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June Highlights in the Financial Industry

 

 

Let's take a look at what June had to offer us in the banking and FinTech bubble.

HINT: it's mostly about cooperation in the industry, RegTech and open banking, with a dash of cybersecurity and trends.

 

 

Cross-border Cooperation in FinTech

 

After signing a FinTech co-operation agreement with Indonesia earlier this year, Australia pushed the fast-forward button in June and inked 3 more such agreements, with Japan, Malaysia and Hong Kong.

 

The Australian Securities and Investments Commission (ASIC) announced the completion of these co-operation frameworks in order to promote innovation in financial services in their respective markets and more agreements are expected in the following months.

 

Moreover, according to recent research, Australia is significantly ahead of the UK and the US in the payment technology race and their cashless future with instant payments is galloping to become reality.

 

But Australia isn't the only one to embark on the FinTech collaboration journey at full speed. Singapore is breathing down its neck after signing a similar co-operation agreement with Denmark, right after the Money 20/20 Europe conference in Copenhagen.

 



"Financial innovation is not confined

to national borders."



Thomas Brenoe

Deputy Director General, Danish FSA



- on Singapore-Denmark agreement -


 

This collaboration aims to help FinTech companies in both countries expand into each other's markets, as well as explore joint innovation projects together, sharing information on emerging market trends and their impact on regulation.

 

Furthermore, Singapore regulators have recently proposed rules that will make it easier for banks to conduct or invest in non-financial businesses such as e-commerce and digital-payment platforms.

 

Singapore's proposals come as financial technology and e-commerce giants are expanding financial services including digital payments in Southeast Asia as part of their global strategy, thus helping banks to better compete with non-bank firms in the area.

 



"The future belongs to the technological giants and to the banks that copy, acquire or collaborate with FinTechs.

It's neither cheap nor easy, but the alternative is irrelevance."


Brett King

CEO, Moven


 

 

RegTech Status in Asia-Pacific. Brief Pit Stop in Bahrain

 

According to the latest news, RegTech is getting ready for a great start in Southeast Asia, where financial institutions often have to deal with more than a dozen different regulatory regimes. But there are 2 sides to this coin...

 

Though RegTech is meant to maximize financial performance and risk management, some international banks anticipate the costs of complying with the new rules to be so high that they are considering leaving the Asia-Pacific region.

 

Turning to the Middle East, it’s worth mentioning Bahrain's central bank (CBB), who launched on June 18 a regulatory sandbox which will enable FinTech companies to test out their products and services. The bank's governor explained this move as: "We are witnessing how technology is defining financial services and CBB remains at the forefront of these developments to enable the industry to advance similarly."

 

 

 

The Latest Studies in the Financial Industry

 

A. Cybersecurity Insights

 

Cyberattacks impacting financial institutions are largely executed for direct financial gain, very few aiming to hurt the brand or customer loyalty. However, these are prominent side effects, of course.

 

More important is how these attacks take place: 88% of security incidents are either web app attacks, DDoS attacks, or payment card skimmers, with a vast majority targeting ATM machines – 66%. More information on this topic can be found in Verizon's annual Data Breach Investigation Report (DBIR).

 

 

B. Top Trends

 

Can you guess what all the latest buzz is still about? Suuure... Artificial Intelligence, blockchain and open banking. The prediction goes like this: AI will become the main way banks interact with their customers in the next 3 years, blockchain adoption will lead to faster transactions and lower costs, while open banking will keep increasing competitiveness.

 

Another aspect to take into account is the necessary transformation of commercial banks in the direction set out by all those disrupting FinTechs that focus on the customer. This is expected to benefit banks in terms of increased profitability and efficiency, with a plus on the safety and soundness side, building engagement on a digital experience.

 

 

C. Open Banking and APIs

 

This is what the future of banking relies upon: third parties developing new products and services through use of APIs, followed by a FinTech-bank collaboration to leverage their complementary strengths and enhance the customer experience.

 

Recent studies underline an otherwise expected fact: FinTechs are more likely than traditional banks to provide positive banking experiences, and that is partly because they're not dragged down by the legacy technology and the outdated processes that banks still have to deal with.

 

Over 90% of banks and 75% of FinTech companies say they expect to collaborate in the future, since open APIs will likely lead to a more effective use of data, the rise of new business models, and enhanced customer trust. All these and more, in the World Retail Banking Report 2017.

 

 

 

 

A newsletter for everyone?!

 

Survey

 

In a good-hearted intent to improve our newsletter and really make it a useful and informative tool for our readers, we have launched a survey. We asked them about their preferences and based on the fact that we were addressing quite a niche market, we underestimated how different people really are; and how different their individual interests are, even if they are working in the same field or industry.

 

Question 1: What areas are you most interested in: technology, banking, regulations, open source, events, corporations, business? We asked the respondents to give each category a rating from 1-not interested to 5-very interested.

The arithmetic mean was: Technology – 3.07, Banking – 4, Regulations – 3.37, Open Source – 3.11, Corporations – 3.22, Business – 4, Events – 3.07. Even though the differences are not so significant, we can see a slight inclination towards business, banking and the trends in this market rather than technology news.

 

Question 2: Are there other related areas you would like us to cover in our newsletter? What would those be?

In the accelerating pace of today’s world, open survey questions don’t seem to be very effective, with only 40.74% answering this question. Nevertheless, we had some suggestions like: projects developed, cloud industry, business and economic trends in the CEE states, impact of politic decisions on regulations.

 

Question 3: What type of information would you prefer to receive: news, analysis, how to’s, essays about personal experiences, etc? Check any that apply.

77.78% are interested in News, 62.96% in Analysis, 48.15% would like to receive how to’s and only 33.33% personal experience essays. As I said, the world is moving fast and it seems that people believe news helps us keep the pace.

 

Question 4: In which format would you like to receive our news? Article links you can access to read in full or a more integrated content with articles' synopsis/text previews/opinions.

This one is a tough one. How can you decide how to improve the structure of your newsletter when the answer to this question divided respondents almost 50-50? 55.56% said they prefer article links you can access to read in full, while the rest of 44.44% opted for a more integrated type of content.

 

Question 5: What news/information regarding Allevo would you like to receive on a monthly basis?

Product feature updates – 59.26%

New initiatives/projects – 88.89%

Updates on the BOOST- Banking On Open Source Technologies project – 37.04%

Opinion articles on market trends/news/events – 55.56%

Allevo events/workshops – 55.56%

 

Question 6: What news/information regarding the FinTP open source project and the FINkers United, the community around it, would you like to receive on a monthly basis?

New releases – 77.78%

New code updates on GitHub – 25.93%

New initiatives – 77.48%

FinTP events/hackathons – 40.74%

Other – 7.41%; included suggestions like howtos and new members or partners

Answers to questions 5 and 6 show people’s interest in what’s NEW. And although we are happy they are interested in our new projects in such a large proportion, the fact that our existing open source initiative rated low in interest in this survey raised a few questions: is open source not an interest priority in the banking world yet or BOOST is just not that well known or well explained?

 

Question 7: What would you change in the graphic format or the newsletter’s layout?

Open question, hence few answers. Most of the respondents said nothing, but there were some recommending a more appealing layout, less information, easier and friendlier navigation.

 

Question 8: If you have any other suggestions, we are more than happy to hear them.

Suggestions: less links, deliver the newsletter once every three months, provide a quick to read overview for included articles.

 

Lessons learned:

  • never underestimate people’s difference of opinions
  • you can never please everyone - but this does not stop us from trying
  • redesigning and restructuring our newsletter is not such an easy task


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