Connect with us

Finance

Three reasons to be optimistic about fintech in 2022

Published

on

Working related to fintech

by Stephen Lemon, Co-Founder and Vice President, Strategic Partnerships & Corporate Development at Currencycloud

 

It’s become cliched to point out the strangeness of the past few years, but it remains true. In the context of the past 24 months, making bold predictions for the next 12 might seem a bit foolhardy.

But while it’s not been easy, the financial sector has managed to perform well amid uncertainty. Perhaps most promisingly, fintech, an industry that exists to digitise, upgrade, and improve old and outdated processes, has thrived in an era of change and upheaval.

This progressive and reformist nature means that when the fintech industry does well, it brings others with it too – and fortunately, the industry looks to be in a strong position for the year to come. Here are three key reasons to be optimistic about the sector in 2022.

This year will be a tipping point for embedded finance 

2022 will be a big year for embedded finance, the term used to describe the act of companies (often non-financial ones) integrating financial products or services with their existing business. A bicycle retailer, for instance, may see bike sales as its main revenue source – but it could supplement this by offering bicycle insurance products as well.

But why will 2022 be such an important year? Two convergent trends point in this direction.

Firstly, we’ve seen fintech companies increasingly focus on developing services that are made available through APIs. An API is a code that lets two applications talk to one another, and in practice this allows businesses to easily integrate features like payments, credit, and insurance to existing applications or services their customers are already using – like making invoice payments through an accounting package, or trading stocks within your banking app.

The second is the unprecedented digitalisation we’ve seen over the past couple of years. This means there are now many more companies with a strong digital platform onto which they can bolt-on financial products or services.

If you also factor in the need for companies to identify new revenue streams in the wake of economic disruption, it’s easy to see why embedded finance is so attractive.

Niche fintech services begin to broaden their proposition

Over the past few years, companies from fintech subsectors like insurtech and wealthtech burst out of the gate in what you might call the great unbundling – niche providers offering a single, specialist service in insurance or wealth management, and not doing a whole lot else.

Increasingly, we’re seeing that logic flipped. In effect, the great unbundling has become the great re-bundling. Now those same specialists are beginning to broaden their offering – like wealthtechs that have won customers with a core proposition now providing other banking services.

Some forward-thinking industry commentators believe the future of financial services lies with companies that are best able to curate a selection of very high-quality services and APIs and offer them to customers – not necessarily the businesses who develop proprietary propositions.

This means many businesses that were once happy to sit alongside other niche providers are now vying for the same customers. Who wins will play a big part in deciding what the future of the fintech industry looks like.

Crypto mania to mask more interesting emergence of real-world DeFi applications

Few will be surprised if crypto continues to be red hot this year, despite inevitable continued volatility. Perhaps the most interesting aspect of this will be companies, governments, and other groups introducing more practical use cases for crypto and other forms of decentralised finance, or DeFi.

We’ve already seen growing support for Bitcoin as legal tender in Latin America following its adoption by El Salvador, a move derided by some but ultimately carried out as a play to tackle import-driven fluctuations in domestic prices.

We’ve also seen the UK government continue to make noises around the development of a British CBDC – a ‘Britcoin’. A relatively unproven concept, CBDCs are nonetheless a tantalising prospect to many: central banks could gain a razor-sharp monetary policy tool, quite unlike anything they have today, with the potential to apply different interest rates across different parts of the economy.

Of course, cryptocurrency is just one application of DeFi. By removing intermediaries and enabling finance to become an action taken up directly between two individuals, or indeed individual companies, DeFi could have massive implications for banks and other financial institutions, while potentially revolutionising everything from music royalties to contract law.

A year of optimism for the fintech industry

The past few years have been dominated by doom and gloom. Fortunately, there are reasons to be optimistic for 2022. What’s good for the fintech industry – whether a company that moves money around the world more easily, or one that helps businesses spot financial crime more easily – is often good for society too. I think that’s as good a reason as any to be optimistic for 2022.

 

Finance

astrantiaPay Selects SaaScada to Enrich Swiss Landscape of Business Payments and Fill Market Gap

Published

on

By

Swiss financial firm, astrantiaPay, to use SaaScada’s cloud-native core banking engine to simplify cross-border payments for SMEs and facilitate international trade and services across the old and new economies

 Cloud-native core banking engine, SaaScada, today announced it was selected by astrantiaPay to launch a Swiss point of contact for international businesses looking to open and run corporate bank accounts in Switzerland. Once regulatory approval is in place, astrantiaPay will provide mission-critical payment services to sophisticated Swiss, European, and global companies.

“Promoting SMEs is high on the agenda of policymakers, but the reality is very different when dealing directly with banks. In fact, financial institutions often show little or no appetite for low-margin, labour-intensive company accounts with regular cross-border payments”, explains Lukas Wissner, CEO of astrantiaPay. “As a result, opening and maintaining corporate bank accounts can become a complex and costly procedure, posing a real challenge for Swiss and European start-ups and established businesses. This can hinder growth, and sometimes even threaten a company’s existence. Ultimately, corporate bank accounts with a foreign nexus are an underserved niche segment in the Swiss financial ecosystem which is historically dominated by asset managers and private banking.”

