 banks and buy-side firms across 200,000 desktops in 60+ countries.

“We have been following OpenFin’s progress and are impressed by the company’s success in gaining wide adoption in capital markets. OpenFin is leading a key effort in providing the financial industry with a modern and unifying foundation for development and secure distribution of financial applications,” said Basil Darwish, Managing Director, Strategic Investments at Wells Fargo Securities. “We are delighted to lead OpenFin’s Series C funding round and excited to support the next phase of their development.”

“Agility and interoperability are core pillars of our digital strategy because time is a precious resource, especially in a banking environment. OpenFin accelerates our innovation cycle and allows us to create better workflows, enabling our colleagues and clients to make more productive use of their time,” said Brett Tejpaul, Head of Digital and Client Strategy at Barclays Investment Bank. “We are pleased to support the company which is a leader in the industry with its open source model and its commitment to industry collaboration.”

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Are Klarna More Than Just Another Banking Service?

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Klarna, the Swedish bank, offers direct payments, pay after delivery options and instalment plans to consumers to allow them to pay when and how they want to. TFT spoke to Eli Geoffroy (Product Manager, Klarna) shortly after his presentation at the Fintech Design Summit to ask how Klarna utilise user experience design to differentiate themselves in the banking and finance industry.

TFT: What makes Klarna’s UX stand out?

Eli Geoffroy, Product Manager, Klarna

Eli: At Klarna, we work with a clear objective to create a smooth consumer experience. For us this means something that is intuitive as well as fun and enjoyable, but of course also easy to use and safe. We are striving to become more than just another banking service and to offer innovative services that provide an unparalleled consumer experience that simplifies payments and financial services, giving people more time to do what they love.

Across markets we see that increasing connectivity has made it harder for people to solve their daily time equation. We have gone from focusing on a few big moments in a day, to hundreds of ‘micro moments’ that needs to be planned, decided on and solved for. This is especially true for managing our money and purchases, and today we spend more time administering finances, purchases, issues, etc. and less time doing the things that we love. Most companies in the banking and finance industry have not been able to solve this (yet). Many often add in unnecessary steps and complexity to a consumer journey or, cater to only a few ‘micro moments’. What people want instead is a life free from unnecessary complexity and a smooth experience throughout all these ‘micro moments’.

This is what we try to do at Klarna. We want to develop services that act like a ‘personal concierge’, taking care of all micro moments throughout the entire consumer journey. To achieve this, we ask ourselves ‘What problem are we solving for the consumer and how does it add value to their lives?’. This is the starting point in everything we do, and ensures that we keep a laser focus on ‘new and value-adding’ services rather than just ‘new and/or cool services’, which I to some extent believe has been an issue for both banks and fintechs historically.

TFT: What are Klarna investing in right now?

Eli: From a UX-in-app point of view, one example is our new Shopping feature in the Klarna app (currently available in Sweden and the US), where shoppers can pay with Klarna everywhere. Before they would have another ‘micro moment’ to solve if a store didn’t offer Klarna. Now, if they shop from within the app they can enjoy the smoothness of shopping with Klarna everywhere.

But that’s just one example, and as previously said we have to make sure to be there throughout the whole consumer journey. So if people want to keep track of the items they like, they can add them to our universal, cross merchant wishlist. If they order something we will let them know once the order is on its way and when it is scheduled to arrive. If a consumer wants to return something – it shouldn’t be a hassle to do so and with Klarna, it’s done in just a few clicks. We do everything to make the consumers everyday lives easier and allow them to spend more time doing the things they love in life.

We want to develop services that act like a ‘personal concierge’, taking care of all micro moments throughout the entire consumer journey

To be able to accomplish this efficiently we have implemented a new operating model that consists of more than 200 small start-up like teams that own a process end-to-end. This has accelerated our time-to-market, and allows us to launch new products and services quickly so we can ensure we are solving the right ‘micro moments’ in the right way, and based upon this feedback adjust our products or services in question tailoring it to the consumers’ needs. All this ensures that we can provide consumers with a superior experience before, during and after completing a purchase with Klarna.

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Raisin Partners with Italy’s New Challenger Bank Illimity

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illimity, the new paradigm banking start-up listed on Borsa Italiana’s MTA exchange, announces a partnership with Raisin, the marketplace for online savings and investments in Europe.

Thanks to this partnership, illimity’s deposit accounts will also be available on Raisin’s open banking platform, a marketplace that allows the savers of 31 European countries to access deposit products from across the continent and select the offers that best suit their needs. More specifically, illimity will offer term deposit accounts through various channels including WeltSparen, Raisin’s proprietary deposit portal.

The partnership will consequently enable illimity to take its deposit account offer cross-border without having to set up a retail infrastructure of its own. As a result, the step will significantly extend and diversify the bank’s retail funding, which will be supported in Europe by Raisin’s open banking infrastructure and dedicated customer service. Meanwhile illimity’s domestic deposit account offer will be available by the end of the first half of the year, concurrent with the launch of its new digital direct bank.

illimity’s cross-border deposit account offer through Raisin will initially be addressed to savers in Germany, and, upon authorisation country by country through the rest of the EU, will then gradually be extended to all the countries in which the platform operates.

illimity is practical evidence of the way banks and fintechs can achieve success together

illimity is the new banking start-up headed by Corrado Passera, formed in 2019 through the merger of Banca Interprovinciale and SPAXS, a special purpose acquisition company which in 2018 raised EUR 600 million on international markets with the aim of fostering a new, highly innovative and specialised banking model. illimity provides loans to SMEs and acquires corporate NPL, and its direct digital bank will be equipped with state-of-the-art technologies. The arrangement with Raisin is another partnership that illimity has entered with a fintech thereby confirming a wholly open banking approach. The concept is made possible by a modular platform that can always be updated and integrated using propriety and fintech systems, a potential that represents one of the bank’s distinctive features.

“Entering a strategic partnership on the deposit front with a top-rate fintech such as Raisin, just a few months after the business combination, is a source of considerable pride for us. And it also testifies to the high level of confidence placed in our banking start-up by a company which, like us, is deeply committed to innovation, efficiency and transparency”, Francesco Mele, illimity’s Chief Financial Officer & Head of Central Functions,stated. “The partnership with Raisin will enable illimity to diversify its funding sources by means of a flexible and efficient tool, consistent with its business plan”.

