Consumers will soon be able to benefit from the same level of trust they get from the local bank in their hometown, wherever they are in the world.
Financial services continue to go through major disruptive changes that are redefining their role and structure. Recognising this, the Bank of England (BoE) launched an initiative on the “Future of finance”. Ahead of the publication of the conclusions of the BoE’s initiative, Deloitte UK considered the current focus in financial services and what the future will look like.
As legislators tentatively prepare to adopt open banking, what are the opportunities and who are the beneficiaries of a new financial rulebook?
Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Digital, NEO, Open Banking, Open Finance
In the Future, Home Will be Wherever Consumers Choose to be
Flinks | Yves-Gabriel Leboeuf | Aug 7 2019
Consumers will soon be able to benefit from the same level of trust they get from the local bank in their hometown, wherever they are in the world.
Imagine for a moment that as you settle in a foreign country, you go straight to a financial institution and ask for a mortgage to buy your new home. They don’t know who you are or what you do. They have no context on which to base a decision. And so it’d make sense to reject your request.
Context has always been a key part of the trust bond between consumers and financial institutions.
Global connectivity in finance — and especially accessing and understanding transaction-level data — has the power to fill that gap by enabling data portability. Having your financial history following you allows for unprecedented autonomy and freedom, wherever you decide to stay.
It happened before
Early nineteenth-century American merchants faced a similar problem.
Up until then, they relied on personal ties for much of their credit information — from wholesale merchants down to local butchers keeping tabs on their clients. If they didn’t know their customer first hand, they could ask other merchants about a potential customer’s trustworthiness. They had available sources of information, based on experiences and opinions.
See: Open banking in Canada – time to prepare for change
As markets expanded, especially in the cities, merchants began to trade with customers they did not and could not know personally.
The lack of knowledge about distant and unknown customers was what we're now used to call a pain point. Merchants did not have the appropriate context to judge if they should conduct business, lend money, accept to open a credit tab, etc.
Limited connectivity at work
A proper solution for this lack of knowledge and context about consumers was to gather and distribute information on a large scale.
The answer came in the form of reports that were managed by networks of correspondents across the nation’s cities and villages. They would collect information from merchants about their customers’ character and reputability of paying things back in a timely manner. All of those data points would then be consolidated in a ledger, accessible for a fee.
If you’re thinking “credit bureau”, you’re right — the agencies built around this concept in the nineteenth century are basically the ancestors of today’s credit bureaus. Of course, the information being reported and the techniques have evolved. But collectively we rely on the same premise to bridges the data gap: businesses still need to figure out whether they can trust potential customers, and to do so they rely on profiles drawn by agencies that collect and consolidate information. Consumer’s context can be shared, but only as long as it’s in the space covered by these agencies.
Trust can cross borders
This model of limited connectivity has now reached its limits.
With people being so mobile worldwide, customers don’t get the same ability to prove they are worthy of trust with credit or access to certain services, simply because the lenders, financial institutions and other companies don’t know them. The same can be true for people with thin credit files or in the process of rebuilding their credit profile.
See: Why Open Banking Represents a Seismic Shift for Fintech
We’re once again facing a gap: information that is relevant about a consumer cannot be accessed. And so we’re left with a financial services system that:
- puts up barriers to access for some segments of the population;
- has people rebuild their financial profile from the ground up after they relocalize to a new country;
- makes it longer and harder to reach important milestones.
Or, simply put, a system that can't understand some consumers' financial life profile because it doesn’t have the proper context.
This is bound to change with global connectivity in finance. Let’s imagine once again settling into a new country, but this time with the ability to give access to your financial data — wherever the source is. Your identity and financial assets can be verified in a timely manner, opening up access to your new country’s financial services system.
Or imagine you’ve been earning a decent salary for years and never needed to have a credit card or a loan. Your traditional credit score might not say much about you, but other types of financial data can be used to understand you as a consumer. Transactional data, specifically, allows businesses can get a deeper and real-time understanding your financial profile and behavior.
When your context can cross borders, trust does too.
Yves-Gabriel Leboeuf, Co-founder and CEO, Flinks
Flinks is a data company that empowers businesses to provide better financial services to consumers. Trusted by over 200 world-class companies, Flinks enables businesses to connect users’ bank accounts, gain financial insights into their customers and provide better risk products.
