Big Canadian banks dismissive of potential risks from open data regime

https://bankautomationnews.com/allposts/retail/big-canadian-banks-dismissive-of-potential-risks-from-open-data-regime/

The big five banks of Canada faced questions about their preparedness for the risks of open banking during last week’s earnings calls, on the heels of news the ruling Liberal party would support a proposed road map for an open banking regime. Leaders at the $1.4 trillion Toronto-Dominion (TD) Bank, $1.3 trillion Royal Bank of […]

https://bankautomationnews.com/allposts/retail/big-canadian-banks-dismissive-of-potential-risks-from-open-data-regime/

Listen: Automation Anywhere expands support for citizen developer programs

https://bankautomationnews.com/allposts/cloud-computing/listen-automation-anywhere-expands-support-for-citizen-developer-programs/

Robotic Process Automation (RPA) company Automation Anywhere released several updates last week designed to support citizen developers, including a new citizens developer role license. Automation 360, the vendor’s cloud-based platform, will now offer a citizens developer role for business subject matter experts to create and run bots on their own desktops. The role incorporates automation […]

https://bankautomationnews.com/allposts/cloud-computing/listen-automation-anywhere-expands-support-for-citizen-developer-programs/

Sensibill and FreeAgent Team Up to Bring Automation to Small Business Expense Management

https://finovate.com/sensibill-and-freeagent-team-up-to-bring-automation-to-small-business-expense-management/

A collaboration announced late last week between a pair of Finovate alums will give small businesses new options when it comes to digital receipt and expense management.

Toronto, Ontario, Canada’s Sensibill, which won Best of Show for its FinovateFall demo of its digital receipt insights solution, has partnered with FreeAgent. The U.K.-based cloud accounting software company will combine Sensibill’s technology within its own new Auto Extract feature to help SMEs transition from manual expense management and receipt tracking to a modern, automated process.

“By joining forces with FreeAgent, we’re eliminating the time and money businesses have traditionally spent manually entering data into clunky and cumbersome spreadsheets and systems,” Sensibill Chief Technology Officer Danny Piangerelli said. “Instead, we’re delivering item-level details that enable faster, better expense management.”

Sensibill’s customer data platform blends ethically sourced, enriched SKU-level data with real-time, actionable insights to help FIs achieve personalization at scale. Integrated into FreeAgent’s Auto Extract technology, the technology enables businesses to capture, organize, and categorize their receipts digitally and accurately link them with corresponding bank transactions.

“Automation is at the center of our business,” FreeAgent co-founder and CEO Roan Lavery said, “which is why partnering with Sensibill was a natural choice.” Lavery added the collaboration will help increase satisfaction and engagement among customers while relieving SMEs and their accounting team from the “administrative hassles,” costs, and inaccuracies that plague most manual, expense management processes.

Founded in 2007 and making its Finovate debut in Europe in 2013, FreeAgent was acquired by NatWest five years later for $73 million (£53 million). The company currently has more than 110,000 small businesses, freelancers, and contractors in the U.K. using its technology for a variety of key business tasks – from invoice and expense management to project management and sales tax calculation.

With more than 60 million users across 150+ financial institutions in Canada, the U.S. and the U.K., Sensibill was founded in 2013 and has raised more than $50 million in equity capital. Founded by current CEO Corey Gross, the company has forged partnerships this year with fellow fintech CAARY, as well as with Maryland-based SkyPoint Federal Credit Union ($182 million in assets) and AbbyBank, a full-service community bank based in Wisconsin with assets of $616 million.


Photo by Karolina Grabowska from Pexels

https://finovate.com/sensibill-and-freeagent-team-up-to-bring-automation-to-small-business-expense-management/

Payments Platform Stem Launches Recoupment Feature to Improve Creator Visibility Into Royalties

https://thefintechtimes.com/payments-platform-stem-launches-recoupment-feature-to-improve-creator-visibility-into-royalties/

Stem, a distribution and payments platform empowering independent musicians and labels with tools to grow their business, has announced the launch of Recoup Rules, a tool that allows its clients to automatically track and recoup expenses before their splits are paid out on tracks and albums.

“Royalty accounting has been made to feel complex and burdensome. It scares most independent managers, artists and labels, to the point where they punt handling it so no one gets paid,” said Milana Rabkin Lewis, CEO of Stem. “Our goal was to demystify and streamline the accounting process. This is the latest step in our journey to modernise the music industry and give music business owners the tools, capital and technology to manage their operations more efficiently and on their own terms.”

Until now, the music industry’s opaque economic structure and inefficient payment systems left even the highest-profile artists unable to access or even track their earnings. For the first time ever, artists and their collaborators can now see the precise status of their recoupment progress when they log into their Stem accounts.

For example, if a manager paid $20,000 to produce a music video and another $30,000 in marketing expenses for a new project, that manager can create a Recoup Rule that will automatically recoup the $50,000 first before paying out the artist and their collaborators. Additional earnings greater than $50,000 will enter a reserve account for collaborators to review before ultimately being paid out according to the splits they set up.

In addition, clients will be able to:
● Recoup across multiple releases
● Recoup from external earnings such as sync, physical sales, vinyl, publishing, and more
● Enable dollar-one agreements and other deal types
● Provide collaborators with monthly recoupment updates;
● Control when recoupment ends and splits are applied to pay out royalties to all
participants.

“As a manager, it’s painful to be on the receiving end of ambiguous reporting from most labels related to costs my producer and artist clients stand behind,” said Tyler Henry, highly sought-after manager behind artists PARTYNEXTDOOR, Wondagurl, HARV, Los Hendrix, Nonstop da Hitman, and Peter Manos, “Now that STURDY, a multi-hyphenate creative company, is in the process of launching our distribution arm, we need to keep track of recoupment — but it’s such a tedious and expensive process. Having this streamlined now with Stem is crucial for our growth and success as a company that values transparency.”

“I’m an artist who buys a ton of cover licenses, but all of those expenses come directly out of my pocket. With Recoup, I’m now no longer losing that initial capital. I appreciate how clear and obvious it is for my shareholders to see when expenses have been recouped and when splits kick in,” said Alex Goot, singer-songwriter and multi-instrumentalist whose YouTube channel GootMusic has more than 800 million total views. “Transparency is what I like about Stem and what I’ve always liked about Stem.”

Recoup Rules are the latest step in Stem’s journey to revolutionise the music industry. Last year it introduced Scale – which offers artists and independent labels advances with the limit and fee based on their net share of income. Uniquely, Scale allows any of the content’s shareholders access to capital. Just a year later, Scale has received more than $60 million in requests from artists including Brent Faiyaz, Justine Skye, Billy Lemos and others.

  • Polly is a journalist, content creator and general opinion holder from North Wales. She has written for a number of publications, usually hovering around the topics of fintech, tech, lifestyle and body positivity.

https://thefintechtimes.com/payments-platform-stem-launches-recoupment-feature-to-improve-creator-visibility-into-royalties/

Rise of Alternative Payment Methods in Southeast Asia

https://gomedici.com/rise-of-alternative-payment-methods-in-southeast-asia

As we move into the last quarter of 2021 and countries worldwide continue to grapple with the pandemic, it is fair to say that COVID has impacted every industry. When nations closed their borders and mandated people to stay at home, digitization and technology adoption emerged as saviors. People had no option but to adapt to hybrid ecosystems consisting of work from home, online conferences, online classes, and digital communication and entertainment. The fear of virus transmission turned staunch supporters of cash economies into ardent believers of digital wallets and contactless transactions. As businesses went digital, people virtually purchased and completed financial transactions with a few clicks on their smartphones or computers. Businesses across sectors were forced to adapt and transition to a hybrid way of work and life, offering solutions via dedicated online platforms. However, no sector was as affected as the payments industry—it significantly ramped up capacity to cater to the burgeoning requirements of a slew of new and existing customers.

