Bank of England sets out its stall for assessing payments innovation

http://www.linklaters.com/en/insights/blogs/fintechlinks/2019/october/bank-of-england-sets-out-its-stall-for-assessing-payments-innovation

Payment systems have an important, although sometimes overlooked, role in the broader UK financial system. Facebook’s proposal to launch a digital currency for retail payments within its network has prompted regulators to consider their approach to innovation in the payments sector more generally. At a recent meeting of its Financial Policy Committee, the Bank of England suggests how these innovations should be assessed.

Three principles for ensuring payment systems support financial stability

In the record of its latest quarterly meeting, the FPC welcomes the exploration of alternative ways to improve cross-border and domestic payments. However, ensuring new solutions support financial stability is a key concern. And so, the FPC has agreed the following three principles for assessing how regulation should respond to fast-moving developments in the payments sector.

  • Principle 1 – financial stability risk is more important than legal form Firstly, according to the FPC, regulation should reflect the financial stability risk, rather than the legal form, of payments activities. In other words, the same level of risk should attract the same level of regulation.

    The FPC’s concern is that use of innovative forms of payment (such as digital assets) could become widespread but not necessarily subject to the same level of regulatory oversight as prevailing payment methods (such as debit cards). The FPC reiterated the point that innovative structures are making it increasingly important to apply regulation based on functions undertaken rather than merely the type of entity involved. See also our blogpost on Protecting the financial system as the market changes.

  • Principle 2 – every link in the payment chain should be resilient Secondly, the FPC calls for end-to-end operational and financial resilience across payment chains. Payment chains typically connect payers and payees via multiple payment services firms, payment systems and other financial market infrastructure. Their length and complexity have been increased by new technology and new market participants.

    The FPC is concerned that, when it comes to resilience, these chains are only as strong as their weakest link. For example, it notes that: “The resilience of the proposed Libra system would rely on the stability of not just the core elements of the Libra Association and Libra Reserve but also the associated critical activities conducted by other firms in the Libra ecosystem such as validators, exchanges or wallet providers”.

    Operational resilience is a regulatory priority and the UK regulators, including the Bank of England, are going to propose new rules and guidance for financial institutions shortly. Read our publication on Building the UK financial sector’s operational resilience for more.

  • Principle 3 – data should be made available so that risks can be monitored and addressed Finally, according to the FPC, sufficient information about payments activities should be made available. Their concern is that supervisors may be blindsided to risks that could emerge from innovative payment systems. With more data, there is more chance of identifying risks to financial stability and addressing them appropriately.
The potential systemic importance of Libra

In the FPC’s view, Libra has the potential to become a systemically important payment system. This means it would need to meet the highest standards of resilience and be subject to appropriate supervisory oversight.

The FPC stressed that the terms of engagement for innovations such as Libra must be adopted in advance of any launch. This echoes comments previously made by Mark Carney on Libra – see also our blogpost on Paving the road for a diversity of payment options.

What is the Financial Policy Committee?

The Bank of England’s Financial Policy Committee looks out for risks in the financial system. As well as payments, its latest meeting considered Brexit, the UK-China trade war, the liquidity of some investment funds and LIBOR transition.

Next steps

The Treasury is leading a review of the payments landscape which includes looking at its resilience and how regulation can keep pace with innovation. The FPC suggests that its principles could inform any assessment of current payments regulation in that review.

http://www.linklaters.com/en/insights/blogs/fintechlinks/2019/october/bank-of-england-sets-out-its-stall-for-assessing-payments-innovation

How to profit from the now likely failure of Facebook Libra. 

https://dailyfintech.com/2019/10/14/how-to-profit-from-the-now-likely-failure-of-facebook-libra/
3 boxers.001

Move fast and break Facebook. It will soon be conventional wisdom that Facebook Libra will fail and you only make money before the herd catches on. In this article, Daily Fintech Subscribers learn why Facebook Libra will likely fail and who/what will win if Facebook Libra fails and how to profit from that. 

Like everybody else in this space I pored over the tea leaves scattered by Facebook when they announced plans for Libra in June. I was excited because I had predicted that Facebook would try to monetize their WhatsApp acquisition via payments when they hired David Marcus in 2014 (link to not so humble-brag post here).  At the time of the announcement in June,  I offered my 10 takeaways from the Facebook Libra announcement which included this:

“Yet many of the partners have more to lose than to gain. For example credit card networks will lose if payments moves to crypto”.

That news forecasting proved accurate when first Paypal and then Mastercard, Visa, eBay and Stripe withdrew support.

The reason Facebook is in trouble is what I described in the June article as “Takeaway 5. Facebook’s delicate dance with regulator.”

The regulator is only a front for the Governments that pay them and those Governments will do whatever they can to stop Facebook creating a global currency that will challenge state monopoly over currency creation. That is why we use the image of 3 boxers in the ring.  Facebook is powerful for sure but a) they are regulated entity that exists at the pleasure of the state and b) Bitcoin is the unregulated honey badger that has been attacked by so many rich & powerful and yet still goes strong.

The Qui Amisit (who loses)story is simple and the same as we told our readers in June:

“ The biggest losers will be global banks. Even if Libra fails, the banks will lose. This is now a boxing match with 3 boxers in the ring. When push comes to shove, governments will throw banks under the bus if they think it will save their monopoly over money from either Libra or Bitcoin.”

Now we focus on what subscribers really want which is our Qui Bono (who wins) Analysis. Keeping to the Latin theme, each Qui Bono story  has a “fac pecuniam” (make money) analysis:

Qui Bono = Bitcoin

Why: Facebook raised awareness of crypto and one crypto that looks like a survivor is Bitcoin.

fac pecuniam = buy Bitcoin and hold it for a long time.

