According to a new study by IDC Financial Insights commissioned by Episode Six, a payments technology company, 74% of consumer payments will be handled by non-traditional financial service institutions (FSIs) by 2030. This figure is an increase from 60% in 2020, putting added pressure on incumbents such as banks, insurers and credit unions.
The IDC InfoBrief, Future Ready Payments Technology Reshapes the Playing Field for the Industry, highlights that while the payments world is changing FSI paytech is not, pushing lucrative consumer payment volumes to non-FSIs.
Factors driving this change include a rise in new (or emerging) digital asset classes, real-time payments and new point of sale payment options such as Buy Now Pay Later (BNPL):
By 2030, 60% of global consumers will have made a transaction using an asset class other than fiat currency.
95% of physical non-cash payments will be through contactless methods and BNPL. BNPL grew 79% compared to 5% for cards in 2020 and is set to continue to grow by 15% annually through 2030. Cards will grow at 4% per year, according to IDC.
Regulation is also playing its part, with the study exploring how Open Banking, domestic real-time payments schemes and CBDCs are adding pressure to incumbent FSIs by shaking up traditionally safe revenue streams.
The payments landscape is changing at pace, but the IDC InfoBrief finds that 73% of FSIs globally currently have paytech infrastructures that are not well equipped to handle payments for 2023 and beyond. IDC deemed only 3% of FSIs to have ‘future ready’ paytech – meaning payments infrastructure that enables payments anywhere and everywhere for any possible present and future asset class. Future-ready paytech also gives FSIs the ability to configure and reconfigure payment products to stay ahead of new entrant competition and consumer demands. And while IDC predicts that global FSI spending on paytech will double to US$80.3 billion in 2030 (from US$39.7 billion in 2020), FSIs are not investing enough in the infrastructure that enables them to compete with non-FSIs. Failing to adapt to future-ready paytech will cost the FSI industry US$250 billion in payments revenue.
“The world of consumer payments is rapidly evolving; from the way we make them to the companies that handle them,” said Michael Yeo, Associate Research Director at IDC Financial Insights. “What this change presents is both a challenge and opportunity for incumbent FSIs. Despite the trends which are unfolding, FSIs can fight their displacement from consumer payments by reshaping the role that they fulfil in the payments landscape of tomorrow. To achieve this, their focus and spending must be on future-ready paytech solutions – otherwise they risk continuously playing catch up with digitally native non-FSIs”.
“Traditional financial services institutions will continue to lose consumer payments market share, and corresponding revenue, until they have infrastructure that is able to support new ways to pay” added John Mitchell, CEO of Episode Six.
“Competition in payments is increasing. There is a land grab taking place for the hearts, minds and wallets of consumers the world over. FSIs need to be able to process value in whatever form consumers demand – fiat, crypto and gaming currencies, loyalty points and value denominations that don’t exist today. That requires paytech infrastructure that’s fast to deploy, highly configurable and future-ready. IDC’s data shows that FSIs are investing, but also suggests that they’re focusing on maintaining a quickly diminishing position, rather than ensuring an ability to compete 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.
The Central Bank of Kenya (CBK) has published the results of its Diaspora Remittances Survey, providing insight into the efficiency and cost of alternative remittance channels; the difficulties in remitting cash or non-cash transfers; the availability of information to Kenyans in the diaspora about investment opportunities in Kenya; and the usage of remittances received.
The Survey was conducted from March to May 2021, aimed at collecting valuable information on remittance inflows to Kenya, with the objective of boosting the role of remittances in supporting the economy and livelihoods.
Remittance inflows to Kenya have increased tenfold in recent years, with total remittances in 2021 reaching a record $3.718million. This surpassed the previous record of $3.094million set in 2020. These amounts are equivalent to approximately three per cent of Kenya’s GDP. However, only inflows through formal channels—e.g., through authorised international remittance service providers in Kenya or commercial banks—are included in the reported inflows, which exclude remittances through informal channels and in-kind remittances.
The Survey therefore represents an additional step in the effort to improve statistics on remittances and in the understanding of the landscape for remittances more generally.
The Survey found that remittances are directed at family members, who are largely self-employed, unemployed, or students. About half of the total remitted was allocated to investment in real estate (land and buildings) for recipients, mortgage payment for senders, and purchase of food and household goods.
The Survey also confirmed the importance of mobile money operators and money transfer companies, in addition to banks, as the main channels for cash remittances. Further, the Kenyan diaspora prefers digital service providers due to convenience, promptness, and ease of access. On average, recipients receive remitted funds on the same day, reflecting the efficiency of these channels. Key problems that were identified included the high cost of remitting cash, and the inadequate information on investment opportunities in Kenya for the remitters.
The publishing of its findings comes in tandem with the introduction of the Bank’s Amendment Act 2021. The Amendment provides the Bank with the powers to license and oversight the previously unregulated digital credit providers.
Correspondingly, CBK announced the issuance of draft Digital Credit Providers Regulations. With the recent advances in technology and ongoing innovations, lending through digital channels, particularly mobile phones, has grown significantly in Kenya. However, concerns have been raised by the public about the predatory practices of the unregulated digital credit providers, and in particular, their high cost, unethical debt collection practices, and the abuse of personal information.
The Amendment requires CBK to publish regulations within three months, and accordingly, CBK has developed the draft Regulations for public consultation. The Regulations provide for inter alia the licensing, governance, and credit operations of Digital Credit Providers (DCPs).
They further provide for consumer protection, credit information sharing, and elaborate on the Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) obligations of DCPs. In line with the public participation requirements, CBK invites interested members of the public to provide comments on the draft Regulations that can be downloaded through its website.
Tyler is a Fintech Junior Journalist with specific interests in Online Banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.
Financial services in the Middle East and North Africa (MENA) region is experiencing digitalisation on a wide scale, accelerated by the pandemic and shifts in consumer demands. A major trend to come out of this is the surge in popularity of cryptocurrency, which we expect to continue throughout 2022 and beyond.
Marwan Abouzeid is Finastra’s Principal Solutions Consultant focusing on retail and SME banking solutions. Finastra currently serves over 8,600 financial institutions, providing the broadest, deepest software applications and connectivity to marketplaces, partners, and fintech’s through its open financial services platform.
Here, Marwan shares his thoughts on how cryptocurrency will surge in popularity in 2022.
Marwan Abouzeid, Principal Solutions Consultant, Finastra
Cryptocurrency has undergone a major evolution over the past 12 years. When Bitcoin was introduced in 2009, it was difficult to foresee how it would progress. There are now more than 6,500 different cryptocurrencies with great potential for continued growth.
Governments and organisations in MENA are embracing blockchain and expanding its application across industries. The keenness to use blockchain and set up related platforms has played a critical role in propelling regional economies in the direction of cashless and paperless ecosystems.
Due to the increased level of transparency blockchain brings to processes, whether it’s a transaction or data storage, there is a growing urgency to harness its true potential. Several initiatives and efforts are being made to understand and leverage blockchain to benefit business growth. For example, the Bitcoin Fund recently became the first cryptocurrency fund to be listed on a major exchange, the Nasdaq Dubai.
The MENA region is gradually becoming a crypto capital, thanks to its progressive policies. Banks and financial institutions need to take advantage of this opportunity in 2022 and beyond.
An opportunity for financial institutions in the MENA region
Back in April 2018, the UAE government announced the Emirates Blockchain Strategy 2021, which aimed to move half of all government transactions to the blockchain by the end of 2021. Dubai’s Multi Commodities Center (DMCC) also opened a Crypto Center last year, to help enterprises gain a foothold in the blockchain and cryptography industries.