The pandemic has transformed the entire payments ecosystem—contactless transactions have come to the fore much earlier than previously anticipated. In Southeast Asia, the pandemic and several other factors in the years prior have led to the rise of alternative payment methods that are disrupting the financial landscape in the region.

Heavy Digitization and E-Commerce

Google’s e-Conomy Southeast Asia report suggests that the region’s internet economy will be worth approximately $200 billion by 2025. Further, considering the population’s affinity to the online medium, products and services are being devised with the intention of leveraging Southeast Asia’s ‘internet friendliness.’ With a majority of upwardly mobile and urban youth using alternative payment methods such as digital wallets and payment platforms, Southeast Asia is on the cusp of a financial transformation. According to a BCG report, 49% of urban consumers, who are also commercial bank customers, already use e-wallets in their daily lives. The report also projects that this number could touch 84% by 2025, further accelerated by the social distancing mandates necessitated by the pandemic. 

While digital payments have picked up strongly in other countries, the Southeast Asian ecosystem is still in its developmental phase, offering tremendous opportunities to innovative FinTech and payments startups. As one of the world’s most populous and economically dynamic growth zones, the region is expected to evolve into a heavily digitized economy in the near future. Research by ACI Worldwide and YouGov states that people today are as comfortable with real-time digital payments as they used to be with cash payments before the pandemic. Reportedly, 61% of the people surveyed in Indonesia, Malaysia, Thailand, and Singapore now prefer real-time payments. This number is also higher than the preference shown for digital wallets requiring cash or card recharges and credit cards. The report further states that about 30% of Southeast Asian consumers have lowered their use of traditional payments methods in the aftermath of the pandemic, indicating that COVID, indeed, catalyzed the paradigm shift in the region’s payments landscape.

E-commerce has proved to be another catalyst for this transformation. It has been witnessing steady growth and has, in turn, promoted the adoption of alternative payment methods. According to a research study, e-commerce in Southeast Asia has spiked because of the pandemic, with Indonesia exhibiting the biggest appetite for the online marketplace, followed by the Philippines and Malaysia. E-commerce offers customers myriad benefits, ranging from the safety of shopping from their own homes to the convenience of pay on delivery to easy return policies. The report states that Southeast Asia has a higher prevalence of e-commerce than mature economies, with Indonesia depicting the highest e-commerce adoption globally (at 87% as of 2020). Thailand and Malaysia followed close behind, with 84% and 83% of their respective internet users purchasing things online. Southeast Asia has been a late adopter of the internet, and most of the region’s population accesses e-commerce and digital payment methods through increasingly affordable and accessible smartphones. Indonesia also topped the list of the world’s largest mobile e-commerce users, with 79% of the country’s internet users having bought items online using a mobile device.

Low Penetration of Traditional Banking 

Southeast Asia has a large number of unbanked individuals who are more than keen to embark on an alternative payments journey given the lack of banking penetration in the region. According to a report, a majority of the population in Southeast Asia is unbanked, with about 73% or 470 million people unbanked as of 2020. This is an extremely high figure, indicating the low penetration of basic financial services in Southeast Asia compared to other regions. Cambodia is among the countries lagging far behind, with traditional banking services accessible to only 5% of the population. In the backdrop of such a landscape, the presence of digitally powered alternative payment systems is enabling Southeast Asians to enjoy the perks of banking services without having to access traditional structures. The growing payments ecosystem encourages financial inclusion while also accelerating growth and development for the economies.

One of the primary reasons for the lack of traditional banking services in Southeast Asia was the extreme dependence on cash before the pandemic. However, post-COVID, the hybrid landscape is showing a drop in affinity to cash. An ACI and YouGov report states that 61% of consumers in Indonesia, Malaysia, Thailand, and Singapore preferred real-time payments and cash payments equally. 

Popular Alternative Payment Methods 

The Southeast Asian payments landscape underwent a dramatic transformation in 2020. For the first time ever, growth in digital payment methods exceeded growth in credit and debit cards, indicating the rise in popularity of alternative payment methods. Contactless payments became the norm, and retailers began to accept payments from various in-person channels including touchless interbank transfers, mobile-based payments, and QR code payment methods. Experts expect the stickiness factor of alternative payments to persist, with few consumers likely to revert to cash once the pandemic is under control. Even though card payments did not make a significant mark in the Southeast Asian landscape, the lack of adequate banking penetration and widespread digitization has ensured an influx of alternative payment methods aimed at offering seamless and optimal services to the new-age customer. Alternative platforms such as e-wallets and microcredit platforms have grown in number and popularity, giving stiff competition to the more traditional financial players in the region.

Here’s how the payments landscape in some of the larger economies in the region looks like:

Singapore

Singapore is at the forefront of the alternative payments ecosystem. As per a report, the total transaction value in Singapore’s digital payments segment is expected to touch $11.2 billion in 2021, posting a 22.7% CAGR between 2021 and 2025 and reaching $25.4 billion by 2025. Further, according to a Visa survey, 66% of Singaporean consumers have now formed cashless payment habits, choosing to pay using cards or mobile apps. Major players in the country include CardUp, 2C2P, FOMO Pay, and Liquid Group. 

Malaysia

Malaysia is following close on the heels of Singapore when it comes to adopting alternative payment methods. A report suggests that 40% of the country’s use the technology. The top alternative payment service providers in the country are Boost, Touch ‘n Go, GrabPay, and PayPal. Boost is widely accepted at over 140,000 locations. According to the Global Payments Report by Worldpay and FIS, 14% of all e-commerce payments in Malaysia were made using digital/mobile wallets. 

Indonesia

Indonesia is at the forefront of digital adoption in Southeast Asia. According to reports, Bank Indonesia stated that the value of electronic money transactions reached $13.95 billion in 2020, depicting a 38.62% growth year-on-year. GoPay and OVO are the major contenders among digital wallets with the highest number of active monthly users. Dana and LinkAja have gained traction in recent times. According to the Global Payments Report by Worldpay and FIS, digital/mobile wallet was the most preferred payment method for e-commerce transactions.

Cambodia

With COVID cases seeing dramatic spikes in Cambodia, the country’s central bank and the Microfinance Association have urged people to limit the use of cash. As per a recent report, as of 2020, the adoption rate of digital payments in Cambodia was 40%. Popular alternative payment methods include TrueMoney Cambodia, Ly Hour Paypro, Pi Pay, and SmartLuy. 

Thailand

Since the pandemic broke out, this Southeast Asian country has recorded strong growth in digital payments and alternative payment channels. As per a recent Reuters report, Thailand’s digital payments in February 2021 surged to double the volume in the year-ago period, with the number of transactions made via the PromptPay platform averaging 22.3 million per day. Major digital payment players are Pay Solutions, Bangkok Payment Solutions, SiamPay, and 2C2P.

