If a doctor only treated the symptoms of your illness, rather than the root cause, you could be looking at a hefty medical bill at the end of the year, not to mention repeated trips to the surgery. Such an analogy could well be applied to the rise of invoice finance as a remedy for…Read more #Polite #persistence #pays – #SMEs #harness #fintech to get #paid on #time
Bank Innovation
After months of rumours, #TransferWise, the London headquartered #money #transfer startup and #fintech darling, has confirmed that it has raised a #further round of funding. Read More
Two of Europe’s biggest players in digital and #blockchain payments, Nets and Coinify respec=vely, are joining forces where Coinify will develop integrated blockchain solutions for Nets.
Nets has entered into a partnership with #fintech company Coinify by establishing a ‘Blockchain Development Lab’ in order to iden8fy business opportunities in the field of blockchain #technology. The partnership involves cooperating with internationally renowned experts in this field of technology with the intention to develop a number of proof of concepts as the basis for developing specific products and services.
Coinify ApS is the largest facilitator of blockchain payments in Europe and supports more than 20 payment service providers reaching over 100,000 online businesses. Coinify payments support up to 17 blockchain currencies and offer payouts to their customers in local currencies. At the same time, Coinify also provides consumer and corporate trading of digital currencies, such as #bitcoin. As such, Coinify is the leading provider of blockchain payment services in Europe and Asia, and is among the top four worldwide in this field.
“We see potential in blockchain technology, so obviously we need to gain a thorough understanding of it and the possibilities it offers. Coinify is a leader in the development of products based on this technology and we believe they are the right partner to help us inves8gate the possibilities of developing customer-oriented products and services based on it,”says Jan C. Plenge, Senior Vice President with responsibility for Digital innovation at Nets.
Blockchain is a decentralised technology which can be used, among other things, as documentation of direct bilateral digital transfers, or to document ownership of contracts, deeds, etc. By joining forces, Nets and Coinify seek to clarify how this technology could be applied commercially and within existing regulatory frameworks, particularly within the same high-level security requirements that Nets already applies to other value transactions.
“It is important for Nets to closely monitor new digital technologies to be aware of the possibilities, even if that means blockchain technology could poten8ally challenge parts of our exis8ng business. For many years, we have been the ones delivering the latest payment solutions to #banks, and we intend to keep it that way, going forward,” Jan C. Plenge continues.
Regarding the partnership, CEO and Co-founder of Coinify Mark Højgaard comments: “Nets is the leader when it comes to digital payments in the Nordic region and we are delighted with this new partnership, and believe that, together with Nets, we will be able to develop a number of first-class products and services that will ultimately benefit both merchants and consumers.”
About Coinify
Coinify ApS operates as a blockchain payment service provider with focus on extending blockchain currency payment processing and trading services to merchants and consumers respectively. Coinify serves global Payment Service Providers, online businesses, physical shops, and individuals. The company incorporated in 2014 and is backed by a multimillion dollar capital injection from SEED Capital (funded by the Danish government) and Accelerace. Headquartered in Copenhagen, Denmark, Coinify is a leading blockchain payment service provider (bPSP) with strong presence on the European and Asian markets.
Visit http://www.coinify.com for more information.
About Nets
Nets’ ambi8on is to connect banks, companies and consumers through innova8ve digital payment solu8ons. We are behind the Dankort, Betalingsservice and NemID, for example. We cover the Nordic and Baltic regions, delivering a whole raft of services in the field of card payments, account transfers and payment solutions for merchants. Nets employs 2,500 staff and turnover in 2015 was DKK 6.8 billion.
Read more at http://www.nets.eu.
The European Banking Authority (EBA) has developed Guidelines (GL 18) that deal with the establishment of product oversight and governance arrangements in regulated service providers. The Guidelines apply to both “Distributors” and “Manufacturers” of financial products. These oversight and governance arrangements must become an integral part of the internal control systems of regulated providers.
