Smart Predictions: The Connected Technology That Will Transform 2021

If there is one thing that we learnt from last year, it’s that we need to accelerate the pace of transformative change. In this article, Matthew Margetts of Smarter Technologies highlights the way that connected technology will be one of the likely key economic drivers going forward.

Matthew Margetts

Margetts is Director of Sales and Marketing at Smarter Technologies. His background includes working for blue-chip companies such as AppNexus, AOL/ Verizon, and Microsoft in the UK, Far East and Australia. 

The digital and physical world continue to converge

2020 symbolises a turning point of adaptation to digital interactions in everyday life, be it working from home, ordering groceries or online schooling. Consumers in 2021 and beyond expect to experience a seamless blend of intertwined in-person and online interactions along the customer journey.

In the manufacturing world, we can expect the rapid growth of AI, IoT and other industrial automation technology, especially since human resources become less accessible and reliable.

Technology’s place in the boardroom

In 2020, technology proved to be a competitive advantage for some companies and a threat to the survival of others. In particular, the failure to have a genuine eCommerce presence cost many companies dearly. As a result of this, the lines between technology strategy and corporate strategy are beginning to blur. In order to survive and thrive, organisations need to assess their current tech capabilities and expand on future possibilities.

Data-driven decision making

To prepare for current changes and an unknown future, corporate and technology strategists need to have access to accurate data to analyse, identify trends, reduce wastage and inform their strategies.

The first step in this process is accurate data collection. This is enabled by Internet of Things (IoT) sensors and networks that are able to report on virtually anything, 24/7. The next step is the ability to analyse this data. Again, technology platforms with advanced analytics capabilities, automation and artificial intelligence (AI) are making meaningful analytics a possibility. By using tools such as cloud-based dashboards, organisations have the ability to:

  • Identify internal and external strategic forces

  • Inform decisions

  • Monitor outcomes

  • Develop strategies continuously and dynamically

Information technology accessed by everyone, but trusts no-one

Cloud-first, cloud-only

One of the first steps in digital transformation is modernising legacy enterprise systems and migrating them to the cloud. The adoption of cloud-based applications became particularly important in 2021, with a large proportion of the office-based workforce operating from home. In order to continue with business as usual, employees needed access to critical software and collaborative working. In 2021, organisations will adopt a cloud-first mentality when it comes to building or upgrading technology infrastructure.

Zero trust is a must

In an increasingly digital world, cybersecurity is high up on the list of organisational risks. Zero trust security (which involves security measures that require everything to be verified) is shaping cybersecurity initiatives. In a zero trust architecture, there is no inherent trust, and every access request should be validated based on:

  • User identity

  • Device

  • Location

  • Any other variables that provide context to each connection

Access to data, applications and workloads is provided based on the principle of least privilege.

For most companies, the creation of a zero trust architecture will require third-party assistance from digital transformation experts in IoT spheres.

Supply chains move to the front office

Supply chains were once seen as ‘behind-the-scenes’ necessities. When COVID-19 hit, it quickly became evident that even the most resilient and agile supply chains were only as strong as the weakest links.

A recent survey of supply chain professionals found that 97% of respondents said that their organisations experienced disruptions related to COVID-19. The same survey found that 73% of respondents are now planning major shifts in the way they approach procurement and supply chain management.

In 2021, more and more organisations are realising that the way they conduct their supply chains can actually become a competitive differentiator. Accelerated by the COVID-19 pandemic, customers are increasingly looking for more streamlined supply chains, fast, contactless delivery and greater traceability. In addition, organisations are realising the value of data extracted through the supply chain network.

There is a growing trend to fit products with IoT-enabled sensors that provide 24/7 asset visibility
from the source to the hands of the consumer. The ability to capture larger volumes of real-time data allows supply chain operators to mine this data for operational insights.

In addition, the use of drones, condition monitoring, robots and image recognition are making physical supply chains more effective, efficient and safer.

Contactless customer service: Delivery and shipping

Born out of customer desire to minimise physical contact, contactless delivery options will continue to develop in 2021. Contactless delivery is made possible by artificial intelligence-based applications and robotics.


To minimise the risk of COVID-19 exposure in the healthcare sector, practices have started implementing more telehealth offerings. These include:

  • Remote/video consultations

  • A.I-based diagnostics

  • No-contact medication delivery

Autonomous vehicles

Autonomous driving technology is set to make significant progress during 2021, with major manufacturers such as Honda and Ford announcing plans to mass-produce autonomous vehicles and launch autonomous driving ridesharing services.

