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How to stay ahead in today’s highly competitive business market while staying within a tight budget? It’s a million-dollar question, but the answer is actually not that complex and it might surprise you (well, probably not because you’ve read the title, but still): CAD optimization.

That’s right, computer-aided design systems can help your business streamline a variety of operations, save money long-term, and, most importantly, produce innovative products, thereby staying ahead of your competition. And no, they’re not just for big corporations with deep pockets – today, there are plenty of budget-friendly CAD software solutions that even small businesses can easily afford.

What are CAD Systems?

Let’s start with the basics by defining CAD systems, and then we’ll move on to how to use them to optimize your operations, innovate, cut costs, and more.

In simplest terms, computer-aided design (CAD) systems are digital tools designed to help engineers and designers create, modify, and optimize their designs. These designs can be anything from commercial lifestyle products to buildings. In essence, using this process, your business can create 3D design simulations of real-world products, complete with scale and physics properties, to optimize and perfect them before manufacturing.

As you can probably tell, this means fewer costly mistakes and less wasted time and resources. Now, you might be thinking, “Sure, this sounds great, but isn’t it expensive?” It’s a common misconception, but the truth is that there are now affordable CAD software solutions that, yes, require some initial investment but, in the long run, save you money.

Investing in Your Business's Future

Before we jump into the benefits of using CAD systems, let’s talk about how to choose the right one for your business.

If you have a small business and are unsure if investing in CAD optimization is a smart move, let us assure you that it is: the long-term benefits (which we’ll go into in the next section) far outweigh the costs. Which, as we mentioned, don’t even have to be steep.

Let’s take SOLIDWORKS vs Fusion 360 as examples as they’re currently some of the most popular CAD software options on the market for both small and medium-sized businesses. Fusion 360 is a cloud-based program that can be assessed from anywhere, making it great for remote teams. It combines parametric, direct, and mesh modelling tools, but it's a user-friendly, affordable option that can practically be used by anyone, even folks with no prior experience with CAD software.

SOLIDWORKS, on the other hand, is more expensive but also better at advanced modelling, making it a better option for businesses that design products with multiple components. It’s probably one of the best CAD software for industries like engineering and manufacturing.

So, let’s say you’re considering one of these two programs: which one should you choose? While some people may think they should invest in a pricier option if they want maximum benefits – after all, it offers all the bells and whistles – this might not be true at all. The choice between these two – and any other CAD systems – should first and foremost depend on your industry, specific design needs, and, of course, your budget.

The moral of the story is, when considering investing in CAD optimization, always, always take time to consider your business’ specific needs and requirements.

Benefits of CAD Software

All in all, any business that wants to become more innovative, competitive, and operate more efficiently with fewer costs, should consider investing in an industry-appropriate CAD program.

They are a valuable tool that can help you manage your finances, understand your spending habits, and make informed financial decisions.

This article will explore eight effective ways to get the most out of your monthly bank statements and the data they provide to become a better money manager.

Convert Bank Statements to CSV for Advanced Analysis

For a deeper analysis of your finances, convert bank statements into CSV format. Many banking platforms offer the option of downloading monthly bank statements in CSV.

If yours does, consider doing so because CSV provides a versatile data format compatible with spreadsheet software like Microsoft Excel or Google Sheets. By making this simple switch, you open up opportunities for more in-depth analysis.

CSV files allow you to customize and categorize transactions according to your preferences, offering a more granular view of your spending patterns. The CSV approach is advantageous, especially for individuals who prefer detailed insights and wish to create personalized financial charts and graphs. 

Additionally, the CSV format seamlessly integrates with various financial tools to give you a more holistic approach to managing your money.

Check your bank’s online portal for instructions on downloading statements in CSV, but if your bank does not have that option, use tools like DocuClipper to convert PDF bank statements into CSV to unlock a new level of precision and control in your financial analysis.

Understand Transaction Categories

Understanding transaction categories on your bank statements is a pivotal aspect of gaining comprehensive insights into your financial habits. These statements systematically categorize transactions into distinct groups that delineate expenditures like groceries, entertainment, utilities, and more.

By scrutinizing the distribution of expenses across these categories, you can pinpoint areas where you might be exceeding your budget or identify sectors where you can exercise prudent cutbacks.

Ultimately, meticulously analyzing transaction categories empowers you to make informed decisions and foster financial discipline and strategic planning that could significantly help you achieve long-term financial goals.

Track Changes in Your Balances Over Time

Monitoring the evolution of your account balances over time, as documented in your bank statements, offers a valuable lens into your financial history. Tracking these changes lets you discern patterns and trends in your financial behaviour and provides a comprehensive overview of your monetary habits.

This practice becomes especially advantageous when detecting irregularities or unexpected fluctuations in your balances. Understanding the reasons behind these variations gives you the power to make informed financial management decisions.

Moreover, this historical perspective enhances your financial literacy and equips you to be proactive and deliberate about planning for future expenses or savings goals.

Use Budgeting Tools and Apps

Using the native budgeting tools and apps available from most banking institutions can significantly enhance your financial management. These digital aids seamlessly complement your monthly statements by providing intuitive features and visual representations of your spending.

The graphical interface employed by most of these apps and tools makes it effortless to understand your financial situation from just a glance; they also offer a holistic view of your expenditures. By embracing these technologies, you can set precise financial goals, monitor your progress, and receive tailored insights from your spending patterns.

Some advanced apps even incorporate predictive analytics, enabling you to anticipate future expenses. This foresight empowers you to make proactive financial planning that lets you stay one step ahead and make informed decisions that promote your financial well-being.

Use Your Statement to Automate Savings and Bill Payments

Transforming your bank statements into a strategic resource can help you leverage them to automate savings and bill payments for seamless financial management.

Use the details in your statements to establish automatic savings account transfers immediately after each payday to create a hands-free approach to building a financial cushion.

Simultaneously, capitalize on online bill payment services to automate regular payments for essential expenses like rent, utilities, and subscriptions. Automating such payments guarantees that you never miss a payment, drastically reduces the risk of incurring late fees, and fosters financial discipline.

By incorporating these automated processes into your financial routine, you can turn your bank statements into a catalyst for a consistent savings habit and a stress-free approach to meeting your financial obligations and goals.

Monitor Interest and Fees

Banks often impose various charges, including maintenance fees or overdraft charges, while also providing interest on certain accounts. Regularly reviewing your bank statements lets you stay informed about these fees and interest payments and creates transparency in your financial transactions.

After noticing unexpected charges, promptly contact your bank for clarification. Taking such a proactive approach helps you understand the financial landscape and empowers you to make informed decisions that minimize fees and optimize interest earnings over time.

By keenly monitoring these aspects during regular bank statement reviews, you can ensure a financially astute and cost-effective approach to managing your accounts.

Compare Statements to Your Budget

Your bank statements are a real-time reflection of your spending habits, and by periodically comparing these actual expenditures to your budgeted amounts, you gain invaluable insights. This dynamic practice enables you to identify deviations when they happen, which allows you to make informed adjustments to your future spending.