However, cryptocurrency is still a relatively new notion in the region. Crypto regulations have been issued by jurisdictions such as ADGM (Abu Dhabi Global Market) and DIFC (Dubai International Financial Center), and the UAE’s central bank launched a virtual asset scheme last year. With international organisations stepping in, it is only a matter of time before virtual currency and blockchain technology enter mainstream transactions. The UAE for example has just signed a cooperation deal with Binance,a cryptocurrency exchange platform. Financial institutions need to act now to stay ahead of this trend.
When it comes to offering cryptocurrency services to customers, banks have options and a big opportunity to demonstrate that they understand their customer’s needs and are quick to respond to them. They can maintain custody of the assets themselves, integrate directly with cryptocurrency exchanges, or partner with fintechs that specialise in cryptocurrency. Another route is partnering with a banking software provider, to integrate cryptocurrency within core banking systems for a richer and more seamless offering.
What’s next for crypto?
In 2022, we can expect more volatility in the cryptocurrency markets. However, this is not necessarily indicative of a bubble that’s about to burst. While they tend to be more volatile than traditional currencies, cryptocurrencies have increasingly stabilised over the last few years and we expect them to continue doing so.
Additionally, Government agencies in the UAE, Saudi Arabia and Egypt are now providing assistance in exploring multiple use cases for blockchain and cryptocurrency. Strong and regulated policies will be required to sustain its growth in the region.
It’s also important to remember that the digital currency landscape is evolving daily. Today the focus is on digital wallets, but the asset class is already expanding to include new products like cryptocurrency ETFs. Banks need to embrace and adopt technology, such as open APIs, that will allow them to integrate emerging products and advanced solutions seamlessly and efficiently. Platforms, such as Finastra’s open developer platform FusionFabric.cloud, help to orchestrate an ecosystem that facilitates such integrations and partnerships.
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.
Whilst the rise of smart machinery, known as Industry 4.0, continues to connect the digital world with manufacturing, revolutionising modern supply chains, its developments have left many industries with concerning gaps in their cybersecurity measures.
Kirat Singh
Industry 4.0 and its impact on how we stay safe online is an area that’s expanded upon extensively through this guest post for The Fintech Times. Here KiratSingh, CEO and CO-Founder of BeaconPlatformInc, considers how its advent will impact various industries, and how said industries can utilise Industry 4.0 to streamline their services whilst staying secure.
Singh has had a long career as one of Wall Street’s premier technologists. Prior to co-founding Beacon, Singh spent four years launching and delivering the Quartz project at Bank of America Merrill Lynch, which is now used by more than five thousand developers across the bank.
Before that, he launched and delivered the Athena project at JPMorgan with Dr. Higgins, and spent eight years at Goldman Sachs building the SecDB platform used across the firm. With Beacon, Singh and his team have built a cloud-native quant and analytics platform designed to supercharge developer productivity and give businesses and their developers the flexibility and scale they need to gain a competitive edge.
As organisations and governments around the world are increasingly vulnerable to cyber threats and continue to get hacked, it might feel like we’re reading or hearing about cybersecurity in the news every day.
With the proliferation of digitised industries, it’s not surprising that threats continue to escalate in a digital way. However, there are many industries that have not yet fully embraced digitisation and as a result, are facing disruption and heightened cyber security risks as they slowly begin to introduce technology to their business model.
The “digital disruption” has reshaped the business world across a spectrum of industries. It would be challenging to find a company today that hasn’t adapted to some extent. That said, some sectors have seen more change than others. Some industries, like technology and media, are obvious hubs of innovation. But more traditional industries are having to adjust their current practices to keep pace with demand, satisfy new expectations and retain customers.
The increased connectivity of smart machinery, a shift known as Industry 4.0, raises the stakes. Industry 4.0 heralds a new age of connected, smart manufacturing, responsive supply networks, and tailored products and services. Through its use of smart, autonomous technologies, Industry 4.0 strives to marry the digital world with physical action to drive smart factories and enable advanced manufacturing. But while it plans to enhance digital capabilities throughout the manufacturing and supply chain processes and drive revolutionary changes to connected devices, it also brings with it new cyber risks for which the industry is unprepared.
Developing a fully integrated strategic approach to cyber risk is fundamental to businesses who are marrying operational technology (OT) and information technology (IT)—the very force driving Industry 4.0.
As threat vectors radically expand with the advent of Industry 4.0, new risks should be considered and addressed. Put simply, the challenge of implementing a secure, vigilant, and resilient cyber risk strategy is different in the age of Industry 4.0. When supply chains, factories, customers, and operations are connected, the risks posed by cyberthreats become all the greater and potentially farther reaching.
Manufacturing and supply chains are not the only industries at risk. All traditionally non-digital industries are potentially at risk as they introduce digitisation. If we look at the commodities industry, as another example, it has also been the victim of cyber security threats, with proof points showing with the likes of the Colonial Pipeline hack last year.
From an operational perspective, modern industrial control system (ICS) environments allow engineers to deploy unmanned sites while maintaining high efficiency and resource control. They do so by using connected systems such as enterprise resource planning, manufacturing execution, and supervisory control and data acquisition systems. These connected systems can often streamline processes and make things easier and more efficient, and they have continued to evolve as systems have become more automated and autonomous.
From a security perspective, the increased networking and usage of commercial off-the-shelf (COTS) products in ICS introduces a variety of exposure points that could be abused by threat actors. In contrast to generic IT where the focus is the information, ICS security focuses on the industrial process. Therefore, the targets in the smart factory primarily focus on the availability and integrity of the physical process rather than confidentiality of information, as with traditional cyber risk.
Notably, however, while the basics of cyberattacks remain the same, the methods of delivering the attack become more advanced. Indeed, as Industry 4.0 connectivity continues to proliferate across not only the digital sphere but also the physical world, the potential impacts of these attacks on production, customers, manufacturers, and the products themselves may grow broader and potentially more significant.
The global shift to digital services and technologies has impacted all sectors, bringing substantial improvements in some cases. As the adoption of these resources continues to climb, more use cases will emerge, leading to further innovation.
Information and communication technology (ICT) is supplying the devices, software, and services that are fueling the shift, but growth could be even bigger than that, though, as the lagging sectors grasp the digitisation idea.
The energy industry has faced increasing pressure to change as environmental issues have become more prominent. Digital transformation has proved critical to this transition for both renewables and fossil fuel companies. Digital technologies help utilities improve service, reduce their carbon footprint and prevent disruptions.
IoT devices like smart transformers give more insight into grid operations. If something happens that threatens power in one sector, these sensors will let utilities know in real-time. Automation features can take these quick reactions a step further, automatically adjusting delivery based on changes in demand.
Digital disruption on the consumers’ end has transformed energy, too. Smart home devices save power and money by adapting to changing conditions and use patterns in real-time. As more people embrace these technologies, energy waste will fall.
However, much like the energy industry and even consumer off-the-shelf devices like the smart home devices continue to leverage ubiquitous computing, the concept of computing on any device, from anywhere, and in any format. This poses a true risk for cyber security threats and it grows without the proper strategy in place. Many of these smart devices, driving digital transformation in our homes as well as traditionally non-digital industries become vulnerable when updates to security measures are not prioritised.