Zero food waste

Food security came to light in the midst of supply and demand challenges brought about by the coronavirus in 2020. In 2021, reducing food waste is moving higher up the agenda.

The UN’s Food and Agriculture Organisation reports that more than 30% of the world’s food is lost or wasted every year. Smart technology can be used to reduce food waste, increase food security, and assist with better distribution of food resources worldwide. For example, automated, sensor-based inventory management and replenishment ensures that the correct quantities of food are ordered at the right time, completed without human intervention and inaccuracies.


And, finally, no series of predictions would be complete without a quick comment on blockchain technology. For the most part, the application of blockchain tech is overshadowed by its “poster boy” application—Bitcoin and other cryptocurrencies. However, as we move into a smarter age, the process accountability distributed ledger technology guarantees will ensure that 2021 will see greater transparency on ordering, delivery and workstream management, along with a host of tradable asset ledgers coming online. All of which will improve efficiency across operating lines and help cut waste.

Technology and transformation

These trends predicted for 2021 are connected by the thread of digitalisation and connected technology. The need for this transformation was accelerated by the ‘new normal’ necessitated by the coronavirus pandemic, which set the world on a course towards powerful new digital capabilities. Daunting as this may seem, having the right technology partners on board helps organisations take advantage of the critical technology trends of today.

  • Gina is a fintech journalist (BA, MA) who works across broadcast and print. She has written for most national newspapers and started her career in BBC local radio.

Security Concerns the Biggest Barrier to Public Cloud Adoption Say UK Businesses

Fifty-eight per cent of UK business decision-makers have admitted that security remains the biggest barrier to public cloud adoption in their organisations, according to new research from Centrify, a provider of modern privileged access management (PAM) solutions.

The research, conducted by independent polling agency Censuswide via a survey of 200 business decision-makers in large- and medium-sized enterprises in the UK, also revealed that over one-third (35 per cent) of the organisations who have adopted cloud are less than 80 per cent confident that it is completely secure.

When questioned about security weaknesses in their companies, 45 per cent of decision-makers agreed that it is the increasing amount of machine identities and service accounts, such as those used by servers and applications, that are becoming the largest exposure point for their organisation.

Interestingly, the findings also revealed that more than one in four (28 per cent) companies have already been targeted by a cloud hacking attempt since the start of the Covid-19 pandemic in early 2020.

Most worryingly, despite continued requirements on enterprises for digital transformation and rapid innovation, almost one-third (31 per cent) of business decision-makers admitted that their development teams are more interested in getting around security than building it into the DevOps pipeline, posing a potentially grim cybersecurity outlook for 2021.

Kamel Heus, VP EMEA for Centrify comments: “Adapting to the Covid-19 pandemic has been a bumpy ride for many businesses and, in most cases, companies have had to adopt the public cloud in at least some capacity due to the level of scalability, availability, and efficiency it provides for distributed workforces.”

“Whilst the common misperception is that cloud security is quite different to that of on-premises infrastructure, it is by no means less secure if common security protocols are followed, and security controls are applied.”

“One core challenge posed by digital transformation is accurately verifying human and machine identities before granting access to systems, applications, and other high-value targets. Therefore, adopting cloud-ready privileged access management software is essential in protecting access to workloads in the public cloud, by granting access only when a requestor’s identity has been properly authenticated.”

  • Gina is a fintech journalist (BA, MA) who works across broadcast and print. She has written for most national newspapers and started her career in BBC local radio.

Velmie Report: Why invest in Mobile Banking in the Middle East and Africa?

Velmie, a white label mobile banking platform provider, has carried out research on how the MENA fintech environment has been transforming recently. The aim was to spot specific regional trends, drivers and challenges that are likely to influence the fintech industry in the Middle East and North Africa in 2021 and further.

The MENA region is fast becoming an exciting frontier for the fintech industry, with growth benefiting from a confluence of contributing factors, including favourable demographics, economic potential, digital appetite and mobile penetration.

The financial technology industry is in the beginning of its development in the MENA region. That is illustrated by the fact that the Middle East fintech startups received a mere 1% (about $0,4 billion) of all venture capital fintech investment across the globe in 2018. However, the growth off this low base is likely to be strong, with the fintech sector across the Middle East already growing at a compounded annual growth rate (CAGR) of 30%. What is more, it is projected that by 2022 some 465 fintech companies in the Middle East will raise over $2 billion in venture capital funding.

