Author: lizmorgese

Most people are familiar with plastic loyalty cards, where stores give you a credit card resembling discount card that tracks your purchases and points. However, as more and more stores begin to offer them, our wallets become too full and they can create more hassle than they are worth. A UK-based loyalty app called Bink seeks to address them by consolidating all these loyalty cards on their app. Currently, the app is only live in the UK, but is seeking funding to expand to the rest of Europe and Africa, and to the United States by 2018. More and more brands are signing onto the app and it is compatible with Visa, Mastercard, and American Express. Customers can securely link debit and credit card info to the app and access all their rewards and discounts at once.

I personally think this is a really smart idea. My mother is constantly sorting through her excessive pile of loyalty cards every time she goes to check out at a store, and making this digital could really solve this problem for her and many others, so long as the app is easy to use. I would also be interested in using this app as it saves the wasted resources on the physical cards and serves the same purpose. It is also really smart for businesses, as they save money on producing physical cards and can more effectively track purchases for marketing purposes.

Source:
http://www.businessinsider.com/fintech-app-bink-seeking-25-million-series-a-expand-us-europe-2017-3

The US Office of the Comptroller of the Currency (OCC) has been receiving criticism for a proposal considering a charter designating fintechs to be licensed as “special purpose national banks” (BI Intelligence). OCC Head Thomas Curry defended the charter through several points. Ultimately, many of the concerns centered around an unclear definition of fintechs and what they would qualify for. Curry clarified that fintechs would not be required to take deposits to qualify for the charter, and that instead, “a company offering any combination of federal banking services falls under the OCC’s mandate” (BI Intelligence). This makes all or at least most fintechs qualified for the charter without individual Congress approval. The next concern was about loose regulations allowing fintechs to take advantage of loopholes and not prioritize consumer protection. Curry only added here that “predatory” fintechs would not be given charter, and that all chartered fintechs would be subject to stringent regulation.

I personally see value in giving legal and regulatory recommendation. As fintechs expand, it is important to have clear definitions and be able to protect consumers. These criticisms do not give me much clarity that this charter is the way to go. While Curry defended it well, and I believe was clearly able to discuss the definition of a qualifying fintech, I am more concerned about regulations and consumer protections. Curry was unable to elaborate as well on how consumers would be protected or fintechs would be prevented from exploiting loopholes. I think full consumer awareness is vital, and since they have much less power than a corporation should something go wrong, need to be fully protected.

Source: http://www.businessinsider.com/the-us-government-is-defending-its-fintech-charter-2017-3

When handling sensitive information, or even in any electronic transaction, security is highly important. Studies show that in the UK, “only five out of 11 leading high street banks had adopted two-step authentication to protect customers when they logged into their accounts, even though they have the technology in place” (Banking Tech). Attacks, however, are on the rise everywhere, with 76 million customers affected at JP Morgan in a single 2014 attack (Banking Tech). This seems almost ridiculous to me that the security is existing and ready to go but not actually implemented. Security obviously needs to be prioritized, especially as hackers get smarter and banks are falling behind.

I believe that security needs to be at the forefront of all technological development, especially fintech. I think it should even be prioritized over innovation, in the sense that new technologies are only released once they are thoroughly secured. Banks in Italy are collaborating to take increased security measures, and while this is an interesting move to take with your competition, I think that ultimately it is the smartest one (Banking Tech). The risks ultimately are too high to not collaborate.

Source:
http://www.bankingtech.com/749122/are-banks-taking-security-seriously-enough/?utm_medium=email&utm_source=fintechweeklycom
http://www.bankingtech.com/683741/italian-banks-set-up-cybersecurity-response-team-certfin/

China is a leader in financial technology, in part because of a high consumer adoption, including widespread and early use of online shopping and smartphones. It accounts for almost half of the global total of online payments and three quarters of global online lending (fintech China). WeChat, Alibaba, and Baidu all have their own digital wallets, and these ones represent more integrated forms than we see in most of the U.S. market. For example, Baidu is a search engine and WeChat is a messaging app. Integrating digital wallets into functions consumers used on smartphones gave a huge advantage and created one of many areas of fintech advancement in China.

My own internship experience in China has shown me firsthand how financial interactions are different. Online shopping is huge, and international interns would ask Chinese interns to order things on Taobao for them because we can’t get them in the U.S. However, shopping in person would be mostly in cash rather than with credit cards. In general, I noticed how integrated online transactions were into daily life. Adapting to the differences in financial transactions gave me a firsthand view of the consumer market. I believe that people around the world will have to pay attention to trends in China if they intend to move forward and be successful. In my opinion, China is and will continue to be the world leader in fintech.

Source: http://www.economist.com/news/finance-and-economics/21717393-advanced-technology-backward-banks-and-soaring-wealth-make-china-leader

The article “Please Don’t Start a Fintech Startup” describes exactly what it sounds like – reasons why to not start a startup in financial technology. Author Matthew Hughes cites several reasons, including complicated and restrictive regulations and difficulty with successful user experience. The argument he writes is convincing, detailing quotes from many fintech startups CEO’s, with experiences such as difficulty with consumer verification and security concerns. These certainly present numerous challenges to any entrepreneur looking to enter the fintech field.

