Australian banks cost of funds

|

article image
Official cash rate: the interest rate paid by banks in Australia, adjusted and set by the Reserve Bank of Australia, to reflect the availability and supply of money. Wholesale funding costs: the price banks pay to access money from the wholesale money market which is then on-lent to consumers and businesses for personal and business loans.

Spotlight

UPS Capital

UPS Capital is a business unit of UPS (NYSE: UPS). We offer our customers expansive solutions that help protect their finances and manage the increasing risks that threaten and disrupt today's supply chains...

OTHER ARTICLES

Putting humans at the helm of finance innovation

Article | February 28, 2020

As technologies such as 5G, IoT and AI are rolled out across industries, old business models are being overturned and new ones created, all in the name of progress. Even the most established industries run the risk of being significantly weakened, or even made redundant – so organizations will have to embrace change to survive. Business agility is crucial to responding to market changes, challenges and opportunities. Embracing the latest technologies, and fast, seems to be the order of the day. But to ensure this can be delivered effectively, a new generation of enterprise resource planning (ERP) systems – powered by artificial intelligence (AI) – are making an entrance.

Read More

7 FinTech Challenges and Ways to Overcome Them

Article | February 28, 2020

2020 has been a challenging year for all industries. As COVID-19 continues to create uncertainty, many FinTech brands are under stress for a number of reasons. However, FinTech brands can use this opportunity to build their reputation and emerge as a substantial entity after the crisis has passed. Many FinTech organizations are putting in their thoughts on big ideas and innovative digital offerings that meet customer demand for a frictionless and seamless banking experience. This article aims to list down the challenges faced by FinTech brands and effective ways to resolve them: Challenges Faced by FinTech Brands in Generating Demand In this unprecedented time, lead generation is on high priority to acquiring new customers. The pressure is to get on board with working remotely, adapting to new challenges, changes, and dealing with customers having urgent & new requirements. FinTech companies have faced unique challenges over the past year. They are using complex technologies to develop better products & services for businesses. Replacing traditional methods to improve financial services need strategic planning, technological advancement, and original content marketing ideas to survive in the digital age. Read on to find out the challenges faced by FinTech brands in generating demand for their solutions. Impact of Covid-19 COVID-19 continues to create uncertainty due to the widespread lockdown. Many FinTech brands are under the stress of counting recent losses, cost-effectiveness, and rethinking their offerings to adapt them to changing needs. The banking & finance industries are now shifting from response to recovery. They are now investing in introducing new FinTech apps for the post-pandemic world. According to a recent survey, almost 82% of the citizens don't want to visit their banks and try digital apps to carry out financial transactions. FinTech brands are grabbing this opportunity to reach out to a new demographics by testing and adding new product range. Today, popular FinTech apps include mobile banking, e-wallets, contactless payments, international money transfer, retail banking, stock trading, FinTech loan app, InsurTech, etc. Go mobile Go digital. As a FinTech brand develops innovative solutions to be used during the pandemic, they also need to figure out ways to promote these products and services to reach their target audience. You are getting acquainted with various social media platforms, and understanding your target audience will help you reach wider. Identifying the top social media platform that works best for your product and service through content marketing will boost your customer base, reduce churn, and attract potential customers. Other functional content marketing solutions that you can think of includes web – content syndication, social media, mobile app – advertisements, and brand awareness content. Inefficiency to maintain a healthy lead pipeline Several FinTech brands are reassessing their approach, their budget, goals, and their offering. Those quickest to adapt to this change will lead the market and continue to grow. According to a research report, B2B specialists make 48% purchases online, up from 38% before the COVID-19 outbreak; this trend is likely to increase. FinTech companies need to generate more new leads than ever to maintain a healthy lead pipeline. To do so, they need to be where their audience is. • Finding the best social media platform for your industry • Rethinking events – Online & Offline • Exploring online opportunities – Webinars/Podcasts/Live Streaming/ Live Q&A/Online Sessions/ Live Feeds • Publish demo videos Building trust One of the most significant issues and struggles with a FinTech brand is to gain the trust of their consumers. Consumers usually select financial service providers as they are trusted by their families for generations. These financial brands should be able to handle issues such as security, confidentiality, and digital fraud. The brand should also comply with the latest financial regulations that need to be communicated. Social media is an ideal platform for brands to connect with their existing and potential customers. To build trust & loyalty between the company and the end-user, brands must focus on helping their customers rather than selling. Inadequate tech stacks