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Financial departments are constantly being transformed by the new financial technologies introduced from cloud computing to artificial intelligence. They are being forced to adapt to the new methods of reporting and budgeting. This struggle raises the question as to what the CFO’s role will be in the future and whether this role will merge with the Chief Technology Officer as the two departments become interrelated. This switch depends on the organization and how both roles pair together.

 
I believe that these are two tremendously important departments in any organization and should remain separate given the uniqueness of responsibilities. While IT and finance will continue to grow closer together, they will always have their own roles and require specialized skills. I can see, however, the two working as one in smaller companies or startups with fewer resources. It is important for individuals to have an understanding of both departments as the two continue to develop. Nowadays, students are encouraged to study technology and financial systems as these are always changing fields that can require a specific skill set.

https://www.raconteur.net/business/finance-tech-puts-cfos-in-control-of-it-budgets

Financial fraud continues to be a major issue with businesses both large and small worldwide.  In a 2014 report, the “Association of Certified Fraud Examiners (ACFE)” determined that a business loses on average a whopping 5 percent of revenue solely from fraud.  Besides the monetary value of the fraud, the organization will also experience negative psychological affects from said fraud.  Another surprising statistic produced by the  “ACFE” was that smaller companies with fewer than 100 employees were more prone to fraud compared to companies with over 100 total employees.

Contrary to popular belief that small companies produce a more family like environment and reduce the risk of fraud, the fact that small companies oftentimes fail to implement anti-fraud policies and training makes them vulnerable.  The notion that fraud is typically a repeat offense if also somewhat of a myth, given the fact that “87% are first-time offenders with clean employment histories” (Quickbooks).

Fraud will continue to be a major global problem because of people’s inherently greedy nature.  The desire to constantly grow up being told to shoot for the stars has made people go against their morals in an attempt to achieve wealth. Combined with the relatively lenient consequences associated with this white collar crime, has convinced some individuals that the risk is worth the reward.  In what ways do you believe we can change this cultural mindset and reduce the prevalence of financial fraud worldwide?

 

“Fraud Statistics Every Business Should Know.” QuickBooks. N.p., 30 Nov. 2016. Web. 12 Mar. 2017.

Website: http://quickbooks.intuit.com/r/trends-stats/fraud-statistics-every-business-should-know/

This article explores why digital ledger technology, with its incredible venture capital/investment support, hasn’t quite taken over the way people would have expected it to. Starting with the argument that fintech has been on the rise for the last decade and there isn’t much signs of stopping, the bitcoin idea should be adapted more universally than its current uptake. However with an industry so wrapped up in regulation and compliance, maybe this is a particularly hard sector to venture into. The article argues that though it might be the right time for digital ledger technology, there’s more to the industry than the products being adequate and innovative. The regulations around such technology has to amend along side the innovations. Beyond the regulatory hiccups, there appears to be hesitant uptake because of privacy concerns and information leakage. Though this is a valid concern, will time diminish these concerns or instill greater fear with the constant unveiling of fraudulent cases? I would argue that the boom of investment will be ever slowing because of the growing awareness of how difficult a full and universal implementation of digital ledger technology would be. Until there is a need for the technology, I think it’ll continue to enter the market and gain market share slowly but plateauing until regulatory problems are addressed and fraudulent activity can be avoided.

http://www.coindesk.com/the-trouble-with-fintech-and-why-now-is-the-time-for-dlt/

On March 11^th, 2017, the Securities and Exchange Commission rejected an application to create an exchange-traded fund tied to the price of Bitcoin. An exchange-traded fund trades like a stock and tracks an index of assets. After the announcement, Bitcoin prices fell more than 15 percent.

SEC cited the lack of regulation in the current Bitcoin trading market as its reason for rejecting the Winklevoss Bitcoin Trust. According to the SEC, the lack of regulation raised “concerns about the potential for fraudulent or manipulative acts and practices in this market.” The SEC, however, is willing to reconsider its decision once Bitcoin-related markets become more mature. If the SEC did approve the application, an exchange-traded fund would help mainstream Bitcoin by increasing its availability to retail investors through brokerage firms.