In a continuing context of low interest rates in a large part of Europe, illimity’s collaboration with Raisin strengthens ties between the European markets and contributes to harmonising liquidity dynamics throughout the continent. Simone Viganò, Director Open Banking at Raisin, explained: “The partnership with illimity reinforces Raisin’s strategy, which on the one hand has the aim of breaking down the barriers that savers and banks face in Europe and on the other of offering more competitive investments to savers. On the front line of the digital transformation of financial services in Italy, illimity is practical evidence of the way banks and fintechs can achieve success together”.

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Complacency Within UK Businesses Could Drive Money Laundering Risks

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Over two thirds (68%) of UK businesses think enough is being done to tackle the country’s dirty money problem, despite recent money laundering scandals sweeping the EU and numerous regulatory crackdowns, according to new research released by LexisNexis® Risk Solutions, the analytics provider.

LexisNexis Risk Solutions worked with the Economist Intelligence Unit to survey a range of senior compliance, finance and legal executives from the banking, fintech, legal, real estate, and gambling sectors for its ‘On the Frontline: The UK’s Fight Against Money Laundering’ report, with a view to understanding current attitudes towards money laundering and AML provisions across UK businesses.

Surprisingly, despite the National Crime Agency estimating that over £100bn of illicit funds impact the UK each year, only a third (33%) of respondents feel that not enough is being done to fight the UK’s money laundering problem. Also of concern is that over half (57%) believe that the regulatory framework is effective in driving businesses to tackle the issue.

Jamie Cooke, Managing Director at fscom, told TFT:

“Simple steps can be taken to ensure businesses don’t fall foul of regulations. A regular review of the anti-money laundering controls and checks in place during a client onboarding process is an obvious starting point. It is always preferable to prevent the problem coming into the business than dealing with it later, hence the importance of strong onboarding measures.”

Are some sectors higher risk than others?

According to the report, the gaming sector and high value vendors (businesses who accept or make payments of over €10,000) were perceived to be the most appealing for criminals looking to launder money, (15% and 12% respectively). The legal sector (4%) and estate agents (6%), were perceived as being at the lowest risk. This is despite recent increased pressure and penalties from regulatory bodies such as HMRC and the Solicitors Regulation Authority (SRA) into their respective sectors. Almost three quarters of respondents (73%) also think that the regulations they have to comply with are proportionate for their sector, when compared with other non-regulated organisations.

Looking to the future, almost a quarter (24%) agreed that evolving criminal methodologies were the single biggest risk in the fight against dirty money in the UK over the next 12 months. This is compounded by the fact that 41% are concerned that there is a lack of understanding of the different ways in which criminals launder money within their own organisations. The impact of geopolitical events is also a concern, according to the report. Almost a fifth (18%) of respondents think events like Brexit will be the largest risk to fighting future financial crime; this is likely as a result of concerns around less information sharing.

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Flawed Customer Experiences Cost British Retailers £102 Billion

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Latest research from Adyen shows that stores running out-of-stock, long queues and lack of payment options are the biggest frustrations for customers.

New data released by Adyen, the payments platform, has revealed that flawed customer experiences cost British retailers up to £102 billion in lost sales each year.

The research paired with 451 Research’s Global Unified Commerce Forecast found that running out of stock in-store is the biggest contributor to lost revenue, costing retailers £14.8 billion each year. Adyen’s research found that four out of five (79%) Brits would not return to make a purchase if they went into a store only to find their desired item was out-of-stock.

The important thing is to make the payment experience as seamless as possible

Queues in-store are the second biggest source of lost revenues, costing retailers up to £11.3 billion each year. Two thirds of Brits (66%) have abandoned their purchase and left a store because of long queues in the past six months. Only 22% said they would return to the store later or make a purchase on another channel.

Failing to create a link between online and offline stores, not offering a variety of payment options, a lack of contextual commerce experiences, not personalising offers and outdated payment systems are the other customer experience factors that contribute to lost revenue for retailers.

Adyen also asked consumers how retailers could improve the customer experience. The top results are:

  • Accepting contactless payments (68%)
  • Enabling people to skip queues by paying for items in-store via mobile app (55%)
  • Accepting digital wallets such as Apple Pay or Google Pay (54%)
  • Enabling customers to check a store’s stock levels online (51%)
  • Buy now and pay later options (50%)
  • Saving payments details on file to speed up the checkout process (48%)

Paul Marcantonio, Head of UK/Western Europe at ECOMMPAY, told TFT:

“The important thing is to make the payment experience as seamless as possible, which will help any eCommerce website avoid shopping cart abandonment and drive conversion. Checkout should be optimised for various channels, incorporating a native software development kit (SDK) for mobile applications and adapting the payment page to various screen sizes.

Features such as OneClick Payment, which registers card details for repeat purchases through a single click, or the Try Again button, which offers a second attempt at failed transactions, can be integrated to streamline the customer journey.”

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7 Crucial Guidelines for FCA Compliance

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FCA (Financial Conduct Authority) compliance is mandatory for all businesses. Ensuring your business is compliant, and remains so, is a time-consuming task that many businesses find overwhelming. Hiring a professional consultant can be incredibly beneficial as they will guide your firm on how to meet all the necessary FCA requirements and how to properly document your records. Before you hire a specialist, you may wish to have a better understanding of FCA compliance in general, so below we break down a few general guidelines to help you get started.

  1. Communication structure

FCA compliance requires businesses to have effective communication channels in their organisations. An FCA regulator needs to understand how management decisions are conveyed to the rest of the staff. Evaluating the communication structure is part of evaluating compliance and according to the FCA, all elements, procedures, and policies are important in communication.

  1. Demonstration of management behaviour

Communication from individuals in management positions is beyond verbal or written as these individuals play an essential role in guiding the rest of the staff by their behaviour. Practices such as corporate governance and ethics are fundamentals of FCA compliance and must be carefully considered.

  1. Response from clients

Receiving feedback from clients is an asset for any business and how a company handles this information is important. Information from clients identifies shortcomings that ought to be addressed, such as failing to meet GDPR requirements, as well as guidance on how to enhance and improve customer experiences. According to the FCA, management should ensure client responses are collected and teach staff how to effectively respond to feedback.

  1. Staff training

New methods and practices, particularly concerning FCA compliance, may require training. Management should schedule regular training or workshops to keep their employees up-to-date on important information. Training is also essential to refresh the skills and knowledge of employees.

  1. Financial promotions

Issues with financial promotions will certainly receive negative attention from the FCA. The FCA requires that all financial promotions are clear and not misleading, this includes the promotion of loans, pensions and mortgages. As the FCA take a media-neutral stance, they expect that all financial promotions meet their marketing requirements.