The key factor that makes this region an attractive hub for fintech startups and mobile banking expansion is a high demand for mobile banking and payment solutions due to the low financial inclusion rates across the region. About 43% of the adult population still have no access to bank accounts in the Arab world.

“MENA’s financial services industry is well-positioned to see significant growth and fintech disruption in the foreseeable future, which makes it a great market for fintech startups and investors,” said Paul Shumsky, Head of Product, Velmie.

Overall the transformation in the MENA region is likely to be propelled by the shift away from oil-based economies toward more service-oriented digital industries, the demographic shift to a younger and tech-savvy population, and the exponential technology evolution.

Payment Innovation: You Can Now Track International Payments Like Parcels

iBanFirst, a global financial services provider delivering solutions across banking borders, has launched its ‘Payment Tracker’ – a real-time payment-tracking service that sets new transparency standards for the payments industry. Rolled out to both payers and payees, this unique feature provides live updates on the status of international payments at any stage of the fund transfer process. The ‘Payment Tracker’ also highlights potential roadblocks or delays along the payment’s journey.

With the ‘Payment Tracker’, iBanFirst’s mid-cap and SME clients can trace payments the same way consumers can track parcels. Bringing this everyday experience to the complex world of B2B foreign currency transactions was no small feat. The ‘Payment Tracker’ is a simple interface accessible on the iBanFirst platform or via an invitation email. It leverages the SWIFT gpi tracking service as well as other payment data sources, including the platform’s own data.

Creating the ‘Payment Tracker’ required the reconciliation of different types of payment status – SWIFT and iBanFirst – as well as giving secure access to this information outside the platform, in order for payment beneficiaries to use the service, not solely iBanFirst clients. This scalable micro-service builds on architecture and APIs that enable the aggregation of any type of bank settlement. Initially developed for foreign currency payments, it also facilitates eurozone (SEPA) transfers.

Commenting on the launch, Oualid Abderrazek, Chief Product Officer, iBanFirst said: “Until now, little had been done to provide real-time status updates on international bank transfers for both payers and payees. A growing number of companies operate internationally and source products overseas. Manufacturers’ terms of payments often call for a 30% advance by bank transfer before production starts and the settlement of their invoice before shipment. The timely execution of payments and the ability to notify beneficiaries are therefore crucial to bolster companies’ relationships with international vendors and to speed up their supply chain.”

Pierre-Antoine Dusoulier, CEO and Founder of iBanFirst, said: “We are delighted to launch the iBanFirst ‘Payment Tracker’, which brings a time-honoured tracking experience from the parcel delivery industry to cross-border payments. This service not only represents a breakthrough in terms of user experience but also delivers full transparency on fees and potential delays at every stage of the payment process. With the ‘Payment Tracker’, iBanFirst remains true to its mission of empowering companies operating internationally. As uncertainty still looms within the context of a global pandemic, timely cross-border payments are vital for economic growth. This is also true of the circle of trust between clients and suppliers, which the ‘Payment Tracker’ helps to strengthen.”

  • Gina is a fintech journalist (BA, MA) who works across broadcast and print. She has written for most national newspapers and started her career in BBC local radio.

Year of the Crypto Bank

The Chinese New Year is coming up in couple of weeks and 2021 is a Year of the Ox. That’s a bull, but a “regulated” bull. And 2021 will be bullish on the convergence of crypto and traditional financial services.

Keeping up the positive crypto momentum from 2020, the Office of the Comptroller of the Currency (OCC) in letter on January 4, 2021 announced it’s latest crypto-friendly move: “Our letter removes any legal uncertainty about the authority of banks to connect to blockchains as validator nodes and thereby transact stablecoin payments on behalf of customers who are increasingly demanding the speed, efficiency, interoperability, and low cost associated with these products,” Acting Comptroller of the Currency Brian Brooks said in a statement.

The coronavirus pandemic may have played its part in spurring banks to roll out commercially viable cryptocurrency products. A study commissioned by Mastercard, found that more than half (53%) of the world’s population uses banking apps, more than they were before the pandemic. The research also showed that people are moving away from cash, with 64% saying they will use physical money less following Covid-19. In a year when Covid-19 shifted everything to online, including online banking, you’d expect that it would be a stellar year for challenger banks. But, the reality is that neobanks stumbled in 2020. The coronavirus lockdown hurt downloads. Research from Priori Data revealed that Revolut, Monzo, N26 and Starling saw their growth rates fall by between 18% and 36% in their home markets. In the US, traditional banks are adding an average of 180% more new mobile app users per month than digital banks are, over the past six months.