Other articles you may like:
- Designing a data transformation that delivers value right from the start
- Element AI: The market is still figuring out how to share data with enterprise AI startups
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 Globalisation Of Fintech – The Australian Example (Part 1)
Forbes | Sarah Kocianski | Aug 2, 2019
I have been watching the development of the Australian fintech ecosystem with interest for a long time. When I lived there 10-ish years ago, the banking system felt so behind that of the UK it was exasperating and there were practically no alternatives to the major high street banks. Fast forward to today, and I’m pleased to report the situation has improved. That’s in large part thanks to a national strategy of “watch and learn”, whereby the Australian industry (including government and regulator) has observed fintech ecosystems develop in other jurisdictions and cherry picked the most successful elements to implement at home.
The new banks have arrived
As I’ve covered before, a new licensing structure brought in last year has resulted in a wave of banks launching in Australia in a pattern very similar to that seen in the UK. While none have banking products in the hands of customers, yet, brand new banks Volt, 86 400 and Judo are all in possession of banking licenses and a fourth, Xinja, is operating under a “restricted” license as it builds out its technology. Volt, Xinja and 86 400 are looking to the retail market with full service, digital-only banks and bold branding, while Judo is going after the SME space.
So far, so similar to the UK model. That said, one area where the Australian startups do differ to their UK counterparts, at least for the moment, is that they are mostly using large technology providers for their core systems. Volt is working with Temenos, Xinja with SAP, Judo with Unifii and 86 400 chose local provider Data Action. It remains to be seen whether they will follow UK challengers and build in-house systems as they become more established.
See: Fintech Industry Reports and Trends
Other brands in Australia are following a model more commonly seen in the US, whereby they work in collaboration with an established bank to avoid the need to get a banking license independently. Douugh is one (more on them later), while Up Bank is another.
Up is working with Bendigo and Adelaide Banking Group which allowed it to beat the independent startups to launch 8 months ago. Not only was it first to market, it also doesn’t need to pour resources into keeping a license, allowing it to focus on developing its technology-first product suite. To date it has 100,000 users and a supportive community who wear Up t-shirts and are vocal on social media — a familiar concept to users of Revolut and Monzo.
The future of the Australian banking market
The neobanking community in Australia is a tight knit one, with founders regularly working together on common industry problems and even looking to form an industry association for neobanks in time, according to Steve Weston, co-founder and CEO at Volt. There is undoubtedly room in the market for all of the above players to make names for themselves, but they will need to quickly differentiate themselves from one another in order to stand out
That’s especially true when you look at the size of the Australian market. The country has a total population of 25 million, in contrast to the UK’s 66 million, so even assuming that people will be multibanked, the Australian neobanks will face a harder battle for market share than their UK counterparts.
They also face a further hurdle when it comes to customer acquisition given the incumbent banks in Australia, particularly the biggest 4, have been in positions of strength and profitability for a long time. That means they’ve had time and resources to dedicate to ensuring they are technologically up to speed, putting them well ahead of their global counterparts in terms of digital services, says Dom Pym, co-founder of Up.
See: EY Global FinTech Adoption Index finds over half (64%) of global consumers use FinTech
All of that means that while the Australian neobank industry is borrowing a lot from elsewhere and seeing growth in the process, there is still no certainty that the eventual outcomes will be the same as in other jurisdictions. They face a fight for a piece of a smaller pie, against stronger competitors.
The payments industry is evolving
Fintech ecosystems elsewhere have followed a pattern of disruption that starts with payments and then moves onto banking, and this has been followed to a certain extent in Australia.
The New Payments Platform (NPP) which went live in 2018 is modelled in part on the UK’s Faster Payments network and is owned by major FIs. Like other instant payment networks around the world, it enables instant account-to-account (A2A) payments. It has also gone one step further than most of its global counterparts, and allows customers to link bank details to an email address or phone number making for easier P2P payments. Another example of the “watch and learn” strategy at play.
Continue to the full article --> here
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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How Jack Ma’s $290b SME credit engine is changing Chinese banking
Deal Street Asia | Bloomberg News | July 28, 2019
Jack Ma’s online bank is leading a quiet revolution in the way China lends to small businesses, taking aim at a credit bottleneck that has held back Asia’s largest economy for decades.Using real-time payments data and a risk-management system that analyzes more than 3,000 variables, Ma’s four-year-old MYbank has lent 2 trillion yuan ($290 billion) to nearly 16 million small companies. Borrowers apply with a few taps on a smartphone and receive cash almost instantly if they’re approved. The whole process takes three minutes and involves zero human bankers. The default rate so far: about 1%.
