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Given last week’s article about issues with mobile banking security, this week I searched for articles focused on suggestions ways in which this issue can be improved upon. The three recommendations are as follows from one specific article.  

• Multi Factor Authentication: establish connection between user’s ID and their real world identity
  • Fingerprints and facial scanning
• Regulatory Compliance: stay up to date with legal regulations as to avoid excess expenses and to ensure security compliance is met
  • Proper identification of users and incorporating Anti-Money Laundering policies
• End-to-End Encryption: enables better protection of data and system integrity to ensure compliance with industry best practices
  • System integrity and protecting users’ identities from adversaries

Considering all of these security measures include already established technologies, I wonder why mobile banking has not widely adopted these as to prevent the issues presented last week. Of course, mobile banking is a newer concept considering it gained traction and popularity in 2010. It seems that mobile banking has the resources to make more secure applications, but it will continue to take time to implement solutions. Additionally, we may see new mobile security threats in the future which will also affect the security of such applications.  

http://paymentweek.com/2017-3-3-three-ways-to-ensure-mobile-banking-apps-are-safe-and-secure/

The world of fintech is growing at a rapid pace. There is a lot of competition coming up in this industry. Technology is allowing people to innovate and provide financial services to people all across the world. It is helping people to transact money from different parts of the world. Unique services are offered which before the space of fintech were very hard for the common man to get a hold off. The problem now is that there are too many such firms that are offering the same services. Financial analysts believe that the level of security and the trust the fintech company offers is going to be a key differentiator. Generally, price of the service is what determines the interest of a customer but in a space where the service is prone to frauds to pay the extra percentage or dollars for a more trustworthy and secure service. Analysts say that the trend for the successful companies for now and in the future is to work towards simplicity of the app and having the best security features amongst its competitors to have an advantage in their space.

 

http://fortune.com/2017/03/10/financial-technology-trends/

Here comes one of the big guys  – a tech giant by the name of Google, that is spinning the Blockchain FinTech in a new direction. In summary, Googles’s DeepMind artificial intelligence (AI) lab is utilizing Blockchain like cryptography, namely Merkle Trees, not in the legacy fashion of using a decentralized network of computers to prove the authenticity of transactions, but instead is creating a new way to authenticate and track changes made to the data without the external networking overhead. The DeepMind project is operating in the healthcare sector and needed a way to comfort the medical industry that any use of private patient data that was being used in their AI research was accurately tracked. This Blockchain like technology of Merkle hash trees could be the answer for Google.

Cade Metz, in writing for wired.com, describes DeepMind’s endeavor as an “Auditing system for healthcare data” (Metz, 2017). I agree with Metz in his analysis of how Google’s effort is unique, and that other players continue to push the traditional use of blockchain technology and digital ledger transaction. I also think Google’s approach is smart, as they truly understand the potential of cryptography in maintaining sensitive data, and have the deep pockets to know that it may just be that the underpinnings of the blockchain are the key, and pulling that technology out, repackaging it and finding other uses for it is the recipe for success. Stay tuned.

 Metz, C. (2017, March 11). Google DeepMind’s Untrendy Play to Make the Blockchain Actually Useful. Retrieved from www.wired.com: https://www.wired.com/2017/03/google-deepminds-untrendy-blockchain-play-make-actually-useful/

Due to the rapid expansion of FinTech, new companies are being established and startups are expanding. This growth in the market has created multiple jobs that must be filled by skilled workers. In the article, “FinTech companies are in ‘a full-scale battle for talent,'” by Oscar William-Grut, he explains that certain positions for FinTech in the U.K. have been struggling to find talent. The hardest position that companies are trying to hire for are mechanical and engineering manager positions.

With the increase of FinTech as a leading market, the economy has continued to grow. However, with Brexit, the U.K’s job market is undesirable. This can create problems for FinTech companies that are headquartered in the United Kingdom. If these FinTech companies continue to have problems attracting potential employees, there can be a possibility of companies looking into moving overseas.

While there is a concern with recruiting talent, there can also be a worry about retaining talent. Since the industry is expanding at a fast pace, more opportunities will arise for those within the FinTech industry. Companies must stay competitive to keep employees happy and content with the job.

http://www.businessinsider.com/hardest-fintech-jobs-to-fill-in-uk-according-to-indeedcom-2017-3

WorldRemit, based in UK, is an online platform for sending money overseas just in minutes and at a low cost by employing online and mobile technology. To compete directly with Western Union, MoneyGram, it offers low transaction fees, no minimum transfer amounts, and better exchange rates.

WorldRemit offers users in 50 countries to remit money by paying into bank accounts or into mobile wallets which can be used for airtime top-ups, or even cash pick-up points; and let people in more than 100 countries to receive remitted money.

The company is also thinking to integrate its services with messaging platforms like Facebook, Viber, Skype but it has not publicly disclosed any plans yet. I believe this integration, if any, will be very successful because it does provide a fast solution of international communication and remittance at low cost.

I think this service is particularly helpful for people who want to transfer money with good causes as it is more timely, convenient and cheaper than Western Union or MoneyGram. However, as WorldRemit allows transactions to be processed immediately and transfers can be received instantly depending on the transfer method, it opens door for frauds or money laundering activities. Thus, the company should do background check for every client when they register and set the limit of maximum transfer amounts in order to prevent frauds.

