Michelle Beyo, Advisor, Payments and Financial Inclusivity
July 17th, 2020
Michelle Beyo is Founder & CEO of Finavator INC, Money2020 RiseUp Alumni, Women in Payments Glob[...]
Category Archives: Enterprise
How six companies are using technology and data to transform themselves
McKinsey Digital | Aug 12, 2020
A study referenced in the popular magazine Psychology Today concluded that it takes an average of 66 days for a behavior to become automatic. If that’s true, that’s good news for business leaders who have spent the past five months running their companies in ways they never could have imagined. The COVID-19 pandemic is a full-stop on business as usual and a launching pad for organizations to become virtual, digital-centric, and agile—and to do it all at lightning-fast speed.
Now, as leaders look ahead to the next year and beyond, they’re asking: How do we keep this momentum going? How do we take the best of what we’ve learned and put into practice throughout the pandemic, and make sure it’s woven into everything we do going forward?
See: Digital IDs Help Open Banking Reach Its Fullest Potential
“Business leaders are saying that they’ve accomplished in 10 days what used to take them 10 months,” says Kate Smaje, a senior partner and global co-leader of McKinsey Digital. “That kind of speed is what’s unleashing a wave of innovation unlike anything we’ve ever seen.”
That realization is coming not a moment too soon. Even before the global health crisis hit, 92 percent of company leaders surveyed by McKinsey thought that their business model would not remain viable at the rates of digitization at that time. The pandemic just put that whole scenario on steroids. The companies that are leading the way out of this crisis, the ones that will grab market share and set the tone and tempo for others, are the ones first out of the gate.
“The fundamental reality is that the accelerating speed of digital means that we are increasingly living in a winner-take-all world,” Smaje says. “But simply going faster isn’t the answer. Rather, winning companies are investing in the tech, data, processes, and people to enable speed through better decisions and faster course corrections based on what they learn.”
Large incumbents who are winning the digital transformation battle get lots of things right. But McKinsey research has highlighted a few elements that really stand out:
- Digital speed. Leading companies just operate faster, from reviewing strategies to allocating resources. For example, they reallocate talent and capital four times more quickly than their peers.
- Ready to reinvent. While businesses need to maintain the profitable elements of their business, business as usual is a dangerous posture. Leading businesses are investing as much in upgrading the core of their business as they are in innovation, often by harnessing technology.
- All in. These companies aren’t just making decisions faster; the decisions themselves are bolder. Two of the most important areas where this kind of commitment shines through are major acquisitions (leaders spend three times more than their peers) and capital bets (leaders spend two times what their peers do).
- Data-driven decisions. “The road to recovery is paved with data,” Smaje says. Data is providing the fuel to power better and faster decisions. High-performing organizations are three times more likely than others to say their data and analytics initiatives have contributed at least 20 percent to EBIT (from 2016–19).
- Customer followers. Being “customer centric” is well established. But competing pressures and priorities mean that the customer can often be sidelined. Top companies that sustain a comprehensive focus on the customer (in addition to operational and IT improvements) can generate economic gains ranging from 20 to 50 percent of the cost base.
See:
The Impact of Coronavirus on Funding Innovation
Innovate Finance: Spotlight on Innovation: Canada Fintech Podcast
Bank of Canada partners with the Bank for International Settlements to launch innovation centre
The companies you’re going to meet here are adopting and deploying these digital strategies and approaches at warp speed. Aside from moving thousands of employees from the office, call center, and factory floor to home overnight, they’re using these technologies to rejigger supply chains, stand up entirely new e-commerce channels, and leverage AI and predictive analytics to unearth smarter and more sustainable ways to operate.
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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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Global Survey on Impact of Covid-19 and Recession Risk: Fintech and Financial Institutions
Norton Rose Fulbright | July 2020
Financial institutions, including banks, asset/fund managers and insurers, as well as established FinTech businesses and start-ups, have been presented with major disruptive events with the advent of COVID-19 and national lockdowns, and with the impending risk of global or regional recessions.
How are financial institutions and FinTechs responding to such challenges? What role might new business models, strategic collaborations, investment and M&A, outsourcing, regulatory considerations, and the risk of litigation play in addressing such challenges?
See: Fintech Reports and Research
To find out, in May and June we undertook a survey of a range of banks, asset/fund managers, insurers, established FinTech businesses, FinTech start-ups and venture capital and consulting firms across the globe.
We invite you to read the findings of the survey which cover the following subject areas:
- FinTech as a strategic priority
- New FinTech use cases
- FinTech strategic collaborations
- FinTech investment and M&A
- Outsourcing and FinTech
- Regulatory impact in relation to FinTech initiatives
- FinTech areas of potential dispute
Download the 23page PDF Report --> Now
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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FFCON20 This Week: Thur, August 6: DIGITAL IDENTITY & CONVERGENCE MARKETPLACES
NCFA Canada | Team FFCON20 | Aug 3, 2020
Join us Thursday, August 6, 2020! As the digital economy grows and the world increasingly moves online, the future of digital identity will deliver new frameworks and infrastructure to support digital commerce, online interactions and social identification in more secure and robust ways than ever thought before. This future is here today where individuals and businesses can establish digital representations of their identities to serve as the gateway to store and protect sensitive data, manage permissions and ultimately enable the future of Convergence Marketplaces.
