Month: January 2017

Trading.co.uk is a London-based fintech firm that is launching an app that will monitor comments that Donald Trump makes on his social media accounts. The fintech company uses artificial intelligence to sort through the tweets and messages, alerting traders with the latest information.

This fintech app can be a very useful tool for traders because the United States and our president are very influential in the global market. This is especially true for day traders because they are trading millions of dollars every few seconds or minutes. So even the slightest decline or increase in stock prices and currencies can affect a day traders’ gain or loss. According to the article, a single comment from Trump caused a decline in the value of several billion dollars in pharmaceutical stocks several weeks ago. I think that fintech has revolutionized traditional ways of trading with AI and other forms high tech programs. The app benefits traders around the world as they see information in real time. Also, I think the app has a lot of potential for other applications in tracking and analyzing other powerful figures and companies.

 

Source:

http://www.nytimes.com/reuters/2017/01/19/business/19reuters-global-stocks-trumpometer.html

In China, it is not until late 1970 that people started to use computers. Nowadays,  the continuing development of digital technologies are widely used into many aspects of management.

In accounting, these technologies started from single entry accounting to comprehensive financial accounting, to integrated financial reporting. Accounting information system (AIS) improved decision-making and reduced organizational boundaries. Finance, business, and management functions supported by the Chinese AIS have become fully integrated.

AIS has been moved to complete automation of original vouchers, accounting vouchers, accounting records and statements, and financial reports. Now that enterprise resource planning (ERP) is widely used, processing information from accounting records to statements is fully automated.

Organizations provide financial and accounting information through different channels for users to satisfy specific needs. Appropriate care is needed to ensure that accurate information is delivered while avoiding over disclosure, which might produce unnecessary security risks.

The development of information technologies in China and the broad application of AIS will bring business and accounting closer.  finance and accounting functions will become more closer to data processing department. The demand for book-keeping will be decrased since the implementation of AIS.

Source: http://economia.icaew.com/en/opinion/january-2017/how-it-developments-are-changing-accountancy-in-china

Fraud analytics is an emerging tool as it relates to detecting anomalies and patterns within voluminous amounts of big data. Fraud prevention measures can  be used to look beyond the individual data points in an organization, to the connections that link them. Often these connections go unnoticed until it is too late. The sole objective of fraud analysis is to develop the most precise and valid inferences.The rationale being used here is that unexpected patterns can be symptoms of possible frauds.

Ratio analysis: It involves the calculation of ratios for key numeric fields. Like financial ratios that give indications of the relative health of a company, data analysis ratios point to possible symptoms of fraud. Three commonly employed ratios are: maximum/minimum, Maximum/Second highest and current year to the previous year. Unexplained deviations could be symptoms of fraud

Network analysis:Mapping relationships helps identify potential vulnerabilities within network between entities to identify association networks. As organizations grows, more complex relations get developed within and outside the establishments, which needs to be monitored, for any untoward development of ambiguity other than normal. It could reveal normal and anomalous patterns of interaction within and between people or groups, can expose facilitators of fraud.

 

 

 

The finance market has been disrupted by technology, making way for fintech firms. With automation becoming widespread,  finance and technology are consolidating. This digital disruption will allow banks to boost margins through labor-saving automation. Accenture and McLagan predicts eight of world’s 10 largest investment banks will use blockchain to cut their costs by 30%. However, this threatens the job market and the traditional structure of finance firms. It is predicted that hundred of thousands of jobs will be lost, and jobs will significantly change in duties. Citibank predicted that as many as 1.7 million jobs will be lost as banks become digitized.

These is a ethical dilemma in automating jobs. Automation allow banks to lower margins and make customers better off by allowing banks to provide better financial services. With automation, banks will be able to make instant lending decisions, pre-score customers, and make more accurate predictions on default rates. However, the biggest tradeoff is the loss of jobs through automation. Millions could be out of a job and lack the skill set to keep up with technology. Although mass layoffs can be seen as unethical, banks must cut costs and master technology if they want to survive.

Source: How Finance is Being Taken Over by Tech

Fintech has already disrupted the banking industry, and is now treading in new territory by making its entrance into the $14 trillion mortgage lending market. To put things in perspective, the mortgage market is about 14 times larger than Student Loans (about $1 trillion). Despite the massive size of the mortgage market, there hasn’t been much disruption in this space, allowing banks to claim major market share. Wells Fargo, JP Morgan Chase, Bank of America, and US Bank are the key dominant players. However, mortgage lending from commercial banks have significantly dropped from 74% in 2007 to 52% in 2014.

There are currently a handful of fintech players making its way in the mortgage market such as Radius Financial Group, Clara, and Lenda by offering a digital mortgage solution. With the help from a few other home loan mortgage companies, Radius was able to close six loans without paper documents.

The mortgage loan process can be tedious, frustrating, and never-ending. I think there is great potential for automation in this space and believe there is a growing demand for electronic mortgage solutions. According to a recent survey conducted by J.D. Power, “20% of buyers of all ages weren’t happy with their lender, providing further support that there is demand for a new type of mortgage service.” Automation will make it easier and more convenient for home buyers and sellers since it will cut down on time, fees, and face-to-face contact.

Reference: http://www.investopedia.com/articles/personal-finance/011917/how-fintech-can-disrupt-14t-mortgage-market.asp

http://www.forbes.com/sites/jaysondemers/2017/01/11/7-ways-the-internet-of-things-will-change-businesses-in-2017/#247886a71260

This article touches upon seven different ways that the Internet of Things (IoT) would potentially change business in 2017. The Internet of Things is, in a brief summary, a new technology revolution that connects all sorts of electronic devices together that can track, record, and send consumer data to those manufacturers. One way that IoT can affect businesses is by improving the efficiency of certain processes, like inventory management, that can enable less worker time, and essentially less room for error.