All of the main types of mass-market financial products are captured by the Guidelines. Mortgages, Unsecured Credit, Deposits, Payment Accounts, Payment instruments, Bankers’ Drafts and Electronic Money are all within scope. All the significant types of mass-market providers are in scope: Credit Institutions, Payment Institutions and Electronic Money Institutions. Consumers are explicitly in scope of the Guidelines, but the EBA has invited Competent Authorities in EU Member States to consider extending the same protections to micro-enterprises and SMEs. These Product Oversight and Governance arrangements will be in force from January 3rd, 2017.
A Distributor is described by the Guidelines as a firm that “offers and/or sells the product to consumers; this includes business units of manufacturers that are not involved in the designing the product but are responsible for bringing the product to the market”.
A Manufacturer is described by the Guidelines as a firm that “designs (i.e. creates, develops, combines or significantly changes) products to be offered to consumers or who is involved de facto in the design of the product”. From January 2017, established #banks will have Manufacturer status for many hundreds of products being used by their customers.
for Non-Specialists) (Volume 1)
What sort of “Overlay” Services might we see from #Fintech’s after PSD2 and will the Fintechs be classed as “Distributors” or “Manufacturers”? We will probably see Consumer services (either PISP or AISP) that integrate with social media. Venmo in the US is a good example but social media giants like Facebook could also fill this role. Venmo uses the Card networks in the US but the SEPA platform could be very attractive after PSD2.
Services like these can be classed as “Manufacturing” i.e. Venmo or Facebook “designs (i.e. creates, develops, combines or significantly changes) products to be offered to consumers or who is involved de facto in the design of the product”. This new type of API-enabled product manufacturing seems also likely to evolve in the SME market segment. If a firm like Xero integrates a PISP and/or AISP service into the Cloud Accounting solution for its EU clients, it is also creating, developing, combining and significantly changing financial products to be offered to SME customers. In API Economy, Facebook, Venmo and Zero will be Manufacturers of composable and API-enabled financial solutions, not mere Distributors of bank accounts. The product oversight and governance arrangements required by EBA will land squarely on these newly regulated providers.
The Manufacturer is required to establish, implement and review effective product oversight and governance arrangements. The arrangements should aim, when products are being designed and brought to the market, (i) to ensure that the interests, objectives and characteristics of consumers are taken into account, (ii) to avoid potential consumer detriment and (iii) to minimise conflicts of interest.
The Fintech as Manufacturer will be required by EBA Guidelines on Internal Governance (GL 44) to have in place a well-documented new product approval policy (“NPAP‟), approved by the management body, which addresses the development of new markets, products and services and significant changes to existing ones. The NPAP should cover every consideration to be taken into account before deciding to enter new markets, deal in new products, launch a new service or make significant changes to existing products or services. The Fintech’s NPAP should set out the main issues to be addressed before a decision is made. These should include regulatory compliance, pricing models, impacts on risk profile, capital adequacy and profitability, availability of adequate resources and adequate internal tools and expertise to understand and monitor the associated risks. The decision to launch a new activity should clearly state the individuals responsible for it. A new activity should not be undertaken until adequate resources to understand and manage the associated risks are available. All actions taken by the Manufacturer in relation to the product oversight and governance arrangements should be duly documented; kept for audit purposes and made available to the Competent Authorities upon request.
Will all of the red-tape that lands on a large and broad Bank land on a small and narrow Fintech? The intention is that it should not. The EBA’s GL18 requires that product oversight and governance arrangements should be proportionate to the nature, scale and complexity of the relevant business of the Manufacturer. The implementation/application of the arrangements should have regard to the level of potential risk for the consumer and complexity of the product.
What does this mean in practical terms for the API-enabled Fintech? EBA Guidelines 25, 26 and 28 of GL44 probably sets out this hurdle. While a Bank will need to have a Risk Control team that is comprehensive and independent, a Fintech will certainly need a staff member with this specific responsibility. This person should provide relevant independent information, analyses and expert judgement on risk exposures, and advice on proposals and risk decisions made as to whether they are consistent with the Fintech’s risk tolerance/appetite. This Fintech employee is explicitly permitted by EBA Guidelines to also have a Compliance role, if the nature, scale and complexity of the Fintech business allows. While a broad and large bank will need a permanent and effective Compliance Team, in smaller and less complex institutions this function may be combined with or assisted by the risk control or support functions (e.g. HR, legal, etc.).