Qui Bono = USD 

Why. This seems to contradict the first Qui Bono = Bitcoin and this one is more short term trading focussed. When the next market crash happens it will likely be on the periphery first ie in developing markets so there will then be a short term flight to safety and that will lead to a short term bump in USD value. Sentiment will change when it becomes clearer that a) there are alternatives to Fiat currencies and b) that the problems are endemic to all Fiat currencies and not just some of them.

fac pecuniam = buy liquid short dated  USD assets and sell as soon the first wave of panic recedes.

Qui Bono = Gold backed CBDC 

Why: if is unlikely that the reserve currency will shift from USD to the next rising power, because a) the next market panic will lead to a questioning of all Fiat currencies and b) geopolitics will resist so much power to one country. The likely successor to USD will be a) a tokenized digital currency (because the cross border payments will be easier b) issued by Governments (because mainstream acceptance of the idea of stateless currency will take time and c) backed by Gold (because a market panic will cause people to lose faith in government’s ability to print more money at will).

fac pecuniam = buy gold and hold it for a long time. Convert your physical gold into a gold backed CBDC when you want to spend some.

Qui Bono = Crypto Payment Processing using Stablecoins

Why Crypto Payment Processing. Merchants want lower costs and less risk of being blacklisted by Legacy Payment Processors.

Why using Stablecoins. In a word, volatility.

fac pecuniam = find a stablecoin that you believe will be resistant to state shutdown and invest in it.

————————–

Confessions of a writing junky. I should give up writing to focus on being the Editor and CEO of Daily Fintech, but I love writing and cannot quite quit.

Inserted by my lawyer: I Am Not A Financial Adviser, just a blogger bloke on the Internet.

This is the kind of contrarian insight that subscribers want. If you have not yet subscribed and got this far, congratulations this is one of your 3 free articles. To make sure you do not miss any in future, please click here to subscribe..

https://dailyfintech.com/2019/10/14/how-to-profit-from-the-now-likely-failure-of-facebook-libra/

Compliance Without Compromising Customer Service: How to Handle PSD2

https://thefintechtimes.com/how-to-handle-psd2/

By Michael Reitblat, Co-Founder and CEO, Forter

In a bid to standardise and safeguard the payments landscape, the Second Payments Services Directive (PSD2), and its Strong Customer Authentication (SCA) requirement, outlines stricter security regulations for businesses to follow.

SCA was due to go into effect across Europe on 14 September 2019, with the UK being one of the exceptions following the Financial Conduct Authority’s (FCA) announcement that it will delay enforcement until March 2021. The staggered implementation of PSD2 makes it even more important that merchants act to ensure they’re fully protected from fraud now, and are prepared for the practical implications when the law kicks in across Europe.

The SCA component of PSD2 is designed to protect consumers’ financial data, offer greater transparency for payments services, and clarify the rights and obligations of users and providers. But what does this mean in practice for businesses?  

The staggered implementation of PSD2 makes it even more important that merchants act to ensure they’re fully protected from fraud

Introducing additional friction to the transaction process

Banks and retailers alike have expressed concern over the complexity of PSD2 implementation, particularly regarding SCA. Central to this concern are the methods used to meet this requirement – knowledge, possession, and inference. These could involve consumers inputting an additional password or a code sent to a personal device, or submitting biometric data, such as a fingerprint, to finalise a transaction. For retailers within the European Economic Area, all online transactions must comply with SCA, and two of these three steps must be carried out for consumers to complete a purchase.

Consumers have concerns of their own as well, particularly in regards to the use of biometrics. Research shows over half (53%) are worried about using biometrics in online transactions due to fear of identity fraud. Businesses are also mindful that many authentication methods “interrupt” the customer experience and introduce increased friction into the path to purchase, potentially resulting in a loss of revenue.

The standard protocol for SCA compliance, 3-D Secure 2.0 (3DS2), doesn’t mitigate the concerns around friction. Successful 3DS2 authentication means the liability for a transaction shifts from the merchant to the issuing bank, while simultaneously introducing a significant amount of friction to the consumer journey. With 26% of checkout abandonment occurring due to increased frictions frustrating customers, businesses need to balance the security requirements of PSD2 with meeting consumer demands, and ensuring a simpler path to purchase.

Banks and retailers alike have expressed concern over the complexity of PSD2 implementation, particularly regarding SCA.

Resolving the challenges of PSD2 and SCA

Online merchants should embrace innovative payments technologies and fraud prevention software, to enable PSD2 compliance without compromising business objectives. The issues of additional friction and surplus effort, on the part of the consumer, can be resolved by adopting a different approach to the transaction process: dynamic routing, powered by human expertise and machine learning technology.

3DS2 concentrates on the checkout stage of the customer journey, whereas a holistic view of multiple consumers’ complete paths to purchase can be achieved by bringing together insights from domain experts and machine learning models. Dynamic routing reduces potential bottlenecks at the point of transaction, by identifying and leading consumers to the path of least friction, on a case-by-case basis, to optimise the individual transaction experience.

Through analysing a myriad of data points prior to the point of checkout, businesses are able to determine bad transactions upfront, or identify which transactions are exempt from additional verification. Deciding this in near real-time is essential to providing the optimal customer experience for each user. 

Online merchants should embrace innovative payments technologies and fraud prevention software, to enable PSD2 compliance without compromising business objectives.  

While PSD2 and its SCA requirements are a necessary measure to ensure the safety of consumers, cybercriminals will always seek to undermine regulatory updates and exploit potential weaknesses and vulnerabilities in the payments system. Machine learning technologies in combination with market expertise, empower online merchants to stay ahead of fraud and purchasing trends, recognising patterns in suspicious activities and immunising the threat early on during the path to purchase. Applying this system to a networked coalition of businesses, results in greater protection and is bolstered by the collective insights gleaned from all transactions processed throughout the broader consortium network.

