Stock trading app Invstr adds mobile classes to attract more clients

https://bankinnovation.net/allposts/focus/prod-des/stock-trading-app-invstr-adds-mobile-classes-to-attract-more-clients/

Stock trading app Invstr is rolling out a series of educational tools to make investing accessible to a wider audience.

The mobile-based training program is called Invstr Academy, which launched last week. It’s a move by the company to expand beyond its learning-by-doing model where users can invest with fake cash, and it beefs up Invstr’s subscription offering. Invstr charges subscribers $3.99 per month, and the first two learning modules will be available to free users.

Invstr Academy

“Even if brokerage is free on some of our competitors’ apps, most people can’t enjoy it because they don’t know what to do,” said Kerim Derhalli, CEO of Invstr. “If you put free champagne and caviar at the North Pole, nobody is going to enjoy it because people can’t get to the North Pole.” 

Invstr is aiming for users who want to invest but feel too intimidated by the complexity of jargon and rules. Compared to do-it-yourself models pursued by some competitors, Ivstr feels its educational aspects make it a more approachable option.

As Invstr rolls out its mobile training modules, it’s not giving up on its gamified approach. According to Derhalli, that’s because some customers prefer hands-on learning like Invstr’s Fantasy Finance option where users can invest with fake cash. 

Invstr Academy features 85 lessons spread over 10 modules, and the lessons focus on topics like financial markets, main asset classes and some of the big names in investing. At the end of each module, users take a quiz to unlock the following module. When users have completed all the modules, they are prompted through a link to start investing for real through Invstr. 

Invstr Academy’s glossary

Invstr Academy builds on the app’s Fantasy Finance option, which allows users to invest $1 million in fake money. The investments fluctuate with the real markets, so users learn how to make investment decisions without any real risk. Invstr also features a social aspect, as users can follow one another to see what stocks friends have been buying and selling.

See also: Game on: Investment app Invstr uses Fantasy Finance to build young user base

Since Invstr was founded in 2013, 500,000 users have joined. The premium option also features double the number of trades and technical analysis charts. The company markets through social media channels, and the company plans to begin a referral program that rewards both the inviter and the invitee. Derhalli himself has more than 30 years of banking experience at big names like JPMorgan Chase, Lehman Brothers, Merrill Lynch and Deutsche Bank. The London-based company has about 25 employees.

Despite the allure of the training programs, Invstr faces competition from other investing apps, including Stash, Acorns and Robinhood, which have also added educational elements to their product offerings. Vijay Raghavan, senior analyst of digital business strategy at Forrester Research, said the mixture of gamification, online lessons and social networking is Invstr’s play to reach the same younger demographic targeted by apps like Robinhood.

The real value of Invstr, he said, might show during a recession, when customers require additional support. “Investing by nature is complicated, and I expect interest in platforms like Invstr to increase during the next economic downturn after more first-time investors suffer economic losses because they didn’t really know what they were doing,” he said.

Bank Innovation Ignite, which will take place on March 2-3 in Seattle, is a must-attend industry event for professionals overseeing financial technologies, product experiences and services. This is an exclusive, invitation-only event for executives eager to learn about the latest innovations. Request your invitation.

https://bankinnovation.net/allposts/focus/prod-des/stock-trading-app-invstr-adds-mobile-classes-to-attract-more-clients/

Plaid expands to France, Ireland and Spain

https://bankinnovation.net/allposts/biz-lines/payments/plaid-expands-to-france-ireland-and-spain/

This week, data aggregator Plaid confirmed its expansion to France, Ireland and Spain. Plaid will work with more than 80% of the consumer accounts in each country, a major step for the San Francisco-based company with the likes of BNP Paribas, Bank of Ireland, BBVA and Santander onboarding the technology. Keith Grose, head of Plaid’s …Read More

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Stash doles out 5 million ‘Stock-Back’ rewards

https://bankinnovation.net/allposts/biz-lines/payments/in-five-months-stash-doles-out-5-million-stock-back-rewards/

As cash back rewards become expected offerings among banks and financial platform companies, Stash is offering customers fractional shares of stocks as purchase rewards when they use the Stash debit card. The subscription-based investing, banking and financial planning platform company this week confirmed that it’s offered 5 million stock-back rewards since the program’s inception five months ago.

CEO and co-founder Brandon Krieg said Stock-Back rewards connect personal finance management, education and investing.

“We started thinking about the sense of discovery that everyday spending brings,” said Krieg. “When you go to to Chipotle, maybe you buy something there every day —  you love the brand but you’re not a shareholder.”

Customers are eligible for Stock-Back rewards every time they make a purchase, and the size of the reward varies by subscription tier. If the purchase is made at a public company, customers receive a fractional share of the brand’s stock. For other purchases, customers can select default investment options as reward currency.

According to Krieg, the company doesn’t generate revenue from the Stock-Back rewards offerings. The are funded through interchange revenue. Stash makes money monthly from subscription fees (beginner, growth and Stash+ tiers cost $1, $3 and $9 per month, respectively) along with interchange revenue.

