Category Archives: Innovation and Resources

Facing disaster, corporate venture capital to undergo key stress test

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Pitchbook | Alexander Davis | March 24, 2020

Sanfrancisco - Facing disaster, corporate venture capital to undergo key stress testAfter driving much of the venture capital market's hyper-growth in recent years, corporations are poised for a decisive stress test of their zeal for funding startups.

Heading into 2020, it wasn't unreasonable to forecast another record year for VC financing involving corporate venture capital arms, such as those of titans Intel, Salesforce and Google.

But that was before the coronavirus brought the world economy to a standstill.

Turmoil spurred by the global health emergency has given rise to a new mantra for business decision-makers: Hit pause.

Inside boardrooms of every stripe, countless investment decisions are either being postponed or subjected to fresh scrutiny. Companies are suddenly on guard as they struggle to take the measure of an unfolding economic disaster, in a challenge of their commitment to venture funding.

"In that hunker-down scenario, all spending goes through a rigorous review, obviously," said Pradeep Tagare, head of the $250 million corporate venture fund at UK-based energy company National Grid. "One of the first things that gets hit is the venture capital part of it because that's an easy thing to step back on."

Corporate VC departments make strategic bets on markets, innovations, partnerships and entrepreneurial talent as a way to propel their parent companies to stretch into bold new directions. In recent years, a wide variety of corporations across all industrial sectors and geographies have jumped into the VC market, including JetBlue, Yamaha Motor and even outdoor gear company Patagonia. Just last week Dating.com said it would start investing out of a $50 million corporate fund for early-stage deals.

See:  Bank On It Podcast: Turning a Funding Failure Into a Win

Because corporations, notably SoftBank, played such a pivotal role in private fundraising recently, their willingness to stick to their VC strategies in this new downturn could go a long way toward shaping the pool of capital that will be available in the months and perhaps years to come.

Last year, startups raised roughly $136 billion in VC funding and about $141 billion in 2018. For their part, corporate venture firms participated in 1,849 US funding rounds totaling $57 billion—second only to the 1,871 deals worth $71 billion in 2018, according to PitchBook data.

Already there are signs of the coronavirus epidemic's chilling effects. Tagare said that two separate funding rounds that National Grid is backing have seen a pair of would-be CVC partners back out in recent days.

"A freeze in all activity is definitely starting to happen," Tagare said, adding that the remaining firms in the deals expect to find partners to fill the gaps left by the ones that got cold feet.

In SoftBank's case, the outlook is so dire that the company, which operates the $100 billion Vision Fund, said publicly this week that it will shed about $41 billion worth of assets as it struggles to regain investor confidence following a series of stumbles even before the global pandemic wiped out 40% of its market capitalization. SoftBank invests off its own balance sheet in addition to the Vision Fund, which raised outside capital from sovereign wealth funds and other institutions.

Under more predictable market conditions of the past several years, VC firms grew accustomed to writing checks in funding rounds that were left open without all the target capital spoken for. Tagare said that will no longer happen in this environment, adding,

"Investors are making sure that capital coming in will give the company 18 to 24 months of runway."

See:  Corporate venture capital deals hit new record as banks invest in fintech competitors

As of Friday, there have been 304 deals worth $14.2 billion with CVC participation in Q1. That's about 100 deals behind the quarterly pace seen in the past years, according to a PitchBook analysis.

One corporate VC based in Silicon Valley said that the COVID-19 crisis has caused "quite a bit of disruption" for the firm's portfolio companies in the midst of fundraising. "We're also seeing cash runways getting squeezed as revenue targets get lowered."

The damage done to the VC investing landscape may not be known until midyear, said Kyle Stanford, a venture analyst at PitchBook.