We are also seeing crypto-first players are making moves into the neobanking space. Bitwala now combines mobile banking with crypto trading in a single app, with a Mastercard debit card included. You probably already know that Kraken, a cryptocurrency exchange based out of San Francisco, is now the first-ever cryptocurrency business in the United States to become a bank. Ziglu, a UK company, is insuring users against theft of crypto funds for up to 50,000 GBP from cybercrime.

From where I stand it appears that banking and crypto are coming together fast. I expect to see DeFi, crypto and banks integrate even more. Prepare for a major shift in banking this year. Banks will be adopting cryptocurrencies.

Ilias Louis Hatzis is the founder and CEO at Kryptonio, a “keyless” non-custodial bitcoin and cryptocurrency wallet, that lets users manage bitcoin and crypto, without private keys or passwords.

There are several developments in the pipeline for 2021, that include the long-awaited Facebook-led digital currency Libra, industry-defining U.S. cryptocurrency regulations and Well Fargo announcing that it would be looking closer at the digital asset space.

In 2019, JPMorgan Chase introduced JPM Coin, its own cryptocurrency, which it uses primarily for funds transfers and faster transaction settlements among clients. Last spring, JPMorgan Chase began extending banking services to Bitcoin exchanges Coinbase and Gemini. Three years earlier, the bank’s CEO, Jamie Dimon, called the currency “a fraud” and said he would fire “in a second” anyone at JPMorgan found to be trading in it. In 2017, he said: “You can’t have a business where people can invent a currency out of thin air and think that people who are buying it are really smart.”

Morgan Stanley has been offering blockchain-based investment products since 2018. Goldman Sachs last year dismissed Bitcoin over its volatility, saying in a May report, “We believe that a security whose appreciation is primarily dependent on whether someone is willing to pay a higher price for it is not a suitable investment for our clients.” However, the bank issued a request for information to explore digital asset custody, according to CoinDesk.

More than 100 banks have tested instant payments with the use of the cryptocurrency Ripple. The European Central Bank has set up a task force to explore offering a digital euro, “not because we want to keep up with fashionable trends,” says ECB executive board member Yves Mersch, “but because we have to be ready.”

This year seems to be on the same track, especially from regulators.

The OCC since the summer has been warming up to crypto. Late last year, crypto firms BitPay and Paxos filed applications with the OCC to become national trust banks. Kraken is the first cryptocurrency bank in the US, since September 2020. It already offers banking and funding options to existing customers. Kraken can operate in multiple jurisdictions without having to deal with state-by-state compliance plans. Kraken is currently working with Silvergate Bank to offer SWIFT and FedWire funding options to US customers. More and more of these kinds of partnerships will become the status quo in the near future.

Services like these are bringing cryptocurrencies into the mainstream, and make them a standard everyday experience.

In the coming years, I can certainly see a scenario where people will be able to move between bitcoin and cash a lot easier in their accounts, for example if some people pay them in Bitcoin, some in dollars and others in euros. People will be able to go to a bank and access credit products, savings accounts and investments that can host both crypto and fiat assets.

Cryptocurrencies are a vehicle with great potential, with the potential to create new global financial leaders.

Crypto financial products can outperform traditional banking products, offering greater efficiency, less bureaucracy, and more transparency. This is exactly what Sir Jon Cunliffe, deputy governor for the Bank of England, talked about last year, in his speech on February 28, 2020. These new crypto offerings could draw away so much capital from current accounts, that banks would have difficulty lending.

This is why both traditional and neobanks should be launching a variety of cryptocurrency offerings, especially challenger neobanks. Time is running out, before all of them are disrupted by cryptocurrency-oriented competitors.

The next few years will more than likely bring cryptocurrencies and blockchains into the mainstream. Innovation in financial services is just getting started. The real risk is not about uncertainty, but about missing out on opportunities.

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Asian Etherium Wallet Giant imToken Confirms Tezos Integration

imToken, one of Asia’s biggest wallets for Ethereum users and China’s first self-custodial digital asset wallet, has deployed support for public blockchain Tezos. This latest public chain wallet integration demonstrates strong support for popular blockchain projects such as Tezos from imToken’s 11 million users in more than 200 countries and regions around the world.

