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Web Scraping Evolves Financial Services Businesses

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Andrius Palionis, VP of Enterprise Sales at Oxylabs

 

There’s no secret that financial services organizations thrive off of information. Almost all business models in the sector rely on beating out the competition by finding out the most profitable investment or spending opportunities. As these are limited in supply, getting to the insights second or third means losing out on returns.

As a result, financial services companies are always on the lookout for ways to gain that sought-after edge, which is often discovered through data collection and analysis. These organizations employ many different methods, however, it hasn’t been exactly clear which are the most effective ones.

So, Oxylabs took it upon themselves to find out if there are some up-and-coming data collection methods, which data sources are the most valuable, and how the industry is shaping up. In cooperation with Censuswide, we surveyed over 1000 key decision makers in various financial services companies.

Andrius Palionis

Web scraping pushes the envelope

While web scraping (i.e., automated public web data collection) is relatively new, it has swiftly gained popularity, especially in ecommerce and finance industries. As the data collection method allows organizations to extract as much information as they need in real-time, it was seen as particularly attractive to these industries.

Exact data, however, was unavailable. Through our survey, we found out that web scraping has been strikingly successful. First, over a quarter (26%) of companies said that it has had the greatest impact on revenue out of all external data collection methods. Web scraping beat out:

  • Third-party traditional data aggregators (12%).
  • Manual data collection (12%).
  • Third-party alternative data aggregators (11%).

Even internal data collection, a method that has existed for eternity and has been optimized to no end, barely came out ahead of web scraping with 28% of participants thinking it as having the greatest impact on revenue.

All of these numbers in combination lead to one conclusion – web scraping has entrenched itself within financial organizations. It’s staying for the longer-term as well, as our further data has shown.

Companies move towards web scraping

Unsurprisingly, there have been a decent number of companies that have yet to implement web scraping or those that are just at the beginning stages of the journey. Going by our previous data, one could make the conclusion that web scraping is seen as valuable by relatively few.

Other questions in the survey, however, illuminated web scraping’s place in the industry. For example, nearly half of our respondents (44%) plan to invest the most into web scraping in the coming years. Clearly, a much larger part of financial services companies sees the method as highly valuable.

Putting web scraping’s best foot forward, however, is the shifting focus in these organizations. According to our survey, 80% of all respondents think their focus will shift more towards web scraping in the next 12 months.

Therefore, it seems reasonable to conclude that those who have implemented and optimized web scraping pipelines have already seen significant benefits. Others, however, are catching up. Clearly, the benefits outweigh whatever the costs may be and by a large margin.

Geographical differences

There are, however, some wide ranging differences in the way web scraping is understood between the US and UK regions. While web scraping has been dominant in both, there are some differences in how it’s utilized.

For example, US companies thought that web scraping is the dominant driver of revenue out of all methods while ones in the UK thought internal data acquisition was more valuable. Additionally, US companies were significantly less likely to outsource anything web scraping or compliance related, focusing more on internal management.

Finally, what we found most interesting is that the US is somewhat more enthusiastic about web scraping. Nearly nine out of ten (86%) participants thought that their focus will shift more towards web scraping in the coming 12 months. In the UK, on the other hand, while still many, fewer decision makers thought this data acquisition method will be in focus (74%).

Conclusion

Financial services companies hold all acquisition and analysis methods as closely guarded secrets. While some of them were publicly known and commonly utilized, their status and importance in the industry was still shrouded in secrecy.

Our survey outlines a few important trends that might be reflecting global initiatives. First, web scraping is experiencing a surge of interest. While not all companies might have implemented it yet, those who have are reaping the benefits and the competitors have taken note.

Additionally, the ROI on web scraping is extremely enticing. We have seen that it beats out either all acquisition methods or only falls behind internal data. Most notably, web scraping is still maturing technology, but it has already reached incredible heights.

As a result, we will inevitably see nearly exponential growth in the field as the technology becomes more optimized and accessible. A lot of troubles today, as evidenced by the rest of our survey, are due to the still developing legal contexts and the seemingly complicated nature of the technology. As these resolve, the data acquisition method will become irreplaceable.

Finance

Crypto’s tipping point

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Chris George, Senior VP of Product at Somo argues that Crypto needs to improve its scalability to be taken seriously

Cryptocurrencies are no longer the exclusive domain of high risk financiers or tech Bitcoin jockeys, willing to ride a niche and volatile asset for good or ill. Today, neobank and mainstream banking apps alike offer crypto banking, helping them trade in Bitcoin or Ethereum from as little as one dollar(https://www.revolut.com/crypto/).

Indeed, in September 2022, Finbold reported that British citizens had invested nearly £32bn in cryptocurrencies, and additional research from HMRC would have it that one in 10 UK adults has bought crypto, double the number from the previous year. 

But even given the legitimacy lent to crypto by the fact that now 50% of UK banks allow customers to interact with these currencies as well as other digital assets, how can the asset management industry turn it into a significant – and mainstream – asset, particularly in today’s turbulent economic climate? With the collapse of FTX, this must be taken into serious consideration. FTX was sold as being a safe and stable way to trade digital currency, alas this has not been the case. It turns out Sam Bankman-Fried seriously over-promised and dramatically under-delivered, gambling away customer assets and ultimately prioritising fraud and malpractice.