The financial-technology boom that turned China into the world’s biggest market for electronic payments is now changing how banks interact with companies that drive most of the nation’s economic growth. As MYbank and its peers crunch reams of new data from payment systems, social media and other sources, they’re growing more comfortable with smaller borrowers that they previously shunned in favor of state-owned giants.
See: Peer to Peer Lending: The Future of Fintech is Now
For China’s $13 trillion economy, which expanded at its weakest pace since at least 1992 last quarter, the implications could be profound. Non-state firms — mostly small businesses — account for about 60% of growth, employ 80% of workers, and have been disproportionately squeezed by a more than two-year government crackdown on shadow lenders.
“Small and medium enterprises are really the boiler room of the economy,” said Keith Pogson, a senior partner in charge of banking and capital markets at Ernst & Young LLP in Hong Kong. “It used to be a segment that banks thought was too difficult and too risky. But now they run their model and work out what the risks are so they feel more comfortable.”
China is quickly becoming a world leader in the use of big data and artificial-intelligence technology to make loans, according to Cliff Sheng, co-head of Greater China financial services at Oliver Wyman, a consulting firm. Among the country’s biggest advantages: it takes a more relaxed approach toward privacy than many other jurisdictions.
“Our legal framework and regulatory environment — which raise fewer privacy concerns — make it easier to generate a huge amount of data and thus provide an unparalleled testing bed,” Sheng said.
One uniquely Chinese source of information for banks is the government-administered social credit system, which is being tested in cities across the country as a way to reward good deeds and punish misbehavior. In one potential scenario cited by MYbank President Jin Xiaolong in a recent interview, a small-business owner whose social credit score dropped because he failed to return a borrowed umbrella would find it harder to get a loan.
See:
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10 FinTech Influencers to Follow if You’re Into Digital Lending
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The lending revolution: How digital credit is changing banks from the inside
But the biggest data trove may come from payments providers like the one operated by Ma’s Ant Financial, the biggest shareholder of MYbank. After obtaining authorization from borrowers, MYbank analyzes real-time transactions to gain insights into creditworthiness. For example, a drop in customer payments at a retailer’s flagship store might be an early indicator that the company’s prospects — and its ability to repay debt — are deteriorating.
The upshot of more information is a loan approval rate at MYbank that’s four times higher than at traditional lenders, which typically reject 80% of small-business loan requests and take at least 30 days to process applications, according to Jin, who plans to double MYbank’s roster of borrowers in three years. He said the Hangzhou-based firm’s operating cost per loan is about 3 yuan, versus 2,000 yuan at traditional rivals.
Continue to the full article --> here
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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Fintech Investor Interview: Rob Antoniades, General Partner of Information Venture Partners
Information Venture Partners | Rob Antoniades | August 1, 2019
Intro: NCFA Fintech Confidential spoke with some of Canada’s experienced fintech investors, on their background, how Canada has evolved, what we should be doing, advice to fintech founders and what keeps them awake at night. This is part 4 of a 4 part series.
What is your background, and why did you start Information Venture Partners?
I have operated VC groups or offices for several banks including CIBC, BMO and then RBC. My finance experience prior to running these VC operations, was heavily influenced by my time in equity capital markets and included equity research, sales and trading, investment and merchant banking. These experiences have helped me tremendously as a Fintech investor. I have lived some of the challenges that we are trying to solve. I co-founded (with David Unsworth) Information Venture Partners to fill a void in the market to fund companies developing technologies relevant for financial services.
How have you seen the Canadian fintech ecosystem change in the past 5 years? How has the Canadian fintech ecosystem evolved?
The Canadian Fintech ecosystem has changed tremendously over the past 5 years, for the better. We are still transitioning as an industry, from very early stage, mostly first-time entrepreneurs 5 years ago or prior, to a more mature ecosystem with companies now generating 8 figures of revenue, some repeat entrepreneurs, and yet still a vibrant start-up ecosystem.
See: Peer to Peer Lending: The Future of Fintech is Now
How can we strengthen and grow the Canadian fintech ecosystem?
The easiest way to build the ecosystem is to concentrate our efforts, of the industry (broadly defined), to supporting domestic Fintechs. For example, our financial institutions spend billions on information technology and if concentrated on Canadian companies, would accelerate the development of the Canadian Fintech community. Clearly, there would be no expectation that these institutions support disruptive and disintermediating Fintechs.
