Financial organisations are expanding their online presence across web, mobile, and social channels at a pace that is unprecedented. Overall this is great, as it provides increased access for customers and levels the playing field by allowing organisations of all sizes to broaden their reach and cut costs. However, this expanding digital presence also comes with increased risks, as it enlarges the attack surface that can be exploited by cybercriminals and increases the number of legitimate digital channels they can impersonate to dupe customers. To this last point we are seeing increasingly creative ways of leveraging digital brands to target organisations and their customers.

The threat of brand impersonation

Organisations can no longer afford to ignore any of their digital channels as an opportunity for brand impersonation; domain infringement, phishing, rogue mobile apps and fake social media accounts all form part of the adversary’s arsenal. As it goes, financial organisations are especially vulnerable – our recent report**, which details trends in phishing activity, revealed that financial institutions are almost always the target of the highest volume of attacks - capturing 40% of all phished brands.

Cybercriminals continually adapt their tactics in an effort to stay ahead of recent developments in the cybersecurity industry.  Many are currently exploiting the interconnectivity of today’s digital world to maximise their reach through multiple channels to conduct fraud, distribute malware and carry out other abusive activities. That finance organisations get targeted so often is no surprise. Not only does the sensitive and valuable nature of the data that they are entrusted with naturally attract malicious actors, but since many companies operate in multiple countries they also tend to lack visibility across all their digital assets and find it difficult to react quickly to potential brand impersonation threats. More often than not, significant numbers of customers end up getting scammed before social threats are identified and properly remediated.

A recent example of this is the phishing campaign observed during TSB’s recent IT meltdown – during which the bank itself warned customers about fraudsters posing as TSB and attempting to trick people into handing over sensitive information in order to steal their money. Mitigating against these types of threats should be a top priority for organisations across the finance sector.

Security and fraud prevention strategies

The nature of targeted attacks has changed. Not only are we seeing a multi-channel approach from malicious actors, the short duration of many of these campaigns makes them difficult to detect and respond to. For example, it’s not uncommon to see phishing campaigns that last less than a day. Identifying potentially infringing digital assets across the vastness of the Internet in a timely manner requires internet scale automation and sophisticated machine learning to be effective.

Maintaining up-to-date asset inventories across web, mobile and social platforms enables security teams to quickly distinguish fake domains, web pages, mobile apps and social accounts from legitimate ones that may belong to different parts of the organisation. Today it is quite common for corporate IT and security teams to lack visibility into as much as 30 % of their organisation’s publicly exposed digital assets.

Once an infringing asset has been identified, organisations need to ability to quickly respond, no small challenge given the number of domain registrars, hosting providers, mobile app stores and social media platforms there are to deal with. Automation can play a key role here in sending out legal notices, monitoring responses and escalating when necessary. Once taken down, automation can continue to monitor for the reappearance of offending assets.

To benefit from these advances, financial organisations will need to adopt new technologies and modify working practices. Many have already established dedicated external threat management teams that work alongside other security teams to ensure that the organisation has a holistic view of threats, both within their corporate networks and out on the open Internet.

When it comes down to it, customers entrust financial organisations with highly valuable and personally identifiable data and ensuring that they continue to do so requires there to be a high level of trust in the organisation’s brand. Counteracting brand-related threats is therefore key to any organisation that wishes grow its customer base going forward.

Website: https://www.riskiq.com/

Video streaming services such as Netflix and Amazon Prime have now been reported to have more subscribers than traditional pay-per-view TV services in the UK, according to new figures released by Ofcom. This of course also applies on a global scale, in the US and beyond.

This week Finance Monthly asked experts in the media industry, communications sector and markets experts what they thought of the proliferation of online streaming services and their impact on traditional TV.

Luke McDowell, Context Public Relations:

Netflix is a brilliant example of a business that adapted and reinvented itself to become not only a giant of the streaming world, but the television and film industry as a whole. It is of no surprise that streaming service subscribers now outnumber the traditional pay TV subscribers.

British television has lagged behind the streaming services for a while now, it’s no longer enough to make your programming available on catch-up, you must now realise the market need for ‘binge-watching’; as this is where Netflix and Amazon Prime have cut their teeth. Users want to be able to experience a whole series in a matter of days or even hours, and as attention spans dwindle, so do the returning viewers on typical week-by-week scripted programming. I think the next big trend we will see is studios closing the gap between seasons, so we may even see one or two seasons of a show in the same year, in order to offset the inevitable audience number drop.

We have already seen some of the traditional broadcasters sell programming to streaming giants, either after the initial air date or in other non-native territories, which has been a step in the right direction. However, in order to future-proof themselves, traditional pay TV providers must cater to a new generation who want to watch content whenever and wherever they are, without the arduous wait for the next episode.

This generation also want the ability to pick and choose subscriptions, with one individual possibly having accounts with multiple services. In my experience of working with streaming services over recent years, this is something that was recognised by early contenders such as Roku who created a set-top box built for streaming that was smaller, more portable and more user-friendly than your typical offering, and offered compatibility across a range of services. Offerings such as TVPlayer have also started to bridge the gap between streaming and traditional British television by bringing live TV to younger, more mobile generations through their app; this is something traditional pay TV institutions should take note of.

John Phillips, Managing Director, Zuora:

It’s no secret that the media industry has changed. A few years back, it was in crisis. The shift towards digital meant advertising spend was predominately diverted to the tech powerhouses such as Google and Yahoo!, resulting in a widespread fear that consumers would never again pay for online content.

A few years later, we started to see a few media houses take control and implement basic paywalls in order to access premium content. This slight adjustment jumpstarted revenue, and for the first time since the crisis, brought growth in through their respective subscriber basis.