Comparing your bank statements to your budget plan transforms budgeting from a static plan to a fluid and responsive process that allows you to fine-tune your budget based on real-world financial behaviour. The synergy between your budget and bank statements ensures that your financial goals remain realistic, achievable, and adaptable to the ever-changing dynamics of your economic life.

Explore Additional Services and Rewards

Take the time to explore these opportunities and maximize the benefits your bank has to offer. Your statements may provide insights into cashback rewards, exclusive discounts on specific purchases, or special promotions for account holders.

Staying vigilant of these perks ensures you fully capitalize on your banking relationship and the overall value derived from your financial institution.

Whether it is uncovering hidden discounts or seizing exclusive offers, being aware of these supplementary services embedded in your statements empowers you to make the most informed decisions and extract optimal value from your banking experience.

Conclusion

By consistently reviewing and leveraging the information in your monthly bank statements, you can gain valuable insights into your spending habits, identify concern areas, and make informed decisions that align with your financial goals. 

Today, core banking software stands at the center of this digital upheaval, reshaping how financial institutions operate, serve their customers, and compete in a global marketplace.

1. Instant and Real-time Banking

 In today's on-demand world, consumers expect banking operations to happen instantly. Real-time processing, once a luxury, is now a necessity. From transferring funds to checking account balances, instant services provide customers with the convenience and efficiency they demand.

2. Cloud Infrastructure

 As financial institutions aim for scalability, flexibility, and cost-efficiency, cloud-based core banking solutions are becoming the go-to choice. By leveraging the cloud, banks can reduce infrastructure costs, ensure higher uptime, and adapt swiftly to changing regulatory or market conditions.

3. Open Banking and APIs

 The rise of open banking initiatives has paved the way for third-party developers to create a plethora of innovative financial solutions. Through the use of APIs (Application Programming Interfaces), banks can integrate with various fintech platforms, extending their services and offerings.

4. AI and Machine Learning

 Artificial intelligence (AI) and machine learning are not just buzzwords; they're tools that enable predictive analytics, fraud detection, and personalized customer experiences. By analyzing vast amounts of data, these technologies can offer insights that help banks make informed decisions, streamline operations, and enhance customer satisfaction.

5. Enhanced Security Protocols

 As digital transactions increase, so does the risk of cyber threats. Core banking systems are focusing on multi-layered security protocols, including biometric authentication, two-factor authentication, and end-to-end encryption, ensuring that customer data remains protected.

6. User-Centric Design

 Modern core banking software prioritizes user experience. Intuitive interfaces, personalized dashboards, and mobile responsiveness are now standard features, ensuring that both bank employees and customers have a seamless experience.

7. Sustainable Banking

 In response to global concerns about climate change and social responsibility, many core banking solutions are integrating features that promote sustainable banking. This includes services that facilitate green investments or tools that enable carbon footprint tracking.

8. Decentralized Finance (DeFi) Integration

 With the rise of blockchain technology and cryptocurrencies, some core banking software is now offering integrations with DeFi platforms. This allows banks to provide services related to crypto trading, lending, and borrowing.

Amid this digital transformation, platforms like Crassula have emerged as robust solutions. They exemplify many of these trends by offering white-label banking software that's both flexible and user-friendly. With such tools at their disposal, financial institutions can confidently navigate the evolving landscape of the banking sector.

In conclusion, the future of banking is digital, interconnected, and customer-centric. As core banking software continues to evolve and incorporate the latest technological trends, financial institutions can look forward to a future that's efficient, innovative, and aligned with the needs of the 21st-century customer.

As most global activity defaulted to remote, FinTechs were able to cater to this trend by offering digital tools that solved a whole host of new problems businesses were now faced with - in the case of Soldo, for example, by offering visibility for finance teams as they increasingly found themselves in the dark as a result of remote working.

As a consequence, it’s been pleasing to see a significant increase in FinTech investment over the last year, in spite of a rocky economic landscape. This has been particularly pronounced in the US, where private equity investments have grown from tens of billions of dollars several years ago to hundreds of billions, approaching trillions of dollars - if counting the market caps of firms that have gone public.

But what does 2022 have in store for the sector? Will the industry continue to thrive and what challenges will need to be surmounted in order to ensure this?

The post-pandemic boom                                             

2022 will hopefully see the end of the COVID-19 pandemic and, with this, a subsequent economic boom. Soldo’s recent report with Coleman Parkes entitled Open for Business looked at how finance teams are planning for this and the opportunities and challenges they see. We found that almost three quarters (70%) of UK businesses are prioritising growth in the next 12 months – with 44% saying their strategy will be to raise new capital, and a third (33%) to acquire businesses through mergers and acquisitions.

The report also highlights that (72%) believe greater visibility, control and oversight across expenditure has a positive impact on revenue growth. In preparing for this, finance teams are turning to investments in technology, and specifically automation tools. Two thirds (66%) cited investments in IT tech and automation as key drivers of profitability, while almost three quarters (74%) have invested in automation to manage employee expenses. FinTechs will hence have a critical role to play in facilitating post-pandemic growth and need to capitalise on the opportunities that the needs of businesses will present.

The great “switch on”

The economic instability brought about by the pandemic caused many businesses to shift into survival mode and cut back on spending, limiting expenses to the strictly essential. However, with the end of social distancing measures, events, meals, drinks and travel are increasingly once again becoming a part of working life.

For finance teams, this great “switch on” means having to manage an influx of POs as workers look to enjoy their renewed freedoms, and this is only set to increase into 2022. This will have to be balanced against managing the costs of the coronavirus crisis, with Bounce Back Loans and deferred tax payments having to be paid off.

With so many UK businesses geared towards growth, the pressure is on finance teams to deliver a holistic view of spending, control costs and implement systems that provide the business with a level of data insight that is essential to driving growth – in whichever format that takes. This pressure provides further opportunities for the FinTech sector to step in and offer solutions. Without the right tools and services in place, finance teams will undoubtedly be wasting precious time that could be better spent on initiatives that aid strategic growth.

Europe vs the World

The global FinTech landscape is in constant flux and it will be interesting to see how this plays out in 2022, particularly how European FinTech businesses hold up in the face of increasing competition from elsewhere in the world.

Providing that COVID-19 has no further nasty surprises to throw our way, we can expect the next 12 months to see a huge global economic rebound.

The EU is currently home to only 7.2% of worldwide unicorns. The sum value of all EU unicorns and EU tech and digital champions already public is dwarfed by the value of today’s non-EU big tech. This allows the latter to buy out potential disruptors, solidify industrial control, build scale, and manage the global digital and tech agenda – and we should expect this trend to continue upwards in 2022.

We have watched the development of China’s FinTech space with particular interest and expect to see a continued rise in 2022. As of April 2021, the sectors home to the highest number of unicorns in China were technology and telecommunications, and transportation and logistics. However, Chinese unicorns active in finance or insurance had significantly higher market valuations than unicorns in either of these sectors.