“At FIS, we are seeing a marked shift toward the acceptance of alternative payment methods (APMs) in Southeast Asia driven by innovative, frictionless solutions being offered. Regionally, FIS is supporting our clients to enable various APM options, facilitating a true omnichannel experience—be it local real-time payment schemes or domestic debit schemes, including closed-loop channels. For instance, riding on the digital payments trend, we recently enabled an innovative wearable payments product launch in the Japan market. In the near future, we see a substantial opportunity in providing avenues to connect these locally prevalent APMs in the cross-border scenario, helping to take adoption to the next level.” 
– Kanv Pandit, Group Managing Director, Asia Pacific, Banking Solutions at FIS

With the catalyzing effect of the pandemic and Southeast Asia’s affinity to digital services, there is no doubt that the underbanked region is primed for an alternative payments revolution. While the pandemic will wind down going ahead, the future is certainly bright for the rising digital payments market in the region.

https://gomedici.com/rise-of-alternative-payment-methods-in-southeast-asia

WorldRemit on How the UK Tech Sector Supports Global Digital Education With Coderoots and Codebar

https://thefintechtimes.com/worldremit-on-how-the-uk-tech-sector-supports-global-digital-education-with-coderoots-and-codebar/

Ahead of International Day of Charity on September 5th, cross-border digital payments service, WorldRemit, recognises two non-profit organisations that are championing digital education worldwide to inspire others to use their skills for good.

Coderoots, a non-profit founded by Zaira Rasool, Software Engineer at WorldRemit, is dedicated to creating sustainable solutions to digital access and tech education for young talent in Africa. The charity was recently awarded £5,000 through WorldRemit’s Catherine Wines bursary, which was created in memory of the late co-founder of the fintech company.

Speaking on how she has used her skills in software engineering to create positive change globally, Zaira said: “Coderoots is made up of a diverse group of people with different roles and skillsets across tech, business and nonprofits, but we all share the same value and mission: to create opportunities and develop tech in the places that have least access to basic technology.

“Skills like coding are a powerful tool for social mobility. I myself was able to take advantage of this after being awarded a fully-funded place to attend my coding bootcamp, which would have otherwise been unaffordable. During COVID, we have seen how essential access to technology is for all aspects of life, and that those working in tech are the privileged few who hold the knowledge to create the change that is needed. It is therefore our responsibility to create that change.

“One thing we really champion at Coderoots is the value of mentors. We provide mentorship to young people and staff in The Gambia, offering them the chance to connect with someone who can help teach them valuable skills that they can use to create long-term change in their communities. All you need to do to be a mentor is have the time to dedicate each week, along with a passion for helping others to learn and grow, so it’s a really accessible way of using your tech skills for good. And for those who are really keen – you can visit The Gambia to support developing exciting new tech ideas we have brewing!”

With years’ of experience working within grassroots organisations, Zaira found a love for coding after attending workshops with codebar, a charity that runs coding workshops for under-represented communities.

Having started in London in 2013, codebar now has 28 chapters worldwide, including groups in Nairobi, Shanghai and across America.

Kimberley Cook, Director at codebar, shares how nonprofits and charities are driving positive changes in tech worldwide: “Several years ago ‘tech’ was just considered to be websites. Now it is everywhere you look – cars, hoovers, TVs – even fridges and washing machines.

“The technology industry is moving at such a fast pace, so the demand for developers is incredibly high. But, the barrier to entry is still hard to overcome. That’s why charities like codebar are allowing adults to access free programming workshops without having to commit to a degree or bootcamp, which are time-consuming and costly.

“Everyone has a skill that a charity or non-profit could benefit from. Whether it’s designing, marketing, illustrating, copywriting or social media. I encourage everyone, regardless of age and profession, to find a cause or charity whose mission and work aligns with their interests, and get in touch. Start with a simple email outlining your skills and desired level of commitment and soon enough you’ll be on your way to making positive change in the world.”

  • Polly is a journalist, content creator and general opinion holder from North Wales. She has written for a number of publications, usually hovering around the topics of fintech, tech, lifestyle and body positivity.

https://thefintechtimes.com/worldremit-on-how-the-uk-tech-sector-supports-global-digital-education-with-coderoots-and-codebar/

Is Tik Tok the Key to E-commerce? Hatch CEO Discusses the Boom of Social Commerce

https://thefintechtimes.com/is-tik-tok-the-key-to-e-commerce-hatch-ceo-discusses-the-boom-of-social-commerce/

Social commerce is booming, and the importance of incorporating it into a well-rounded omnichannel sales strategy has never been more urgent, according to Joris Kroese, CEO and Founder of global omnichannel commerce solutions provider, Hatch. Here he shares his thoughts on social media in commerce. 

Joris Kroese, CEO and Founder, Hatch

Defined as the utilisation of social media platforms to promote, sell, and purchase products and services, social commerce was catapulted to the forefront last year, amid the onset of the COVID-19 pandemic. When retail shuttered, customers shifted to shopping online rather than in-store. Social media usage also accelerated, and brands quickly recognised the potential for increased sales via their social channels.

As a result, the UK saw a 95 percent increase in social commerce sales during 2020, while the global social commerce market generated approximately $474.8 billion (£374.8 billion) in revenue in 2020. The trend acted as a liferaft for many brands struggling with the closure of retail, and social commerce has proved itself to be a valuable, if even crucial, sales channel ever since.

In my opinion, for a brand to achieve sustainable success it should recognise that no one sales channel should be prioritised over another. A strong omnichannel strategy remains the most effective and sustainable way of maintaining customers and increasing sales. Omnichannel means that each sales channel works together in harmony, creating a sense of cohesion across the brand and enforcing a seamless cross-channel sales experience. Last year, PwC found that the number of companies investing in omnichannel experiences increased from 20 to over 80 percent. Given that 40 percent of customers say that they won’t do business with companies if they can’t use their preferred channels, it seems clear to me that operating sales channels in competing silos is clearly no longer a sustainable option. For brands considering investing in social commerce, it is essential for them to question how best it can be incorporated into a healthy omnichannel strategy, rather than how it can compete with any other sales channel in particular.

Seamless path to purchase

For a true omnichannel experience, I believe a brand should interlink each channel with the intention of enhancing the buyer’s journey. A prospective customer should be able to check stock on the company’s website, make an order for delivery, or reserve a product for collection in-store. An omnichannel strategy that has integrated social commerce should create a seamless path to purchase for consumers browsing the company’s social media profiles. It is important that brands ensure their content across all channels is interlinked and not competing with one another, especially given that many consumers often look to social media for further insights into the brand itself, or the product they are considering purchasing. This is backed by research indicating that 84 percent of shoppers seek additional insights on social media before making their purchase. 

The last year has proven that incorporating social commerce into an omnichannel strategy has the potential to increase overall sales and enhance a company’s brand in the process.  In fact, as social commerce flourished last year, so too did omnichannel retailers, marking a 40 percent growth rate in 2020. Despite the clear benefits of the omnichannel experience, many companies struggle with striking the right balance in their transition from working in silos. In this respect, I think AI technology offers solutions that deliver the invaluable insights a company may need to get their new omnichannel strategy off the ground.

Harnessing the insights of AI-powered Where to Buy solutions can solve these pain points and enhance the brand’s omnichannel experience, making every touchpoint an opportunity for purchase. By using Hatch’s Where to Buy solution, even a chatbot could be integrated into the omnichannel strategy and offer another sales opportunity. 

For me, a well-rounded omnichannel strategy like this prioritises the consumer experience above the channel profit, ultimately concentrating on overall profit. Integrating social commerce should be considered in the same way. Social channels enhance the brand and connect with customers, but most importantly they should appear in harmony with the other sales channels available. When every aspect of the buyer’s journey is considered, each channel can truly work together for the overall benefit of the company’s sales. 

