Quick Blockchain Adoption a ‘Myth’, Says Russian Central Banker
#Blockchain #technology isn’t ready to replace #banks today, according to a high-ranking official at Russia’s #central bank.
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Blockchain Tech Still Not Ready to Handle Bank Transactions at Scale, ACI Says
Blockchains, or distributed ledgers, if you prefer, have been the subject of so much chatter — and more importantly, investment &8212; in financial services that it might come as a surprise the #technology has yet to be implemented in a meaningful way. This year more than a quarter of a billionRead More
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Bank of England Explores Blockchain, Says Digital Currency is Far Off
The #Bank of #England is continuing to explore distributed ledger #technology as part of a wider embrace of financial technology.
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Fintechs Likely to Jeopardize One Third of German Banks Revenues, Says McKinsey
#Fintech could potentially #jeopardize around a #third of all #German #banks #revenues over the next few years, according to #McKinsey and Company.
In a new report, McKinsey explores how fintech is transforming Germany’s financial sector, offering new opportunities for both entrepreneurs and banks.“All the indications are that these #FinTechs will also gain an even stronger foothold on the German market over the next years. Customers are open to change as never before,” the report #says.
&8220;By 2020 almost half of all German bank customers will have opened a digital bank account. The share of mobile banking is increasing rapidly. FinTechs are strong in these areas. In the mid-term they can challenge but also partner with banks.&8221;
Successful fintech companies have a few things in common. Firstly, they are lean, agile and innovative. They require fewer but highly specialized staff, and hardly any physical infrastructure. Secondly, they focus on individual segments of the value chain and can often substantially undercut the fees charged by incumbents.
Two examples are Auxmoney, the startup that runs one of the largest marketplace lending platforms in Germany with over a million registered users. The company leverages Big Data for better credit scoring.
Another example is Number26, the startup behind Germany&8217;s the first digital bank that lets customers manage their finances from a smartphone. Users can open an account in just eight minutes thanks to real-time identification provided by IDnow.
The report points out that fintech companies have so far primarily targeted private customers, leaving German corporate customers as a substantial untapped opportunity.
&8220;The key reasons for the focus on private customers are the low barriers to entry and that less expert know-how is required for founding a fintech,&8221; it says.
&8220;Solutions for corporate customers are harder to realize. In the corporate arena it is not enough to be cheaper, more convenient and more user friendly. Fintechs also have to also be familiar with many nuances, invest more time in rather complex products, and build up specialist know-how for marketing them.&8221;
The report suggests that in Germany at the end of 2015, there were over 200 reasonably sizable fintechs, some sponsored by domestic incubators such as FinLab and FinLeap.
For banks, the growing competition with fintech companies represents a challenge which could potentially cost them between 29% to 35% of their revenues.
That said, if banks undertake digital transformation of their value chain, they could increase their returns.
&8220;The prime requirement is to keep an eagle eye on key pioneering developments,&8221; the report advises. &8220;Proactive market surveillance is essential.&8221;
It concludes:
&8220;The market is in constant upheaval – this applies to FinTechs and banks alike. Each player should investigate new technical opportunities and build its strategy on its own strengths. Customers in Germany are open to change as never before. Companies that have a compelling customer proposition with transparent products and superior service will continue to succeed in the future.&8221;
Get McKinsey and Company&8217;s full ‘Fintech – Challenges and Opportunities: How digitalization is transforming the financial sector&8217; report: http://www.mckinsey.com/industries/financial-services/our-insights/fintech-challenges-and-opportunities
Featured image by NicoElNino via Shutterstock.com.
The post Fintechs Likely to Jeopardize One Third of German Banks Revenues, Says McKinsey appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
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Alternative Data In ‘Early Adoption Phase’ for Asset Managers, BofA Says
The use of #alternative #data for #asset management has grown in popularity, but the industry is far from a complete #adoption, Bina Kalola head of global strategic direct investments for global banking and markets at Bank of America, said during the Future of #Fintech Conference this morning. “Data is beingRead More
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Chase Ready to Compete in Digital Payments, CEO Says
The #digital #payments space is crowded and competitive, but that doesn’t seem to concern JPMorgan #Chase at all. Quite the opposite: the bank’s Chief Executive Jamie Dimon said at a conference yesterday that Chase will be “very competitive” when it comes to online payments and mobile wallets. We need Chase toRead More
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London School of Economics Paper Says Blockchain Could Reduce Custody Risks
A new #London #School of #Economics #paper suggests that #blockchain tech #could alleviate #custody #risks for securities owners.
