For financial service self-regulation

| April 8, 2019

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Aconsultation paper put out by capital markets regulator Sebi on amending its regulations for Self-Regulatory Organisations (SROs) has come not a day too soon. The Sebi rules were framed back in 2004, but due to legal hurdles, no SROs have actually been set up in the fast-growing financial services industry, which is indeed anomalous.

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Old Mutual Wealth

The Old Mutual Wealth group is a leading UK and cross-border wealth manager. We provide financial advice through the Intrinsic network, wealth management products and services through the Old Mutual Wealth UK and International platform, asset management solutions through Old Mutual Global Investors and discretionary investment management through Quilter Cheviot.

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Fintech in 2021: 5 Fintech Trends Shaping the Banking Industry for Good

Article | March 12, 2021

The Fintech industry is consistently regulating itself since its inception. The industry has become a game-changer since the pandemic caused every consumer to look for convenience in daily transactions. Recent situations have created a necessity for Fintech companies to empower financial institutions as digital transactions soar to an all-time high, with the Indian Fintech sector at the forefront, contributing the highest in CAGR (Combined Annual Growth Report) globally. According to the market research report of March 2020, Indian and Chinese markets contributed the highest in Fintech adoption rate (87 percent) out of all emerging markets worldwide. These numbers are a green signal for the industry to roll up its sleeves as market researchers expect the Fintech market to reach INR 6207.41 billion by 2025 in India. As the Fintech world sees an all-time high upsurge, this article covers the list of 5 Fintech trends to look out for that will shape the banking industry. But before that, let's take a look at what Fintech is, and what value it can provide. What is Fintech Fintech is an abbreviation of Financial Technology and refers to the emerging technologies in finance that provide improved business solutions to clients, and a convenient way to transact. Fintech helps customers to interact and exchange value with businesses more efficiently. Fintech is neither a software, nor a brand name. You can describe Fintech as a collection of technological advancements in the financial sector to ease up transactions. Fintech trends help customers do banking in a faster, smarter, and efficient way. Fintech is on a bull run with the ongoing pandemic covering the finance industry and making users pay without wasting any time or physically being present. With Fintech, financial institutions use technologies like blockchain, artificial Intelligence, biometrics, electronic and mobile payments, etc., to make their business more efficient, helping them interact with their customers effortlessly. New upgrades and innovations in Fintech allow businesses to integrate their financial accounts with secure mobile applications. Receiving and making payments, alerts, and tracking invoices have become swift due to this integration and allow users to undertake time-intensive activities within seconds. With the help of Fintech, you can sell or buy products and pay for them from anywhere around the world—that is how Fintech is changing the world. 5 Fintech Trends That Are Shaping the Future of Banking Financial firms are aggressively taking on Fintech Financial firms and banks are adding new features in their cashless transactions to fit this pandemic-hit economy. Fintech offers convenience to customers as it has multiple options to choose for cashless transactions like mobile wallets, QR codes, contactless payments, etc. It provides a speedy process for payments and digital loans and can create dynamic growth in financial services. This acceleration will continue to groom the investments until banks and Fintech become interwoven. Now, it is just a matter of time for Fintech to emerge as one of the most booming industries. Blockchain and Big data Although blockchain and big data are on a bull run, there are miles to go before it enjoys a major slice of the market. This full swing of blockchain and big data may disrupt if challenges like cyber-attacks and fraudulent activities don't get addressed. To help overcome these obstacles, financial services adopting blockchain technologies can utilize