  1. Record keeping

Besides records from financial promotions, keeping personnel and assessment records is also crucial as the FCA requires sufficient records to complete its supervisory tasks. These records should contain documents of training, recruitment, competence, and supervision. It is advised businesses keep their records for a minimum of five years before deleting or destroying any old files.

  1. Third party relations

A business should keep and store contracts and agreements of working with third party suppliers. Collecting intelligence before engaging with third-party suppliers is necessary as the degree of keenness is critical in compliance and regulation.

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BCMstrategy, Inc. to Expand Availability of Patented Public Policy Metrics

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BCMstrategy, Inc. the public policy risk measurement specialist, is expanding the availability of its risk metrics to provide FinTech firms with additional, standardised policy trend projection. The offering provides 360-degree views of global policy trends in three key issue areas: FinTech regulation (monthly), cryptocurrency and payments regulation (weekly), and USMCA ratification (weekly). Expanded policy coverage is expected in the second half of 2019.

BCMstrategy, Inc. is a technology company that uses patented processes to analyse automatically the language of the policy process. The process also automatically converts lexicon elements into structured data in order to support dynamic, interactive visualisations that accelerate strategy formation. It was used daily in analog format for over five years in order to provide accurate policy trend projections regarding global economic, regulatory and geopolitical policy. Technology platform automations today deliver data visualisations that include measures of momentum regarding specific issues and time-series data disaggregated by activity type for any given issue or lexicon term. Platform access currently is only available to a small number of “Early Adopter” enterprise-level customers.

Based in Alexandria, VA, the company announced the product launch in Toronto, Canada at the Collision 2019 conference where it is exhibiting its new technology platform. Aggregated data analysis from the platform will now be available to subscribers on a weekly and monthly basis, just in time for the summer summit season when the Group of Seven, the Group of Twenty, the Financial Stability Board, and other policymakers meet.

Policymakers worldwide continue to intensify their efforts globally to regulate various elements of the FinTech sector. They have also signalled an interest in expanding the financial regulation perimeter to “big tech” companies that continue to expand into the payments and digital currency issuance. Not all these efforts are coordinated much less convergent.

“We are excited to help FinTech companies harness the power of the data revolution to minimise proactively their exposure to public policy risk by providing objective, transparent data,” said Barbara C. Matthews, Founder and CEO of BCMstrategy, Inc. “Our patented data provides a unique value proposition to a FinTech market seeking more effective tech-savvy ways to assess and anticipate public policy risks. For many firms, even a small shift in regulatory policy can have a material impact on the viability of their business. We want to be sure that the most innovative new entrants in the FinTech sector also have access to the most innovative and accurate ways to measure public policy risks and anticipate outcomes accurately.”

The new products provide high level data analysis and policy trend projection through regularly issued reports. Weekly analysis on Friday will identify prevailing policy trends globally at the intersection of cryptocurrency regulation, payment systems regulation, and e-currency (including central bank digital currency) regulation. Monthly analysis will deliver macrotrend projection regarding the FinTech industry as a whole, with separate sections assessing trends in insurtech, payments/digital assets, and banking. The reports will all be data-driven, relying on observed policy developments globally. They will include data visualisations from the platform.

The reports will broaden the availability of this data-driven approach to public policy risk management to small and medium-sized companies that do not need daily interactive data access. They also decrease the distractions of the noisy news cycle and decrease the time wasted on reaction functions, thus delivering significant efficiency gains for companies without government relations teams in multiple national capitals.

“We are committed to helping professionals at companies of all sizes read smarter and connect the dots faster when it comes to the often chaotic news cycle regarding FinTech public policy,” said Ms. Matthews.

“As a small company, we understand well the challenges that small companies have when seeking to acquire information and react strategically to new developments. This is why we built the platform in the first place. Today’s launch of these three publications makes it possible for more companies to achieve efficiency gains and make smarter business decisions with a clearer picture of looming policy risks made possible by advanced technology. When those companies grow and require daily interactive platform access, we will be glad to design transition products to suit their needs as well.”

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Five Best Places to Start When Analysing Payroll Data

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Payroll is one of the most critical sources of data in your company, and when analysed properly, it could prove beneficial for your finances. This analysis could provide more accurate predictions in regards to budget management and cash flow during business growth or company changes. Below, we’re taking a closer look at some of the best places to start when analysing payroll data.

Remunerations

With salary figures to hand, you will have the opportunity to analyse metrics such as the return on investment (ROI). Examining your remunerations will also help you evaluate the efficiency of your investment and the impact remunerations have on your overall payroll data.

Turnover

Turnover will help you gauge and estimate your cost-to-hire ratio for budget purposes. If your company has a high turnover rate, this could spell out a more profound problem within the company, such as morale, corporate culture, and conditions within the office. It might also lead to a loss in productivity and a greater need for training and recruitment.

Absence

Analysing this data will help you determine how often your employees are off sick, spot any trends related to their absences, and figure out when they are most likely to take annual leave (e.g., school holidays, Christmas). You definitely wouldn’t want all your employees taking annual leave during the vital last quarter of the year. By doing a thorough analysis, you will get to know when most of your employees are likely to be absent and plan appropriately.

Overtime

You can decide to weigh overtime against the productivity of your staff if your personnel work longer than is expected of them. If overtime is counterproductive, you can consider hiring more workers who will be working part-time or consider getting additional staff.

Training costs

Payroll departments and HR might find it difficult to cut costs while trying to improve the efficiency of the organisation at the same time. When you have a cost training metric, you will be in a position to balance the costs involved with getting skilled employees.

All these areas cover a massive amount of data that you will be able to examine. However, having the right technology is vital, as it will give you an excellent platform for future planning and analysis.

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Fenergo and Refinitiv Join Forces to Accelerate Client Onboarding

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Facilitating the flow of legal entity and counter party information between banks and data providers to counteract financial crime, bribery and corruption is critical. Fenergo, the provider of digital Client Lifecycle Management (CLM) software solutions, has partnered with Refinitiv, the provider of financial markets data and infrastructure, to enable customers to more efficiently identify risk.

Fenergo’s API integration with Refinitiv’s World-Check One allows financial institutions to streamline know your customer (KYC) verification and anti-money laundering (AML) screening via a user-friendly interface. According to a Fenergo survey, 81% of C-suite executives at banks agree that information gathering and managing increasing volumes of client data lengthens compliance and onboarding, negatively effecting customer experience. Just 15% have automated the collection of data. Addressing this burden, Fenergo and Refinitiv’s combined offering reduces the need for repeated customer outreaches for information, enabling financial firms to streamline customer due diligence (CDD) and focus on optimising customer experiences. 