  • Polly is a journalist, content creator and general opinion holder from North Wales. She has written for a number of publications, usually hovering around the topics of fintech, tech, lifestyle and body positivity.

https://thefintechtimes.com/is-tik-tok-the-key-to-e-commerce-hatch-ceo-discusses-the-boom-of-social-commerce/

Nearly Half of All Transactions to Be Contactless by the End of 2022

https://thefintechtimes.com/nearly-half-of-all-transactions-to-be-contactless-by-the-end-of-2022/

Contactless spending is expected to account for almost half of all transactions by the end of 2022 (47%), as it becomes the most popular payment method for the first time, according to new research.

The VoucherCodes.co.uk Life after Covid: Prospects for online retailing, physical stores and how we pay report, carried out by the Centre of Retail Research (CRR), examined the pandemic’s effect on the way UK shoppers pay for goods.

The study shows that pre-pandemic in 2020, chip and pin was the most popular payment method, accounting for over a third (37%) of all transactions in the UK. During the same period, only 17% of all payments made were contactless. However, between 2021-2022, chip & pin payments are forecast to decline to just 25% of all purchases and cash payments will see a sharp decline, accounting for just over a tenth (11%) of all payments by the end of 2022.

The switch, which will constitute a 30% increase in contactless payments from pre-pandemic to the end of 2022, was accelerated by changing consumer and retailer behaviour when it comes to paying for goods during Covid-19. Shoppers swapped cash for card for hygiene reasons, many retailers also stopped accepting cash altogether, and the contactless payment limit increased from £30 to £45.

Looking ahead to next year, card payments are expected to account for almost three quarters (72%) of all transactions.

Anita Naik, Lifestyle Editor at VoucherCodes.co.uk, commented: “Covid-19 has forever changed the way consumers spend their money. With exponential increases in online orders during the pandemic, combined with increased contactless limits and retailers implementing cash bans, people have quickly adapted to relying on contactless payments for the bulk of purchases as a result.

“It remains to be seen whether the government will amend laws relating to legal tender, enabling retailers to permanently refuse to accept cash if they wish.

“Ultimately, only time will tell, but in the immediate future, whereby cash was once key, contactless is our future.”

  • Polly is a journalist, content creator and general opinion holder from North Wales. She has written for a number of publications, usually hovering around the topics of fintech, tech, lifestyle and body positivity.

https://thefintechtimes.com/nearly-half-of-all-transactions-to-be-contactless-by-the-end-of-2022/

Aviva Calls for Online Safety Bill to Include Financial Scams as Low Consumer Trust in Online Ads

https://thefintechtimes.com/aviva-calls-for-online-safety-bill-to-include-financial-scams-as-low-consumer-trust-in-online-ads/
Aviva is calling for greater consumer protection from online financial fraud by urging government to include financial scams promoted by paid-for adverts in the scope of the Online Safety Bill.

The Aviva Fraud Report – which launched today and investigates fraud and financial scams relating to pensions, savings, investments, and insurance – has found consumers have low trust in the internet as a tool for shopping for financial services.

More than half of internet users (53%) don’t trust that the adverts on search engines are placed by a legitimate financial services company or provider. And more than half (56%) don’t believe that search engines verify the authenticity of the financial product, service, or provider that they allow to be advertised on their platform.

Of those, there is a significant difference in trust by age. Those over 55 were much less likely to trust the results of a search engine than those aged 16 – 24; only 29% of over 55’s compared to 59% of 16–24 year olds.

Rob Lee, Director of Fraud Prevention at Aviva, said: “There is a clear mistrust of financial services adverts online. However, there is no legal responsibility for technology firms to verify the legitimacy of the companies which pay them to publish adverts on their platforms. This potentially leaves millions of internet users exposed to unscrupulous adverts.”

Consumers are clear that more needs to be done to protect them from financial harm online. Almost nine in ten people surveyed (87%) think government should legislate to ensure search engines and social media sites do not mislead consumers or promote financial scams. And 85% of people think search engines should be responsible for advertising content on their platforms so that it is not misleading.

Lee continued: “We believe the Online Safety Bill presents an opportunity to protect financial services consumers at every stage of their online journey. We welcome the recent inclusion of user-generated fraud – such as that promoted on social media sites – within the scope of the regulatory framework. We support the financial services industry in calling for the legislation to include financial scams promoted by paid-for adverts.”

Covid has accelerated the need for action

Lockdown has transformed spending habits in the UK and accelerated adoption of the internet, with half (50%) of people saying they used the internet more – either significantly or a little – to search for products and services over the last year.

While the types of financial scams are generally the same as those before the pandemic, coronavirus has been used as the hook to lure victims. Being in lockdown has meant more people using the internet to search for, and buy, financial services and products.

Lee said: “The challenges posed by lockdown conditions has shifted the mindset of millions, opening the door to more people buying financial services and products online. While this brings opportunities for making it easier to buy products, it does also open the door to fraudsters looking to prey on the vulnerable.”

The scale of fraud has accelerated through the coronavirus pandemic, which has resulted in a deluge of opportunities for fraudsters over the last year. Aviva’s research found two-in-five (42%) people have been targeted by a covid scam. This is a 91% increase over the last year in the number of people who reported receiving emails, texts, phone calls and other communications mentioning coronavirus, and which were suspected to be a financial scam.

“It’s clear we’re a long way from the Government’s commitment to making the UK the safest place in the world to be online,” concluded Lee. “The current online environment combined with challenging economic conditions and increased financial strain on consumers is creating the perfect storm for fraudsters to exploit the most vulnerable. Government must act quickly to protect more consumers from becoming the victim of online fraud, by ensuring financial scams are included in the Online Safety Bill.”

  • Polly is a journalist, content creator and general opinion holder from North Wales. She has written for a number of publications, usually hovering around the topics of fintech, tech, lifestyle and body positivity.

https://thefintechtimes.com/aviva-calls-for-online-safety-bill-to-include-financial-scams-as-low-consumer-trust-in-online-ads/

Kroll Finds AML Enforcement is Not Slowed by Covid-19

https://thefintechtimes.com/kroll-finds-aml-enforcement-is-not-slowed-by-covid-19/

Kroll, a provider of services and digital products related to valuation, governance, risk and transparency, has published new data showing that the COVID-19 pandemic has not stunted global enforcement action for anti-money laundering (AML) failings.

The findings come from the company’s annual Global Enforcement Review 2021 which shows that, globally, 45 fines for AML failures were issued in 2020, the same as in 2019. Moreover, the first half of 2021 seems to be following suit, with 17 fines issued between January and July this year, just under half of 2020’s year-end total.

Despite the consistency in the volume of fines issued, the total value of AML enforcement has rocketed, reaching $2.2 billion at the end of 2020, which is five times higher than in 2019 and over two-thirds of the record levels recorded in 2018 ( $444 million and $3.3 billion, respectively). Similarly, the total value of AML fines as of June 2021 is nearly half of the 2020 total, standing at 994 million.

Claire Simm, Managing Director, Financial Services Compliance and Regulation at Kroll, said: “The figures show that investigations were not paused for COVID-19. While the number of fines remained constant, the value of fines surged as regulators imposed tougher penalties, continuing to send the message that despite any obstacles, enforcement remains a top priority for non-compliant behaviour.”