What advise would you give to Canadian fintechs competing globally?
Canadian Fintech companies need to understand that they can start in Canada, and if they have traction here, this momentum can be leveraged with FIs globally. Our financial system and institutions are highly regarded globally. We can leverage that advantage.
However, in the absence of such a beachhead, there are thousands of customer opportunities around the world. If your solution addresses a common pain point, you can just as easily build a company with lead customers from virtually any part of the world. The entrepreneurs need to have that global mindset.
What keeps you awake at night?
Insomnia, joint pains and the recurring thought that we, as a nation, have not developed a unified strategy to develop our nation as a leading fintech hub, in the global context.
We as cities or regions, have generally not rallied around local champions, and we as a nation have not developed a coherent strategy. Can it be done without a strategy? Absolutely, but it would be exponentially more powerful, quicker, and likely successful, if we had the financial and moral support of the ecosystem including all levels of government, industry, capital providers, advisors and entrepreneurs.
See: Form Fintech & Holt Accelerator Create Map of Canadian FinTech Ecosystem
This strategy would build on local strengths, be minimally competitive between the centres, and not too difficult to execute if we had a champion, with capital and a willingness to make a few mistakes in order to accelerate the advancement of the cause.
Is there anything else you’d like to add?
There has never been a better time to be a Fintech entrepreneur in Canada, at least not in the 20+ years that I have been involved in the sector.
Robert Antoniades, General Partner and Co-Founder, Information Venture Partners
Robert Antoniades co-founded Information Venture Partners in 2014 with Dave Unsworth to work with startups in the field he knows best: financial services. Robert is interested in finding the disruptive ideas and entrepreneurs that believe new or better information is foundational to businesses. He believes that financial institutions need technology to service their customers, reduce cost and compete. Some of his main areas of interest include SaaS, next generation analytics including artificial intelligence and machine learning, capital markets, banking, wealth management and insurance technology.
More Canadian Fintech Investor Interviews in this 4 part series:
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Part 1: Karim Gillani, General Partner, Luge Capital
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Part 2: Christian Lassonde, Founder & Managing Partner, Impression Ventures
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Part 3: Peggy Van De Plassche, Founding Partner, Roar VC
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 Case for Open Banking: Benefiting The Underserved
Progressa | Philipp Postrehovsky | July 31, 2019
The Open Banking Opportunity
The consumer owns their financial data, not the bank.
B2B: Fintech companies are able to securely access a consumer’s financial information without having to use third party services like Decision Logic.
B2C: More options to shop and compare products, achieving the best products and rates. More educated and active financial service consumers.
Benefits
- In the open banking era, you’re linked into alternative sources of value and not being driven by a closed ecosystem/closed banking monopoly which restricts the consumer to access resources they need.
- Consumers can get the help they need in a streamlined manner when going through challenging financial times.
- Banks can migrate risk to fintech companies and fintechs can provide more diverse financial services and advice to better serve the consumers.
See: Open banking data tapped to speed up laundering checks
Risks & Mitigation
- To ensure the protection of customer data, stringent compliance standards need be implemented along with regular compliance verification.
- Any security breach or misuse of data could significantly harm the banks’ brand reputation and confidence they currently hold, which would instantly jeopardize the program.
- The Government needs to play a leadership role to mandate and enforce standards in order to create a unified vision.
Some Inspiration: The Airline Industry
Travellers historically were required to contact incumbent airline companies directly in order to book or manage reservations, check availability, check in, and check arrival times. Modern standards in our airline industry placed the customers in control and enabled customers to decide what, when, where, and how they wished to consume airline services. This amounted to expanded and improved services for the would-be travellers. The modernization of the travel industry allowed for open functionality through secure APIs. This re-visioning of the industry enabled customers and third-party apps to perform most, if not all of the travel functions, without the need to ever contact the airline through slow, analogue channels.
Open Banking has Already Arrived Overseas
Open banking would position us as a global leader alongside the European Union and UK. PSD2 (Payment Services Directive 2) arrived in Europe last January, forcing European banks’ to open up their API’s to fintech and other financial companies.
Our Stance
The democratization of personal banking data while maintaining the highest level of security means happier consumers. Progressa fully supports open banking, but companies need to be prepared to take on the responsibility of it. Canada’s current ecosystem is not prepared for open banking and it will take several years to become a reality.