Concerns surrounding PSD2 are legitimate, but the means to address them are readily available to merchants. By leveraging dynamic routing and machine-learning systems, powered by the insights and expertise of human analysts, online merchants can safeguard their revenue and conversion rates. This integrated fraud prevention approach will protect merchants not only against fraud attacks, but similarly from damaging their consumers’ paths to purchase. With the most innovative systems in place, businesses can guarantee that it will be only the fraudsters missing out when PSD2 comes into full effect across all of the EU.

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Smartcards Get Smarter: Innovation in Payment Cards

https://thefintechtimes.com/smartcards-get-smarter/

By Stéphanie El Rhomri, VP Testing Services at FIME

Since the launch of contactless just over a decade ago, innovation in payment cards has struggled to keep pace. While card payments themselves have steadily risen, in an increasingly mobile and digital age, many are already predicting the death of the card.

Stéphanie El Rhomri

The beginning of the end for the payment card? Not quite. In recent years, we’ve seen the development and launch of new, non-standard cards that are giving the form factor the boost it needs to continue to thrive.

Undoubtedly, digital services will continue to gather momentum – but we aren’t saying goodbye to the trusted payment card just yet. In fact, many are even citing the rise of contactless payment cards as actually slowing the adoption of mobile payments. Here’s some of the latest trends bringing new life to consumers’ wallets.

The biometrics boost!

Contactless card adoption has rapidly increased in recent years, especially across Europe. But fear of fraud is a major concern that’s been limiting consumer adoption. And the stats show it’s not just scaremongering. Fraud is on the rise in ‘tap-happy’ markets, with more than half of the UK’s card fraud now linked to contactless cards. As a result, consumers are more aware than ever of the security risks.

But the entrance of biometric security might just be the answer. Already commonplace in smartphones, the addition of fingerprint sensors to payment cards is bringing security to contactless, without compromising the much-loved user experience.

Fraud is on the rise in ‘tap-happy’ markets, with more than half of the UK’s card fraud now linked to contactless cards.

The last two years has seen a number of bank pilots of the technology announced globally, including major players such as Crédit Agricole and NatWest. With 117 million biometric payment cards predicted to be in use globally by 2023, this is one card technology worth keeping an eye on.

Cards in focus

It’s not just fingerprint sensors we’re seeing embedded into cards either. LED display screens are also growing in popularity, with a range of new functions in trial: from one-time passcodes (OTP) for added security, to account balances to help manage spending.

These are gaining traction across the globe, too. Earlier this year, RHB Bank in Malaysia launched a card that displays a dynamic security code – CVV2 – that regularly changes automatically. Replacing the static CVV code on the back of cards, this brings greater security to online card payments without harming convenience.

the addition of fingerprint sensors to payment cards is bringing security to contactless, without compromising the much-loved user experience.

Cards get cool

The humble payment card is undergoing a design makeover, too. Especially evident in the launch of design-led cards from many of the digital challenger banks, the card remains an important physical brand touch point for banks. Monzo’s hot coral card and the ‘choose-your-own’ colour Klarna card are just two examples bringing the card back in vogue. Not only that, it shows that even the mobile-first innovators still see value in the trusty card.

Many premium brands are now also moving to metal cards. Adding a luxury ‘clink’ to each payment, it’s become especially popular in Asia and the U.S. Take the sleek metal card launched by Monaco – with the option to store cryptocurrencies on the card too, this is another example of physical cards remaining relevant in the digital age.

Don’t throw out your wallet just yet…

This wave of innovation is making the card more secure, stylish and convenient. Consumers want choice, flexibility and security, and the new-age of card is shaping up to be the perfect partner to mobile and online services.

FIME is proud to champion innovation, supporting card vendors and issuers to design, develop, deploy and validate new card form factors. Visit our website to find out how our range of consultancy, testing and certification services can help.

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Is it time to Decentralize the World?

https://dailyfintech.com/2019/10/14/decentralizing-the-world/

decentralizing_the_world

Is the current state of blockchain development ready to attract a large number of users? For the technology to become mainstream, it needs to be applied in ways that people actually find useful and provide a much better experience than what is already available. Can social media be crypto’s killer app? Decentralized and decentralizing technologies are challenging and changing how we manage our digital identities and who has access to our data. 

Ilias Louis Hatzis is the Founder at Mercato Blockchain Corporation AG and Weekly Columnist at Daily Fintech.

A couple of weeks a couple of stories surfaced in the news. The first was that Kik was shutting down its messenger app and cutting its staff from over 100 people to just 19 employees. Kik climbed to prominence alongside other well-known messenger apps like WhatsApp, Facebook Messenger, and Telegram with its distinguishing feature of being privacy-centric. The second was that officials in the U.S., U.K. and Australia were pressing Facebook to give authorities a way to read encrypted messages sent by ordinary users, re-igniting tensions between tech companies and law enforcement.

If there’s one thing the Internet lacks, it’s privacy.

The cryptocurrency industry is 10 years old. The Internet was developed in the 70s, 80s and 90s and it didn’t really take off until the browser was created. Just like the Internet the cryptocurrency market needed to build its bridges and roads. I think that our Netscape moment has come. We now have the infrastructure to launch scalable decentralized applications on blockchain. The future of the internet is distributed, decentralized applications and not just things like cryptocurrency.

Some of the things, that are going to drive mass adoption for cryptocurrencies and blockchain, will be the same things that we use on the today on Internet, things like new decentralized social networks and messenger apps.

More and more, trends point to decentralization being the next step for social media. Almost all traditional social media apps track user activity and sell the aggregated information, behavior, and habits to provide the highest bidder with better targeting for their advertising and marketing campaigns. Two years ago, Facebook brought in $9.32 billion in revenue in the second quarter, mostly from mobile ads, and kept the profits to themselves.

At this point you can build just about anything on blockchain that you can build on the traditional Internet. Today, you can build a new Facebook entirely using a blockchain, and best of all, users could have absolute control of their data. We could control who has access to our data and give our permission to advertisers to access our data. We might even be the beneficiary of any renumeration that occurs because of access to our data. Imagine a world where you, the user, receives all of the revenues that are generated from your data and you know who has access to it.