Key failings

Kroll’s report also highlights the four key AML failings from 2016-2021 that regulators across the world have consistently identified through the fines they imposed:

· AML management (124 cases)

· Suspicious activity monitoring (98 cases)

· Customer due diligence (94 significant cases)

· Compliance monitoring and oversight (57 cases)

Simm continued: “Despite the increasing value of fines and consistent enforcement from regulators worldwide, we still see the same key AML failings being sanctioned. This year, the FCA launched criminal proceedings against a bank for inadequate AML systems and controls. Interestingly, a separate bank was fined GBP 102 mn by the FCA in 2019 for the same AML failings.

“The FCA’s decision to exercise its criminal powers is the first of its kind in the UK and a clear warning from the regulator that compliance failures will not be tolerated, on top of the already significant deterrents of mega-fines and reputational damage.”

Global breakdown

Over the past 18 months, a number of global regulators have joined the US in imposing significant fines for AML failures. In 2020, Australia imposed the greatest proportion of the global total (41%), followed by Sweden and Hong Kong. The Netherlands is currently leading the way in 2021, accounting for 59% of the total value of global fines to end of June 2021 following a single fine of $582 million.

Simm concluded: “These fines show that across the world, regulators continue to put high importance on financial crime enforcement. We can expect to see mega-fines and criminal enforcement continue through 2021 and beyond.

“Domestically, a lot of attention is focused on how the FCA will assert its regulatory powers post-Brexit. We expect the UK’s Sanctions and Anti-Money Laundering Act 2018, which came into force following Britain’s exit from the EU in December 2020, to lead to greater levels of enforcement action in the future.”

  • Polly is a journalist, content creator and general opinion holder from North Wales. She has written for a number of publications, usually hovering around the topics of fintech, tech, lifestyle and body positivity.

https://thefintechtimes.com/kroll-finds-aml-enforcement-is-not-slowed-by-covid-19/

Lightning Network grows as Bitcoin rises

https://dailyfintech.com/2021/08/30/65333/

With bitcoin’s value rising again, the adoption of the Lightning Network is also on the rise. The Lightning Network is a second layer on top of the Bitcoin blockchain, that enables private payment channels to be established between users. The Lightning Network has experienced continued growth at an increasing rate, in the number of nodes, the number of channels, and network capacity over the past several months. For the first time, the Lightning Network has exceeded 25,000 active nodes, indicating that the network is becoming more powerful. Since July, the number of channels has increased to 65,323 and expanded their capacity by roughly 78%, from 1,800 to over 2,379 BTC, based on data from 1ml.

Ilias Louis Hatzis is the founder and CEO at Kryptonio wallet. Please participate in our Crypto Wallet Survey, we could use your help. It’s 7 simple multiple-choice questions about crypto wallets and you should be done in 60 seconds. The survey is completely anonymous.

Today, Bitcoin is seen by retail investors and financial institutions as a store of value. However, bitcoin can do much more than that. On top of Bitcoin, Lightning Network is a second-layer solution built on top of bitcoin that makes it possible to transact faster and cheaper.

Lightning enables users to open payment channels between two or multiple parties. Users on the Lightning Network can set up nodes, that send payments via the quickest routes between parties. A node operator gets a small fee for each transaction. Transactions are much faster, as parties can transact with each other without everything having to be approved by nodes.

The adoption of the Lightning Network is accelerating rapidly, with the number of active nodes doubling in the last year. Kraken was one of the first exchanges to add Lightning support, but Strike is the company that brought Lightning Network to the mainstream. Strike is now available in El Salvador, with EU adoption planned soon.

International remittance is a multibillion-dollar business, but processing costs restrict how much money individuals can transfer. Due to increased transaction fees with traditional remittance providers, bitcoin and Lightning Network offer a quicker and cheaper way for people to send money. El Salvador could become the biggest user base Lightning Network, easily processing thousands or hundreds of thousands of transactions instantly. The use of Lightning Network in El Salvador represents a huge test and will serve as a catalyst for other remittance-dependent countries to adopt bitcoin and Lightning Network.

But Lightning Network will also help people around the world realize what bitcoin can do as a network, not just an asset, and actually transact with it.

Lightning could help change the internet’s ad-driven model and serve as the de facto payment method to access services and resources on the web. A week ago, Substack announced that its 500,000 paying subscribers will now be able to pay using bitcoin using the Lightning Network. This is a very significant step for content creators. In the future, we may be able to send micropayments to read individual stories, instead of subscribing to a publication. There have also been talks that Twitter may integrate Lightning payments to tip the users for useful information.

Lightning messaging protocols could offer more private and foolproof encrypted communications, free from censorship or centralized control. Joost Jagers, a Dutch developer, has been working on a messaging application called Whatsat. This messaging app is completely built on top of the Lightning Network and allows people to transfer messages. These messages are end-to-end encrypted. Sphinx is another example of a chat app that uses the payment rails of Lightning to send text messages,

From an investment standpoint, Lightning Network has the potential to transform bitcoin, and investors can earn a lot of money. As this technology becomes widely used, people who invest in bitcoin today may realize substantial profits over time as bitcoin finds more use cases and becomes more valuable.

Although the Lightning Network has experienced growth and development since its inception, challenges remain. “Watchtowers”, a much-anticipated next step for securing the network, will be released in the next version of the Lightning Network to fight fraud. When someone uses Lightning, it’s necessary to remain online to make sure their counterparty isn’t trying to steal those funds. The watchtower “watches” for old states to be broadcast, so if a bad actor tries to broadcast an old transaction, to give themselves extra money, the watchtower responds by punishing that bad actor.

Obviously, we are still talking about a technology that is under development, but with the potential to revolutionize not only how we send money, but also that of content, messaging, and much more.

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https://dailyfintech.com/2021/08/30/65333/

The Nordic FinTech Ecosystem – Sweden

https://gomedici.com/the-nordic-fintech-ecosystem-sweden

The Nordic financial landscape is no stranger to FinTech-powered disruptive technologies and innovations. As per a Deloitte report on the Nordic FinTech ecosystem, the region has seven banks, each with balance sheets exceeding EUR 100 billion, indicating the tremendous growth potential of the region. The underlying statistics and scope for scalability imply a rapid influx of FinTech players in the Nordic financial ecosystem even though incumbent stakeholders are overwhelmed by sluggish economic growth and fast-changing regulatory norms. The factors dampening the traditional financial ecosystem are, in fact, lending a helping hand to disruptive FinTech players that are making the most of a dynamic financial landscape in the Nordic region, especially Sweden.  

Major Sectors Experiencing FinTech Revolut …

https://gomedici.com/the-nordic-fintech-ecosystem-sweden

FinTechs Enabling the Credit Building Landscape

https://gomedici.com/fintechs-enabling-credit-building

Imagine you wish to purchase a car on loan. However, this is the first time you have considered taking a loan. Till now, all your purchases were paid up front, and you never opted for easy monthly installments. How do you assure the loan provider that you are not a credit risk when you do not have a credit score? Enter credit-builder loans. These loans offer the uninitiated a chance to build a loan repayment record, thereby enabling easy loan access.