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Fintech Opens IPO Window with BATS and says sorry about earlier IPO fluffs.
Image courtesy Westwick Partners The IPO #window has been shut down for a while. The January crash put a padlock on that window. According to Renaissance Capital, 22 IPOs raised #about $ 3.5 billion up to mid-May, which is down 63% by deal count from the same period last year. The IPO window is starting to…Read more #Fintech #Opens IPO Window with #BATS and #says #sorry about #earlier IPO fluffs.
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Faster Chip Payments Standard Is in the Works, MasterCard Says
The payment networks are coming together to work on a #standard for speedier EMV transactions. As part of that effort, #MasterCard is making its M/#Chip Fast #technology “available to all parties” involved, including other payment networks, acquirers, and processors, Chiro Aikat, senior vice president of product delivery, told Bank Innovation.Read More
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Switzerland Is Lagging Behind on Digitalization, Says New EPFL Study
While #Switzerland is a global leader in many sectors, the country is #lagging #behind on #digitalization, according to a new #study.
In a new report released today, the Ecole polytechnique fédérale de Lausanne (#EPFL) – on behalf of Swisscom and SIX &8211;, explores Switzerland’s current digital landscape and details how it can benefit from future technological developments.
The document, entitled ‘Switzerland&8217;s digital future &8211; Facts, challenges and recommendation,&8217; suggests that although Switzerland is recognized as one of the world&8217;s most competitive economies, the country is lesser known for its information #technology sector or for its influence in the digital economy area.“The EPFL study clearly shows that although Switzerland is well placed globally, we are not in an overly strong position either,” Urs Schaeppi, CEO of Swisscom, commented on the research findings. &8220;We need to take action today so that we do not miss the opportunity to harness the technologies of the future.&8221;
The report focuses on five current trends in digitalization: digital infrastructure, startup ecosystem, data governance, the digitalization of the public sector, and societal trends. It aims at identifying Switzerland&8217;s strengths and weaknesses in the global landscape.
Findings suggest that Switzerland has a strong and highly competitive ICT infrastructure, but at the same time, is constrained by strict regulatory requirements and costs regarding mobile broadband.
The report also points out that there are still untapped opportunities in relation to data management as Switzerland has an excellent reputation globally for responsible data management and effective data protection. Therefore, it is ideally positioned to become a global &8220;safe haven for data&8221; and a prime location for &8220;big data&8221; centers.
When it comes to the entrepreneurial spirit, however, the study found that Swiss people are lagging behind the likes of the US, for instance, which has a strong startup culture. The Swiss startup ecosystem has not emerged yet, the report #says. It notes that changes in funding and taxing startups would help make the country more attractive to creative, tech-oriented companies.
The report also suggests that current legal framework is holding back digital progress. It notes that the country&8217;s relatively high level of regulation can pose a barrier to digital process. Additionally, e-government is relatively underdeveloped is Switzerland and represents an untapped opportunity for the Administration and the economy.
Some of the barriers to achieving success and becoming a major player in digitalization, are not specific to Switzerland, though. For instance, the report notes that digital literacy and readiness should be promoted through dedicated programs.
The report also lists a number of recommendations in order for Switzerland to fully benefit from technological developments.
Among these recommendations, the document suggests an increase in private and public infrastructure investments in mobile broadband. It also advises for the promotion of the attractiveness of Switzerland&8217;s infrastructure for finance-oriented digital infrastructure.
Switzerland should further improve and promote its position as a secure trusted center of corporate and individual data.
Furthermore, new funding mechanisms must be introduced to fill the gap between seed money and large investments.
&8220;Switzerland&8217;s digital future will depend on citizens, policy makers, and entrepreneurs at the local and global level,&8221; the report concludes.
Featured image: Man holding social object by chanpipat, via Shutterstock.com.
The post Switzerland Is Lagging Behind on Digitalization, Says New EPFL Study appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
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