to work remotely The inability to work remotely gave rise to new entrepreneurs with knowledge of finance who developed innovative solutions to help FinTech brands connect remotely. Another essential aspect that has evolved this industry is remodeling the user interface and customer experience. FinTech brands are largely coming out with innovative solutions that can help with: - Financial close - More visibility and transparency to financial transactions - Centralized data - Cloud support Cybersecurity Cybersecurity is a common problem across industries. With the advent of advanced technologies rises the need to develop stronger security. Considering the threat posed by cybercriminals and fraudsters, the financial system needs to handle this risk smartly. All the financial information remains sensitive, whether it's your social security number, card number, PINs, or password. With the growing number of smartphone users, FinTech becomes cheaper and easy to use. The process and services that were once monopolized by the banking sector are now available for all, helping develop innovative solutions, lower operating costs, and improve financial organizations' efficiency. Reaching Millennials FinTech brands should target millennials. They are fueling the market among money transfer applications and personal investment applications. Financial brands need to focus on financial management, lending, financing, and insurance applications. According to a report, 33% of millennials believe they won't need a bank at all in 5 years. Expanding FinTech press/media The increasing use of financial technology has given rise to a number of media houses covering them. Over the year, dozens of FinTech focused media sites, podcasts, and newsletters have been launched. Several authoritative publications have hired beat writers to pump up stories on trending topics and subject interest. Final Thoughts The FinTech market is growing in numbers, and the industry is heading towards the trillion-dollar industry. To grow as a FinTech brand, you need to ensure that you are better than your competitors. These challenges are temporary and can be overcome through practical approaches and technological advancements. While the challenges in deploying a FinTech firm continues, we have given a clearer perspective on how to overcome them in this blog. Overall, digital transformation for customer satisfaction is what is necessary. FAQs Q1. What risks are associated with FinTech products and/or services? A1. Cybersecurity, consumer data privacy & security, consumer data rights, online frauds and scams; cross-border transactions, anti-money laundering and countering terrorist financing; and digital identity risk are the key factors in the FinTech market. Q2. What are the benefits of FinTech? A2. FinTech has helped us drive positive change in the traditional financial services and foster innovation by creating products and service that benefits customers and small and big enterprises. Some of the benefits of FinTech products and services include convenience, digital resolutions, hassle-free practices, flexibility, high rate of approval, upgrade payment systems, customer services, and revenue, user-centric, transparency, and many more. Q3. What are the challenges for the financial services industry? A3. As mentioned in the blog, there are 7 key challenges faced by the FinTech Market they are: Pandemic situation Inefficiency to maintain a healthy lead pipeline Building trust Inadequate tech stacks to work remotely Cybersecurity Reaching Millennials Need to expand FinTech press/media { "@context": "https://schema.org", "@type": "FAQPage", "mainEntity": [{ "@type": "Question", "name": "What risks are associated with FinTech products and/or services?", "acceptedAnswer": { "@type": "Answer", "text": "Cybersecurity, consumer data privacy & security, consumer data rights, online frauds and scams; cross-border transactions, anti-money laundering and countering terrorist financing; and digital identity risk are the key factors in the FinTech market." } },{ "@type": "Question", "name": "What are the benefits of FinTech?", "acceptedAnswer": { "@type": "Answer", "text": "FinTech has helped us drive positive change in the traditional financial services and foster innovation by creating products and service that benefits customers and small and big enterprises. Some of the benefits of FinTech products and services include convenience, digital resolutions, hassle-free practices, flexibility, high rate of approval, upgrade payment systems, customer services, and revenue, user-centric, transparency, and many more." } },{ "@type": "Question", "name": "What are the challenges for the financial services industry?", "acceptedAnswer": { "@type": "Answer", "text": "As mentioned in the blog, there are 7 key challenges faced by the FinTech Market they are: Pandemic situation Inefficiency to maintain a healthy lead pipeline Building trust Inadequate tech stacks to work remotely Cybersecurity Reaching Millennials Need to expand FinTech press/media" } }] }

Read More

A bank account - A concept of the past

Article | February 28, 2020

Almost every recent article written about banking starts with the statement that the banking industry is being disrupted by new competitors, new innovations and new technologies. Although this statement is definitely true, the extend of the disruption can still be debated. Even the most innovative neo-banks still work with bank (current, saving, term and investment) accounts, cards (credit and debit), traditional credits, existing payment infrastructure… The user experience surrounding the origination and servicing of these products has dramatically improved (and will continue to evolve), but the underlying banking products are not really disrupted.