Philipp Postrehovsky – SVP Marketing, Progressa
Philipp is a product visionary, brand builder and an award-winning marketer who has been involved in the Vancouver tech scene for over 15 years. In 2013 he co-founded RentMoola, which continues to be one of North America's leading fintech companies with the mission to eliminate the rent cheque and modernize rent collection for the enterprise. Before that, he was a brand leader for Mogo Technologies and Wonga Canada and began his career at Electronic Arts. He is the founder of Grind For Kids, a program that raised over $1 million for BC Children’s Hospital Foundation and sits on the Board of one of BC’s top independent schools.
You may also like:
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Open Banking: What’s Really at Stake
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Open banking in Canada – time to prepare for change
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Canada’s financial upstarts are lining up behind open banking, but bigger players may need con
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Why Open Banking Represents a Seismic Shift for Fintech
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 future of finance: Insights into tomorrow’s financial system
Deloitte UK Financial Services | July 31, 2019
Financial services continue to go through major disruptive changes that are redefining their role and structure. Recognising this, the Bank of England (BoE) launched an initiative on the “Future of finance”. Ahead of the publication of the conclusions of the BoE’s initiative, Deloitte UK considered the current focus in financial services and what the future will look like.
Technology: How can technology enable cheaper, better and faster provision of financial services and improve the efficiency of markets?
The major changes in technology are being driven by: customer expectations; competition and margin pressures; the availability of greater computing power (including through Cloud computing); the ability to draw customer and market insight from structured and unstructured data using artificial intelligence ; and the willingness of customers to engage with digital interfaces.
This has refocussed attention in two key areas – the industry-wide opportunities to reduce friction and challenges arising from the way new technologies are deployed within firms.
The future of finance is expected to be on-demand and flexible with firms offering tailored products on a point‑in‑time basis and enabling customers to switch between providers and products seamlessly. This will accelerate the expansion of platform-based financial services, where all customer interaction is consolidated in one interface or platform. Firms and the governments will also increasingly explore the role of utility-based functions (for areas such as Know Your Customer and onboarding requirements) to reduce customer friction and costs.
See: The future of finance report
One of the inherent challenges with increased automation is the significant increase in speed and potential lack of transparency around decision making and related controls. How firms govern these innovative technological solutions, and identify and manage risks, from the design stage through to execution and post-deployment, is a challenge for them, and will be an area of focus for regulators.
In addition to reviewing the regulatory perimeter, regulators are expected to experiment with innovation themselves specifically in areas such as regulatory reporting, market surveillance and enforcement. In the longer term, the ability to interrogate and draw insight from firm and market level data at a granular level will have a significant influence on supervision, enforcement and policy development.
Low-carbon economy: How can finance support the transition to a low-carbon world?
The major changes under way in the low-carbon economy are being driven by: rise of new technologies, increasing pressure from customers, and increasing regulatory response to the financial risks posed by climate change.
The transition to a low-carbon world in the future will need to be accelerated by the access of financial services to “green” data. Therefore, for financial markets to work efficiently, new third parties will emerge to provide estimates of firms’ carbon footprint based on a stream of different data sources (e.g., satellite data, market sentiment and disclosures could be overlaid). In addition, financial services will (need to) think about what role they can play in reducing their customers’ carbon impact. As such, financial services firms may increasingly include a penalty factor or an incentive factor as part of the terms on which they provide finance to both business and personal borrowers. This will ultimately help reduce the inequality of carbon consumption across end users.
See: The Future of Government… in a Digital Age
The key challenges will be for financial services firms to ensure a shared understanding of the low-carbon strategy across product development, risk management and sustainability teams. In addition, firms will need to boost their climate change scenario analysis capabilities (e.g., by exploring foresight over forecast) so as to price the climate change externality. As some “brown” firms will continue to exist, another key challenge will be for financial services to assess the utility of “brown” firms – in addition to their cost and carbon-efficiency.
Regulators will need to accelerate this transition by helping financial markets measure “green” data by framing and standardising it in order to allocate resources efficiently.
Emerging markets: How can we facilitate the increasing integration of emerging markets into the global financial system?
Major changes are under way in emerging markets, driven by the rising share of global growth that they account for (forecasted to grow to almost 65% of global GDP by 2022).
The BoE expects that deeper global financial partnerships with emerging economies” will be the most important drivers of global growth in the decades ahead.”
