Category Archives: Fintech International

FFCON20 Draft Shortlist Finnovate.io: Your virtual technical team

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NCFA | Samuel He | July 28, 2020

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With technical job creation outpacing the rate of technical studies graduates, demand for software developers is high. As a result, competition for in-house software development talent is expensive.

The rapidly growing Fintech space requires top-notch development teams to push the limits of new financial experiences. Ideas in fintech are plentiful, but the challenge is a lack of technical capability.

Recognizing this need, Finnovate.io was founded in 2016 to provide digital innovation services to customers in the Fintech ecosystem.

Finnovate.io specializes in web, mobile, and blockchain application development. They have a track record of providing technical expertise at all stages of product development.

See:  Fearless: How Technology Helps Conquer our Fear of the Unknown

Acting as a trusted software development partner, the company leverages its expertise in software technology and finance by working closely with a client’s core team. Their mission is to deliver results while cutting time to completion, costs, and stress.

As a part of their product mix, they also deliver technical training to their Fintech partners.

Finnovate.io’s training initiatives involved gamifying financial literacy training in the classroom for Junior Achievement. They also delivered a budget simulation experience that changes the way students learn about personal finance as part of the organization’s Dollar with Sense program.

At the enterprise level, the team helped accelerate the adoption of modern web and mobile technologies for Manulife. With their expertise, multiple teams at Manulife were trained on the latest web development technology to build the next generation of financial tools and products.

 

Finnovate.io nailed the shortlist, so check them out at the FFCON20 RISE Fintech Draft. 

Check out their profile or If you like what you see, show them some love and give them your vote.

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NCFA Jan 2018 resize - FFCON20 Draft Shortlist Finnovate.io: Your virtual technical team 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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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.



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Bid – Ask: Seedrs Secondary Market Now Allows Variable Pricing for Listed Securities

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Crowdfund Insider | | Jul 27, 2020

SeedrsSeedrs raising capital - FFCON20 Draft Shortlist Finnovate.io: Your virtual technical team has long been an innovator in the secondary market for crowdfunded securities. Today, the leading UK based crowdfunding platform is announcing variable pricing for its secondary market.

Launched in 2017, Seedrs Secondary Market has continued to iterate and add new features and functionality. Of course, the biggest challenge is liquidity but that is something that should resolve itself over time as the platform grows and external issuers utilize the marketplace.

According to a recent blog post, Seedrs July market volume saw levels return to their “pre-Revolut levels of trading.” Seedrs states that during the July opening, 907 share lots were sold worth £229,000. There were 456 buyers and 423 sellers trading in securities issued by 162 businesses at an average value per business of £1.4k. Seedrs reports that each seller made an average profit of £202.

See:  OSC LaunchPad approves TokenGX (Tokenfunder) for Secondary Trading of Digital Securities

Variable pricing should make it easier for buyers and sellers to make a market by matching supply with demand more effectively.

In an email, Seedrs founder and Chairman Jeff Lynn said variable pricing represents an “important milestone in our work to be a full-scale marketplace for private investments.”

“The change will work as follows. Previously, as a prospective seller, you have only been able to list shares on the Seedrs Secondary Market at the set price we determine under our Valuation Policy (which is usually the company’s latest valuation). Buyers in turn have only been able to buy the shares at that price. Starting now, however, we will allow sellers to list their shares at a premium or discount price – up to 30% above or below the marked share price – if they so choose. Buyers will see each share lot and the price at which it is listed, and they can make their investment decision accordingly.”

The change is effective as of today and will be available during the August market day.

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NCFA Jan 2018 resize - FFCON20 Draft Shortlist Finnovate.io: Your virtual technical team 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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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.



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Is Open Finance worth getting excited about, or is it just spin?

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Sifted | Isabel Woodford | Jul 22, 2020

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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.

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NCFA Jan 2018 resize - FFCON20 Draft Shortlist Finnovate.io: Your virtual technical team 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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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.



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Hey bank, get onto my cloud!

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The Finanser | Chris Skinner | July 21, 2020

fintechs banks and cloud - FFCON20 Draft Shortlist Finnovate.io: Your virtual technical teamI’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.Doing Digital cover 152x225 PRESS 1 - FFCON20 Draft Shortlist Finnovate.io: Your virtual technical team

However, in the press releases, the picture is different.

See:

“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.

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NCFA Jan 2018 resize - FFCON20 Draft Shortlist Finnovate.io: Your virtual technical team 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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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.



