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  • user 3:35 am on October 29, 2016 Permalink | Reply
    Tags: , , , , Investigates, Mutual, , Sigma, , technology   

    A Comeback For Mutual Insurance? Swiss Re Report Investigates Six Sigma and Digital Technology 

    The #mutual #insurance sector has undergone a modest recovery in recent years, says #Swiss Re’s latest #sigma #report “Mutual insurance in the 21st century: back to the future?” Mutual insurers&8217; share of the overall insurance market increased from 24% of direct premiums written in 2007 to just over 26% in 2014, reversing some of the declines of previous decades. However, the segment faces challenges, including adapting to new risk-based capital requirements and more stringent corporate governance arrangements, which could put some mutuals at a competitive disadvantage.

    sigmaFurther, mutual insurers must embrace technological disruption. Exploiting #digital #technology such as smart analytics and social media should allow mutuals to better serve the interests of their member-owners, while their ownership structure should enable mutuals to keep insurance affordable for some individuals and risks.

    The primary purpose of mutual insurers is to provide risk protection coverage for its owner-members, rather than to make profits or provide returns to external shareholders as in the case for stock-based insurers. Over the past few years, cumulative premiums written by mutual insurers have outpaced those of the wider insurance market, with much of the outperformance concentrated during the height of the financial crisis in 2008-09.

     

    &8220;That mutuals&8217; relative premium performance did not reverse once economic growth resumed after the financial crisis, suggests a degree of permanence to the segment&8217;s recovery,&8221; says Kurt Karl, Chief Economist at Swiss Re. &8220;Some mutual groups have expanded internationally in recent years, and new mutuals have been established in a number of markets, another indication of the segment&8217;s renewed popularity.&8221;

    However, while mutuals&8217; share of the global insurance market has increased modestly since 2007, it remains well below previous highs. For example, in the life sector, the share of global premiums of life mutuals was 23% in 2014, well below levels of around 66% in the late 1980s and early 1990s before a wave of demutualisations in a number of countries.

    sigma4_2016_fig2

     

    New challenges
    Mutual insurers face a number of challenges. The most obvious comes from new risk-based capital requirements and tougher corporate governance arrangements introduced by governments and regulators, designed to boost the resilience of individual insurers and curb excessive risk taking. These requirements could put some mutuals, especially smaller ones with a narrow regional or business line focus, at a competitive disadvantage. Larger and better-diversified insurers are in a stronger position to manage the additional operational and funding costs associated with compliance.

    Regulators appear alert to the possible unintended consequences of their new rules, and emphasise proportionality in implementing the new prudential (i.e. capital) and governance regimes. There has also been a renewed focus on the range of capital solutions available to mutuals, including legislation in some countries to allow equity-like capital instruments to be issued, such as certificats mutualistes in France. Together with customised reinsurance solutions and alternative risk transfer mechanisms such as insurance-linked securities, this will give mutuals increased financial flexibility to grow their business and compete with other types of insurers.

     

    Embracing digital technology
    Digital technology is changing the way that insurance is designed, priced and sold, and is fundamentally re-configuring the competitive landscape in which all insurers operate. Mutual insurers must adapt and upgrade their underwriting and distribution practices if they are to remain relevant in the digital age. There are signs that many are actively embracing such change, but some mutual insurers are lagging behind.

    sigma4_2016_fig1

    For example, smaller mutual insurers have not yet adopted full online functionality in their business practices, perhaps reflecting their greater attachment to traditional agent/broker distribution. The laggards run the risk of losing out to market participants better placed to harness the new technologies. This is especially true given the growing development of peer-to-peer (P2P) insurance platforms, which enable individuals to share risks among themselves in much the same way that affinity-based mutual insurers do.

    The post A Comeback For Mutual Insurance? Swiss Re Report Investigates Six Sigma and Digital Technology appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.

