Article | February 28, 2020
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’.
Article | February 28, 2020
Open Banking is all about the customer being in control of their data and funds. It gives them the freedom and flexibility to decide when and with whom to share their valuable information. However, as with all vibrant and progressive ecosystems, speed, security, and ease of use will determine open banking’s future success along with the key issue of trust. Will the end user trust people to share data with them and trust their banks to still protect their data?
PSD2 Open Banking gives Payment Service Users (PSUs) the legal right to share their transactional account data with regulated third party providers (TPPs). For this to be possible, the 6,000+ Financial Institutions providing transactional payment accounts that can be accessed online have to put in place open banking APIs. These APIs give TPPs the access required to either make payments on an account holder’s behalf or view account data and funds, both of which require the account holder’s prior explicit consent. Access can only be denied if a TPP is believed to be unauthorised or fraudulent.
Open banking regulation has given rise to a new group of FinTechs who are seizing the opportunity to create innovative apps and products with the customer at the core of the offering. At the end of 2019, 240 TPPs from across the EEA and UK were regulated to provide open banking services. A year later, this figure had increased to 450 (excluding the thousands of credit institutions that are also able to act in the capacity of TPPs). The near doubling of newly regulated entities demonstrates user demand for the innovative products and services that these organisations are offering – it is now down to trust and security in the ecosystem, along with ease of use, to drive volumes.
The ability for TPPs, many of whom may be unknown to these Financial Institutions, to request immediate access to valuable data and funds presents many challenges and risks – all of which must be addressed without introducing potential friction in the customer journey. The main challenges are knowing if a TPP is who it claims to be and whether it is regulated to provide the services being requested at the time of the transaction request. After all, these are the key factors enabling the bank to trust the TPP and feel confident the end user can trust them. The added difficulty of knowing which markets within the EEA a TPP is authorised to operate in is an additional challenge.
Financial Institutions have long been the trusted guardians of their customers’ data and funds. Although the open banking model means the customer now has ultimate control of their data, it is still primarily the Financial Institution’s responsibility to ensure nothing goes wrong and they are likely to be held liable in any disputes that arise. There is also the very real reputational risk to Financial Institution if something does go wrong.
Checking a TPP’s identity, its current regulated status, and the services it is requesting to perform are essential but not easy tasks to complete in that, firstly, a Financial Institution needs to determine whether a TPP is who it claims to be. This is done by having real-time access to the 70+ Qualified Trust Service Providers (QTSPs) who can issue PSD2 eIDAS certificates. These eIDAS certificates contain the requisite information on a TPP’s identity and are used to secure communications between Financial Institutions and TPPs. They also digitally seal messages, ensuring the integrity of the concept and proof of origin.
However, an eIDAS certificate can have up to a two-year validity period. During this time, changes may have been made to a TPP’s regulatory authorisation status by its Home National Competent Authority (NCA). This introduces significant risk to the Financial Institution’s decision process.
eIDAS certificates also do not contain information on the countries a TPP is authorised to provide their products and services into under passporting rules. This information is held on the TPP’s Home NCA Credit Institution and Payment Service Provider (PSP) registers. Between them, the 31 NCAs maintain over 115 databases and registers. Checking them at the time of a transaction request is paramount to prevent fraudulent TPPs from slipping through the net.
According to the Konsentus Q4 2020 TPP tracker, every country in the EEA had at least 75 TPPs who could provide open banking services. These may not all be Home regulated TPPs. Take, for instance, Germany, who had 35 Home Regulated TPPs in December 2020 but an additional 112 TPPs who could passport in their services. To do the requisite due diligence on all these TPPs would require having online access to all the databases and registers hosted by the NCAs regulating these TPPs. This means connecting to the 31 NCAs and interrogating over 115 separate registers in real-time, in addition to connecting with all the QTSPs who issue PSD2 eIDAS certificates.
When a Financial Institution is presented with an eIDAS certificate by a TPP, if a real-time online connection can be made to all the legal sources of record, the Financial Institution can make an instant informed risk management decision on whether, or not, to give the TPP access. All this can be done behind the scenes without the end user even being aware of what is happening.