Maintaining high levels of innovation is a key challenge for European FinTech. In the EU, ensuring innovation is essential to both territorial cohesion and growth. Government, as well as business, has a role to play in facing this challenge. It can do so by reducing fragmentation of regulation across the EU’s main innovation areas and removing unnecessary obstacles. It is equally important to have close cooperation with the existing expert organisations who unite various European innovation industries.

Final thoughts

We all hope that 2022 will bring a return to true normality and much needed social and market stability across the globe. Providing that COVID-19 has no further nasty surprises to throw our way, we can expect the next 12 months to see a huge global economic rebound. This will mean that opportunities for the FinTech sector will be in no short supply. But FinTechs, investors and governments alike must not be too complacent about the inevitability of bouncing back. Careful planning and management will still be required to ensure opportunities are not squandered.

Here is Finance Monthly’s list of the hottest FinTech startups which are expected to continue attracting new customers in 2020. Some of them are well-known companies which will remain at the forefront of the sector and some are new startups which have the potential to disrupt FinTech in the new decade.

2019 has been a remarkable year for Revolut in terms of growth. Founded by Nikolay Storonsky, the digital finance platform which offers banking, currency exchange, cryptocurrency and stockbroking services, currently has around  6 million customers (up from 1.5 million a year ago) and is welcoming around 16,000 new users every day. It also currently has around 1,200 employees – the bank has recruited around 800 new team members in the space of a year. Despite the fact that Revolut reported a pre-tax loss of £33 million in 2018, compared with £15 million the previous year, exciting things such as a potential $1.5 billion funding round, as well as reports that Japanese investment giant SoftBank might invest in the challenger, are happening.

Founded in 2012 in San Francisco, Coinbase is a digital currency exchange which provides you with a platform where you can buy, sell, and manage your cryptocurrency portfolio. To wrap up an exciting year, Coinbase recently announced that it’s added five new cryptocurrencies to its offering (BAT, REP, XLM, XRP and ZRX), which brings the amount of the cryptocoins it supports to nine (with the original four being BTC, ETH, BCH and LTC). It’s also launched in 10 fresh international locations - Bulgaria, Croatia, Denmark, Hungary, Iceland, Liechtenstein, Norway, Poland, Romania, and Sweden. With its secure storage and insurance policy which covers all cryptocurrency stored on Coinbase’ servers, the FinTech is one of the most trusted cryptocurrency platforms in the world.

Regarded as one of the most popular neobanks out there, Monzo is currently used by 3,437,886 people and counting – according to its website, 40,000 people open a Monzo bank account every week. With its new features such as the ‘get paid a day early’ and the ‘salary sorter’ which separates your money between savings, bills and spending so you can't overspend, the FinTech’s super user-friendly app is continuously disrupting online banking.

Despite its unicorn valuation though, UK-based Monzo operates under the “disrupt-now-and-make-money-later” approach – it reported losses of £47.2 million in the fiscal year ending February 2019, which are expected to rise further this year due to a £20 million marketing drive. However, with its rapidly growing number of users and staff (1,351 people at present), Monzo will definitely continue to drive innovation and be a trusted partner to tens of thousands of people in 2020 and beyond.

Founded by internet entrepreneurs Jeremy Allaire and Sean Neville in 2013, Boston-based Circle is a platform which helps you use, trade, invest and raise capital with open crypto technologies. With offices in Boston, New York, San Francisco, Dublin, London and Hong Kong, the company has caught the attention of Jim Breyer (Facebook), Goldman Sachs, IDG Capital (Baidu, Tencent), General Catalyst (AirBnB, Snapchat) and Accel Partners who have supported the company with $250 million.

Starling Bank is another online-only challenger bank which is disrupting traditional banking through innovation and technology. Launched in 2017 by Anne Boden in the UK, it recently hit 1 million users and is growing at a similar pace to Monzo. Over the past couple of years, Starling Bank has won a number of awards such as Best British Bank and Best Current Account 2019 and is also reportedly on-track to reach profitability by the end of 2020 - a rarity among the challenger banks.

Founded by Bulgarian entrepreneur Vladimir Tenev and American entrepreneur Baiju Bhatt, Robnhood is a commission-free investing platform. The company is currently valued at $7.6 billion after closing its most recent, late-stage funding round in July 2019 when Robinhood raised $323 million. With its over 6 million customers in the US and a planned expansion into the UK in early 2020, the company and its billionaire co-founders won’t be stopping anytime soon.

London-based Greensill specialises in supply chain finance, where businesses raise funding backed by supplier payments, with serious establishment backing. Founded in 2011 by Lex Greensill who used to be a Director at Morgan Stanley and Citibank, the company raised a round of $800 million in May 2019 from SoftBank’s Vision Fund which valued the company at $3.5 billion. Five months later, in October, it raised another $655 million in new funding from the same fund, bringing its total capital raised to $1.7 billion.

Headquartered in Berlin, N26 is one of Europe’s most prominent digital banks which target millennials. Labelling itself as ‘not your grandad’s bank’, the challenger is investing a lot in marketing campaigns and does not see profitability as a “core metric”. Earlier this year, the bank raised a further $170 million from existing investors at a valuation of $3.5 billion (increasing its market worth by $800 million from the last raise). With its 3.5 million customers in Europe, the neobank has big plans for 2020 and plans to expand into the US market in the near future.

2019 has been a good year for Berlin-based FinTech Raisin – it raised €25 million from Goldman Sachs in August on top of a €100 million Series D round three months before. It now has 84 partner banks from 24 countries and eight platforms which cover all of Europe. Founded in 2012 by Dr Tamaz Georgadze (CEO), Dr Frank Freund (CFO) and Michael Stephan (COO), the company offers an open banking platform for online savings and investments for customers across Europe, claiming that it has delivered more than €115 million in interest to its 200,000 savers across Europe.

With its US platform launching in 2020 and plans to buy potential businesses in the retirement market, it looks like Raisin is set for another exciting year.

With its offices in Stockholm, London, New York and Berlin, Klarna is on its way to become one of the world’s top FinTech companies. In 2019, the startup that makes shopping easier launched a new $460 million fundraising round, which resulted in a post-money valuation of $5.5 billion and made it the highest-valued private FinTech company in Europe.

The company has recently faced some criticism because the ‘pay later with Klarna’ button is used too much by young people who then end up in debt, so there are definitely some things that the Swedish FinTech needs to work on in the future when it comes to its image. However, with its more than a million transactions a day between 170,000 merchants in 17 core markets, Klarna is definitely one to watch!