    Fintech Schweiz Digital Finance News – FintechNewsCH

     

  • user 12:19 am on October 29, 2016 Permalink | Reply
    Tags: , , , , , , , , technology,   

    Chain Releases Open Source Code, Partners with Visa 

    It seems as though #fintech-ers are more interested in chatbots than #blockchain these days, but that doesn’t mean distributed ledger #technology has slid out of the spotlight. Blockchain startup #Chain  made waves at the recent Money20/20 event when it announced what it’s calling the Chain Core Developer Edition: basically theRead More
    Bank Innovation

     

  • user 11:35 pm on October 28, 2016 Permalink | Reply
    Tags: , , technology   

    INSURTECH – You will never insure – or be insured – the same again! 

    In the startup world, #insurtech is currently one of the most dynamic and exciting sectors: more than $2,6bn were invested in the industry last year, three times the amount invested the year prior. Corporate insurers such as Axa, Allianz, AIG or Aviva are creating in-house funds to identify the most promising innovation in the field. The landscape is fast evolving, with the shared economy practices turning the industry upside down: thus, unicorns like Blablacar or Airbnb push traditional actors to develop new insurance models that go beyond transportation and housing, and draw from IoT, big data, or gamification to transform the insurance industry overall.

    An entire book would not be enough to capture all insurtech innovations, so let’s focus on three transforming trends in the industry and their impact on traditional insurers.

    Don’t speak about insurtech, speak about insurtechS!

    Traditional insurance used to be applied to a few sectors, with a few bundle products, but times have changed! The industry is now facing several levels of segmentations:

    • first, a segmentation in model, with an increased separation between product ownership and product consumption as a result of the shared economy. You no longer use a car that is yours but one you have borrowed to someone – so who should pays the insurance?;
    • second, a segmentation in application, with insurtech going beyond the traditional insurance products applied to transportation or housing, to now comprise new wearables or peer-to-peer practices;
    • third, a segmentation in #technology, with insurtech start-ups choosing specific verticals such as data analytics, claim acceleration tools or customer engagement to support more traditional insurance activities.

    These segmentations mean traditional insurance actors are faced with new challenges to respond to new consumptions habits, as well as new business opportunities, for instance responding to specific needs.

    Mastering personalised insurance

    Not only have consumers changed their habits, but they are also increasingly asking for personalized services: less and less people are willing to pay bundles, and would rather get personalized coverage. Whilst before, insurers relied on market trends to develop new insurance products, they now need to be more lean and creative in their packages.

    Failure to satisfy increasingly demanding and selective consumers would result in losing clients, but traditional actors have in fact been very good at embracing insurance curation: they are making the most of new health tracking devices to provide premiums to fit customers, or offering discounted auto insurance for customers using telematics devices to track safe driving. All-in-one policies are also starting to emerge, thanks to highly personalised digital risk assessment.

    For corporate insurers, insurtech is a way to climb the food chain

    The emphasis put by traditional insurers on insurtech is easily justified: from data analytics and lifestyle apps allowing client service personalisation, to hardware supporting preventive action rather than corrective ones (to detect fire for instance), the added-value of insurtech is immense. Information security systems or digital processing are further revolutionizing customer service, making insurance/client relations more seamless.

    Insurtech ultimately gives incumbents the opportunity to get directly exposed to the client rather than go through intermediary brokers, making coverage more affordable for consumers and more profitable for the providers. As such, corporate actors and insurtech startups should not see each other as competitors, but rather as complementary actors. In fact, no insurtech today is directly challenging an insurance company like Monzo or Starling Bank do with traditional #banks, and for insurtech, the path to customer acquisition is more so than not likely to go past corporate insurers.

    Increased synergies between insurtech and corporate insurers are likely to be beneficial to both parties. Other than the traditional challenges related to regulation and barrier to entry, the main test for insurtech and insurance companies will come from the consumers’ reaction: if the personalisation of services can be beneficial operationally, it also comes at high cost, that of privacy. Traditional insurers and insurtech companies will therefore have to work together to guarantee that their customers’ data is collected and managed in a secure and safe way. And for that cybersecurity startups may have some answers.