See also: The ‘Netflix of finance’: How MoneyLion is evolving its subscription offering

Ron Shevlin, research director at Cornerstone Advisors, wrote in March that Stock-Back rewards could appeal to a segment of customers, but he noted that some may prefer the tangibility of traditional cash back rewards. But Stash is also moving in that direction. The company this week rolled out a 10% cash back rewards offer for purchases made on booking.com this week, and according to Krieg, other cash back partnerships with brands are on the horizon.

Founded in 2015, Stash, which began as an investment platform, has built out its ecosystem of products. The company offers retirement savings, custodial accounts and insurance products through partners. Since 2018, it’s been offering checking accounts in partnership with Green Dot Bank.

Krieg acknowledged the comparison with other digital-only challenger banks, but stressed that banking was a means to an end rather the core value proposition of Stash. He also noted that the personal finance advisory capabilities of the platform work best when information from the various financial products come together. The objectives are for customers to get personalized advice based on their behavior and to automate as many financial management tasks as possible.

“For me, banking isn’t the most important thing — the customer outcome is,” said Krieg. “One of the reasons we got into banking is that we wanted to be the financial home [for customers]. When we see the whole picture, we can give better advice. ”

Stash, which reports that it has 4 million customers, has raised $186 million in equity funding to date.

Bank Innovation Ignite, which will take place March 2-3 in Seattle, explores emerging technologies in banking. Attendees will gain a firsthand look at new products and services from both legacy and upstart perspectives. Request your invitation

https://bankinnovation.net/allposts/biz-lines/payments/in-five-months-stash-doles-out-5-million-stock-back-rewards/

Nigerian Fintechs Near $400m Week; Ant Financial Eyes License in Singapore

https://finovate.com/nigerian-fintechs-near-400m-week-ant-financial-eyes-license-in-singapore/

The nearly-$400 million poured into fintech companies in Nigeria alone this week is being remarked upon as a testament to the growing investor interest in sub-Saharan Africa. The three recipients of the new capital in recent days are OPay ($120 million), Interswitch ($200 million), and PalmPay ($40 million). The investors include Sequoia Capital China and SoftBank Ventures Asia, as well as China’s Transsion and Visa.

For comparison, African fintechs raised $357 million in all of 2018, according to a 2019 report from the GSM Association, The Mobile Economy, Sub-Saharan Africa. Quoted in the Financial Times on the week’s funding news, Guaranty Trust Bank chief executive Segun Agbaje credited the payments industry for the surge in investment, calling the growth in the sector “probably like no other on the continent.”

Finovate made its African debut last year in Cape Town, South Africa. For an in-depth look at recent trends in African fintech, check out Jonathan Gregson’s “Africa’s Fintech Makeover.”

China’s impact on international fintech is also evident in the news that Ant Financial is considering applying for a virtual banking license in Singapore. Successfully securing such a license would enable Ant Financial to compete against Chinese incumbents like DBS Group Holdings and Oversea-Chinese Banking Corp. Ant Financial secured a license to operate a digital wallet in Hong Kong last year.

Latin America and the Caribbean

  • Brazil’s digital bank Neon raises $94 million in round led by General Atlantic and Brazil Banco Votorantim.
  • Biz Latin Hub’s Craig Dempsey makes the case for Mexico as the fintech sector to watch in 2020.
  • Mexican non-bank wallet service Todito Cash inks partnerships with four financial payment solutions companies.

Asia-Pacific

  • Ant Financial may be one the hunt for a Singaporean virtual banking license, reports Bloomberg, following the online finance titan’s recent scoring of a license to operate a digital wallet in Hong Kong.
  • InstaReM rebrands as Nium, announces cross border payments partnership with Cambodian banking group, PhillipBank.
  • Indonesia’s biggest banking group, Bank Mandiri will use the Avaloq’s Banking Suite to run its wealth management division, which has $14 billion in assets under management.

Sub-Saharan Africa

  • Nigeria’s OPay raises $120 million in new funding. The investment adds to the $50 million the mobile payments service raised in June.
  • Asilimia, a Kenya-based fintech that helps SMEs access more efficient mobile payment solutions, secures $350,000 in funding.
  • South African digital commerce fintech Vectra wins Seedstars Cape Town competition.

Central and Eastern Europe

  • Revolut reaches 250,000 users in Hungary and reports an 8x gain in monthly transaction volume since the beginning of the year.
  • Latvia-based, P2P lending platform TWINO surpasses €1 billion euros in originated loans.
  • Tradeshift moves Bucharest team to larger office in Tower Center, announces plans to hire more staff next year.

Middle East and Northern Africa

  • A partnership between BPC and WeNet will bring a new instant payments system to Yemen.
  • ZagTrader wins full certification for its market making technology from Bourse Kuwait.
  • In partnership with the Dubai Financial Services Authority, Wethaq pilots Sukuk issuance on its securities market infrastructure.