Is that something you’d be interested using? I think that most of us would be.

It’s going to be exciting to watch how things develop over the next year, in the battle between the centralized social networks and the decentralized networks that are fighting for privacy, consent and user participation in the revenues that are generated.

Even more exciting will be messaging. Today, most of us are concerned over privacy. Is your Signal, Telegram, WhatsApp or Skype applications secure? Do you know? No, you don’t. You have to trust those platforms are doing what they say they’re doing. Blockchain enables a security layer to secure messaging systems, that even the companies offering the systems cannot access your data.

Decentralization doesn’t just mean more protection for personal data. It puts the power back into the hands of users by allowing them to have complete control over the information they give and receive, by eliminating the bias of ad-based centralized models that use our personal data.

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https://dailyfintech.com/2019/10/14/decentralizing-the-world/

Why Is It Important To Have The Perfect Boardroom Space?

https://thefintechtimes.com/perfect-boardroom-space/

First impressions are everything when running your own business and your board room is one of the most crucial rooms in your office space. With interviews conducted, meetings held, and problems being resolved, you need a professional-looking space to help increase the productivity of your business. In this article we will be providing you with insight into why the perfect boardroom space is important.  

Internal Company Meetings 

A meeting space is important for a number of reasons but having a modern boardroom table and chairs available to seat all your employees is crucial when having internal meetings. Whether this is a glass table that you opt for a larger desk space, you can hold all-important meetings and training sessions in a professional space. In addition to this, you will be making a great first impression to all new employees as your business will look the part. 

Professional Setting For Client Meetings

In addition to making a great first impression to those who are new to the team, a meeting room is a perfect way to engage with clients in a professional setting without disrupting the work going on in the office. This will help you as a business to close deals and undergo presentations without being disrupted. This is crucial to the success of a business as this will provide customers with the best possible first impression of you. The more modem and clean the board room is, the better impression you will give to the client, so make it count!

Company Interviews 

If you are a new business that is conducting interviews to expand the team, a meeting room is crucial. This will help you to interview potential candidates in private and give them a first glimpse into the business and the way that you operate. By having a glass partition between the meeting room and the rest of the office, you can allow some insight into the company by the cleanliness of the work environment. Therefore, a perfectly designed board room with drinks fridge helps employees to feel comfortable before and after their interview and leave with a brilliant first impression. 

The Perfect First impression 

Though a board room table and chairs are important, the colour theme and overall look of the room is just as important. By having a television for presentations and access to the internet, you are making a room that is fit for meetings as well as training sessions. The colour of the walls and carpet are also important as this can cause lack of concentration. By keeping the colour theme, a simple white and grey or a blue and white, this can stick with branding whilst creating the perfect space for creative meetings and interviews. 

With this in mind, there are a number of reasons that a board room needs to be perfect as this is where you will be conducting a majority of your business. Whether you opt for a wooden or carpeted floor with white or blue walls, this will create the perfect professional space. 

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Onward Innovation! FinovateAsia Returns to Singapore

https://finovate.com/onward-innovation-finovateasia-returns-to-singapore/

We’re back! After seven years Finovate has returned to Singapore for our annual fintech event in Asia. Singapore is where we first launched FinovateAsia, and we are thrilled to be back in the Garden City to showcase and celebrate the latest in fintech innovation.

Here at rehearsal day on Sunday, our demoing companies are busy practicing their pitches and testing their technologies. And from all indications, we are in store for a fascinating day of live fintech demos covering everything from AI and cryptocurrencies to regtech and wealth management.

We hope to see you at the show. Until then, here are a few reminders and need-to-knows to help you make the most of your time at FinovateAsia this year.

What

This year, our fintech demos will be held on Tuesday, October 15th, Day Two of FinovateAsia. Check out our roster of demoing companies, and learn more about them via our Sneak Peek series.

On Monday, October 14th, Day One of FinovateAsia, we will feature a variety of keynote addresses, roundtables, and power panels discussing some of the key trends in fintech. Day One also will offer attendees the opportunity for deep dives into topics like emerging Asian markets, digital lending and payments, investech, insurtech, and more.

FinovateAsia will also host a special Summit Day on Wednesday that will focus on two of the most potentially disruptive technologies in our industry today: artificial intelligence and the blockchain. Visit our registration page to add this special day to your FinovateAsia plans.

When

FinovateAsia begins Monday morning, October 14th, at 8:50am with opening remarks from the chair. The conference continues all day until 6:30pm with our reception and networking Happy Hour. FinovateAsia resumes Tuesday morning, October 15th at 9:30am with the chair’s opening remarks, and concludes that evening with our reception, networking, and Best of Show awards ceremony.

We will also have a third Summit Day on Wednesday, October 16th. Opening remarks will begin at 9am, and the day will conclude with closing remarks from the chair at 4pm.

Where

FinovateAsia will take place at the Marina Mandarin Singapore on 6 Raffles Blvd. The venue located in Singapore’s Central Business District, and easy to reach via Mass Transit Railway (MTR), bus, train, and taxi.

We are excited about our return to Singapore for FinovateAsia and are looking forward to seeing you at the event. If you’ve got any questions about the conference, we’ve got the answers. Visit our FinovateAsia contact page and touch base with one of our conference representatives for more information.

https://finovate.com/onward-innovation-finovateasia-returns-to-singapore/

The Role of the Modern Day CFO

https://thefintechtimes.com/modern-day-cfo/

By Bert van der Zwan, CEO, Onguard

In recent years, as technology has evolved, so too have the roles and responsibilities of individuals working within the finance sector. Nowadays, automation technology is being used in financial processes within businesses and is giving finance professionals real-time access to data from which they can gain valuable insights. Consequently, the role of the finance professional and the CFO, in particular, is changing.

