David Durand, Advisor, Innovation and Advocacy
September 9th, 2020
Edelman | Feb 17, 2021
This year, after months of unprecedented disaster and turbulence – including the COVID-19 pandemic, economic crisis, the global outcry over systemic racism and political instability – the findings reveal widespread misinformation and mistrust of societal leaders in Canada.
In fact, 50% of respondents worry that business leaders are purposely trying to mislead them, and 46% believe the same about government leaders – this is a wake-up call for leaders, who need to take action to build trust amongst their stakeholders, or risk falling behind.
In the Spring, business, government and NGOs all saw a spike in trust, moving them into the trusted category among the Canadian general population. Since then, the trust bubble has burst, with all institutions giving back most (if not all) of the gains they saw and returning to the neutral zone. Government saw the biggest increase in the Spring with a 20-point increase; however, despite declining 11 points in the past six months, government remains the most trusted institution in Canada.
Amid urgent problems and a year of crisis, leadership is failing. Government leaders, CEOs and religious leaders are not trusted to do what is right. Instead, we’re seeing Canadians look to experts and those that are local – like people in their community – to help tackle the issues that matter most to them. In fact, 50% of respondents worry that business leaders are purposely trying to mislead them, and 46% believe the same about government leaders – this is a wake-up call for leaders, who need to take action to build trust amongst their stakeholders.
Not one information source – traditional media (55%), search engines (47%), owned (32%) or social media (22%) – is trusted in Canada and the latter three are distrusted. All four information sources have witnessed a decline in trust compared to last year.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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FCAC | March 2021
The Financial Consumer Agency of Canada (FCAC) is a federal financial sector regulator, which oversees federally regulated financial entities’ compliance with consumer protection measures, promotes financial education, and raises consumers’ awareness of their financial rights and responsibilities. In addition, FCAC is responsible for monitoring and evaluating trends and emerging issues that may have an impact on consumers of financial products and services, as well as providing timely and objective information and tools to help consumers navigate financial products and services.
The Advisory Committee on Open Banking (the Committee) shared consultation materials with interested stakeholders, including the FCAC, in fall of 2020. FCAC welcomes the opportunity to participate in the development of a uniquely Canadian open banking solution that prioritizes the right of the consumer to control their financial data and puts in place safeguards to ensure they are protected from financial and non-financial harm. This submission has been submitted to the Committee for their consideration in the context of their consultations.
FCAC is broadly supportive of a hybrid model for open banking that carves out specific roles for government and industry and sets out the building blocks outlined in the Committee’s consultation materials. FCAC supports the Committee’s advocacy of a framework centred on several core consumer outcomes:
We strongly recommend adding a sixth core consumer outcome: Consumers benefit from consistent consumer protection and market conduct standards. Based on experiences in other jurisdictions, consumer confidence is necessary for the success of open banking. A core outcome related to market conduct and consumer protection should be explicitly stated to provide assurance to consumers and as a signal to the industry.
This would include the following base level requirements: clear, simple, and not misleading language; no coercion or tied-selling; express consent; and a robust complaints-handling system which prioritizes a fast and seamless process for the consumer.
It is inherent in the Committee’s consultation materials that consumers will have meaningful protection; FCAC recommends that the sixth core consumer outcome be added to reinforce this foundational principle. This central focus on consumer issues is critical to enable adoption of open banking and also needs to be ongoing – consumer protection must be embedded in every stage of accreditation, implementation, and in the governance and maintenance of any open banking system. Consumers should continue to receive at least the same level of protection that they currently enjoy, including in terms of liability protection. For example, today consumers are not held liable for unauthorized transactions on their debit and credit cards, provided that they have taken reasonable care to protect their information. FCAC believes that similar protections should apply in the open banking framework.
FCAC recognizes that the time to act is now and acknowledges the positive role that open banking can play in the future Canadian economy. We agree that the risks of the status quo (i.e., screen scraping) will lead to adverse outcomes for consumers.
FCAC has already warned consumers of these risks through a consumer alert and will continue educating consumers on open banking as implementation moves forward. To that end, FCAC plans to publish additional consumer education web content on open banking and fintechs in early 2021.