Credit-Builder Loans – An Introduction

Credit-builder loans help people who have little or no credit history build a credit record. Good credit scores not only open up the world of credit cards b …

https://gomedici.com/fintechs-enabling-credit-building

The Rise of Open Banking Standards in the United States

https://gomedici.com/the-rise-of-open-banking-standards-in-the-united-states

Last month, US President Joe Biden issued an executive order aimed at the consumer financial services industry. The order encourages the Consumer Financial Protection Bureau (CFPB) to issue regulations under Section 1033 of the Dodd-Frank Act. The Act governs financial data access rights for customers of FinTech firms and banking institutions, and the executive order is in line with the US’ aim to encourage Open Banking standards.

Open Banking – An Introduction

Previous administrations kept US banking as a relatively closed ecosystem—banks and financial institutions served as gatekeepers that controlled account information and other customer-related data. However, with an uptic …

https://gomedici.com/the-rise-of-open-banking-standards-in-the-united-states

Using Phone Intelligence to Fight Social Engineering

https://gomedici.com/using-phone-intelligence-to-fight-social-engineering

Digitalization has made it easy for fraudsters to manipulate individuals to gain access to sensitive data or bank accounts. Today, scamsters execute fraud using far more subtle and effective methods such as social engineering techniques that target humans through multiple social interactions.

Phishing, vishing, smishing, pharming, Business Email Compromise (BEC), and Email Account Compromise (EAC) are commonly used social engineering methods. Here’s how these techniques work:

  • Phishing: Fraudsters pose as executives from reputable firms to send emails to working individuals asking them to reveal personal information such as passwords and credit card numbers.

  • Vishing: These are phishing techniques that use voice calls or messages purporting to be from reputed companies to mislead individuals into sharing personal and financial information.

  • Smishing: Fraudsters send text messages from credible-looking sources to retrieve personal information from unsuspecting individuals. Smishers leverage this technique to retrieve SSNs, credit card numbers, and passwords.

  • Pharming: Swindlers redirect the web traffic of a legitimate website to a fake website for stealing usernames, passwords, financial data, SSNs, or any other personal information.

Business Email Compromise & Email Account Compromise: Fraudsters pose as seemingly genuine institutions/persons and send mails, for example, a CEO making a purchase request. In 2020, 19,369 BEC victims lost $1.8 billion in the US alone.‍

High-profile individuals such as executives, business owners, IT professionals, and government officials are usually the victims of social engineering fraud. Last year, social engineers turned the COVID pandemic to their advantage by exploiting businesses and individuals leveraging viruses, vaccines, and COVID relief themes. As per the FBI Internet Crime (IC3) Report, phishing, vishing, smishing, and pharming incidents registered a 110% growth between 2019 and 2020 in the US.

While educating employees is crucial for preventing social engineering fraud, organizations must also insulate their systems from social engineering hacks. Sending numerous OTPs to a victim’s phone number and phishing/smishing (to steal identity) using fraudulent links are techniques deployed by social engineers to gain access to systems.

Businesses need to implement authentication systems that can protect their customers and employees from this fraud vector. Legacy authentication methods such as OTPs must be replaced by modern methods such as Phone-Centric Identity™ to ensure that the actor is indeed who they claim to be. Multiple verified identity sources and device and phone number-related characteristics can enable companies to measure the trustworthiness of digital interactions.

Instant Link™ leverages secure SMS link messages. The technology uses a combination of active (SMS delivery with user action required) and passive (checking against phone intelligence signals) to authenticate identities in real time when users click the link.‍

‍Trust Score™ thwarts social engineering attacks by analyzing behavioral and Phone-Centric Identity™ signals from authoritative sources at the time of a potential transaction.‍

GaitAuth™ behavioral biometrics passively authenticates a user by analyzing their gait.

This article is a synopsis of a blog published by Prove.

Accelerate your onboarding

Contact us to learn how leading companies are using Prove Pre-fill to modernize the account creation process by shaving off clicks and keystrokes that kill conversion.

https://gomedici.com/using-phone-intelligence-to-fight-social-engineering

SME-Focused Neobanking Picking Up Pace in Europe

https://gomedici.com/sme-focused-neobanking-picking-up-pace-in-europe

Challenger banks and neobanks started riding high in 2014. Neobanks gained instant popularity with their online, legacy technology-free banking. The UK leads the neobank segment; UK-based neobanks have almost 20 million customers. Over the past few years, FinTechs and neobanks focused on addressing shifting customer demand and targeted needs of SMEs—such as cross-border and B2B payments, SME lending, working capital optimization, cash flow management, KYC, invoicing, and accounting—have emerged. The neobank segment is also now a key focus for VCs.

Europe is a neobanking hotspot. In 2020, the region accounted for 30% of global neobanking revenue ev …

https://gomedici.com/sme-focused-neobanking-picking-up-pace-in-europe

Improving Phone Management to Boost PSAP Compliance

https://gomedici.com/improving-phone-management-to-boost-psap-compliance

In one year, the average 9-1-1 emergency service dispatcher will answer 2,400 phone calls, many of which will be of life-or-death importance. As call answer time is critical during an emergency, national standards dictate that at least 90% of all 9-1-1 calls should be answered within 15 seconds. Dispatch centers responsible for answering emergency calls, i.e., public safety answering points (PSAPs), are failing to meet this standard, thus increasing wait times for panicked callers. 

Staffing shortages plague the efficiency of PSAPs, and non-emergency calls made by telemarketers only make matters worse. Fortunately, the Federal Communications Commission (FCC) is penalizing companies that autodial PSAPs. A growing number of businesses are investing in phone management technologies to ensure smooth PSAP operations and avoid hefty FCC fines.

An audit found that in Colorado Springs, just 68% of 9-1-1 calls were answered within 15 seconds. Kansas City and its surrounding suburbs, too, are impacted by slower than average PSAP response time. Despite public outcry against cities failing to meet national standards for PSAP response time, 9-1-1 wait times continue to increase. 

Understaffing caused by a tight labor market is the primary reason why wait times are growing at PSAPs. Overtime for existing employees, increased burnout, low retention rate, stressful work conditions, and modest salaries (the average New York City 9-1-1 dispatcher earns $50,400 a year) make hiring and retaining emergency service dispatchers difficult.

Telemarketer calls get in the way of emergency service dispatchers trying to promptly answer legitimate calls. While it’s illegal for anybody to call a PSAP when there is no emergency, fines are especially steep for telemarketers. Today, a telemarketer who calls a PSAPs will have to pay a fine between $10,000 and $100,000 per incident. Companies are now finding new ways to avoid accidentally dialing one of the thousands of PSAP numbers by improving their phone management system.

Phone numbers are widely used to track customers in-store and online. However, many companies lack a robust phone management system. Because millions of phone numbers are continuously updated every year, a number that once belonged to a customer could now be a direct PSAP line. Prove’s Fonebook™ helps companies manage customer phone numbers while authenticating customer identity and preventing fraud. The platform automatically removes PSAP numbers from company registries, helping them avoid hefty FCC fines.

This article is a synopsis of a blog published by Prove.

Accelerate your onboarding

Contact us to learn how leading companies are using Prove Pre-fill to modernize the account creation process by shaving off clicks and keystrokes that kill conversion.

https://gomedici.com/improving-phone-management-to-boost-psap-compliance

The Nordic FinTech Ecosystem – Norway

https://gomedici.com/the-nordic-fintech-ecosystem-norway

The Nordic FinTech market, known for innovative practices and stringent security measures, offers customers a combination of advanced technology and unparalleled safety. Norway’s FinTech landscape has grown exponentially over the past years, thanks to massive digitization. As per a recent survey, Norway had 5.39 million internet users as of January 2021, with a 99% internet penetration. The meteoric rise of FinTech in this Nordic country can be attributed to easy smartphone access. The COVID-19 pandemic has further fueled the adoption of FinTech and digital banking services.