Since then, the wider media industry has caught on and subscription services have evolved tenfold. Today’s subscription services have morphed into flexible and adjustable models, where media brands have the power to create unique, effective and profitable plans.

From the standard rate plans for weekly, monthly or quarterly subscriptions, to flexible charge models - per article or per download - the ability to adjust has allowed media leaders to test and try what clicks with their subscribers. As a result, they’ve created a successful and reliable revenue model independent from advertising.

David Ciccarelli, CEO and Co-Founder, Voices.com:

Before I got married, we cut the cord to the TV. This was likely predicated by growing up in a household where there was a one hour limit on the amount of television we could watch. When considering starting a family of our own, my wife and I agreed that books and the Internet would be the primary source of news and knowledge entering the home. Since then, we’ve never been a cable subscriber, and I think I know why.

What Netflix does well is facilitating the act of discovery. First, by allowing viewers to create their own profiles, the platform recalls the shows that you watched, but also those in progress that you likely want to finish. By analysing the viewing habits of the individual, Netflix can make recommendations seemingly tailored to your unique preferences.

While recommendations are a good means of discovering new content, it’s equally enjoyable to navigate the categories of both movies and TV series’ in hopes of finding something new. Surely, TV networks could better organize their content using a similar structure. Let’s move beyond the timeline and give the viewer alternative paths for discovering what’s on right now, and in the future.

It’s well understood that TV is advertiser-supported. However, perhaps it’s time to innovate beyond standard ad formats, the ubiquitous 15 and 30-second spot. Shorter spots may be one option, or subtle overlays may welcome new advertisers looking to reach audiences in fresh new ways. While I certainly don’t claim to have the answer on this one, I’d like to encourage broadcasters to consider this space ripe for innovation.

Both Netflix and the movie theatre experience are very immersive. In our household -- and I’ve heard of others doing the same -- sitting down for a show on Netflix, even one as short as a single episode, involves getting snacks, drinks, and blankets on a cold day. When visiting others, I have yet to see or hear of a similar ritual when flipping through the channels on TV for an indefinite period of time. Live sports may be the rare exception. Nonetheless, programming could be designed in such a way for the viewer to suspend their disbelief. Constant interruptions ruin the flow of the experience. Networks should consider new ways to keep the viewer watching and engaged.

Chris Wood, CTO, Spicy Mango:

British TV will have to change the way it operates if it wants to compete with internet giants such as Amazon and Netflix. OTT providers are under still under no obligation to adhere to the usual broadcast guidelines, giving consumers access to content whenever they want it. On the other hand, the linear world is still heavily regulated, particularly around watershed, and this essentially positions OTT at an advantage and has allowed those businesses to innovate faster.

Increased regulation, processes and rules are proven factors of reducing innovation, which the Broadcast sector has seen a lot of in current years. When boundaries are allowed to be pushed, technology has space to innovate and becomes more attractive to different businesses. The fact is, that internet giants free from regulation have completely captured the market and audience today and consequently the traditional broadcasters have been left behind. But how could we introduce regulations that apply to all and how would it work? How would a watershed rule be enforced in catch-up OTT? Would it require credit card verification to prove age? Is PIN enforcement enough? Or should it be enforced at all? Rather than locking everyone in, why don’t we open the doors?

Providers like the BBC need to be freed from constraints like this in order to innovate. With less and less Millennials tuning into live TV and more opting for paid for streaming services like Netflix on a device of their choosing, there is little value for this demographic in their TV license fee if they are only going to watch odd World Cup match or the news. OTT products and services have grown rapidly – primarily because of the flexible nature of viewing that is offered. For British TV to grow its user base and capitalise on these benefits – it’s time to remove the shackles.

The result would give viewers more platform choices and enable content developers to create more relevant programmes for their audiences.

Chris Lawrence, Head of UK Communications, Media and Technology Consulting, Cognizant:

In many ways, we are living a golden age for television. Technology giants, like Netflix, have raised the bar, spending more than ever before on high quality shows. It has become clear that to keep up, broadcasters need to make sure that they are investing more money on producing shows and films that draw in audiences. But in order to spend additional budget on production, cost savings need to be made elsewhere.

That is why broadcasters are using technology to streamline back-end operating costs. Automating back-end operations is a crucial step towards greater agility, enabling broadcasters to maximise revenue from content. A good example of this is UKTV’s investment in a new broadcast management system to provide greater flexibility to schedule and manage content across its channel brands and support Video on Demand viewing.

Broadcasters also have a chance of winning back customer loyalty through providing a slick customer experience and reducing any friction along the customer journey. Reacting to this challenge, last year the BBC announced it would be using artificial intelligence (AI) to “better understand what audiences want from the BBC". The initiative, launched in partnership with eight UK universities, will take the learnings and directly apply them to the BBC’s UK operations. The use of AI to boost the customer experience and streamline services will crucially enable broadcasters to invest more heavily in the front of screen services. Because ultimately, content is king.

James Gray, Director, Graystone Strategy:

As technology has changed so have subscription models and hence we now have a shift towards Amazon Prime and Netflix from pay TV. There was a time when TV content was consumed by a family with one subscription per household and only one device - a TV - in the house to watch it on.

Now individuals consumers have multiple content subscriptions and many different devices so they can access programmes on the bus, in the park, at the station, by the pool on holiday, and in a different room to another family member. Smart phones and tablets have enabled this, as well as the availability of wifi and more recently better rates for data and data roaming.

