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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

open banking US vs UK and Europe - Is Open Finance worth getting excited about, or is it just spin?

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 - Is Open Finance worth getting excited about, or is it just spin? 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 - Is Open Finance worth getting excited about, or is it just spin?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.Doing Digital cover 152x225 PRESS 1 - Is Open Finance worth getting excited about, or is it just spin?

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 - Is Open Finance worth getting excited about, or is it just spin? 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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Coinsquare to pay $2.2 million in OSC settlement

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Advisor's Edge | James Langton | Jul 21, 2020

Bitcoin - Is Open Finance worth getting excited about, or is it just spin?It’s the regulator’s first enforcement case against a crypto trading platform

In a settlement that aims a shot across the bow of the fledgling crypto asset sector and mounts its first defence of whistleblowers, the Ontario Securities Commission (OSC) sanctioned crypto trading platform Coinsquare Ltd. and several executives.

The regulator found the firm faked its trading volume, lied about it, and retaliated against an internal whistleblower. Following a virtual hearing, an OSC hearing panel approved a settlement with Coinsquare and its executives that includes over $2.2 million in sanctions and costs, as well as industry bans.

The sanctions follow admissions that the firm violated securities rules by reporting inflated trading volume, which was generated by an internal algorithm that produced 840,000 wash trades (involving 590,000 Bitcoins), representing 90% of the platform’s reported trading activity.

The OSC also found the firm made misleading statements about the phony volume when concerns were raised by clients on Reddit, and that Coinsquare retaliated against an internal whistleblower who brought concerns about the suspect volume to senior management. The whistleblower was terminated by the company.

See:  Wealthsimple to expand into crypto trading

In settling the case, the firm admitted to engaging in market manipulation by reporting inflated trading volumes, misleading clients about the suspect volume and retaliating against a whistleblower.

CEO Cole Diamond and founder, president and CTO Virgile Rostand admitted to facilitating the firm’s breaches of Ontario securities law, while former chief compliance officer (CCO) Felix Mazer admitted to failing to fulfil his role as CCO.

Under the settlement, Diamond and Rostand both agreed to resign from the firm. Diamond paid a $1 million penalty and Rostand paid $900,000.

Coinsquare, Diamond and Rostand agreed to pay $300,000 in costs.

“Being an innovator in our capital markets is not a free pass to disregard Ontario securities law,” Kehoe said in a statement following today’s hearing.  “All market participants – including those in novel industries – must act honestly and responsibly,” he added.

The two executives are also banned from registration for three years, and they are both banned from participating in the management of Coinsquare for three years.

Additionally, Diamond received a three-year director and officer (D&O) ban, and Rostand agreed to a two-year D&O ban (although there’s a carve-out in the deal that will allow them to be involved with a Coinsquare affiliate that’s not a market participant after one year).

Mazer is also banned for one year and agreed to pay $50,000 for his role in the misconduct.

See:  An IOSCO report highlights crypto trading issues, but stops short of setting standards

“Despite several employees raising concerns about inflated trading volumes, Coinsquare not only stuck with the practice, but lied to investors about it and retaliated against a whistleblower,” said Jeff Kehoe, director of enforcement at the OSC, in a statement.

As part of the settlement, Coinsquare and its subsidiary, Coinsquare Capital Markets Ltd., which was seeking registration with the OSC and the Investment Industry Regulatory Organization of Canada (IIROC), are also required to “implement substantial corporate governance improvements” before it can continue to pursue possible registration with the OSC and IIROC.

These improvements include establishing independent boards of directors, appointing new CEOs and CCOs, creating an internal whistleblower program, and implementing policies and procedures to ensure compliance.

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NCFA Jan 2018 resize - Is Open Finance worth getting excited about, or is it just spin? 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 - Is Open Finance worth getting excited about, or is it just spin?Fintech 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 - Is Open Finance worth getting excited about, or is it just spin? 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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Open Banking – North American Style

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Fintech Talents | Lisa Moyle  | Jul 14, 2020

open banking north america style - Is Open Finance worth getting excited about, or is it just spin?Open 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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NCFA Jan 2018 resize - Is Open Finance worth getting excited about, or is it just spin? 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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Treasury mulls plan to set up coronavirus toxic debt body to save UK small businesses

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The Guardian | Kalyeena Makortoff  | Jul 16, 2020

Covid impact on small businesses - Is Open Finance worth getting excited about, or is it just spin?City calls for state-owned recovery corporation to handle £35bn of unsustainable government-backed debt

The Treasury is reviewing a “radical” proposal for a new state-owned body that would manage £35bn of toxic coronavirus debt and help save up to 780,000 British businesses.

A City taskforce, the Recapitalisation Group, led by EY and the lobby group TheCityUK, is recommending that a government-owned UK Recovery Corporation be established to handle a growing pile of unsustainable government-backed debt that could otherwise wipe out thousands of businesses and lead to 3 million job losses.

See:  Refusal to embrace open banking puts Canada behind yet another curve

Businesses that took on debt through the government-backed coronavirus business interruption loan scheme (CBILS) or bounce back loan scheme (BBLS) would be able to apply for special measures through the corporation if they were at risk of default.

The UK Recovery Corporation would be able to convert their government-backed debt into special financial instruments such as preference shares or an earnings-based profit tax, giving businesses breathing space to repay and recover from the coronavirus crisis.

