Month: January 2017

Organizational Growth and Data Security

Article URL:

http://www.information-management.com/news/security/organizational-complexity-greatest-threat-to-cybersecurity-study-finds-10030706-1.html

I found this article from the website Information Management to be very relevant to the topics discussed in class this week. The article was discussing that the number one threat to their information systems is their “organizational complexity.”

The reason for this is that most security features are “too difficult” for employees to utilize and use. The article describes that most employees are accessing company data on their personal devices many times on public or unsecured network connections.

In class we learned about master data and how different department have different views on the master data. Having each department with a different view not only promotes a Segregation of Duty, but it could also limit the amount of access an intruder can have when they breach the information system.

However, that also poses the question how can information system respond better to hacking intrusions. As the article claimed, we want to ensure that employees are productive and the information system will connect all departments, but at the same time we need to address the issues surround data protection. How can we guarantee the integrity of the data, if a security breach has occurred?

 

Raisin is a German fintech company that allows customers in Europe to invest in savings accounts around the EU that offer the best interest rates. Raisin, formerly called WeltSparen, does not hold any of the customer’s money, but instead opens each saver an individual account at the bank where their money is invested.  The money invested by the consumer can be stored in any of the partner banks across the EU, regardless of which country the customer is from or currently has their money.  There are over 50,000 customers who use Raisin, accounting to $2.1 billion deposited in 27 partner banks across 14 European countries.  Raisin is continuing to add more banks as they grow, as well as find partnerships with other fintechs to make sure their products stay attractive.  They claim that customers have earned over 20 million euros in interest since their launch three years ago.  The employees at Raisin have stated that they believe the next billion will be easier than the previous one.

 

http://www.businessinsider.com/fintech-raisin-reaches-2-billion-investment-milestone-2017-1
https://fintechvalley.org/2016/11/14/fintech-valley-interview-raisin-a-company-profile/

As we talked about in class, Bitcoin is a revolutionary financial system that had the goal of replacing traditional currency. Unfortunately, the process was not as widely adopted as many had hoped, but there were still few who were lucky to have cashed in early on the adoption of bitcoin, making a fair amount of money along the way. For the first time in three years, Bitcoin jumped over $1,000, outperforming all other currencies in 2016. However, this is not cause to celebrate and jump on the Bitcoin bandwagon, as it has been widely criticized for being one of the most volatile currencies in the current market. However, it does demonstrate that the current market does show promise for alternative financial markets. I am very interested to see how this market will continue to grow.

US financial technology regulation has undergone some changes as of December 2016. For example, the OCC—Office of the Comptroller has announced that it will consider to allow fin tech applications to become “special purpose national banks”. In addition, the US Federal Reserve also released its information regarding regulation for distributed ledger technology. Until now most regulation has been nonexistent in regard to financial regulation technology. Also talked about is the Financial Services Innovation Act which was discussed this past fall. This would create an environment in which fin tech firms can test products/services absent of the regulatory consequences that would originally take place. This would also help to ease the sharing of data of these results and help to improve the level of innovation in the fintech industry.

Cloud Elements is receiving its second round of venture capitalist financing, led by Harbert Partners. The company builds API integration tools for developers, and the company attempts to tackle the data deluge by building integrated systems directly into a company’s application. They differentiate themselves from competing companies such as SnapLogic and MuleSoft, which have a separate, external integration product aimed at IT.

This relates to our in class discussion on how enterprises must face the issues that arise from sharing data across multiple systems. As opposed to investing in a single system, which is both costly and risky, an enterprise can opt for Cloud Elements’ API integration platform. If developers need to connect multiple financial systems in order to synchronize fiscal data across an organization, they would use the company’s application to create a financial hub. The company wants to expand the number of systems it can connect to, and with an ever expanding amount of data and systems, that number is limitless.

Cloud Elements scores $13 million Series B to advance API integration tools

Cryptocurrency was never intended to be invented. The invention was a digital cash system which is completely decentralized, without a server or central authority similar to a Peer-to-Peer network for file sharing, which led to the emergence of cryptocurrency.

Cryptocurrency can be defined as limited entries in a database no one can change without fulfilling specific conditions. A cryptocurrency has a network of peers which records all transactions. A transaction is complete only when it gets confirmed by miners and it is permanent, forming a part of historical transactions called block chain.

Working of Cryptocurrency

Some of the popular cryptocurrencies are Bitcoin, Ether, Litecoin, Monero, Ripple. Bitcoin is the largest cryptocurrency and often regarded as the first cryptocurrency, even though prior systems existed.

