Month: February 2017

In an article written by Mike Elgan, the way we use our personal devices can not only put our personal data at risk, but also the confidential data of their company.

The article provides a list of 5 new security concerns. However, I will highlight a few which can have a direct impact on a Information Systems Confidentiality.

Link to Article

1. Be wary of your selfies:

Elgan argues that with the high resolution of today’s mobile phones, the camera itself can accurately capture our fingerprints, which hackers could use to make prints and bypass biometric systems. While it may seem unlikely, it’s always a possibility.

I would also like to add to that topic of being aware of what you’re background is. If you’re at work, you would want to make sure no confidentiality information can be picked up from the background. Such as passwords written on the dry erase board.

2. Do you really know what your Mobile apps are sending to their servers.

We all download different mobile apps for their different purposes. However, we may not necessarily know what is occurring in the background. The author used the example of Meitu, an app from China which was sending back information back to their servers including the mobile carrier and IP address.

This can pose a problem for Information Systems because we link our company emails to our personal devices, we send texts to our bosses and coworkers, and we may use the companies Wi-Fi.

Essentially our mobile devices are becoming gates to unlocking the doors to our servers.

At the end of the day, while we can never fully secure our data we can still utilize this knowledge to be more wary and make better decisions as to how we use and monitor our personal devices and our company’s data.

 

 

Be it be security or demonetization, the growth of card less payments  is increasing everyday. The number of users who prefer making their payments without cards are spreading all over the world. The demonetization  act in India has also played a really important part of, people freely making their card less transaction. Long ques in the ATM’s forced customers  to consider to the option of other Fin Tech like Pay TM. It’s a Fin tech start up in India, which has been wildly spread in a very short duration of time.This start up has replaced the concept of people carrying cash. This is an instant money transfer platform which works a lot like  Paypal , but the transfer of money is much faster. The PayTM stands from PAY through mobile, Uses all kinds of ways for money transfer. One can create a PayTM wallet and save your money their, Or It also provides you to save the option of your credit or debit card and the money will be deducted from that for the corresponding transactions ,It can also use our net banking accounts.This is an app which has spread and is also used in the payments of jeweler which involves a transfer of large amount of money to to the payment of your taxi fare.

The market in US for digital wallets has been growing considerably. Many payment options like Apple pay, Citi Wallet, Android  are in use and upcoming product announcements from Samsung, Chase, Visa and MasterCard sounds promising. But if we consider the consumer side, only 2% of the payments are through mobile wallet. Even services like Paypal, Venmo are struggling to gain progress. So will consumers adapt digital wallets at a faster rate? A Mckinsey Research suggests that mobile payments will reach upto 9% spending by 2020. Among these, the early leaders would be online transactions combined with mobile payments. This could be followed by POS.

Online transactions are mostly done by card data stored in file, browser etc. Hence digital wallets should offer some sort of value to particularly capture this market segment. Also a considerable amount of effort is required from merchant side in terms of acceptance. Merchants should incentivise consumers to enable some motivation to help them make the switch. Starbucks is a good example as it helped consumers make the switch with reward programs.

Among consumers, if we look at a need based segmentation, Mobile enthusiasts would be early adopters. They could be followed by people who like to shop for deals, manage finances on their own. People who are cautious about security and budget would be late adopters. Hence trying to maximise market adoption would require specific strategies to attract different segments. Apple pay and android pay would be more attractive to mobile enthusiasts. To appeal to other segments, the product should have additional propositions other than just payments like helping to manage finances, reward programs by merchant companies, integrating bank card with digital wallet etc.

Source: http://www.mckinsey.com/~/media/McKinsey/Industries/Financial%20Services/Our%20Insights/Digital%20wallets%20in%20the%20US%20Minding%20the%20consumer%20adoption%20curve/Digital%20wallets%20in%20the%20US.ashx

This article talks about how despite the push of mobile payments from banking and technology companies, many retailers have been slower to adopt this FinTech.

In my experiences and opinion, the article is accurate about the primary reasons why this is the case. I haven’t seen many people use mobile payments in stores, and  when it comes to credit cards, my experiences tell me that people don’t like change. For example, when cards started having security chips, I saw many consumers initially express annoyance with them, even though the chips were beneficial. Why? Because people weren’t used to them, and made people break their established ways. In addition, even though mobile payments are supposed to be safer, major security breaches in technology (Target, Yahoo, etc.) seem to get more attention from the media than card fraud. Because of this, many people might still think that putting credit card info on phones is unsafe. I think another reason for the struggle for acceptance is that too many stores may be developing their own system. It may be hard to convince consumers that they need to download Apple Pay and Starbucks payment and Wal-Mart payment and CVS payment and so forth when they can just use a single physical card for all these stores.

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http://digiday.com/brands/retailers-struggling-adopt-mobile-payments/

While originally many startups tried to compete with traditional financial institutions, currently, there has been a shift toward collaboration between them through partnerships or acquisitions. Thanks to technologies like robotics, cloud computing and data analytics, “we are now in a golden age of fintech”. Globally, the number of investments in fintech startups competing against the traditional financial institutions versus that of investments in startups pursuing to collaborate with them has remained steady over the past five years (“with 62 percent of deals going to competitive companies”). The move is pretty much obvious in North America, especially at New York. It is surprising that “in the first quarter of 2016, New York received more fintech financing than Silicon Valley for the first time ever. I do agree with the article that collaboration, and eventually a real adoption instead of competition will strongly continue and help fundamentally change the banking ecosystem. Of course, there are still definitely a lot of work for banks and regulators to seamlessly adopt new technologies which provide solutions for many problems simultaneously.