Set up in 2011 by Estonian friends Taavet Hinrikus and Kristo Kaarmann in London, TransferWise has revolutionised the way we transfer money overseas. With its wise model of not moving money across borders, which would incur fees, the startup maintains separate pots for each currency, which it then disburses funds from. Backed by investors such as Richard Branson and Silicon Valley VC firm Andreessen Horowitz and collaborating with FinTech rivals such as Monzo and N26 which have integrated TransferWise’s software into their platforms, TransferWise is one of the FinTechs that are actually profitable – it reported an annual post-tax net profit of £10.3 million for the fiscal year ending March 2019, which was 66% more from the previous year.

Founded in 2018, Bita is a FinTech company that offers infrastructure and software for the development, backtesting, calculation and administration of indexes and systematic investment strategies. By using BITA's open infrastructure, asset managers, banks and institutional investors can run any type of systematic strategy or index in house, retaining their IP and avoiding costly data and index licensing costs. Bita is one of Frankfurt’s fastest-growing FinTech companies and this year, it secured  €1.25 million from a group of local and international investors.

Cleo is a London-based artificial intelligence startup that offers an assistant to help users with managing their finances. Through connecting to your bank accounts and credit cards, the app provides you with insights into your spending and can answer all of your questions. Founded in 2016, Cleo has so far raised $13.3 million and is set to become everyone’s virtual financial assistant.

With over 600,000 users, Curve provides a smart platform for all of your cards which replaces your wallet. Launched in 2018 and based in London, the startup recently raised €49 million and offers its customers to become part of the ownership structure of the company through launching a Crowdcube campaign in September this year.

Founded in 2017, Goin is an award-winning app which helps people save and invest money automatically. You don’t need any previous investment experience – all you need is the Goin app. Based on a simple system which understands the user’s profile and habits through questions and answers, it offers automatic ways and methods to save money. Once you’ve saved enough money, Goin provides its users with options for investments – including through crypto. The startup has raised €2.2 million in the past 2 years.

Lunar Way is a Danish digital banking app which operates in Denmark, Sweden and Norway. Founded in 2015, the startup received its banking licence this year and has offices in Aarhus, Copenhagen, Oslo and Stockholm, having raised $53 million so far. Lunar Way provides its users with a basic account, money transfers, bill payment, and budgeting tools. You can also create personalised goals, save money and choose credit lines depending on your needs.

German FinTech Penta offers SMEs and startups a digital financial services platform which saves them time and money. Hoping to disrupt business banking in Europe and worldwide, the company connects a number of services and provides a platform for all of its users’ financial needs. Earlier this year, Penta was acquired by finleap and in August 2019, it raised €8 million in an investment round led by HV Holtzbrinck Ventures.

London-based startup Trussle is your free online mortgage broker, helping you wherever you are on the ladder. All you need to do is create a Trussle profile which indicates your unique needs and Trussle will go through 12,000 deals to find the right one for you. Set up in 2016, the company is the first online mortgage broker and has raised £19.3 million in the past three years.

Since its inception in 2016, TrueLayer has been building universal APIs that allow companies to securely and efficiently access their customers’ bank accounts to share financial data, make payments and validate their identity. London-based and available in the UK, the company will be expanding into the EU soon, aiming to become the leading provider of APIs that will power a new era of financial innovation. In June this year, the startup raised $35 million in funding in a round led by Chinese financial giant Tencent and Singaporean sovereign wealth fund Temasek, which will fuel its expansion into Asia.


Wagestream is an app which gives your employees the power to stream their earned wages into their accounts whenever they need it. The company has an expanding list of partners – all of which are seeing up to a 40% increase in staff retention, 10% increase in employee productivity and a huge competitive recruitment advantage - as much as a 10x increase in job applicants by offering flexible daily pay to employees. Backed by Jeff Bezos and Mark Zuckerberg, the London-based FinTech was founded in 2018 and has so far raised an impressive £44.5 million.

A Global Guide to FinTech and Future Payment Trends

Peter Goldfinch

In his book, payments specialist Peter Goldfinch sheds light on highly topical themes such as the evolution of payment systems from paper instruments to computerisation, their role in enabling commerce to contribute to the development of emerging economies, cryptocurrencies and the slow decline of physical credit and debit cards due to the introduction of alternative forms of payment.

A Global Guide to FinTech and Future Payment Trends offers a comprehensive overview of the evolution of payments, looking at the ways they’ll develop in the future and encouraging readers to explore their own predictions. Published earlier this year, the book is an unmissable summer reading for technologists, marketers, executives and investors in the FinTech field, as well as academics teaching business and technology courses.

Inclusive FinTech: Blockchain, Cryptocurrency and ICO

David Lee Kuo Chuen & Linda Low

With the uninterrupted growth of the cryptocurrency market and the new class of FinTech companies born out of digital finance, this book illustrates how the underlying technology innovation may be applied to a wide range of industries and explores trends in FinTech, blockchain and token sales.

Inclusive FinTech: Blockchain, Cryptocurrency and ICO’s aim is to dispel the numerous misconceptions about cryptocurrencies and blockchain (especially bitcoin, Initial Crypto-Token Offering or ICO), as well as the idea that businesses can be sustainable without a social dimension going forward. It is a book for people who are interested in switching to a more meaningful and sustainable career or for those on the lookout for new business opportunities. The book’s primary hope is to change our mindset and show the potential that digital economy has.

Blockchain Regulatory Compliance Made Easy

Jargon-Free Insights and Tips for Blockchain Executives and Compliance Professionals

Simone Domenico Casadei Bernardi

Authored by a compliance adviser who works with a number of crypto-businesses and FinTech companies, Blockchain Regulatory Compliance Made Easy is the blockchain regulation compliance bible. Jargon-free and easy to assimilate, the book delves into the ins and outs of compliance and the ways you can benefit from it, discovers the strands of financial services regulation, the different sources of regulation and the regulatory models in the US and EU and explains how a number of directives and regulations might apply to your blockchain FinTech business. It also offers advice on what to do when things go wrong, discussing what the consequences of a breach are and what happens if the regulator starts an investigation.

This book is a vital read for compliance professionals operating in the blockchain FinTech sector, crypto business owners and senior managers, as well as journalists and bloggers who struggle to get their heads around compliance.

Blockchain Design Sprint

Moses Ma & Langdon Morris

The blockchain era is the next tsunami of digital change and it’s only getting started; expected to disrupt business models and inspire more change than ever before. Blockchain Design Sprint hopes to educate readers on the impact that blockchain will have on their businesses and help them develop a successful strategy for surviving and thriving in the blockchain era.

The workbook combines powerful techniques from Agile Innovation design sprints to increase creativity, as well as carefully designed exercises focused directly on building a blockchain business. Designed to prepare the reader for the remarkable future that the advent of decentralised financial services and the blockchain promise, this FinTech edition focusses on exercises and special content for the financial services blockchain developer.

FinTech: The Banks Strike Back

Yves Eonnet & Herve Manceron

 

Technology is changing the way the financial industry works as FinTech companies, BigTech firms, and the markets for third-party services continue to develop. Failing to keep up with the latest digital trends and hindered by cumbersome branch networks, traditional banks are fighting for their survival. FinTech: The Banks Strike Back is a book that examines not just the ways banks are responding to the FinTech thread, but also how they’re striking back through reinventing themselves.