Bert van der Zwan

However, these developments have caused some concern about job security with research conducted on behalf of Onguard finding that over a quarter of CFOs believe their job won’t exist in its current form in ten years’ time. Fortunately, this is unlikely to be the case, and instead, we will see a continued evolution of the role. As CFOs will no longer need to spend prolonged periods of time on manual activities, such as chasing up late payments, they can begin to focus more closely on the bigger picture issues, as well as those accounts that are in greater need of their attention. CFOs will, therefore, be driven towards more strategic, value-adding roles. So, what will the role of the modern-day CFO look like?

The importance of gaining new skills

Across the business world, automation technology is now being adopted for routine administrative tasks which is reducing the amount of back-office work done by people. This is shifting humans towards more challenging roles, which requires them to develop new skills. With this in mind, it will be essential for CFOs to harness their analytical, communication and programming skills. Analytical skills will be especially useful as it will allow CFOs to interpret data collated within their credit management system and turn it into actionable insights. 

As part of these value-adding roles, CFOs can create new KPIs to ensure they are continuing to get the most of their operations and focus more on managing financial processes, rather than carrying them out. With less time spent performing the monotonous day-to-day tasks, CFOs will be able to look more closely at customisation and ensuring they understand and deliver each customer’s preferred communication channels and payment methods for their invoices, for example. This will allow the business to interact with customers in the way they prefer to increase the chances of invoices being paid on time and to strengthen the existing relationships.

“it will be essential for CFOs to harness their analytical, communication and programming skills.”

Deriving insights from big data 

The modern-day CFO will also be responsible for using big data to derive key insights which can be used to drive better commercial decisions and determine new strategies to cut costs. This can allow CFOs to make a substantial impact on the example, as shown by UPS using data to determine that it could significantly reduce costs if drivers took fewer left turns. This finding led the courier to save 38 million litres of fuel and the significant price tag attached to that. 

Further to this, CFOs could use big data for predictive analyses which would enable them to make connections which inform decision-making processes. This would help finance professionals to add strategic value by being proactive, rather than reactive, as they can use information from the past to predict the future. For example, predictive analysis may show that a certain customer has paid his invoices on average within 28 days for the past seven years, which means it is highly likely he will do the same when he receives the next invoice. The CFO can then use this information to decide how the finance team interacts with this customer, chasing for payment only after that time period has elapsed. 

“CFOs could use big data for predictive analyses which would enable them to make connections which inform decision-making processes.”

Encouraging company-wide collaboration 

The siloed nature of large companies often inhibits the efficiency of a CFO as it can mean they have a lack of visibility and aren’t always privy to important information. Additionally, if each department works in isolation, it means that the finance department won’t be as effective. CFOs can, therefore, help organisations to address the disconnect between sales and finance, for example, by encouraging the sharing of information between teams and helping each team to understand what the other does. After all, a sale isn’t a sale until payment has been made, so collaboration is needed to ensure that the sale really comes to fruition. As part of this responsibility, CFOs could spend more time collaborating with other departments within the company to ensure the organisation gets the most from all of its financial operations. 

An opportunity for CFOs 

The role of the CFO has certainly undergone significant changes in recent years, and this is only going to continue as technology develops at pace. Yet, this shouldn’t be a cause for concern. Instead, it’s vital the modern-day CFO makes the most of the technology available to them to automate some of the more monotonous financial processes and use it as an opportunity to develop new skill sets and add value to their organisation in new ways. 

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Stripe, eBay, Visa, Mastercard bail on Facebook's Libra

https://www.mobilepaymentstoday.com/news/stripe-ebay-visa-mastercard-bail-on-facebooks-libra/

(Updated at 12:48 p.m. Oct. 12 EDT with comments from Mastercard)

Stripe and eBay are bailing out of Facebook’s Libra cryptocurrency project, according to a report by CNBC. They join PayPal, which announced its exit from the project last week.

Governments have been increasingly scrutinizing Facebook’s Libra cryptocurrency, which has in turn led to many companies dropping support.

“We highly respect the vision of the Libra Association; however, eBay has made the decision to not move forward as a founding member. At this time, we are focused on rolling out eBay’s managed payments experience for our customers,” an eBay spokesperson said in the report.

Visa which had been the subject of speculation for weeks, confirmed that it will not join Libra under the current regulatory climate. 

“Visa has decided not to join the Libra Association at this time,” a spokesperson said via email. “We will continue to evaluate and our ultimate decision will be determined by a number of factors, including the Association’s ability to fulfill all requisite regulatory expectations.”

Visa continues to have an interest in participating in Libra, stating that it believes “well regulated blockchain-based networks could extend the value of secure digital payments” to additional people and places, particularly in emerging and developing markets. 

Mastercard has also decided it will not become a member of the Libra Association at this time, according to Mastercard spokesperson Seth Eisen. 

“We remain focused on our strategy and our own significant efforts to enable financial inclusion around the world,” Eisen said via email. “We believe there are potential benefits in such initiatives and will continue to monitor the Libra effort.”

Mark Zuckerberg, CEO of Facebook, is set to testify before the House Financial Services Committee about Libra on Oct. 23.

 


Topics: Blockchain, Cryptocurrency, Mobile Payments, Regulatory Issues

Companies: Facebook, Visa, eBay, Stripe


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https://www.mobilepaymentstoday.com/news/stripe-ebay-visa-mastercard-bail-on-facebooks-libra/

Insurers and Banks Face Battle to Overcome Security Fears Over Voice-Assisted Tech

https://thefintechtimes.com/insurers-and-banks/

Security concerns run the risk of preventing consumers from fully benefiting from voice-assisted technology, according to digital home insurer Policy Expert, with insurers and banks facing a particular battle to help customers overcome this fear.

As many as 70% of UK adults now have access to voice assistant technology through smartphones and smart home devices, with Amazon’s Alexa being the most popular (used by 26% of UK adults in our sample). Apple Siri (17%) and Google Assistant (17%) fall into joint second place.