FCAC’s consumer protection mandate is exercised in two principal ways: 1) we oversee regulated entities’ compliance with consumer protection provisions, and 2) we educate consumers to improve their knowledge, skills, and confidence in making financial decisions. As a result, FCAC is well-positioned to contribute to the design and implementation of an open banking framework. The following are the main recommendations and issues that FCAC believes would merit further consideration by the Committee.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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The Finanser | Chris Skinner
Chris Skinner:
Traditional banks tend to push products through channels to get greater share of wallet and cross sell. Whereas, digital banks start with the customer journey and need, and then build the user experience to be part of a relationship interaction digitally, rather than trying to actually sell them anything.
James Robert Lay:
Greetings and hello. I am James Robert Lay and welcome to the 67th episode of the Banking on Digital Growth podcast. Today’s episode is part of the Exponential Insight series, and I’m excited to welcome Chris Skinner to the show. Chris is an author, speaker, and troublemaker, according to his LinkedIn profile. I like that. And Chris has written 14 books, most recently Doing Digital: Lessons from Leaders. He also writes a daily blog and consults about the future of banking. Hello, Chris, and welcome to the show.
Chris Skinner:
Hi, James. Thanks for inviting me. Great to be here.
James Robert Lay:
Yeah. And I think you mentioned before you do a lot of thinking about the future and when we think about the future, particularly through the lens of financial services, it can be hard to let go of the past. This idea of being built on the cloud natively, it’s operational, it’s mindset. And you share in your book Doing Digital, that banks must create a burning platform to ignite change for transformation, to spark change of transformation. Can you expand on this thinking about creating a burning platform? Is this really about first principles thinking, starting over instead of duct taping something that’s really falling apart, or just trying to hold things together for the old world?
Chris Skinner:
Well, there’s over 30 lessons in the book that I sort of outlined from the interviews I made over six months with these five big banks. But you start with obviously working out what to do and how to do it and getting a vision around how to digitally transform. And then you have to disturb people and make the organization uncomfortable. This is what Jamie’s doing with this “I’m scared shitless about FinTech.” He’s been doing it for a number of years in fact. I think his first time was about 2014, “Silicon Valley’s coming to eat our lunch.” And there’s been regular mantra from Jamie around effecting change and disturbing people. That’s quite funny, because when you look and track what he’s been saying about Bitcoin, for example, it’s turned around from, “Bitcoin is just a Ponzi scheme for criminals” to, “It’s worth $146,000 by the end of this year and we should invest in it.”
So it’s interesting how things change. And I think the critical thing is it’s great to have a burning platform and say, “We’re all going to die unless we change,” which actually is another thing I heard from two of the banks. You know, if we don’t transform, we die. But you have to then say, “What are we transforming to?” And I use the quote often of Charles Darwin, which is “It’s not the fittest, the fastest, the most intelligent or the strongest who survive. It’s the ones who are most adaptable to change.”
But the thing is, and my challenge to most banks, is are you adapting to change in the right way?
If you’re delegating digital transformation to a CFO or CTO, CIO, CDO, giving them a budget and a project to implement in a line of business that’s fragmented, you’re really not going to survive. Because you have to digitally transform as a company with a leadership team who are passionate about making the whole company change.
And you really have to adapt, not necessarily in a way that’s rigid. In a way that says, “Well, we have to have a vision of the way forward, so this is where we need to try and get.” It’s not a fixed destination. It’s a continuum of change to make this organization fit the 21st century based on the internet and born on the internet. And that’s the huge challenge for any bank leadership team, because most banks are led by bankers who don’t understand technological requirements.
James Robert Lay:
We’re burning the ships. We’re either going to survive or we’re going to die, and we have to keep moving forward.” But what’s holding bank leadership teams back the most, or maybe a better question is about specifically vision, is what’s blinding them to begin with in the first place?
Chris Skinner:
Well, I think, and again, going back to Jamie Dimon’s comments. He points at Square, Pay Pal, but also Ant Group and Amazon and says, “You know, these guys are going to be taking all of our business.” And that’s the disturbance, but then you have to then say, “So how are we going to change? And what do we have to change into?” And it’s a metamorphosis. It’s not a reengineering. It’s a complete reinvention, renewal. And I think what blinds them and holds them back is the challenge of doing that is humongous. It’s really not easy.
There’s a couple of great books that I’ve used through my years of talking about this. One is How Do You Make the Elephant Dance? by Lou Gerstner, talking about turning around IBM in the 1990s. But more recently Satya Nadella’s book about Microsoft. When you look at Microsoft and the turn around there, you go,
“That’s amazing that you can take a company that’s stubborn, saturated, sinking, and suddenly make it nimble and quick and turn around.”
