Month: March 2017

This article discusses the different preferences that the Generation Y people think about regarding finacnes and banking. One of the findings of KPMG  was that many in this generation have been found to be more likely to purchase luxury items and travel while delaying other larger purchases like property ownership. Another finding was that with the emergence of a large array of finacnial technologies allow for Generation Y and younger individuals to have multiple different products depending on the features. Younger people can have many different banks or financial services in order to have access to the best capabilities and features possible. Lastly, half of the responsdents would possibly bank with tech giants, yet they cite privacy and security as their major concerns.

I think this KPMG study and article just shows how flexible younger generations can be with their banking and financial needs. Myself and others have a large range of differnet services we can pick from which allows us to be very flexible. Hopefully this will lead to a generation that is more knowledgeable with their finances.

 

 

 

https://home.kpmg.com/au/en/home/insights/2016/11/gen-y-banking.html

Financial Technology has disrupted the world in a way not many could have predicted, it has also broken down business barriers around the world. Mobile and digital payment applications have breached the world while still being in only one physical space. However, fintech has the mass potential to do good as well as disrupt the current environment. Companies such as M-Pesa created in 2007 have created an infrastructure for people in Africa to utilize mobile pay and become more financially literate.

However, moving forward, how do we keep the trajectory of fintech moving towards the unbanked? The Fintech Stage Inclusion Forum will be held in Jakarta in late March to bring together Fintech startups, investors, and financial institutions to help collaborate and keep this momentum moving forward.

Keep a sharp lookout for the new collaborations and innovations coming from this conference and in the near future. I’m excited to see how this conference will impact the landscape of creating opportunities for the unbanked.

 

Source: http://fintechnews.sg/9202/fintech/fintech-can-key-driver-financial-inclusion/?utm_medium=email&utm_source=fintechweeklycom

A panel discussion from SxSW (South by Southwest) demonstrated ways that Fintech could boost the global economy. Two major approaches were emphasized: increasing internet users in the third world countries and high end fintech service in first world countries. It was argued that currently internet penetration in third world countries was far below the average world rate (50%), with Africa having an average of 26.9% and Asia having an average of 44.7%. In addition, users in the third world countries usually had fewer financial service alternatives compared those in the developed countries. Both these two factors create a great potential for Fintech to influence people’s life rapidly in developing countries and therefore contribute to their economic development. It was argued that fintech could increase the total GDP by 6% by 2025 for developing countries.

I think this forecast has some valid points. As we have already seen in some developing countries, such as China, fintech is dramatically changing people’s life in many areas. While in the U.S. some restaurants are still cash-only, one can make a payment on cellphone with even a small street vendor in China. This phenomenon could be explained somewhat by the fact that in China, people used to have fewer payment alternatives other than cash, and credit cards are not very popular even for today.  Additionally, internet infrastructures are being designed and established at an unforeseen speed. Especially some wireless internet technologies, such as Facebook’s Aquila, a Wifi airplane, could make people in the developing countries get connected faster than ever before.

Source: https://www.forbes.com/sites/oracle/2017/03/14/how-fintech-is-powering-the-global-economy/#4ef9b39f1b5e

 

Many of us are familiar with Android Pay and Apple Pay. Today I have learnt a lot from another notable mobile payment systems named iBeacon technology.

iBeacon technology is fast gaining momentum and paving the way for efficient and seamless solutions across multiple domains today. Beacons are being used in almost every sector, from retail to events to education, to build and improve multiple solutions from indoor navigation to loyalty programs to pushing contextual notifications. One of the latest applications of beacons today are for proximity payments.

Proximity payments have experienced significant growth in the recent past and is projected to witness rapid growth in the near future. According to the latest proximity mobile payments forecast from eMarketer, the total value of mobile payment transactions in the US will grow up to 210% in 2016. Beacons are among the newest additions that are helping drive sales and digitized consumer payments in the FinTech world.

A successful beacon deployment was at the Levi’s stadium in Santa Clara, where 1000 beacons were deployed. As a result of the beacons and the Levi’s Stadium app, visitors were treated to an enhanced experience from easy navigation to ordering food and making payments. This beacon deployment led to an increase of $1.2 million in revenue, through the mobile app.

Source:

https://blog.beaconstac.com/2015/11/5-beacon-solutions-driving-change-in-mobile-payments/

 

What the Article Says:

This article focuses on Asia’s development of mobile banking, suggesting that physical banks will become nearly obsolete in the future. Over the past couple of years, the number of people switching to mobile banking applications to manage their finances has increased dramatically. These figures are expected to rise to 1.8 billion users by 2019.

This rise in users is being attributed to the combination of speed and security. Consumers are increasingly demanding faster services, and at the same time, security standards are improving. In Asia, customers are using online banking almost five times more often than five years ago.

My Thoughts:

I think this article presented the information well, but there wasn’t much of a convincing argument. It’s clear that mobile banking and financial management through smartphones has increased dramatically over the past decade, but I would have liked to see more statistics than were presented.