Growing adoption of voice technology means many UK adults are or would be comfortable using voice assistants to help with a range of everyday tasks, from finding out the weather forecast (54%) and getting directions (47%) to selecting music or video content (41%) and writing an email or text (18%).

Almost three quarters (70%) of UK adults now have access to voice assistant technology through smartphones and smart home devices

However, while 11% would use voice assisted technology to shop online, only 7% would use this to check their bank account balance, 5% to make a bank transfer, 5% to take out an insurance policy and 4% to make an insurance claim.

This comes despite a growing number of established high street institutions and challenger brands in the banking sector integrating voice capabilities into their services.

Graph 1: Proportion of UK adults comfortable using voice assistants for various tasks

Security concerns prevent consumers from making full use of voice assistants

The main factor preventing UK adults from making more use of voice assistants is security concerns, with more than a third (37%) worrying their details won’t be secure. One in five (19%) are sceptical whether the technology is accurate or effective enough and 16% find the whole idea of speaking to voice assistants weird or creepy.

Fear of making a mistake (10%) and confusion around how the technology works (9%) are other common factors preventing wider adoption of voice assistants in daily life.

Adam Powell, Co-Founder and Chief Operating Officer of Policy Expert, commented: “With many UK households owning at least one device with a voice assistant, access to this technology is quickly becoming widespread. But consumers are holding back from getting the maximum benefit from voice assistants, and security concerns represent a significant barrier to wider adoption of this technology to help people manage their household finances.

less than one in ten would use a voice assistant to take out an insurance policy or manage their banking, with 37% not trusting their details will be secure

Financial services providers are increasingly introducing voice-assisted features and services to help customers manage money matters. While banks have led the way, we’re likely to see this trend gain traction in the insurance industry and adoption could quickly be accelerated if brands like Amazon make a play for a central role.

Our quick-quote API capabilities and microservices infrastructure mean Policy Expert’s technology platform is fully primed for the wider use of voice activation as soon as today’s aggregated insurance marketplace is ready for it. As well as making the customer journey quicker and easier, voice assistants can also help improve accessibility, such as for people with visual impairments.

However, as an industry, it’s crucial that we tackle security concerns and put people’s minds at rest otherwise this technological innovation is likely to go un-used. Consumers must feel safe and secure at all stages of the insurance process, with the right safeguards and data protection steps put in place.”  

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Cognitive Credit Launches Application to Transform Corporate Credit Analysis for Global Investors

https://thefintechtimes.com/cognitive-credit/

Cognitive Credit, an enterprise software company focused on the global corporate credit market, has launched its data-driven analytics application custom-designed for institutional credit investors. Corporate credit is one of the world’s largest investment markets, at over USD10 trillion, yet has seen limited technological innovation over the past decade compared to other asset classes.

Cognitive Credit offers institutional investors a modern and intuitive web-based application that delivers the most accurate fundamental data in the market and a suite of advanced features that enable more insightful and efficient analysis.

All fundamental data in the application is generated by Cognitive Credit’s proprietary machine reading technology. Web-hosted financial spreadsheet models provide years of annual and interim financial data, supplemented with derived credit metrics, forecasting functionality, data visualisation tools, text search capabilities, and auto-generated credit memos. Data is always a single click away from its source, ensuring that it is of the highest integrity and easily auditable.

By simplifying the time-consuming and expensive process of data management, credit investors can now prioritise more advanced analysis and respond to new information more quickly. Other features in the application support improved communication and collaboration across the entire investment team, and mobile accessibility means clients are now never separated from their most important information.

Developed by technology and finance experts and backed by a group of leading industry executives

To drive innovation in the industry, Cognitive Credit assembled its team two years ago by bringing together finance experts with backgrounds in accounting, market analysis, and asset management and technology experts coming from the fields of machine learning, document analysis, high frequency electronic markets, and cloud computing.

Robert Slater, CEO and Founder of Cognitive Credit said, “We are thrilled to launch our application to the institutional market today. Corporate credit investors have long been frustrated by the lack of technological innovation in their asset class. Over the years I’ve had countless conversations with credit professionals disappointed by poorly designed tools and frustrated with the inefficiency of manual, repetitive processes in their industry.

Cognitive Credit was established to empower credit investors to be more insightful and efficient through advanced technology and thoughtful product design. In developing this application, our team has received ongoing feedback from a wide range of market participants, and this tremendous support has resulted in a product that we see as a game changer for global credit investors.”

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How TD Canada Trust is personalizing its in-app experience

https://bankinnovation.net/allposts/biz-lines/retail/how-td-canada-trust-is-personalizing-its-in-app-experience/

As customers navigate through TD Canada Trust’s digital banking platform, the bank is looking to data analytics tools to make customer experiences more relevant. With reams of data on customer behavior, TD turned to Canadian tech company Flybits five years ago, and it’s looking to grow its capabilities to personalize digital banking experiences.

Based on customer attributes like spending patterns and other banking transactions, TD is able to modify the customer journey for each individual user, according to Vipul Lalka, vice president of TD’s payments platform and capabilities.  “We leverage Flybits to digitally modify the experience for our customers in real time,” he explained, adding that TD is careful to determine the “right moment” for the customer to receive a message from the institution.

TD Canada app

For example, if a customer is pre-authorized to upgrade their credit card limits, the app is able to send them push notifications notifying them of their eligibility to receive the offer. It’s also able to send customers informational messages and advice about products that may be relevant to their transactions and browsing behaviors.

See also: TD Focuses on Voice, Mobile to Drive Bank Transformation

According to Lalka, the advantage of using Flybits’ technology is it allows the bank to safeguard the trust of the consumer. Flybits doesn’t hold customer data, but its platform is able to make sense of it to personalize digital interactions. Meanwhile, all personal data stays at the bank. Instead, Flybits sees a list of randomized numbers that correspond to customers or customer groups.