How did they do that? It’s really about recognizing the cultural needs. Digital transformation has nothing to do with technology. It’s about people. It’s about making people understand that they have a voice, and they have an ability to enable change. They’re not just being told what to do, but they can tell us what to do.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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FCA Consultation | Jan 28, 2021
To address these, we’re proposing amendments to our Technical Standards on Strong Customer Authentication and Common and Secure Methods of Communication. We’re also taking this opportunity to amend our guidance on prudential risk management and safeguarding in our Approach Document (AD), and make general updates to a number of areas and onshoring-related changes. We’re also updating our Perimeter Guidance Manual (PERG).
One section of the CP, relating to contactless payments, will close on 24 February 2021. The rest will close on 30 April 2021.
The payments landscape has grown and evolved in recent years, as business models adapt to user needs. The coronavirus (Covid-19) pandemic has accelerated these changes. This consultation will help us make sure regulatory expectations keep pace with the changing landscape.
We want to remove identified barriers to continued growth, innovation and competition in the payments and e-money sector (including open banking), while making the sector more resilient and protecting consumers if firms fail.
Payment service providers (PSPs) and e-money issuers, as well as trade bodies representing them, should read this consultation. Our proposals affect credit institutions providing payment services and/or issuing e-money, as well as payment institutions (PIs), e-money institutions (EMIs) and registered account information services providers (RAISPs).
It also applies to firms that are subject to the temporary permission regime (TPR) and the financial services contracts regime (FSCR) set out in Schedule 3 of the Electronic Money, Payment Services and Payment Systems (Amendment and Transitional Provisions) (EU Exit) Regulations 2018 (Exit SI). It also applies to Gibraltar firms providing payment services in the UK.
It may be of interest to:
In our 2020/2021 Business Plan, we identified the payments sector as a priority for the next 3 years. Our work intends to make sure: consumers transact safely with payment firms; payment firms meet their regulatory obligations while competing on quality and value; and consumers and SMEs have access to a variety of payment services.
In this consultation paper, we’re also proposing changes to the AD to reflect the UK’s withdrawal from the European Union and the end of the transition period.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Digital Sandbox Pilot UK | Feb 20, 2021
The pilot ran from November 2020 through to February 2021. An evaluation process is currently being undertaken by an independent consultant. The pilot will be assessed against the 5 success criteria:
Sedicii: An AML solution that allows financial institutions to securely share knowledge about clients or transactions without disclosing any underlying data or information.
EalaX Ltd: A solution that creates digital synthetic twins of real financial data which can then be used to detect fraudulent patterns and complex problems that are being experienced during Covid-19.
MPC4AML: A solution that uses a Privacy Enhancing Technology (PET) known as Secure Multi-Party Computation (MPC) to run risk scores on a transaction network data from multiple banks.
Norbloc: A solution that uses blockchain to allow for a secure and GDPR-compliant sharing of verified KYC files across multiple institutions in real-time to create a single profile per customer.
IT2 Fraud Signals - Trust Stamp, Cifas, Lloyds & OneBanks: A solution that uses biometric data to create an identity token that can be used to match, de-duplicate and verify across institutions while protecting the users personal identity information.
PrinSIX Technologies: PrinSIX is focusing on detecting vulnerability within credit applications, testing and deploying dynamic onboarding journeys that identify applicant vulnerability flags and trigger highly personalised digital assessments to improve customer outcomes.
Qpal: A digital assistant focused on financial wellbeing, powered by Open Banking, that automates financial decision for consumers.
Applied Blockchain: A solution to allow a range of lenders to assess the credit risk of a borrower without requiring direct access to private and sensitive financial data by using privacy-preserving technologies.
DirectID: A solution that uses transactional data to predict the probability of default based on an individual’s historical and predicted cash flow.
Fluence: A solution that uses natural language processing AI to interpret and analyse financial applications and claims handling processes in order to automatically interpret new applications and claims.
Company Watch Ltd: A solution to enable finance funding providers to predict, analyse and risk assess the ability of a small business to repay credit within certain time periods.
Fractal Labs: A solution that uses Open Banking to create a cashflow forecast in order to help assess the eligibility of SME’s for small working capital loans.