Fenergo’s integration of World-Check One allows customers to quickly identify potential risks and respond to threats across the entire enterprise. It also allows users to create and maintain a model inventory and a clear evidence trail of the acceptance or rejection of changes, report on governance status, sign-offs, supporting attachments and related issues all from a single platform.

“Financial institutions face increasingly stringent global regulatory obligations, which demand the collection, processing and remittance of more client and counter party data than ever before. Through the combination of Fenergo’s market-leading CLM solution and Refinitiv’s World-Check One, financial institutions can better manage increasing amounts of regulation that require them to collect more data and documentation from clients,” said Phil Cotter, Managing Director of Risk at Refinitiv.

Marc Murphy, CEO of Fenergo, said: “In partnering with Refinitiv, we can automate data collection bringing huge efficiencies to client onboarding and account opening processes, increasing time to revenue and reducing client outreaches. Our complimentary solutions enable the shift from time-based client KYC reviews to a perpetual and continuous KYC review model.”

“Our clients require robust onboarding systems that help them become disruptive. Refinitiv is a key addition to our partner ecosystem, ensuring we can create a seamless solution that will drive operational efficiencies and improve customer experiences,” said Julian Clarke, Global Head of Partnerships at Fenergo.

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The Bank of England Has Called for a “Collective Solution” to Tackle Cyber Security Threats

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The Bank of England has called for a “collective solution” to tackle cyber security threats similar to the “super shield” system used in the US.

Bank of England Supervisory Risk Specialists director Nick Strange said:

“A possible, and I only say possible, outcome of the cyber stress testing we are piloting may be that on their own, firms cannot meet the FPC’s proposed tolerance for payments system outage.

If this were the case then it would either fall to the public or private sector to come up with a collective solution.”

Sarah Armstrong-Smith, Head of Continuity & Resilience at Fujitsu UK & Ireland, commented to TFT:

“The Bank of England’s recent call for a collective effort to tackle cyberthreats is a step in the right direction that should be welcomed by all organisations – private or public. With the number of threats continuing to increase exponentially, customer trust has never been so valuable or hard to come by and as such it has never been more important for businesses to test and ensure they are protected appropriately. A fifth of the public believe that cybercrime is the biggest challenge facing the UK today, and there are certainly some lessons UK firms can learn from the American initiative ‘Sheltered Harbour’ to vault and protect customer data in the event of a cyber attack.

A collective solution to cybersecurity threats can help to enhance the operational resilience of the financial sector, and in turn, better protect customers and their data. With digital continuing to pave the way in financial services, the industry can no longer afford for it not to be the number one priority. Banks need to be able to identify, react and defend against a breach quickly, which includes stress-testing a range of scenarios, in collaboration with multiple stakeholders.”

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Digital Therapeutics Market to Exceed $32 billion by 2024 Offering Mixed Fortunes for Drug Companies

https://thefintechtimes.com/digital-therapeutics-market/

A new report from Juniper Research has found that the market for digital therapeutics (software that augments or replaces traditional therapies), will expand rapidly over the next 5 years; reaching over $32 billion in revenues in 2024, up from an estimated $2.2 billion in 2019.

The report, Digital Therapeutics & Wellness: Disruption, Innovation Opportunities & Forecasts 2019-2024, has found that the biggest application for digital therapeutics will be diabetes and weight loss; generating over $19 billion in 2024. This sector, led by companies like Omada, Virta Health and Welldoc, has taken an early lead, as lifestyle changes have a more demonstrable impact on diabetes than other conditions.

However, Juniper expects higher growth to occur in ‘other conditions’, such as chronic obstructive pulmonary disorder treatment, VR for PTSD, and computer games to help with developmental disorders.

Universal Interest, but not Universal Payment

While healthcare insurers are leading the way in distributing digital therapeutics, the report notes a strong interest amongst employers. With reimbursement still largely unresolved, Juniper expects that the majority of revenue will arise from direct payments from employers until 2021, and public health interest to be confined to a handful of markets.

Wellness Apps on the Up

Wellness apps, which frequently claim less quantified health benefits but are otherwise similar to digital therapeutics, are also on the rise. Juniper expects over 870 million consumer wellness apps to be in use by 2024; generating over $5 billion in revenue. In contrast, employer wellness apps will be worth $20 billion in the same period.

“While our research shows that employee schemes typically have a lower revenue per user than consumer payers, they will pay for longer,” remarked research author James Moar. “They also do not compete directly with free wellness apps, a constant problem for the B2C wellness industry, which has also constrained B2C digital therapeutics.”

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What You Should Know About Scalability in the Financial Sector

https://thefintechtimes.com/scalability-financial-sector/

By Dmitry Reshetchenko

What is Scalability? Types of Scalability

Today’s financial sector faces lots of challenges like security issues, differences in operational processes, regulatory uncertainty, and many others. Each day financial organizations look for new ways to grow their business and provide services of high quality. Scalability is one of the key needs of banks, credit unions, loan associations, investment companies, insurance agencies, and mortgage companies. In this article, you will learn what scalability is, why financial companies need scalability, and how to scale up properly.

First off, let’s define scalability. Wikipedia determines scalability as a system’s ability to cope with the huge workload simultaneously with the increase in resources. Simply put, it’s the ability to increase productivity within the company. Scalability can be of two types:

Vertical – When the productivity of every single component of the system is increased to reach the scalability of the whole system. In this case, each component of the system can be replaced with a more powerful component to reach the desired results faster.

Horizontal – When the system is divided into smaller structural components. To reach the scalability of the whole system means to add some new structures, processes, servers to it.

Financial companies can use both types of scalability to grow up their services and management resources. Let’s figure out, why companies operating in the financial sector may need scalability and why they need to think about it beforehand.

Why Do Financial Companies Need Scalability?

Complicated document management

Often, financial institutions face the difficulties in organising their document flow in a proper way. They have piles of papers and files that are to be processed, stored, shared and analysed. Thus, today they are starting to use more robust management information systems (MIS) that can provide for flexibility, speed, user-friendly interface, etc. What is also important about these systems is customisation, security, and scalability. These parameters should be kept in mind if you want to have a system which is fully personalised according to the company’s needs and requirements. No off-the-shelf product could offer you that. Therefore, the majority of insurance companies, banks, and other financial organizations contact software development partners to build their corporate technology products.