    [linkedinbadge URL=”https://www.linkedin.com/in/antoine-baschiera-85aa033a” connections=”off” mode=”icon” liname=”Antoine Baschiera”] is CEO at Early Metrics

     

  • user 10:00 am on October 28, 2016 Permalink | Reply
    Tags: , , , , technology   

    Blockchain and major questions we need to understand. 

    After reading hundreds of papers on #Blockchain the question and choices are becoming clear. Companies are starting to get an insight of what Blockchain can do for them. I have discussed the possibility for not only as a financial system but also supply chains, government voting, medical record keeping, Identity, transport systems, security systems and the list goes on and on. The possibilities seem to be a bit endless at this point and therefore my mind started to think about what is the next step. What are the #questions we need to answer to get going on a project? I decided to write this whitepaper dissecting the hype word Blockchain and clearing up two major questions that lets us look at the different #technology’s and some of the technical choices we need to understand to get started. This paper is intended for business strategist but techies might find it interesting too.

    What is a Blockchain?

    First, a Blockchain in its simplest form is sets of data, called blocks, connected in some manner to form a chain. The data is usually transaction data but does not have to be. Transaction data gives information about “A” sending or moving something to “B” at what time and how much. The users keep track of their transaction’s by saving links to their transaction’s and storing them in there “wallet”, a small piece of software. The Blockchain organizes blocks with some predefined capacity e.g. 1000 transactions, 1 megabite, all the transactions this hour or some other defined perimeter. The Blockchain mechanism’s, that will be outlined in this paper connect the block of data it to previous blocks and store them.

    First question:

    How are you connecting the blocks to each other? Or even more technical, if you want to give the impression you know something about Blockchains: What is the consensus algorithm?

    Consensus algorithms vary a lot. There are thousands of methods for connecting blocks. I will explain the three most commend ones:

    PoW – Proof of Work, this means that you have some work to do, usually mathematical. To give a real-world example of this, imagine walking in a dessert and suddenly, as you come over a sand dune, you see a pyramid. Before you know who has built it or even what it is, you automatically understand that it took a lot of work to set it up. That is proof of work. Looking at the Eifel tower it dawns on you that someone had to put all those nuts and bolts in place. That is proof of work. If proof of work is implemented correctly in a Blockchain this can be an extremely secure solution. #Bitcoin uses PoW by using application specific circuits (super computers) to solve a hashing challenge, basically brut forcing an incomplete alphanumeric solution. This is kind of like solving a Sudoku puzzle. Because looking at a solved Sudoku it is easy to see if it is solved correctly and at the same time someone has obviously solved it and so its proof of work. To complete some work it requires energy, no matter if it’s the pyramids or the nuts and bolts in the Eifel tower or the hashing challenge on the bitcoin Blockchain, the all require energy. Bitcoin Blockchain PoW translates into using extreme amounts of electric energy. There-fore, since there is no guarantee that you’re the one that will win the challenge, you’re basically staking (gambling) your power consumption as an external factor from the Blockchain itself. With PoW the history, of all the transactions, is secured by the latest block, so any changes in technology will swiftly be compensated as newer technology, e.g. quantum computing, will help securing blocks. This type for Blockchain has one big draw back. You need a large amount of computing power before the Blockchain can be considered secure. I believe decentralization is the only option that has a chance but more on that later.

    PoS – Proof of Stake, this means that you have lottery tickets based on the amount of Power you hold on that Blockchain. Ethereum, Litecoin and Steemit are examples of PoS Blockchains. Compered to PoW, you are now on an internal stake in the Blockchain. So, say you have a vast amount of ether on the Ethereum Blockchain you win the lottery because the odds are in your favor. You then accept the block with your digital signature so that it is approved to connects to the Blockchain. There are to major challenges that arises with PoS. One, it is all done internally so the system is only of value to itself. Two, everyone in the system must watch and make sure that you are not cheating by corrupting the latest block, especially if your odds are so high that you’re signing several blocks in a row. However, if you’re corrupting blocks who are you hurting, if you have vast amounts?