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NCFA Jan 2018 resize - Facing disaster, corporate venture capital to undergo key stress test 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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Applications OPEN: UNCDF Announces Gig Economy Challenge – Driving Financial Health for Gig Workers

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UNCDF | Jia Wei Khor | April 2, 2020

Gig economy challenge - Facing disaster, corporate venture capital to undergo key stress testAPEC Malaysia, Bank Negara Malaysia (BNM), Malaysia Digital Economy Corporation (MDEC) and United Nations Capital Development Fund (UNCDF) launched the Gig Economy Challenge.

The challenge is funded by MetLife Foundation through the i3 (Innovate, Implement and Impact) program.

In light of COVID-19, gig workers are likely to face new and unforeseen challenges which will affect their financial health.

Calling for applications to seek viable solutions for improving the financial health of gig workers in APEC's (Asia-Pacific Economic Cooperation) 21 member economies.

If you have a solution, apply now!

See:  Malaysia’s potential as the fintech hub for the ASEAN region

Why participate?

  • Technical assistance worth $100,000 to pilot your technology product or service
  • Up to $30,000 grant per team as seed capital
  • Opportunity to pilot the solution in Malaysia
  • Access to enabling partnerships, including financial institutions, technology companies and other infrastructure providers

 

Questions?

Join the info sessions!  Click below to register

7 April (Tue) 11 am ( GMT +8)

14 April (Tue) 10 am ( GMT +8)

23 April (Thurs) 11 am ( GMT +8)

 

Where can I know more?:  www.bit.ly/GigEconomyChallenge

Application Deadline:  27 April 2020

Contact finlab@uncdf.org

 


NCFA Jan 2018 resize - Facing disaster, corporate venture capital to undergo key stress test 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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CCI tells feds emergency wage subsidy must be expanded to support Canadian tech

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Betakit | | April 2, 2020

Canadian flag3 - Facing disaster, corporate venture capital to undergo key stress testThe Council of Canadian Innovators (CCI) and its members are calling on the federal government to make adjustments to the 75 percent emergency wage subsidy, arguing that it does little to support Canada’s tech sector.

The CCI is recommending that the government expand the eligibility criteria for the subsidy, which currently requires businesses to have seen a 30 percent year-over-year decline in gross revenue directly related to COVID-19.

In a copy of the CCI’s latest submission to the federal government, obtained by BetaKit, the lobby group states, “this measurement is only appropriate for a small number of static, traditional businesses, and is not appropriate for high growth firms in Canada’s technology sector, or SMEs that experience monthly recurring revenue.”

“The intention of the wage subsidy program is to save Canadian businesses from making drastic job cuts or going bankrupt so that we can reignite the Canadian economy,” CCI vice-chairman and OMERS founder John Ruffolo said in a statement to BetaKit. “The program as currently outlined seems aimed to make it difficult to apply for, to receive funds, and to attest to the criteria in a timely manner.”

See:  How Governments Should Use Crowdfunding to Battle the Economic Impact of #Socialdistancing

Similar sentiments have been shared by the Canadian innovation and tech sector, which was quick to respond to Finance Minister Bill Morneau’s Wednesday announcement outlining the details of the program. CEOs and venture capitalists alike took to social media arguing that the subsidy does not support startups.

Matt Roberts, partner at ScaleUp Ventures, told BetaKit that the revenue clause “might be a killer for the tech ecosystem.” Alistair Croll, founding partner of Montreal’s Startupfest, shared a similar sentiment on Twitter, noting that the revenue criteria “basically eliminates huge swathes of the startup sector (where revenue growth is the whole point) from support.”

“Absolutely needs to be fixed,” Croll added.

“We appreciate this is highly complicated,” Ruffolo told BetaKit. “But we need a second kick at the can in designing this program for success.”

In a copy of the CCI’s latest submission to the federal government, obtained by BetaKit, the lobby group states, “this measurement is only appropriate for a small number of static, traditional businesses, and is not appropriate for high growth firms in Canada’s technology sector, or SMEs that experience monthly recurring revenue.”