- Why digital identity matters globally in 2020 – where is it taking us and what’s the future
- How businesses and government need to adapt to consumer ownership of data
- Are consumers ready to control their own data?
- How blockchain technology and other core tenants are the foundation for Convergence Marketplaces – A peak into the future
- Liquid Avatar and and convergent marketplace DEMOs
FFCON20 Week 5: In Focus
NEXT UP --> Aug 6, 2020
Digital Identity & Convergence Marketplaces
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FFCON20 RISE: Join us this Thursday, July 30 for Week 4 theme: LEADERSHIP AND CULTURE
NCFA | FFCON20 Team | July 28, 2020
Join us Thursday, July 30, 2020! Leaders inspire a vision of the future, motivate and coach others, and bring together the resources and skills to achieve a vision. They must overcome challenges and obstacles as they lead people, technology, markets and navigate regulation towards transformative change.
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How humans can adapt during crisis and how to unleash it
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How to understand and lead in culturally diverse and different environments
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What are the 'People lessons' learned for growing organizations?
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How can a dynamic leader capitalize on their vision, market and relationships?
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Interactive Networking Breakouts! Network and learn with experts on the topics of 'Pitching & Funding During Covid-19, Fintech Innovation and Growth Mentoring'
Is Open Finance worth getting excited about, or is it just spin?
Sifted | Isabel Woodford | Jul 22, 2020
It's been a slow journey to get UK customers meaningful control of their bank data. Is the next phase of "open finance" the answer?
It’s a noble task to want to help users control, access and utilise their financial data better. The problem is, users aren’t convinced they want a third-party poking their nose into their data, or if it’s really of much use to them.
Here are their top four top takeaways about what it will take for open banking to take off, and why open finance is an important next step.
1) Success relies on building awareness
The panellists agreed that one key obstacle to open banking so far has been a trust-gap; fuelled by poor communication around user-benefits.
See: 3 examples of what open finance can do right now
Roisin Levine referenced research that still shows “very, very low percentages” of people say they’re willing to share their data in exchange for “more personalised services.” She said these vague concepts are unhelpful and apps need to “explain this stuff…don’t use these big, high-level generic terms.”
She recommended products leveraging open banking get more specific about the benefits to boost awareness.
“[We should ask]; do you want to ensure that the cash you have is in a high-interest account? Do you want to compare pricing on your insurance or… purchasing your energy? Then all of this stuff seems really common sense, and suddenly that applies to everyone.”
She added that trust in open banking is slowly “moving forward” and that seeing a value exchange is key in this respect.
“It’s kind of early days, but they will begin to get more and more used to it as time goes on.”
Another goal is to make open banking services so helpful that users don’t just want to use it; they want to pay for them. In particular, that might come from analytics tools currently being developed to give users intelligent insights into their future cash flow, for instance.
“Now I can see all [my accounts], but then you can show me what my actual cash flow is looking like in the next six months. What kind of decisions then can that drive?” Levine said.
2) The data is yours — but expect leaks
Another dilemma around open banking is uncertainty about what fintechs do with the data shared with them; again feeding into the trust question.
On the bright side, there are protections in place and limitations; overseen by the regulator. Users completely own their data and can revoke the access they give to third-parties at any time.
See: The Clearing House Releases Model Agreement For Sharing Financial Data
There are also restrictions on companies’ ability to sell the data directly to third-parties.
Instead, companies holding the data can monetise it by recommending new pension providers and taking a commission fee, for instance, or charging consumers for the service (like Monzo has done).
“What’s going to make or break the success longer term is ‘do you feel confident that you know where this data is going?'” Grose noted, highlighting the need to educate users on their data rights and companies’ use of their data.
Nonetheless, Levine warned that some companies might be tempted to charge a so-called ‘privacy premium’, whereby consumers get a worse deal or product based on their financial data.
“It only takes one kind of major loss of trust or issue that we find ourselves in a place where actually the whole industry is hurt, and we may be going backwards,” Levine said.
Meanwhile, Vans-Colina added there’s a big risk that open banking and finance data will get hacked and leaked.
See: New regime needed to take on tech giants
“I think that’s probably inevitable,” he warned. “But the regulatory framework in place is strong. And it means that only regulated companies are able to process and hold the data. And I think it’s a trade-off as a society we have to decide. Do we want to take this step?”
He also emphasised that open banking had big security perks overall, explaining that the amount of fraud and cybercrime will “go down massively because of open banking.”
3) A cross-generational project
Apps like Moneyhub — which aggregate users’ various bank accounts — have proven most popular with the over 55s.
Yet Grose is confident that open banking rules are already benefiting the younger audience too.
“I recently saw someone did a survey, and a lot of Gen Z would actually use a bank account inside of TikTok,” he said. “You’re going to see a lot of companies start to access and provide financial services using this type of [banking] data and they can meet different generations and different groups where they are already. I think that’s going to be incredibly valuable for people.”