Central and Southern Asia

  • Perfios, a fintech software company based in Bengaluru, raises $50 million from Warburg Pincus and Bessemer Venture Partners.
  • Pakistan’s Askari Bank selects Finastra’s trade finance solution.
  • CredoLabNeener Analytics, and Vymo win finalist spots in the India FinTech Forum’s IFTA 2019 awards.

https://finovate.com/nigerian-fintechs-near-400m-week-ant-financial-eyes-license-in-singapore/

Wells Fargo's payments head Modjtabai to retire, names Fischer to lead cards

https://www.mobilepaymentstoday.com/news/wells-fargos-payments-head-modjtabai-to-retire-names-fishcher-to-lead-cards/

Wells Fargo's payments head Modjtabai to retire, names Fischer to lead cards

Wells Fargo & Co. announced a couple of leadership changes in its payments and card business, as Avid Modjtabai will retire as head of the bank’s payments, virtual solutions and innovations group at the end of March 2020.

Modjtabai, a 26-year veteran of Wells Fargo, led the formation of the bank’s PVSI Group in 2016, which brought together its payments, digitization and innovation businesses. During the last three years, her group oversaw the launch of the bank’s control tower, overdraft rewind and the Wells Fargo Propel Card.

“I have been incredibly fortunate to have had so many exciting and fulfilling career opportunities and to have worked with so many extraordinary people in my 26 years of working with Wells Fargo,” Modjtabai said in a company release. “I am pleased that, as I complete my plan for retirement, I will be leaving a company that has such bright prospects and renewed momentum.”

Charlie Scharf, president and CEO at Wells Fargo, thanked her for her service, saying she served as a “catalyst for digitizing and transforming the company.” 

The bank also said that Ray Fischer, senior advisor to the Aries Financial Group, will join the bank to lead cards, retail and merchant services. He previously was vice chairman and administrative officer at the Kessler Group and before that spent 14 years at JPMorgan Chase, where he was CFO of card, merchants services and auto finance. 


 


Topics: Mobile Banking

Companies: Wells Fargo & Co


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Weekly Wrap: Real-time payments expand, as big tech adds financial offerings

https://bankinnovation.net/allposts/biz-lines/payments/weekly-wrap-real-time-payments-expand-as-big-tech-adds-financial-offerings/

Welcome to the latest episode of our weekly wrap video series, for the week ending Friday, November 22, 2019. In this episode, Suman Bhattacharyya, deputy editor, and Angely Mercado, associate editor, discuss the following news developments: The expansion of The Clearing House’s RTP Network; How Facebook Pay can advance its e-commerce strategy; and How Green …Read More

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https://bankinnovation.net/allposts/biz-lines/payments/weekly-wrap-real-time-payments-expand-as-big-tech-adds-financial-offerings/

Paidy offers Buy Now, Pay Later financing for Amazon purchases in Japan

https://www.mobilepaymentstoday.com/news/paidy-offers-buy-now-pay-later-financing-for-amazon-purchases-in-japan/

Paidy offers Buy Now, Pay Later financing for Amazon purchases in Japan

Paidy Inc., a Japan-based firm that offers installment financing for e-commerce transactions, announced an agreement to its Buy Now, Pay Later service on Amazon purchases in that market. 

Customers using Amazon.co.jp will now have the option of using the extended payments option on purchases made on the Japanese site. 

“We are deeply honored to be working with Amazon to offer a new and unique consumer experience to Amazon customers,” Russell Cummer, founder and executive chairman of Paidy, said in a company release. “We see tremendous potential to work with Amazon and other partners on future innovation, continuing to improve consumer experiences and the payments landscape in Japan.”

Customers need to enter their name, email address and mobile number on the Amazon payment screen, according to Paidy. Amazon customers using Paidy can pay the following month at convenience stores, using bank transfer or direct debit, and there is no need to enter credit card information. 

Billing information is sent to the customer via email or SMS and payment is due by the 10th day of the following month. 

The Amazon announcement comes just three weeks after the company raised $143 million in funding, led by PayPal Ventures.

Cover image: Paidy.


Topics: Mobile Apps, Retail, Transaction Processing

Companies: Amazon


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UK-based gold currency app Glint Pay returns after new investors found

https://www.mobilepaymentstoday.com/news/uk-based-gold-currency-app-glint-pay-returns-after-new-investors-found/

Glint Pay, the U.K.-based fintech that allows users to trade gold currency through a mobile app, will resume business next week after it found 5.7 million pounds ($7.3 million) from new investors and emerged from administration, which is the British equivalent of bankruptcy. 

The firm, which expanded its business to the U.S. in July, entered administration in late September after a dispute with a secured creditor. 

“I would like to thank existing and new shareholders who have backed the company with a fresh injection of financing,” founder and CE0 Jason Cozen said in a company statement. “I understand the frustration of our customers and can only apologize for the inconvenience caused by the dirsruption, which led to accounts being suspended.”

The company said that client funds remain segregated at a tier 1 bank, and physical gold belonging to clients is secured at an accredited Brink’s vault in Switzerland. Lloyds Bank had frozen client accounts as a precaution after the administration filing. 

The Financial Conduct Authority, a U.K. regulatory body, announced earlier this week that the firm had come out of administration and the joint administrators told Mobile Payments Today in a statement that the company would be back up and running by Monday, Nov. 25. 