Fintech. This implementation will help reduce fraudulent activities, phishing, and cybercrimes while generating trust with the customers. Looking at all the advantages that Fintech offers, banks adopting blockchain technologies will benefit the most out of it. Artificial Intelligence & Machine Learning Additional fields where the Fintech industry has to shift its attention are AI (Artificial Intelligence) and ML (Machine Learning), where there is a lot of room for growth. Progressively, Fintech brands rely heavily on AI technologies to reduce costs and monitor transactions closely. Experts predict AI will lower the cost of financial services up to 22 percent in the next five years. Through Machine Learning, banks can offer ease of use to their customer with speedy transactions, automated trading processes, and secure payment processing. Providing multiple services on a Single Platform Instead of downloading a separate app for each financial service, any customer would prefer to have a single platform that can do everything. Many banks have already taken a step to offer multiple services across one app. It may increase the cost of building such apps with powerful API integration, but soon enough, it pays off as most financial services will turn to those banks that offer 'single platform, many features' apps. Some financial institutions may not deliver this kind of app, but the Fintech industry is sufficient to meet their demands. Fintech becoming 'the new normal.' The Fintech industry is slowly taking a step towards the general community of consumers. As the need for secure payment processes and easy accessibility of transactions keeps increasing, so does the value of Fintech serving these demands. Adoption of data analytics will garner a massive Fintech market in the upcoming days. According to market research experts, banks have already started providing financial services with a customized and local offering to their customers by closely watching market movements and data analytics. What should we expect from here? As the need to balance the demand and supply of financial transactions keeps increasing, payments and the banking sector need to keep up the speed. It is only a 'wait and watch' game to see to what extent the Fintech market grows. Frequently Asked Questions What is the next big thing in the Fintech industry? AI and blockchain are the next big thing that would take over the Fintech industry by storm. Artificial Intelligence like chatbots reduce the front-desk manual work and can be available 24/7 to help the users. Blockchain provides security on every customer transaction on payment platforms. What's new and trending in the Fintech industry? Financial institutions are focusing on financial literacy to enhance the banking experience for users. They have more control over their expenditure and savings through innovative features of Fintech, like income and expense analytics. What are the benefits of Fintech for banking? Through new Fintech innovations, the Fintech industry is reaping the benefits of improved global money transfers. Here are some of the benefits banks get through Fintech: • State-of-the-art security and compliance • Better speed in transactions • Enhanced transparency • Reduced costs { "@context": "https://schema.org", "@type": "FAQPage", "mainEntity": [{ "@type": "Question", "name": "WHAT IS THE NEXT BIG THING IN THE FINTECH INDUSTRY?", "acceptedAnswer": { "@type": "Answer", "text": "AI and blockchain are the next big thing that would take over the Fintech industry by storm. Artificial Intelligence like chatbots reduce the front-desk manual work and can be available 24/7 to help the users. Blockchain provides security on every customer transaction on payment platforms." } },{ "@type": "Question", "name": "WHAT'S NEW AND TRENDING IN THE FINTECH INDUSTRY?", "acceptedAnswer": { "@type": "Answer", "text": "Financial institutions are focusing on financial literacy to enhance the banking experience for users. They have more control over their expenditure and savings through innovative features of Fintech, like income and expense analytics." } },{ "@type": "Question", "name": "WHAT ARE THE BENEFITS OF FINTECH FOR BANKING?", "acceptedAnswer": { "@type": "Answer", "text": "Through new Fintech innovations, the Fintech industry is reaping the benefits of improved global money transfers. Here are some of the benefits banks get through Fintech: State-of-the-art security and compliance Better speed in transactions Enhanced transparency Reduced costs" } }] }