“We completely distribute the data and, instead of moving the data, we ask questions from the data,” said Hossein Rahnama, CEO of Flybits. “We have done a lot of work, especially on the data layer and ad portfolio, to make sure that we can [enable] very high-impact personalization when we have no idea who the customer is.”

While TD has made advances in its efforts to tailor experiences for customers, bringing all of its data together from various platforms is an ongoing challenge, Lalka noted. The company’s work with Flybits and recently acquired AI company Layer 6 are helping the bank with its data management efforts. “The challenge is that we have a data ecosystem [that] is all over the place,” he said. “So there’s a huge exercise trying to aggregate that data.”

Another challenge, Lalka explained, is creating contextual interactions that aren’t considered “creepy” or intrusive. “We don’t want to be big brother,” he emphasized. “Our objective is how do we get more engaged with the customer [in a way] that is meaningful but still maintaining what we are known for, which is a trusted brand.” 

Tiffani Montez, senior analyst at Aite Group, noted that, by working with Flybits, large banks like TD are moving away from a “mass market” approach to customer engagement and reaching customers with messages and offers that are relevant to their situations. Indeed, banks like TD are no longer treating their customers as if they’re one out of a million customers, but as individuals who need tailored offers and advice. “Trust is the endgame of creating value,” she added.

Bank Innovation Build, on Nov. 6-7 in Atlanta, helps attendees understand how to “do” innovation better. It is designed to offer best practices, to guide the innovation professional to better results. Register here.

https://bankinnovation.net/allposts/biz-lines/retail/how-td-canada-trust-is-personalizing-its-in-app-experience/

Stripe, eBay bail on Facebook's Libra

https://www.mobilepaymentstoday.com/news/stripe-ebay-bail-on-facebooks-libra/

(Updates at 4:40 p.m. EDT with comments from Visa)

Stripe and eBay are bailing out of Facebook’s Libra cryptocurrency project, according to a report by CNBC. They join PayPal, which announced its exit from the project last week.

Governments have been increasingly scrutinizing Facebook’s Libra cryptocurrency, which has in turn led to many companies dropping support.

“We highly respect the vision of the Libra Association; however, eBay has made the decision to not move forward as a founding member. At this time, we are focused on rolling out eBay’s managed payments experience for our customers,” an eBay spokesperson said in the report.

Visa which had been the subject of speculation for weeks, confirmed that it will not join Libra under the current regulatory climate. 

“Visa has decided not to join the Libra Association at this time,” a spokesperson said via email. “We will continue to evaluate and our ultimate decision will be determined by a number of factors, including the Association’s ability to fulfill all requisite regulatory expectations.”

Visa continues to have an interest in participating in Libra, stating that it believes “well regulated blockchain-based networks could extend the value of secure digital payments” to additional people and places, particularly in emerging and developing markets. 

Mark Zuckerberg, CEO of Facebook, is set to testify before the House Financial Services Committee about Libra on Oct. 23.

 


Topics: Blockchain, Cryptocurrency, Mobile Payments, Regulatory Issues

Companies: Facebook, Visa, eBay, Stripe


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Upgrade bridges the gap between credit cards, installment loans

https://bankinnovation.net/allposts/biz-lines/lending/upgrade-bridges-the-gap-between-credit-cards-installment-loans/

Banks and digital lenders may be throwing their weight behind point-of-sale loans instead of credit cards, but personal loan company Upgrade is launching a product that straddles both product categories.

The Upgrade card and app

The Upgrade card, launched Thursday, functions like a credit card at checkout, but purchases are turned into payment plans that can last one, two, three or five years. Customer eligibility for the card is based on data beyond traditional credit bureau information, including customers’ cash flow and expenses. Instead of revolving credit, Upgrade turns customers’ monthly balances into installment loans.

“If you only make the minimum payment on a credit card, it’s going to take you 25 years to pay it off,” said Renaud Laplanche, co-founder and CEO of Upgrade and the co-founder of Lending Club. “Credit cards don’t encourage that responsible behavior of paying down your balance every month. The personal loan does.”

The Upgrade card offers credit limits of between $500 and $50,000 depending on assessed risk. According to Laplanche, terms are more financially healthy for customers than traditional credit cards.  The installment loans start at 6.49% APR, but the rates can go as high as 29.99%. The loans can help build customers’ credit scores if they pay them off in time, according to the company. Like credit cards, however, Upgrade charges late fees, which Laplanche said vary by state. 

With the Upgrade card, the company hopes to improve its underwriting and provide better loan terms with a clearer line of sight into customers’ spending data. The loans are provided by Cross River Bank, while Sutton Bank is the card issuer.

See also: Lending Startup Upgrade Opens Personal Credit Line, Shares Plan for Mobile App

Upgrade launched more than two years ago, and the company has originated more than $2 billion in personal loans. In addition to revenue from interest and late fees, Upgrade makes money from its marketplace, which sells consolidated loans back to banks.

Leslie Parrish, senior analyst at Aite Group, said the Upgrade card won’t be as helpful to consumers who typically pay off their credit card balances each month. “While converting a balance to an installment loan would be more expensive for those borrowers who might otherwise pay off their card each month, it should result in cost savings for those tempted to otherwise make only the minimum monthly payment,” she explained.

Bank Innovation Build, on Nov. 6-7 in Atlanta, helps attendees understand how to “do” innovation better. It is designed to offer best practices, to guide the innovation professional to better results. Register here.

https://bankinnovation.net/allposts/biz-lines/lending/upgrade-bridges-the-gap-between-credit-cards-installment-loans/

With $2b valuation, Marqeta focuses marketing strategy on startups

https://bankinnovation.net/allposts/biz-lines/payments/with-2b-valuation-marqeta-focuses-marketing-strategy-on-startups/

A company that operates quietly in the background of popular financial apps and platforms is taking steps to become more visible. While large consumer-facing fintech companies like Square, Klarna, Affirm and others tout speed and efficiency of their user experiences, card issuing and processing startup Marqeta‘s technology supports their payment capabilities, with its APIs allowing …Read More

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https://bankinnovation.net/allposts/biz-lines/payments/with-2b-valuation-marqeta-focuses-marketing-strategy-on-startups/

Coinbase Pro Goes Mobile

https://finovate.com/coinbase-pro-goes-mobile/

There have been mobile apps allowing investors to trade stocks on-the-go for a decade now, but mobile options for crypto traders have been limited. That is, up until today.