“We would like to thank Glint’s clients for their patience during what we appreciate must have been a frustrating time,” former Joint Administrator Jason Baker said in an emailed statement. “We have worked closely with the Glint management team and various stakeholders throughout the administration process to ensure that every measure was taken to protect client funds and enable clients to access accounts at the earliest opportunity.”

 

 


Topics: Mobile Apps, Mobile Payments, Region: EMEA, Regulatory Issues


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The Essential Guide to Agile

https://www.mobilepaymentstoday.com/whitepapers/the-essential-guide-to-agile/
The Essential Guide to AgilePublication Type:
White Paper

Published / Updated:

The speed and adaptability of Agile development is no longer a competitive advantage. Per the 12th Annual State of Agile Report, 97% of companies practice Agile on some level. In spite of this positive trend, running an effective Agile development process remains very rare. Only 16% of organizations believe they exhibit a high level of Agile maturity.

https://www.mobilepaymentstoday.com/whitepapers/the-essential-guide-to-agile/

Your Key to Combating Bias in AI

https://www.mobilepaymentstoday.com/whitepapers/your-key-to-combating-bias-in-ai/
Your Key to Combating Bias in AIPublication Type:
White Paper

Published / Updated:

There is clearly a lot to gain from AI, but it’s incredibly difficult to achieve AI maturity. It requires immense amounts of data and continual training of the algorithm. While you can manage this on your own, there are many issues that commonly arise during the process. Most common, and potentially the most dangerous, is the bias of your data. If you plan to excel with AI, combating this bias is Priority No. 1.

https://www.mobilepaymentstoday.com/whitepapers/your-key-to-combating-bias-in-ai/

Mobile Payments, More than Just a New Way to Pay

https://www.mobilepaymentstoday.com/whitepapers/mobile-payments-more-than-just-a-new-way-to-pay/
Mobile Payments, More than Just a New Way to PayPublication Type:
White Paper

Published / Updated:

In order to successfully implement mobile payments as a merchant, it is critical to understand all of the complexities that mobile payments create for a business, as well as how to mitigate them.

https://www.mobilepaymentstoday.com/whitepapers/mobile-payments-more-than-just-a-new-way-to-pay/

Balancing payment innovation and trust

https://www.mobilepaymentstoday.com/blogs/balancing-payment-innovation-and-trust/

Balancing payment innovation and trust

Michael Jabbara, senior director, global risk, Visa 

Sixty years ago, the idea that a plastic card was the future of payments would have been perceived quite skeptically, but eventually it became a standard way to pay. Today, there is once again skepticism about the plastic card but for entirely different reasons. As the world shifts to a digital-first mindset, some experts predict the industry will outgrow the plastic card. Regardless of the form of payment, a foundation based on security and enhanced customer trust needs to be established. A recent survey from Forrester Consulting commissioned by Visa confirms that as businesses respond to this digital shift, they need to balance payment innovation with responsible security.

The near-universal adoption of mobile technology and internet connectivity have significantly reshaped consumers’ purchasing behavior and expectations. Companies in the global payments ecosystem (merchants, banks, and fintechs) recognize that payments are a core component of the digital experience and are consequently transforming their operational models to enable digital payments with dynamic security when the card is present at the point of sale. In order to stay relevant in the rapidly changing payment landscape and to enable the future of payments from connected devices of all types, innovation and investment across strategic security initiatives is required. So what is the current status of the North American market and how are firms in the region preparing for a fast-approaching future state?

  • Digitization of payments will accelerate with 62% of surveyed firms in North America expecting consumer use to increase within the next 2 years. As Internet of Things (IoT) expands the consumers’ collection of networked devices beyond the smartphone, they will likely want their connected devices to make seamless, secure payments across multiple merchant channels and payment use cases. This will further accelerate the shift of purchases away from cash and card to stored, digitized payment credentials. 
  • The shift to digital presents complex security challenges. More than half (59%) of respondents believe new payment technologies make their firms more susceptible to fraud. New opportunities for convenience and speed also open up new avenues for criminals to exploit. Malicious actors follow the money and as payment volumes become digitized, criminals will look for vulnerabilities in payment systems, fraud prevention tools, and business logic to exploit.
  • Fraud management capabilities need to evolve to keep pace and realize the digital opportunity. With 64% of North America firms reporting the use of usernames and passwords as their main capability within their payment risk management suite, there is much room for improvement. It is well documented that this form of authentication is insecure. As payments become digital and more sophisticated, fraud management capabilities need to modernize and be more sophisticated to keep pace. And firms that can manage these challenges believe the opportunity is worthwhile, as 71% of respondents believe the benefits of new payment technologies outweigh the risks. 
  • To do so, North American firms are taking a holistic approach to remain on the forefront of payment security with 83% of firms confirming they are investing in hiring talent specializing in fraud/security, 80% investing in new fraud management tools (e.g. biometrics, tokenization, and AI/ML), and 76% leveraging industry standards (e.g. EMVCo’s 3DS protocol) to innovate securely at scale. This is critical since payment security requires a multilayered approach. It typically includes investments in intelligence and technology by using talent and technology to prevent, detect and help decrease threats; adopting governance processes that proactively support and manage key regulatory and risk governance matters; and empowering payment ecosystem stakeholders with tools, resources and control so their customers can make better decisions to manage risk. 
  • Lastly, organizations know that payment security is central to the consumer experience with 54% of North America firms hoping to achieve higher customer satisfaction through improving the security of new payment technologies and 47% use higher customer satisfaction as the measure of success for their fraud detection capabilities. Payment security and consumer experience need to be balanced with each other in order for digital payment growth to continue. 