“The intention of the wage subsidy program is to save Canadian businesses from making drastic job cuts or going bankrupt so that we can reignite the Canadian economy,” CCI vice-chairman and OMERS founder John Ruffolo said in a statement to BetaKit. “The program as currently outlined seems aimed to make it difficult to apply for, to receive funds, and to attest to the criteria in a timely manner.”

Similar sentiments have been shared by the Canadian innovation and tech sector, which was quick to respond to Finance Minister Bill Morneau’s Wednesday announcement outlining the details of the program. CEOs and venture capitalists alike took to social media arguing that the subsidy does not support startups.

See:  4 Important strategies to help your business recover from coronavirus

Matt Roberts, partner at ScaleUp Ventures, told BetaKit that the revenue clause “might be a killer for the tech ecosystem.” Alistair Croll, founding partner of Montreal’s Startupfest, shared a similar sentiment on Twitter, noting that the revenue criteria “basically eliminates huge swathes of the startup sector (where revenue growth is the whole point) from support.”

“Absolutely needs to be fixed,” Croll added.

“We appreciate this is highly complicated,” Ruffolo told BetaKit. “But we need a second kick at the can in designing this program for success.”

The CCI letter states that in order for the Canada Emergency Wage Subsidy (CEWS) program to have its intended impact, the eligibility needs to reflect the operating metrics and structures of Canada’s fastest-growing businesses.

The lobby group notes that it is not necessarily reasonable to expect small-and-medium-sized enterprises (SMEs) to have monthly income statements that report sales. In most cases, sales is not the right metric to determine a business’ growth or activity, said CCI.

“From the CEOs we’ve heard from, most SMEs do not generate monthly income statements; instead they track key quantifiable activities (such as bookings, net new subscribers, units shipped or billable hours) that vary from business to business and sector to sector.”

One founder and CEO who spoke to BetaKit on condition of anonymity echoed this statement, noting that the subsidy may be helpful for well-capitalized businesses where operations are more focused on revenue, but not useful for a majority of startups.

The CCI’s submission outlines four recommendations for expanding the criteria on an and/or basis:

  • Billable hours/receivables;
  • Units shipped;
  • Gross Bookings and;
  • Subscription Revenue.

The group also notes that measuring declines by billable hours will support services companies, non-point of sale companies, companies that have delayed billing processes, and deferred revenue companies. Using units shipped as a metric opens up the door to medical or wearable device companies, with CCI noting that a reduction in units shipped is also an indication of a decline in business activity.

See:  How payments can adjust to the coronavirus pandemic—and help the world adapt

The lobby group adds that for some tech companies a decline in gross bookings is a significant indicator, while subscription revenue for software-as-a-service (SaaS) companies translates to revenues lost.

The current revenue criteria do not necessarily reflect the activity in tech businesses, CCI says in the submission. “Few innovative companies prepare monthly GAAP revenue financials; criteria must reflect the type of business. A demonstration in material drop in one of the aforementioned should be considered,” the group says.

The CCI has been coordinating calls with various federal ministers and providing the government offering numerous recommendations to help support the tech sector. This latest submission also asks the government to backdate the 75 percent wage subsidy program to February, noting that COVID-19 began to impact global supply chains much earlier than March 2020.

Currently, the program is retroactive until March 15, which emergency measures to help curb COVID-19 were initially put in place in Canada.

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NCFA Jan 2018 resize - Facing disaster, corporate venture capital to undergo key stress test The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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How payments can adjust to the coronavirus pandemic—and help the world adapt

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McKinsey & Company | By Philip B, Reet C., Olivier D., Tobias L., and Marc N  | March 2020

payments and covid19 1 - Facing disaster, corporate venture capital to undergo key stress testThe challenges are immediate, with long-term implications for global, regional, and local economies—and for the payments industry itself. Here’s what to expect.