As capital flows between developed and emerging markets increase, financial activity will naturally follow. Emerging markets will become better integrated into the global financial system through a combination of increased issuer participation, broader investor base and improved market access and efficiency. This integration is likely to lead to greater market liquidity and lower capital costs, and will present investors with new opportunities for investments and risk-sharing.
See:
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Open banking in Canada – time to prepare for change
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Singapore topples United States as world’s most competitive economy
Regulators will need to ensure that this ever-greater integration is matched by increasing integration of rules and standards, and supervisory oversight. There is of course precedent for cross-border cooperation, but for a variety of reasons it is less well established with many of these economies. A plan announced by the UK government in May to expand a programme that sends BoE officials to help emerging economies reform their financial sectors is an example of how this cooperation will be built. The agreement between the UK Financial Conduct Authority and Chinese Securities Regulatory Commission on the "Shanghai-London Stock Connect", which will support mutual access to each country’s capital markets gives an indication of how integration may developed.
The BoE (as the central bank) will also play a role in developing infrastructure to support cross-border capital flows in the currencies of emerging markets. Analysis also points to emerging market debt and equity funds being more responsive to prices falls than advanced economy funds, with implications for financial stability. Authorities in the UK are considering system-wide stress scenarios and macro prudential tools.
Continue to the full article --> here
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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Open banking in Canada – time to prepare for change
The Sixty Percent | Dan Smith, Editor | July 30, 2019
As legislators tentatively prepare to adopt open banking, what are the opportunities and who are the beneficiaries of a new financial rulebook?
Open banking is on its way to Canada, representing a major opportunity for the region’s fintechs. In September 2018, the Department of Finance created a committee to advise on the pros and cons of opening up consumer financial services. Its report was published in January and, despite raising concerns around the privacy of consumers’ data, is largely receptive to the concept.
At iwoca, where we provide fast, flexible business loans for SMEs, open banking has been an important part of our growth. Canada’s fintechs should prepare for the opportunity.
So, what is open banking?
In Europe, the open banking regulation PSD2 (Revised Payment Service Directive) came into effect in 2015. This set of rules was designed to break the hegemony of the established European banks and welcome innovative new players to the industry, while making electronic payments safer and more secure.
Under this framework, in 2016 the UK forced its biggest banks (Allied Irish Bank, Bank of Ireland, Barclays, Danske Bank, HSBC, Lloyds, Nationwide, RBS and Santander) to allow fintech startups access to their customers’ data, when requested by the consumer.
What does this mean on the ground?
At iwoca open banking allows us to make better credit decisions for the benefit of our customers. We can now access several years of an applicant’s financial statements direct from their bank, and as a result make highly accurate credit decisions.
Elsewhere in the UK, newcomer banks, such as Monzo and Starling are thriving by offering slick apps that help people manage their money more easily. Financial planning platform Finimize is providing millenials with a low-cost alternative to a financial advisor. Investment platform Nutmeg is democratising wealth management, helping people invest with as little as £100.
For Canadian firms looking to benefit from any forthcoming rule changes, there are plenty of areas to explore. With greater access to transaction and statement data, fintechs have more information about their customers. This will make easier for them to offer tailored products for individual customers, manage risk with greater accuracy, identify customers to onboard, offer money management solutions, and collaborate with other players in the industry.
A word of warning
But that’s not to say the introduction of open banking will result in success for all of the industry’s players. Much of the opportunities available to tech firms are also available to incumbent banks, which are well respected by the Canadian public. The established giants have the advantage of strong brands and significant resources to throw at developing new tools and services. Taking them on won’t be easy.
See: Open Banking: What’s Really at Stake
In addition, any legislation would likely involve the loosening of red tape in some areas and tightening in others. Fintechs must therefore innovate with care. People’s money and financial data is a sensitive area, so accounting errors, data breaches and other lapses of trust can have a major impact on a fledgling company’s reputation.
Consumers will not stand by firms who are seen as irresponsible with their financial records.
What’s the score elsewhere?
Open banking is being roll-out around the world, with several other markets poised to implement it in some form. Hong Kong, Japan, Israel, Australia, Mexico and New Zealand are all researching the area, conducting pilot schemes and drafting potential rules to implement in coming years.
It’s an exciting time to be in financial technology, with amazing opportunities to innovate and build new products. At iwoca we aim to keep our customers at the centre of everything we do. Afterall, success in the open banking landscape depends on providing a valuable, high quality service – it’s what the initiative was designed to do.
Read more from iwoca at The Sixty Percent
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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