Source:

WorldRemit Raises $100M To Take On Western Union In Money Transfers

https://www.compareremit.com/money-transfer-companies/world-remit/

With all the forward thinking already concerning FinTech, it is essential to consider its trend going forward.

• Increasing partnership, decreasing competition.

The industry has started to see FinTechs as collaborators. Not only private companies like Paypal and Visa; even banks like Citi are showing a willingness to work with FinTechs rather than against them especially when open banking regulation will take power completely.

• Block-chain will continue to exist.

The banks have and will continue to show interest in Block-chain because of its potential to provide an underlying, interconnected financial services infrastructure.

• Realizing FinTech’s potential to cause a disruption.

Financial services industry that includes Retail banking, Lending, Payments, Wealth Management, Insurance, Markets and Exchange etc. are on their way to be revolutionized with advanced software and hardware advancements made in the technology environment which opens the back door for cross domain, cross platform businesses to operate in more than one industry.

My piece of advice to any job seeker would be to also consider targeting the above mentioned domains within financial services industry as who knows how far this technology could get one to? For those still in doubt. The image below will give you a fair idea of it’s increasing magnitude.

Link – http://www.businessinsider.com/heres-everything-we-learned-about-the-future-of-fintech-at-mobile-world-congress-2017-3

According to KPMG, the global investment in fin-tech is about $13.8 billion, it is the new disruption and the future. Technologies like peer-to-peer lending, faster payments, robo-advisors would face severe consequences if security is not built in from the start. Along with new technology, new threats would arise. Companies like Bitcoin are under severe threat already. They are losing thousands of dollars to cybercrime. Tracking these attackers becomes difficult due to anonymity and lack of regulation. Also keeping customer information safe is also a major concern.

In the current world, cyber attacks have moved on from network attacks to application layer attacks. Fin-tech companies need to start working closely with real hackers and perform thorough application security assessment. It needs to be inculcated in the core design itself. They should consider this the same way they consider speed and trust with both users and regulators. Hence it is important to develop it as a part of the organisation culture. When it comes to cyber security, there is no one solution that solves all. Different companies would be targeted by different types of hackers for different needs. Investing in the hardware and software from the start, avoiding public cloud for confidential data, conducting regular audits and implement strict security protocols would be the most important tasks for a fin-tech to improve safety.

References:

https://centricdigital.com/blog/fintech/is-your-data-safe-fintech-security-challenges-and-solutions/

A London fintech world leader in cross-border payments called CurrencyCloud recently raised $25 million from Google’s venture capital arm, Google Ventures.  CurrencyCloud is a five-year-old startup which raised this money in the Series D round, as Google joins other investors such as Notion Capital, Sapphire Ventures, Rakuten FinTech Fund, and Anthemis.  The start up has more than 200 customers in 35 countries, as they work with banks and payment providers to set up multi-currency payments and conversion tools for millions of end-users.  The way they make money is by taking a small portion of all payments made through their API.  Google Ventures has invested roughly $500 million to companies worldwide, but this is their first investment in the financial technology sector.  According to a report from the Financial Times, the general partners of Google Ventures have stated that a major interest for Google Ventures is that of fintech.  It will be interesting to see if there are any more fintech investments made soon.

 

https://www.cryptocoinsnews.com/google-ventures-conducts-first-fintech-investment/

GV, formerly called Google Ventures, participated in a $25 million investment round in Currencycloud alongside existing investors Notion Capital Ltd, Sapphire Ventures LLC, Japanese technology company Rakuten Inc and venture capital firm Anthemis Group.

Currencycloud, launched in 2012, is a platform that allows companies ranging from banks to popular payments startups to offer international payments services without having to set up complex and costly cross-border infrastructure.  The money will be used to support the company’s global expansion plans. To date, around $25 billion has been sent through the company’s infrastructure to over 200 countries.

Google looked at us as a tool that is used in globalizing domestic businesses.  This is an investment in the right step, as this fintech company aids in the globalization of payment services in an increasingly globalized marketplace.

https://www.nytimes.com/reuters/2017/03/09/business/09reuters-google-currencycloud-investment.html?_r=0

On Friday, the SEC denied the Winklevoss Fund as the first registered investment vehicle to make bitcoin investment accessible to everyone. This ETF would have made it so people could invest in bitcoin through all accounts including IRA’s and 401K accounts.

After it was revealed that the Winklevoss Fund would not be SEC approved Fortune reported that bitcoin value fell “18% from nearly $1,300 to $1,060”. It has since rebounded slightly.

According to Fortune, the SEC did not approve the Winklevoss Fund because “the Commission is disapproving this proposed rule change because it does not find the proposal to be consistent with Section 6(b)(5) of the Exchange Act, which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest.”.

I think that bitcoin has the necessary protection to protect investors and public interest. Although there is limited regulation I think that blockchain technology would have prevented fraud. The constantly growing database, the blockchain makes bitcoins nearly impossible to manipulate.  Cash on the other hand is much easier to launder because all of the previous transactions do not remain attached to the currency itself. Also, I realize their is currently no regulation surrounding bitcoin. However, I wish the legislature would accept this is the future, and create the legislation. Instead of halting financial technology progress, like they are now.

https://www.forbes.com/sites/laurashin/2017/03/10/sec-rejects-winklevoss-bitcoin-etf-sending-price-tumbling/#166a393f643c