Any projection of industry performance rests on assumptions about overall economic activity. The outlook largely depends on the spread of the virus, the public-health response, and the effectiveness of the fiscal, monetary, and broader public response. A relatively optimistic scenario, taking into account these variables, assumes that the virus will be contained after an economic lockdown of two to three months in Europe and the United States. Under this scenario, global GDP would decline in 2020 by 1.5 percent, which we estimate would result in, at most, a decline in payments revenues of around $165 billion, some 8 percent lower than they were in 2019.

See:  All businesses seeing 30% drop in revenue due to pandemic will be eligible for 75% wage subsidies: Trudeau

Cross-border consumer-to-business transactions are likely to drop. One-quarter of the total decline in revenues in our analysis is driven by cross-border payments, led by a 25 to 30 percent decline in cross-border C2B transactions. This would be explained mostly by the disruption of travel and tourism, but also by increasingly localized commerce ecosystems, such as those promoted through buy-local campaigns. Examples of highly vulnerable markets would be Saudi Arabia, with 40 percent of online payments related to travel and entertainment, and Thailand, a major destination of international travelers. Major expat markets, such as the United Arab Emirates, could also see a substantial share of their revenues disappear.

Cross-border business-to-business transactions have also been affected. Container freight is down since January, considerably lower than its level in the comparable period of 2019. However, supply chains will be disrupted over the longer term because different geographies will emerge from the crisis at different times. Chinese manufacturers, for example, won’t be able to sell engine parts to US automakers until US car production resumes.

Payments related to securities transactions are at record highs, reflecting the market’s instability and volatility. This volatility is creating a higher degree of risk for international securities-clearing transactions.

Retail payments and merchant-services businesses will be severely affected. Classic point-of-sale (POS) payments volumes could drop by as much as 30 to 40 percent in the short term, though online sales will be less affected. Data for retail show that as of March 18, foot traffic was down, compared with the same period in 2019, by around 20 percent in the United Kingdom and by more than 70 percent in Italy and the United States. Sales at restaurants and hotels and for recreation, culture, and travel have virtually collapsed. In 2018, these categories represented over 30 percent of EU household expenditures and an even higher percentage of POS transactions.

The gig economy—and fintech wallets based on it—is also suffering. Our industry observations suggest that flows are down by 20 to 30 percent for some leading wallets in Asia, despite a growing number of users. Offline merchant payments and ride hailing are most affected, while online payments and food delivery are holding up.

See:  Bank of Canada Speech: Money and Payments in the Digital Age

Finding the next normal

As the crisis plays out, we will get more clarity about the depth and duration of the pain. One thing is clear now: there will be no return to the norms of 2019; the impact on the behavior and expectations of customers and businesses—indeed the entire fabric of the economy—will be profound. So it is critical not only for the payments ecosystem but also for the economy as a whole to develop, today, the payments solutions that will allow economies to emerge from the current crisis efficiently and define the post-COVID-19 future.

Here we highlight ten fundamental changes that require us all to be prepared. These are not only things we believe the industry should predict or anticipate but also things that we should all ensure will happen for the effective and lasting relaunch of our economies.

Rationalize cash. Physical means of payments, such as cash and checks, have been actively discouraged through the crisis for their potential of carrying the virus. Banks have closed branches for security reasons, and clients and staffs have readjusted to changed interaction models, either over the phone or by appointment only. Some branches will never open again. Now is the time to promote and design digitization programs for commerce and the economy.

Ensure universal access. The current crisis is highlighting the fact that not everyone has the same level of access to the necessary new technologies and digital tools. Moving away from cash affects unbanked citizens disproportionately. Merchants without access to digital payments lose out more as remote buying increases. Now is the time to design setups where all merchants and all consumers, irrespective of finances and education, will have access to the tools of the future. Limits in the payments infrastructure or prices should not be used as an excuse.

See:  The Cash Crisis: Why America’s financial plumbing has seized up

Stabilize digital currencies. With values collapsing and trust eroding, digital currencies have proved incapable of delivering on their promise of a universal payments solution in a time of need. The crisis is reinforcing the importance of governments in maintaining the global financial system. Consider, for example, the momentous currency swap lines of credit made available by the US Federal Reserve to global central banks.