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Does robotic process automation have a place in finance?

Article | March 12, 2021

Robotic process automation (RPA) may be a relatively young technology, but it’s already secured a firm foothold in the financial services industry. In the UK alone, 72% of banks, insurance firms and other financial institutions are using artificial intelligence (AI) technology, according to Microsoft’s report, ‘Accelerating competitive advantage with AI’.

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How Blockchain Technology is Powering FinTech Revolution in 2020

Article | March 12, 2021

The 21st century doesn’t fail to surprise human society with its innovation. Blockchain is going as a part of mainstream business operations and it's impossible to keep FinTech unaffected. As the new universality of the twenty-first century, technological advancements have now unquestionably seeped into the workflow structure across multiple industries and are an indispensable element of varied business processes. Assignments that once needed human hands, bulky machines, and physical currencies have now been efficiently digitized. Mobility, cloud services, and consumers who have grown up in the digital age are forcing a CHANGE. Technology has been the core of a number of disruptive trends in financial services and it is a driver behind three key themes; the first being convergence of other industries into financial services that is frankly leveraging data and technology, the second is wholesale sort of interruption or disruption of business models and new entrants entering into the competitive landscape and certainly last is a much more transformative journey and that is the leveraging of things like Blockchain Technology, which is completely going to change the financial services ecosystem and marketplace in 2020. Anyone with an internet connection can now engage in day-to-day banking activities, trading and investment in the stock market, widen e-commerce platforms, make online payments, exchange currency online, undertake equity funding, and more. Similarly, new players are now experimenting in different areas of financial activity such as banking, payments, peer-to-peer lending, wealth management, and more. FinTech itself is at the cusp of the renovation as if there was a need. That flux of change is coming from the headwinds of Blockchain swinging its wings. Its stagnant style of doing business is apparent to all. What needs to be examined though, in this distinct phenomenon is the contribution of Blockchain which has enhanced this progressive revolution. Table of Contents •Why use Blockchain for Fintech? •How is it currently managed? •How big is the impact of Blockchain in FinTech? •Blockchain for Global Payments/Cross-Border Transfers •Blockchain in Trading and Trade Finance •Blockchain in e-KYC Utilities •for Credit Scoring •Conclusion (All in all) Why use Blockchain for Fintech? When we talk about FinTech, or technology for finance, we are going to touch a very delicate aspect. We are in 2020 and banks still demand people to send them a fax with their information, because regulators that are there are not catching up with the technology. So Blockchain for FinTech is a very powerful tool. But until the regulators don’t allow it to be deployed in full, recognizing digital signature, recognizing a contract, a time stamp by blocks in a blockchain is going to be hard. How is it currently managed? Let’s understand this with an example - payment with a credit card. Before the payment with a credit card arrives in our bank account, there are 12 companies with 12 databases. They bring the data one to the other before it arrives to the bank account. With the blockchain, it’s up in a single transaction. So in many cases for remittance and for rebalancing accounts, even between branches of a single bank, a blockchain solution allows to remove error in transaction. There are banks that have branches in different time zones. At the end of the month, one time zone branch writes the transaction in the previous month, the headquarters writes the transaction in the next month. And when the month goes to level, it creates a lot of confusion. The accounting system based on blockchain technology will guarantee that all is aligned perfectly. How big is the impact of Blockchain in FinTech? Blockchain surely is born for fintech and is already bringing quite a lot of interest. The reaction of the financial industry is being very positive, one of adoption. When the financial board saw blockchain, rather than getting scared, they started adopting the technology for their own good. In fintech, blockchain is making a big influence to start with. According to a survey on the financial services sector and fintech conducted by PwC, around 77% of the financial services industry plan on adopting blockchain by 2020. Banks being 1/3rd of the institutions surveyed have shown an inclination in incorporating blockchain in their operations as was reported by a study published by Accenture and McLagan (January 2017) that made mention of at least eight of the ten biggest global investment banks comprising the blockchain route. Blockchain for Global Payments/Cross-Border Transfers Blockchain-powered payments are hyper-secure and private. Each user has personal cryptocurrency keys that they can use to conduct transactions safely. The blockchain ensures that only participants involved in a particular transaction know the details of this transaction. Any changes to the transaction are possible only with the consent of all participants. Learn more: https://capital.report/blogs/tracking-the-future-of-cross-border-payments-with-ai-ml-and-blockchain/8124 As per Deloitte, blockchain-based payments from business-to-business and peer-to-peer results in 40% - 80% reduced transaction costs. They’re also settled within seconds. Yes, it would be a paradigm shift but as per a projection by Mckinsey & Co. blockchain could drive $50 - $60 Billion in transcontinental B2B and $3 - $5 Billion in P2P payments respectively. A blockchain records and validates every transaction and administers transactions in a way that no one can tamper with or delete them post-execution. FinTech companies such as Aeternity leverage this advantage of the blockchain to protect payments. Another benefit of blockchain is that it eradicates the need for a mediator to handle financial services like money transfers. This is a huge relief for businesses that provide peer-to-peer (P2P) transactions. Learn more: https://rubygarage.org/blog/how-blockchain-works#article_title_1 Blockchain in Trading and Trade Finance The trade financing field requires lots of tedious paperwork and bureaucracy. Stock and share purchases have to pass through brokers, exchanges, clearing, and settlement. Shipping, for example, requires client-side etiquettes like lading bills, invoices, and the letter of credit. Each transaction is typically completed within three days. Yet transactions can be delayed when trading transpires over the weekends. The blockchain technology can release traders from troublesome