By Gary Lessels, General Manager at HotDocs, Powered by AbacusNext
If you’re on autopilot, leave it to the computers…
The finance sector is highly regulated, with good reason. Since the economic crash over ten years ago, financial organisations have faced increased scrutiny and are constantly under pressure to perform both efficiently and ethically.
While it is vital that we meet these stringent requirements, our financial workforce’s productivity has been crippled as they become increasingly burdened by administrative and office management tasks. A report from Cerulli Quantitative shows that financial advisors can spend up to 41% of their time on these processes. That’s an estimated 2 hours per day spent on tasks that aren’t generating new income for the business.
It’s not just the financial sector. A staggering 90% of employees face dealing with repetitive tasks that could be easily automated according to SnapLogic. The average employee spends a third of their working year (more than 600 hours) on admin alone. In an industry as closely regulated as specialist finance, staff can spend an inordinate number of hours compiling and reviewing binding documents throughout the working week, consuming critical time they could be spending on other things which need considerably more brain fuel.
So how do we combat this problem? Embracing technological advances is key. There are many increasingly sophisticated technologies available to support our financial workforce by streamlining repetitive manual processes. This leaves employees with more time and energy to focus on tasks that require the human touch, such as creativity, innovation and client support.
Regulatory technology, or RegTech, is technology used to ensure organisations manage regulatory processes correctly and efficiently. Using real-time information, RegTech uses cloud-computing technology to help organisations remain fully compliant with regulations. Functions automated by RegTech include employee surveillance; compliance data management, fraud prevention, and audit trail capabilities.
The meteoric rise of FinTech has led to an exponential increase in the amount of customer data received. As we became increasingly reliant upon this consumer data to drive our digital offerings, it was apparent that we required sophisticated regulatory measures and technologies to ensure both consumers and organisations were protected and secure.
According to a survey by Intertrust, an overwhelming majority (85%) of financial services professionals predict that demand for RegTech solutions will continue to grow until at least 2020 to combat ever increasing regulatory pressures as the impact of the financial crisis shows no sign of abating.
Automated document generation
Automated document generation is the use of sophisticated template technology to create error-free documentation. This increases operational efficiency in document creation, reduces risk, enhances compliance and saves resources. It ensures that information contained within business-critical documents is accurate.
Regulatory lawmakers are notoriously fickle. Any time a governing body meet; the regulations are subject to change, which directly impacts the compliance of related legal documentation. In these uncertain times, as the unknown impact of Brexit remains at the forefront of our minds, it’s becoming increasingly difficult for experts to keep on top of every change. Fortunately, automated document generation can help stop us from making mistakes.
Implementing document automation software gives financial professionals confidence that they are consistently compliant. The software allows for legislation to be updated in one location, which in turn appears on all new documents created.
The use of this technology has also been adopted by many organisations trading internationally, such as global banks, as it ensures regional variables such as date format and currency are adhered to automatically.
Document accuracy is absolutely integral to business performance. Using a template-based format, without fear of non-compliance, standardises work practices and makes the process faster. Implementation of document automation technology in the financial sector can drastically reduce the time spent drafting, reviewing and finalising contracts by up to 80%, allowing the experts to focus on the job in hand.
Robotic Process Automation
An increasing number of financial organisations are using Robotic Process Automation, or RPA to support back office processes and time-consuming manual tasks that previously required human input.
RPA is the use of software with artificial intelligence (AI) and machine learning capabilities to handle high-volume, repeatable tasks such as calculations and maintenance of records and transactions.
This is especially promising for the financial sector. Capgemini reported that by 2020, the financial services industry could see up to $512 billion in new global revenues thanks to the implementation of these technologies.
RPA can have a huge impact on operational efficiency. For example, financial institutions process a high volume of customer service requests. RPA can help organisations automate the manual, repetitive tasks that fill the daily operations of customer service reps including updating records and order statuses. This is incredibly efficient as all information is automatically synchronised between systems, and cuts down on time clients need to spend answering queries.
RPA also enables financial organisations to improve their communication channels. For example, customers can request balance inquiries using text messages. As these daily repetitive tasks become automated, customer service representatives can focus on solving more complex issues, and develop more meaningful relationships with customers.