Hughes makes many valid points. Fintech startups do seem difficult, and would require time and energy. However, he even states that “there’s a certain allure to the fintech space. Financial services are old, stodgy, and in dire need of shaking up.” I believe that being afraid of regulations is not an excuse to abandon innovation. Hughes says himself that the industry desperately needs some disruptive innovation. While I understand the difficulties they present, his choice to not enter this market does not mean he should discourage others. Imagine if the creator of the credit card felt overburdened with regulations? Financial technology would be greatly different today. So, in conclusion, if you have an idea that could be successful, it should be pursued, and who knows what kind of change you could make in the fintech market.

Source: https://thenextweb.com/finance/2017/02/15/please-dont-launch-a-fintech-startup/#.tnw_JTbqt1of

More recently, women have made more banking decisions for their families and themselves, with a focus on practicality. In fact, studies show that “women influence up to 80% of household buying decisions worldwide but 73% of them report being unsatisfied with their banking services” (Cernuda). This shows a clear gap in the market and how it is currently not meeting the needs of most of its consumers. From both a business and sociological point of view this presents opportunities to create better services and technology.

While one solution the article presents is a pink bank and female employees, I do not think this is the only way to get women more engaged with banking services. Author Gemma Cernuda states that “developing products and services relying on male traits and values don’t resonate with female consumers and leave them annoyed and exhausted” (Cerduna). She suggests that banks need more data on women, which I agree is important. Ultimately, I believe that banks need to be flexible and understand the financial decisions women make, and integrate that into current technology like apps, allowing them to access services they need.

Source: http://blog.strands.com/bridging-the-gap-connecting-banks-and-women?utm_medium=email&utm_source=fintechweeklycom

Technologies and applications are constantly coming out that simplify and better consumers financial lives (the article names Venmo, Betterment, and Digit as a few examples). These new technologies allow people to make their money management more convenient, allowing for better and more informed investment, saving, and loans for consumers. With the increase of online banking, technology that enables easy data access, such as account balances or identity verification, to help make these decisions is vital.

However, some financial institutions are looking to cut off consumer access to this data when using third-party applications. Motivations range from security, competition, and control, but have countless effects on developing Fintech. While allowing data access undoubtedly has business repercussions, it also generates economic benefits that would otherwise never happen. I believe consumers need to be allowed access to their own data through trustworthy third party apps, as it allows much more personal control over their finances. Once people are more informed, they can make better financial decisions. Our economy and many people’s well beings would clearly benefit from being more financially informed consumers.

Source: http://www.forbes.com/sites/forbestechcouncil/2017/02/03/the-importance-of-data-access-for-fintech/#47b6d1771a69

Technology is constantly evolving, creating future innovations no one could have ever imagined. That being said, security generally does not come as quickly as new inventions. This tension is of prime importance to banks, as security issues and attacks could cause a huge loss of business. Statistically, “63% of senior IT leaders in the financial services sector globally said their company had suffered an attack in the past year…14% they weren’t very confident they could return to business as usual within 48 hours if they suffered another attack” (Weatherhead).

In my opinion, banks need to consider security at the forefront of all new business. The loss of customer trust as the result of attack could be irreparable. Security cannot evolve as fast as new innovations, and while banks should be encouraged to remain inventive to remain competitive, they need professionals monitoring cyber security at all times and to be cautious and thoroughly vet new technology. Customer convenience may have to be sacrificed at times, and it might present an issue to convince stakeholders that security should be prioritized, but it ultimately should be the priority.

Source: http://www.fintechbusiness.com/blogs/610-cyber-security-should-be-a-focus-from-the-start

Artificial intelligence is set to make huge strides in banking. While it has some present applications, going forward the technology is likely to increase immensely. AI can identify patterns that humans generally cannot through taking in immense amounts of data, making it incredibly useful with numerous business applications (Marous).

Artificial Intelligence is growing so quickly that “Ray Kurzweil from Google estimates that AI will surpass human intelligence by 2019” (Marous). While many praise this as objective success, it is hard to not be even a little nervous. The film industry has portrayed numerous situations where robots/AI take over society and humankind is in danger, though this is unlikely in reality. While I do not personally believe we need to be afraid of the terminator, we should all gain a better understanding of what AI really means for banking and business applications. In this context, AI will improve customer personalization, productivity gains, fraud detection, and better customer recommendations (Marous). Ultimately, I believe that AI should be pursued in business as long as security is considered as well.

Source: https://thefinancialbrand.com/63322/artificial-intelligence-ai-banking-big-data/?utm_medium=email&utm_source=fintechweeklycom

Healthcare delivery is accompanied by a series of complicated financial transactions between the patient, provider, and insurance companies. Currently, most of these transactions are done manually, involving extensive labor hours conducting phone calls, and mailing and faxing documents. In particular, claim attachments, which providers use to give additional information required for certain claims, take up a significant amount of additional time. In total, these tasks are estimated to take up to 1.1 million unnecessary labor hours (Lagasse).

However, this does not have to be the case. New findings show that switching over to electronic transactions through a financial information system could potentially save $9 billion through an average savings of $6 per claim (Lagasse). Evolving industry standards and advances in technology have likely contributed to greater adoption, but many processes remain to be performed manually. Dental providers could potentially see even more benefits, as they tend to adopt electronic systems at a 30% lower rate than medical providers (Lagasse). Ultimately, healthcare payments are relevant to most people and should be performed in an efficient manner. Adoption of financial information systems would show significant cost savings in the healthcare delivery industry.

Source: http://www.healthcarefinancenews.com/news/electronic-business-transactions-switchover-could-save-healthcare-9-billion-report-says