 

 

 

Chatbots

In a matter of years, the use cases for chatbots have increased dramatically going from only being capable of completing very basic tasks, such as answering FAQs, to initiating actions on their own. Consequently, chatbot technology is likely to completely disrupt the way banks interact with their customers which will have a tremendous impact on the way banks operate. In fact, Juniper Research estimates that the operational cost savings from using chatbots in banking will reach $7.3 billion globally by 2023, up from an estimated $209 million in 2019. Additionally, it is expected that there will be a growth of nearly 3,150% in successful banking chatbot interactions between 2019 and 2023, while Gartner predicts that by 2020 consumers will manage 85% of their total business interactions with banks through FinTech chatbots. Thanks to advances in chatbot technology, banks will be able to streamline their operations, reduce service costs, improve their customers’ experience and be able to serve more people, more quickly.

Blockchain

In recent weeks, we have heard a great deal about Facebook’s new digital currency Libra with London FinTech Week making the case it is energising the blockchain and FinTech scene. This may well be the case as blockchain continues to gain momentum across banking and financial services sectors and looks set to be one of the most disruptive FinTech trends moving forward. This is echoed by the fact the financial services industry was found to be spending about $1.7 billion per year on blockchain last year, however, the International Data Corporation (IDC) predicts this figure will increase to $11.7 billion by 2022.

One in ten banks and other companies are now reporting blockchain budgets in excess of $10,000,000.

Further research from Greenwich Associates revealed that one in ten banks and other companies are now reporting blockchain budgets in excess of $10,000,000. Additionally, it found that the typical top-tier bank now has about 18 full-time employees working on the technology. These figures are substantial and are expected to rise as blockchain technology gains more traction. As its adoption increases, it is likely banks and financial services organisations will focus more on how they can use blockchain technology to reduce operational complexity, streamline efficiencies and find a competitive advantage.

 Advances in Mobile Banking

Increasingly, small businesses are demanding the same mobile interactions they get from their personal banks with research from Fraedom finding that 95% of commercial clients bank digitally in their personal lives. As a result, commercial banks are beginning to invest in key technology areas to make consumerisation possible. This is a trend that will grow as more commercial banks expand their digital offering to allow businesses access to a greater range of mobile banking capabilities.

Partnerships

According to London FinTech Week, the trend of financial institutions partnering with FinTechs will continue to develop, with Fraedom finding that more than 84% of commercial banks in the UK are considering new FinTech partnerships this year. There are a number of drivers for this, such as improving customer experience, speeding up digital transformation, better cash and card management and cost savings. Partnerships with FinTechs are not only enabling banks to implement the right technology, but they are also helping banks to better understand the consumerisation of business processes and technologies.

84% of commercial banks in the UK are considering new FinTech partnerships this year.

Regulatory changes

As the financial sector tries to get to grips with the new wave of regulations being introduced and the FATF prepares to roll out new rules to increase the compliance requirements on cryptocurrency exchanges, regulation was unsurprisingly a hot topic at London FinTech Week. However, where regulation may once have been seen as a barrier to the FinTech market, there is now more positivity associated with it in part due to PSD2 and the introduction of Open Banking showing regulations can actually be instigators of innovation. While we can’t say all regulation will have the same impact, it has certainly highlighted that the financial services sector must prepare for their introduction so as to be able to manage their influence.

As the financial services sector gets back to normality after London FinTech Week, it’s vital that they apply the learnings from the event and capitalise on these trends. With technology at the heart of many of these developments, partnering with FinTechs will be instrumental in helping banks to make the most of them, allowing them to improve their customer service, develop the more modern offering that society now expects and stay at the forefront of developments within the industry. 

We live in a digital world, and the financial industry is no exception. Eschewing traditional methods, finance has merged with technology to create a whole new sector, FinTech, that is changing the way we manage our money in a big way.

With banks and other established financial institutions cutting jobs in favour of automatic processes and AI, it's no surprise that many people in the industry are turning to FinTech for career opportunities instead. Plus, there's a lot of investments being made in FinTech start-ups and they have incredible potential for growth, so you could end up making more money if you find the right position.

So, whether you're looking to start somewhere fresh or are just after something more lucrative, here are the three things to consider when making the change from finance to FinTech.

Identify your transferrable skills

You don't necessarily need to be an expert in technology to find your place in FinTech. FinTech refers to the use of technology in any aspect of financial service, including markets, banking, payments, and insurance. There's such a broad area of focus that you'll likely find a company to suit your interests whatever they may be. And, whether you're technologically inclined or not, your experience in finance will be invaluable for identifying and assessing opportunities that technology specialists might overlook.

You know how the financial industry works and you have regulatory knowledge, which means you have valuable insight into the possibilities and limitations posed by standards, which will be useful when designing financial technology.

You know how the financial industry works and you have regulatory knowledge, which means you have valuable insight into the possibilities and limitations posed by standards, which will be useful when designing financial technology. Most importantly, though, FinTech companies are very data-driven, so you'll continue to be expected to use numbers and data to make business decisions.

It's also important to consider any other valuable professional skills that you've acquired in your previous roles, like communication and management. These are the kinds of qualities that will set you apart in any business, so it's just as necessary to draw attention to them as well as your financial background.

Aim for the right companies and roles

If you don't have a strong background in technology, don't worry. You could focus on looking for roles at FinTech companies in financial analysis, accounting, credit risk analysis, risk management, and compliance, as these are good roles for financial specialists to fill. The big question, though, is where to apply.

There's a lot of FinTech start-ups to choose from and not all of them will last, so working out which companies to approach can feel like a bit of a gamble.

Early-stage start-ups will probably ask you to take on a more dynamic role, which is certainly a chance to gain more responsibility, but it means you have to be much more invested in the company than you would normally be. Make sure you ask potential employers about their future goals before you accept these sorts of positions to determine whether they are in line with your own aspirations.

If you're looking for a position with more job security, remember that it's not only start-ups that are focussing on FinTech.

Additionally, start-ups have to be fluid but also capable enough to adapt to unexpected challenges and opportunities. Although there's a lot of money being pumped into FinTech start-ups, a lot of them will fail. So, if you have any concerns that their plans for the future won't provide you with the career you need, you'll be better off looking at one of the many other FinTech companies out there.

If you're looking for a position with more job security, remember that it's not only start-ups that are focussing on FinTech. Established financial institutions are also working out ways to combine finance and technology to keep up with industry trends, so don't rule out looking for major opportunities in places like HSBC and Citibank as well.

Continue to nail networking

Networking is always important if you want to keep abreast of news and job opportunities within your sector, but it is especially useful if you're thinking about changing from a career in finance to FinTech. It's a fast-moving sector, so by attending events such as new app launches you can get a better idea of the structure of the industry, the upcoming trends, and the sorts of positions available that might suit your experience. You may also begin to recognise some little-known companies and their representatives that you can add to your list of potential employers, as well as pick up some technological knowledge.