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Banks in US Can Now Offer Crypto Custody Services, Regulator Says

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Coindesk | Nikhilesh De | Jul 22, 2020

bank vault - FFCON20 Draft Shortlist Finnovate.io: Your virtual technical teamIn 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.

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NCFA Jan 2018 resize - FFCON20 Draft Shortlist Finnovate.io: Your virtual technical team 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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JOIN US THUR, AUGUST 6 DIGITAL IDENTITY & CONVERGENCE MARKETPLACES WEEK!


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.



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Fintech & Cybersecurity: Key Risks and Solutions

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Guest Post | July 21, 2020

Cybersecurity risks and solutions - FFCON20 Draft Shortlist Finnovate.io: Your virtual technical teamFintech companies have dramatically improved financial services worldwide. The sum of innovative technologies is offering groundbreaking banking and financial services to both consumers and B2B clients. In terms of funding, payments, investments, and other processes, the financial sector has never been more streamlined.

But in line with increased performance, there is increased risk. The fintech industry is on a quest to ensure optimal cybersecurity and safeguard customers’ financial and personal data; as well it should because it seems every month we hear about another major data breach.

See:  Cybercrime and Covid-19: Preying on Fear

While we may pat ourselves on the bank and point to the positive aspects of fintech and open banking, we shouldn’t lose sight of the fact that critical technical dependencies on third parties in the integrated fintech ecosystem have made it uniquely vulnerable to several cybersecurity risks.

Here we shed light on some of those risks and go over a few actionable solutions to improve the landscape.

 

Key Fintech Cybersecurity Risks

Malware Attacks and Hacking

If you want to categorize cybersecurity risks in the fintech industry, malware attacks and hacking are among the most prominent. In one key example of the latter, bad actors are launching sophisticated cyberattacks on SWIFT infrastructure, a financial telecommunication system used worldwide by banks and other financial institutions to transfer transaction-related information.

The “insane” (as Wired termed it) $81 million bank heist incident in Bangladesh incident took place because of exploitable vulnerabilities that are prevalent in many banks. A similar attack is probably a matter of time as the risk here is directly related to financial operations such as domestic and international funds transfers.

 

Lack of Regulatory Compliance

The rapid rise of fintech companies is associated with an overall transformation in information technology and related fields. Legacy banking regulations don’t cover technological risks in a comprehensive manner, which means the fintech industry is largely unregulated.

Regulatory bodies are catching up but there is a lot left to cover to minimize the risk. In the meantime, a lack of regtech means organizations at risk of breaches include both those handling financial and personal data and peer to peer loan data.

 

Digital Identity Theft

In the fintech ecosystem, most applications and financial services are web-based with iOS or Android mobile devices at the front end. Fintech technology uses one-time passwords (OTPs) as security codes to verify customer authenticity during online marketplace transactions. Unfortunately, these OTPs are easily accessible by cyber attackers and critical information is easily traceable by bad actors. Faulty fintech software solutions are mostly liable in these cases.

See:  Comparison of UK banking providers’ fraud controls

The risk of digital identity theft is directly related to online marketplaces. When a customer shares sensitive financial and personal information on online platforms or in e-banking solutions, this information is far too easy to garner.

 

A Few Solutions

Reputable Third-Party Service Providers

The fintech industry is largely dependent on various third-party service providers, from malware and cyberattack protection, cloud computing, to digital data services, to name just a few. Many IT risks arise due to weak software management by third-party service providers. Always go for reputable providers for fintech solutions as it ensures greater safety and security across the board.

 

Ensure Regulatory Compliance

Regulatory compliance for the fintech industry is still scant, particularly when compared to the size of the landscape. However, applying what compliance is available should save fintech companies from cross-border legal issues, potential loss of reputation, and the often hefty regulatory fines imposed by jurisdictional authorities. At the same time, regulators should review regulation perimeters routinely. Some key regulations to follow include:

  • GDPR — Worldwise
  • PSD2 — European Union
  • eIDAS — European Union
  • PCI DSS — Worldwide
  • NCUA — Americas

 

Robust E-banking Security Architecture

In order to maintain customers’ privacy on web applications, online marketplaces, and when using e-banking solutions, banks and financial institutions should periodically update their security framework and architecture. This will mitigate some of the risk factors and pave the way for effective fintech implementation.

In addition, the industry as a whole needs to do a bit more to protect application users on-site. Companies can’t always rely on users to download a secure and effective VPN so apps should have VPN protection in place to secure connections and prevent unauthorized access. System firewalls, antivirus, and other steps are fundamental to stopping breaches.