While traditional financial institutions have avoided investing in Bitcoin due to regulatory concerns, these institutions have shown great interest in blockchain, which is the technology behind Bitcoin that created a new system for tracking information. Since the Bitcoin market is still in its infancy, I believe SEC made the correct decision to protect investors from an unregulated market that trades beyond the US and has relations to online black markets.

Reference: https://www.nytimes.com/2017/03/10/business/dealbook/winkelvoss-brothers-bid-to-create-a-bitcoin-etf-is-rejected.html

On March 8th, Singapore’s central bank – The Monetary Authority of Singapore (MAS), and Abu Dhabi’s Financial regulator – Abu Dhabi Global Market (ADGM) signed a cooperation agreement between countries to develop and nature Fintech innovations and entrepreneurs. Specifically, MAS and ADGM will discuss and establish a strategic framework to aid Fintech startups and innovators through the application and authorization process, as well as explore collaborative projects in technologies such as blockchain, distributed ledger technology, mobile payments, big data, and much more.

In my opinion, despite seeing many news stories about how financial regulations are slowing the development of fintech in the US, it is refreshing to see what other countries are doing to push forward new technologies in the financial market. Having such an agreement is the first step to encourage new entrepreneurs and innovators to invest in fintech, especially when this agreement is backed by Singapore’s central bank and Abu Dhabi’s financial regulator. Similar to international trade agreements, these fintech agreements will be one of the largest obstacles in using blockchain and distributed ledger technology across boarders. If more countries were to sign on to the same agreement, then fintech will flourish when the technology matures.

Source:
https://www.cryptocoinsnews.com/dubai-regulator-signs-fintech-pact-with-singapores-central-bank/

 

A Chinese Fintech startup, Mioying, is launching a new operating system that offers a more efficient and streamlined platform for wealth management processes and analytics. The system allows wealth management managers to utilize end to end portfolio data and analytics, making their previously tedious responsibility of manual analytics and Excel manipulation a worry of the past. One of Mioying’s motivations for this innovation stems from their desire for Hong Kong to remain a competitive financial hub relative to the rest of the world. In the past decade, Hong Kong’s wealth management sector has not seen any new financial technology until this innovative new system was launched.

The startup’s motivation behind this Fintech innovation points towards a larger theme of global competition in markets and how fintech will be the fuel for growth in the future. Increased use of Fintech is already proving its value in reducing inefficiency in multiple regards. Futher innovation and implementation of Fintech will definetely boost economic performance while creating stronger and more competitive local and global markets.

http://www.marketwired.com/press-release/mioying-technology-shakes-up-hong-kongs-financial-sector-with-hardcore-fintech-os-2201679.htm

 

Ripple:  Funding $93.6 Mn;

Investor – Blockchain Capital, Satander Innoventures

Founded: SFO (2012)

Ripple is one of the first such blockchain-based settlement mechanisms: Its banking partners include UBS, Santander, and Standard Chartered. Ripple provides instant, certain, low-cost international payments. Ripple offers a global real-time payment system that enables banks and financial institutions around the world to directly transact with each other without the need for a central correspondent.

The company also offers FX Market Making, a solution enabling enterprises to gain access to cross-currency liquidity through a distributed network that allows foreign exchange to be externally sourced from a competitive FX marketplace or an internal FX trading desk. This minimizes FX exposure thereby lowering the volatility and counterparty risk of trades. Ripple Insights features industry updates, insider perspectives, and in-depth market analysis.

I feel the fact that Ripple does not take transaction fees like Paypal or other credit card companies makes it more of an attractive proposition for vendor, sellers. Ripple also has an advantage with stability and speed of transactions. Companies like Ripple can surely help eliminate frauds and financial thefts with their highly robust financial systems.