These advances in technology, and many others, have the potential to support financial specialists, enhancing their ability to focus on their jobs and deliver their business objectives by freeing them from the burden of repetitive administrative tasks. As a sector we must embrace technology in order to evolve and push forward with innovation.
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WILL BLOCKCHAIN REVOLUTIONIZE FINANCE?
By Ken Timsit, ConsenSys
Over the last 10 years, researchers, software developers, start-ups, and large companies have been conducting experiments aimed at determining whether networks based on blockchain technology can ultimately – in whole or in part – replace the infrastructure on which financial institutions and capital markets are built.
In today’s electronic databases, any information can theoretically be replicated at will. This is why most governments allow only regulated actors to keep records of digitized assets (banks, depositories), to avoid pitfalls such as the execution of misleading transactions or the creation of artificial assets. With blockchain, these pitfalls can be avoided at the source code of the technology, which is available to all members of the network. The creation of Ethereum enabled a more robust blockchain network capable of “smart contracts”, which once programmed, can run automatically without the results being modified or manipulated.
Contrary to what some critics argue, the potential of the blockchain is not the creation of a free and unregulated space in which everyone can invent new financial instruments. Rather, the potential lies in creating a much more efficient and globalized commercial and financial infrastructure, in which many layers of control and intermediation are no longer needed as they are replaced by transparent and immutable IT rules that ensure the same risk management functions.
For example, bonds are essential financial instruments on which a large part of our economy and savings are based. The issue and exchange of a bond requires the intervention of several dozen financial institutions (issuers, intermediaries and investors). Some regulated players in this intermediary chain exist mainly to ensure that it is possible to know, at any time, who holds each bond, in order to guarantee their rights to its bearers.
It is theoretically possible to simplify these stacks of operators by linking them to a global blockchain network, open to all stakeholders in the industry. The blockchain network can thus ensure at any time that the number of outstanding bonds corresponds exactly to the number of bonds issued, and that each exchange transaction is carried out without the risk of default.
The blockchain revolution is first and foremost the reduction of costs and delays caused by the current financial infrastructure. The blockchain revolution also creates innovation opportunities for consumers, savers, and investors.
The Web3 revolution, often used to refer to the blockchain revolution, will be driven by the reduction in transaction costs, allowing the emergence of new peer-to-peer business models that we are not yet able to accurately predict, but which will probably participate in a rebalancing of the relationships between financial institutions and their clients. Some international peer-to-peer payment and loan-to-peer savings investment models are already attracting increasing interest from the most sophisticated consumers.
Where are we in 2020?
Today, the blockchain revolution is still in its infancy. Transaction volumes through blockchain networks, public and private, are low compared to those of existing systems. The fixed costs of the technology are still relatively high, and the user experience leaves something to be desired.
However, innovations abound. It is already possible for me, from my smartphone, to buy digital assets whose value is equal to about one US dollar, and to lend them in three clicks to other users who will pay me between 1% and 10% per year for this service, depending on the type of platform.
The number of large operational business projects is still small, but very promising. Numerous international commodity trading players have joined forces to create Vakt and komgo, two platforms that contribute to a significant simplification of trade and oil financing. Similar and competing projects, Voltron and Marco Polo, are being launched. On the corporate side, the Capbridge 1x platform (Singapore) already allows shares to be traded on an Ethereum blockchain network. Other important projects such as LiquidShare (France), SIX Digital Exchange (Switzerland), Daura (with Deutsche Borse and Swisscom in Switzerland), Synapse (Hong Kong Stock Exchange) are in preparation. The World Bank, Société Générale and Santander have issued bonds on an Ethereum blockchain network. These initiatives are still experimental but have attracted significant interest from financial institutions around the world.
And of course, many projects aim to revolutionize global payments by creating digital assets on blockchain networks that are fixed in Euros, U.S. Dollars or other currencies, such as those of the Monetary Authority of Singapore, the South African Reserve Bank, and Union Bank of the Philippines. Since the announcement of the Facebook-initiated Libra project, many governments have expressed concern about the possibility of private companies controlling global payment flows, and have asked their domestic financial institutions to redouble their efforts to explore competing initiatives.