Huge client base

For financial companies like for many others, generating more revenue means increasing client base. The ever-growing number of customers requires a highly scalable system that will be able to manage communication, services, and other important processes within the company. Thus, fintech companies strive to provide the software that could cope with the high workload in the time when others can’t continue their work. Scalability is your key to success in the competitive market.

Wide range of product offerings

Banks as well as insurance agencies, for example, have lots of product offerings for their customers. To remain competitive, companies generate ideas and create innovative and sometimes even disruptive products for their clients. To manage all these products and organise them into a certain structured entity, they use up-to-date technologies that allow to process Big Data and manage enterprise resources correctly. Scalability is the number one functionality for ERP systems. If you want to get your system developed the right way, your technology partner should undertake a thorough business analysis to identify the scope of your product offerings in order to know how scalable the system should be.

Personnel management

Efficient services and risks management is impossible without professional manpower. Financial organisations engage lots of human resources that’s why it’s important to manage them effectively. HRM systems for banks, for example, provide such features as planning, acquiring people, training people, performance management, communication management, etc. To manage the ever-growing number of human capital, branches, departments, you should think of scalability in advance.

Multi processes/tasks

The process of financial management is quite complex. It includes multi-processes and tasks related to the above-mentioned operations. To process all this stuff, the fintech system must be really powerful and scalable. The ability to grow simultaneously with the growth of human resources, product offerings, services, assets, and other things is of crucial importance for the financial sector. Thus, companies must consider scalability as the key parameter when developing their software systems, applications, and other technology solutions.

Effective Ways to Manage Increased Workload

How to grow your systems effectively? What methods and tools to use? Modern technologies allow scaling up without compromising the high quality of services and security. Here are the main ways you can grow your systems:

Artificial intelligence technology allows using neural networks for detecting images (documents) and identifying customers. AI-enabled applications can significantly automate the processes of documents scanning or customers’ authorization along with providing a high level of security for personal data. Among the other AI-based features that are currently popular for implementation by banks, there are chatbots, fraud detection, personalization, voice, and digital assistants. All these functionalities can reduce time, efforts, and money allocated by financial institutions for proper operations management.

Blockchain enabled by peer-to-peer (P2P) technology is becoming popular in the finance sector. This technology is one of the most powerful tools for providing scalability. Banks, for example, are interested in using blockchain as it could reduce the time for operations processing as well as it could reduce administrative expenses. The integration of Blockchain with current payment systems could make payment processes more secure and fast.

As you can see, considering scalability will help you plan your future with regard to many factors affecting the revenue. Thus, think carefully before developing any software products for your company. Plan, conduct a business analysis and make a list of all the operations you plan to perform in your company.

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Adyen Selected by Uber to Roll Out 3D Secure Globally

https://thefintechtimes.com/adyen-uber-3d-secure/

Adyen, the payments platform, has announced that it has been selected by Uber to be its initial solutions provider for 3D Secure (3DS).

“Uber is excited to be expanding our payments platform with Adyen. We are focused on maintaining a seamless and rewarding payments experience for our consumers, and we chose Adyen’s 3DS solution based on the innovative product features, the ease of implementation, and the expertise of their team,” said Marco Mahrus, Head of Payments Partnerships, Uber.

“We look forward to expanding our partnership with Uber and becoming their first global partner for 3DS. 3DS authentication has become a top priority for all of our merchants. We have made a significant technology investment in our 3DS solution and merchants like Uber are leveraging our full-service capabilities to be prepared for evolving regulatory demands without sacrificing their customer experiences.” said Sam Halse, COO, Adyen.

3D Secure 2 (3DS 2) is a new technology standard developed by EMVCo that enables strong customer authentication to comply with regulations like PSD2 in Europe. It introduces a new approach to authentication through secure data sharing, biometric identification, and an improved mobile-friendly customer experience. Adyen’s market leading solution supports the widest coverage of card networks for 3DS 2 and legacy versions of 3DS at global scale through a single platform.

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Brits Wary of New Technology in Banking, Despite High Demand

https://thefintechtimes.com/brits-wary-of-new-tech/
  • 63 percent of Brits have never used fingerprint or voice recognition to log in to their bank’s app

  • 52 percent rate face recognition as secure and just 35 percent rate voice recognition as secure

  • 70 percent still go into a branch to access services from their main banking provider

  • Yet, over two thirds (69 percent) agree banks should deliver the latest technologies to their customers and 80 percent believe banks should work together to ensure the latest payment systems work everywhere

While British consumers expect their banks to ensure that the latest technology is available, consumers’ rate of adoption does not necessarily meet the rate of innovation. Nearly a third (30 percent) of Brits say their bank is over-ambitious introducing additional services on different devices, saying they do not need or want more ways to interact. At the same time, over two-thirds (69 percent) expect their bank to be delivering the latest technology to them and a third (34 percent) say that since they started using devices to manage their money, their financial goals are clearer.

These are the findings of global bank ING, which published its seventh ING International Survey on ‘New Technologies’. The study of 14,824 respondents in 15 countries, including 13 across Europe, suggests that while Brits are optimistic about having the latest financial technology available to them, they are not necessarily adopting it as fast as it is becoming available.

For those who are using devices (i.e. tablets, phones or wearables) to manage their money, many agree they are keeping a closer track of their finances. Since they started using devices to manage their money, 67 percent say they view their account balance more frequently, 32 percent say they take less risk with their money and 41 percent say they now think about money more. 

While Brits are optimistic about having the latest financial technology available to them, they are not necessarily adopting it as fast as it is becoming available.

The conflicting views on expectation vs adoption may be due, in part, to a lack of trust in technology and concerns over the security of how we interact with tools. Only half of Brits (52 percent) rate facial recognition as a secure tool. This coupled with two in ten (22 percent) who believe voice recognition is not secure, indicates a gap between services provided and accepted amongst consumers.

Phil Bindley, Managing Director of The Bunker told TFT:

“Trust is a key factor for the adopting of technology and cloud based services. As organisations and individuals adopt new enabling technologies in the world of all things financial, businesses operating in this space will need to demonstrate they have robust and secure ways of not only identifying individuals, but in securing that personal data under their control.”

Further to this, 62 percent of people in the UK aren’t comfortable with a computer programme making investment decisions on their behalf and 41 percent say no to receiving recommended improvements to their spending habits from robo-advisers. In fact, 70 percent say they maintain the use of their local bank branch, in most cases in addition to the use of technology to access banking services.