Having a “bulletproof” cyber security plan means that it needs to be integrated, and part of that is ensuring that the business model includes the right infrastructure that will allow continued connectivity and the ability to control physical devices and digital information with efficiency. Reinforcing device upgrades through a platform that allows for customisation and advanced levels of security is how traditionally non-digital industries will successfully operate as they introduce technology into their business model. And in today’s world, the options are to digitise or forever hold your peace.
The average cost of a data breach in the financial services sector now exceeds $5 million, nearly $2 million higher than the average cost across all other sectors. That’s according to a data breach report published by IBM earlier this year, highlighting the disproportionate levels of risk facing the financial services industry as businesses continue to navigate one of the most turbulent economic periods on record.
Ian Porteous is the Regional Director for Security Engineering at Check Point Software Technologies.
Ian Porteous is the Regional Director for Security Engineering at Check Point Software Technologies. With more than 20 years’ experience in the field, Ian has been with Check Point for the past 14 years, through their transition from a Firewall vendor to a provider of cyber security solutions covering Enterprise Networks, Data Centre, Cloud, Mobile and Endpoint Security.
Here, Ian shares his thoughts on why financial services are being targeted by cybercriminals.
Against the backdrop of an international health crisis, businesses in all sectors have been redoubling their efforts to sustain pre-pandemic levels of productivity, often leading to the rapid acceleration of digital transformation initiatives. By McKinsey’s reckoning, some sectors achieved more than a decade’s worth of growth in a 90-day period as they adapted their internal processes and customer service operations. However, when businesses are pushed to grow out of necessity rather than move at their own pace, security often takes a backseat. This has presented threat actors with more opportunities to strike, and it’s one of the reasons we’ve seen the threat landscape change so significantly in the past two years.
By October 2021, global incidents of cybercrime had experienced a 40% year-on-year increase as bad actors continued to take advantage of the disruption. According to our researchers, 2021 saw a staggering 102% increase in ransomware attacks, with fraudsters adopting new strategies such as triple extortion techniques to seize data.
But while the impact on all sectors has been significant, the financial services industry has been disproportionately targeted by cybercriminals post-pandemic. According to one source, there was a 238% spike in the number of cyberattack incidents experienced by banks between February and April 2020, just months into the crisis. And according to Check Point Research, over the last six months, financial organisations in the UK have experienced an average of 409 cyberattacks a week. To date, nearly 75% of banks and insurance groups have reported spikes in cybercrime to varying degrees and according to Ponemon Institute, 57% of companies in the UK finance sector believe the pandemic has exposed employees to increased cyber risk. After a year or more of remote working and cloud migration, cyber threats are continuing to ravage the financial services sector in what could easily be described as a perfect storm of risk and vulnerability. So what are those risks, and what security strategies should businesses be considering as we move into 2022?
Challenges facing the financial services sector
One of the biggest challenges reported by Check Point’s financial customers has been the rapid implementation of a cloud migration strategy, particularly when it comes to regulatory and compliance concerns around public cloud adoption. Public cloud adoption as part of a wider multi-cloud strategy has become increasingly important for businesses in all sectors, allowing them to take an agile, cost-effective approach to cloud migration. However, more is at stake for the financial services sector as they attempt to walk the line between public, private and on-premise data management solutions. Getting this balance right in a way that prioritises efficiency, cost-effectiveness and security is a huge challenge for the sector.
But cloud innovation is only possible where budget is available, and often this budget is swallowed up by legacy systems and architecture that can be difficult to shake. Those that haven’t been able to embark on a rapid cloud transformation journey due to strained budgets are usually the same businesses that spend huge amounts of capital on “keeping the lights on” when it comes to legacy services.
Beyond migration and infrastructure, the financial services sector has to think more carefully than almost any other sector about data security. Who is responsible when it comes to securing customer endpoints like mobile devices? The user? The app developer? The phone manufacturer? There are so many touchpoints along the security chain that everybody has a role to play, particularly service providers themselves. A chain is only as strong as its weakest link, so those businesses in the financial services sector need to have a complete and robust understanding of the security role they need to play in order to provide a secure end-to-end service for their customers.
Navigating the current threat landscape
As as well as strategic challenges, businesses in the financial services industry are also facing increasingly sophisticated threats from bad actors. Online commerce has skyrocketed, and the number of people handing over their data to third-party financial services firms has boomed as a result. Those in the FSI sector work almost exclusively with funds, personal credentials and other sensitive customer data, all of which have tremendous value to a criminal who could hold this information to ransom, use it to redirect payments, or simply sell to the highest bidder on the dark web.
Among the biggest threats currently facing the sector are phishing scams and so-called “banking trojans”, which are evolving at pace. Trickbot, Dridex, Qbot and IcedID are all banking trojans that have developed significantly over the past 12-24 month period following the Emotet takedown in January. Rather than settling for the backdoor transfer of relatively small sums of money, these new-wave banking trojans attempt to monetise every machine and network they compromise, all while making future cyberattacks easier to execute. These trojans are now major platforms for unleashing devastating ransomware and double extortion attacks on the financial services sector.
Another prominent threat facing the sector are DDoS, or “distributed denial of service” attacks. In a DDoS attack, the target network is flooded with thousands, or even millions, of superfluous requests that overwhelm a company’s resources, leaving it vulnerable to attack. In June 2021, Radware reported a wave of DDoS attacks specifically targeting financial institutions.
What financial services institutions can do to safeguard their data
One of the biggest challenges that has materialised in the past two years is the rapid expansion of attack surface area for cybercriminals to exploit. Generally speaking, the broader the attack surface, the more vulnerable a business becomes, so rapid cloud transformation is a risky endeavour for the unprepared. When it comes to cybersecurity, prevention is always better than cure, so financial institutions need to be looking at all-encompassing architected solutions that provide visibility and real-time insight instead of focusing purely on remedial strategies. Rather than having a dozen siloed security solutions clumsily stitched together, businesses should instead be focusing on their security as an architecture in and of itself, consolidating patching, segmentation, audits, access controls and more into one unified set of processes.
This is of particular importance today when teams are more likely to be distributed and endpoints scattered. According to the Ponemon Institute, around 70% of breaches originate at the endpoint, so gaining integrated, real-time control and visibility over those endpoints is absolutely crucial as we move into 2022.
To this end, we’re likely to see AI play an increasingly important role in end-to-end network monitoring. Consumer trends and developments in IoT technology are advancing at such a rapid pace, that AI is really the only way businesses can stay ahead of the curve and monitor their entire value chain. Over the next couple of years, expect the number of AI models developed for this purpose to increase exponentially, with models competing with one another to provide the best monitoring capabilities. Innovation, however, is not exclusive to businesses.
Threat actors will also be looking to enhance their attacks using AI and machine learning, resulting in a “war of models” as the battle over the massive amounts of data generated by IoT devices begins to heat up. Like it or not, the FSI sector is about to enter an arms race against threat actors. Whichever side has a better, more robust way of dealing with anomalies, identifying signals and uncovering new intelligence, will prevail.
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.
Cryptocurrencies such as Bitcoin have garnered much attention to the public on a global scale in recent memory. However, they are currently banned in nine countries – this article explores why.
There are parts of the world where cryptocurrencies are completely banned. At present, it is reported that there are nine countries. Almost all of them are in emerging markets and are mainly in the Middle East and Africa (MEA) as well as in Asia.