First, we need to acknowledge that not all crypto is created equal. Some, such as Bitcoin or Ethereum, do function as a currency, are limited in volume and therefore can increase and (as 2022 amply showed) decrease in value. But other blockchain-based crypto doesn’t behave like what most people commonly accept as currency at all. 

For there to be significant uptake in crypto as an asset, there is going to have to be a far broader and deeper understanding of what it is and what it can do. As Christophe Diserens, chief compliance officer at SwissBorg has suggested: “Value and useability are going to be key. Metcalfe’s Law has been used to value tech and internet stocks so why not crypto?”. That value took a bit of a beating during the recent sell-off and crypto’s perceived volatility will need to be addressed if it is to achieve scale. Because that’s what it’s going to need if it’s ever going to be considered as a legitimate global payment alternative in the future.

 

The role of The Merge

Not the latest B-movie, sci-fi flick, The Merge in September 2022 saw the world’s second-biggest cryptocurrency, Ethereum, move from a ‘proof of work’ to a ‘proof of stake’ protocol. This was nothing short of seismic. 

Proof of work is how the vast majority of crypto has been mined to date. People solving complex equations to validate transactions (the ‘work’) uses masses of computer processing energy, accounting for a significant slice of the world’s electricity consumption. In today’s climate (in both senses of the word), that’s just not on. 

Proof of stake, on the other hand, relies on far fewer ‘miners’, fewer computers and less energy as a result. This so-called ‘Merge’ is not only expected to reduce worldwide energy consumption by 0.2%, but also boost the crypto economy as a whole, creating more opportunities for investors and allow developers to build more products and applications on Ethereum. Ultimately, it could be what drives the decentralised internet of blockchain, crypto and NFT – Web3 – mainstream. 

What does this mean in the ‘real’ world? This could present a real opportunity for the financial services sector as a whole. It will change the way it operates, speeding up transactions, creating new business models and generally just making the whole thing a more efficient way of working. Fully cashless payments for business would be a real boon, given the costs and potential losses involved in transacting in cash. Digitisation also makes transacting an altogether more intuitive experience. 

One thing crypto and its associated technologies and solutions needs to be wary of is becoming a solution in search of a problem. For a truly mainstream breakthrough, the industry needs to make sure it’s bringing the consumer along on the journey. For end users to be truly confident in crypto, it has to benefit from the same levels of governance and regulation that cover the rest of the financial services industry, building and maintaining consumer confidence will be extremely important as trust levels have been shaken by the recent lack of solid administration and “irresponsible lending practices” leading to the FTX implosion . It has to be simple to transact, but with all the protections that investors have come to expect. It can’t afford to take them on another rollercoaster ride like 2022’s. 

While 50% of the UK’s banks may be getting on board with crypto to some degree, there is still a wide open ocean of opportunity for asset management players to realise value for themselves and their clients. It will involve some reshaping and more investment in digitisation to manage the assets of the future, whatever they may be. 

Somo, part of the CI&T family, will be publishing a report titled ‘Assessing the Crypto Conundrum: Will cryptocurrency ever be a significant trading asset and how can digitalisation shape its future?’ in 2023. 

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Skedadle to change the game for advertising with Currencycloud partnership

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Currencycloud, the experts simplifying business in a multi-currency world, has partnered with Scottish start-up app Skedadle to provide its users an easy, secure and seamless way to transfer money earned in-app while playing games on public transport.

Skedadle rewards travellers for the time they spend playing on-the-go. They can earn £2 per day simply for playing games on the move. That’s an extra £60 in their pocket each month. This can be done thanks to a disruption in the advertising market, by using algorithms to verify and track the users’ engagement with ads, proven to be higher while playing than in traditional online advertising, which increases product and brand recall for advertisers. Thanks to the partnership with Currencycloud, Skedadle users can use the app on public transport and be reassured that all financial transactions and financial data comply with the highest standards of security and validations.

By connecting to Currencycloud’s API technology, Skedadle has been able to integrate in their app a state-of-the-art payments ecosystem that seamlessly bulk settles the money earned from advertisers into a secure account and then processes withdrawals from users fast. At the same time, Currencycloud also sets the infrastructure that will enable them to grow both geographically in the UK and globally, by providing access to 38 currencies and low cost, fast FX rates.

Says Nick Macandrew, CEO and Founder at Skedadle: “Trust and security are crucial, especially when it comes to people’s money. As we rapidly grow our platform, we need a solution that can keep up with our pace and Currencycloud do just that. Our cutting-edge technology requires a secure, stable, and simple way of managing payments, whilst guaranteeing the best user experience possible.”

Nick Cheetham, Chief Revenue Officer at Currencycloud commented: “Backing bold start-ups from day one has always been part of our DNA. Skedadle’s creation of new revenue streams for travellers and advertisers alike is an exciting business endeavour. We are eager to see how the  platform can grow and disrupt the market by integrating our seamless payment capabilities.”

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