When it comes to awareness around financial data sharing innovations, such as the Second Payment Services Directive (PSD2), many are in the dark. 52 percent of Brits say they are not aware that in some countries, providing consent is given, financial providers can access information held by other companies (i.e. your bank).  Similarly, 64 percent say they would not be happy to use this and only 23 percent say it would be useful, signifying that more can be done to alert consumers to the potential benefits of these latest banking developments.

Jessica Exton, Behavioural Scientist at ING, said:

“Many people are now mobile bankers, using multiple devices to manage their money on the go and across different platforms. Yet while a large majority agree that the latest financial technologies should be available to them, when it comes to newer digital ways of managing money, we see some hesitance around adoption. Concerns about security, privacy and maintaining control of finances appear to be key barriers.

Over time and if new digital approaches are shown to be reliable, useful and socially accepted, it is possible that the uptake of services such as automatically generated advice for budgeting and even investing could be rapid. That was the experience with the uptake of mobile banking. Consumers indicate that they want banks and other financial institutions to stay in the lead by developing new ways to help them manage their money despite any reluctance to accept them immediately.”

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PPRO and HighRadius Partner to Expand B2B Payment Options for Global Clients

https://thefintechtimes.com/ppro-highradius-partner/

PPRO, the e-payments specialist, has partnered with HighRadius, a fintech enterprise software-as-a-service company, specialising in automating the order-to-cash and treasury management processes, to offer merchant clients a faster and easier way, and more options, to accept payments from their buyers. The integrated offering from HighRadius and PPRO allows for the discovery and support of local payments in key markets.

By combining the HighRadius Integrated Receivables platform with PPRO’s wide array of local payment methods (LPMs), clients receive a completely seamless experience that matches the growing diversity in payment preferences globally.

“We are excited to partner with such an innovative company. HighRadius has developed a great range of B2B solutions and we are proud to be able to provide their merchants with local payment connections from around the world,” said Steve Villegas, vice president of partner management at PPRO. “Together we will offer a unique value proposition to a market that continues to grow and is looking for innovation from its business partners.”

The integrated solution simplifies B2B payments, while also making the process faster and more accurate. Launched throughout the European region, this partnership will broaden the number of payment options available to HighRadius clients, giving businesses access to various LPMs, including Entercash (AT, DE, FI, SE), Giropay, iDEAL, P24, Sofort, Trustly, SEPA, and Bancontact. These non-traditional local payment methods help facilitate the changing, global payment environment. HighRadius customers can now experience the simplicity, convenience, and choice of LPMs.

“As a part of our global expansion and offering of our Integrated receivables platform, we are embracing newer payment methods as they are becoming more relevant to the B2B world,” said Sayid Shabeer, chief product officer, at HighRadius. “We believe with PPRO we will be able to provide a variety of Local Payment Methods to our clients and keep bringing new efficiencies to transactions.”

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eToroX adds gold and silver stablecoins to its, err, stable…

https://thefintechtimes.com/etorox-gold-silver-stablecoins/

eToro’s blockchain division, eToroX, has announced the addition of two commodity-stablecoins – eToro Gold (GOLDX) and eToro Silver (SLVX), two further fiat-stablecoins – eToro Ruble (RUBX) and eToro Yuan (CNYX) – plus 17 pairs to its crypto exchange.

In a press release issued on Tuesday, Yoni Assia, Co-founder and CEO of eToro, said;

“The blockchain brings transparency and a new paradigm for asset ownership. We believe this is the future of finance and we’ll see the greatest transfer of wealth ever onto the blockchain.”

Stablecoins are a class of digital assets that seek to maintain price stability by being pegged to the value of a stable asset, like fiat currencies. Since 2014, over 70 stablecoins have been designed, and three sub-categories can be discerned: centralised IOU issuance, collateral backed, and seigniorage shares. Each of those have shown flaws and it is difficult to see which one, if any, will succeed in the longrun.

Referring to such limitations, Assia added;

“One of the key obstacles that cryptoassets need to overcome for mainstream adoption is price stability. Stablecoins largely eliminate this hurdle, creating a more user-friendly way to interact with the blockchain. By adding eToro Gold and eToro Silver and expanding our fiat-stablecoin range to 10, we are demonstrating the vast potential offered by tokenized assets.”

“The blockchain brings transparency and a new paradigm for asset ownership. We believe this is the future of finance and we’ll see the greatest transfer of wealth ever onto the blockchain.”

The new instruments added to the eToroX exchange are:

  • 2 commodity-stablecoins: eToro Gold (GOLDX) and eToro Silver (SLVX)
  • 2 new fiat-stablecoins: eToro Ruble (RUBX) and eToro Yuan (CNYX)
  • 17 pairs: USDEX-EURX, USDEX-GBPX, USDEX-JPYX, USDEX-CHFX, USDEX-AUDX, USDEX-NZDX, USDEX-CADX, USDEX-RUBX, USDEX-CNYX, EURX-GBPX, EURX-JPYX, EUR-CHF, EURX-AUDX, EURX-NZDX, EURX-CADX, GOLDX-USDEX and SLVX-USDEX.

    “The addition of 17 pairs and 4 assets to our exchange less than a month since we launched shows the commitment to grow our exchange and the huge possibilities offered by the blockchain.”

This is in addition to the existing 8 fiat-stablecoins (eToro New Zealand Dollar (NZDX), eToro Japanese Yen (JPYX),  eToro Swiss Franc (CHFX), eToro United States Dollar (USDEX), eToro Euro (EURX), eToro Pound Sterling (GBPX, eToro Australian Dollar (AUDX), eToro Canadian Dollar (CADX), 5 cryptos (Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), BitcoinCash (BCH) and Litecoin (LTC) and 43 pairs including BTC-USD, XRP-GBP etc.

The 2 commodity-stablecoins and 10 fiat-stablecoins are all ERC20 tokens.

Doron Rosenblum, Managing Director of eToroX, said;

“The addition of these fiat pairs means that people can now trade FX 24/7 as well as traditional assets such as gold and silver. We are continuing to open up markets and this step allows people for the first time to trade, hedge and close exposure whenever they want.

“The addition of 17 pairs and 4 assets to our exchange less than a month since we launched shows the commitment to grow our exchange and the huge possibilities offered by the blockchain. We don’t want to just add established cryptoassets. We want to push the boundaries and continue to innovate.”