Evolving FinTech Landscape

Studies suggest that Norway’s financial landscape may experience disruption followin …

https://gomedici.com/the-nordic-fintech-ecosystem-norway

Adding the Essential ‘Presence-Less’ Identity Verification Layer to Neobanking and Other Financial Services

https://gomedici.com/adding-the-essential-presence-less-identity-verification-layer-to-neobanking-and-other-financial-services

The promise of neobanks, digital banks, embedded finance, and so on has changed how financial services are accessed and experienced. Players, ranging from banks to startups to big tech companies, are thus exploring the multifarious ‘as-a-service’ offerings and infrastructure, such as Open Banking APIs, UPI, and the upcoming Open Credit Enablement Network (OCEN). Many of the resulting arrangements manifest as a layer on top of banks and other regulated players. To access the financial services they offer, compliance with the applicable KYC mandate, the service, and the player or the underlying player is an essential first step.

Customers expect a seamless and digitized identity verification procedure, particularly during the pandemic that has made traditional contact-based and in-person KYC processes a health risk. Integrating a completely digitized and scalable identity verification layer is thus essential for innovation in this space to achieve its full potential. Regulatory steps relaxing individual and business KYC and technological infrastructure for API-based verification play a crucial role in creating this layer.

The Digitized Identity Verification Layer and Scaling an Experimental Service

The explosion of API-based services has facilitated numerous new arrangements. Take, for example, banks and FinTech companies partnering to launch digital banks to add new distribution and onboarding channels, companies signing up as TPAPs to launch UPI-based payments services, and tech/FinTech companies riding on the licenses of regulated players to offer digital lending and other services. In fact, dedicated financial infrastructure players that partner with multiple banks, NBFCs, and other entities via APIs enable companies to simply ‘plug and play’ to launch their financial services. 

Services in the experimental stage and trying to scale, such as a new service or a new way to access a traditional service, must minimize customer onboarding friction—a valuable lesson learned the hard way by the m-wallet industry in its initial years. Business models in the m-wallet industry were originally built around low-cost Aadhaar-based eKYC (approximately INR 20, as opposed to INR 200–250 for regular KYC). The 2018 withdrawal of eKYC, combined with the mandate to convert to full KYC, took away convenience—a key factor that drove the early adoption of m-wallets. M-wallets have since completely reinvented themselves, but this still leaves lessons to be learned on the KYC front. 

A digitized identity verification layer, much like IndiaStack’s integrated ‘presence-less’ and ‘paperless’ identity layer (via eKYC, DigiLocker, etc.), thus plays an essential role.

How KYC Verification and Account Linking with API-Based Services Work Today

Neobanks can partner with multiple banks or other regulated players. Customers can access the services of a neobank if they have an account with any of the underlying partner banks. KYC compliance is then defined by the norms applicable to the banks.

A neobank and its partner bank can set up ‘connected banking’ models, enabling customers having accounts with the partner bank to simply link their account via a net banking process. KYC must be completed first if a new account needs to be opened. Account linking and KYC vary across banks, with varying levels of digitization. For example, a URL can be redirected from the neobank’s website/app to the bank’s website to complete the process. Alternatively, some or all of the required data—to be shared with the bank—can be collected at the merchant’s portal that conducts and confirms the verification via APIs. The bank can also conduct Aadhaar-based verification depending on the service.

Similar steps are deployed when accessing a new service requiring separate KYC, say, accessing insurance, lending, or mutual funds after linking an existing savings account. The same goes for an embedded finance offering, for example, a savings account or wallet service embedded as a feature directly in a merchant app.

KYC verification and account linking with API-based services are not yet completely digitized. Video KYC primarily eases individual KYC; business KYC is still a far cry from digitization. KYC here also often ends with a mandatory in-person verification by the bank before account activation.

Benefits of the Verification Layer and the Vast Potential of Real-Time KYC

An identity verification layer undoubtedly eases verification at the technological level, covering the multiple API integrations with banks, public databases, and other sources as required. In addition, API-based data access can further ease verification, for instance, allowing consent-based predictive auto-filling of KYC forms to reduce human error, accelerate onboarding, and support the overall due diligence and fraud checks.

While KYC has specific requirements such as accepting only official ‘equivalent e-documents,’ data from government databases and other sources can also be used for digital identity verification outside of the legal mandate for KYC. For instance, apart from KYC for customers, verification is equally important, say, for onboarding vendors, partners, and employees. Sector-specific rules can also have requirements that may not be KYC per se. For example, the Consumer Protection (e-commerce) Rules, 2020 require marketplace e-commerce entities to keep records, allowing identification of sellers.

Even with regulated entities, a modular approach can help platforms set up staggered KYC policies on a need-to-know basis instead of full KYC. A step in this direction was RBI’s guidelines—that differentiate between account-based and onboarding relationshipsfor payment aggregators (PAs). With this, PAs onboarding merchants with an underlying full KYC bank account need not conduct the entire KYC process again; a board-approved KYC policy will suffice.

Features to ease the process have already been introduced. For instance, using GSTIN, data such as legal entity name, business address, registration date, GST status, and beneficial owner information can be pulled from the GST portal and auto-filled. Trusted sources such as the account aggregator framework and other Banking-as-a-Service (BaaS) facilities can all be leveraged here. Even payment credentials need to be verified, for instance, verifying payment credentials prior to processing employee salaries and vendor payments. The traditional ‘canceled check’ technique can also be made instant and paperless with online bank account verification via APIs.

Open Banking, thus, has tremendous potential to create reliable ‘instant’ identity verification.

Defining a Verification Layer’s Functioning – Features and Key Business KYC Challenges

Several factors impact how a digital identity verification layer works—what KYC and verification entail, restrictions on data storage, etc. Although regulatory steps have eased the process, several challenges still need to be addressed.

1. Different KYC requirements for different services

KYC—a multi-step process that starts from pre-onboarding and continues until the relationship ends—includes checking identity documents, such as Aadhaar and passport, and business documents (licensing, registration), verifying PAN and GSTIN, beneficial owner KYC, and bank account verification. Many of these steps can be digitized via a verification layer, thanks to regulatory relaxations and government databases that have opened API access to enable direct verification.

KYC norms vary from service to service and, sometimes, entity to entity. Businesses, therefore, need to assess their business requirements, applicable regulatory norms, and the facilities their verification layer requires. For example, consider a business using an embedded finance feature for wallets to credit salaries to its unbanked vendors/partners or facilitate specific authorized purchases by employees. Seamless issuance of wallets will also require an integrated ability to complete KYC. The following points specific to KYC for wallets must be kept in mind:

  • KYC must include the facility for collecting data for minimum KYC (OTP-verified mobile number, self-declared name, and OVD identity number) and converting to full KYC (say, via V-KYC) under RBI PPI norms.
     
  • Voluntary Aadhaar-based eKYC also comes in for bank-issued wallets.
     
  • KYC levels also vary based on the type of wallet facility required. For example, converting to full KYC isn’t required for low-limit (INR 10k) wallets loaded only from a bank account. In this scenario, minimum KYC will suffice as long as the issued wallets are loaded by the business only from those company bank accounts that have completed KYC.
     