Reference: https://ripple.com/

 

https://wallethub.com/edu/credit-debit-card-fraud-statistics/25725/

To be quite frank, credit card scams and credit card fraud scares the living daylights out of me. The thought of some stranger having all of my personal financial information is terrifying mainly because with knowledge comes power, and that power may just be financially ruining me. However, through this article of statistics on Credit and Debit Card Fraud, I was surprised that it’s really the card issues (74%) and merchants and ATM acquirers (28%) who incur most of the fraudulent losses.

Interestingly enough, “in 2015, US accounted for 38.7% of the worldwide payment card fraud losses but generated only 22.9% of total volume” (Nilson Report, October 2016). The reason that the US has such high fraud losses compared to its contribution of worldwide total volume may be attributed to the development of more complex fraud schemes. Additionally, from Javelin Strategy & Research, 2016-2017, although switching to EMV reduced existing card fraud, the US saw a 113% increase in new account fraud, which now accounts for 20% of all fraud losses. Essentially, despite these precautions, people are just getting more clever at stealing money.

Additionally, the most recent largest credit card data breach is from Home Depot in 2014 with 56 million. With the push for online sales, protecting customer data has and will surely play a larger part in the fintech industry.

Since its inception, Fintech was assumed to be an application of emerging technologies in the financial domain. But today, it is one of the major disruptors in the financial services market and has completely transformed the way people manage money. The domains that have seen the most disruption are asset management, lending, money transfers and mobile payments. Fintech has seen a steady growth ever since the dot com boom, but it was not until 2008, that the industry experienced massive global investments.  It highlights that the financial sector is hit by a digital hurricane, disrupting and redefining the fundamentals of banking and finance.  

1.  Not only has the digital innovation in Fintech set up new business avenues such as crowdfunding, online money transfer and lending services, but it has also reduced the reliance on banks as the primary source of funds.
2. Crowdfunding is another interesting application of Fintech. Businesses can potentially raise money from people spread across the world. The underlying idea is that, an individual will share his cause and details of the objective over the web and anybody who relates to the cause can start donating.
3. In the past, starting a business meant borrowing funds from the bank, manually filling in the documentation, or opening an account if necessary, and waiting for disbursement. Likewise today, the same objective entails applying online, getting verified online, and getting paid online.
4. Instant money transfer is also one of the key application of the Fintech service sector. Individuals can make payments ranging from small amounts to huge sums in a fraction of minutes through channels such as Paypal. These channels function differently than the traditional banks, here the individuals who are willing to transfer the amount do not have to qualify with a minimum transaction value. Fintech has facilitated international money transfer as well, overriding the border constraints and international regulations.

Customers’ today are technology savvy and manage most of these service offerings through mobile applications, and it’s not far when a cashless economy with digital wallets will dominate. Although this just seems like the start of the Fintech revolution, it will be interesting to see what new technologies and opportunities will emerge in the future.
Reference: http://www.readitquik.com/articles/fintech/getting-fintech-righta-beginners-guide/

Pariti is an app that help you get out of debt quicker. It is a personal finance mobile app that helps you keep an eye on your spending and tracks how much you are paying out servicing existing debt, such as overdrafts or credit cards. It then suggests changes you can make to pay off that debt more quickly. This mobile app connects to users’ existing banks and credit cards to analyze the financial standing and calculate whether the users can save on their debts.
I think this new app is very practical and helpful for most people. Since most of us have credit cards and loans to pay, it would be better if something more professional can help us to make plans for spending and saving. And this app can also help people to be aware of the true cost of the money they have, or borrowed. In addition, this app can also help lending partners get more accurate pictures of consumer suitability, affordability and credit worthiness about their customers and do corresponding adjustments for the lending rules. There is no doubt that this transparency of finance can help consumers to realize their true situations.

Index-backed Pariti is an app to help you get out of debt