IBM is probably not the name you expected to see in front of the latest’Pay,&8217; but Big Blue is indeed wading into #mobile #payments. The newest form of mobile payment was introduced yesterday at Money20/20 in Las Vegas, and its selling point does not seem to be convenience so muchRead More
Bank Innovation
Attracting US$ 19.1 billion in investment in 2015, #fintech firms are growing fast. As customers are increasingly relying on financial services provided by non-traditional providers, #banks are #gearing up for #digital #disruption of the industry, according to a new report by #Swisscom’s e-foresight and Sourcing Competence Center of the University of Saint-Gall and Leipzig.
Peer-to-peer payment has been a hot topic in Switzerland, notably since the launch of Twint and Paymit. But despite the buzz, volumes of mobile payments remain small, growing at a slow pace.
Nevertheless, over 50% of banks believe that mobile contactless payment methods will become popular in the near future. Peer-to-peer services and contactless payments methods will continue to evolve, grow and remain an opportunity for financial services firms, the #report says.
92% of respondents said that online onboarding will be crucial for banks in the near future. In March, the Swiss Financial Market Supervisory Authority (FINMA) passed new rulings aimed at reducing obstacles to fintech, among which a circular on video and online customer identification to allow financial intermediaries to onboard clients by means of online and video transmission.
A report by Signicat released in April argued that customers are feeling increasingly unsatisfied with banking onboarding processes which are often considered frustrating and time-consuming. Customers are demanding 100% online processes, the study found.
According to the Swisscom survey results, banks are confident that digital assistance, #robo-advisory, payments and financing are the areas that will be the most impacted by fintech solutions.
Qualifying robo-advisors as one of the key innovations in the sector, the report advises banks to identity their target groups for such services and start elaborating a strategy.
Despite Switzerland&8217;s relatively small crowdfunding sector when compared with the likes of the US and the UK, the industry has been growing steadily since 2014. The report cites the launch of crowdfunding platforms by a number of banks as well as the increasing number of collaborations between startups and financial institutions in the areas. It further notes the emergence of innovative solutions such as real estate crowdfunding and predicts notable growth for SME lending and financing.
Banks named the most disruptive technologies in the industry as being mobile terminals, biometric authentication, cloud computing and Big Data.
Earlier this week, the Swiss government announced plans of policy changes to boost competitiveness of the country&8217;s financial industry. Notably, the Swiss Federal Council released a report on a “future-oriented financial market policy” that would allow foreign banks to open in the country. The legal framework is expected to encourage the fintech sector and sustainable investment.
&8220;A stable and competitive financial sector that functions well is a mainstay of the Swiss economy. The Swiss financial centre should continue to assert itself as one of the world&8217;s leading locations for financial business and even be able to strengthen this role,&8221; the Council said as quoted by Out-Law.
The move came a month after Switzerland&8217;s financial regulator FINMA has signed a fintech cooperation agreement with the Monetary Authority of Singapore (MAS).
The agreement aims at providing a framework for fintech companies in Singapore and Switzerland to expedite discussions on introducing new products into each other&8217;s market and understand regulatory requirements.
MAS has signed similar fintech agreements with the Korean Financial Services Commission, the UK financial authority and the government of Andhra Pradesh.
Featured image: Wireless technologies by ESB Professional, via Shutterstock.com.
The post Swisscom Fintech Report: Banks Are Gearing Up For Digital Disruption appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
A recent report by the survey software provider SurveyMonkey indicated that #mobile downloads for the bank had dropped 7.7% since the cross-selling scandal broke, while the other megabanks saw increases. So, while Chase, BoA, and Citi saw growth within the expected range for their app downloads after the scandal, onlyRead More
Bank Innovation
In AI-Ready or Not, Weber Shandwick surveyed global consumers and senior ranking
marketers on their attitudes toward and expectations for #artificial #intelligence (AI). The
following provides the results of the consumer perspectives and what those implications
mean for marketers.
In its most basic definition, AI is intelligence exhibited by machines. It is frequently thought of as
robotics, but encompasses a broader range of technologies, some of which are in wide use among
the general population today.
