#Banks don’t want to make the big investments that new payment systems require without some solid business case. But looking for ROI in the fast-moving world of #payments can delay projects and leave a bank behind the competition.
Financial Technology
From the use of artificial intelligence to bank apps to chatbots, #Fintech has become a behemoth force to reckon with in today’s world.
Fintech was coined from “Financial #technology”. It simply refers to the use of technology across all functions and facets of financial services.
It is impossible to disregard Fintech as a solid aspect of change in the world today.
All trends also indicate that it could only get better.
Particularly, the foreign #exchange sector is enjoying this advancement in technology. Those conversant with the foreign exchange sector can attest to the revolution and scalability associated with fintech.
It is pertinent to note that foreign exchange is not Forex. Forex refers to a decentralized global market where the currencies in the world are traded with leverage. Forex is also referred to as currency trading.
Foreign exchange on the other hand, is the conversion of different currencies. Here, no leverage is involved. This does not mean foreign exchange cannot generate profit as a business. With a good understanding of the pros and cons of the financial market, it is highly lucrative as well.
A major challenge for many that deal with foreign exchange frequently is costs required in executing transactions. Such transactions include transfers and remittances. Fintech has worked in this space to cut down the costs associated with foreign exchange. This advantage is not only beneficial to only customers, but to the #banks as well. Fees have drastically reduced and networks now easily render services that were out of their capacity in previous years. The access of customers to smartphones is also a major plus for the fintech industry, as processes could be carried out in a matter of seconds.
As a result of the drastic reduction in dealing with foreign exchange, several people are drawn to this market. Hence, there is an overall boom and the market gets more stable with every new fintech development.
For cross-border remittances, minimization and elimination of fees is now possible. This is all possible; thanks to fintech.
Fintech has helped in getting closer towards achieving the United Nation SDG of a global 3% transaction cost.
All of over the world, financial institution experience all kinds of fraud attacks. In the foreign exchange sector especially, fraud is still a thorn in the flesh. In today’s fintech powered world, devices can be tracked and traced after certain transactions with foreign exchange.
Biometrics like vocal patterns, facial recognition, thumbprints and irises are now used for authentication. These kinds of verifications can also be performed on the user’s smartphone. Online payment apps are taking advantage of fintech in this respect.
Trust is necessary for dealing in the foreign exchange market. The blockchain which is highly trusted, has entered the fintech space. In Blockchain, no historical data can be altered without a generalized agreement from all participants of the network. A system administrator or a user in a single entity can’t make changes to the data on a blockchain without having an agreement from every participant. This provides a perfect platform trading and reduction in criminal activities, as nothing is done in the hidden.
Gradually, problems of money laundering are going into extinction. The anti-money laundering departments of many banks now use artificial intelligence. Machine learning is also helpful. This is because fintech has helped in combating laundering as well as other frauds. The availability of data in the technological space makes it easier. Although, there are several hindrances, the process is steadily at work. Fintech’s relevance in foreign exchange continues to evolve. Fintech is moving to the point of being at the very center of foreign exchange. Reaching that milestone will indicate real progress.
Conclusively:
Indeed, with fintech, the world’s finance has taken its place within the sphere of this “global village”. It is more important that the world at large embraces and understands the advancement in fintech.
[linkedinbadge URL=”https://www.linkedin.com/in/demioye” connections=”off” mode=”icon” liname=”Demi Oye”] Demi Oye is Freelance Writer in Fintech
#Forrester urges #banks to be cautious #ahead of #volatility, but then charts some aggressive steps they need to take
Financial Technology
#Kony has expanded its range of banking apps that can sit on top of legacy systems to provide modern #digital functionality. With an acquisition of tech from #Umpqua #Bank it can provides #banks with a way to combine digital mobile with human interaction.
Financial Technology
#Banks‘ #digital efforts are decent, but not exciting, to their customers who prefer interacting with Amazon and social media.