Egypt
Pictured is Cairo, Egypt – the capital and largest city of the country IMAGE SOURCE GETTY
Cryptocurrency transactions are prohibited in Egypt, as what has been reported with the Egyptian Islamic advisory Dar al-Ifta believing that cryptocurrencies can be harmful to both the national security and economic health of the country. Article 206 of the Central Bank and Banking System Law promulgated by Law No. 194 of 2020 “prohibits the issuance of cryptocurrencies, trading in them, promoting them, establishing or operating platforms for their trading or implementing activities related to them.” The Central Bank of Egypt (CBE), despite that, has been undergoing various reforms to make Egypt competitive and push for wider economic development and diversification.
Qatar
Doha is the capital and most populous city of Qatar IMAGE SOURCE GETTY
In the Gulf Cooperation Council (GCC) region, Qatar,s financial centre regulatory authority, the Qatar Financial Centre Regulatory Authority (QFCRA) announced, as reported, that all services involving cryptocurrencies have been banned throughout the Qatar Financial Centre (QFC), until further notice. They said, “Virtual Asset Services may not be conducted in or from the QFC at this time.”
Iraq
Baghdad is the capital and largest city of Iraq IMAGE SOURCE GETTY
A statement was issued by the Iraqi Central Bank in 2017 prohibiting their use and is still in force. In Iraq, despite attempts such as in 2017, cryptocurrencies remain popular. Early last year, the Ministry of Interior of the Kurdistan regional government issued similar guidance to stop money brokerages and exchanges handling crypto.
Oman
Muscat is the capital and largest city of Oman IMAGE SOURCE GETTY
In Oman, a press statement was released in December 2017 by the Central Bank of Oman that stated cryptocurrencies is not a legal tender in the country. It also urged caution by Omani citizens and that they would assume the risk and responsibilities of using cryptocurrencies.
Algeria
Algiers the capital and largest city of Algeria IMAGE SOURCE GETTY
The 2018 Financial Law of Algeria has prohibited the use of any cryptocurrencies. As written in Freeman Law’s website, “The purchase, sale, use, and possession of so-called virtual currency are prohibited. A virtual currency is one used by Internet users over the Internet. It is characterised by the absence of physical support such as coins, paper money, or payments by check or credit card.”
Tunisia
Tunis is the capital and largest city of Tunisia IMAGE SOURCE GETTY
While unclear on whether cryptocurrencies are legally completely banned, there were reports last year of the laws going to be changed to embrace it. This as reported was stemmed from a 17-year old Tunisian boy that was apparently arrested last April for using cryptocurrency for an online transaction. Much will be seen if the Central Bank of Tunisia will decriminalise the laws pertaining to cryptocurrencies.
Morocco
Casablanca is the largest city of Morocco IMAGE SOURCE GETTY
Bitcoin and cryptocurrencies have been banned in Morocco since November 2017. Interestingly though is that Morocco has many fans of crypto, where it is the top country in terms of crypto trading and around a million of its population has crypto – the ladder stat according to cryptocurrency aggregator and provider Triple A.
China
Shanghai is the most populous urban area of China IMAGE SOURCE GETTY
China, which is one of the world’s largest cryptocurrency markets prior to joining the list of countries that ban it, made headlines last year by banning cryptocurrency training and mining. Nevertheless, the country is pursuing other uses of technologies such as blockchain and non-fungible tokens (NFTs). The People’s Bank of China said that “Virtual currency-related business activities are illegal financial activities,” and that it “seriously endangers the safety of people’s assets.” The same source highlighted that China’s announcement last year resulted in the fall of price of Bitcoin.
Bangladesh
Dhaka is the capital and largest city of Bangladesh IMAGE SOURCE GETTY
The country of 200 million people in South Asia back in 2017 had the Bangladesh Bank sent a circular through its website by asking all to refrain from trading virtual currency. The country’s banking regulator still does not allow or support trading of any cryptocurrency (for example Bitcoin, Ethereum and Ripple), Bangladesh Bank said in a statement today that was sent in July of last year.
Besides the nine highlighted, there are 42 other countries that have various levels of restrictions on cryptocurrencies. An example of one is Nigeria, where last year the Central Bank of Nigeria barred banks from working with cryptocurrencies.
Irrespective of the rise of crypto, there is a general global common consensus theme that there should be some form of regulation on this as it further evolves.
Will the list of nine grow? Notably, reports have circulated that Russia is considering banning cryptocurrencies. Only time will tell.
Topping the news for fintech funding this week are two unicorns: a California cryptocurrency asset-tracking platform provider and a New York credit-building platform provider, both of which reached valuations of more than $1 billion. And, two London-based fintechs, one in crypto business trading services and the other in investment management, had nearly identical $59 million […]
A $260 million Series F funding round has given Brazilian secured lending platform Creditas a valuation of $4.8 billion. The new capital will help the company expand its operations and provide a “one-stop solution for those seeking a digital-first experience in everything related to their houses, cars, motorcycles, and salary-based benefits.”
The round was led by Fidelity Management and Research Company and featured participation from a sizable number of investors including Actyus, Greentrail Capital, QED Investors, VEF, SoftBank Vision Fund 1, SoftBank Latin America Fund, Kaszek Ventures, Lightrock, Headline, Wellington Management, and Advent International by way of its affiliate Sunley House Capital.
The Series F brings Creditas’ total capital raised to $854 million, according to Crunchbase.
Founded in 2012 and headquartered in Sao Paulo, Brazil, Creditas announced a significant boost in revenues in the third quarter of 2021 compared to Q3 of 2020 – from $46.8 million to $14 million. Creditas founder and CEO Sergio Furio projects that the company will realize annualized revenues of $200 million for the year that just ended. Creditas also saw its credit portfolio grow from $189.3 million in Q3 2020 to $532 million in Q3 2021.
“We plan to continue growing by nurturing and expanding our ecosystem, such as providing financial solutions to our marketplace customers, launching new products, extending our geographic reach (including our recent successful entry into Mexico and the expansion of our tech hub in Valencia, Spain) and selectively pursuing strategic M&A opportunities,” Furio said in a statement.
Last fall, Creditas announced a partnership with fellow Brazilian fintech – and Finovate alum – Nubank, that will enable Nubank customers to secure loans and other services from the Creditas platform. Months earlier, Creditas acquired used car buying and selling platform Volanty. The move will help buttress Creditas’ automotive division, Creditas Auto. Also last summer, Creditas acquired multi-channel insurance brokerage company Minuto Seguros, which was also part of the company’s project to enhance its auto financing business.
FinovateEurope 2022 is right around the corner. If you are an innovative fintech company with new technology to show, then there’s no better time than now and no better forum than FinovateEurope. To learn more about how to demo your latest innovation at FinovateEurope 2022 in London, March 22-23, visit our FinovateEurope hub today!
Here is our look at fintech innovation around the world.
In this Weekly Wrap episode of “The Buzz” podcast, the Bank Automation News editors drill down on technology spending at banks. After the COVID-19 pandemic led to a holding pattern for IT budgets in 2020 and the first half of 2021, tech spending is on the rise again with large banks increasing or planning to […]
The BSTX exchange won approval from U.S. regulators for a plan to use blockchain technology to fuel key aspects stock trading.
Image by CanStock
The approval, announced on the SEC’s website late Thursday, is being hailed by some as a milestone in a push for regulated crypto markets. However, the SEC said in its filing that the go-ahead doesn’t apply to the trading of digital tokens — meaning that the exchange won’t be able to start offering cryptocurrencies and other virtual assets.