checks of counterparties and optimize the complete lifecycle of a trade. Using a blockchain, companies can intensify trade accuracy, speed up the settlement process, and reduce contingencies. Ornua and Barclays completed the world’s first blockchain trade transactions in 2016, employing four hours rather than a week on a letter of credit — a document guaranteeing the export of $100,000 worth of agricultural products. IBM & Maersk collaborated for a global trade platform to attain scalable solutions of Blockchain in Fintech. Furthermore, Forbes released its report of Top 50 Billion-Dollar companies who’re exploring the scope of implementing blockchain solutions. Learn more: https://www.forbes.com/sites/michaeldelcastillo/2019/04/16/blockchain-50-billion-dollar-babies/#3d2cf7be57cc Blockchain in e-KYC Utilities Identity can be undoubtedly established by government-issued documents such as driver‘s licenses, social security cards or passports, etc. Establishing identity through KYC verification is a lengthy procedure. While exploring the bank-driven approach to KYC customer record sharing, there is always a debate around centralized versus decentralized approaches. According to Niall Twomey, Chief Technical Officer, Fenergo, The centralized model offered centralized KYC utilities, controlled by a single entity. The main proponents and vendors behind these models at the time were incumbents with huge data resources and reach, which makes sense when it comes to creating a KYC utility. However, each utility had separate financial institution members, meaning that the overlap of customers and the ability to re-use customer information between them was seriously diluted. This was a key showstopper for utilities at the time. This led to a shift towards a decentralized model, where control is shared and participants coordinate with each other without going through a single intermediary. Blockchain is a form of distributed ledger technology, having a specific technological foundation and cryptographic features that enable the storage of data in an immutable (unchangeable) ledger of ‘blocks’ of records. The blocks of records are linked in groups or a ‘chain’, which are maintained by a decentralized network, where all records are approved by consensus. It can build trust between financial institutions as it is auditable, and can help streamline the attestation process; ensuring clients are in charge of their own personally identifiable data. The use of blockchain, currently best known as the foundational technology for Bitcoin and other cryptocurrencies, could overcome inefficiencies and duplication of effort in KYC information gathering between legal entities within a more comprehensive financial corporation or even between competing banks. The blockchain offers a digital identity system. Using this system, clients need to go through validation just once and can then use this verified identity document to conduct transactions all over the world. A blockchain allows clients to • Manage their personal identity data and reputation; • Share their data with others without safety concerns; • Log in to digital services without passwords; • Digitally sign any type of documents, such as claims and transactions. for Credit Scoring FinTech companies are widely using blockchain to cater to the unbanked population lacking CIBIL score and helping them get credit. Apart from the unbanked and underbanked, two more groups of consumers — credit invisible and unscorable — lack banking services. The Consumer Financial Protection Bureau (CFPB) shows that one in ten adults in the USA don’t have any credit history, and 19 million Americans have unscored credit records. Unscorable consumers mean people who have credit records at least in one credit reference agency but the data is too out-of-date to generate a reliable score. Consequently, millions of people are deprived of loans, mortgages, the ability to rent apartments, and more. Traditional banks and lenders approve loans based on a system of credit reporting. Blockchain technology unlocks the possibility of peer-to-peer loans, complex programmed loans that can approximate a mortgage or syndicated loan structure, and a faster and more secure loan process in general. When you apply for a bank loan, the bank evaluates the risk involved. They do this by looking at factors like your credit score, debt-to-income ratio, and homeownership status. This centralized system is often unfriendly to consumers. The Federal Trade Commission concludes that one in five Americans have a “potentially material error” in their credit score that negatively affects their ability to get a loan . Alternative lending using blockchain technology offers a cheaper, more efficient, and more secure way of making personal loans to a broader pool of consumers. With a cryptographically secure, decentralized registry of historical payments, consumers could apply for loans based on a global credit score. All in all In fintech, blockchain finds application in areas like digital ID, customer authentication, insurance, to name a few. Blockchain practitioners are experimenting with this technology to bring out new use cases and applications to solve the repetitive and complicated issues in the fintech industry. Blockchain in fintech is anticipated to reach $6,700 million by 2023 in the United States. Financial institutions will use blockchain for smart contracts, digital payments, identity management, and trading shares. The blockchain sector in fintech has been intended to provide banking with a more seamless and efficient experience. We will soon see the process of cash to crypto and vice versa to become ubiquitous. Blockchain technology has tremendous potential to deliver excellence in core areas of banking and financial institutions’ business model. But to succeed in implementing blockchain, financial institutions should collaborate with the ecosystem before they launch blockchain solutions.

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5 FinTech Companies Disrupting Banking And Finance

Article | March 12, 2021

You may think of ATM workings as a revolutionary experience but since the advent of Fintech, the entire financial services domain has entered a new era. Whether you purchase a cup of coffee or manage your finances, fintech is everywhere. From payments via apps such as Payoneer or Paypal to getting reports, or even using cryptocurrency, fintech is everywhere. This decade — 2020 — is bringing along loads of useful technological developments and therefore, you need to implement these updates to stay ahead in the industry and offer better services.

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Spotlight

Old Mutual Wealth

The Old Mutual Wealth group is a leading UK and cross-border wealth manager. We provide financial advice through the Intrinsic network, wealth management products and services through the Old Mutual Wealth UK and International platform, asset management solutions through Old Mutual Global Investors and discretionary investment management through Quilter Cheviot.

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