 But there are some real polar differences as to which customers take which TV service. Graystone segmentation analysis shows that older customers “Settled Seniors” have the lowest take up of Pay TV, with 53% having Pay TV like Sky or Virgin and only 17% taking internet TV models like Netflix or Amazon. Unsurprisingly the Technology Trailblazer segment, which is much younger, has the highest adoption rates - 65% and 56% showing that they are taking multiple subscriptions. It’s a clear indicator of where the market is going and where providers need to place their bets.

The younger segments are also far more transactional, so for example if a show moves from Prime to Netflix they will move too. Amazon’s move into football will no doubt cause some ripples in the market. It illustrates that as well as offering convenience, the content has to be right too. You must know what your customers like and provide more of it - Netlfix is very good at producing original drama for this reason.

What fascinates me is where the subscription economy is going. I can pay for shaving products, gin, dog food even socks on a monthly subscription. We can’t be far away from a time when all subscriptions can be managed under one mega bundle - TV, mobile, broadband, gas, electric, gin, socks, car access, and who knows what else.

As millennials care less about ownership and more about experience and access, we will see more and more subscription models managed via smart phone apps. And for companies that has to be a great thing, particularly if consumers manage their subscriptions like my gym subscription - 36 monthly payments to date and just 5 visits! (But next month I am definitely going more regularly!)

Alistair Thom, Managing Director, Freesat:

With a raft of new entrants in the market and increasing choice for consumers driving change in viewing habits, there’s no argument that TV services in the UK and elsewhere are facing tough challenges.  Whether that’s competing for content rights against global companies with huge budgets or facing up to new distribution opportunities offered by online services.

Yet from a Freesat perspective, we believe that Ofcom’s report suggests that new entrants offer a great opportunity for subscription free platforms like ourselves. While On Demand services offer new choice and flexibility for customers, they do not offer all of the content customers want, nor can they offer the same level of shared experience as the “appointment to view” TV moments found on traditional broadcast TV; whether that’s amazing sporting events like the World Cup, global spectacles like the Royal Wedding or this summer’s “OMG TV” in Love Island.

Our research^[1] has shown, that the most watched programmes are consistently those available on free channels, even in homes signed up to a pay TV subscription. These pay platforms must now face up to the additional challenge to their business models offered by new entrants with lower monthly fees and no long-term contracts.

I strongly believe that the UK has the best free-to-air TV in the world and while methods of entertainment consumption are clearly evolving, especially amongst younger viewers, there will still be a place for more traditional viewing in the changing media landscape for many years to come.

[1] Freesat carried out omnibus research with OnePoll in May 2017, surveying 2,000 TV subscribers on their TV habits.

Neil Williams, Senior Associate Solicitor at business crime experts Rahman Ravelli, considers the possible fate of cryptocurrencies.

It has been reported that more than 800 cryptocurrency projects have died a death in the past year and a half. It is a statistic that cannot be ignored for a number of reasons.

There is little doubt that the rise – and, from what we are seeing, the fall – of cryptocurrencies has been dramatic. It wasn’t a slow and steady rise in popularity. Cryptocurrency seemed to arrive in a bang. Suddenly, as if from nowhere, it was everywhere. And now, it appears, we are seeing a dramatic reversal of that trend.

To explain such a reversal requires a brief examination of the way cryptocurrency functions. In a nutshell, new digital tokens are created through an initial coin offering (ICO); which sees those behind the start-up issuing a new coin. Investors can then choose to buy that coin. By doing this, any investor is not purchasing equity in that company but the cryptocurrency that they do purchase can be used on the company's product. Such a process is, in effect, speculation. Those who invest in an ICO do so because the coins are usually cheap in their early days – and they hope that they will increase in value and provide a tidy profit if and when they cash in.

It is a process that has attracted plenty of enthusiastic followers. Researchers examining the market have stated that companies raised £3.8 billion through ICO’s last year, whereas the figure for this year is expected to be more than triple that. The sheer scale of investment in cryptocurrency demands that we pay attention to the problems it is currently suffering. Those problems may have implications for the financial wellbeing of many individuals and organisations who have staked a lot on the continued rise of cryptocurrency – only to discover that hundreds of such coins are already dead or worthless.

This is due largely to cryptocurrency’s unreliability factor. Many were set up with the simple intention of making fraudulent gains. Fake start-ups have been known to see the initial hard sell swiftly followed by those behind an ICO disappearing with investors’ money. Others were created but the company’s product never became a reality. And even those that have been regarded as the “major players’’ have struggled. Bitcoin, the biggest cryptocurrency, has seen its value fall by about 70% since 2017’s record high of $20,000. It is certainly still in existence and still has its enthusiastic following. But the fact that even Bitcoin has suffered a major battering to its reputation and its value shows that cryptocurrency has a credibility problem. Cryptocurrency has to be seen as a risk. And the more its credibility is eroded, the less chance cryptocurrencies – both the legitimate and fraudulent ones – may have of attracting and retaining investment.

Cryptocurrencies may, therefore, face a struggle to regain credibility – and see that reflected in rising values. Cryptocurrencies, as originally devised, are by their nature a friend of the fraudster. They have no tangible product, they allow anonymity and the lack of regulation historically has made them a virtual haven for those who want to conduct their dealings away from the authorities’ prying eyes. An awareness of this may be behind the sudden attack of cold feet among many who were so keen to invest not so long ago. But conversely, we may still be some way off the logical outcome.