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Blockchain’s Role Will Be Critical After the Next Financial Crash – GoodDollar Lead Economist

https://thefintechtimes.com/blockchains-financial-crash/
By Nir Yaacobi, Economic Lead, GoodDollar

A dozen years after the last major financial crisis, experts are predicting a global economic downturn will happen, sooner rather than later.

Some commentators have voiced concerns that the lack of tools in central banks’ arsenals – interest rates are already very low in many countries – could mean that the trough lasts longer than past crises. Should this play out, it would impact most severely on those without access to a secure local or regional currency.

wealth inequalityNir Yaacobi, Economic Lead, GoodDollar

It’s hard to predict the future, but it might be that financial institutions and governments have to change their business models completely. As such, it is not a great leap to reason that within the next five years we might see more countries embracing blockchain-powered projects and cryptoassets as alternative economic system.

To sceptics, this may seem too far fetched to countenance. However, the rapid progress of the blockchain technologies and cryptoassets means that someday there will be a feasible alternative to fiat currencies in a country near you – and one that is properly secured and scalable.

What, then, will happen after the next financial crisis, and how can cryptoassets – and blockchain advancements in particular – improve the situation for everyone?

To achieve robust solutions at scale and speed, those in power should embrace blockchain solutions and those in the tech community ought to collaborate with financial authorities.

Furthermore, the next economic crash is likely to strengthen the case for a global-scale universal basic income (UBI) – the idea of providing regular, unconditional cash payments to citizens to enable a baseline standard of living.

As Thomas Piketty demonstrated in Capital in the Twenty-First Century, published in 2013, as long as the rate of return on capital is greater than the growth rate of the economy, which is the case for most economies most of the time, the rich get richer. That triggers growing inequality in society, and eventually leads to poverty, crime, political instability, reduction of output and more crises. In essence, the way the system works leads to inequality. And when the next financial crisis hits, it is those without a secure local economy would are likely to suffer the most, and for the longest amount of time.

as long as the rate of return on capital is greater than the growth rate of the economy, which is the case for most economies most of the time, the rich get richer.

Now, we have the technology at our fingertips to help. Some, like us at the GoodDollar project, believe that a UBI solution may be found without the backing of centralised systems, while others are taking a classic UBI approach engaging with authorities in charge of the redistribution of funds.

Blockchain solutions could transform the global economy

By building solutions that create better wealth distribution then, potentially, inequality across the globe can be improved. By making the world more equal then more people can participate in the economy.

The issue of wealth inequality has been at the forefront of the mind of Yoni Assia, the Co-Founder and Chief Executive of the global multi-asset investment platform eToro, for most of his adult life. “It is a critical economic challenge of our time,” he wrote in November when announcing the GoodDollar experiment at Web Summit 2018. “I’ve long felt a solution is conceivable when all the elements are aligned. I first wrote about this idea in 2008, in an article entitled The Visible Hand. The original concept has significantly evolved since then.”

With the convergence of tech trends, a blockchain-backed project that adopts UBI principles – and collaborates and works alongside governments, crucially – could be achievable before long. That is why Yoni helped to launch GoodDollar, a project to which eToro initially committed $1 million.

GoodDollar is a not-for-profit project that intends to launch a payment network, and explores how decentralised cryptocurrencies and blockchain technology may enable models based on UBI. Our central aim is to reduce global wealth inequality.

We are looking to launch a peer-to-peer money transfer network and a digital wallet to access it. The goal is this: once GoodDollar is fully functioning, every day, any person – wherever they live in the world – will be handed an equal portion of the redistributed funds from the GoodDollar network.

My GoodDollar colleagues and I believe this represents a more just economic model, and would encourage everyone in the world to make payment transactions on the GoodDollar network, instead of their local one – especially if they believe financial inequality should be fixed for good.

The goal is this: once GoodDollar is fully functioning, every day, any person – wherever they live in the world – will be handed an equal portion of the redistributed funds from the GoodDollar network.

We are well aware that delivering decentralised UBI on a large scale requires much input from the whole ecosystem, and beyond – we cannot do this alone. We welcome partnership and collaboration and are keen to learn from other blockchain-backed projects in this exciting space.

Many progressive minds are adding their voices to the cause

Sam Altman, the President of the start-up accelerator Y Combinator, has been interested in UBI for a long time, and in late February he announced that he is to pursue a large pilot study. On Conversations with Tyler – a podcast hosted by economist Tyler Cowen – Sam discussed the importance of “providing fair financial infrastructure for poor people”.

wealth inequalityAdditionally, he suggested that cryptoassets, in some form, could provide the foundation for a global UBI. “I can imagine a crypto system where you see something that is more powerful than any government on Earth, where you actually figure out a way to give every person on Earth a coin, and then you make this gigantic network that everyone believes in, and you can do redistribution outside the control of any government,” he said.

With the convergence of tech trends, a blockchain-backed project that adopts UBI principles – and collaborates and works alongside governments, crucially – could be achievable before long.

Sam was talking about something I have believed for a good while: a new economic order is inevitable. In 2019, owing to network limitations and security challenges, a decentralised digital currency cannot yet scale the globe.

While crypto-based UBI might seem implausible just now, I echo Sam’s belief that it will eventually happen. “That would be the most powerful network effect the world has ever seen economically, and I think that would be cool,” he said on the podcast. I think that it would be cool, too, and that’s why the exploratory work GoodDollar – and other blockchain-based UBI projects we want to collaborate with – is doing is so critical.

Nir Yaacobi, PhD, is  the economic lead for GoodDollar, a not-for-profit payment network that explores how decentralised cryptocurrencies and blockchain technology may enable models based on universal basic income (UBI) with the central aim of reducing global wealth inequality

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Former Government Advisor Says Not Enough is Being Done to Back Small Businesses

https://thefintechtimes.com/government-advisor/

A former leading advisor to the UK government for over 20 years says the support shown for small businesses is “nothing but window dressing”.

Duncan Collins, who was the principal advisor appointed by the Thatcher and Blair governments said, “Since the closure of Business Link in 2012 there has been nothing but window dressing and no prospect of improvement – so, we are where we are.”

“I agree with Andy Haldane, the Bank of England Director, who heads the government’s Productivity Commission when he says that too many small businesses are underinvested in systems – advocating starting with online bookkeeping,” he says.

During Collins’ tenure as advisor to the government for small businesses, UK small business competitiveness rose from 21st to 7th place in the international league table.