According to the SEC, BSTX’s go-ahead is limited to more traditional stock exchange services, including:
Clearance and settlement procedures that could be as short as the same day, versus the standard time of two business days
Market data that would be available on BSTX Market Data Blockchain
Beeks Group offers secure, high-performance, guaranteed private and hybrid cloud infrastructure as a service (IaaS) all around the globe, and can accommodate exclusive, single-tenant security requirements, as well as replication of hosting. Beeks helps connect its customers to all the cloud providers they need in a safe environment, bypassing the public internet. Here the company discusses security and peace of mind with specialist cloud IaaS provision.
The question of security is the biggest handbrake to financial institutions migrating data, processing and execution to the Cloud.
Despite the efforts of the big tech giants, banks, exchanges, brokers and financial services firms remain wary of making too hasty a leap into cloud technology, and for very good reasons.
The speed of tech
Graeme Marsh, Chief Information Security Officer of Beeks Group, a leading, specialist cloud infrastructure provider in the capital markets sector since 2011, warns against the lure of deploying technology that may fall foul of regulators.
“Big tech’s innovative algorithms, on-demand scalability and increased access to markets all sound great,” comments Marsh.
“Beeks’ infrastructure provides this capability but also has capital markets regulation and security at its core. The public cloud providers can’t claim that.”
Generalists vs Specialists
According to a Gartner survey, less than 30 per cent of Google’s business is IaaS – even less than that is financial market focused.
It’s a similar story with Microsoft and AWS, although their IAAS revenue is double that of Google.
In contrast, 100 per cent of Beeks Group’s revenue comes from Capital Markets firms who recognise the company’s knowledge, expertise and considered approach to private and hybrid cloud infrastructure.
Key concerns
Marsh says: “Our customers are mostly worried about FCA, PRA and GDPR compliance, business and customer data protection, and safeguarding against malicious attacks, power outages and Denial of Service events.
“They want reassuring that their cloud provider can anticipate their need for cost-effective ultra-low latency compute, flexibility and choice without making any compromises to security, privacy and performance whatsoever.”
Security assurance
By keeping their offering laser-focused on trading infrastructure, connectivity and performance analytics, Beeks have ensured that their technology stays in check with regulatory requirements.
“We have achieved ISO27001 accreditation in respect of international security standards,” Marsh explains, “and we use these as the bare minimum requirements.
“Beeks will always aim for a strong security posture, utilising additional frameworks and standards to provide further assurance.
“These include the Center for Internet Security controls, UK-governed National Cyber Security, and the National Institute of Standards and Technology.”
Regarding data protection, Marsh comments: “Our policies are aligned and compliant with the financial markets and brokers’ regulations.”
As regulators suck their teeth about cloud migrations in the sector, this should provide them with some reassurance.
Security-based cloud configurations
Beeks Group is highly experienced and knowledgeable about all the different permutations of private, public and hybrid cloud capabilities, and how far these are suitable for the needs of financial institutions.
Whilst Beeks recognises the cost-effective value of public cloud shared resources, they recommend a ‘horses for courses’ approach. This means ensuring that their customers align the importance of their workload with the relevant solution.
“Private cloud technology that connects directly to public cloud providers, means that organisations’ ‘crown jewels’ of financial trading are inherently secure,” says Marsh.
“But it also allows shared resources to be harnessed when needed and this provides significant customer benefits.”
Financial applications, trade and market data can be kept on the private cloud, whilst information processing can take place on the public cloud without the data having to be exposed.
Shared responsibility
“We provide a highly secure infrastructure topology that is controlled internally but monitored by us, in line with the client’s security and resiliency requirements.
“In the public cloud, it would be wholly the responsibility of the client to manage their own infrastructure configuration, with no way of monitoring adverse events.
“This is another advantage to working with a dedicated specialist partner.”
Built-in permissions
“As an independent CISO team we take a top-down approach to security. Our networks and apps meet the highest standards and our end-to-end managed security protocols protect customer information from both the internet and Beeks access.
“We define rigorous user permissions for access to configuration management, and we provide a clear and visible audit trail of all access – either by Beeks or the client.”
The next generation of capability
Beeks latest offering, Proximity Cloud, replaces all shared infrastructure with a dedicated, client-owned environment that can be deployed wherever the organisation wishes.
“Proximity Cloud goes one step further than even the standard private cloud implementations,” comments Marsh.
“It enables data to sit within a customer’s own physically held location, so we can absolutely point to where it is under the customer’s specific physical and logical security configuration.”
Having all data under one postcode, where power resilience, DR and security are keenly monitored and observed, is also reassuring to both clients and regulators alike.
Climate change has been a pressing issue in the last decade, and has been highlighted as one of the biggest global concerns impacting every sector. Giant organisations across the world have committed to working towards carbon neutrality with the first International Financial Centre in the world having now announced this: by offsetting its 2021 carbon emissions, the Abu Dhabi Global Market (ADGM) achieved this status.
This development came following ADGM’s recent decision to transform the 4th edition of Abu Dhabi Sustainable Finance Forum (ADSFF) into a carbon-neutral platform and event in the UAE.
To obtain its carbon-neutral position, ADGM purchased and retired all its 2021 carbon credits via the Rimba Raya project, one of the highest-rated REDD 1+ projects globally, based in Indonesia. This initiative was facilitated by AirCarbon Exchange, a digital carbon trading exchange based in ADGM Square.
At his opening keynote address at the 4th ADSFF, H.E. Ahmed Jasim Al Zaabi, Chairman of ADGM, said: “ADGM is glad to be the first international financial centre in the world to be carbon-neutral. ADGM’s commitment to ADSFF and being a ‘carbon-neutral’ financial services hub dovetail well with its ongoing efforts to provide an innovative financial platform and progressive, holistic ecosystem that bolster Abu Dhabi and the UAE’s long-term economic development and sustainable growth. We will continue to foster meaningful collaborations with local and global businesses and play our part in supporting the UAE’s Net-Zero by 2050 Strategic Initiative, which is in line with the country’s Principles of the 50 blueprint.“
The ADSFF is an extension of the annual Abu Dhabi Sustainability Week and a strategic platform by the UAE financial sector to accelerate sustainable financing and investments and build up a more sustainable economy and future.
At this year’s ADSFF, a new cohort of 18 industry members joined the Abu Dhabi Sustainable Finance Declaration, bringing the total number of members 59. Together, these members seek to foster more sustainable financing activities and responsible investments, and address matters that affect the financial sector and long-term well-being of the UAE.
During the Forum, ADGM has also unveiled a series of new initiatives and programmes designed to support the sustainable finance agenda. These new initiatives include:
The ADGM Sustainable Finance Platform – designed to promote and accelerate sustainable finance activities and decision-making among investors and stakeholders by providing them with real-time access to UAE and regional sustainable finance market data. The Platform will feature critical sustainable finance data and focus on responsible banking, responsible investing, sustainable products, ESG disclosure, and sustainable capital markets.
The ESG Intelligence Sustainable Finance Report – ADGM is working with the Oxford Business Group to produce the ESG Intelligence Sustainable Finance Report to highlight ADGM’s and Abu Dhabi’s efforts and contributions towards the developments of the sustainable finance industry, and how they have been supporting the evolving needs of green asset issuers and investors in the region and globally.
Achievements of ADGM’s partners in addressing how they worked towards financing sustainable economic growth while supporting net-zero targets.