The buzz around FinTech means that you won't be the only person you know who's thinking about transitioning, so you don't need to be shy about building relationships with like-minded professionals. They might be able to share tips and recommend places to you if they find their way into FinTech, so make sure you keep in touch with fellow job-hunters you think have the potential to become valuable through social media.

 

Identify your transferrable skills, find the right company, and up your networking game. Focussing on these three areas can help you make a smooth transition from finance to FinTech and find the best opportunity for you.

“Banks have responded to this new paradigm, digitising their processes by leveraging and making decisions based on data and analytics, and shifting their focus on consumer experiences that go beyond mobile and online”, says Rosanna Woods, UK Managing Director at Drooms. “They have realised that to remain competitive and maintain market share they need to be more strategic and technologically adept, recognising the need to invest in automation, core modernisation and digitisation.” Below, Rosanna tells us why a collaborative approach is the way forward.

 The changing landscape of investment banking

2019 is proving to be a momentous year for the global investment banking industry as it returns to normalcy in terms of profitability and capital adequacy. Global M&A activities, mainly by large US banks, are creating opportunities to expand overseas and acquire FinTech startups.

Today, most investment banks are enthusiastic about digital transformation initiatives to reduce costs and improve customer experience. Although investments banks adhere to their conservative business model, digitisation has shifted power to investors, who favour partnering with banks that are digitally more advanced.

Opportunities amid regulatory challenges

In Europe, the introduction of wide-ranging regulations has also impacted the working environment for banks. For example, the Second Payment Services Directive (PSD2) has encouraged innovation and competition between incumbents and FinTechs, while implementation of the revised General Data Protection Regulation (GDPR) framework has given EU citizens comprehensive data protection, forcing banks to ensure the privacy of customers’ data.

While addressing the myriad requirements of these new and contradicting regulations makes data management more daunting for banks, the major challenge for most of them is that data is being managed in siloed and disparate systems, making it all the more difficult to understand clients’ needs and demands.

Today, most investment banks are enthusiastic about digital transformation initiatives to reduce costs and improve customer experience.

However, the good news is that more banks are recognising the capabilities of cognitive technologies in gathering intelligent insights on customers, compliance and operations making collaboration with FinTechs more attractive. Also, robotic process automation (RPA) is rapidly gaining popularity as it brings productivity benefits to the table.

Helpful technology

The advent of Artificial Intelligence (AI) has been particularly helpful for banks in processes including client servicing, trading, post-trade operations such as reconciliations, transactions reporting, tax operations and enterprise risk management.

While much of the media attention towards AI has focused on its potential capacity to replace humans, at present it is seeing much more practical use in terms of complementing human intelligence. ‘Augmented’ intelligence involves machines assisting humans in their decision-making processes.

A sub-field of AI – Natural Language Processing (NLP) is a good example of augmented intelligence in practice. NLP systems are designed to read and interpret human languages. A key application of this in relation to banking is the analysis of substantial amounts of ‘unstructured data’, which is data that as yet cannot be ‘read’ by machines, such as PDF files, images and audio materials.

Banking is a data-intensive sector and many key tasks demand correct interpretation of partly structured data. Therefore, NLP has the potential to make processes much more efficient with less effort required from humans. As such, FinTechs have been quick to apply this technology because of its value in improving customer interactions, making collaboration with them attractive for most banks.

The advent of Artificial Intelligence (AI) has been particularly helpful for banks in processes including client servicing, trading, post-trade operations such as reconciliations, transactions reporting, tax operations and enterprise risk management.

Role in M&A

Technologies such as virtual data rooms (VDRs) come into their own for banks when used in M&A deals, helping to address many of the challenges such pursuits face even at the best of times. There are several key causes of failure, including politics around the deal, culture clashes among the personnel involved and, in particular, parties being unprepared for the due diligence phase. In this latter regard, M&A deals rarely fail because of a lack of knowledge. Rather, it is about how that knowledge is handled. Over half of deals fail because those parties involved are reluctant to confront issues head-on.

Buyers often proceed with deals despite the challenges because they feel obligated by the amounts of time and money involved. They should, however, be prepared to cut their losses if the risks outweigh the benefits. For example, allocating inadequate resources during the review stage cost Bank of America $50 billion in legal fees post its acquisition of Countrywide Financial in 2008, let alone the reputational damage it suffered for inheriting the past mistakes of the mortgage lender.

A VDR enhances the M&A process by increasing the power to collect, process and distribute information to the right parties with much greater security and accuracy. It digitises relevant documents, automates tasks and streamlines workflows.

Authorised users, including those inside a company and their external stakeholders, are connected digitally and in a secure environment with real-time access to all relevant documentation, depending on users’ individual permission levels.

A VDR enhances the M&A process by increasing the power to collect, process and distribute information to the right parties with much greater security and accuracy. It digitises relevant documents, automates tasks and streamlines workflows.

Creating a database in which documents can be updated consistently gives asset owners full control and the ability to react to the latest market conditions, bringing assets to market quickly when the conditions are right, sometimes at short notice.

One of the strengths of the Drooms NXG VDR is its Findings Manager function. This improves the vendor due diligence both prior and during the sales process. It allows for the automatic pre-selection of documents and helps in the assessment of potential risks and opportunities within a transaction. This yields greater control, instils confidence in potential buyers and cuts disruption to existing business.

Blockchain first

Macro forces such as blockchain are also slowly revolutionising many areas of banking. For example, blockchain made it possible to automate approvals of contracts as well as protect the transfer of confidential data from hackers and fraudster whenever transactions are made. In 2018, Drooms became the first provider to move its VDR offering into the blockchain age, using this modern technology to enhance the security of transaction data archives. Up to that point, all data had been stored on physical data carriers following completion of a transaction. But now it can be stored on Drooms’ own servers with blockchain protection. As a result, the secured data cannot be lost, is non-manipulable and is accessible to all parties involved in a transaction at any time.

A new threat

As more financial institutions start to adopt technologies created by FinTechs, a likely threat is emerging. Tech giants such as the likes of Amazon, Alibaba, Apple and Google are attracting customers in the payments domain by offering alternative ways of managing finances. In the US, Amazon is already offering its customers the option to turn spare change into gift cards, and parents can also give children their allowances via a reloadable debit card for example. In India, customers pay delivery fees through a Cashload feature and store excess cash from previous purchases in their account, as well as deposit money for future orders.

With platform companies’ potential to exploit customer data and come up with innovative solutions to address customer pain points, there is a lingering risk of disintermediation for banks. Customers who feel that tech companies alone meet their banking needs may decide to switch to non-banking channels. And there is also the possibility that tech giants may provide banking services in the future, making services provided by banks non-exclusive. Although big techs pre-dominantly target the origination and payments domain of banking, a stronger foothold by platform companies could threaten the survival of many banks in the industry.