As volumes look to dramatically increase over the next few years fraudulent and other sorts of attacks are bound to increase. Financial institutions are going to face increasing challenges around protecting end users’ data, ensuring access is only given to those with the appropriate authorisations and permissions. A very real risk for them is the reputational one; after all, end users may not be that good at separating a reputational issue around open banking from broader issues around their banking relationship.
For Financial Institutions, maintaining trust in their brands is going to be crucial going forward, but the risks are going to increase if they have not locked down who can access end user account data and funds.
Article | February 28, 2020
Blockchain is a relatively new technology but is significantly changing the world around us. The term refers to a decentralized ledger technology used in cryptocurrency transactions. Almost everyone is now familiar with Bitcoin and other cryptocurrencies. Blockchain technology is utilized to record cryptocurrency transactions and to ensure the security of such transactions.
Blockchain technology continues to impact several industries – banking and finance are one of the industries. The trend continues to cybersecurity, shipping, real estate, and also digital marketing. Blockchain began as a technology for cryptocurrencies, but now it is set to take over several other industries.
Since blockchain is a decentralized technology, it assures marketers that their transactions are secure by improving cybersecurity. The technology is not centrally controlled, as nobody controls or owns blockchain. With this in mind, marketers are not only waiting anxiously to see how blockchain will optimize or impact their work, but also looking forward understanding how they can better leverage the technology to deal with business partners and reach millions of potential customers in the digital marketing industry.
Here are nine ways in which blockchain marketing can help marketers to boost their strategies and thus transform the consumer experience.
1. Targeting and Engaging the Right Audience
With regards to the digital marketing industry, an estimate of 70% of marketers fail to target consumers with behavioral data, as only about one in a thousand ads get clicked in an online displays ad campaign.
Despite the majority of marketers having lots of consumer data and paying huge fees to middlemen involved in advertising, they are still unable to engage and target the right audience.
Blockchain marketing is an effective means through which marketers can use to get the right audience to see their adverts and then engage them with such ads. The technology creates a decentralized search engine where marketers easily reach and get in front of their target audience.
Through this technology, marketers can also compensate target consumers using tokens (digital wallets) for providing their personal data to the marketers. Every time someone clicks on adverts on a marketing company’s search engine, they get paid. This increases the hyper-targeting of adverts, and consumers only see those ads that they have shown interest in. In this way, marketers only target and engage the right audience.
2. Ad Fraud Prevention
Ad fraud is becoming an increasing problem facing advertisers and marketers. Paying for fake clicks and impressions is a common trend nowadays, as about one in every five pay per clicks is found to be fraudulent.
Ad fraud is emptying marketers’ money and distorting their analytical data, which eventually affects their strategic decisions towards their marketing and advertising efforts.
With the application of blockchain technology, marketing platforms can display all click-throughs in real-time, and marketers rent out their advertising space and attract quality traffic. In this way, blockchain authenticates clicks and therefore prevents ad fraud.
3. Decentralizing E-Commerce
Blockchain is decentralizing how consumers buy products and services online. Marketers can use the technology to create decentralized marketplaces where they can sell their products or services directly to consumers without the need of using expensive third-party platforms. Such decentralized marketplaces have built-in Bitcoin wallets that help to pay and earn in cryptocurrencies without the need to rely on third-parties or intermediaries like banks.
4. Influencer Marketing
Consumers normally believe what other customers say about a product or service rather than what a brand is saying about itself. With being that case, the majority of marketers allocate budgets for influencer marketing (a type of social media marketing that uses endorsements and product mentions from influencers) to promote brand awareness, drive engagements with their brands, and reach new target audiences.
Blockchain makes it possible for marketers to take advantage of influencer marketing. By leveraging the technology’s immutability and transparency, blockchain marketing helps marketers to authenticate the identity of influencers and validate their followers and get a guarantee of their investment. With the help of smart contracts, payments can be held in escrow until the desired output has been achieved by influencers.