The post AI-Ready Or Not: Artificial Intelligence Here We Come! appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
Image source Eons ago I managed a sales team that sold core banking systems to global #banks. One sales guy was consistently the best performer. I decided to find out his secret to teach it to the rest of the sales team. He had found a report that senior managersRead More
Bank Innovation
I can remember sitting in conferences back in Australia during the “naughties” (2000 to 2010) and the talk was around which of the four major local #Banks was going to be the last to complete their #core banking replacement programs. It is the middle of the next decade and I think the count is two completed, one still in progress and one not started.
Having experienced the bruised ribs and black eyes from more than a few core banking system implementations, I can say with some authority that it is one of the hardest things to do in a bank. Apart from the #technology spaghetti that a core system replacement has to deal with, it is also a major transformation program, because it invariably ushers in numerous analogous process re-engineering and automation programs.
So if you are a bank and thinking about embarking on a core banking system replacement, you have to ask yourself whether this is the best focus of the majority of your investment capital and energy over the next three to five years or more.
I would argue that it is not, because of the race for scale, the imperative to digitalizeand the potential of #blockchain.
Scale is King
Back in the 1880s in the US, the Oklahoma Land Runs (https://en.wikipedia.org/wiki/Land_run ) saw settlers dashing out on horses, in wagon trains, or any transport they could find to put stakes in the ground and lay claim to newly opened territory. Within 24 hours of each run, thousands of settlers had laid claim to packets of land, but the slow and the indecisive missed out.
The modern-day equivalent of the land run is happening today, but the real-estate of the #digital age is customers. Alibaba is leading the “customer land run” across Asia. They have rapidly accumulated hundreds of millions of customers across China, and are already pushing out for new claims across Southeast Asia.
Alibaba’s investments in Paytm and Lazarda are prime examples of its drive for scale. Both take-over targets had been running loss-making business models focused on customer acquisition. In 2015 Lazarda for example had over a billion dollars in sales, yet by the time Alibaba bought them out they were close to burning through their entire 2014 $250m cash injection.
Alibaba paid $500m to buy out most of the existing Lazarda investors and tipped in another $500m to turn that stake into a majority controlling interest. They weren’t buying a great technology platform (Alibaba already has that) and certainly not a profitable business model. They were buying customers.
But why pay such a premium? Surely Alibaba could have competed head to head with the likes of Lazarda and won over customers?
The answer is that this is a land run. Alibaba want scale and they want to lay claim to it before their competitors do.
If you look at Ant Financial’s own publications and beyond, (http://www.alibabagroup.com/en/ir/pdf/160614/12.pdf ) the competitive advantage that scale gives them in terms of customer analytics and marketing is clear. If you read between the lines you will also see that there is an even bigger prize to be had with scale.
Alibaba’s customer numbers and payment transaction volumes are rivaling those of Mastercard and Visa. This is significant because the major credit card schemas used to rely on a combination of pipes (the need for physical cards, POS terminals at merchants and secure connections via banks) and volume as barriers to entry to protect their businesses. Smartphones and apps have removed the need for bespoke pipes, so the only barrier to entry now is volume, and Alibaba is breathing down the schemas’ necks.
It is not only the credit card businesses whose revenue is under threat; it is also the banks. Combating the threats of the customer land run is probably a more pressing problem to tackle right now than any core system replacement.
Customers want digitalization
As I noted in a recent article, there are multiple imperatives for banks to undertake digital transformations, but the most pressing of them is customer expectations. While there is no doubt that end-to-end digital solutions are required to take full advantage of the efficiencies and scalability that digitalization implies, for banks sitting on legacy core banking systems I think there is a strong argument now to “fake it until you make it” in terms of digitalization. A lot of customer-facing digital transformation can be undertaken while sitting on legacy platforms, and you are more likely to lose customers because of a lack of digital engagement than you are because of poor-performing back-end systems.
Blockchain is real
I have to admit that I have been a blockchain skeptic for some time, but I am changing my tune. The real prize of blockchain in my opinion is not so much the crypto-currency facilitation. For me it is the distributed ledger capabilities.