In crude conclusion, banks can avoid a lot of Product Manufacturer oversight overheads if they scale back on the size of their “own brand” applications suite. If a bank shrinks to a smaller core of own-brand products and services, it can engage with the market on less important products through API Developers. The new players that emerge to use PSD2 APIs in composable financial services will be designated “Manufacturers” within the regulatory regime.
Of course, these new players are introducing potential rival brands into the consciousness and activities of banks’ existing clients. However, the threats being posed by these potential rivals are limited if these new Manufacturers do not hold a Credit Institution license. A Payment Institution or eMoney Institution cannot offer credit nor take deposits. In the API Economy, banks could find that they can grow their balance sheets by being loosely coupled to these new overlay services through APIs. This growth could come without the product oversight and governance overheads that arises when a bank grows by selling directly under its own brand.
[linkedinbadge URL=”https://www.linkedin.com/in/paulrohan” connections=”off” mode=”icon” liname=”Paul Rohan”] , the author of this post, is also author of “PSD2 in Plain English”.
for Non-Specialists) (Volume 1)
As bitcoin/blockchain technology is gaining much traction from the financial world and beyond, a number of dedicated online publications and #blogs have emerged to share expert commentary and industry news.
Today, we’ve made a list of the top 10 #bitcoin and #blockchain online publications and blogs to follow to keep up with this fast-paced industry:
Check also out our lists: “Top 10 Fintech News Sites and Blogs” and “15 Insightful Fintech Blogs You Might Not Know“ and &8220;Top 10 Fintech Books&8221;
Founded in 2013 by serial entrepreneur Shakil Khan, CoinDesk is a news site focusing on bitcoin and digital currencies and undoubtedly one of the world&8217;s leading blockchain-centric online publications.
CoinDesk covers news and analysis on the trends, price movements, technologies, companies and people in the bitcoin and digital currency world.
In January 2016, CoinDesk was acquired by Digital Currency Group.
is the oldest source of news, information and expert commentary on Bitcoin, the blockchain and the digital currency industry.
Founded in 2012 by Vitalik Buterin and Mihai Alisie, Bitcoin Magazine provides analysis, research, education, and thought leadership at the intersection of finance and #technology.
Bitcoin Magazine was acquired by BTC Media in January 2015.
The LTB Network is a publishing network created for content providers to present the ideas and people involved in the #cryptocurrency world.
The publishing platform is built on token-controlled access technology developed by the team at Tokenly.com which allows contributors to be rewarded with LTBCoin, the official token of the network.
Founded by Adam B. Levine, The LTB Network started with the Let&8217;s Talk Bitcoin podcast.
Based in Australia, Brave New Coin is a company that specializes in digital assets and market data.
The company operates a news portal that covers the digital currency and blockchain industry and has published a number of featured articles by renowned contributors such Chris Skinner.
(CCN) is an independent news source focusing on bitcoin, digital currencies and blockchain technology. It is a popular source of cryptocurrency news, with writings often cited in other mainstream and economic publications.
Founded in 2013 by Jonas Borchgrevink, CCN is part of PF Wetting, a company registered in Oslo, Norway, which also owns and operates Hacked, an online publication specializing in cryptography and IT security news.
Founded in October 2013, NewsBTC is an online publication covering cryptocurrency news, technical analysis and forecasts for bitcoin, litecoin, dash, doge and other digital currencies.
It is one of the fastest news services in the industry and has been mentioned in publications such as TechCrunch, CNN, Forbes, Business Insiders, and others.
AVC.com is the personal website of renowned American businessman, venture capitalist and blogger Fred Wilson.
Wilson, the co-founder of and a partner at Union Square Ventures and Flatiron Partners, has been blogging since 2003.