What has to be recognised is that as cryptocurrencies attract the attention of mainstream investors, and even banking institutions, the lure and attraction of them is diminishing for those who wish to remain in the shadows: the very people who have given the currencies their damaging credibility problem. If such mainstream investment in cryptocurrencies continues, it is sure to be followed by closer official scrutiny and / or regulation – either of which will have the effect of further driving out those looking to make fraudulent gains. The consequence of this may not only be these types of currencies having less appeal to those who originally traded in them, it may also lead to a more stable market being created for honest investors.

We may, therefore, see another swing upwards in cryptocurrencies’ fortunes, as they become increasingly marketable and viewed as safer and more legitimate than at present. This is something that could only be hastened if and when regulation is introduced. It would be unwise, therefore, to announce the demise of cryptocurrencies.

Online research from Equifax, the consumer and business insights expert, reveals over a third (37%) of Brits believe the UK will be a cashless society within the next 10 years. Over half (53%) of 16-34 years olds believe we’ll be reliant on digital and card payments by 2028, compared to just 22% of those aged 55 or above.

However, the research shows that while the use of cash is declining¹, it still has its fans. In the survey, conducted with Gorkana, respondents said coins are their top payment choice for vending machines (60%), parking meters (57%), charity donations (53%), and buses (52%), and paying with notes is the preference for taxis (42%).

While 46% of people use cash less often that they did three years ago, more than half (54%) of respondents use cash either as or more often, and almost three in five (59%) think shops, cafes or market stalls that only accept cash are convenient.

The findings also highlight that although the use of digital payments via contactless cards and online transactions is growing rapidly¹, some people are still wary about security. Over a quarter (27%) of respondents don’t feel confident payments via websites or contactless cards are secure, and 26% think it’s difficult to track money spent using digital methods.

Sarah Lewis, Head of ID and Fraud at Equifax, said: “We’re in the midst of an exciting smart payments revolution. We can pay for our lunch with our watches and passers-by are now able to donate to buskers via contactless. This growth of new payment technologies is drawing us closer to a cashless society, but long standing preferences for cash remain in certain situations, particularly among older consumers.

“The shift to digital payments in the new economy raises important questions about the role of different payment methods, and highlights the need to balance the convenience people want with security. As digital and online payments continue to grow, so too does the associated fraud. It’s vital that new technology is maximised to give people the reassurance they need as they change the way they spend.”

(Source: Equifax)

This week Finance Monthly hears from Nick Williams, Head of Business Development at UK Accountants, Intuit, who discusses change management methodologies and outlines an 8-step process for accountancy firms to apply Dr John P. Kotter of Harvard Business School’s methodology to ensure a smooth transition to Making Tax Digital.

These are changing times in the UK's accounting industry. Making Tax Digital (MTD) is the biggest overhaul to the taxation system in decades, and firms are not only adopting new ways of working, but they are completely re-thinking business models to meet the evolving needs of their small business clients.

The shift to digital accounting introduces new opportunities for accountants to take on more of a financial advisory role, providing real-time insights and strategic guidance to grow their clients’ businesses. However, while the shift to digital accounting is part of a wider push to digital in nearly all aspects of both our business and personal lives, the enormity of it cannot be underestimated. To ensure a smooth transition for their practice and their clients, accountants would do well to approach it in the same way as any other change management programme.

One of the most well-known change management methodologies is by Dr John P. Kotter of Harvard Business School, who observed countless leaders and businesses as they were trying to transform and execute their strategies, and developed the 8-Step Process for leading change. Here’s how accountancy firms can apply the same methodology to ensure a smooth transition:

1. Establish a Sense of Urgency: For months – years perhaps – we’ve been saying “it’s not too late to be early” to prepare for MTD. Communicate the message internally and externally that now it is in fact is a bit too late to be early. It really is time to move forward with cloud-based accounting to avoid a last-minute panic when deadlines approach.
2. Create the Guiding Coalition: Having dedicated “experts” flying the flag for digital accounting will help to ensure broader education among all employees on the forthcoming regulations. Start a process to train fee earners on your preferred cloud software and have "champions" trained as soon as possible.
3. Develop a Vision and Strategy: Think about how you can use MTD to seize new market segments or opportunities. For example, there are an estimated 1.75 million landlords in the UK, and all those earning more than £10,000 from property income will be liable for Making Tax Digital. For some, recording transactions online will be a first, and they will likely seek counsel from dedicated experts. Be one step ahead by positioning yourself as a future-ready firm.
4. Communicate the Change Vision: Once employees are up to speed on the changes, running a Making Tax Digital marketing campaign with clients is critical. Telephone calls, emails, client letters and even social media marketing will help to communicate these changes, and position your practice as a firm that is there for its clients every step of the way.
5. Empower Employees for Broad-Based Action: Some firms and their clients will be new to digital accounting; however, employees should be given freedom to experiment with different ways of working. Periods of change are frequently followed by periods of innovation, so try not to hamper any enthusiasm as employees “test and learn” to drive better outcomes for their clients.
6. Generate Short-Term Wins: Employees and clients will be more receptive to digital accounting if they see immediate benefits. Highlighting the time saved from less manual entry and the benefits gained from automation, for example, can help staff members see the potential of their roles to evolve from keeper of historical records to real-time financial advisor.
7. Consolidate Gains and Produce More Change: Use data to establish what changes have driven the best rewards for clients and share best practices across the business.
8. Anchor New Approaches in the Culture: Reward employees who share examples of how they have used digital accounting to achieve a better outcome, and encourage sharing, feedback and open discussion as you adopt new technologies to take your practice to the future.

By adopting a change management mindset, firms can ensure they stay ahead of the curve and have a business set up for long-term success.

By as early as next year more consumers will use apps on their smartphone than a computer to do their banking, according to forecasts.