The Tezos integration with imToken is part of a rising global phenomenon of combining digital value storage in cryptocurrencies and transmitting them through digital wallets in a new era of programmable Internet money. PoS chains such as Tezos are enabling a new generation of financial networks and governance systems for entrepreneurs and businesses of all sizes and industries. These financial networks bring powerful network effects that reward their participants relative to the value they contribute in an auditable and decentralized manner.

Unlike the high computational resources required by Bitcoin miners to secure the Bitcoin network, Tezos uses a consensus mechanism known as Liquid Proof of Stake (LPoS) protocol to secure its network in a greener and more cost-effective way.

“This integration with imToken not only continues the transformation of payment transactions, but also allows the community to continue building on and advancing the Tezos protocol,” said David Shin, Head of TZ APAC.

In blockchain technology, the PoS mechanism enables participants to reach consensus on the state of the blockchain at scale, minimising the friction of counterparty risk and a single point of failure. Anyone can participate in the consensus process by holding a certain amount of the blockchain network’s native cryptocurrency and setting up a blockchain node.

Through the integration, imToken wallet users are now able to help secure the Tezos network by delegating their tez, the native cryptocurrency of Tezos blockchain, to imToken and other popular validators within the Tezos ecosystem. These validators, known as bakers, are in charge of securing the Tezos network on the wallet users’ behalf.

Ben He, the Chief Executive Officer of imToken, added: “Ethereum has been our focus from the beginning, but with PoS chains emerging in popularity for their lower transaction costs and energy-efficient usage, our users are asking for more PoS chains to try and use.

“With Tezos, we are excited to bring not only the original PoS chain, but one with a unique self-amending governance mechanism to integrate the latest technology. We are grateful to the developer support provided by the TZ APAC team during the integration process. We are looking forward to this long-term collaboration. Let’s bake!”

  • Gina is a fintech journalist (BA, MA) who works across broadcast and print. She has written for most national newspapers and started her career in BBC local radio.

Can Crypto Hit $2 Trillion? New Research Outlines The Steps to Get There

A new research report from advisory firm Aite Group commissioned by investment platform eToro reveals that insufficient market capitalisation is the biggest barrier to institutional adoption of crypto and the recent crypto rally supports this finding with the evidence of increased institutional flows. With the total value of all cryptoassets surpassing $1 trillion for the first time, currently one-tenth of the gold market, the report outlines what must happen for the sector to reach $2 trillion.

Based on in-depth interviews with 25 institutional market participants, the report identifies four key barriers to wider participation in the crypto ecosystem. Insufficient market capitalization was cited as the single largest impediment to further growth, but respondents also highlighted regulatory uncertainty, immature market infrastructure, and concerns over reputational risk and security issues.

Access to credit was also deemed necessary for wider institutional adoption, alongside greater adoption of enterprise-grade infrastructure and standards. Some market participants revealed that they trade exclusively with OTC desks rather than exchanges, citing lack of access to credit as one of the primary reasons.

One respondent’s assertion that bitcoin should break $25,000 to attract the attention of major tier-1 banks and individual investors proved particularly prescient. Since September, investors who purchased at least 1,000 bitcoins have helped drive the price of the bitcoin past its all-time high, setting a new record of $41,973 earlier this month. The report notes that rising interest is coming from high-net-worth individuals, family offices, and a few institutions.

Reflecting on the research, Tomer Niv, Head of Business Development for eToro’s professional crypto exchange eToroX, said, “2020 was the year when many institutional investors such as banks and traditional asset managers began to either invest in crypto or seriously consider doing so, with several touting the asset class – particularly bitcoin – as an inflation hedge. Daily trading volumes on eToroX doubled from Q3 to Q4 as prices surpassed the $25,0000 threshold.

The report provides a fascinating insight into the factors which leading institutional investors consider vital for encouraging richer institutional inflows into the crypto market. Only by widening the playing field and facilitating more participation will crypto reach and maintain a market cap of $2 trillion and beyond.”

Contributors to the report agreed that barriers to institutional adoption were gradually falling thanks largely to innovative crypto-native participants sustaining the market. The executives noted, however, that the next wave of growth must be led by traditional institutional investors buoyed by greater regulatory clarity, improved market infrastructure, and technological innovation.