The one-day ADSFF featured many globally renowned speakers including, H.E. Ahmed Jasim Al Zaabi, Chairman of ADGM, H.E. Mohammed Ali Al Shorafa Vice Chairman of ADGM, H.E. Ban Ki-moon, President of the Assembly and Chair of the Council of the Global Green Growth Institute, Eight Secretary-General of the United Nations, H.E. Younis Alkhoori, Undersecretary at the Ministry of Finance, UAE, H.E. Mohammed Al Hammadi, Managing Director and CEO, Emirates Nuclear Energy Corporation (ENEC), H.E. Salama Al Ameemi, Director General, Ma’an Authority for Social Contribution, H.E. Dr. Maryam Al Suwaidi, Securities and Commodities Authority (SCA), Mary Shapiro, former Chair of the US SEC and Vice Chair, Glasgow Alliance for Net Zero (GFANZ), JeanLemierre, Chairman, BNPParibas, and MariaFerraro, Member of the Executive Board and Chief Financial Officer, Siemens Energy AG.
The $187 billion Citizens plans to increase its technology spend this year although, like other large banks, the bank declines to reveal any numbers. “Overall, it [tech spend] is increasing; we’re definitely spending more year over year,” Michael Ruttledge, chief information officer and head of technology services at Citizens, told Bank Automation News. The reason […]
Throughout the entire month of January, The Fintech Times will be exploring every dimension of one of the industry’s most pressing topics: cybersecurity.
During our fourth week of cybersecurity coverage, we’ve considered how passwords are being breached, and the highs and lows of contemporary security measures like biometrics. Today we’ll be continuing along this theme with a more hands-on step forward, to consider all the best ways to manage passwords more securely.
Amir Hashmi
Password technology stands between cybercriminals and our personal information, so it’s critical that these front line measures are as robust and as unbreakable as possible. “According to a 2021 IBM report, stolen credentials are the most common cause of data breaches, making employee passwords one of the biggest ongoing threats to corporate security – whether the employees using them are remote working or not,” zsah CEO and founder, AmirHashmi tells The Fintech Times.
The security of a business depends on the security of a password, and to provide a comprehensive solution to this task, we sat down with a range of industry experts to gain an on-the-ground understanding of how this can be achieved effectively.
Complexity is Key
Building a password is like building a bridge. It needs to be long enough to cross the river of cybersecurity breaches, unforgettable, so that you don’t forget where to make the crossing, and fortified so that the bridge doesn’t give way under your feet.
Jason Dowzell
“Managing passwords securely can be challenging – especially when we’re all using an ever-growing number of systems, both professionally and personally,” comments JasonDowzell, CEO and Co-Founder of NaturalHR. “We’re supposed to memorise a vast number of passwords designed to be impossible to guess!
“A good starting point to managing passwords securely is to cultivate the practice of creating longer passwords which aren’t re-used on multiple sites. Many businesses and sites require that passwords are made up of both upper and lowercase letters, numbers, and special characters.
“While this contributes to more complex passwords, these are often hard to remember and can ultimately lead to poorer security hygiene. No one will remember ‘A6*8Jhku)[email protected]’ in a hurry!
“It should be noted that a longer password combining multiple words – opting for password length rather than complexity – is harder to crack and also easier for the user to remember. In fact, research has found that a password containing 12 characters is 62 trillion times more difficult to crack compared to one with just six.”
Jason Stirland
Adding to this, JasonStirland, CTO at DeltaNetInternational recognises how a small crack in the wall could compromise the integrity of your defences, and how raising employee awareness remains essential: “According to research by LastPass, despite 92 per cent of online users recognising that using the same password is a risk, 65 per cent still reuse theirs across accounts, increasing the risk of a data breach. That’s why it’s so important for businesses to train their employees on the importance of using passwords securely as a preliminary line of defence.
“With cyber-attacks on the rise, it is remarkable how many passwords are compromised simply because they are not strong enough. Strong passwords are hard to guess, include a combination of upper-case letters, lower-case letters, symbols, and numbers, and are different for each account/platform. It’s important not to use names, important dates or words from the Oxford dictionary. Instead, use a memorable phrase and change out some of the letters for numbers or symbols to make it difficult to guess.”
Two-Factor Authentication
Two-factor authentication is the process of accessing data by presenting two, or sometimes more, different types of information. Typically, users might be requested to verify their identity by triggering a parallel process on a supporting app once they’ve entered their password.
“Unfortunately, often due to the sheer number of passwords required for users online – many people reuse the same password across multiple accounts, making them vulnerable and posing an information security risk, especially if shared with business accounts,” adds Stirland. “To help counter this risk, IT teams should enable mandatory two-factor authentication on company accounts as an added layer of security.”
“Using two-factor authentication provides a second layer of security beyond just a username and password,” explains Dowzell. “This security approach requires an additional login credential to gain account access, and receiving that second credential requires access to something that either belongs to the user (e.g. a unique access code sent via SMS to their mobile phone), something only the user knows (e.g. security question answers or a PIN) or something only the user is (e.g. biometric data such as a fingerprint).”
Password Managers
“Depending on your business, the number of applications your employees may need to use to perform their duties can reach dozens, if not hundreds. A robust password policy must be enforced. It is, of course, difficult for employees to remember a long list of strong passwords with strings of random letters, numbers, and symbols. As such, the use of password managers which create, retain, and autofill passwords can be a good,” explains Hashmi.
Password managers work online in a similar way to how keychains keep all of your keys securely in one place. The solution could appear to be highly valuable when managing remote teams, and are also beneficial when managing a large volume of passwords.
“Using a reputable password manager can also help in managing passwords securely and can be readily accessed using one master password,” Dowzell adds. “These tools allow users to store multiple passwords in an encrypted format so that they don’t have to remember each of them – and they often generate ‘strong’ passwords on the user’s behalf.”
Michael Crompton
One such solution that consumers might be interested in utilising is the password management service of Forghetti. The service allows users to generate and implement passwords using just one secure key. Whilst speaking to the company’s Founder and CEO, MichaelCrompton advises: “The most vulnerable and difficult aspect of maintaining security is the human factor. Cybersecurity is a necessity for young and old alike. As a society, we need to encourage everyone to take a first step towards being secure and responsible with their personal data. We have designed a series of illustrations aimed at teaching and raising awareness of five critical rules for handling passwords:
Make your passwords complex
Have a unique password for every account
Make your passwords long
Be mindful of where you store your passwords
Change your passwords regularly
Ultimately it is not practical for anyone really to manage this manually – so time to get a password management solution if you do not have one already.”
Tyler is a Fintech Junior Journalist with specific interests in Online Banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.
This week our experts brought you the following insights based on their experience as investors, entrepreneurs & executives.
MondayIlias Hatzis our Greece-based crypto entrepreneur (Founder & CEO at Kryptonio a “keyless” non-custodial bitcoin and cryptocurrency wallet, that lets users manage bitcoin and crypto, without private keys or passwords and Weekly Columnist at Daily Fintech) @iliashatzis wrote The digital euro is on the way
Digitalization is affecting everything and is accelerated by the pandemic. One area unable to escape this accelerated trend is money. Money inventions have challenged and transformed the structure of the financial system throughout history. Time and again, innovations have sparked disputes about the dangers they represent and the benefits they provide, as well as the role of central banks in fostering financial trust. Not so long ago, cash was more or less the only way to make an immediate purchase. However, we have grown accustomed to using forms of private digital money such as online bank transfers, debit cards, and applications on our smartphones or smart watches.
Editor note: Ilias makes the case for CBDCs as an interim step to a stateless currency like Bitcoin.
There is a big difference between philanthropy/ charity and impact investing. Philanthropy/charity has no revenue model. Such pure giving is needed at the lower levels of Maslow’s hierarchy of needs where the donees have no capacity to pay anything.