It has also been predicted that 35 million people - or 72% of the UK adult population - will bank via a phone app by 2023.

Ian Bradbury, CTO Financial Services at Fujitsu comments: “This is a tipping point for the industry. Mobile is rapidly becoming the channel of choice, and it’s no surprise – it’s easy to use,  with an emphasis on customer experience and convenience, and it’s with consumers wherever they go.

“However, the migration of banking onto mobile phones will certainly put more pressure on banks to up their security - more frequent mobile banking use, with devices which can be easily lost or stolen, means criminals can potentially do more damage to more people.  This is where we will increasingly see banks use higher-grade biometric based solutions to secure banking apps and transactions, which phones are now beginning to incorporate.

“The experience customers have with their mobile banking app will also be crucial in retaining and attracting customers. With many organisations outside Banking setting a high standard of what good customer experience for mobile apps looks like, banks will have to bear in mind that a smooth customer journey for their app can be the next ‘make or break’ element.

“Looking forward, we can expect to see more and more use of voice to control Banking Apps, enabled by the use of AI enabled robotic assistants.  Once again, it will be the customer experience that will be key in supporting the uptake of this channel.”

(Source: Fujitsu)

It is becoming clear that trade digitisation has huge potential to unlock access to world trade for small-to-medium-sized enterprises (SMEs). The move away from laborious, manual, paper-based processes will lever simpler access to trade finance, now that it is being provided by more agile, technology-friendly alternative funding providers. Here Simon Streat, VP of Product Strategy at Bolero International, discusses the new wave of digital change and the drive it’s providing for SMEs worldwide.

Regulatory burden has meant that SMEs often don’t fulfil certain criteria for banks to justify lending to. The demands of anti-money laundering (AML), Know Your Customer (KYC) rules, sanctions and other banking stipulations have been deemed too time-consuming and too costly to be worth the trouble where smaller exporters and importers are concerned. This is a significant blow, since by some estimates, more than 80% of world trade is funded by one form of credit or another. Until now, if your business was deemed too small to be worth considering for finance, there was hardly anywhere else to go.

The result has been deleterious to the prosperity of SMEs and detrimental to international trade. In 2016, the ICC Banking Commission’s report found that 58% of trade finance applications by SMEs were refused. This, as the authors pointed out, hampered growth, since as many as two out of every three jobs around the world are created by smaller businesses.

This rather depressing view was supported by a survey of more than 1000 decision-makers at UK SMEs which was conducted in February this year by international payments company WorldFirst. It found that the number of SMEs conducting international trade dropped to 26% in Q4 2017, compared with 52% at the end of 2016. Economic conditions and confidence have much to do with this, but so does access to trade finance.

There is a growing realisation, however, that if digitisation makes sense for corporates seeking big gains in speed of execution, transaction-visibility and faster access to finance and payment, it definitely will for SMEs. The ICC Banking Commission report of 2017 estimated that the elimination of paper from trade transactions could reduce compliance costs by 30%.

Over the past few years, for example a number of trade digitisation platforms have emerged offering innovative business models for supplying trade finance and liquidity, while optimising working capital, and enhancing processes for faster handling and cost savings. Progress is under way, but it requires expertise.

Fintechs in trade hubs such as Singapore, where there is huge emphasis on innovation, are taking the lead, transforming the availability and access to finance for SMEs. By making the necessary checks so much faster and easier and opening up direct contact with a greater range of banks, digital platforms enable customers to gain approval for financing of transactions that would otherwise be almost impossible. Not only that, they enjoy shorter transaction times and enhanced connectivity with their supply chain partners.

If we scan the horizon a little further we can also expect to see SMEs benefit from the influence of the open banking regulations, which require institutions to exchange data with authorised and trusted third parties in order to create new services that benefit customers.

Although the focus of these new regulations is primarily the retail banking sector, the tide of change will extend to trade finance, creating a far more sympathetic environment for the fintech companies and alternative funders. Yet the fintechs cannot do it alone, they need to be part of a network of networks that operates on the basis of established trust and digital efficiency.

No technology can work unless it is capable of satisfying the raw business need of bringing together buyers, sellers, the banks into transaction communities. That requires the building of confidence and the establishment of relationships, along with – very importantly – a real understanding of trade transactions and the processes of all involved. It also requires on-boarding and you can only achieve that once everyone knows a solution will deliver the efficiency gains it promises, as well as being totally reliable, secure and based on an enforceable legal framework. All this requires a level of expertise and insight that cannot simply be downloaded in a couple of clicks.

Nonetheless, it seems pretty obvious that thanks to digitisation, the market for SME financing in international trade is set for real expansion.

The automation of work, including the use of robotics and artificial intelligence (AI), is expected to rapidly increase. In fact, recent research by think tank ‘Centre for Cities’ found that one in five jobs in Britain will fall victim to automation by 2030. These findings are further echoed by auditing firm ‘PricewaterhouseCoopers (PWC)’, who estimate more than 10 million UK workers will be at high risk of being displaced by robots within the next 15 years.

As the prevalence of automation becomes more common in our day-to-day routines (supermarket self-service tills, air travel self-check in etc.), it’s threat towards human jobs only becomes more apparent.

Interested in this phenomenon, Reboot Digital Marketing analysed findings from Mindshare, who surveyed more than 6,000 individuals from across the UK to see whether they would prefer robots or humans in eight different occupations/scenarios.

Reboot Digital Marketing found that when making car comparisons with the intention to eventually purchase, a significant percentage of Brits would want robots (60%) aiding them instead of humans (40%). Thereafter, Brits would be most inclined to accept music/film recommendations from robots at 49% - though 51% would still opt to do so from other people (family, friends etc.).