Advantages of Cryptocurrency:

• No central authority, flexibility to make transactions all across the world.
• Almost impossible to manipulate transactions due to the additional layer of security called cryptography.
• All transactions have to be confirmed by miners, and once confirmed they are immutable.
• Personal information is hidden, thereby reducing the possibility of identity theft.
• Minimal processing fees.

Disadvantages

• If the holdings are not backed up, a computer crash can cause loss of cryptocurrency.
• There are constant fluctuations of cryptocurrency value.

 

http://blockgeeks.com/guides/what-is-cryptocurrency/

What Are Bitcoins – Pros & Cons, Investment Opportunities

 

Bitcoin has gained traction in the ever increasing global world. The initial reason for Bitcoin was for the implementation of a decentralized currency system as well as the authenticity of the system through blockchain technology. It also allowed for the flexibility of transportation of value across borders.

While this concept of currency seems ideal, there have been some unintended consequences. China has been a notable country for manipulating their currency to gain competitive advantages in trade and labor. However, this has negatively the Chinese people as it reduces the total purchasing power. As a result, China is believed to control over 95% of the total Bitcoin market. This means that Bitcoin is controlled by speculation and price of the yuan. Bitcoin jumped to over $1,000 USD last week and fell sharply after China’s banks pledge to investigate domestic trading of the currency. To wide adoption of a global currency, Bitcoin will need to find a clever way to navigate around this solution.

Reference: WSJ: Chinese Yuan Is Other Side of Bouncing Bitcoin

I stumbled across an interesting article titled “Beyond Bitcoin: How The Blockchain Could Disrupt Our Financial System” (Forbes/SAP Business Trends, Dan Wellers, SAP, August 11, 2015). Reflecting on how Professor Schermann had included a short discussion on Bitcoins and the Blockchain in our opening lecture, I decided it was worth reviewing. Dan starts out right away in the article dispelling any fears that the Bitcoin would ever replace any of the worlds existing currencies, and then shifts focus to his main topic of discussion – the Blockchain, or the underlying technology of the currency itself. The Blockchain, utilizing cryptography coupled with a distributed management architecture, has the potential to serve as a powerful electronic historical ledger that doesn’t rely on a centralized legacy financial institution. The power lies in decentralization and the incentives involved in verification of transactions. This, combined with current computing technologies, has created a new mechanism to operate more securely in todays and tomorrows increaeingly digital environment. I feel Dan has nailed it, and anyone that is dismissing the Bitcoin, is failing to realize the true economic value – the underlying Blockchain and its potential impact and implications on a larger scale. Stay tuned!

There are so many accounting rules which are becoming easier and accurate to be implemented with Financial systems. The concept of Multi period accounting is one of them. It enables users to create accounting for a single accounting event for more than one GL period. For Example, business cycle of an Insurance premium payment. Normally an insurance premium is paid Annually. A premium paid annually is an advance payment of insurance for 12 months. At the time we pay the premium, the actual expense does not occur, rather it occurs as and when the month for which insurance is paid completes. It is difficult to implement this concept by entries in the manual journal book and keeping track of the full payment done as well reductions done every month as monthly expense. With the help of Financial system and the availability of the automation concepts there are setups with which we can implement these business processes for different type of payments and reduce the effort of recording these reductions every month. In any organization, this concept is common and can be observed and put into actions in tiny things like buying office supplies to bigger things like paying the rent for organization building.

 

These article is about the relationship between traditional banks and Fintech. The article argues that some Fintech companies, have not been able to fully disrupt banking products, but that future companies could use improved technology to give customer better data and more differentiated services.

I agree with the article that Fintech companies have not been fully successful at replacing banks, and that it will not be easy, for a few reasons. First, despite the many customer complaints that banks get, banks still have a reputation for being, “the safe choice,” when it comes to handling people’s money. I also agree that some of the Fintech companies have not made it clear enough why their services are both better and safer than using a similar banking service. Finally, the banking industry has a lot of regulations that Fintech companies may not be able to deal with.

In my opinion, some keys for Fintech companies to disrupt regular banks are providing more accurate data, providing banking services with fewer fees or limits and greater convenience, and the companies have to somehow change the perception of safety and strength that banks have.

 

 

 

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“Why Fintech Has Failed to Supplant Big Banks – So Far”

https://www.entrepreneur.com/article/286633