Editor note: The big question is whether Fintech only serves big companies or whether it can be used by all of us? Is it Fintech4Us or Fintech4Big&Wealthy? Can the 99% use Fintech to better their lives? Is there a real level playing field?
In general, technology stocks declined substantially on Wall Street in the past year, but insurtech stocks saw major declines. Lemonade fell 78% to a market cap of $2.3 billion, less than its trading day price in July 2020. Hippo crashed 77% since entering the NYSE through a SPAC merger last year, seeing current market cap drop to $1.5 billion from $ 5 billion at the time of the merger. Root, which specializes in car insurance went public in 2020 and lost 88% within a year. Metromile, another American car insurer that went public via a SPAC merger a year ago, lost 87%, and was acquired by Lemonade. Oscar Heath saw its share price collapse by 79% since its March ’21 IPO.
Editor note: this is a timely post as all investors rediscover the V word – valuation
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Contactless payments saw a massive uptake at the start of the pandemic, with this trend not showing any signs of slowing down two years later. In 2022, research from Barclaycard has found contactless payments have increased 40.2 per cent year on year, with 91.1 per cent of all eligible card transactions in 2021 having been made contactlessly.
The data also shows that shoppers increasingly opted for ‘touch and go’ at the check-out following the limit increase from £45 to £100 in October 2021, which resulted in the average number of transactions made contactlessly in the UK each day growing by 27.5 per cent.
Growth across all sectors
All sectors have benefited from the contactless limit increase, with the payment method saving an average of seven seconds per transaction compared to Chip and PIN and 15 seconds compared to cash.
Analysis across sectors shows that the value of contactless transactions made in the entertainment sector, which includes cinemas, theatres, bowling alleys, arcades grew by 105.8 per cent, while bars, pubs and clubs drove an 83.4 per cent increase year-on-year.
Other significant increases in the value of payments made include at sports and outdoor retailers (up 64.7 per cent), clothing stores (up 64.6 per cent) and takeaway and fast food outlets (up 39.2 per cent).
How consumers used contactless in 2021
Individually, the average contactless user made 180 contactless payments in 2021, worth a total of £2,293, an increase from 2020 where users made on average 141 payments worth £1,640.
As UK consumers finalised their festive purchases, Thursday 23 December 2021 was the busiest day for contactless transactions, where the value of eligible sales grew by 121.4 per cent, compared to the daily average of 2021.
JoseCarvalho, Head of Consumer Products at Barclaycard said: “Our data shows that many shoppers have welcomed the £100 increase to the contactless limit and are now choosing to pay this way for goods and services in store. Unsurprisingly, many consumers are also increasingly reluctant to touch cash or PIN pads when they go to shops which is why innovations that enable a ‘low-touch’ experience, such as contactless payments have really grown in popularity.”
RobCameron, CEO of Barclaycard Payments, said: “The increase to the £100 payment limit has been a great opportunity to take friction out of the purchase experience. This is especially the case in busy stores where queues can quickly build up; the faster that line moves through, the more likely shoppers are to have a good experience and want to come back. Speed at the checkout will often avoid shoppers going elsewhere, which is why the limit increase is a win-win for cardholders and merchants.”
Despite having a land area of only around 21 square miles, the fintech scene in Bermuda is one that is ripe for innovation and disruption of the global industry. With a strong regulatory environment, the Bermudan government has identified the country’s opportunity to be a pioneer in the financial technology sphere, attracting the world’s best-structured fintech companies to be a part of the ecosystem.
The Rt Hon David Burt, Premier of Bermuda
Edward David Burt MP was elected Premier of the country in July of 2017 as Bermuda’s youngest-ever head of government. Burt is also the minister responsible for fintech, keen to continue the growth of the island’s fintech landscape, as well as promote and develop its long-established strengths and status as a hub for innovation. Only a few months after he was elected, Bermuda formed a blockchain task force to examine both the business development side of things as well as regulatory aspects, highlighting the country’s strong regulation and legislation pathways.
“Bermuda was one of the first countries in the world to introduce a licensing regime for digital asset companies, and in addition to that we continue to advance, with Bermuda known for being a sound regulator,” says Burt.
Government involvement in fintech
As the minister responsible for fintech, Burt stresses that the responsibility to supervise and develop the industry is shared threefold.
“In Bermuda, we have what I used to call the holy trinity, but now I call it the Bermuda Triangle, and what that is, is the relationship between the industry, our regulator and the government. All three of us work to ensure that our financial services marketplaces can advance.
“The government sets the laws, but when it comes to regulating digital asset companies, that is completely independent of the government and is handled by the Bermuda Monetary Authority. The government takes feedback from the industry to use when drafting legislation, which is then implemented by the regulator.”
In terms of the three institutions working together, Burt adds: “Things are working so well in Bermuda. One of the latest changes that we’ve made was in the area of clarifying derivatives and how those can work underneath our regulated environment, something that was requested by industry players to make sure we can have additional growth and expansion for Bermuda products.”
Strong regulatory landscape
The regulatory landscape in Bermuda is strong, with Burt stressing the robustness of their regulation.
“Bermuda is known for being a sound regulator, our Bermuda Monetary Authority is very well respected,” he said.
Bermuda is also one of the only global authorities to implement a legislative framework that encourages the testing and development of technology that could disrupt the financial services industry, not only via a regulatory sandbox but also with a strong, proactive regulatory regime.
“There are only two countries in the world that have regulatory equivalence when it comes to risk matters with both the United States and the European Union, and that is Switzerland and Bermuda.
“So, we are a place that is known by international regulators as a serious contender. Right now, we have 10 regulated companies inside of our space, with more companies going through the process as we speak – some incredibly big names that we can’t wait to announce when they become officially regulated.
“For companies that want to be regulated, Bermuda is the home for them. We enable fintech companies to do things that they cannot do in other jurisdictions with a well-known regulator, and we believe this will stand us in good stead as we move forward.”
The local market
As a small country, Burt advises that Bermuda often gets excluded from what he calls ‘Fintech 1.0’, the companies, products and services that are commonplace for consumers in Europe and the US, such as Paypal and Venmo.
“These companies don’t come to countries as small as ours because it doesn’t make sense for them to put in the infrastructure for such a small market,” the Premier said.
Instead, Bermuda encourages homegrown fintech companies in the country to create these solutions locally, offering an alternative licence to its sandbox level which starts with a slightly lower level of regulatory scrutiny than what is applied to companies in the digital asset spaces.
“Our test licence has a lower application fee and allows locals and others who are looking to test their startups inside this environment to go ahead and see what it is like working with a regulator to build and develop their products, eventually advancing them up to a sandbox license and ultimately a full licence.
“We have a full suite, and we want to be known as the place where companies can come and test and develop their products and services in an environment where a government is willing to work with them to help scale them up.”
Looking to the future
Bermuda’s goals and objectives as a fintech sector over the next five years all revolve around being known and recognised in the global market. As an established hub for fintech that is consistently growing, the Premier is keen to highlight the country’s role in the industry moving forward as a provider of sound regulation.
“We haven’t been like other countries who have rushed to try and get in the big names because we recognise that inside of this industry that there are people who want to be regulated but not everyone actually wants the scrutiny that a regulator does provide,” Burt said.
“From our perspective, the companies that do want that scrutiny are in for the long haul and recognise the way the industry is moving globally and that need for a well-regulated environment. Those are the types of companies that we’re looking to attract in Bermuda.”