Despite the efforts of individual bodies, the lack of a standardised global regulatory regime is a significant barrier to entry for most institutional players. This is predominantly because one jurisdiciton often has multiple regulatory bodies and it is currently unclear as to which one crypto would fall under. The report provides a dispatch of current steps regulators around the world are taking to bring crypto inline with traditional markets. 

Respondents named regulated markets as their preferred execution venue, followed by OTC market-makers and crypto spot exchanges. Regarding the possible launch of regulated funds and ETF products, executives were positive, with most stating that the availability of reputable funds and crypto ETFs would help to ensure institutional market growth. 

The report also noted that traditional institutional players wish to make a decision on exposure and trade without having to concern themselves with the technical complexity and risks of storing their own private keys. Most respondents heralded cold storage as the most popular custody method while dismissing hot wallets as inappropriate for the institutional market.

Tomer Niv added, It’s encouraging to see that the next phase of the crypto industry’s evolution is underway with more participation from institutions. At eToroX we are seeing more and more professional traders coming to us wanting to know how to access crypto liquidity. 

“More needs to be done from a market infrastructure point of view to make this group of investors feel comfortable joining the crypto ecosystem. eToroX has introduced a series of enterprise-grade infrastructure solutions like FIX APIs and cold storage, which we view as a critical component for attracting institutional capital to the exchange.

  • Gina is a fintech journalist (BA, MA) who works across broadcast and print. She has written for most national newspapers and started her career in BBC local radio.

10 Fintech Predictions From Our Experts on What Will Define 2021

In 2020 the COVID-19 global pandemic pushed digitisation faster than anyone expected, especially in Fintech. Many leaders predict that last year was just a jumping-off point, and we’ll continue to see the category grow at ‘warp speed’ in 2021.

Here, experts from all corners of fintech share their thoughts on what we should expect to see, which trends will continue, and those that will fizzle out as the year progresses. 

Prediction 1: Neobanks and digital banks will continue to see challenges, as big tech and financial services companies enter the space

“Digital banking will undergo significant changes in 2021,” Despite the category being all the rage as recently as two years ago, we saw several neobanks shut down in 2020. That’s when it became obvious that general consumers were unimpressed with digital banking platforms and their perceived limitations, instead preferring traditional banks’ broad array of services and reputational confidence,” says Rich Silverman, Founder, and President of RTS Strategic Communications, an advisory firm that specializes in traditional banking and fintech companies.
“Simultaneously, several platforms based on specific groups’ unique financial services challenges were launched, including Tenth, Greenwood, and Paybby (catering to Black and LatinX communities) and Daylight (LGBT). Each of these firms seems to comprehend their own financial needs and why their groups sought to walk away from traditional banks. It will be interesting to see how these companies fare in 2021 and beyond as we observe whether or not their mission-focused business plans resonate with their targeted prospects.”

Prediction 2: Social media, eCommerce, payments, and rewards will converge, creating new ways for people to discover and purchase products and cutting the middle-man (AKA paid advertising). The main beneficiary: The consumer’s wallet

Wissam Dakka, is the Co-Founder of Meemo. He explains just what drove her to create the app. “I purchased an excellent subscription to receive science books each month for my 7-year-old. After a year and a half of being a happy subscriber, I was having a conversation with Evan [Speiglemen] and my co-founder Andre to tell them about the books. Then it hit me, these are 2 of my best friends, we chat with each other on all social platforms, probably for 2 hours a day, we all have Amex [American Express], which is what I used to pay for the subscription, we also all use the same bank, Schwab [Charle Schwab] and we email and know the algorithm on Google and Meemo


Snapchat to recommend stuff. And here for a year and a half, a brand that I’m very loyal to was kept a secret.

Had Evan and Andre known, they would have bought a subscription for their kids who are the same age as mine. This was a ‘wow’ moment for us, a major product here that hadn’t been built, and we looked into why. Google does not have the transaction or credit card information, credit cards don’t know about other people, and banks don’t know anything about my social network, and we thought the future was an app or system that somehow was able to connect all these dots in a safe way and be able to tell me ‘hey we think your friend Andre might like this brand. Would you like to recommend it?’ That was the start of Meemo. We really wanted to redesign the experience of discovery by connecting all these disparate sources of information.”

Prediction 3: Commercial banking will continue to digitise and experience a subscription revolution to change the way companies of all sizes approach their banking relationships.