5. Eliminating the Middlemen
Marketing involves finance and this means marketers doing transactions through banks. However, blockchain technology comes with digital wallets (cryptocurrencies) and this eliminates the need to conduct transactions through banks. The technology ensures that transactions run smoothly and minimizes the costs involved in making transactions through banks acting as middlemen.
6. Social Media
Blockchain marketing is set to change the scenario of social media for individuals providing services to businesses and those using social media to reach consumers. Social networking sites built on blockchain are more secure with no central hosting server.
One of the impacts of blockchain is that marketers can validate their own data without the need to rely on third-party tools for it. Blockchain ensures privacy, thus allowing users to transact in a private manner. Only the recipient and sender have knowledge about the contents of the transactions.
Blockchain verifies users’ identities and therefore ensures their genuineness. It maintains transparency in social media ads that involve the process of buying, booking, and placing ads, thus eliminates the chances of fraud.
Through blockchain marketing, it is possible for markets to get rid of the role of social media platforms (like Facebook, Twitter, Instagram) as middlemen by compensating customers directly instead of such intermediary platforms. When consumers log in on social networking sites, their data is released to marketers and blockchain ensures search data privacy.
Marketing firms, which are monitoring customer behavior, are able to obtain all information from one place, which is reliable because of blockchain’s high level of accuracy, and marketers pay consumers for their personal information.
Social media has spambots and fake news. With blockchain marketing, marketers are able to verify the content distribution, trace the spread of data, and even block fake contents and their contributors.
7. Data Collection
Good data is highly important for marketers. Despite having abundant marketing tools and making attempts to try out different marketing strategies, the majority of marketers are still unable to get quality and accurate customer data. It is only consumers themselves who can provide accurate data.
But how can a marketer make customers share their data? Blockchain marketing has made it possible for marketers to encourage customers to share their data in return for some compensation, and this making is a win-win situation for both parties. By putting consumers at the center of the data economy, data obtained in this way is highly authentic and relevant.
8. Smart Contracts
Blockchain enables smart contracts, thus helping marketers to offer services to clients across the world. Such contracts are “programmable agreements that execute automatically when conditions are met.” Every contractual milestone must be fulfilled, even for the next steps to come. This ensures that payments are made only after the contract terms are met.
The main benefit of a smart contract is that it can process transactions without third parties. The transactions are irreversible and can be traced, and through smart contracts, marketers get a guarantee that they will be paid and contractors are guaranteed of security. Such contracts provide transparency, thus saving time for both parties.
9. Reward Systems and Loyalty Programs
Customers always remember when they are made to feel special. Sales loyalty programs work so well when they make customers feel special. Marketers can use blockchain to create an unforgettable, unique experience for customers. Gift cards can be attached to the blockchain, thus creates a safe platform for issuing and maintaining gift cards and loyalty programs.
If clients accumulate gift cards but are unable to use or redeem them, then they will have a bad experience with the brand. However, with the use of blockchain, gift cards can be converted into cryptocurrencies or digital wallets, and make it easier for clients to redeem or use them.
Blockchain technology is still in its infancy and is expected to evolve and grow significantly in the next few years. It is set to disrupt digital marketing, offering marketers a variety of benefits in terms of efficiency, transparency, security, and performance. Marketers who plan to adopt blockchain marketing will be able to provide an increased trust to consumers and a better user experience because of hard-to-crack security and permission-based access of blockchain.
With blockchain technology, marketers can gain more accurate information from customers directly interested in their brand. This would not only increase their return on investment (ROI) but also enable them to target adverts to potential customers based on verified data. Marketers interested in global transactions always feel at ease knowing that implemented smart contracts will guarantee secure deals.
Article | February 28, 2020
In the ongoing technological era, the outsourcing software development company transports their valuable resources to their core business model and helps businesses to save a lot of time and money. To survive the digital era for financial institutions helps to drive efficiency in Fintech companies. Moreover, software development outsourcing companies offer solutions that enable financial institutions to manage bulk data, tech products, and much more to build an efficient environment with their tech services.