Make the leap to omnichannel payments solutions to support omnichannel commerce. The growth of online commerce has accelerated and will continue to do so, especially as markets, such as those in Southern Europe, close the gap with more advanced Northern European or Anglo-Saxon economies and China. Some smaller retailers forced to close in the crisis may not reopen physically but seek a digital future instead. The rapid build-out of omnichannel capabilities—which will bridge payments in any environment, physical or digital—will become an essential requirement for all payments players in most geographies.

Make all payments touchless. The fear of contact with contaminated surfaces has given a real boost to the use of contactless payments, card and wallet based. Cashiers are being trained not to take cards from customers and to promote the insertion of cards into readers by customers. The educational impact of, say, local shopkeepers who actively encourage customers to use contactless payments and refuse to take cash will convert some of the more reluctant users. As this habit becomes further engrained, it will become the key to removing barriers to further growth.

Expand digital-wallet solutions beyond payments. Payments using digital devices—phones or wearables—had already started to emerge before COVID-19 struck. Enabling wallets to offer other features, such as digital IDs and transaction monitoring and reporting, will promote even more growth. Your phone could tell you when it is too crowded to go shopping or alert you when your goods are ready to pick up when you arrive. Such capabilities will make a difference to the reopening of some stores. Companies that provide viable options for integrated and contactless payments, to both customers and merchants, will probably have a distinctive edge over competitors.

See:  Fintechs getting a boost from coronavirus outbreak

Deploy data as a protection against fraud. The COVID-19 crisis has opened new avenues to use data. In China, phone data were used to help people understand “safe corridors” for movement and to track contagion cases rapidly. Even in Europe, consumers are more open to the use of data for their own benefit. The protections against fraud that can be developed should benefit users, not providers, in the weeks when activity resumes. Benefits delivered then will carry the mindset change forward. Fraud prevention is likely, more than ever, to be the priority here.

Promote a new era of cooperative competition. The universal disruption of our societies is triggering a new wave of innovation, with a cooperative mindset not common in past crises. The liquidity and profitability crunch provoked by the crisis will lead to a shakeout in the fintech industry, eliminating initiatives that lack clear long-term economic viability. We believe this development will lead to a new fintech landscape, geared more to marketwide cooperation and win–wins and less to challenging the incumbents. Given the change in valuations and market expectations, market consolidation and the development of local and regional champions may continue. In that context, companies will also be reviewing their prospects for growth, as well as considering partnership models and organic and M&A growth, to support their strategies.

Transform bank-payments operating models. Banks will also have to readjust to the new normal. Payments today are a major cost burden for many banks, and most spending maintains existing systems instead of creating change. In the postcrisis world, banks will need to reflect on how to organize themselves for change, possibly by running some of their payments businesses in a completely different way. They could, for example, consider structural moves on the use of onshoring versus outsourcing, cloud-based infrastructure, automation, and analysis-driven decisions to reimagine scale or the realignment of products. Payments-as-a-service business models, in their infancy before the crisis, are likely to get a boost, particularly where they can provide relief for reduced IT budgets.

See:   Globalizing Fintech In Action: A Discussion With Harinder Takhar of Paytm

Redesign the regulatory model. In a time of change, we must move to setups that solve real-world problems—guaranteed by regulators but not imposed. This will require a new model of collaboration between the payments sector and regulators—a model focused on innovation in payments, adapted to the new economic reality in a sustainable and resilient fashion. Early indications are hopeful: for example, the US Federal Reserve, the FDIC, and the OCC announced, on March 27, that they will allow companies to delay the adoption of current-expected-credit-loss (CECL) standards on regulatory capital for two years. This will support lending activity in the wake of COVID-19 while maintaining the quality of regulatory capital.