We are already seeing just how much, and how quickly, technological advancements are affecting payments today. The imperative is not just keeping pace with this technological change, but also being able to manage the risks associated with the change itself to allow digital innovation to scale. The success of an organization in this environment will be dependent on how it aligns its resources to deliver a seamless, secure payment experience to customers in the digital age. 

Cover image: iStock


Topics: Card Brands, Mobile Payments, Security, Trends / Statistics


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Church's Chicken probes data security breach at company-owned sites

https://www.mobilepaymentstoday.com/news/churchs-chicken-probes-data-security-breach-at-company-owned-sites/

Church's Chicken probes data security breach at company-owned sites

Church’s Chicken said it is investigating a possible data breach involving credit and debit card information at some of its company owned locations in the U.S., where it operates quick service restaurants in 11 states. 

The company said an unauthorized third party may have accessed its payment processing systems at some of its 165 restaurants in the U.S., and it has notified federal authorities, credit reporting agencies and retained a cybersecurity forensics firm to probe the incident. The company security update page says the incident took place in 2019 and involved payment card numbers, names and dates. A list of locations possibly affected by the breach is on the site.

“Our company has retained a leading cybersecurity firm to help us determine exactly what happened and what more we can do moving forward to keep our customer’s data secure,” the company said in a statement. “We are also cooperating with federal law enforcement and have notified the payment card networks and credit reporting agencies to mitigate any potential harm to our customers.”

Church’s operates more than 1,500 locations in 25 countries worldwide, however, the incident only impacted some of its 165 company owned locations in the U.S. The company owns restaurants in Alabama, Arkansas, Florida, Georgia, Illinois, Louisiana, Mississippi, Missouri, South Carolina, Tennessee and Texas. 

A spokesperson said that customer payment card data impacted was only at point-of-sale or drive thru locations and not online or on apps. The company website said that orders through third-party delivery apps are run through a separate system and are not impacted. 

Cover image: iStock.


Topics: Card Brands, Mobile Payments, Security

Companies: Church’s Chicken


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Tyro Payments Preps for IPO

https://finovate.com/tyro-payments-preps-for-ipo/

Australian paytech Tyro Payments is vying to float on the Australian Securities Exchange (ASX) in an initial public offering (IPO) which is projected to raise up to $173.23 million (AUD 252.7 million), reports Ruby Hinchliffe of Fintech Futures (Finovate’s sister publication).

The Sydney Morning Herald reported that the 2003-founded firm, which said it’s Australia’s fifth-largest payments provider, is pursuing a $1 billion valuation too.

Targeting small and medium-sized businesses, Tyro offers an electronic funds transfer point of sale (EFTPOS) service, as well delivering online payments, business bank accounts and business loans.

The plan to float on the ASX comes after six listings on it were aborted last month, suggesting Australia’s IPO market is not easy to break into. Reuters puts this down to investors demanding lower prices to protect themselves against the possibility of post-float losses.

With a price range of $1.70 to $1.87 per share, the paytech said its focus still “remains firmly on challenging the status quo” for its merchants.

Despite net losses of $18.6 million in the last fiscal year, existing investors, including Tiger Global, TDM Growth Partners, Telstra’s CEO David Thodey and Australian billionaire, Mike Cannon-Brookes, will wait until Tyro’s 2020 financial reports before selling any shares.

Thodey, who is also Tyro’s chairman, said he’s delighted to be able to invite new shareholders. “We [can] build upon our solid foundation to pursue an exciting growth strategy,” he added in a statement.

Tyro Payments demonstrated its Smart Growth Funding financing solution at FinovateSpring 2017. The offering is the first lending solution released by an Australian challenger bank. Tyro provides integrated payment, deposit, and unsecured working capital solutions to SMEs, and partners with more than 200 point of sale providers and cloud-based accounting platform such as fellow Finovate alum Xero.

https://finovate.com/tyro-payments-preps-for-ipo/

Thai bank targets $1 billion spinoff among Its fintech units

https://bankinnovation.net/allposts/biz-lines/payments/thai-bank-targets-1-billion-spinoff-among-its-fintech-units/

Siam Commercial Bank Pcl plans to spin off some of its fintech divisions as it tries to monetize its push into technology investment at a time of sluggish earnings from traditional lending.

The nation’s third-biggest lender by assets expects one of the fintech units has the potential to become a ‘unicorn,’ or a private company with a valuation of $1 billion or more, according to Siam Commercial Co-President Orapong Thien-Ngern. “We will spin off some of them to allow them more freedom and independence, including raising their own funds from other investors,” Orapong said in an interview on Wednesday.