Digital currency wallet and crypto management platform Coinbase launched the Coinbase Pro mobile app on iOS today. The company notes it will ship on Android “soon.”

The new app offers much of the same functionality as the desktop platform and allows traders to quickly see prices, check their portfolios, and place orders. Similar to the desktop version, the app features analytical tools such as real-time candles, depth charts, order books, and advanced order types. And, just like the desktop version, orders made via the mobile version are subject to the same fees.

Coinbase Pro launched in May of last year to serve Coinbase’s active crypto traders. Coinbase Pro fees range from 0.50% to 0.0% on trades made in a 30-day period. Similar to Coinbase Pro but for institutional clients, Coinbase offers Coinbase Prime.

After its most recent funding round of $300 million, Coinbase’s total funding hit $525 million and its valuation rose to $800 million. Coinbase demoed InstantExchange at FinovateSpring 2014.

https://finovate.com/coinbase-pro-goes-mobile/

Enterpay raises $1.1M for international expansion, enters deal with German bank

https://www.mobilepaymentstoday.com/news/enterpay-raises-11m-for-international-expansion-enters-deal-with-german-bank/

Enterpay, a Helsinki-based fintech, said it raised $1.1 million (one million euros) to expand is automated invoicing technology internationally, and entered an agreement with German bank Volksbanken Raiffeisenbanken. 

Enterpay said the agreement specifically involves automating invoices for the B2B ecommerce market with Volksbanken unit VR Payment, a specialist in cashless payments for the German market. 

“Enterpay is at the core of the exponentially growing B2B segment, and the partnership solidifies our potential,” Jarkko Anttiroiko, CEO at Enterpay, said in a company release. “We are excited to bring our solution to the German merchants and make life easier for every stakeholder in the value chain.”

Enterpay already has been working with Collector Bank and Arvato in Finland. The company did not disclose the names of the specific funders, but said the investment came from national as well as Nordic investors. 


Topics: Mobile Banking, Region: EMEA, Technology Providers


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BBVA's Strickland: customers want similar experiences in desktop, mobile banking

https://www.mobilepaymentstoday.com/videos/bbvas-strickland-says-customers-want-similar-experiences-in-desktop-mobile-banking/

Bank Customer Experience Summit

| by David Jones

Meeting customer expectations is a big challenge for the banking industry historically, and in the age of ever evolving technology, the task can become even more serious as digital capabilities are a constantly moving target. 

Gil Strickland, vice president, product management at BBVA USA, discussed what he sees as the main challenge of meeting customer expectations in the digital banking market. Strickland, who oversees the bank’s Net Cash product, an online treasury management portal, says what he aims for is how much can a customer accomplish in 30 seconds when working on the mobile application. 

He says that customers really don’t differentiate much between online and mobile banking in their expectations, but that they really just want similar capabilities and experiences no matter what digital tool they are using.

“They want to be able to do all the features they need to do, beginning to end, no matter if its at their desk, on their desktop or laptop, on the online experience, but also be able to do that same experience within the mobile application,” he said. So, I don’t think users really see a different channel where banks have online experiences or mobile experiences.” 


Topics: Bank Customer Experience Summit, Mobile Banking

Companies: Hughes, BBVA



David Jones

David Jones is a veteran business and technology journalist, with three decades of experience writing about business travel, real estate and technology.

Since 2015 he covered a range of technology stories for the ECT News Network, which includes the E-Commerce Times, TechNewsWorld, LinuxInsider and CRM Buyer, writing about cybersecurity, artificial intelligence, machine learning, open source computing and privacy issues among others,. He recently covered FinTech issues for PYMNTS.com.

He worked as a staff writer for Bloomberg Business News and an online reporter for Crain’s New York Business. He has written for numerous media organizations, including Reuters, The New York Times, The Real Deal, Continental, City Limits and The Nation.

He was previously awarded the George Washington Williams Fellowship for Journalists of Color by the Independent Press Association.


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Weekly Wrap: More fintechs eye core banking products

https://bankinnovation.net/allposts/biz-lines/lending/weekly-wrap-more-fintechs-eye-core-banking-products/

Welcome to the latest episode of our weekly wrap video series, for the week ending Friday, October 11, 2019. In this episode, Suman Bhattacharyya, deputy editor, discusses the following news developments: Why a trio of financial startups have decided to expand into savings and/or checking accounts; and How point of sale lenders like Affirm are …Read More

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Technavio sees demand for OTT content driving direct carrier billing

https://www.mobilepaymentstoday.com/news/technavio-sees-demand-for-ott-content-driving-direct-carrier-billing/

Technavio sees demand for OTT content driving direct carrier billing

Technavio issued a forecast claiming the direct carrier billing market will grow at a compound annual growth rate of 12.6% between now and 2023 to $20.1 billion, amid rising demand for OTT content and the high use of mobile phones and slow credit card penetration in the developing world. 

The report cited the high rate of mobile phone ownership in the Middle East and Africa, which has led to increased need for digital content. Direct carrier billing allows subscription purchases that are paid directly through the mobile carrier, as many consumers in these markets do not have credit cards, according to Technavio. 

The report also shows direct carrier billing growing at 14% in the U.S. between now and 2023 to a total of $1.82 billion. 

Cover image courtesy of Technavio.


Topics: Direct Carrier Billing, Mobile Payments


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