    PoA – Proof of Authority, this means that VISA, MasterCard, a Nations central bank or someone of authority puts their stamp of approval on the block. In this scenario, you could have a 1024-bit encryption code. This code is virtually unbreakable now in this day and age. However where will we be in 20 years. With quantum computers, right around the corner, someone could change a transaction 20 years back that could render the Blockchain corrupted.

    Second question:

    How are you storing the information in the Blockchain? Or even more technical: The Blockchain is distributing the ledger, who is it distributing it to?

    DLT – Distributed Ledger Technology, this means that someone is storing the copy of the ledger usually in real time. Everyone that has a copy of the ledger can see the information in it. Practically you would run a query or search as they tend to get very long. The examples that I have encountered are consortium (a group of partners) of #banks and financial institutions. The R3 Blockchain is one example. These are known as permission Blockchains, as they are closed to the public you require permission to get access. Bitcoin, Ethereum and most crypto-currencies are referred to as decentralized Blockchains, as a play on the opposite of a central bank. As the term suggest it is permission-less and therefore open for everyone to get their own copy of the ledger.

    [linkedinbadge URL=”https://www.linkedin.com/in/bbjercke” connections=”off” mode=”icon” liname=”Bjorn Bjercke”] is Blockchain Specialist

     

  • user 6:00 am on October 28, 2016 Permalink | Reply
    Tags: , , , , technology   

    The Bankers’ Plumber on FinTech: The Swiss and UBS have good chances to win the battle of digital wealth management. 

     

    The Swiss are world leaders in many things: watches, chocolate, Swiss Army knives and wealth management. Although the world of Swiss private banking has had more downs than up lately, wealth management is in the national DNA. There is good reason to see the Swiss coming out on top as private banking reinvents itself as a more digital product. Amongst the Swiss #banks, UBS is well set up to lead the pack; its recent announcement of its intentions in the UK: “UBS to launch digital wealth management platform in Britain” offers much promise, as does history, or rather deja vue.

    In the #FinTech world, several different terms are used to describe expected changes or influences on the same thing: Digital Wealth Management. #Robo-Advisors. Machine Learning are all being applied in relation to what commentators see will be the future in the world of asset or wealth management.

    In essence, this is about applying more advanced processes to the matter of looking after people’s money; making the interaction between bank and clients function faster, better and cheaper via mobile and internet channels, using rules to drive investment decisions and using AI, artificial intelligence, or Machine Learning to learn lessons and fine tune those decisions. For all the new terms and new #technology, the underlying core banking discipline is not changing;

    1. Asset allocation according to investment goals, which are based on risk appetite and risk experience, or awareness.
    2. The two basic approaches to investing: as an investor either I am “self directed”, making my own decisions, with varying degrees of input from my banks or advisor, or I am a passive investor giving a “mandate” to my advisor.

    Swiss banks have been managing money on this basis for a very long time. There is an ingrained culture of formally setting investment strategies based on investing goals; growth, balanced, capital preservation and of dealing with the multi-currency needs of an international clientele.

    The theory is underpinned by solid back-office processes, for example in investment controlling, making sure that the investment guidelines are followed. Having been the product manager for a Shariah complaint cash management fund, I have seen this working first hand at Credit Suisse. Asset servicing is another discipline where the Swiss excel; the international client base means the banks have a very diverse set of asset information and detail to keep on top of. Prices, corporate actions and dividend information are all effectively gathered and processed.

    Historically, the Swiss have not been that efficient; fat, super-normal, profits bloated by lots of offshore, black money have masked high costs and poor processes. The game plan worked as long as the vast majority of those assets were processed on the big, old-iron, mainframes in Switzerland. Neither UBS nor Credit Suisse managed too build really great platforms for offshore processing that would replicate the efficiency of the HQ machinery. In the US, firms such as Vanguard have led the way in offering low cost investment vehicles.