Financial Technology
The move toward real-time #payments in the U.S. has been slow because regulators have not mandated that #banks go real-time.
Financial Technology
Following the rollout of #Open #Banking regulations in the UK and the launch this year of the EU’s Payment Services Directive 2 (PSD2), countries across the Asia-Pacific region are following suit to establish their own frameworks to enable #banks to share select customer data with third-party providers (TPPs), and TPPs to run transactions on customer accounts.
As in Singapore, #Malaysia’s approach to Open Banking, while less comprehensive than that of its city-state neighbour, has been to establish a non-mandatory framework and to support banking transformation with the creation of implementation teams. There are currently no timelines for implementation.
Malaysia’s central bank and principal financial services regulator, Bank Negara Malaysia (BNM), established a Financial Technology Enabler Group (FTEG) in June 2016 to support innovations in the sector. The FTEG is responsible for formulating and enhancing regulatory policies related to the adoption of new #technology in financial services in the country. Accordingly, in mid-2017 it launched a #Fintech Regulatory Sandbox framework to allow the testing of applicable technology, including Open Banking.
In its final quarterly bulletin of 2017 [PDF], BNM focused on open APIs and their potential impact on the country’s financial sector, promising to establish an Open API Implementation Group in early 2018. This was set up in March, with a remit to develop standards on open data, security, access rights and oversight arrangements for TPPs, and to review existing regulations covering controls on customer information.
Also in March, the BNM set up an Interoperable Credit Transfer Framework (ICTF), which promotes collaborative competition for mobile payments.
The government is prioritising the impact of new technology on the banking sector, with insurers and government agencies a secondary focus. Banks have already seen the opportunities and risks, with some acting to anticipate and benefit from the impact of the country’s vibrant fintech scene, although in the main they lack the capabilities to launch and scale open APIs.
CIMB, for instance, launched its fintech incubation programme as early as 2015, targeting and mentoring startups for their API platforms. The bank subsequently released a point-of-sale and payments platform. Standard Chartered in early 2017 launched a global developer sandbox with limited API capabilities. Later that year, Maybank also launched a developer portal equipped with 20 APIs, enabling 85 differing operations. Hong Leong Bank, meanwhile, runs a “LaunchPad” contest to develop innovations, which led to the successful launch of five applications in its first year.
Another significant development that banks in Malaysia seized on was BNM’s granting in December 2017 of an e-money license to WeChat Pay, the payments platform run by Chinese tech giant Tencent. Hong Leong Bank, Maybank, Public Bank and CIMB subsequently partnered with WeChat Pay.
Partnering with fintech innovators is one way banks in Malaysia are monetising Open Banking APIs; bank-specific POS systems have also been sold with payment-API connectivity. Predetermined pricing models—subscriptions, per-call and flat rate charges—have also been used. So far, successful open API use cases such as Maybank’s Treats Card app, on the Maybank2u platform, have been focused on retail customers.
Several global, regional and Malaysian banks have granted developers access to their APIs via publicly available developer portals and sandboxes. Maybank, OCBC and DBS have advertised various applications and partnerships that have arisen from the use of their developer platforms. Some other banks, such as CIMB and Hong Leong, have been more selective, privately choosing which fintechs can access their APIs.
The use of developer portals and individual selection means that Malaysia has a number of siloed Open Banking use cases and products. The country’s Open Banking future will depend on how banks, fintechs and regulators develop a common framework and infrastructure that supports a cohesive ecosystem. The ASEAN Financial Innovation Network (AFIN), has been established to do exactly that.
AFIN, which is supported by the Monetary Authority of Singapore (MAS) and the International Finance Corporation, aims to accelerate fintech innovation, digital transformation and build an Open Banking ecosystem across the region. This gives Malaysian fintechs and banks the opportunity to develop the infrastructure and capabilities with other geographies to support a regional Open Banking ecosystem.