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NCFA Jan 2018 resize - Facing disaster, corporate venture capital to undergo key stress test 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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Accenture: Fintech, Cybersecurity and Methods to Handle Threat

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FintechZoom | Jung Min-seo | April 1, 2020

cybersecurity - Facing disaster, corporate venture capital to undergo key stress testWhat’s the cybersecurity risk panorama for fintechs in 2020? Accenture’s perception offers some readability

The tempo of digital transformation throughout the monetary panorama continues to quicken.

In such an atmosphere the digital or cyber risk proposition evolves quickly, making it important to take care of the best requirements of know-how and preparedness, and hold updated with the impression of cyber tendencies.

In response to Accenture’s 2019 Ninth Annual Price of Cybercrime report, monetary providers incurred the best cybercrime prices amongst all industries studied in 2018.

See:

On this analysis, Accenture explains: “As industries evolve and disrupt the present atmosphere, threats are dramatically increasing whereas turning into extra advanced. This requires extra safety innovation to guard firm ecosystems. The following value to our organisations and economies is substantial – and rising.”

See:  Smart Cities Offer Promises and Concerns Over Privacy

Throughout all industries, Accenture discovered that data theft is the most costly and quickest rising consequence of cybercrime. Nonetheless, it famous that there are a number of drivers behind the evolving world cybersecurity risk for all sectors:

  • Evolving targets: knowledge is now not the one goal in response to Accenture. Moderately, corporations worldwide are seeing their core programs  – controls programs and infrastructure – being hacked, which may result in better disruption.
  • Evolving impression: it’s now not nearly theft. For instance, cyberattacks are altering strategy from merely stealing knowledge to destroying or altering it to create mistrust. At present, knowledge integrity itself is weak.
  • Evolving strategies: assault strategies are adapting shortly. Accenture discovered a deal with “the human layer” that targets the weakest hyperlink – individuals – by means of phishing and malicious insiders.

Fintechs and banking: cybersecurity risk

The biggest monetary providers business knowledge breach occurred in September 2017 when Equifax, one of many three largest shopper credit score reporting businesses, uncovered the private data of 147 million individuals.

The breach was brought on by an unpatched Apache Struts vulnerability – Apache Struts being a framework on one of many firm’s US-based internet purposes. It noticed the names, social safety numbers, dates of beginning and different data being disclosed and resulted in a number of members of Equifax’s C-suite stepping down.

Comprehensive:  Cyber security world first as unique guide is launched

This was not at all an remoted incident. After Equifax, different vital monetary providers knowledge breaches have seen as many as 130 million, 90 million and 76 million individuals and households affected.

In a 10 December weblog, Be Secure: Cybercrime within the Monetary Providers Trade, Accenture outlined a cyberattack as “malicious exercise carried out in opposition to an organisation by means of the IT infrastructure by way of the inner or exterior networks or the web. Cyberattacks additionally embrace assaults in opposition to industrial management programs.”

Malicious insider assault, or threats from inside an organization’s firewall are probably the most harmful, it says, costing a mean of $243,000 per incident and taking greater than 50 days to resolve.

As to why that is regarding for banks and monetary providers establishments, Accenture present in its analysis that, within the banking and capital markets, solely 18% of Chief Data Safety Officers (CISOs) believed their staff to be held liable for cybersecurity.

Traditionally, banks and different organisations had one mission: to maintain cash and data protected from all. Past that, says Accenture, extra funding in stopping insiders from accessing knowledge or different data was by no means prioritised.

Know-how vs cyberattack

Modern and superior applied sciences will not be getting used to their full potential in cybersecurity purposes, Accenture finds.

For instance, it reviews that solely one-third of corporations are deploying applied sciences reminiscent of machine studying or AI, whereas solely 24% mentioned they have been utilizing cyber analytics and person behaviour evaluation to their benefit. The latter determine had truly decreased from 31% a 12 months beforehand.