    So, the core already exists as the industry transitions to another generation, both of clients, technical capabilities and regulatory requirements. The challenge is to adapt. According to head of digital at one of the major banks, the key challenges are:

    1. Moving from a push business model to a pull model, including the move from a predominantly offline experience to an online first experience.
    2. Transformation of legacy technology stack into a modular, open-API platform which is more horizontally integrated
    3. Biggest obstacle is culture change, i.e. to find the talented people required to create new world and change existing mindset to a digital one

    In thinking about where the industry is headed, I had a sense of deja vue. In the early nineties, securities lending, or Stock Borrow & Loan as our American cousins like to call it, became possible in Switzerland. The challenge was to to open up all the “internal drawers” where the security positions were filed away and channel the aggregated holdings to the market. The assets were there, they just needed to be connected up and channeled to the borrowers. UBS, or rather the then SBG, led they way. Led by the charismatic Felix Oegerli, a very capable team added a great deal to the industry. Credit Suisse had the same starting position, but could not get out of the starting blocks. From days at Goldman Sachs, where we were active borrowers, I recall a time lag of about two years between the first deals with the leaders at UBS and the laggards at Credit Suisse.

    Another recent announcement UBS’s private banking arm suggests the bank is taking the steps to simplify their infrastructure: “UBS’ European Bank Finds a Home”

    Lessons Learned: Digital private banking is really the world of what the academics call the “adjacent possibles“. What is close to what we are already doing?

    Apple did not invent MP3 music storage, they innovated around it, creating the iPod and the iTunes music store. Apple was not a start up when it made that move. In the mid aughties, Credit Suisse, then under the leadership of the ex McKinsey duo of Lukas Muehlemann and Thomas Wellauer pursued a “mass affluent” strategy. This was based on “bricks” rather than “clicks”. That was an idea ahead of its time. The “mass affluent” will not pay 100 basis points or more for advice. What they will pay will support a “clicks” based approach, but not a “bricks”based one.

    There is wonderful advert for Ricola, a Swiss company which makes lozenges. The main character pops up to challenge others around the world making claims to have invented the sweet, challenging them: “Who invented it? The Swiss!”

    My money, well at least the deeply out of the money options my wife has as a UBS employee, is on the Swiss mastering this evolution and UBS leading the pack.

    Previous Posts 

    Are available on the 3C Advisory website, click here.

    Publications

    The Bankers’ Plumber’s Handbook

    How to do Operations in an Investment Bank, or not! Includes many of the Blog Posts, with the benefit of context and detailed explanations of the issues. True stories about where things go wrong in the world of banking. Available in hard copy only.

    Cash & Liquidity Management

    An up to date view of the latest issues and how BCBS guidance that comes into force from Jan 1 2015 will affect this area of banking. Kindle and hard copy.

    Hard Copy via Create Space: Click here

    Amazon UK: Click here

    Amazon US: Click Here

    [linkedinbadge URL=”https://www.linkedin.com/in/bankersplumber” connections=”off” mode=”icon” liname=”Olaf Ransome”] is Bankers`Plumber | Intraday Liquidity | Cash Management | BCBS 248 | CLS Programme Manager

     

  • user 11:37 pm on October 27, 2016 Permalink | Reply
    Tags: , , technology   

    Smart Contracts: A Spectrum of Possibilities 

    In-house counsel are going to be hearing a lot about smart contracts. They need to prepare themselves for the discussions that their business and commercial leads are going to want to have with them. That means quickly coming to grips with the key commercial, legal and regulatory issues that #smart contracts can give rise to.

    Smart contracts exist as code within blocks in a #blockchain. They have the potential to automate performance of a transaction and are typically described as “self-executing” for this reason.

    In identifying the issues a business may face in a smart contract deployment, it is important to take on board that there is a spectrum of possibilities as to what a smart contract actually is. At one end of the spectrum, there is the “code is contract” model (which aspires to fully encode complex commercial contracts). At the other end of the spectrum, there is the automation of business logic and/or the automation of the performance of aspects of a conventional contract.

    The “code is contract” model is very challenging from a legal perspective. It puts into question an issue potentially relevant for all smart contracts: has a legally binding contract formed? The answer to that question may vary according to the applicable law determining the issue.

    In between the two extremes on the smart contract spectrum, it is likely that more modest but achievable use cases will emerge. A good example is the smart contract model developed by Barclays and R3, under which contracting terms (in the form of an ISDA master agreement in natural language) are connected to computer code via parameters (a smart contract template). These parameters feed into computer systems for execution.