Source: https://www.accenture.com/t20160724T221504__w__/us-en/_acnmedia/PDF-26/Accenture-FinTech-New-York-Competition-to-Collaboration.pdf#zoom=50

With $19.1 billion invested in fintech companies in 2015, investors are beginning to question the true value of companies categorized as fintech. The term fintech has been used to describe a wide range of companies. Subprime lenders that state that fintech can lower default rates is one area of concern by investors. An example of this is Elevate Credit and LoanDepot. Both companies sought to go public, but pulled their I.P.O.s due to concern from investors in the true value of the companies.

The rapid investment in fintech can be compared to the “.com” bubble of the early 2000s. Within the industry there is a mix of financial companies utilizing technology and technology companies that are in finance. The main area of concern for investors is the worry that companies are categorizing themselves as fintech in order to appear more attractive. Overall, fintech is a relatively new industry and it is time that will aid investors in determining the true value and category that fintech belongs.

Reference:

The small business industry is one of little interest to large banks due to their risk-averse outlook on investing in companies. A recent study has been conducted where it was discovered that smaller institutions were 18% more likely to invest in smaller businesses and those that partnered with larger banks had a 51% satisfactory rate. With the recent rise in fintech companies and attributes, competition in the banking industry has grown significantly due to the success of the technology’s processing method and rate. Companies such as Kabbage and Trustly have processed over $1 billion in small business loans each and have provided a more cost effective and efficient way to process payments. Other SMEs are the ones taking advantage of fintech and disrupting the market for the larger institutions. It operates all under one contract for all market, thereby lowering admin costs and performs other functions such as refunds and splitting payments. Fintech allows you to eliminate the middlemen and save the extra money it would cost to process. Its no surprise that fintech is disrupting the status quo of the investing business and that banks are paying the price for it because of its inconvenience. In order to reclaim the market they are slowly losing, large institution must utilize a way to adapt fintech to their advantage and the place to start would be the small business market. I believe in the future we will see larger corporation invest more in the smaller businesses and soon will reclaim the market they have lost.

URL: https://smallbiztrends.com/2017/01/fintech-trends.html

Lehman Brothers was created in 1850 and over its 108 year lifespan, was the fourth biggest investment bank in the United States.  As highlighted in films such as “The Big Short” the housing market crash of 2008 significantly impacted Lehman Brothers and caused them to file bankruptcy soon after.  However one topic that’s oftentimes swept under the rug is the financial fraud committed just prior to its bankruptcy.

Following a poor financial showing in the later half of 2007 and the beginning of 2008, Lehman Brothers manipulated its financial statements in order to misinform investors.  This manipulation occurred three times, each time hiding overall losses.  In total, Lehman Brothers hid 138.1 million dollars in debt by temporarily making sales of toxic assets to Banks in the Cayman Islands with the promise of buying them back.  However; rather than classifying these as the loans they clearly were, the accountants recorded them as overall sales and therefore were able to manipulate the overall losses.

This fraud is only possible with the help of many regulators whose job is to prevent this as well as accountants willing to break the law.  If it wasn’t for the lone person who brought this fraud to the public, do you think they would have gotten away with this fraud?

 

http://www.forbes.com/2010/03/19/lehman-brothers-markets-streettalk-dick-fuld.html

Lezner, Robert. “Lehman Lies But Nobody’s In Jail.” Forbes. Forbes Magazine, 19 Mar. 2010. Web. 05 Feb. 2017.

 

 

Robo-advisory was one of the first use of financial technology in the investment space. Robo-advisors provide an online wealth management service based on their proprietary software. This has reduced the advisory costs as there is less human involvement therefore reducing their cost per client. This has enabled greater use of technology to achieve simplicity and avoid the unnecessary paper work involved. The current generation in particular can use these services with ease as these are provided through apps and with an increase in the smartphone usage, these could be perceived to be more user friendly. This technology also helps you to invest on your own without having to interact with any representatives and some Robo-advisors even offer significantly less fees as compared to the traditional wealth management firms. The financial technology in these Robo-advisory firms is developing fast and with this they have eliminated minimum investment amounts and targeting younger people and also allow people to try and invest with smaller amounts to build confidence. This to me is a great revelation and use of FinTech to provide investment services to the common man.

 

https://investorjunkie.com/37307/5-ways-robo-advisors-changing-investment-industry/

While fintech continues to be adopted by more and more people, there are still a few challenges that fintech must face in order to be an accepted method for the mainstream public.  One of the issues are that many developing countries do not have the infrastructure or cloud services that are needed for many fintech firms to succeed. Another challenge for fintech services entering developing markets is that there is not much data for these companies to learn about their potential environment. With more data, fintech firms can make smarter and more advised decisions on how they can market and offer their products to developing communities.

Lastly, much of the world’s population are living paycheck to paycheck and do not see the need of the fintech’s offerings. However, fintech firms are continuing to adapt their product lines and services in order to successfully adapt to these new developing nations. I believe the rise of fintech can have a very positive affect on the people in developing countries, but there are a few issues that are currently in the way. However, I think fintech firms will continue to learn and tailor their business to fit the needs of these markets.

https://hbr.org/2017/01/fintech-companies-could-give-billions-of-people-more-banking-options