Towards modernisation

The various areas of the banking industry will undoubtedly continue to evolve at varying speeds. And as time progresses more banks will likely partner with innovative FinTechs to remain competitive and market relevant. Potential for creative and ground-breaking collaborations and advanced modernisation will also likely increase.

That said, as technology transforms the future of banking, so ought banks’ mindset towards cognitive technologies and collaboration with FinTechs. After all, technology is not a panacea and it is accompanied by many challenges as well as opportunities.

According to Tony Smith, MD of Business Expert, for the most part, London has bucked this trend by beating even Silicon Valley to becoming the global Fintech hub. The historic financial centre has welcomed thousands of startups via progressive regulation, a forward thinking consumer market for tech products, and a central European location.

With the shadow of Brexit causing mounting uncertainty in the business community, the question of whether London can retain its title as the Fintech capital is becoming a talking point. More than almost any other industry, the ability to scale Fintech companies relies on access to global talent pools and, with post-Brexit employment laws still uncertain, many fear Britain is going to lose one of its greatest financial assets.

European Capitals Mop Up Fintech Exodus

While Theresa May struggles to push through her Brexit plan, other countries have been busy rolling out the red carpet with tax incentives and easy access to funding as a means of luring potential Fintech talent while the going is good.

Paris is one example of this. Sharing London’s historical reputation as business centre, Paris already hosts banks and large insurance companies, alongside a workforce rich in engineers and data scientists. Efforts are being made to entice tech talent via smoother regulation and a city-wide focus on AI training courses.

The German capital, Berlin, is another contender. Berlin is actively promoting Fintech relocation with it’s slogan ‘Keep Calm Startups and Move to Berlin.’ With cheap commercial real estate, governmental funding support, and 100 Fintech startups already placed, Berlin is likely to benefit widely from the political situation in the UK.

Tallinn, Estonia, while smaller than the major capitals, already has the third highest concentration of startups in mainland Europe. Tallinn is now benefiting from the efforts of the post Soviet government who recognised that technological education could drive the economy of the future. Estonia now has one of the most tech-savvy workforces in the world.

London still has a lot to offer

Despite the Brexit gloom, many pundits are at pains to point out that London is by means on the ropes just yet. In addition to its position as one of the world’s financial centres, a number of universities specialising in artificial intelligence have added to its hub status.

At the recent Amsterdam Money conference, London’s Deputy Mayor for Business, Rajesh Agrawal commented: “London is the greatest city in the world, and it’s no wonder that so many financial tech companies proudly call it home. As a fintech entrepreneur myself, I know that London has the right mix of clear regulation, world-beating talent, and a massive customer base to make it the international fintech capital.”

One sector at the forefront of this disruption is FinTech, in which firms enjoy cost bases lower than those of traditional banks and freedom from the restraints of branch networks and legacy IT systems. As such, they can provide faster services and more innovative products, thereby revolutionising systems and processes, says Rosanna Woods, Managing Director of Drooms UK.

Digitisation will be a priority for firms

FinTech trends have disrupted the industry for over a decade now, and I believe this is the year challenger banks will become prime targets for investors. Large FinTech firms – and traditional financial companies – will also be more likely to get involved in the M&A space as digitisation remains a major driver for deal-making.

In terms of funding, 2018 marked the best-performing year for UK FinTech M&A (US$457.8 billion), which shows that investors are still hunting for the next big FinTech investment. And although Brexit has brought a lot of uncertainty, it could also mean that investors have a lot of dry powder.

Prime examples of challenger banks gaining momentum include Monzo’s crowdfunding exercise and Revolut’s increasing user signups to its finance app that facilitates both worldwide currency and cryptocurrency.

In the digital payments space, we have already seen the roll-out of digital payment methods, particularly via mobile, allowing consumers to make payments at a single tap of a card or mobile device. As banks continue to seek technologies to speed up customer service, they will look to FinTech companies to integrate with their own systems and enhance customers’ experiences.

In terms of funding, 2018 marked the best-performing year for UK FinTech M&A (US$457.8 billion).

Core drivers for M&A

In many ways, growth in FinTech innovation and M&A transactions each contribute to their own success. Businesses and investors are both attracted to opportunities that technology could bring in the industry, and its potential to automate services. This leads to several M&A transactions taking place for geographical expansion and technological innovation.

But will Brexit impact or slow down the developments of financial technologies in the sector? In my opinion, only moderately, if at all. In fact, Blackstone’s acquisition of Thomson Reuters (US$17 billion) last year shows that transaction values increased due to businesses continuously embracing innovation in digital banking, payments, and financial data services.

Although Brexit may have some impact on investors’ confidence in the UK, it is possible that they are simply biding their time. It is common for investors to practice caution when investing in foreign markets. But despite the transactional and regulatory uncertainty we currently face in the UK, I suspect that investors will see the growth in the FinTech space as opportunities to invest in emerging technologies.

Technology’s broader influence

Technology is not just the focus for investment, it is also helping the investment process too. In particular, it has paved the way to making the due diligence process for M&A more efficient and secure. The creation and utilisation of virtual data rooms to help solve the problems faced by dealmakers and investors has been embraced by the industry as good investments.

From a technology provider point of view, artificial intelligence, machine learning, and analytics have digitised the screening process of deals and greatly reduced the time undertaken for due diligence, as well as improving workflow. This is also true for many other sectors such as real estate, legal, life sciences, and energy.

As such, it makes sense to predict more investment in technology that will help the digital transformation of businesses, as demonstrated by Siemens’ investment in software companies in 2007, which generated US$4.6 billion in 2016.

Although Brexit may have some impact on investors’ confidence in the UK, it is possible that they are simply biding their time.

The heightened desire of investors to acquire businesses for digital transformation remains – as previously mentioned - one of the core drivers for M&A. Although Brexit may eventually present unexpected challenges to the FinTech sector, it will continue to thrive. This belief is supported by a report by Reed Smith that stated 31% of financial organisations plan to invest over US$500 million in the FinTech sector this year.

Opportunities amid uncertainties

Taking stock of the aftermath left by the EU referendum, Brexit has undoubtedly created lingering uncertainties and ever-present threats to deal making. But the overall value of UK M&A activities between 2017 and 2018 shows that Brexit did not prevent UK M&A from performing. In fact, over 140 M&A transactions in Q1 2018 were FinTech deals.

This was due to many factors, such as the strong relationship between UK and US investors, as well as the pound’s devaluation after the EU referendum, which made cross-border deals more attractive for global investors and particularly those deals involving businesses specialising in RegTech and digital payments.

Although the on-going Brexit negotiations are not going well and that a no-deal Brexit, despite not being ideal, is still a real possibility, recent history suggests that the FinTech M&A sector will not be as heavily affected as it might seem. The signs indicate that investors will continue to pursue new technologies that can help make business operations more efficient.