    This is in effect a split (or so-called “Ricardian”) contractual model, which avoids some of the pitfalls currently associated with the “code is contract” model (for example, how do you encode concepts that involve judgement or degree, such as “reasonable endeavours” or “as soon as practicable”?)

    Any proposed smart contract deployment would need to consider regulation. However, to date, the responses of regulators globally to blockchain #technology have been fragmented, and are (generally speaking) at quite an early stage.

    There is likely to be a lack of certainty and consistency in terms of the regulatory treatment of smart contracts and other applications of blockchain technologies for some time. In developing their regulatory responses, policy-makers will need to consider a number of key questions, such as: what should be regulated; which activities should be regulated; who should be subject to and responsible for compliance with the relevant obligations; and how should regulatory responses be pitched so as to avoid stifling innovation? In addition, policy-makers are likely to focus on how AML and KYC regulatory obligations can be credibly performed. Regulators will also be interested in how the use of blockchain and smart contracts affects firms’ risk profiles.

    As a matter of risk analysis, in-house counsel will need to consider the legal and operational consequences of transacting in an electronic context. Apart from the fundamental question about whether a legally binding contract is formed, it is important to bear in mind that smart contracts sit within blockchains operating over the World Wide Web. They are code. Code can contain bugs. Code may not always perform as the parties had intended. Messages transmitted over the Internet can be delayed or interrupted, and data can be corrupted in transmission. Private encryption keys can be obtained by hacking. The liability implications of these kinds of events need to carefully considered.

    It is likely that, once a model is demonstrated to work in a live environment, not only will it be adopted elsewhere, but smart contracts will, with developments in the underlying technology, incrementally become more sophisticated over time. It is quite possible that, in five years or ten years’ time, smart contracts will be doing significantly more than just automating aspects of the performance of contracts.

    However, some observers put the time horizon for a large-scale implementation of smart contracts within, say, the financial services sector at just 18 months. My own view is that it will probably take longer. Having said that, there is a great deal of technology and entrepreneurial “digital fuel” being thrown at this area at the moment, so in-house counsel would be wise to track developments and to ask to be involved in the consideration of a business’s use cases and proof-of-concept deployments for smart contracts at an early stage .

    Norton Rose Fulbright has a dedicated global team focused on blockchains, distributed ledgers and smart contracts. Follow the latest developments here.

    Sean Murphy is a Norton Rose Fulbright Partner in London. He co-chairs the firm’s global blockchain and distributed ledger practice group.

     

  • user 7:36 pm on October 27, 2016 Permalink | Reply
    Tags: , , , , peer-to-peer, technology   

    5 Reasons Peer-to-Peer Lenders in India could attract poor credit quality 

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    #Peer-to-Peer Lending is emerging in #India and will be successful if the Credit quality on these platforms have a reasonable default rate and provide good returns to the lenders.

    Peer-to-Peer Lending is a new asset class and it is important to create Awareness, Education and Understanding for lenders on how to proceed further to add #P2P lending in your investment portfolio.

    At Citibank Consumer Bank, where I worked for close to 20 years, I learnt a concept of “Negative Self Select”.

    In simple terms “Negative Self Select” means customers who choose your product and brand have poor credit track record. If most of the poor credit profile are choosing your product or brand your portfolio quality is bound to perform poorly over time compared to the industry peers.

    Then the question arises, What leads to “Negative Self Select” ?

    As a Bank, we used to have 3 key criteria to understand if we were a potential target of “Negative self select”.

    They were:

    1. Heavy documentation / Cumbersome Application – asking for more information or documents then the industry.
    2. Slow process – if the industry is processing a loan in 7 days your process take 10+ days or more.
    3. Higher interest rate – if you price your credit product higher than others and information is seamlessly available then a good customer will choose the loan which costs them lower.

    These 3 criteria could work in combination or stand alone. It is quite logical that the best customer would not want to be inconvenienced by Heavy documentation, wait for long or pay higher cost for borrowing until and unless s/he does NOT have a choice.