His blog covers a wide range of topics including venture capital, politics, mobile technologies, crowdfunding, wearables, robots and drones, and of course bitcoin and blockchain technology.
Ripple is without a doubt one of the hottest startups right now. Having raised over US$ 38 millions from the likes of Andreessen Horowitz, CME Group, IDG Capital Partners and Lightspeed Venture Partners, the company has received a number of awards and distinctions for its groundbreaking distributed ledger technology that promises to allow #banks and financial institutions clear and settle transactions in real-time via a distributed network.
The Ripple payments network and protocol has been adopted by a number of financial services firms and is being tested by a number of banks around the world including in Australia, Asia and Europe.
Its blog delivers company updates but also insights on the blockchain space and the impact of technology on the financial services industry.
The Wall Street Journal&8217;s MoneyBeat is a blog that provides analysis and news stories about the financial world.
Bitcoin and blockchain-related news and stories are predominantly covered by financial reporter Paul Vigna.
Vigna, along with former WSJ journalist Michael J. Casey, are the authors of &8220;The Age of Cryptocurrency,&8221; a publication released in early-2015 that explores the world of Bitcoin and cryptocurrencies.
FT Alphaville is a free daily news and commentary service of the Financial Times. FT Alphaville has four core components: news and commentary, morning briefing notes, markets live and the Long Room, an exclusive comment and analysis arena.
Its &8220;Bitcoinmania&8221; section, led by financial journalist Izabella Kaminska, covers the latest news as well as the history of Bitcoin.
The post 10 Must Read Bitcoin and Blockchain Blogs and Webpages appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
A major #Chinese financial firm has inked a new partnership with startup R3CEV.
fintech techcrunch
We are once again learning the old lesson that if it walks like a duck and quacks like a duck, it probably shouldn’t get a SaaS multiple. Read More
While the long-term opportunity offered by #blockchain is clear, widespread #adoption by financial institutions will take between 5 and 10 years from now, according to #Morgan #Stanley.
In a new report entitled ‘Global Insight: Blockchain in Banking: Disruptive Threat or Tool?’, Morgan Stanley #shares a timeline for blockchain adoption.
The financial services firm believes 2016-2018 will be the years during which #banks and corporations will be testing use cases of blockchain. These proof-of-concept tests will be aimed at assessing if blockchain can scale and effectively reduce costs.
During the years 2017-2020, we will begin to see shared infrastructure emerge, with proven assets being adopted well beyond the initial proof-of-concept stage.
Between 2021-2025, more assets will move onto blockchain as efficiencies prove out.
According to a report by Magister Advisors, financial institutions are expected to spend over US$ 1 billion on blockchain projects in 2017.
Among the proposed applications, blockchain #technology is expected to provide greater efficiencies for post-trade settlement and change in title, but also trade finance, international payments and regulatory.
Post-trade settlement: A distributed ledger could enhance the audit function as specific securities are more easily tracked. The technology could enable all participants to see where the documents are in the sequenced approval process. Additionally, there are opportunities to shorten the settlement window which would allow for lower costs to trade.
Trade finance: Using a blockchain would allow all parties to see when the goods have been shipped and release funding appropriately.
International payments: Moving to a blockchain would shorten settlement periods, speed up transactions and reduce the risk of fraud.
Reference data: Blockchain technology could offer significant efficiencies to transactors by holding reference data for individual securities.
Regulatory: A blockchain hosting the data for regulator could be more efficient for banks assessing the data intra-firm as well as for regulators wanting to compare their regulated entities.
While blockchain technology has the potential to offer many benefits for the financial industry, there are still key hurdles to surmount before blockchain implementation becomes a reality.
Use case cost benefit: Given the high cost of building a blockchain system, an proposed use must have a position return on invested capital.
Cost mutualization: If a shared blockchain were to work like an interoperable industry utility, banks would need to share the cost of building the infrastructure, which could be a challenge.
Aligning incentives: In the case of a shared blockchain, different entities may have conflicting priorities.
Evolving to the right standards.