Going forward

What concerns businesses and investors in the UK is the fear that London may lose its crown as a FinTech hub. They will be looking for a Brexit deal that replicates the passporting rights the City currently enjoys and would also allow the UK economy to grow by about 1.75% by 2023 (as firms continue to trade in the City).

Moving forward, the difficulties Brexit presents are not insurmountable for the FinTech sector. It will continue to grow and disrupt the industry – whether the UK leaves the EU with a deal or not – and although it is wise to make contingency plans, businesses should avoid making drastic decisions. The FinTech sector is here to stay and it is well-equipped to withstand the many challenges ahead.

Artificial intelligence (AI), Big Data, and Cloud are no longer just buzzwords as enterprises globally are embracing all types of next-gen technology to drive significant business transformations. Blockchain, a more recent addition to the roster, fits within the same technology bracket and is poised to become a major disruptive force across all industries. However, despite emerging applications across supply-chain logistics, healthcare and FinTech that are promising ‘game-changing’ solutions leveraging the technology, to date, very few companies have been able to tap into the complete potential of blockchain.

The Growth of FinTech

Thanks to the rapid global proliferation of the Internet and coming of age of tech-savvy millennials, the marriage of technology and financial institutions has expanded from simple credit card and ATM transactions to online money transfers and payments. In fact, the FinTech industry has already staked its claim in adapting emerging technologies such as wireless payments and AI-enabled chatbots.

Leveraging these next-gen technologies to complete traditional financial transactions, such as money transfers and loan applications has resulted in many consumers looking to deal with FinTechs over traditional banks. Their ability to promptly, securely and successfully complete transactions have helped build customer trust over time. With the continued improvement in security and privacy measures backed by new technologies such as blockchain, the ‘trust quotient’ in the financial services industry is bound to rise manifold. Looking ahead, 77% of financial institutions are expected to adopt blockchain by 2020, according to PwC’s 2017 Global FinTech Report.

What is Blockchain?

Oftentimes incorrectly used interchangeably with the term Bitcoin, blockchain is actually a distributed ledger that is capable of maintaining an ever-growing list of records. Although it resembles a spreadsheet like Excel, there are certain unique features that set blockchain apart from traditional databases:
• Decentralised: Blockchain promotes a decentralised system where data is distributed across several servers. Its lack of a single authority makes the system fair and more secure.
• Immutable: Blockchain is a tamper-free environment. It has immutable and irreversible records that do not permit changes once a ‘block’ is written. Only new records can be written.

These key benefits make blockchain a vital tool in building trust between businesses and customers, which is especially critical in the financial services industry, by providing access to accurate data from retail banking to investment banking to insurance.

How Blockchain Helps Build Trust

In the digital era, the rate at which consumers adopt next-gen technology is among the top growth metrics for the FinTech industry; however, FinTechs face big challenges in generating trust among consumers. This is where blockchain comes into the picture. In a complete shift from how traditional banks operate - where customers have little to no insights into their banks’ operations and processes, blockchain maintains its data in a centralised repository. This shifts the ‘power’ into the hands of the consumer, effectively cutting out intermediaries and ensuring complete transparency in all transactions.

Blockchain provides companies with access to a decentralised network where they can share information in a secure environment that guarantees unalterable data transfers and ensures an agreement of obligations from both parties when processing a transaction. In addition, it simplifies financial services, such as money transfers, loan applications, and mobile payments, something that every customer yearns for in terms of augmenting their overall experience.

Ensuring the accurate authentication and authorisation of every customer and transaction is another big challenge for FinTechs when it comes to establishing trust. Blockchain technology makes these functions, as well as identity management, a lot simpler and more convenient by enabling users to choose the mode of identity and with whom they want to share it while registering. The information is then stored on a secure decentralised network, with user-only access to alter it. This helps FinTech companies save on paperwork and data servers.

Blockchain Applications in FinTech

Cross-Border Payments

Cross-border money transfers can be expensive and slow due to complex procedures. Blockchain technology is able to simplify, speed up, and make cross-border payments less expensive. Peer-to-peer transactions cut out the ‘middlemen’, resulting in faster and less expensive transactions. In fact, blockchain also helps lower the remittance costs on the total transfer amount from about 20% to a mere 3%.

Smart Contracts

Smart Contracts are arguably one of the most promising applications of blockchain in the FinTech industry. They are nothing but computer programs developed to verify or enforce agreements. These contractual clauses are either partially or fully self-executing or self-enforcing. Smart Contracts using blockchain help in recording information on a shared ledger, making it an unquestionable digital proof, thus empowering everyone from regulators to individual artists and authors with strong security features, a lowered risk of internal hacking, and the prevention of plagiarism of work by intermediaries.

Share Trading

Share trading involves several third parties, such as brokers and the stock exchange. This makes the clearing and settlement process time-consuming and cumbersome with multiple stages and bureaucracy to navigate that can take up to three working days to complete. The decentralised nature of blockchain technology, however, helps remove the unnecessary intermediaries and optimise the whole lifecycle of the trade by enhancing trade accuracy, speeding up the settlement process, and reducing risks.

Trade Financing

Trade financing – financial activities related to commerce and international trade – involves lots of tedious paperwork and bureaucracy, making the process highly time-consuming and risky. Blockchain-based trade financing helps overcome these bottlenecks, streamlining the process. It eliminates the need for participants to maintain a personal database of documents as well as the risk of an error in one document being duplicated to its copies by creating a single digital document that contains all the necessary information. Blockchain also supports real-time updating of the document, which ensures all members have access to the most up-to-date information at all times.

Happily Ever After: FinTechs and Blockchain

In today’s increasingly digitised world, there is a growing need for a bridge between new technologies and financial institutions in order for the industry to meet the demands of consumers who want a convenient yet safe and secure way to complete their financial transactions. Blockchain has the ability to build that bridge and FinTechs leveraging this new technology will reap the rewards of an exponentially increasing customer base.

With the support of a trusted service delivery partner with experienced customer service agents who can knowledgeably address questions and concerns about blockchain, these new FinTech kids on the financial block are poised to take on traditional banks.

 

About Neeraj Sabharwal
Neeraj Sabharwal, Director of Cloud and Big Data Solutions at Xavient Digital - powered by TELUS International, has more than 15 years of experience in the next-gen technology industry, helping customers derive incremental value from their data. He is a true data enthusiast and enjoys writing his popular blog and regularly contributes to articles as a member of the Forbes Tech Council.

About Xavient Digital - powered by TELUS International
Xavient Digital is a US-based provider of digital IT solutions and software services, headquartered in California with offices throughout the United States and an international network of delivery centers. Xavient Digital leverages its global footprint to deploy the best talent, time to market and cost optimisation benefits for its customers. Xavient Digital’s corecompetencies are in digital transformation stacks and full lifecycle IT services across telecom, media, BFSI and consumer technology verticals.

Learn more at:

xavient.com
telusinternational.com

 

 

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