  • In all other cases, full KYC is mandated within two years. Even here, full KYC wallets allow features such as interoperability (upcoming), cash withdrawal, and increased balance limits (INR 2 lakh), which allow wallets to become substitutes to bank accounts. Depending on business requirements, these additional features may support earlier conversion to full KYC.
     
  • e-RUPI now adds a KYC-free option for prepaid vouchers via UPI, but this comes with restrictions such as a INR 10,000 cap and one-time use only.

 2. Important regulatory steps for digitizing KYC

Regulatory steps to digitize KYC play a crucial role with seamless identity verification. With m-wallets, the initial regulatory flip-flop around KYC was a big part of the challenge. Moreover, the respite that came (permitting minimum KYC low-limit wallets and increasing time for converting to full KYC to two years) was slow. However, steps are now being taken to digitize and relax KYC.

In addition to relaxing KYC for wallets, there are initiatives that relax KYC for particular services or entities. For example, customers can link an underlying bank account for which the bank has already conducted full KYC. Similarly, PA guidelines approve board-approved KYC policies when onboarding merchants with such accounts. The distinction between account-based and onboarding relationships mentioned in the guidelines is important and is, in fact, also found in the KYC Direction that requires the ‘customer due diligence aspect’ of KYC to be carried out only when “establishing an account-based relationship.” Yet another example is UPI that requires linking the account to the UPI app. As a result, UPI is favored more than wallets. Minimum KYC wallets, loaded only from such accounts, are also an example.

Yet another step toward digitizing KYC is using Aadhaar OTP based e-KYC as a simple KYC option for opening savings and lending accounts. While these are subject to limits of INR 1 lakh and INR 60,000, respectively, and must be converted to full KYC (via V-KYC again) within a year, these are a good option, say, for issuing short-term, small-ticket loans.

Digitizing KYC, in general, includes essential steps such as permitting the use of ‘equivalent e-documents’ for KYC from DigiLocker or the issuing authority (e-PAN, e-AoA, and e-MoA). Operationalizing C-KYC for individuals and, recently, for businesses and permitting V-KYC for individuals first and now businesses are among the other steps. V-KYC was eased recently to accept identity documents apart from Aadhaar via the C-KYC Identifier and DigiLocker. The increase in API-accessible government databases (such as NSDL for PAN, GST Portal, and MCA) is another benefit.

All these steps increase the possibility of an end-to-end digital KYC process. The key benefit at present, however, is for individuals. For businesses, KYC is still not adequately digitized.

3. Key challenges with digitized business KYC

Individual KYC is comparatively more digitized than business KYC, thanks to V-KYC, C-KYC, and DigiLocker, though practically, even these run into issues. V-KYC, for example, still hasn’t been adopted widely. KYC sharing via C-KYC is not highly reliable due to the risk of fraud at the other institution. For business KYC, despite recent welcome steps, there are several additional challenges:

  • All business documents not digitized: While many government databases have enabled API-based access, digitization does not cover the complete spectrum of documents needed and every type of business. Partnership deeds, trust deeds, registration proof, board resolutions are some documents that are often unavailable in a digital format. Company MoAs and AoAs can be downloaded from the MCA portal, but these are usually scanned copies of physical documents. One may encounter the same issue while submitting ITRs, IEC certificates, and other documents even though PAN or IEC in itself can be verified online.
     
  • Issues with scanned documents: Uploading scanned documents prevents API-based access to the data in those documents while also necessitating traditional ‘original seen and verified’ checks for many of them. Another challenge is converting the scans to the supported formats and size of each portal before uploading, which hampers smooth onboarding.
     
  • C-KYC not operational: Although the legal entity template has been shared, C-KYC is not operational yet and will be plagued by the lack of digitized business documents.
     
  • Mandatory on-site verification: Recent V-KYC relaxations for sole proprietors and beneficial owners may allow completely digitized KYC processes for onboarding some MSMEs, one-person companies, and similar small businesses with entirely digitized processes. Higher risk and larger businesses, however, still need to wait. Banks, for example, often mandate on-site verifications for businesses as a key due diligence check. The physical aspect of business KYC thus becomes unavoidable for business address verification, activity checks, etc.
     
  • Multiple business owners and ownership setups: Multiple business owners and ownership setups make business KYC a lot more subjective than individual KYC. A significant challenge is correctly identifying current beneficial owners, such as the current majority shareholder or relevant director. This, in fact, is also a common source of fraud.

Moving Closer to Real-Time Identity Verification

A verification layer thus takes many factors into consideration and plays a crucial role in easing customer onboarding for businesses. Regulators can certainly take the next steps, like increasing the number of API-accessible business documents, recognizing API-based verification as original seen and verified, resolving operational issues with C-KYC, and increasing data available on merchant fraud. These steps can play a pivotal role in digitizing onboarding, particularly for business KYC, including small businesses and MSMEs. The regulatory focus and initiatives in this regard cannot be undermined. Each step brings fully digitized and real-time verification closer to reality.

https://gomedici.com/adding-the-essential-presence-less-identity-verification-layer-to-neobanking-and-other-financial-services

How Auto Lenders Can Improve Customer Experience Using Phone Intelligence

https://gomedici.com/how-auto-lenders-can-improve-customer-experience-using-phone-intelligence

Over 100 million Americans have an auto loan. The auto financing sector is thriving, thanks to a scorching hot car market driving up the cost of vehicles. With an average loan for a new car totaling $35,392, competition between financial institutions to issue auto loans is fierce. A growing number of auto loan providers are leveraging Phone-Centric Technology™ to cut down on time taken to complete the necessary forms, improve customer experience, and increase sales while staying competitive.

Despite historical, social, economic, and political uncertainty, Americans are eager to purchase cars and hit the road. On average, consumers are paying 99.9% of the sticker price for new vehicles. Besides, “Americans are borrowing record sums to buy new vehicles — and used ones — and they continue to pay relatively high interest rates.” As a result, competition among auto loan lenders is intense, and profit margins are high. 

Americans have two primary choices when financing their car: direct and indirect financing. Regardless of the type of financing, consumers should seek the best option and expect some serious paperwork. As applying for a loan is a fairly laborious process, lenders are investing big in technology to accelerate form-filling and cut down on user errors.

Filling out the forms necessary to finance a car can be quite frustrating, both in-person and online. Financial institutions require stips (industry shorthand for stipulations) like proof of income to ensure that a customer can pay back their loan. After providing copies of their stips, a customer fills out their CIP (Customer Identification Program) forms. With so many repetitive forms to complete, customers are prone to making errors which can lead to increased processing time on the part of lenders and higher rates of rejection for customers.

Prove Pre-Fill™ improves customer experience by drastically cutting down on the time it takes for a customer to fill out their CIP and stips while reducing fraud and improving compliance. Pre-Fill leverages Phone-Centric Technology to autofill forms using an authoritative source and then asks the consumer to simply confirm the answers.

Without Prove Pre-Fill, the average time it takes to fill out a five-line application (industry speak for the auto loan application) is 40 minutes. With Prove Pre-Fill, a five-line application can be completed in just a few minutes. Cutting down on a customer’s time spent filling out forms is especially critical for car dealers because it allows salespeople to get back to the floor faster while improving customer experience.

This article is a synopsis of a blog published by Prove.

Accelerate your onboarding

Contact us to learn how leading companies are using Prove Pre-fill to modernize the account creation process by shaving off clicks and keystrokes that kill conversion.

https://gomedici.com/how-auto-lenders-can-improve-customer-experience-using-phone-intelligence