Maintaining scalability: A blockchain must scale effectively from proof-of-concept to succeed, a key reason why most new blockchain proposals are looking at a range of rules, including ones that restrict users or centralize all, or part, of the blockchain.
Governance: A blockchain would need a governing body to decide who can access the blockchain and who are in charge of maintenance.
Regulation: The challenge of regulating digital identities and cross-border standards would need to be addressed.
Legal risks (KYC/AML): Banks and policymakers need close control for KYC and AML issues. Finding a single digital identity passport authorizer will be key
Security: Banks will have to perform extensive research to ensure that any blockchain they implement is at least as resilient as their current infrastructure against attack.
Simplicity: Blockchain solutions need to be uncomplicated and easy to understand. They also need to interface with other parts of the parts of the technology chain seamlessly, enabling faster set-up time, training time and fixing time.
Featured image: Morgan Stanley in Canary Wharf by Gordon Bell, via Shutterstock.com.
The post Morgan Stanley Shares Roadmap for Blockchain Adoption appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
Source: The money project (size accounts for all asset classes, not only stocks) The Northern hemisphere clearly dominates in the world #stock #exchanges realm. This 35,000 feet perspective includes all the assets traded through these exchanges (fixed income and multiple derivatives) and of course, a slice of the private shares market. The best example to grasp…Read more #Fintech in #action on stock exchanges of the&160;“REST”
Bank Innovation
London is the #Fintech innovation centre of the world, and there is an inherent belief that these new start up firms are going to be the saviours of the broken and dysfunctional global banking sector. Right here, right now, everyone wants a piece of the burgeoning Fintech action – which brings to mind the immortal words of Del boy, the nations much loved cowboy trader – “Rodders, with a bit of luck if this goes well, this time next year we’ll be millionaires.”
Whilst on the surface, the new Fintech frenzy is intoxicating, and potentially game changing for the #banks, the new service providers and for the early investors alike – is it really everything it’s cracked up to be? Go back some 16 years, and to me, what’s going on now feels a bit like the dot.com ‘boom and bust scenario’ we experienced in the early ’00s. A time peppered with telephone number valuations based on no track record of success and with multimillion investment dollars available to anyone with a ‘good idea’. Undoubtedly at the time some got lucky and cleaned up, but overall very few people really profited from that particular overhyped bubble.
Fast forward to today. Pick up every newspaper, tap into any social media channel, and turn on the TV and they are full of stories and sound bites evangelizing the ‘amazing opportunities’ and potentially mouthwatering valuations that the new world of 21st century fintech potentially offers. Sound familiar? My fear is that just like at the beginning of the new millennium when a plethora of new businesses were launched in a fanfare and then almost overnight failed dramatically, leaving many people badly burnt and out of pocket. All in all it was a bloodbath which pretty much plunged us all into a global recession. Have we learnt anything from that unhappy situation, or are we in danger of the banks, the vendors and investors blindly repeating the same mistakes all over again?
The much heralded Level 39, Accenture led, initiative in Canary Wharf has been aggressively promoting the advantages of the new Fintech firms for sometime now. Everyday across the world financial institutions are setting up investment vehicles or incubator funds designed to provide finance for the new players, and cash rich family offices from all four corners of the globe have also jumped onto the investment bandwagon. Added to this, the advantageous tax breaks offered, by the UK government, in the form of SEIS and EIS schemes to private individuals is further fueling the fintech investment frenzy. On paper, it looks fantastic, or is it? Just how exactly, does this translate into meaningful and profitable business relationships between the banks and the new #technology players and also provide a reasonable return to the investor community? And let’s be clear just as way back in the Dotcom days, quite frankly some of the ideas were completely nuts and did not have a snowballs chance in hell of ever succeeding, the same is true today for many of the new start firms. So buyer beware.