SaaScada is an industry-proven core banking system that unlocks trapped customer value, mitigates risk, and drives real-time data insights. It was founded from a desire to provide first-class financial services capabilities for everyone. SaaScada’s configurable product features and transactional ledgers can be connected to any payment scheme, gateway, channel, or FX provider. Its event-driven architecture will provide astrantiaPay with a real-time stream of events for each company account.

“SaaScada’s experience and deep understanding of how to execute a bank in the Swiss financial and regulatory landscape convinced us,” concludes Lukas Wissner. “Looking back, SaaScada was the right starting point on our integration journey, as its experienced team of programmers readily enable open API connections to virtually any data source and endpoint; be it software tools for onboarding, client relationship management (CRM) and transaction monitoring (TM), or accounting systems, payment aggregators and international correspondent banks. Leveraging SaaScada’s proficiency and infrastructure has helped us create an organic whole.”

“Lukas Wissner and the team at astrantiaPay have a distinct vision to make bank account opening simpler for international SMEs,” explains Nelson Wootton, Co-Founder and CEO at SaaScada. “SaaScada is delighted to support astrantiaPay in driving financial inclusivity for its customers, solving complex compliance challenges, and enabling SMEs to thrive.”

Continue Reading

Banking

How Biometric Payments Are Tackling Financial Exclusion

Published

on

By Catharina Eklof, CCO, IDEX Biometrics

We are moving closer to a cashless society: 89% of payments in the UK are contactless and, globally, contactless payment transaction values are set to surpass $10 trillion by 2027. Ease, convenience, security, and inclusion have accelerated the transition away from cash. However, many of today’s current payment solutions are leaving entire cross sections of society behind: including the most vulnerable, underserved, and unbanked populations.

Developments in the payment sector over the past decade still aren’t a perfect fit for all. Those suffering from dementia, literacy challenges, or impaired vision can find current payment methods – with a PIN to remember – extremely challenging. Financial inclusion requires us to make payments accessible to all demographics. Though the financially excluded represent minorities, they account for an estimated 1.7 billion people – almost a third of adults globally.

Enabled by huge advances in technology, our evolving social dialogue has become accelerated and unfettered, on a global scale. It is critical to harness technology as a force for dynamic economic improvement: democratizing access to banking and payments. As such, we need to look beyond mobile wallets or digital payments and support those in need of easier access to payment and fintech solutions. A more inclusive form of payment technology is essential.

Catharina Eklof

 

Personal Identity as the New Pin Code

Many communities remain vulnerable or underserved by the functionality of traditional payment solutions such as bank cards. These products are, at their core, only linked to the owner by way of name and signature, offering limited security and protection. With contactless payments, no link whatsoever is required to a card for payment.

In an increasingly contactless society, fraud and digital security are growing concerns. Credit and debit cards can be used by anyone, and card readers don’t understand if cards have been apprehended illegally. Vulnerable groups may also struggle to input their credentials into what can be, for some, a complex system. Empowering those vulnerable groups therefore means providing them with the independence to access payments with greater ease.

Biometric payment cards play a significant role in bridging the gap between the financially underserved and the financially included. Simple and secure financial authentication, like facial or fingerprint recognition, allow payments to become about who a person is rather than what they know or remember. If individuals can be personally linked to a payment card via biometrics, it can address the significant 1.1 billion people worldwide who are currently without official government identification or access to it. In Nigeria alone, 149 million individuals lack the legal means to evidence their identity, while in South Africa, 12 million individuals are excluded from the country’s formal identity system.

Fingerprint authentication has the added benefit of optimizing security, in that it requires the individual to opt into a purchase, avoiding any issues of unauthorized or unintentional payments from having a reader placed near the card owner’s face. This provides increased independence for the blind and visually impaired, who account for an estimated 2.2 billion people globally, as it allows for seamless payment authentication without sensory barriers. Similarly, biometric smart cards can be transformative for more than 55 million people living with dementia and Alzheimer’s, as it enables access to payment without the difficulty of remembering passcodes.

Literacy is also a little talked about hurdle to inclusion. Globally, there are 750 million “functionally illiterate” individuals struggling to use and understand financial products. Across all levels of education, biometric authentication is a universally inclusive concept. It is easy to communicate and understand that one’s fingerprint is inherent to their identity, and can act as a form of verification. Biometric smart cards facilitate and secure payments with ease by simply requiring their fingerprint to instantly authenticate their own card.

 

Pushing on With Progress

Even the most reluctant individuals are likely to have succumbed to contactless payments and some form of digitized banking in recent times. This will have the positive impact of making the needed transition to biometrics more seamless. Using fingerprints or facial recognition to unlock phones or access apps is not unusual. If anything, they have been convenient and comforting additions to the surge of tech innovations over the last couple of decades. There is a relief in knowing that these portals are being secured by methods that are almost impossible to replicate.

It is a breakthrough that financial players and governments in the world’s most developed countries still need to catch up with, as emerging economies have already capitalized on biometrics’ capabilities for almost a decade now. In India, for example, internal fraud and leakage from pension payments dropped by 47 percent after transitioning from cash to biometric smart cards. Because the solution bypasses the need for prior credit ratings or credentials, the country has also been able to catalyze safe online banking among previously unbanked adults since biometrics’ introduction in 2014.