The financial service industries are becoming a leader in software development and corporate new strategies for fintech businesses. Many companies are planning to use this working model that is specialized in all processes and seek more agility and quality.
Outsourcing software development to the fintech industry can bring many gains to companies, so, in this blog we’re going to look at them closely. According to research, investments in fintech are expected to reach $40 billion in 2021. Additionally, software outsourcing companies makes the development process smooth and improves the quality of data analytics in the industry.
Read on to know the benefits of outsourcing software development to the fintech industry and achieve the dedicated digital transformation goals of your business.
What Are The Benefits Of Outsourcing Fintech Software Development?
Expand your business development
The benefits of outsourcing software development services creates a pleasing and commending condition for the fintech industry. It becomes easier to execute actions and plan for the company’s expansion if the management focuses on the core business and internal quality processes.
Additionally, the development service provider also helps to sustain the growth of the operation without investing huge investments in infrastructure and technology.
Economies of scale
If you’re planning to internally develop a software application requires both money and time. And not everyone has an extended IT team with dedicated developers. In such situations, software development outsourcing companies become your partner. The services provided by software outsourcing agencies for fintech development helps businesses to achieve economies of scale and allow them to invest more time on core competencies and perform critical tasks.
However, software development outsourcing offers competitive advantages to fintech industries by minimizing costs, better customer service, and maintaining product quality with an affordable budget.
Optimize time for dedicated professionals and managers
Hiring outsourcing software development services helps businesses a practical and sensible optimization of the time of professionals and managers. If your business is planning to enhance the process of professionalism.
To such a degree, fintech industries can directly help to increase the capital and implement strategic tasks and analyze surveys that collaborate to make the right decisions. Thus, outsourcing software development helps to monitor indicators and supervise the possibility of risk to the company.
Risk Management/ Critical-path method
IT outsourcing software development service providers carry a lot of risks. So to grab the absolute advantages, an organization should build effective risk management plans.
Reducing the number of data breaches is one of the most important challenges faced by many fintech industries. This challenge is even more critical when you consider the information type such as salaries, credit card information, social security numbers, and much more which can be used by criminals for gaining profit. Various components and operations help to reduce risks and provide a successful path for outsourcing when you know the challenges and tackle the situation.
Increased profits through data analytics
Finance is the leading data collection and analytics industry that helps to increase software profit via data analytics. Popular investment banks like Goldman Sachs and JPMorgan have employed specialists who analyze data when issuing trading futures.
These fintech software development industries are now identifying customer data and helping them to increase sales and promote customer loyalty. To analyze creditworthiness and provide services to each customer they use credit scores and demographic data that also helps them to build analytics software with the Python programming language.
Reduce software server load via cloud computing
To implement cloud computing technology, the fintech industry has been reluctant to use web-based storage for bulk data which is vulnerable to hackers. There are few improvements in data security that have led banks to begin integrating modern technology into their core business functionalities.
To store sensitive business information related to accounting and communications, many banks are using cloud computing. In recent years, it is reported that the SaaS model is one of the best models that is implemented by fintech software enterprise to store emails, contact lists, and other important information online.
Faster product development
Hiring software outsourcing companies helps fintech industries to start your projects quicker and complete them before the deadline. The outsourcing enterprise implements traditional hiring processes for software development projects and instructs those dedicated developers to perform critical tasks who can start product development without investing much time on the hiring process.
The dedicated team of developers working at any outsourcing companies help to shorten the fintech software development lifecycle and work on multiple projects to quickly resolve common problems and reduce the overall length of the software.
The fintech enterprise is investing millions of dollars to build custom software according to their business requirement to survive in the new data-driven marketplace. Leveraging a fintech software development service is much bigger than just launching a system that enables the creation of innovative fintech solutions in the future.
Many of these companies are switching to fintech software development that provide a dedicated development team to perform critical and complex tasks of any software and reach their goal without distracting from their core missions.