Fascinatingly, even though most Brits (75%) would still prefer humans to be MP’s, 25% would elect robots to be in this position of power.

Moreover, despite the negative perceptions associated with bankers as a direct result from the fallout of the 2008 financial crisis, Brits would still select humans (71%) over robots (29%) to be in their respective role.

On the other end of the scale, 11% of Brits would be least willing to take medical advice from robots. Similarly, only 14% of Brits would not feel apprehensive about receiving legal advice from robots. Information for immediate release RebootOnline.com

Shai Aharony, Managing Director of Reboot Digital Marketing commented: “Automation is undoubtedly on the rise. As the technologies which underpin its development become more sophisticated and efficient, certain industries will certainly face the real prospect of robotics and artificial intelligence disrupting their traditional flow of human labour. Whilst the assumption tends to be that it will either be people or robots, I believe they will complement each other in different tasks and facilitate new types of jobs. What this research certainly demonstrates is that Brits currently favour humans as opposed to robots in a handful of occupations/situations. Although, as automation becomes more prominent and Brits understanding of it drastically improves, this may potentially change.”

(Source: Reboot Digital Marketing)

Contactless and online banking have pulled cash out of the pockets of most people, and while there are those that believe cash will always be a vital part of the international economy, there are some parts of the world that are borderline cashless. Below Shane Leahy, CEO of Tola Mobile, elves into the possibilities of cashless countries around the world.

With more digital payment options now readily available to consumers than ever before, the depreciation in use of traditional forms of payment, such as bank notes and the humble coin, has been inevitable. When we would once delve into our pockets for some cash, consumers today are now increasingly reaching for their mobile devices to complete purchases quickly and conveniently.

The rise of mobile payments technology over the last few years has played a particularly huge hand in enabling both merchants and customers worldwide to facilitate more cashless transactions. With the global mobile payment transaction market forecast to reach US$2.89 trillion in revenue by 2020, the rapid uptake of mobile-centric methods and the resulting shift towards a more cashless consumer culture is showing no signs of slowing.

Yet, not only have these technologies made fast digital payments accessible for smartphone owners in the more technologically advanced areas of the world; it has also empowered consumers in many emerging markets around the world to undertake instant and secure payments through their mobiles, without the need for physical cash or a registered bank accounts. In fact, it is these same developing regions in which we are now seeing the most widespread and advanced adoptions of mobile payment solutions, which are rapidly eliminating cash as a dominant form of payment amongst consumers within these markets.

One particular area of the world in which cashless payments have broken down many of the previous barriers to entry for both merchants and consumers is Sub-Saharan Africa. It has been demonstrating a rapid mass-market adoption of mobile money services of late and has so far outstripped the rest of the world in terms of its approach to cashless payments. So much so that it now accounts for more than half of the total 277 mobile money deployments worldwide.

One of the biggest driving forces behind this development has been mPesa, the mobile phone based money transfer service which now boasts over 30 million subscribers across various African countries, including Kenya, Congo, Tanzania, Mozambique and Ghana. Unlike apps such as Paypal and NFC-based mobile enabled credit card methods like Apple Pay and Samsung Pay which have been gaining traction in Western regions, the sheer simplicity of the technology required to conduct cashless payments across Africa has contributed to its growing uptake of mobile money options.

In contrast to these methods, which require users to invest in a modern and more expensive smartphones to utilise the technology, mobile money transactions across Africa can be carried out using the most basic handset and without needing an internet or data connection. By leveraging a low-level service menu provided on every GSM phone, this technology is widely accessible and therefore able to support the region’s current technological infrastructure.

What’s more, services such as Apple Pay and Paypal still also require users to link a bank account in order to complete mobile payments, making these methods largely inaccessible for the millions of unbanked consumers in developing regions. These factors also have an impact on merchants as they will have to pay more to process transactions conducted through a linked bank account, than they would if it was made directly through a physical credit or debit card.

With this and the growing preference towards cashless payment methods globally combined, it is unsurprising that the rate at which Sub-Saharan Africa is adopting mobile money is much faster than that of any other region. At the end of 2016, there were over 500m registered mobile money accounts in the region alone, a figure which has undoubtedly now significantly increased.

The establishment of mobile money across Sub-Saharan Africa is now giving much of its previously unbanked population unprecedented levels of financial inclusion and freedom to make purchases anywhere, at any time, a move which has undoubtedly played a significant role in the growth of cashless transactions and gradual decline in other payment methods. What’s more, these services have significantly reduced the concerns over carrying physical cash for consumers within these countries and have replaced them with a simple and secure means for them to instantly access funds and pay for goods and services.

Not only has this rise in mobile money use facilitated an increase in consumer empowerment; it has also paved way for merchants who have previously combatted against the region’s developing infrastructure, in which periods of downtime and network outages cause huge disruption and can often lead to lost funds when payments are made via credit cards. By ensuring a seamless and instant digital transfer of funds from customers to the merchants, the appeal of cashless options has increased dramatically, providing merchants with more business continuity and offering these countries an opportunity to drive economic growth.

While there is still some way to go before cash is rendered expendable globally, there are various countries Sub-Saharan Africa, such as Kenya and Tanzania which are currently leading the way in terms of changing consumer behaviour and quickly adopting a cashless approach. For now, cash still remains king across most Western and other countries. However, as consumers continue to seek convenience and security, it is certain that we will see a growing shift towards digital payment methods and a continued demise of physical cash worldwide.