This would help avoid using taxpayer money to cover unpaid debts if firms otherwise defaulted on their government-backed loans.

It is understood that the final report by the Recapitalisation Group, publicly released on 16 July, is being reviewed by the Treasury.

Adrian Montague, the former chairman of Aviva and chairman of TheCityUK’s leadership council, said:

“It’s clear that the Treasury are grappling with the problem of how they get these loans repaid without impairing the recovery. I think that some of our solutions are quite radical, so I think it’s obviously going to be for the Treasury to decide on how they want to take these ideas forward.”

So far, more than 1m businesses have taken on debt of £31.7bn through the BBLS scheme, which is aimed at the UK’s smallest businesses and is 100% government-backed. A further 54,538 loans worth £11.85bn have been granted to small and medium-sized businesses through the CBILS scheme, which comes with an 80% government guarantee.

See:  UK Government Adds COVID-19 Program to Support Early State Ventures. Is it Enough?

The report estimates that 2.3m businesses will have a CBILS or BBLS loan by the end of March 2021.

While BBLS loans, which are interest and payment-free for 12 months, will come up for repayment from March 2021, the City taskforce warned that a solution needed to be in place by the end of October 2020. That is when companies will come under greater financial pressure with the winding down of state measures including the furlough job retention scheme.

Montague said: “We had originally thought this would be a problem for March next year, but actually it’s going to hit in Q4 this year when the rent relief starts to end, when the furlough scheme starts to unwind, and when VAT payment deferrals need to be made. So it’s not far away.  “We are urging the government to take immediate action to address these issues.”

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NCFA Jan 2018 resize - Is Open Finance worth getting excited about, or is it just spin? 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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3 examples of what open finance can do right now

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Yapily | Joe Terry | Jun 19, 2020

Open Finance image - Is Open Finance worth getting excited about, or is it just spin?The average Briton's relationship with their bank lasts longer than their marriage - and this inertia can be costly. Banks have always been the one-stop shops for all things finance, but thanks to open finance that has changed.

Digital offerings in the financial services sector have changed the way we expect to interact with our banks and manage our finances. Gone are the days where switching is difficult, opening a new account takes weeks or applying for a loan means printing out bank statements.

Open finance is enabling a new wave of innovative financial services. The access to data made available by open banking connections is more versatile than originally imagined. The majority of sectors can now benefit from access to the API links created during the open banking era, meaning that customers can easily share their financial data. From mortgages and pensions to payment solutions, open finance encapsulates the idea of accessibility and removes barriers for banks, firms and consumers to interact more efficiently.

See:  Open banking in Canada - Interview with Senator Deacon at FFCON20

How could open finance change the credit process?

Businesses could benefit from a new, more accessible way of accessing credit. Using open finance could increase efficiency as opposed to the traditional methods used when assessing a businesses loan or credit application. Choosing to use this option means businesses could share their financial data instantly, meaning the lender could:

  • Carry out faster eligibility checks.
  • Assess affordability and credit worthiness instantly.
  • Gain immediate access to historical transaction data.

Businesses would in turn benefit from access to faster funds without laborious checks and waiting times. Open finance would transform credit assessments and could be automated, ensuring less human error, ultimately improving overall lending efficiency.

Open finance can solve the inefficiencies in money management.

How many finance apps do you have on your phone?

The odds are, if you have a credit card, more than one bank or accounting software on your phone, then you have a few different apps. Usually, all of the platforms or apps have different login details (you’re lucky if you only ever use face ID). It can be a nightmare, checking balances, transferring funds and managing accounts.

Open banking provides a secure and scalable method, whereby innovative firms can create money management apps that could collate all of your data in one place. Given the consumers consent, financial data from different accounts and financial institutions can be pulled together and be managed within one platform or app.

See:  UK: Open Finance: The FCA Consults On How To Transform The Financial Services Market

Open finance enables the automation of financial management. Innovative firms could create platforms to enable applications to make financial decisions based on consumer information and preferences. A great example of this is moving money to the best interest rate available, maximising the return on savings and the opposite for debt, where moving debt to the lowest interest rate for overdrafts and credit cards could be automated.

Do you check and compare prices for utilities or insurance online?

Today's online comparison sites play a big role in what financial product customers end up purchasing. The quotes are usually generated by the user going through roughly 4 or 5 pages, typing in the relevant information to that product. Customers are then presented with many different quotes or estimates based on the information they have typed in.

Of course, typing in this information presents various challenges. Fraudulent entries being the most frequent. This may be in an attempt to reduce the cost of the product or service or it could be due to human error. However, comparison sites, pension providers, utility companies, insurers and more can utilise open banking data to see the real financial picture, automatically increasing effectiveness and reducing risk. The data made available through open banking could help simplify the process for firms and consumers.

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NCFA Jan 2018 resize - Is Open Finance worth getting excited about, or is it just spin? 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

Latest news - Is Open Finance worth getting excited about, or is it just spin?FF Logo 400 v3 - Is Open Finance worth getting excited about, or is it just spin?community social impact - Is Open Finance worth getting excited about, or is it just spin?

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.



GET TICKETS NOW
More Info



Week 5 Digital Identity and Convergence Marketplaces resize2 - Is Open Finance worth getting excited about, or is it just spin?



NCFA COVID 19 letter to government to support Fintechs and SMEs - Is Open Finance worth getting excited about, or is it just spin?

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share save 171 16 - Is Open Finance worth getting excited about, or is it just spin?