Wells Fargo and CBA just recently announced their joint experiment to use the blockchain’s distributed ledger to facilitate a trade finance deal. (http://fortune.com/2016/10/24/commonwealth-bank-well-fargo-blockchain/ )
The blockchain is the perfect adjunct to trade finance transactions, and once trade finance gets settled there, other ledger-based financial transactions will soon follow. So if you are a bank thinking about buying the latest core banking suite from one of the leading vendors, now would be a good time to hold off and hopefully leapfrog to a blockchain-based solution in three to five years (my guess on the gestation period for the new breed of blockchain-based core systems).
Laut einer neuen Visa Studie hat sich die Zahl der europäischen Verbraucher, die regelmässig ein mobiles Endgerät – das heisst Smartphone, Tablet oder Wearable – für das #Bezahlen nutzen, im letzten Jahr verdreifacht. Aktuell verwenden 54% der befragten Verbraucher regelmässig ein mobiles Gerät, um Produkte und Dienstleistungen zu bezahlen. Bei der gleichen Befragung im Vorjahr waren es nur 18%.
Für die Studie wurden mehr als 36.000 Konsumenten in 19 europäischen Ländern befragt. Die Ergebnisse zeigen, dass die Akzeptanz des digitalen Bezahlens in den vergangenen 12 Monaten stark zugenommen hat. Noch vor einem Jahr gaben 38 % der Befragten an, noch nie ein mobiles Endgerät zum Bezahlen benutzt zu haben und dies auch nicht vorzuhaben. Heute ist diese Zahl auf 12% gesunken.
Die Top Ten der Länder, in denen #digitales Bezahlen am weitesten verbreitet ist, lassen sich dabei in zwei Gruppen unterteilen: Auf einer Seite stehen aufstrebende Märkte wie die Türkei oder Rumänien, die traditionelle Bezahlmethoden übersprungen und neue Technologien schneller adaptiert haben. Auf der anderen Seite stehen weit entwickelte Märkte, insbesondere die nordischen Länder, die neue Technologien schnell annehmen.
73% der Schweizer nutzt digitales Bezahlen
In der Schweiz nutzen insgesamt 73% der Befragten, die ein Smartphone, Tablet oder Wearable besitzen, digitales Bezahlen. 49% davon nutzen ihre mobilen Endgeräte für E-Banking und 42% bezahlen damit In-App Käufe. Die Befragten fühlen sich insgesamt wohl dabei, mit mobilen Endgeräten zu bezahlen, unabhängig davon, ob es sich um teure oder günstigere Produkte und Dienstleistungen handelt. In der Schweiz begleichen 27% höhere Beträge, beispielsweise für Reisen oder Elektrogeräte, digital. 38% bezahlen so Bus- oder Zugtickets.
Stefan Holbein, Country Manager von #Visa Europe Schweiz, sagt: „Die Zukunft des Bezahlens hat bereits begonnen. Verbraucher in der Schweiz und Europa nutzen heute eine Vielzahl neuer Bezahlmethoden. Mit dem Markteintritt von Apple Pay diesen Sommer kann in der Schweiz, als einem der ersten Länder in Europa, bereits an über 100‘000 kontaktlosen Zahlterminals mobil bezahlt werden.
“Millionen vernetzter Geräte werden es ermöglichen, tägliche Zahlungen einfach und sicher in nahezu jede Technologie zu integrieren. Wir erleben aktuell eine neue Ära des Bezahlens mit Wearables wie Smartwatches, Armbändern und sogar Kleidung. Dieser Trend wird sich weiterentwickeln und es Verbrauchern ermöglichen, die vernetzten Geräte zu verwenden, die am besten zu ihrem individuellen Lebensstil passen.“
Kontaktloses Bezahlen ist Basis für digitales Bezahlen
Die zunehmende Nutzung des digitalen Bezahlens hängt mit der wachsenden Verbreitung des kontaktlosen Bezahlens zusammen. Die Studie zeigt, dass kontaktloses Bezahlen mittlerweile über alle Altersgruppen hinweg eine alltägliche Bezahlmethode ist. In der Schweiz haben in diesem Jahr fast die Hälfte (48%) der Befragten kontaktlos bezahlt. Personen zwischen 25 und 34 Jahren nutzen das kontaktlose Bezahlen mit 54% am häufigsten. Europaweit sind die Nutzer kontaktloser Karten ausserdem weitaus offener für neue Bezahlmethoden als Verbraucher, die nicht kontaktlos bezahlen. Sie sind stärker daran interessiert, mit mobilen Geräten in Geschäften zu bezahlen (52% der Verbraucher, die kontaktlos bezahlen, vs. 32% der Konsumenten, die dies nicht tun), über die App eines Händlers einzukaufen (49 % vs. 31%) oder mit mobilen Geräten ein Essen zu bezahlen (50% vs. 30%).