Meanwhile, in Pakistan, the total number of mobile wallet accounts tripled from 5 to 15 million in 2015, with an estimated 50 percent of new registered mobile wallet accounts opened using biometric authentication. This was a result of Pakistan’s National Database and Registration Authority’s (NADRA’s) effort of collecting biometric information to allow for more convenient and democratic account opening processes.

Many around the world have been marginalized by both the pace of change in banking and the solutions that have, to this point, been created to accommodate such change. With the mass adoption of biometric smart cards, the same benefits seen in India could be realized on a global scale. If we take on the opportunity in front of us – promoting solutions like biometric smart cards to increase accessibility to the global economy – we will foster a digitally-focused, equitable and inclusive society. This doesn’t just mean ease and convenience, but also security for all and financial inclusion of those who have been left out of digital evolution, until now.

Continue Reading

Magazine

Trending

News14 mins ago

Tata Motors partners with IndusInd Bank to offer exclusive Electric Vehicle Dealer Financing

Key Highlights:   One-of-its kind Electric Vehicle Inventory Financing program for Tata Motors’ dealers  Limits extended towards EVs will be over...

Finance25 mins ago

astrantiaPay Selects SaaScada to Enrich Swiss Landscape of Business Payments and Fill Market Gap

Swiss financial firm, astrantiaPay, to use SaaScada’s cloud-native core banking engine to simplify cross-border payments for SMEs and facilitate international...

Business14 hours ago

How Big Data is Transforming Bilateral Trading

By Stuart Smith, Co-Head Business Development – Data & Risk   Since its inception, Big Data has been an important...

Banking15 hours ago

Three tips to help banks profit from the rise of managed services

By Chris Mills, Global Head of Managed Services Sales, Finastra Research from IDC finds that only 29% of banks claim...

Banking15 hours ago

How Biometric Payments Are Tackling Financial Exclusion

By Catharina Eklof, CCO, IDEX Biometrics We are moving closer to a cashless society: 89% of payments in the UK...

Banking2 days ago

Poor software testing puts banks at high risk of IT failures

 Sune Engsig, VP Product at Leapwork   IT failures have plagued the banking industry for several years. From the TSB computer...

Finance2 days ago

The Importance of Experienced Customer Service Advisors in Finance

If there is one thing which can be said about the finance sector, it would be that as a customer-facing...

Business4 days ago

Financial Services Makes Gains In Employee Engagement

By Phil Chambers, GM Workday Peakon Employee Voice    A new report shows that the financial services industry improved in...

Business4 days ago

The FTX collapse: Lessons learnt for the CFO

Hartmut Wagner ,CEO of Serrala   ‘A complete absence of trustworthy financial information’ were the words used to describe the...

Business5 days ago

Black Friday, Cyber Monday and beyond: The inevitable shift to mcommerce

Arunabh Madhur, Regional VP & Head Business EMEA at SHAREit Group   Last year, we saw explosive growth in Black...

Business5 days ago

Keeping your options open and flexible: How to manage cloud migration for Financial Services Organisations

By Rachel Mcelroy, Marketing Director at Cloud Gateway   Financial Services Organisations, such as banks, insurance firms, and accounting firms,...

Business5 days ago

What makes a good entrepreneur?

By Emma Lewis, Myriad Associates Ireland   Many of us have dreamed of coming up with the next big thing...

Finance5 days ago

Things To Think About Before Starting Your Cryptocurrency Investment Journey

Making the decision to start investing can be an exciting time. Knowing that you’re going to be taking a more...

Banking5 days ago

How banks can increase customer acquisition and user engagement with sustainability

By Karolina Szweda, Head of Growth Marketing at Connect Earth Young people are demanding more innovation from traditional financial institutions,...

Banking5 days ago

The new blueprint for Open Finance? – A look inside the new Saudi Open Banking Framework

Chris Michael, Co-Founder & CEO, Ozone API   It has been a genuine privilege for all of us at Ozone...

Business6 days ago

How intelligent AP automation can put construction businesses on solid ground for growth

Cody Manning, NORAM Chief Sales Officer at Yooz   The ability to access personal emails, utility bills, invoices and other...

Finance6 days ago

Unlocking the power of AP Automation to tackle payment fraud in an economic downturn

Daniel Ball, SVP Innovation at Medius   Fraudulent activity in the workplace is not stopping any time soon. According to...

Business1 week ago

Why building trust in the workplace should be an employer’s priority

Emma Price, Head of Customer Success of ActiveOps discusses why managers should focus on workforce trust to negotiate the management...

News1 week ago

Times International and SaaScada partner to deliver innovative trade and commerce financial solutions

Global trade is forecast to increase between 30% and 70% by 2030, with 80% relying on trade finance. With traditional...

Top 101 week ago

Top 5 Holiday Season Fraud Trends

By Doriel Abrahams, Head of US Analytics, Forter With International Fraud Awareness Week and the holiday shopping season officially underway,...

Trending