Customers’ everyday interactions with banking and insurance companies have been undergoing a steady process of transformation for some time, but the process still has far to go, both in terms of direct communication with customers and collaboration with third parties. Below Tony Rich, Head of Propositions at Unify, discusses the current banking environment and its ongoing interactions with a fast-evolving digital world.

Far fewer people now regularly visit or phone the local branch of their bank than even a decade ago, assuming there is one close by. I can pay money into my account at an ATM and arrange transactions just using my mobile app and a thumb print as security.

But bigger change is still to come. Today, when I interact with someone at my bank or insurer, I can choose to make a phone call or have a web chat, but as soon as I need a document or to speak to someone else, that conversation stops. Interactions can still be fragmented and time consuming. If I need to sign or check something, even if the document is held for me on a secure portal as some insurance companies now do, the process is very disjointed.

Let’s roll the clock forward a little to a time when cloud-based collaboration technology will make things much more seamless. Imagine I want to apply for a mortgage, or file a complaint, or make an insurance claim. My initial contact will start in the same way as now (say, a phone call) because it’s the one I am most comfortable with. But from there, things look very different.

I am immediately sent a link to a secure digital space where all interactions, conversations, documents and transactions about this particular process (my mortgage, complaint or claim) are stored and instantly accessible. Now, at any point, I can switch to a voice call, or a chat box, or a video call with two or more people. All this is done within the same secure online space, accessible through my mobile, tablet or PC. Here, at any time, I can hear a recording of the original call, see any documents I need to review and sign, talk to other relevant contacts, and so on. And when my case is complete, it can be archived to meet all auditing and compliance requirements.

This is a leaner procedure, with less to-ing and fro-ing, and document distribution and version control is easier. For customers and staff alike, it’s a more joined up, better and faster experience. For the company, a streamlined, friction-free process increases efficiency and drives down costs.

Multiple benefits

Given the challenges that all banks and insurers face – getting costs under control, protecting their brand, retaining and attracting customers and staff, achieving leaner agile operations while meeting regulatory requirements and compliance – it’s easy to see how this kind of immersive omni-channel experience could help address every single one. So, what’s needed for online communication and collaboration to be the norm?

The airline industry has already blazed a trail in creating more joined up omni-channel customer experiences. When I fly, part of my journey now is my ability to print or download my own travel documents, choose my seat, check myself in online or at a kiosk, and so on. I feel more empowered and in control – and the airline has enhanced its brand and achieved major efficiencies at the same time.

Key differentiator

In financial services, perhaps, things are in a state of transition. Internally, delivering more immersive customer experiences requires organisational and cultural change to think, connect and collaborate digitally by default. As far as customers are concerned, success depends on making sure the experience is easy and available to them in whatever channel is right for them. Older people, for example, might prefer phone calls and printable web pages. Digital natives, on the other hand, are savvy at reading and absorbing information direct from the screen and are more likely to initiate any communication digitally, including via social media.

Omni-channel communication and collaboration platforms are already in use at banks and insurance companies and new applications of this technology is being tested and developed every day. Extending platforms out into the customer space is a logical next step as the world becomes ever more connected. And in a fast-changing market and with the arrival of Open Banking driving new services, unified omni-channel experiences could be a key differentiator for any player looking to compete.

Finance Monthly caught up with Alex Corral, the Co-Founder and Chief Executive Officer of preCharge Risk Management Solutions. Founded in 2003, preCharge has since protected thousands of the world’s largest merchants, including Sony Entertainment, Footlocker, BassPro and many other brand name clients. Below Alex tells us more about it.

Tell us a bit about the technology and solution that PreCharge offers.

Since our inception, our technology has protected merchants. If you purchased from a major brand name online, there is a good chance that preCharge reviewed the order. Our goal was always to make identity validation seamless and in most cases, the millions of people we monitored never even knew. For over a decade, we worked with merchants to understand their tools, their needs and their technologies, and those merchants supplied us with their internal processes, as well as with millions upon millions of consumers, which lead to the creation of one of the most advanced identity verification tools online. While merchant service is a fickle industry, and merchants often change providers every 18 months, our average merchant was on board for upwards of five to ten years. Our goal was simple - verify the consumer without the need for them to contend with sending in their ID, calling for verification and jumping through hoops. We are now taking that same technology and offering it freely to consumers in an open-source, stable, audited and compliant solution. Our goal is to offer consumers a way of transacting with each other and not having to worry about whether who they are talking to is legitimate. We do this by offering everyone a free preCharge Wallet, which unlike traditional digital currencies, is centered around a person’s email address. From there, we validate the consumer, and in 99% of the cases, the consumer doesn't even need to send in their ID or other personal information because we are able to use the various data points to track who they really are. In the rare 1%, we will simply ask for some verification through our third-party companies, but preCharge will never see your information. Once a person has a wallet, they can basically ping other users with our utility token; think digital currency. An advantage is that while the wallet does have a unique alphanumeric code like traditional tokens, the core is an email address, so anyone with an email address can either send tokens to another user or simply use the service to validate their identity. We are rolling out an oAuth technology that will allow merchants to freely use the service, validate consumers or even transact business, essentially taking what merchants paid millions of dollars for year after year and giving it away for free. Our feeling is that our merchants help build this network, the consumers are the network; why not give it back to them for free?

What makes PreCharge’s solutions unique? 

While there are literally thousands of token options out there, no other is as heavily focused on compliance, auditing and openness as preCharge is. When it comes down to it, someone will become the leader in the token arena, why shouldn’t it be a company that has been building the technology for over a decade? We were helping create tokens even before it was a thing in 2006, with Sony Entertainment and Galanet, and worked with them for years on their in-house game tokens. My guess is that when you consider our history, our partners and our resources, preCharge will become the leading transactional token on the market.