    Only, poor credit quality customers would go through these inconvenience as they do NOT have a choice.

    However, for Peer-to-Peer Lending platform there are 2 more challenges:

    1. Brand Awareness: The belief that borrowers do not care about the brand from which they borrow – is not correct. A good borrower does not want to borrow from an unknown brand. They care about their personal information, kind of practices the borrowers adopt post disbursal of loan and how will they get serviced during the loan period.
    2. Confidentiality of the transaction: Most cars and houses in India are sold with financing however no one puts a sign on the car or house the name of the bank they took financing from. Similarly, the good borrowers do not expect finance company to publish their name of their website.

    At Monexo (http://www.monexo.co/in), we have solved for all of them before we launched our platform, namely:

    • our process is digital and fast. Approvals are given the same day and we can 100% guarantee disbursal once the loan is committed by our lenders. Monexo is the only company which can give this guarantee. This is NOT possible on other P2P platforms as they rely on lenders to transfer funds to borrowers. Lenders may forget, get busy or even change their mind. We are making the loan process “paperless”.
    • we rely on Data Science and ask for minimal documents on our platform. More documents does not mean better credit – it means more inconvenience to borrower and good ones will leave.
    • we price our loans across the spectrum of 13% to 30% which allows us to play across #Banks and NBFC pricing. We also have launched 20% Interest Discount offer for Personal Loan Transfer – this could save customers as much as Rs. 20,000 over 3 years. Visit us at – https://www.monexo.co/in/campaigns/personal-loan
    • yes we are young company however are trustworthy. Our Founders have 70+ years of Financial Service and #Technology experience with Global Brands. Further, we believe in Education, Awareness and Understanding of our product and services is critical rather than selling. Every customer can connect with us as and listen to our Free Webinar https://www.monexo.co/in/webinar.
    • finally, we respect our borrowers privacy and do not put their pictures or name on our website. We share the borrowers profile, Credit Score, Monexo rating and other key demographic and income details for lenders to make decision.

    We are building a new paradigm for borrowers and lenders with our 3D’s – Digitial, Data Science and Democratisation of Finance at Monexo (http://www.monexo.co/in). Visit us, talk to us and engage with us in our vision of “making borrowing more affordable and investing more rewarding.”

     [linkedinbadge URL=”https://www.linkedin.com/in/mukeshbubna” connections=”off” mode=”icon” liname=”Mukesh Bubna”] is Founder at Monexo #FinTech Pvt. Limited
     

  • user 9:23 pm on October 25, 2016 Permalink | Reply
    Tags: , , core banking, , technology   

    Forget core-banking replacements – It is all about scale, digital and blockchain 

     

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    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.

    (https://techcrunch.com/2016/04/14/spiralling-losses-show-lazada-desperately-needed-alibaba-investment/ )

    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).

     [linkedinbadge URL=”https://www.linkedin.com/in/gregory-morwood-%E8%8E%AB%E6%81%AA%E7%91%9E-20a8064″ connections=”off” mode=”icon” liname=”Gregory Morwood (莫恪瑞)”] is Head of Strategy and Planning, Digital Bank
     

  • user 3:36 am on October 25, 2016 Permalink | Reply
    Tags: , , Dealing, , , , , , technology,   

    P2P Lending Won’t Displace Banks; Dealing with Credit Risk Management 

    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.

    Risk p2p lending Deloitte report

     

    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.

    Fintech Schweiz Digital Finance News – FintechNewsCH

     

  • user 1:24 pm on October 23, 2016 Permalink | Reply
    Tags: , , , , , , , Outlines, , technology   

    BNY Mellon Outlines Innovation Agenda — Less Office Space, More Blockchain 

    BNY #Mellon has made a lot of noise about #blockchain #technology in recent months and that continued in a discussion of the bank’s #innovation agenda yesterday. Reporting the bank&8217;s third-quarter earnings, CEO Gerald Hassell #outlines a shift in resources from real estate to digital. This practice normally refers to branches — all theRead More
    Bank Innovation

     

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