See:  The Clearing House Releases Model Agreement For Sharing Financial Data

Accenture calls this development discouraging, noting that it “suggests monetary providers corporations are struggling to maintain up with the speedy tempo of latest applied sciences and, because of this, do not make the suitable investments to extend operations effectivity and cut back threat”.

As a result of the cyber risk panorama continues to diversify, extra targeted funding in the proper know-how will pay dividends.

Accordingly, it set out 5 key steps for monetary providers corporations to take to start corrective motion:

  1. Improve defenses in opposition to web-based assaults

  2. Give attention to lowering ransomware occurrences

  3. Make investments to forestall disruption to enterprise

  4. Improve the deployment of applied sciences which have a excessive return on funding, reminiscent of automation, machine studying and AI

  5. Handle the usage of ‘much less efficient’ applied sciences liek enterprise governance, superior perimeter management and the in depth use of knowledge loss prevention.

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NCFA Jan 2018 resize - Facing disaster, corporate venture capital to undergo key stress test 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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Eight virtual banks transforming Hong Kong’s fintech sector

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Fintech Magazine | By Matt High | March 31, 2020

Virtual banking - Facing disaster, corporate venture capital to undergo key stress testWe take a closer look at the eight innovative virtual banks that are digitally disrupting Hong Kong's financial services industry using technologies like AI, machine learning and Big Data

With a national GDP of $341.4bn, Hong Kong is a rapidly growing economy and a centre of innovation and digital transformation. The special administrative region's history is rooted in the financial sector due to its low taxation, legislation that favours free trade and a currency pegged to the US Dollar.

Despite the financial sector in Hong Kong being dominated by incumbents, it is seeing a rapid rise in fintechs, digital banks and new propositions that are driven by the latest technologies.

The rise of virtual banking

Last year the Hong Kong Monetary Authority announced that eight virtual banks had been selected to receive licenses to operate in the country. Below we look in more detail at those virtual banks.

Ant SME: A subsidiary of Ant Financial, the virtual bank is reportedly going to target the Hong Kong SME market, and is dedicated to providing inclusive banking solutions to smaller businesses in the nation’s economy.

Insight Fintech: A joint venture between smartphone brand Xiaomi and AMTD Group, with Xiaomi owning 90% of the company, Insight Fintech provides capital markets and advisory, asset management, insurance brokerage, and strategic investment services. According to a recent press release, the bank will use Xiaomi’s strong foothold in the IoT technology space to create modern, integrated banking solutions that are easier to use and more accessible than traditional alternatives.

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Fusion Bank: The Hong Kong challenger with the most impressive backing is Fusion Bank (originally branded as Infinium), which is a joint venture between Chinese giants Tencent and ICBC, with additional support from Hillhouse Capital. Fusion Bank is reportedly looking to provide a full-service virtual banking experience, particularly highlighting small-value deposit services to the under-banked. The bank’s service also won’t require any minimum account balance, or low-balance fees both to the general public and SMEs.

Livi VB: Another of Hong Kong’s new challengers banks to have backing from mainland Chinese financial giants, Livi VB is a joint venture by the Bank of China, JD Digits and Jardines. Worth an estimated $2bn, the resulting company has huge cash reserves behind it and plans to use cutting edge fintech solutions driven by artificial intelligence (AI), blockchain and Big Data to deliver a truly seamless digital experience comparable to some of the leading European virtual banks.

SC Digital: Backed by global finance giant Standard Chartered (alongside PCCW Limited, HKT and Ctrip Hong Kong) SC Digital is looking to corner the retail banking market in Hong Kong. In addition to standard digital banking solutions, the virtual bank is looking to offer retailers and shoppers better ways of spending and transferring money.