A home for all fintech
Finally, when asked what was the one thing he wanted the global fintech industry to know about Bermuda, the Premier concluded: “Bermuda will be the future of fintech regulation. If you are a company that is serious about wanting to be regulated by an internationally respected regulator that understands digital assets, offers regulatory clarity and a government that will commit to working with you to develop products and services locally, there’s a place for you here.”
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.
Mojaloop, an open-source payment platform designed as a mobile payment system to help serve underbanked markets, has recently released a new whitepaper.
Discover how Mojaloop can support hub operators to deliver instant interoperable payments for schemes in this recently published whitepaper. This whitepaper shares insight into:
· Interoperable instant payments and financial inclusion
· Defining good instant push payment interoperability
· Schemes and consortiums
· Things to consider when choosing technology
· The significance of Mojaloop approach
To read the full whitepaper in full please click here.
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.
In 2021, online retail trading reached record volumes of over $8billion globally, continuing an upward trend in volumes that began in the first quarter of 2020. The retail investment boom was a reaction to the market fluctuations caused by COVID-19, with a new generation of investors and traders looking to secure financial gains by trading online in stocks, cryptocurrency, and other assets. The outlook for 2022 is positive: retail investors continue to be highly active, with crypto at the forefront of the online retail trading market.
Joe Jowett co-founded StrikeX with the goal of producing simple blockchain-based products that allow individuals to invest easily and safely. His highly successful background as a trader and spirited community leader makes him the perfect candidate to innovate in building an ecosystem that puts the user’s needs first, and provide them with the most valuable and useful tools possible.
Speaking to TheFintechTimes, Jowett explains why online retail trading is broken, and how it can be made fairer, safer, and more accessible through increased transparency, tokenisation of assets, and removing entry barriers to new traders:
Joe Jowett, CEO at StrikeX
However, for online retail trading to continue its surge in popularity in the long term, certain aspects of the sector need to be fixed. The infamous GameStop saga of January 2021 highlighted the failures of the current market, with young investors on Reddit creating a short squeeze by buying out GameStop stocks, and eventually organising the purchase of enough shares that short sellers closed with immense losses. Meanwhile, retail trading platforms restricted transactions of GameStop stocks. The market had underestimated everyday investors, and platforms reacted by severing the trust their users had in them. To regain that trust and build a better market, platforms must be more transparent with their users, adapt to users’ needs such as including tokenised asset trading, and empower their users to trade safely and responsibly.
The need for transparency
The ramifications of the GameStop saga meant that online trading platforms had to rebuild their reputation. By freezing trades, trading platforms were responsible for millions of investors losing money, and became the subject of numerous lawsuits. It is therefore vital that platforms operate transparently and securely to regain users’ trust. Done right, the use of blockchain technology offers the ability to do so more effectively than anything else.
Blockchain has many benefits, supporting decentralised peer-to-peer transactions that are lightning-quick, secure, and free from additional costs. By being instantly traceable, keeping an accessible information log, and encrypting sensitive information, blockchain is the future for transparency and security in trading, and one of the key reasons why trading in crypto and NFTs is so popular today.
Tokenised asset trading
Tokenisation, of which NFTs are an example, is an alternative to encrypting data. By tokenising assets, they become similarly secure, with tokens acting as a non-sensitive substitute for the actual assets. As the popularity of tokenisation is increasing, platforms that offer the ability to trade tokenised assets are becoming highly coveted.
Tokenisation brings all the benefits of blockchain technology into digitised assets ranging from commodities to stocks. Tokenised asset trading allows for faster, cheaper, and safer trading, while also opening up an unlimited market. Not only are markets always open and globally accessible, but platforms that offer tokenised asset trading can remove the need for multiple accounts on multiple platforms. Instead, tokenised asset trading allows for all assets to be traded on a single platform, providing that platform supports tokenisation.
Removing entry barriers
Offering accessibility for first-time users is an absolute must for these platforms. With the large influx of users over the last couple of years – 15 per cent of current retail investors began in 2020, with a median age of 31 – it is crucial that platforms adapt to be more user-friendly and easier to navigate, to attract further users and retain existing ones. Currently, many online trading platforms are confusing and overly complex, and offer little in the way of education for inexperienced traders.
Platforms that offer transparency, provide tokenised asset trading, and cater to novices as well as experienced users will be more likely to retain their user base, while trading platforms that do not adapt will be left behind. At StrikeX, we have listened to feedback on what users want out of their trading platforms. To offer a solution, we designed TradeStrike, our flagship platform which is due to be released in late 2022. TradeStrike will offer tokenised asset trading for crypto and other assets such as real estate and stocks on a single platform, utilising an intuitive user interface that aims to educate and empower traders.
As online retail trading becomes more prominent across younger generations, trading platforms must increase their appeal, fulfilling their user’s needs and providing trading that is fairer, safer, and more accessible. It is time to revolutionise the marketplace, so that it truly works for everyone who uses it.
According to PwC UK’s Net Zero Future50 report, the UK ranked first in Europe for total climate tech Venture Capital funding between 2013 and the first half of 2021, which saw investment levels in excess of £6.5billion.
The report identified the UK as an epicentre for climate tech innovation, ranking the country third globally for total Venture Capital (VC) funding in Climate tech between 2013 and the first half of 2021; surpassed only by the USA and China.
The UK also recently saw record VC investment levels, in excess of £2billion, in the second half of 2020 to the first half of 2021 and has more climate tech start-ups that have received funding than any other country in Europe from 2013 to June 2021, in excess of £6.5billion.
Leo Johnson
“As climate challenges grow ever more urgent, climate tech innovations are helping to bend the emissions curve and accelerate decarbonisation,” comments LeoJohnson, Head of Disruption and Innovation at PwC. “The UK has been pivotal in climate tech’s growth over recent years and with COP26 highlighting the need for climate technology as part of the Glasgow Breakthrough Agenda, the space is emerging rapidly. Technology is not the panacea, but climate tech is a critical mechanism to get us on track to meet the 1.5-degree goal, and the UK is at the forefront.”
PwC’s inaugural Net Zero Future50 report analyses the UK’s rapidly growing climate tech sector and identifies 50 innovative start-ups with the potential to make a significant difference in the battle against climate change.
With investment predominantly focused on well-proven technologies and near term profitable outcomes, a ‘Carbon Funding Gap’ is identified and presents an opportunity to focus greater pools of capital on certain innovations across high-carbon sectors like Built Environment to Food, Agriculture and Land Use (FALU).
The top but not the peak
To support the acceleration of funding, further progress is needed to channel and align national and global policies, especially with agreeing on the rules and guidelines for a global carbon credit market.
The report also finds that:
Critical funding gaps are present within the built environment, industry, manufacturing and resource management and GHG capture, removal and storage.
Despite mobility and transport receiving disproportionately more funding than every other sector in relation to its emissions abatement potential, it is still far from fully decarbonised.
There remain funding gaps within sectors – for example, funding into low-GHG aviation and shipping is significantly less than electric vehicles (EVs).
The same can be seen in Food, Agriculture and Land Use, where large-scale investment has gone into alternative meat start-ups and less focus on natural carbon sequestration through methods such as oceanic ecosystem restoration.
Johnson concludes with: “Investment is needed across all sectors, but the challenge is implementation, speed and scale. It will take engagement and action from policymakers as well as investors to deliver the potential of these climate tech breakthroughs.”
Tyler is a Fintech Junior Journalist with specific interests in Online Banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.