He didn’t specify which divisions might be spun off, but the bank’s main technology units include Digital Ventures Co., which invests in startups, and National ITMX Co., a payments services provider, according to its 2018 annual report.

“Thai banking like most other countries is a sunsetting industry, as existing lenders and new players are competing for limited pools of customers,” said Orapong, 57. “Venture capital and technology investments will be the key survival strategies for SCB in attracting new customers and boosting earnings.”

Siam Commercial and other local banks have been investing in technology to fend off competition from fintech startups, at a time when margins from regular lending operations are under pressure. The bank’s return on equity has fallen from 20% in 2014 to about 11% in the quarter ended Sept. 30, according to data compiled by Bloomberg.

Chief Executive Officer Arthid Nanthawithaya said in August he wants to transform Siam Commercial into a technology company, and the firm has recently completed a four-year capital spending program worth $1.3 billion focused on artificial intelligence, digital platforms and other technology.

The Thai lender will require additional “major investments” in areas such as artificial intelligence, to improve its data and transaction processing, according to Orapong. The amount of those investments is still under consideration and will need to be approved by the bank’s board, he said.

Orapong is also chief executive officer of Digital Ventures, which has a $100 million budget for investing in technology and innovation businesses, according to its website. The unit has invested in startups such as Pagaya, an AI-based asset management company, and Ripple.

“SCB has a very positive development as the country’s leading player for digital technology, despite its late start,” said Sukrit Friestad, an analyst at CGS-CIMB Securities (Thailand) Co. in Bangkok. “Still, it will need further large technology investments to stay competitive. This would continue to put pressure on its earnings.”

— Anuchit Nguyen (Bloomberg)

https://bankinnovation.net/allposts/biz-lines/payments/thai-bank-targets-1-billion-spinoff-among-its-fintech-units/

4 Challenges with Digital Payments and How to Address Them

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Standard Chartered and Quantexa Join Forces to Tackle Financial Crime With Contextual Decision Intelligence

https://thefintechtimes.com/standard-chartered-quantexa/

Standard Chartered has partnered with Quantexa, the contextual decision intelligence software company, to amplify its anti-financial crime efforts globally.

Working as part of a wider ecosystem, Quantexa will support Standard Chartered’s Financial Crime team through use of dynamic entity resolution, network analytics and contextual data to tackle major real-world challenges, including money laundering, fraud and terrorist financing. Quantexa’s decision intelligence platform utilises AI to provide Standard Chartered with a connected 360-degree customer view, empowering the bank’s investigators to make faster, more accurate decisions

Developed in partnership, the platform enables Standard Chartered to conduct complex financial thematic investigations more efficiently and effectively, demonstrating the bank’s ongoing commitment to uphold the highest global standards in compliance and risk management. The enhanced capabilities provided by Quantexa allows the bank to see a holistic view of investigations, providing a deeper understanding of the trends and risks across billions of data points from more than 40 countries.

New contextual intelligence platform enhances investigations using big data analytics and artificial intelligence to combat financial crime globally

By automating labor intensive, manual intelligence gathering, the bank’s investigators now have more time to focus on finding true risk, as well as have improved consistency in their investigations. The platform will become a key support tool for Standard Chartered and presents rich detail about customers and transactions in one place, visualizing the relevant relationships and behaviours to provide context for faster decisions. It also allows Standard Chartered to leverage its existing investments in monitoring and case management for more efficient and effective financial crime compliance.

Praveen Jain, Head FCC Controls Strategy and Innovation at Standard Chartered, says: “Quantexa’s solution consolidates information from multiple sources, leverages advanced analytics, visualisation and contextual output. This not only simplifies tasks for the analyst, but also helps them understand the flow of funds, see the relationships between entities and identify otherwise hidden linkages that may have been difficult to establish previously”.

Vishal Marria, CEO and Founder at Quantexa, says: “Working with Standard Chartered to support this initiative is a true testament to their desire to tackle and disrupt financial crime globally. Standard Chartered and Quantexa are at the forefront of using Contextual Decision Intelligence and I am very much looking forward to growing this partnership with the bank across the enterprise”.

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https://thefintechtimes.com/standard-chartered-quantexa/

Top 7 Global Fintech Trends 2019

https://dailyfintech.com/2019/11/22/top-7-global-fintech-trends-2019/

This is my third year at DailyFintech. Looking back, this year has been the most eventful year of the three, with several significant Fintech trends emerging across the world.

Typically, I am not a big fan of the “Top” titled posts. But, I have had to use it, thanks to the events of 2019. A few key themes stand out for me.

Starting from Asia- be it China slowdown, India Payments or South East Asia for Financial Inclusion – there were some big headlines this year.

Facebook’s Libra, China’s Digital Currency and the FCA regulations for crypto businesses kept the crypto hodlers interested.

Softbank Fund 1 saw a massive hit due to a bad year at the IPOs, and there were several learnings from there. Fund 2 is now up in the air, although they are revisiting their strategy to be more profitability and less growth.

Google Bank, Apple Card, Facebook pay are perhaps giving wall street a few sleepless nights.