Like Singapore, there are risks in Malaysia’s approach: without enforced compliance, the standardisation and adoption of APIs across the country could prove difficult. There is also uncertainty around when the Malaysian authorities will impose regulation.
In Malaysia as well, further opportunities will present themselves to drive retail and SME customer adoption with additional services and reduce the cost of servicing banks’ customer bases. Ecosystem platforms for real-time data sharing between banks and regulators will enable new use cases and shared revenue models—and, ultimately, enable banks to build their own TPP services using their competitors’ APIs.
This article was written in collaboration with Ewa Wojcik, Sam Waldman and Hakan Eroglu. Many thanks for their input, research and analysis.
Accenture at Sibos
We’ll be discussing Open Banking and other topics at Sibos. Come see us at our booth and join us in the conversation around enabling the digital economy. Keep up to date on all the latest from us around Sibos right here on the blog.
The post The brave new world of Open Banking in APAC: Malaysia appeared first on Accenture Banking Blog.
Following the rollout of #Open #Banking regulations in the UK and the launch this year of the EU’s Payment Services Directive 2 (PSD2), countries across the Asia-Pacific region are following suit to establish their own frameworks to enable #banks to share select customer data with third-party providers (TPPs), and TPPs to run transactions on customer accounts.
As in Singapore, #Malaysia’s approach to Open Banking, while less comprehensive than that of its city-state neighbour, has been to establish a non-mandatory framework and to support banking transformation with the creation of implementation teams. There are currently no timelines for implementation.
Malaysia’s central bank and principal financial services regulator, Bank Negara Malaysia (BNM), established a Financial Technology Enabler Group (FTEG) in June 2016 to support innovations in the sector. The FTEG is responsible for formulating and enhancing regulatory policies related to the adoption of new #technology in financial services in the country. Accordingly, in mid-2017 it launched a #Fintech Regulatory Sandbox framework to allow the testing of applicable technology, including Open Banking.
In its final quarterly bulletin of 2017 [PDF], BNM focused on open APIs and their potential impact on the country’s financial sector, promising to establish an Open API Implementation Group in early 2018. This was set up in March, with a remit to develop standards on open data, security, access rights and oversight arrangements for TPPs, and to review existing regulations covering controls on customer information.
Also in March, the BNM set up an Interoperable Credit Transfer Framework (ICTF), which promotes collaborative competition for mobile payments.
The government is prioritising the impact of new technology on the banking sector, with insurers and government agencies a secondary focus. Banks have already seen the opportunities and risks, with some acting to anticipate and benefit from the impact of the country’s vibrant fintech scene, although in the main they lack the capabilities to launch and scale open APIs.
CIMB, for instance, launched its fintech incubation programme as early as 2015, targeting and mentoring startups for their API platforms. The bank subsequently released a point-of-sale and payments platform. Standard Chartered in early 2017 launched a global developer sandbox with limited API capabilities. Later that year, Maybank also launched a developer portal equipped with 20 APIs, enabling 85 differing operations. Hong Leong Bank, meanwhile, runs a “LaunchPad” contest to develop innovations, which led to the successful launch of five applications in its first year.
Another significant development that banks in Malaysia seized on was BNM’s granting in December 2017 of an e-money license to WeChat Pay, the payments platform run by Chinese tech giant Tencent. Hong Leong Bank, Maybank, Public Bank and CIMB subsequently partnered with WeChat Pay.
Partnering with fintech innovators is one way banks in Malaysia are monetising Open Banking APIs; bank-specific POS systems have also been sold with payment-API connectivity. Predetermined pricing models—subscriptions, per-call and flat rate charges—have also been used. So far, successful open API use cases such as Maybank’s Treats Card app, on the Maybank2u platform, have been focused on retail customers.
Several global, regional and Malaysian banks have granted developers access to their APIs via publicly available developer portals and sandboxes. Maybank, OCBC and DBS have advertised various applications and partnerships that have arisen from the use of their developer platforms. Some other banks, such as CIMB and Hong Leong, have been more selective, privately choosing which fintechs can access their APIs.