But for Collins, this isn’t enough, “The Productivity Commission is only scratching the surface…I’ve had several offers to assist the Department for Business, Energy & Industrial Strategy (DFEIS) for free, refused by the government, which leads me to believe they’re just not open to change.”

Mr Collins, who is now the Founder and CEO of Runagood®, the world’s first AI-driven business advisor software says businesses today need to think outside of the box.

“Businesses need a sustained relationship with business advisors who keep them informed about best practice. But the only way to make that affordable is by using AI, to accelerate the processes to such an extent that it becomes affordable to access smart advice all the time.

It’s what big businesses do to stay big because they can afford the high costs (incurred by new tech). But AI levels the playing field for the first time ever enabling small businesses to compete,” Collins says.

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GoodDollar: Send Not For Whom The Bell Tolls, It Tolls For Thee

https://thefintechtimes.com/gooddollar-interview/
Interview by Matthew Dove

It’s rare that fintech and the words of great poets make apt bedfellows but GoodDollar is no ordinary fintech and its goal, the reduction of the global wealth gap, commands the loftiest of literary comparisons.

When John Donne wrote Devotions Upon Emergent Occasions he could never have imagined that his 17th century meditations on the interconnectedness of humanity would still be as pertinent in 2019 as they were on the day that he committed them to paper:

“No man is an island, entire of itself; every man is a piece of the continent, a part of the main. If a clod be washed away by the sea, Europe is the less, as well as if a promontory were, as well as if a manor of thy friend’s or of thine own were: any man’s death diminishes me.”

GoodDollar is a project keen to remind us that, in a world of extremes of wealth and poverty, one should never send to know for whom the bell tolls, it tolls for thee…

So, what is GoodDollar and how does it work?

gooddollarGoodDollar is a not-for-profit project that intends to launch a payment network, and explores how decentralised cryptocurrencies and blockchain technology may be enabled to redistribute the added value of the network together with donation, through models based on universal basic income (UBI) with the central aim of reducing global wealth inequality.

Thanks to the advancement and confluence of a number of technologies, such as cryptoassets and blockchain (the distributed digital ledger that underpins bitcoin), hope is building that UBI principles can be adopted – by GoodDollar and other projects – to help the poorest people in the world achieve more financial freedom.

GoodDollar is a not-for-profit project that intends to launch a payment network…with the central aim of reducing global wealth inequality.

Projects in the OpenUBI community are working hard and collaborating to deliver solutions around digital identity – ensuring a user on UBI-based systems such as GoodDollar is verifiable and unique – and governance structures.

Momentum is building. Advanced economic models are currently being tested. GoodDollar will launch a pilot scheme in 2019 and our vision is to expand it on a global scale.

Our economic model employs UBI principles, and the vision is that a cryptocurrency (GoodDollar) will be distributed in a fair and transparent way, using “smart contracts” on the blockchain.

By adopting a carefully crafted, and fully tested model – to be determined through experiments and pilots – the least advantaged on the decentralised GoodDollar network will receive the greatest relative benefit. Eventually, users – in the developing and developed world – will be able to use their GoodDollars to purchase goods and services and even exchange them for other cryptocurrencies, thereby empowering the beneficiaries. Ultimately, this will help generate a sense of purpose for many more people while reducing global wealth inequality.

At what stage in development is the project at now?

GoodDollar was officially introduced in November 2018 at Web Summit, but for most of the year before the launch work had been going on, and a team of economists, scientists and like minded people had been established.

Momentum is building. Advanced economic models are currently being tested. GoodDollar will launch a pilot scheme in 2019 and our vision is to expand it on a global scale.

That core group has expanded, partly thanks to the support of eToro; the global multi-asset investment platform initially committed $1 million to the project in autumn 2018.

In November 2018, GoodDollar helped launch the OpenUBI ecosystem, in Berlin. This was established to foster collaboration and discussion around universal basic income (UBI) and its technological implementation. We hope to use the principles of UBI to deliver GoodDollar.

GoodDollar has a number of interesting projects planned in 2019, and we are working hard to deliver them as quickly as we can. For example, we will be launching a pilot UBI project, and will reveal more details in due course.

In 2019 we expect to build upon the early momentum GoodDollar has generated so far. We want to scale our research. We will encourage more meet-ups and hackathons (the first “Hackinequality” took place in March), engaging and collaborating with likeminded people, with a common aim of using blockchain to reduce global wealth inequality.

Are projects like GoodDollar inevitable given the rise of automation and machine learning?

gooddollarWealth inequality is the crucial economic challenge of our time. It’s no coincidence that the number-one goal (out of 17) of the United Nations’ Sustainable Development Goals is “end poverty in all its forms everywhere” (see here). Further, goal 10 is “reduce inequality within and among countries” (see here).

With the rise of technology unemployment – the jobs of up to 800 million human workers (one-fifth of the global workforce) are forecast to be displaced by 2030 (McKinsey Global Institute, November 2017) – we believe the tech industry needs to find solutions for those with less money to participate in the economy and pursue their purpose.

Our economic model employs UBI principles, and the vision is that a cryptocurrency (GoodDollar) will be distributed in a fair and transparent way, using “smart contracts” on the blockchain.

Add to that the fact that the 26 richest people on the planet own as much in terms of assets as the 3.8 billion people that comprise the poorest half of the globe’s population (Oxfam, January 2019).

Were GoodDollar (or a similar UBI model) to scale, what kind of resistance could it expect to experience from established concentrations of centralised power (governments, corporations etc.)? Has the project experienced any resistance thus far?

Hitherto, GoodDollar has not met any resistance, or negative sentiment, from governments, or centralised authorities. We have been encouraged by the fact that the United Nations is turning to blockchain solutions in a bid to solve humanitarian challenges. We are interested to learn more about what blockchain technology can help with. The GoodDollar team hopes that we can work alongside and together centralised platforms and payment networks to help reduce global wealth inequality. We strongly believe the two types of system can co-exist and help one another.

Is GoodDollar working with other organisations (governments, corporations, charities, NGOs etc.) to bring its vision to fruition?

Ultimately, we are well aware that delivering decentralised UBI on a large scale requires much input from the whole ecosystem – we cannot do this alone.

Now – together – we need to determine a network or system to exchange ideas, particularly around identity and governance of UBI projects. Additionally, we must scale the OpenUBI activity and would like meetups to happen all over the world on a regular basis.

We are currently in discussions about partnerships with several people and organisations that can make our collective vision – to reduce global wealth inequality – possible. GoodDollar is open to collaborations, and we welcome any and all suggestions.

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