Read More

How Blockchain is Changing the Banking Industry

Article | February 28, 2020

How Blockchain is Changing Banking and Finance Industry We all have basic knowledge about Cryptocurrency and Blockchain technology, and many peoples understand its complex structures and its valuable benefits for the future. That's why many peoples believed that it's the future of currency exchange. Apart from Cryptocurrencies like Bitcoin, Dogecoin, Etherium, etc., Blockchain has the potential to use the existing technology up to its peak to exchange transaction information and data. With more security and easy to trace back previous transactions benefit, we can say it is the new age of Electronic currency to avoid human errors and frauds. Blockchain technology in Banking Around the many conspiracies and fake theories about Blockchain and Cryptocurrency, many organizations and even countries like Australia, China, Japan, and other developed nations embraced this Blockchain in Banking as a future of seamless exchange of transactions. Apart from that, its decentralized transactions are easy and more secure than we have today. Blockchain could change the current banking technology used by its admins to trace and track the record of every exchange of digital money to lessen the frauds and reduce the time and human efforts. Prominent players of the Bank and Finance Industry like the Bank Of America, JP Morgan Chase, Citi Bank, and other renowned players of finance sectors using Blockchain in banking to improve funds transfer between banking institutions globally and maintain every record of their history of transactions effectively. How Blockchain is helpful in Banking Blockchain technology is a decentralized ledger of transaction which enables the bank to keep track of all the transactions publicly and transparently. It provides a direct connection between the sender and receiver of payments. No intermediary and complete control of the transaction exists in between them. Because of this reason, it provides a way for financial services to work more specifically and without errors to make payments securitization more precisely. This makes Bitcoins that uses Blockchain technology a better option of investment. Benefits of Blockchain in Banking As you continue to read this article, you might have an idea about this new age technology's immense benefits in the finance sector. Let's take a look at how it can be more helpful in the upcoming future. Security: The primary concern of 21st century’s banks is their security. No one knows who will hack their systems and scatter with the money of people who trust the financial system. With Blockchain technology, security issues such as suspicious activities are easily tracked. It is hard to decode the encryption of the Blockchain and takes too much time because the data is not stored on one server but across a huge network of computers. These computers constantly check and verify the records and data. This feature allows a noteworthy use for Blockchain in banking. For a hacker, it is hard to breach many servers. Every transaction that gets recorded in a Blockchain ledger undergoes complicated sets of encryption interconnected with the next block, which results in an unaltered series of coded data "blocks," each dependent on a ledger series. That's why it is one of the best cyber-protection against hacks in this internet world. Fast transaction: If you want to transfer money to someone living in another country, you go to the bank and might have to stand in the long queue for your turn. Once you forward your request, it takes 5 to 10 days to credit the amount in the bank of the recipient. Blockchain can easily reduce such a long time-consuming process. It has the potential to complete the transaction within minutes, not in a day. It saves your valuable time, though. Easy to track and transparency: No doubt that it is a highly transparent and traceable system as compared to the traditional finance system. Every record of amount can be easily tracked with a digital recording system. It reduces the need for time-consuming and costly third-party verification tools. Also, it undoubtedly offers visibility into the transaction history within the banks' operations. Reduce fraud: It can reduce hacking, DDOS attacks, and other scams. Blockchain helps banks to identify their user's IDs and confirm their detail with digital Blockchain ID. It automatically reduces future frauds, which is the biggest concern of the banking system. How bank can use Blockchain: With Blockchain in banking, financial institutions would not need to depend on the network of custodial services and regulatory bodies like SWIFT. They can easily settle transactions directly on a public Blockchain. Here are few benefits of using the new-age technology. Verifying Digital Identity: Banks can't process online transactions without the verification of a person. This process can be done via face-to-face verification, logging in with passwords, or sending OTP on registered mobile numbers. Although, after the application of Blockchain technology, this process becomes more seamless and more secure due to its accurate data reading capability. Smart Contracts: It might be possible to automate the process of transaction, which costs time, added complexity, and delays the transactions using smart contracts. It is a contract with