Incidentally, Vans-Colina’s new startup, Fronted, will also use open banking tools to help young renters get cheaper deposit loans, by accessing their bank data and assessing their affordability.
See: Open Banking just got its own App Store
However, the inter-generational benefits may be less applicable to open finance. The fundamental benefit that open finance adds is being able to aggregate a wide array of different accounts and assets, which arguably millennials — the main audience of fintech apps — have less use for, given they generally have a smaller financial portfolio.
Still, Levine argues that pensions are important regardless of age, as well as is having a grasp on your investments and savings.
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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Hey bank, get onto my cloud!
The Finanser | Chris Skinner | July 21, 2020
I’ve seen a few big deals signed this month to get banks onto the cloud, such as National Australia Bank (NAB) switching to Microsoft’s Azure, and Deutsche Bank moving to the Google Cloud.
McKinsey expect that cloud usage will rise from less than a quarter of banks business being cloud-based to anything between 40 and 90 per cent of banks’ workloads globally moving to the cloud over the next decade. Bankers believe coronavirus will accelerate that shift dramatically which is why companies like IBM made a big announcement of renewed Cloud for Financial Services offer yesterday.
This is a development building on when Bank of America and IBM announced their collaborative efforts in creating the first public cloud specifically designed to address the requirements of financial services institutions late last year.
See: 4 Digital Transformation Lessons that Banks Need to Learn from Covid-19
Bank of America’s Cathy Bessant, Chief Operations and Technology Officer at Bank of America described the new partnership with IBM as “one of the most important collaborations in the financial services industry cloud space. This industry-first platform will allow Bank of America to use the public cloud, putting data security, resiliency, privacy and customer information safety needs at the forefront of decision making.”
Interesting.
There’s a number of interesting points here.
First and foremost is why didn’t they do this before? They didn’t do this before because it was too risky. They worried about security and how data in the cloud would be protected.
Second, why are they doing it now? Because of COVID19. Plain and simple, banks are being forced into the cloud because their staff are all stuck at home. Tough.
Third, why Google and Microsoft? Because everyone else is really busy. I spoke the other day to a leading cloud services provider, and they said: every bank is knocking on our door to move to our platform now, but we are too busy and told them to join the back of the queue? Cool.
However, in the press releases, the picture is different.
See:
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Fintech & Cybersecurity: Key Risks and Solutions
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Banking and the cloud: should banks adopt cloud computing solutions?
“For more than 150 years, Deutsche Bank has been an industry pioneer, with a strong record of innovation in the financial services sector,“ said Sundar Pichai, CEO of Google and Alphabet. “We’re excited about our strategic partnership and the opportunity for Google Cloud to be helpful to Deutsche Bank and its clients as they grow their business and shape the future of the financial services industry.”
This is the bank that’s worth less than half a Stripe, has completely lost its way, has taken serious body blows in the last decade and has a questionable future.
Nevertheless, the new Deutsche Bank leadership team is at least committed to technology and may see a way out. It announced a strategy in 2019 with a key line I use in all my presentations today:
At its heart, our technology strategy empowers our businesses to control “what” is produced, while technology has control of the “how”.
In other words, banking is what we do but technology is how we do it.
This is a critical statement and it encourages me that the new Deutsche Bank leadership team has finally got it.
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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Banks in US Can Now Offer Crypto Custody Services, Regulator Says
Coindesk | Nikhilesh De | Jul 22, 2020
In a letter dated July 22, Senior Deputy Comptroller and Senior Counsel Jonathan Gould wrote that any national bank can hold onto the unique cryptographic keys for a cryptocurrency, clearing the way for national banks to custody digital assets for their clients. At present, only specific crypto custodians, such as Coinbase, can do so, usually with a trust charter issued by a state financial regulator.
The letter, which appears to be addressed to an unidentified bank or similar entity, notes that banks “may offer more secure storage services compared to existing options,” and that both consumers and investment advisors may wish to use regulated custodians to ensure they don’t lose their private keys, and therefore, access to their funds.
See: Consilium Crypto Saves 10% on Transactions for Institutional Digital Asset Traders
“Providing custody for cryptocurrencies would differ in several respects from other custody activities,” the letter said.
It pointed to the need for digital wallets, adding that because they exist on a blockchain, there is no physical possession for cryptos.
“The OCC recognizes that, as the financial markets become increasingly technological, there will likely be increasing need for banks and other service providers to leverage new technology and innovative ways to provide traditional services on behalf of customers,” the letter said.
Banks can provide both fiduciary and non-fiduciary custodian services, the letter said.
It also specified that banks entering the space “should develop and implement those activities consistent with sound risk management practices and align them with the bank’s overall business plans and strategies.”
The OCC is currently headed up by Brian Brooks, a former Coinbase exec who joined the regulator earlier this year. He’s filled in as Acting Comptroller since the beginning of the summer, and has already proposed a number of reforms that would benefit crypto companies, including a national payments charter which would let crypto startups bypass the state-by-state approach in terms of acquiring money transmission licenses if they provide payment services.
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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