The post Visa Digital-Payment-Studie: Digitales Bezahlen immer beliebter appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
Today #Mastercard announced that it will be partnering with Microsoft, Google, and #Samsung in order to integrate its #Masterpass network with those digital wallets — so users of Google Wallet, #Android Pay, or Samsung Pay can shop online wherever Masterpass is accepted, starting in early 2017. “Once the consumer optsRead More
Bank Innovation
Peer-to-peer #lending, which aims at shaking up the banking market and attacking one of the core profit-generating activities of #banks, is not likely to #displace banks from their core roles of lending to retail consumers, according to a report by Deloitte.
Peer-to-peer (P2P) lending, also referred to as marketplace lending, leverages digital platforms and modern #technology to cut out the middle man and provide better rates of interest to lenders and borrowers.
Despite the promising outlook, the P2P lending industry has recently come under fire as Renaud Laplanche, CEO of Lending Club, one of the leading platforms in the US, was forced to resigned after the company revealed that it had provided mis-assessed loans to Jefferies and Co., which was distributing the loans to institutional investors, reports the Wall Street Daily.
The news was followed shortly by a report released by the US Treasury that warned about peer-to-peer lending businesses, recommending it to be more tightly regulated.
The skepticism over P2P lending has also been felt in China where loan sharks have been widely criticized for practicing aggressive debt recovery tactics, demanding for instance nude photos as collateral from female borrowers for blackmail if they fall behind on their repayments, reports the Financial Times. Other disturbing debt recovery tactics in China include property destruction and bodily injury.
Bankruptcy lawyer Han Chuanhua of the Zhongzi Law Offices in Beijing, told the media outlet:
“If they borrow from banks there is no threat to personal safety. But if they borrowed from private lenders, especially high-interest lenders, it can happen. […] If they can’t repay sometimes the high-interest lender sends people to their homes. Mostly they threaten, but sometimes they take action. These types of people don’t go through legal channels.”
While P2P lending has enabled the masses to gain access to #credit and investment opportunities in China, the sector has nevertheless a Wild West aspect with lenders reportedly peeking in bathrooms in order to assess credit risks and borrowers settling payment obligations with bottles of spirits.
Despite the struggles, the industry continues its path to maturation with notable initiatives emerging to structure and legitimize the practice. For instance, the Marketplace Lending Association, launched in April with the purpose of promoting responsible business practices and sound policy to benefit borrowers and investors.
A similar organism exists in Switzerland called the Swiss Crowdfunding Association and counts among its members the likes of Advanon, Cashare, Lend, Swisspeers, WeCan.Fund, Crowdhouse and CreditGate24.
Launched in March 2015, CreditGate24 connects borrowers directly with private and institutional investors. During its first year of operation, CreditGate24 enabled more than 270 credit projects without any failure.
The company performs strict credit checks based on traditional methods with use of Big Data analytics.
Yet, P2P lending remains a risky bet compared to other savings and investment options, according to Deloitte. However, it highly depends on the market. Switzerland seems to be a very attractive destination. The country is known to be very reliable and strict in credit-#Risk #Management and investors can get attractive yields with the likes of CreditGate24 and others.
Featured image: Hand shake by Bplanet, via Shutterstock.com.
The post P2P Lending Won&8217;t Displace Banks; Dealing with Credit Risk Management appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
Yesterday the payments network formerly known as #clearXchange, a product offered by Early Warning, officially re-branded itself as #Zelle. The announcement was made by Early Warning’s president and CEO Paul Finch as he strode onto the Money20/20 stage wearing a polo with the brand–Zelle&8211;proudly embroidered in white. The Zelle network willRead More
Bank Innovation
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