Consumers at all levels have never been so empowered and are demanding change, completely fed up with being being penalised for years of under investment or in some cases downright illegal practices by the banks. Trust had gone completely out of the window – and it will be a long and rocky road before confidence in the banking sector is restored, if ever. Actions speak louder than words – and the banks need to be seen to be taking action now. To address these negative perceptions many financial firms have embarked on global marketing and advertising ‘charm offensive’ campaigns, spending millions of dollars designed to convince customers that they really are ethical upstanding members of society. But one only has too look at recent examples such as the outrageous behaviour of the outgoing chairman of the supposedly uber ethical Cooperative bank, the shenanigans at Barclays under the tutelage of Mr Diamond and the tax evasion scandal at HSBC, to know this is always going to be an uphill struggle. While bad behaviour prevails, despite all the new rules and regulations – all the advertising spend in all the world will not change a thing until the consumer sees a positive change in terms of acceptable service capabilities, fairer commercial engagements and as importantly – respect.
It’s no secret, banks desperately need to innovate in order to survive and prosper in the harsh new world, post the 2008 financial meltdown and are no longer enjoying their once impeachable monopoly over the business of banking. #Blockchain, chat rooms, the rise of the smaller more agile challenger banks, the growing number of alternative payment service providers, not to mention global giants such as Google, Apple and Amazon, all these guys are no longer just nibbling around the edges, but are in fact taking bite size chunks out of a traditional and once protected banking enclave.
But the $640,000 question (taking inflation into account) is do the established financial firms have wherewithal and courage to make the wholesale changes required to stay in the game? And its not just about implementing new technologies, it’s as much about transforming the traditional business models, as well implementing a complete overhaul of the legacy cultures and sharp practices which have dogged the industry for so many years. Arrogance is no longer tolerated.
Money is allegedly being poured into ‘fixing’ aged and constantly failing systems. RBS continues to be the poster child of broken infrastructure horror stories, with the likes of Nationwide and Barclays Bank not far behind. The inability of any financial institution to process vital transactions, such as salary receipts, standing orders and mortgage payments is nigh on criminal. And the standard response to these addressing these outages – is to allocate a few million quid to ‘patch up ‘ the problem. But therein is the crux of the matter – this make do and mend attitude is about as useful as a chocolate fireguard . Whilst I am pretty sure there are some amazing transformation initiatives already in play – what are they and where are they happening? And why are they so secretive about what’s going on? Job protection, not invented here, fear of change and sometimes downright inertia are all cited as potential reasons as to why change is so slow in coming. But there is a clear and very present danger that if the banks stay in the slow lane for much longer there may be very few jobs left to protect.
These days there is an awful lot of talk about transparency, but how does that work when most banks cast a complete shroud of secrecy over their internal operations. And how is that helpful? The continuing refusal to support the good work being delivered by vendors has always baffled me. User evidence is king, and in my long experience of this sector, most banks, before making any purchasing decisions always want to know who else within their peer group is already using the product or service, and sadly in the main they refuse to disclose. The excuse of not giving away competitive advantage just doesn’t wash. Surely it’s what you do with the technology, the robustness of ones internal processes and how one collaborates with the provider is actually the secret sauce of success.
Many of the start up organisations will not have live references to present, and those more established firms with satisfied customers face the same challenge.
if this aversion to supporting third party providers persists, it creates yet another barrier to success, and just as we saw back in the dot.com day, far too many of these new smaller, innovative businesses who could help to make the changes so desperately needed will go under. And with them goes those hard earned investment dollars as well.
Which brings one almost full circle – is the Fintech investment frenzy really being viewed as a serious strategic opportunity? Are funds internally really being allocated to implement the innovative new service offerings for the good of the customer and shareholders alike. Can the new world vendors deliver against their promises? And will the banks really ever embrace the much talked about concept of openness and transparency?
Or is the sad truth they are just another ‘get rich quickly vehicle’ which will enable the banks to grab potentially massive returns without actually having to fundamentally change anything? My fear is that it’s more of the latter. And so spare a thought for Poor Delboy and Rodders, and everyone else who invests, if the status quo continues, dreams of being millionaires by Christmas will always remain a pipe dream.
[linkedinbadge URL=”https://uk.linkedin.com/in/clare-walsh-5972143″ connections=”off” mode=”icon” liname=”Clare Walsh”], is consultant and this article was originally published on linkedin
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