PreCharge has been helping merchants and consumers all over the world before people knew anything about cryptocurrencies - can you tell us more about the history of the company? 

I had just sold my marketing company and moved to New York City. In 3 years, we had gone from start-up to over 30,000 clients, and were one of the leading companies in PPC in 2001. During my time there, most of our operations were handled by leading consultants or by our people in-house, but the one thing I enjoyed working on was processing the actual credit cards, I even created a script where every time we would process a credit card, it would sound like a cash register. We eventually had to take the script down, which is a good thing, I guess. Over this period, I had personally processed tens of thousands of credit card transactions and over time, I noticed various patterns and figured, why not automate it? Most consumers are good, honest people, but our job was to focus on the bad actors, those looking to harm others and then simply stop them. I met several people who really liked the idea.  We then were able to gather 40 investors, and preCharge grew. Over the years, the system adapted and changed but the goal always remained the same: to seamlessly allow commerce. The sad part is that whenever we would find a bad actor that was a merchant, they would sue to suppress the information, so we were often the target of lawsuits and various litigation issues. Those matters just became a cost of doing business. We put a lot of focus on compliance, audits, third-party reviews and ensuring compliance, and plan to continue that, and with this transparency built into our DNA, people will learn to trust digital currency and those behind it.

Have you always wanted to be the CEO of preCharge?  

No - my goal was never to be the Chief Executive Officer; I am more of a hands-on person. We had hired two CEOs in our past and sadly, the last one nearly destroyed the company. Working with my team and our people, I am doing what I can to be the kind of CEO people can be proud of, and hope to continue to do that until preCharge reaches the point where a more experienced and savvy CEO comes along.

What do you think the future holds for Blockchain and cryptocurrencies? 

I find most things in life are evolutionary, meaning they are bound to happen. It's pretty easy to project - space travel, quantum computing, digital currency, all inevitable solutions. What most people tend not to realise is that we've always had digital currency, as long as people transacted business digitally. When you send money through a Money Transmitter like Western Union or use your credit card online, you are in fact doing it digitally. The only difference with cryptocurrency is that it's open and secure, for all to see. People lost trust in the closed loop natures of payment systems and frankly, I don't blame them. I have first hand witnessed some pretty horrific things banks do, and frankly, it's sad. Digital currency is an absolute; governments and many banks are trying to suppress it, but you can't. The very nature of digital currency is that it's open and secure; it's just applying value to one form of digital currency over another, and as it stands, people will ultimately find that they can trust an open source and public system over any government or bank, which is what everyone ultimately wants. preCharge is simply the medium to make that happen.

What lies on the horizon for PreCharge? 

We are working to build out a partner network, where people can train and educate others on financial management and digital currency. We plan to focus a lot on teaching people - from high school students, all the way up to regulators, as to what digital currency really is. We want to show people that it's there, it's real and although you may not be able to touch it, it’s the very thing governments have been doing for decades. We already have several classroom visits set up, and are looking to build out more. We have a number of online certifications planned, where people can learn about it online in their free time. Ultimately, we want to educate people on what it is and what it is not. Not so much teach people about preCharge but rather, what is Blockchain technology, what is digital currency and why is it so important. Ultimately if we can do that and prove to people that it's real, then maybe they will find they can trust an open system as a means of validation, and hopefully the solution they ultimately trust is preCharge.

I am happy to see the industry starting to mature, and we plan to be there when they graduate!

Website: https://www.precharge.com/

The Financial Conduct Authority (FCA) cryptocurrency review will be one of the most impactful regulatory reviews in modern times and will shape the burgeoning crypto market for years to come. The UK regulator’s proactive and cautious approach must be welcomed.

This observation from Nigel Green, founder and chief executive of deVere Group, comes as the UK’s financial services and markets regulator has confirmed it will publish its review of cryptocurrencies in the third quarter this year.

Mr Green, whose firm launched deVere Crypto, a cryptocurrency exchange app earlier this year, comments: “The highly anticipated FCA cryptocurrency review is set to be one of the most impactful and far-reaching regulatory reviews in modern times for two key reasons.

“First, because of the sheer numbers of people it will directly affect.  There’s been incredible growth of the cryptocurrency market in recent years. This growth can be expected to soar further and quicker over the next decade as more and more investors pile into the likes of Bitcoin, Ethereum, Ripple, Litecoin and Dash, and as adoption by businesses and organisations further increases.

“And second, because the FCA is one of the world’s most influential and respected financial regulators.  As such, it can be expected to help shape and define the thinking and policies of regulators globally, the majority of which in the major economies are now also carefully looking at the crypto space.”

He continues: “In our increasingly tech-driven, digital age, cryptocurrencies are here to stay; they simply can no longer be ignored.

“Therefore, the FCA’s proactive approach towards the crypto market must be welcomed as it will help protect investors and tackle illicit activity and unscrupulous firms.

“I expect the regulator to issue warnings and this caution should also be championed as these digital assets remain highly speculative and the market relatively new.”

In its business plan for the financial year ahead, the FCA said the review was part of a taskforce with the Treasury and The Bank of England.

The watchdog noted that cryptocurrencies themselves do not fall within its regulatory remit, but "some models of use or packaging cryptocurrencies bring them within our perimeter, making the landscape complex".

The deVere CEO concludes: “The FCA cryptocurrency review will fundamentally shape this market that now, thanks to its exponential growth, needs a robust regulatory framework.

“It is right that firms operating within the crypto sector should comply with applicable FCA rules and expect to come under the regulator’s scrutiny.”

(Source: deVere Group)