The use of developer portals and individual selection means that Malaysia has a number of siloed Open Banking use cases and products. The country’s Open Banking future will depend on how banks, fintechs and regulators develop a common framework and infrastructure that supports a cohesive ecosystem. The ASEAN Financial Innovation Network (AFIN), has been established to do exactly that.
AFIN, which is supported by the Monetary Authority of Singapore (MAS) and the International Finance Corporation, aims to accelerate fintech innovation, digital transformation and build an Open Banking ecosystem across the region. This gives Malaysian fintechs and banks the opportunity to develop the infrastructure and capabilities with other geographies to support a regional Open Banking ecosystem.
Like Singapore, there are risks in Malaysia’s approach: without enforced compliance, the standardisation and adoption of APIs across the country could prove difficult. There is also uncertainty around when the Malaysian authorities will impose regulation.
In Malaysia as well, further opportunities will present themselves to drive retail and SME customer adoption with additional services and reduce the cost of servicing banks’ customer bases. Ecosystem platforms for real-time data sharing between banks and regulators will enable new use cases and shared revenue models—and, ultimately, enable banks to build their own TPP services using their competitors’ APIs.
This article was written in collaboration with Ewa Wojcik, Sam Waldman and Hakan Eroglu. Many thanks for their input, research and analysis.
Accenture at Sibos
We’ll be discussing Open Banking and other topics at Sibos. Come see us at our booth and join us in the conversation around enabling the digital economy. Keep up to date on all the latest from us around Sibos right here on the blog.
The post The brave new world of Open Banking in APAC: Malaysia appeared first on Accenture Banking Blog.
In today’s market all these services are available through non-bank service providers, posing a threat to the trade finance establishment.
The over-reliance on paper and manual checks means that the current processing of transactions is fraught with inefficiencies and risk, which ultimately leads to higher costs. #Banks often seek to protect their margins in traditional trade finance by passing these costs on to the corporate client, driving such clients towards open account trade that is riskier but cheaper.
This is a unique moment in our industry, when changing regulation, increased availability of emerging #technology and changing expectations from corporate clients are pushing banks to #change their business models beyond the simple digitization of current processes.
In a sector particularly vulnerable to fraud, letters of credit, standby-letters-of-credit and other trade finance instruments are used to ensure exporters are paid on time by importers. Meanwhile, banks guarantee that importers receive goods that match the terms of the letter of credit. Bank-intermediated trade provides confidence and fosters trade around the world while providing banks with a low-risk source of revenue that is capital efficient under Basel III.
Out of this mix of social, technological and regulatory change, next-generation trade platforms and processes are emerging. Distributed business models, which no longer rely on banks being central to the financial supply chain, mean that those institutions are looking at ways to retain their relevance to corporate clients. Traditional competitors are collaborating through consortia of ecosystem players, working for the benefit of the entire industry instead of being self-serving in their approach.
In the second part of this series, we will look at how #blockchain and other technologies are helping banks rethink and redesign their approach to trade finance.
Join me at Sibos 2018, as I moderate the “Delivering the trade environment of the future” roundtable. Register here.
The post The need for change in trade finance appeared first on Accenture Banking Blog.
Following the rollout of #Open #Banking regulations in the UK and the launch this year of the EU’s Payment Services Directive 2 (PSD2), countries across the Asia-Pacific region are following suit to establish their own frameworks to enable #banks to share select customer data with third-party providers (TPPs), and TPPs to run transactions on customer accounts.
#Singapore’s approach has matured rapidly to make the city one of the leading jurisdictions for Open Banking in the region. The groundwork was done as early as 2014, under the government’s Smart Nation Singapore initiative to drive the adoption of new digital technologies, starting with open data and payments.