All of this is to say that adoption is happening, albeit gradually. The middlemen and intermediaries of the financial world will not be replaced overnight. Moreover, the exact formation or architecture of the new financial system is impossible to predict with accuracy. However, it’s safe to say that blockchain will enable a financial system that is more efficient and yields more value-add to consumers, users, and investors.
RECOLLECTING 2019 CRYPTOCURRENCY TRENDS & LOOKING FORWARD TO 2020
Marie Tatibouet is the CMO at Gate.io
It has been a bold and progressive year for the digital asset market with exciting announcements flowing in from technology behemoths and government bodies around the world. However, Facebook’s launch announcement of Libra (though they are now facing regulatory issues) and China’s new cryptocurrency law caught all the attention, affecting the Bitcoin price, and the overall market sentiment.
In 2019, the global market saw several catalysts emerging for mainstream adoption despite increased scrutiny around several burning issues such as wash trading and security breaches. For over 400 cryptocurrency exchanges in the world, being able to constantly improve on aspects around user experience and fund security is the only way to be sustainable. However, only a handful have real trading volume and technical expertise to build strong trust in the community. For instance, global wash trading has been the hottest topic of discussion in 2019 but new rankings on CoinMarketCap clearly indicate that the industry is working towards eliminating market manipulation.
Looking back at 2019
In 2019, digital asset organisations have constantly innovated to attract users but at the same time, the trading process has become increasingly fragmented, spiking the time gap between new users becoming long-term users.
Holding & Lending Funds
Since 2014, the Bitcoin margin trading market has expanded from $10 million to $100 billion. Margin trading has been a great use case in the cryptocurrency space. Many exchanges launched the feature to provide diversity to the trading experience and attracting a huge amount of users to the platforms. It allows traders to multiply their profits on successful trades, providing a range of possibilities for both profits and losses.
Staking is a process where users can buy digital assets and earn interest by keeping (holding) them in a cryptocurrency wallet for a particular period of time. It has proved to be a strong use case for digital asset companies as it encourages user participation. In 2019, staking programs brought stable earnings for cryptocurrency investments made by the users. For instance, HODL & Earn launched by Gate.io in August 2019 has been bringing stable earnings for cryptocurrency investments made by its users. The competitive advantage for HODL & Earn is its annual interest rate, which is as high as 32%.
Crowdfunding as an approach to build and grow products has seen a lot of traction over the last decade or so. One of the highlights this year was the emergence of “Initial Exchanges Offerings”, more commonly termed as IEOs, an alternative to traditional IPOs where companies can raise funds by selling a quantity of digital assets to investors, supervised by cryptocurrency exchanges. With over 1.5 Billion funds raised, IEOs shook the entire cryptocurrency space in 2019.
Owing to the richness and variability that we have seen so far, there has been no one clear winner to pick, but there’s also no ignoring the leaders; Gate.io has the second best average IEO returns, raising over 80 million dollars in its first 5 projects and has similar offerings panned out for 2020.
Deals and Discounts
Discount deals are being increasingly leveraged by digital asset companies, encouraging users to maximize their capital. Holiday seasons such as Black Friday are packed with jaw-dropping discounts. However, as an industry, we should aim to integrate discounts in digital currencies into the mainstream world, which would bring price stability.
Dynamic User Relationship
Cryptocurrencies are being taken seriously and companies are designing consumer-specific strategies. It is a great indication of the fact that more and more people are interested in trading digital assets. However, we have a long way to go when it comes to tackling the industry challenges and unlocking value for the entire ecosystem.
Regulation, Security, and Mass Adoption
Central banks of the US, Europe, China, and Ghana are looking at creating their own central bank digital currencies, putting a structure to the adoption of the blockchain technology across finance and other industry verticals. Japan’s recent regulation amendments, China’s new crypto law have laid the right frameworks for mainstream crypto adoption.
While we have major countries pushing for the mainstream adoption, security remains a major concern. Cryptocurrency thefts and frauds in Q3, 2019 annual stand at USD 4.4 billion and this will only increase if fund safety mechanisms aren’t strengthened. Therefore, the strongest will survive as far as digital asset security is concerned.
Nonetheless, blockchain technology is helping to create an innovative and accessible financial system around the world and its mainstream adoption is closer than we can fathom.
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WILL BLOCKCHAIN REVOLUTIONIZE FINANCE?
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