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NCFA Jan 2018 resize - Facing disaster, corporate venture capital to undergo key stress test 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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All businesses seeing 30% drop in revenue due to pandemic will be eligible for 75% wage subsidies: Trudeau

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CBC News | Kathleen Harris | March 30, 2020

justin trudeau funding for small businesses - Facing disaster, corporate venture capital to undergo key stress testPM warns of 'serious consequences' for companies that abuse the system

Businesses and non-profit organizations seeing a drop of at least 30 per cent in revenue due to COVID-19 will qualify for the government's 75 per cent wage subsidy program, Prime Minister Justin Trudeau announced today — adding that "serious consequences" await those who abuse the system.

During the daily media briefing outside his residence at Rideau Cottage, Trudeau said the number of people a business employs will not determine its eligibility. Charities and companies big and small will qualify, he said.

For those companies experiencing a decrease in revenues of at least 30 per cent, the government will cover up to 75 per cent of a salary on the first $58,700, which could mean payments of up to $847 a week. The prime minister also encouraged businesses to top up their employees wages with the remaining 25 per cent of their salaries.

Trudeau said the wage subsidies will be retroactive to March 15, 2020.

"We are trusting you to do the right thing," he said. "If you have the means to pay the remaining 25 per cent that is not covered by the subsidy, do it.  And if you think this is a system you can game or take advantage of, don't."

Trudeau said there will be measures in place to prevent exploitation but added that, in a time of "unprecedented" emergency, the government had to act quickly.

He said those who do take advantage of the program will face "stiff consequences" from society and the government.

See:  Neobanks Can’t Fight the COVID-19 “Flight to Quality”

The Canadian Federation of Independent Business (CFIB) said it's pleased the government appears ready to keep the administrative requirements light to ensure the money flows swiftly.

"We stand ready to support government with any retroactive measures needed to address anyone found cheating the intent of this or other support programs," says a statement from CFIB.

While more details on the wage subsidy program are "urgently needed," the CFIB said the approach announced by Trudeau today will give "significant relief" to tens of thousands of employers and hundreds of thousands of employees.

"The decision to make the wage subsidy widely available to employers of all sizes and structures is the right approach given the unique nature of the COVID-19 pandemic," the statement reads. "The wage subsidy is the single best measure to help Canada prepare for a quick recovery the minute the emergency phase of the pandemic is over."

Delivering 'economic life support'

Aaron Wudrick, federal director of the Canadian Taxpayers Federation, said that while abuse of the program is likely, the government has no option but to deliver "economic life support" during the pandemic.

"They're blunt instruments, drawn up in a rush, but because speed is of the essence right now, there's not much alternative," he said.  "As long as measures are temporary, tracked and targeted as best as reasonably possible under the circumstances, I think that's about the best we can expect."

Wudrick said the government also should consider broader tax relief measures to help people weather the emergency.

Conservative small business and export promotion critic James Cumming said he welcomed the details Trudeau provided today, but added questions remain about when businesses can apply and when funds will flow.

See:  Canadian small businesses are facing extinction amid lockdowns

"There are also still two more recommendations Conservatives have made that the Liberals must implement that would support small businesses and workers, including refunding all GST remittances to the small businesses that collected them in at least the last six months, as well as backstopping banks that extend low interest loans to small businesses," he said in a statement.

The Canadian Chamber of Commerce also called it a good move, saying that it will help avoid high unemployment and the devastation it brings to local economies, while also preparing big companies to ramp back up quickly after the crisis subsides.

The decision to extend the wage subsidy to all businesses also removes potential administrative burdens or delays that could be caused by confusion over what constitutes a small or medium-sized business.

Trudeau said the government also promised to guarantee loans of up to $40,000 for small businesses which will be interest-free for the first year, as a way to help businesses "bridge to better times."

Under certain conditions, up to $10,000 of the loans could be non-repayable.

Trudeau also announced that GST and HST payments, as well as duties and taxes owed on imports, will be deferred until June, which he said amounts to $30 billion in interest-free loans to businesses.

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NCFA Jan 2018 resize - Facing disaster, corporate venture capital to undergo key stress test 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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