Source: http://www.atimes.com/financial-technology-making-app-based-banks-future/

Technology consistently shapes how we live our lives, whether we like it or not. The increased use of smartphones has given rise to a number of advanced applications that make activities and chores a breeze. One such type of application is mobile banking, which allows individuals to pay bills and manage funds with the touch of a button from anywhere. Money is pouring into the development of these banking apps as investors recognize the trend from traditional in store banking to mobile banking. Investors recently raised 40 million dollars for a European-based digital only bank.The reason for such heavy investment is that 1.9 billion users are expected to shift to mobile banking by 2019. With this many people shifting over, there is clearly opportunity for companies to explore this market.

 
I do not think the question that has arisen is whether mobile banking will become popular or not, but instead what companies will make the shift quicker and more efficiently. As of right now, the major banks have made a push towards mobile banking but the landscape of maintaining their store locations is still up in the air. These stores are expensive to operate and are not driving much traffic as is evident by the number of users switching to mobile banking. I believe many of these facilities will transition to smaller offices or even get shut down altogether.

http://www.atimes.com/financial-technology-making-app-based-banks-future/

There has been conversation about banking and its role in the expansion of FinTech. Many have been looking for major banks to provide them with cutting edge solutions for their mobile lifestyle. While most banks have taken strides in the mobile arena, artificial intelligence is left undiscovered.

I believe that the outcry for artificial intelligence is futile. Currently, major banks have mobile apps that allow you to manage accounts, deposit checks, and even check your FICO score. This technology came out years ago, signaling that we might have already found the Uber of banking. Artificial intelligence can spark a new trend in mobile banking, but might not be practical. When it comes to personal finance, automation can seem irresponsible and lazy.  It is up to users to trust AI to execute IFTTT processes on bank accounts. Personally, spending a few extra seconds on a mobile app in exchange for peace of mind is worth it. I do believe that banks are utilizing most consumer friendly FinTech innovations, and calls for more technology in the fields are baseless.

Link: http://bankinnovation.net/2017/03/is-bankings-uber-moment-coming/?utm_medium=email&utm_source=fintechweeklycom

As FinTech sector expands rapidly, european FinTech firms believe that banks are lobbying against EU legislation that could see the power balance shift. If the lobby went successful, FinTech companies would face greater regulation, but the belief is that this would provide greater confidence to users in the reliability of the services.

In the mean time, banks are aim to tighter restrictions on FinTech companies and their access to customer data due to the controversial issues about cybercriminals will obtain customer’s confidential information. As a result of this, FinTech firms blame banks will delay response times to access requests.

Not only banks, former Group CEO of Barclays, Antony Jenkins also expressed his view that “within the next ten years the financial technology sector would substantially disrupt traditional banking systems and the banking sector as a whole.”

Due to concerns and worries, government regulators will have to maintain a strong focus on the regulatory perimeter, including a more disciplined management of operational and cyber risks. However, this action will further delay the process of implementing FinTech in the sector, which is already considered as sluggish by numerous industry specialists.

 

Source: https://www.cryptocoinsnews.com/fintech-firms-big-banks-are-lobbying-to-block-change/

For those who have played the popular mobile game Pokémon Go, you would remember that the initial launch wasn’t so stable. Particularly, the servers would overload due to the amount of players and the game itself would crash. So what does this have to do with Fintech?

The underlying success of Pokémon Go was it’s ability to geolocate players around the globe and allow the players to interact with a virtual world through augmented reality. The technology behind this relies on a lot of real-time calculations  Similar to Pokémon Go, Fintech also relies on real-time functionality. Financial transactions, investments, loans, and many other finance related offerings can be achieved through technology that is capable of calculating computer functions in real time.

With this in mind, there are already several companies who are looking to do just that. Companies such as DeepstreamHub and FireBase (who was acquired by Google) are providing technologies that is capable of doing real-time calculations. Other companies then can rely on their technology and build it into their products. In cases such as this, games, banks, and other industries can potentially  use this technology to build products that need to communicate in real time. Ultimately, the technology behind Fintech can lead to benefits in other industries, while Fintech can also borrow technologies from other industries as us consumers can benefit from the best of both worlds.

Sources:
https://thenextweb.com/eu/2017/03/16/why-fintech-could-have-saved-pokemon-go-servers/#.tnw_MhI0U8BH

Throughout this quarter I have wrote about multiple large scale financial frauds such as ING, Lehman Brothers, Enron and Tyco.  These frauds have had devastating affects to both shareholders and the company as a whole.  Rather than re-summarize these frauds, I believe it would be more beneficial to explore the factors that made these frauds possible and the ways in which they could have been prevented. In almost all of these cases, at least one of the fraudsters was the CEO.  By holding the position of CEO, they were entitled to all parts of the company, and had the ability to override a lot of the checks and balances in place.  By disregarding segregation of duty and utilizing their power to control others, they were able to manipulate stock prices through misappropriated revenues.  By putting higher revenues on their balance sheet, these well-known companies were able to manipulate stock holders perception of the company.

In the end each of these companies fell hard, leaving thousands unemployed and even more scammed out of their hard earned money.  Although most of the fraudsters received jail time, it in no way makes up for the lives these individuals destroyed throughout their fraudulent schemes.  Overall, I believe that a more standardized set of checks and balances as well as segregation of duty could have prevented these frauds from happening, and saved millions of dollars disappearing from the hands of shareholders.  Crime doesn’t pay.