The bottom line is that fintech will never be free from security vulnerabilities. However, by fostering appropriate security measures the industry can stay strong.

 


NCFA Jan 2018 resize - FFCON20 Draft Shortlist Finnovate.io: Your virtual technical team 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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JOIN US THUR, AUGUST 6 DIGITAL IDENTITY & CONVERGENCE MARKETPLACES WEEK!


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.



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Open Banking – North American Style

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Fintech Talents | Lisa Moyle  | Jul 14, 2020

open banking north america style - FFCON20 Draft Shortlist Finnovate.io: Your virtual technical teamOpen Banking is taking shape in different ways across North America. From driving the development of new providers to enabling existing institutions to keep pace with a fast changing industry, the impact on financial services is significant. As the current crisis demonstrates, the swift change in the economic outlook and the situation of consumers and business alike, not to mention a rapid move to digital channels, the ability to understand, pivot and serve customers is so crucial and can be supported by open access to vital market data.

Open Banking is coming to North America but is taking shape in different ways across the continent. From driving the development of new providers to enabling existing institutions to keep pace with a changing industry, the impact on financial services will continue to grow in significance. That impact and the innovations that open banking initiatives support and catalyse, no doubt, will vary depending on the structure and regulatory framework of the financial services sector and the needs of economies/communities. It both opens the gateway to opportunity and flags challenges and jobs to be done.

See:  Digital IDs Help Open Banking Reach Its Fullest Potential

Open Banking in the US differs greatly, for example, from the European approach which was propelled by technology trends and solidified through regulatory initiatives (PSD2, The Open Banking rules in the UK). There is no single regulatory framework in the US compelling existing institutions to share data through an open API standard and no broad-based accompanying rules protecting consumer data or mandating security standards. According to a 2018 report by the US Treasury, although there is a will to avoid fragmentation and remove regulatory/legal uncertainty, a mandated and coordinated approach is not supported or deemed feasible.

As the report notes, “There are significant differences between the United States and the United Kingdom with respect to the size, nature, and diversity of the financial services sector and regulatory mandates. Given those differences, an equivalent Open Banking regime for the U.S. market is not readily applicable.”

While open finance in North America will not look like it does in the UK or Australia, the need for it here is not unique,” said Steve Boms, executive director of FDATA North America. “And with millions of families and small businesses struggling to keep afloat, there is no time to waste. Consumers will have improved access to capital, financial tools, and sound retirement options once they gain full control of their own data. North American economies simply will not be able to build back until open finance is a reality.”

See:  3 examples of what open finance can do right now

Open banking is coming to America but it will be driven by the private sector and State and Federal regulators will get involved as required rather than being in the driving seat. That may well be the American-way but market forces will continue to drive the adoption of Open Banking.

The Financial Data Exchange (FDX) is a prime example of how the financial industry has come together rapidly around a common, interoperable and royalty-free API standard to make the open finance concept a reality regardless what type of regulatory framework may be in place,” said Don Cardinal, Managing Director of the Financial Data Exchange.

“FDX is a big tent with financial institutions, consumer groups, fintechs, financial data aggregators, payment networks, financial industry groups and other permissioned stakeholders of all sizes at the table and working to ensure that consumers have secure and reliable access to their own data,” added Cardinal.

New entrants will seek access to key troves of consumer data held by banks and other financial institutions and those very same institutions will need to keep pace with the rapidly evolving technological landscape and equally fast changing customer expectations and needs.

According to Alex Yang, Director, CashPro API and Global Open Banking Strategy Bank of America Merrill Lynch, “Absent the ‘letter’ of open banking, organizations like Afinis, SWIFT, and FDX have stepped in to help lead conversations on behalf of the North American corporations who seek access to commercial or retail data and services in the ‘spirit’ of collaboration and innovation. It is this spirit that will help improve the financial lives of businesses and consumers alike.”

See: 

Looking North and South from the large US market. Canada and Mexico are also seeking to create more competitive, responsive and inclusive financial services sectors through exploring/supporting government-led initiatives. The Department of Finance Canada established an Advisory Committee in 2018 and published an initial consultation into whether a UK Style approach should be adopted.

Further plans have been delayed due to the Covid-19 pandemic and progress has been stalled. Whilst the lack of a mandated open API may not block innovation, it may well make a concentrated banking sector slower to move and create barriers to faster innovation.

The current crisis is illustrative as the swift change in economic outlook and the situation of consumers and business alike, not to mention a rapid move to digital channels, further highlights the extent to which the ability to understand, pivot and serve customers is so crucial and can be supported by open access to vital market data.

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