terms and agreements between the buyers and sellers' business. This computerized contract permits the trustworthy transaction completely free from any central authority or external enforcement mechanism. The new way to do business is here. Faster lending: Loan processing takes too much of the user’s valuable time. It can be reduced with Blockchain. This use of the technology is called Blockchain lending. Blockchain lending can give direct benefit to customers by reducing the growing costs. It provides lenders with a competitive offer and helps them do the transaction faster and without any security defect. Blockchain-based Smart Contracts ensure that loan seeker and lender agree viable and fair terms regarding proof of funds and payment planning for future installments. Blockchain technology has lots of advantages and revolutionary benefits to finance and banking institutions. Though, still, people are generally unaware of this technology and fear of adapting to it. This might cost us time to unify our currency and have a better future. Frequently Asked Questions: How is Blockchain used in finance? Blockchain technology can improve finance and lending services by lowering counterparty risk and shortening issuance and settlement periods. It enables: authenticated paperwork and KYC/AML data, reducing risk exposures and facilitating real-time financial document verification. What is an example of Blockchain? Bitcoin is a well-known example of Blockchain in operation. This is a type of digital money (commonly called a cryptocurrency). This electronic form of funds may be transmitted safely from user to user without the need for intermediaries. In other words, there is no requirement for a central bank or administration. Bitcoin isn't the only currency that uses Blockchain technology. Where can Blockchain be used? Blockchain uses extend well beyond cryptocurrencies such as Bitcoin. With its capacity to increase openness and fairness while also reducing businesses' time & expense, the technology influences a wide range of areas, from contract enforcement to making government run more effectively. What software is used for Blockchain? There is multiple software available in the market for Blockchain technology; some of them are: Solidity is one of the most widely utilized programming languages among Blockchain developers. Geth is a Go-based Ethereum node implementation. Mist is the authorized Ethereum wallet created by Ethereum's makers. Is Blockchain the future? Blockchain technology has several uses in a variety of sectors. Blockchain is already being utilized to help with identity management, smart contracts, supply chain analysis, and many other things. The full potential of Blockchain technology is unlikely to be realized. Till then, it is safe to assume that Blockchain is the future of the Fintech industry. { "@context": "https://schema.org", "@type": "FAQPage", "mainEntity": [{ "@type": "Question", "name": "How is Blockchain used in finance?", "acceptedAnswer": { "@type": "Answer", "text": "Blockchain technology can improve finance and lending services by lowering counterparty risk and shortening issuance and settlement periods. It enables: authenticated paperwork and KYC/AML data, reducing risk exposures and facilitating real-time financial document verification." } },{ "@type": "Question", "name": "What is an example of Blockchain?", "acceptedAnswer": { "@type": "Answer", "text": "Bitcoin is a well-known example of Blockchain in operation. This is a type of digital money (commonly called a cryptocurrency). This electronic form of funds may be transmitted safely from user to user without the need for intermediaries. In other words, there is no requirement for a central bank or administration. Bitcoin isn't the only currency that uses Blockchain technology." } },{ "@type": "Question", "name": "Where can Blockchain be used?", "acceptedAnswer": { "@type": "Answer", "text": "Blockchain uses extend well beyond cryptocurrencies such as Bitcoin. With its capacity to increase openness and fairness while also reducing businesses' time & expense, the technology influences a wide range of areas, from contract enforcement to making government run more effectively." } },{ "@type": "Question", "name": "What software is used for Blockchain?", "acceptedAnswer": { "@type": "Answer", "text": "There is multiple software available in the market for Blockchain technology; some of them are: Solidity is one of the most widely utilized programming languages among Blockchain developers. Geth is a Go-based Ethereum node implementation. Mist is the authorized Ethereum wallet created by Ethereum's makers." } },{ "@type": "Question", "name": "Is Blockchain the future?", "acceptedAnswer": { "@type": "Answer", "text": "Blockchain technology has several uses in a variety of sectors. Blockchain is already being utilized to help with identity management, smart contracts, supply chain analysis, and many other things. The full potential of Blockchain technology is unlikely to be realized. Till then, it is safe to assume that Blockchain is the future of the Fintech industry." } }] }

Read More

Spotlight

UPS Capital

UPS Capital is a business unit of UPS (NYSE: UPS). We offer our customers expansive solutions that help protect their finances and manage the increasing risks that threaten and disrupt today's supply chains...

Events