In November 2016 the Monetary Authority of Singapore (MAS), in collaboration with the Association of Banks in Singapore (ABS), published a comprehensive roadmap—Finance-as-a-Service: API Playbook—which, in effect, set the gold standard for regulatory advice on the topic in Asia. The playbook set out a comprehensive framework that introduced governance, implementation, use cases and design principles for application programming interfaces (APIs), together with a list of over 400 recommended APIs and over 5,600 processes for their development.
In May 2017 MAS, the International Finance Corporation and the ASEAN Bankers Association launched the ASEAN #Fintech Innovation Network. AFIN aims to accelerate financial sector development, boost access to finance, improve the customisability of products and reduce banking costs in the region. AFIN is scheduled to launch their Industry Sandbox, which will sit between banks and fintechs, in late 2018. This interoperable and scalable infrastructure will act as a method to standardise banking infrastructure and data while also allowing institutions to test applications.
The launch in September 2017 of the Network for Electronic Transfers (NETS) nationwide payments service, including the NETSPay eWallet, was another major milestone. Also in late 2017, the government built an API Exchange (APEX) to serve as a centralised data-sharing platform, which allows government agencies across the city to share data securely through APIs. It has also established a Financial Industry API Register, updated semi-annually, which tracks APIs by functional category as they are launched.
The approach of Singapore’s authorities to Open Banking has been characterised by a willingness to shape innovation with a comprehensive, non-mandatory regulation and governance framework; to lead by example by opening their own data for APIs, and to establish scalable data practices and a payments infrastructure that underpin innovation in the area. MAS officials have preferred not to force the issue and to approach the development of Open Banking services in an organic fashion, according to comments made in recent media interviews. There is no specific timeline mandated for compliance or adoption.
The reason for the regulatory light touch is principally because banks in Singapore see the opportunities of the #technology and are already keenly pursuing them, with competition driving innovation.
DBS, for instance, launched an Innovation Plan in mid-2015 that had over 1,000 experiments in APIs, cloud computing, microservice architecture and Machine Learning. In May 2016, OCBC Bank launched the first open API developer platform in Asia, Connect2OCBC. CitiBank’s Global Developer Hub opened its first platform in Singapore in late 2016; Standard Chartered did so in early 2017, and DBS in November that year launched an API platform with more than 20 categories and 155 functions. More recently UOB announced plans to launch an open, digital-only bank.
So far these efforts have been characterised by a focus on retail opportunities, with competition driving banks to move quickly and establish large API platforms while also releasing novel products that showcase Open Banking capabilities.
Many banks in Singapore, unlike elsewhere in the region, have partnered with fintechs and developers to launch applications that use their publicly available APIs. One example is Standard Chartered’s The Good Life service, which provides its Singapore customers with an ecosystem of merchants that offer deals, alternative payment methods and reward-point options. UOB, by contrast, has been more selective: instead of launching a public developer platform, it has selected specific fintechs and launched applications that leverage their APIs.
Banks in Singapore have monetised their APIs through a combination of private partnerships with third-party platforms, predetermined pricing models (including subscriptions, per-call and flat-rate charges) and also pricing models determined by sales functions.
There are risks in Singapore’s approach: Without enforced compliance, API standardisation across the country is difficult. There is also uncertainty around when the MAS will impose regulation.
Nevertheless, further opportunities will present themselves to drive retail and SME customer adoption with additional services and reduce the cost of servicing banks’ customer bases. Ecosystem platforms for real-time data sharing between banks and regulators will enable new use cases and shared revenue models—and, ultimately, enable banks to build their own TPP services using their competitors’ APIs.
Accenture at Sibos
We’ll be discussing Open Banking and other topics at Sibos. Come see us at our booth and join us in the conversation around enabling the digital economy. Keep up to date on all the latest from us around Sibos right here on the blog.
The post The brave new world of Open Banking in APAC: Singapore appeared first on Accenture Banking Blog.
Reply