Untangled Finance: A solution using tokenised assets on a blockchain to enable simple, cost-effective and transparent ways to securitise SME loans and invoices.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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AltFi | Aisling Finn | Feb 18, 2021
The fintech’s business customers will be able to take payments via QR codes, helping to maintain social distancing.
Taking one step closer to becoming a ‘financial super app’, Revolut is rolling out QR codes for its business customers.
From today, Revolut’s business customers across 25 countries will be able to take in-person, socially-distanced payments via a QR code.
The touch-free payment method allows for instant payments, with small business owners able to see if a payment has been successful right away,
Paulo Guichard, product owner for Acquiring at Revolut said: “The popularity of QR codes has increased as this payment method is quick, easy and allows people to make socially distanced payments which are increasingly important during the global pandemic.”
“We’ve removed the need for additional devices or hardware, as all business owners have to do is use their Revolut Business app and show customers a QR code to accept payments straight away through this efficient and touch-free method.”
Revolut Business customers can generate a QR code in the app which the customer can scan on their mobile phones from a safe distance.
The new feature will be rolled out to customers across Europe, including Croatia, Greece, Luxembourg, Slovakia, Slovenia and here in the UK too.
Revolut isn’t the first to introduce QR payments for its business customers.
Back in March 2020, ANNA Money, in collaboration with financial API provider TrueLayer, announced it would let its business customers settle payments using the method.
Similarly, messaging platform Whatsapp, which has extended its capabilities in several countries to include payments, allows customers in certain countries to pay using QR codes.
In China, the use of QR codes is far more popular, with social media platform WeChat launching WeChat Pay, which lets users pay via QR code, all the way back in 2013.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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DUCA Impact Lab | Keith Taylor | Feb 18, 2021
Building banking that is not just different, but better, is a common refrain when speaking with fintech entrepreneurs. It is natural to wonder then, what roles are fintech companies playing now in building ‘better banking’, and more importantly, what opportunities are there to better deliver on this promise?
The DUCA Impact Lab was established by DUCA Financial Services Credit Union to explore these types of questions, and to ultimately work with its partners to build and test models of banking that benefit all. Each year, the DUCA Impact Lab, in partnership with Angus Reid Group, examines national perspectives on fair banking in Canada. The study surveys a national pool of banking consumers on their perceptions of fairness in their banking experiences. It evaluates a number of fair banking factors such as transparency, credibility, pricing, as well as access to products and services. It then compares these consumer perspectives with responses from bank employees working in a sales or lending capacity at different types of lending institutions, including fintech’s.
Reflecting on the study results for 2020 reveals some key considerations for fintech companies as they continue to innovate and build on their presence in the financial services marketplace. For example:
The majority of consumers interact with a financial advisor once per year, or less. In fact, 29% say they have never met with one. Even for those that do meet with an advisor, chances are they either don’t trust, or are indifferent to the advice they get (75% of consumers combined). This is particularly troublesome, given that the right advice is desperately needed - nearly 45% of people with debt say they have neither a budget, nor specific financial goals. Lenders surveyed who work in fintech take an overly ‘sales first’ view of their companies compared with peers, and are significantly less likely to view the primary focus of their company as helping people (21%), when compared to 35% at banks, and 48% at credit unions. Perhaps there’s an opportunity to do both.
Nearly as many Canadians distrust financial institutions as trust them, with a winnable 46% of consumers who are somewhere in the middle. Also consider that only 22% of big bank customers think they are getting a good deal on their financial service products; this should translate into opportunities for new entrants and alternatives to the big banks. The level of trust consumers have in fintech companies is generally similar to other lending options to start, but borrower experience becomes more negative post fulfillment. For example, fintech customers are more than twice as likely to respond that their debt has impacted their ability to afford basic health care services such as prescription drugs. Mitigating these risks has benefits for everyone.
The Fintech sector has produced some amazing innovations, improving the way financial institutions are able to offer a range of services, facilitate transactions and understand customer needs. Extending this innovative thinking to focus on consumer experiences and well being is a natural fit.
Keith Taylor is the Executive Director of the DUCA Impact Lab at DUCA Financial Services Credit Union, an innovation hub focused on building banking that benefits all. He works with a range of collaborators such as fintech’s, community organizations, academics and others to build and test solutions to inequity in the banking system.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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CONGRATULATIONS TO THE 2020 FINTECH DRAFT PITCHING AND DEMO COMPANY WINNERS!![]() ![]() ![]() |