The ability to track, view, and gather data using technology isn’t new but certainly IoT would simplify and automate many tasks that would otherwise need worker supervision. Then, with the improvement of these inventory systems, financial information systems managers, auditors, and many more stakeholders must question the reliability of the financial system in terms of accuracy, security, and functionality. From the viewpoint of system architects, 2017 would be a good year to get into the IoT designing business, which will also keep systems testers and regulators employed. The Internet of Things, with its ability to collect and store more irrelevant data will also inevitably make finding fraud much more difficult, something that auditors have something to look forward to.

Here are five great reasons why Bitcoin’s price will continue to rise in the future.

1. Bitcoin value increases over time by design: 

   With Bitcoin’s transactional volume increasing worldwide every day, a cap on production in the future, and a reduction in Bitcoins produced every 10 minutes just implemented July 10th, Bitcoin values will continue to climb for the foreseeable future. U.S. Dollars and pretty much any fiat (paper) currency you can think of are losing value every year due to inflation, which is the increase of supply of said currency. Bitcoin is deflationary, by design.

2. Fiat currency fatigue: 

   With global access to the Internet, and so many recent economic collapses of paper currency, there is more interest than ever in a flat-out better economic system that is not so prone to failure after failure. Mexico and Ecuador have been in discussions to mimic the Bitcoin blockchain and create their own digital currencies. Tunisia, a North African nation, has already started its own national economic blockchain, and Japan has accepted Bitcoin as a national currency, on par with the Yen itself.

3. Wall Street/ Big businesses hasn’t jumped onto Bitcoins bandwagon yet: 

   Blockchain technology has been the darling of Wall Street, not Bitcoin. This is not without some good reason. Bitcoin has been embroiled in scandals and regulatory purgatory in many global locales, so it can be seen as a financial wild card to place big bets with. PayPal has caressed the exterior of the Bitcoin concept, but it still is not a part of their core business. Microsoft and Dell are the other major players, but until a mass adoption event happens, or is forced to happen by some greater economic meltdown, Bitcoin will be seen as an outlier, not the best bet.

4. Cash is leaving the scene anyway: Nations around the world are funnelling the mainstream into the digital payment system and away from cash through soft bans. They may be doing it for economic control over all transactions, and the ability to record and tax every transaction in the future, but consumers will get closer and closer to the realization that Bitcoin is really their digital currency of choice.
5. The Global Reserve currency keeps loosing value: As the U.S. Dollar keeps accelerating its inflation through ‘QE Infinity,’ which increases supply and erodes its value every year, global interest in it continues to wane, and a Bitcoin will cost more and more to buy on the weakening dollar. Since Bitcoin is not beholden to any country or economic paradigm run by the banking system, it can sit on the sidelines and collect value, like Gold and Silver will, while the legacy financial system continues to burn down around them. ‘Digital Gold’ has treated Bitcoin owners very, very well over the years, making incredible returns in six out the last seven years.

References:

https://cointelegraph.com/news/5-reasons-why-bitcoin-value-must-increase-in-future

 

https://www.selectleaders.com/candidate/viewjobdetails.do?&jid=49138

A new startup in Singapore called Touché is developing a device that allows customers to pay via fingerprint. Upon using the system the first time, customers will pay normally via credit card. The credit card will then generate a unique signature to each individual customer. The customer will then scan their fore and middle finger on the device to register their fingerprints. For each subsequent visit to the (currently 150) shops and restaurants that are participating, the user will only need to scan their fingerprints to pay. Both customers and participating shops and restaurants can see the purchase history, expenditures, and offers. Currently, the company has already received $2 million in funding.

Security Concerns
Physical Security:
Similar to Apple Pay and Android Pay, the device uses a method of authentication called tokenization. This allows the device to generate a one-time, unique token that authenticates the purchase each time the user pays with their finger. Furthermore, two fingers are needed to authenticate the payment providing another layer of security if users are concerned.

Data Security:
However, as secure biometrics can be, there is still an issue of data security. Although information is encrypted, if people other than the stores/restaurants and the user were able to retrieve the data, the data privacy of the users will be breached. This means that purchase history and expenditures of users in the system will be compromised.

 

Sources:

https://www.techinasia.com/touche-profile-funding
http://www.channelnewsasia.com/news/singapore/touch-and-go-singapore-company-launches-biometric-payment/3433924.html

A new breed of developing technology has become prominent among the likes of Millennials and Gen Xers called Fintech (Financial Technology).  As the younger generations have become early adopters of the new technology there has been a group that more resistant towards this massive shift to nontraditional financial institutions; the Baby Boomers.

In an interesting article I read recently entitled, “Boomers, it’s time to embrace the power of fintech“, the author talks about some of the useful applications that the older generations may have for this new technology.

Paying Bills

Recently, there have been a number of mobile applications that assist with centralizing and automating the hassle of paying bills on a monthly basis. These applications could help simplify the monthly financial obligations faced by individuals into a simple interface that allows the user to be more cognizant of their current financial positions.

Health and Medical

Another use the author mentions for these new financial technologies is in the medical and health arena. From pricing out and managing medical prescriptions to test results and other health based information there are applications that assist with many different medicinal areas. With the benefits of secured, portable and accessible information, many people are beginning to take an active role in managing their health through the suite of free and paid for technology.

Investment and Cash Management

As the number of Boomer retirees is set to increase for the foreseeable future, the importance of wealth management is rapidly increasing. With applications such as Mint, which centralizes all your financial and investment information and provides analysis based on spending and investment return, retirees can utilize this information to make informed decisions about their finances.

Source: http://www.chicagotribune.com/business/sns-201701131830–tms–savagectnts-a20170113-20170113-column.html