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Image Source

The idea for a trend post came from Theodora Lau, when we were discussing a theme for our podcast episode. As we went through the recording of the trends episode, I felt this definitely deserved writing down as a blog post.  Anyways, here you go!

Trend 1: India – the key battleground

(I had to start with India)….. Asia Fintech was where all the action was this year. China saw a slowdown due to the trade war. Investments dried up, and India overtook China for Q1 and Q2 Fintech investments.

The more interesting aspect of India Fintech this year has been the growth of payments. It has been largely due to the rise of internet, thanks to Reliance Jio. 300 Million Indians suddenly got access to internet in a matter of 24 months. Many digital business models that weren’t viable before, started scaling quickly.

I personally made an investment into Niki.Ai, a voice app for even the rural population of India to do transactions in their regional languages.

Walmart’s 2018 acquisition of Flipkart hit jackpot with PhonePe – a payment business that was valued at about $300 Million last year. PhonePe has gone from 26% of payments market cap to 47% in 12 months since the acquisition. Its valuation is expected to be around $10 Billion now.

With China payments largely taken, India is the battleground for the big firms like Alibaba, Amazon and Google. In a “winner takes all” world, getting 20% of the world population onboard is a big deal for these firms.

Trend 2: Tech giants conquer Wall Street

Apple did it again. They picked up an already existing, relatively well executed product, and did it even better. The apple card experience is seamless, simple and sophisticated. We can argue that the challenger banks had done it already, but we all know that, when Apple does it, it takes some beating.

Google bank has been in the news for the last couple of weeks. Google’s announcement that they would be launching checking accounts shook social media. On the day it was announced, all I could see on my twitter feed was just that. People were predicting doomsday for mainstream banks.

Facebook pay is yet another recent development. Instagram got an in-app-checkout functionality that allowed users to make purchases from the app. Facebook pay however, is a common capability across all FB apps. They will be powered by Paypal and stripe, and plan to take over the mobile e-commerce market.

I believe, banks may have to accept that tech companies will be distributors of banking products. Banks will need to collaborate with them, rather than view them as competition.

Trend 3: Growth vs Profitability

As much as I like the VC job at Green Shores Capital, I often find that the industry is hyped up. This was especially the case until last year. This year though, funds are drying up top-down. I saw four Series A funding rounds fold because the funds (or their funders) pulled out of the round.

Nothing has been more pronounced than Softbank Funds portfolio. Softbank fund took a strategy of investing in pre-IPO firms, taking them to IPO, and making money in the process. A $100 Billion fund was seen as super powerful. But the market brought their portfolio firms to their knees.

The Wework collapse could be compared to the dot com bubble burst. This time it may be a graceful slowdown in the market, however, it has led to a much needed introspection within funds. Softbank has started focusing on profitability as a strategy for their next fund.

Even with their portfolio firm PayTM in India, Softbank have asked them to demonstrate profitability before an IPO.

Trend 4: Challenge banks look at Global Expansion

There are challenger banks across the world. For those in Europe and the UK – Monzo, Revolut, Starling and N26 have all had pretty decent growth stories. This year, some of them have started to plan an US expansion. They are all largely in growth mode, and there are still questions around if they can really be profitable. Something for them to figure out in 2020s perhaps.

The other set of challenger banks are in Latin America (Nubank) and Asia. These are markets that don’t have the burden of legacy banking infrastructure. As a result, their challenger banks have grown pretty fast. Softbank invested into Nubank, and their valuation has skyrocketed past $10 Billion.

So the key takeaway is that, when you are a challenger bank in an underserved part of the world, the opportunities are sky high. If you have the “misfortune” of being a challenger bank in an over-banked part of the world, you may have to quickly look outside your region.

Trend 5: A year of Financial Inclusion

While several public and private firms across the world have been trying to solve this issue, South East Asia over the past 12 months suddenly emerged as a case study. Only 18% of adults in S.E.Asia use a bank account and 11% use financial products. As a result, there is a genuine opportunity in this part of the world for a provider of last mile financial products.

Grab and Gojek have conquered S.E.Asia, and as they expanded through their ride sharing apps, they have also started offering payment services. As Singapore opened up their licenses for digital banks, Grab have applied for it too.

A key takeaway here is that, in several parts of the world, expansion could happen as a lifestyle business. Fintech offerings can follow.

A broader takeaway is that, distribution of banking is getting disrupted, not as much the banking services offered.

Trend 6: Blockchain Unchained

Libra has been quite noisy on social media. It should have ranked quite high on the hashtag list of the year. Despite all the negative press around anything related to FB, Libra still has its merits. It may or may not be the tool that brings banking and payments to every household. But it may have scared governments and central banks enough to act on digital currencies of their own.

As a result of Libra’s announcement, China have had to expedite their digital currency offering. Libra’s success may not be its own product. If sovereign digital currencies emerge, we will see transparency and ease of transactions at a global scale never seen before.

Trend 7: Climate Risks

This is my favourite trend of the year – without a doubt. The extinction rebellion, and dramatic climate patterns across the world has sent shock waves across financial services too.

Recently the Bank of England (BoE) released its supervisory text on how banks should include climate risks as part of their stress testing. This is a pretty interesting move.

If it is executed right, climate risk management would be overseen by financial regulators and central banks across the world. Banks would be asked to capitalise themselves against climate risks that they were exposing themselves to.

Therefore, if a bank had a counterparty that had a high carbon footprint, the bank would need to recognise that. They would have to rank a high carbon footprint transaction as a higher risk transaction, and as a result allocate higher capital against that transaction. This would soon change the way banks deal with their clients – and could help keep the wider business ecosystem climate conscious.

As the world welcomes 2020, it’s critical to note that these trends are green shoots of something big and mostly in the right direction too. That is perhaps what interests me the most. Despite the financial aspect of it, most of these trends have a strong social impact too!

https://dailyfintech.com/2019/11/22/top-7-global-fintech-trends-2019/

PayPal Buys Rewards Platform in $4 Billion Deal

https://finovate.com/paypal-buys-rewards-platform-in-4-billion-deal/

Payments titan PayPal is shelling out $4 billion today in a transaction to purchase Honey, an online shopping and rewards platform. The deal is PayPal’s 20th acquisition and closely follows the California-based company’s arrangement with GoPay last month that gives it a 70% ownership in the China-based company.

PayPal, which offers solutions for both end consumers and merchants, will leverage Honey to create a better experience for the end customer while giving its merchant clients a boost through increased sales and customer engagement.

Honey brings with it a network of 30,000 online retailers and 17 million monthly active users. PayPal will be able to engage with these shoppers while they are still at the beginning of their online purchasing experience. Leveraging access PayPal’s 275+ million active customers and network of 24 million merchant accounts, Honey will be able to scale up its user base considerably.

Calling today’s purchase as one of the “most transformative” in the company’s history, PayPal President and CEO Dan Schulman went on to praise Honey for its ability to improve the online shopping experience. “The combination of Honey’s complementary consumer products with our platform will significantly enhance our ability to drive engagement and play a more meaningful role in the daily lives of our consumers,” Schulman said. “As a partner of choice for our merchants, this is another way that we can help them build and strengthen their customer relationships, provide personalized offers, and drive incremental sales.”

Logistically, Honey will stay intact, maintaining its headquarters in Los Angeles. The company’s co-founders George Ruan and Ryan Hudson will continue to lead the Honey team, reporting to PayPal’s Senior Vice President John Kunze.

PayPal showcased its Instant Account Creation feature at FinovateFall 2012. The company has a market capitalization of $120 billion.

https://finovate.com/paypal-buys-rewards-platform-in-4-billion-deal/

CFPB, Federal Reserve Board: AI bias can’t be ignored

https://bankinnovation.net/allposts/operations/comp-reg/cfpb-federal-reserve-board-ai-bias-cant-be-ignored/

Following a recent backlash resulting from allegedly discriminatory underwriting methods for the Apple Card, lenders’ moves are facing scrutiny from regulators. In light of the increased oversight, however, industry practitioners emphasize the role of AI as a catalyst for a more inclusive process.

Albert Chang, counsel at the Consumer Financial Protection Bureau‘s innovation office, said discrimination allegations shouldn’t be taken lightly. While regulations should enable innovation, he argued that companies need to be mindful of the impact of biases in underwriting models.

“If you’re facing those allegations, the first step is to understand why the algorithm in the decision-making process led to two different outcomes for apparently similarly situated applicants,” he said, speaking at The Clearing House annual conference in New York on Thursday.

Meanwhile, Carol Evans, associate director of the division of consumer affairs at the Federal Reserve Board, said the fact that AI algorithms were developed by men creates opportunities for bias to creep into the process. As a result, she noted that diverse teams are crucial to combating bias.

“Diversity and inclusion matters in this discussion,” she said. “Who was at the table when the model was discussed?”

See also: Apple Card’s gender-bias claims look familiar to old-school banks

Lenders, however, expressed optimism about AI’s prospects as an enabler for change. Meredith Fucs, chief counsel of regulatory advisory at Capital One emphasized that institutions should consider AI-based underwriting as one component of a larger effort to align products with customer needs. To ensure the effectiveness and quality control of AI-based underwriting methods, humans need to be involved, she noted.

“You don’t just sort of unleash the machine to make a decision — humans are always involved in the decision making,” she said. “The machines allow humans to set criteria, to gather more data, to identify correlation [that people] couldn’t identify before, but we still set the outcome criteria,” she explained.

Annie Delgado, chief compliance officer at Upstart, expressed confidence that the technology will evolve. To Upstart, greater consistency of underwriting processes across the industry could help root out discrimination. 

“If you’re talking about a machine learning model and you have a more limited group of people that can control the inputs and monitor the outputs of that system, you can teach a machine to not have biases,” she said.

Bank Innovation Ignite, which will take place March 2-3 in Seattle, explores emerging technologies in banking. Attendees will gain a firsthand look at new products and services from both legacy and upstart perspectives. Request your invitation

https://bankinnovation.net/allposts/operations/comp-reg/cfpb-federal-reserve-board-ai-bias-cant-be-ignored/