“Just as consumers have grown comfortable with subscription models that make it easy and efficient to add or delete features, so too corporate and commercial banking clients want the ability to add or remove products and services quickly. To attract and retain customers in 2021 and beyond, banks must adopt an easy “plug-and-play” approach with price transparency in order to create value-driven relationships., said Matt Cox, EY Americas Corporate, Commercial and SME Banking Consulting Leader

Prediction 4: The number of fintech unicorns is set to grow, despite many analysts’ belief that the overall number will decrease.

“2021 is already seeing some surge in investments, with five companies receiving unicorn status in the first week of the year. While there is a lot of disruption in every industry at the moment, businesses are finding new and innovative ways to keep moving and even thrive. It may be that private-market investors are anticipating exit valuations and that a late-coming venture market will continue this year,” comments Rob Israch, CMO at Tipalti.

“When we take a closer look at the unicorns in the market, it is clear that these businesses have reached status by focusing on the product-market-fit for their specific product. They all have a unique growth strategy and fundraising plan; some have received VC funding, others bootstrapping, and some even crowdfunding. Our research shows that the fintech and e-commerce industries, in particular, were thriving in 2020, suggesting that these, along with other growing industries such as AI and internet services, will continue to service and innovate consumers in their time of need and hit unicorn status in 2021.” 

Prediction 5: Merchants of all sizes will adopt a cloud-based payments infrastructure, continue to seek socially distant and zero-contact solutions as the point of sale.

Nili Klenoff, Senior Vice President, Global Acceptance Solutions at Mastercard said, “We announced the first live deployment of Mastercard Cloud Tap on Phone anywhere in the world. We have moved our Tap on Phone product to the cloud, which will enable partners to develop their own tap on phone

solutions more easily and more quickly than ever before. With Tap on Phone, any business – regardless of size – can deliver new and best in class contactless consumer experiences using a device they already own – a smartphone.

“The desire for a seamless experience is where we are today and what will continue to be the expectation for consumers and businesses in the future. We are preparing for this future by leveraging the cloud to empower every business, consumer, and financial institution to remain resilient in today’s evolving tech world.” 

Prediction 6: Online payments still have significant room to grow

Believe it or not, many companies of all sizes have yet to fully adopt the multitude of solutions available in a vast market. Just look at’s recent roughly $400m valuation and the continued success of Shopify, stripe, and others as indicators for this category’s potential.’s valuation sets the tone for 2021 and is indicative that investors continue to believe in the growth of eCommerce and the need for merchants to have a strong online payments/checkout infrastructure. Merchants want more flexibility and control and so are looking for alternatives to the Amazon model. The continued growth of firms like Shopify, Stripe,  and now shows that there is room for new entrants to differentiate as this sector continues to grow at a high pace throughout 2021, with Covid accelerating the shift to digital for retailers. However, on the pathway, while growth will accelerate in 2021 and early 2022, I expect it to stabilize after that as the world settles into the new normal post-pandemic,” adds Sudeepto Mukherjee, Managing Partner, Financial Services at Publicis Sapient.

Prediction 7: Financial institutions continue to focus on accelerated digitisation (despite saying this for  years)

Internally and externally, they’re are finally behaving more like technology companies. The pandemic has proven to be a wake-up call.

“As we’ve seen trends in the shift from offices to remote work and analogue to digital, establishing a collaborative digital workplace creates a strong foundation for digital transformation in banking and financial services. Slack is uniquely suited to respond to the challenges of fast-moving, regulated industries, and also integrates with systems across different sectors of businesses, streamlining work and boosting efficiency. There are several ways in which financial institutions have been leveraging the platform to bring the future of work to life,” said Robert Frati, Senior Vice President of Sales & Customer Success at Slack.

“Our work with HSBC shows an example of how Slack is empowering digital transformation, The company has made it a priority to make online customer experiences both enjoyable and easy to navigate. With Slack, HSBC’s 1,000-person developer platforms team can bring solutions to market faster. With Slack, HSBC has radically improved its ability to serve its customers, enabling them to launch 31 times as many customer journeys digitally—from 7 to roughly 220. Customer journeys could range from ordering a checkbook onsite to getting a mortgage quote.”

Prediction 8: Open Banking Is going to do to banking what open source did to software

Junta Nakai, Global Industry Leader of Financial Services & Sustainability at Databricks, said: “Open Banking is quickly becoming law across major markets around the world. While it is not yet widely known in the United States, Open Banking represents a significant paradigm shift for Banks. At its core, Open Banking is about data ownership. It forces incumbent institutions to open up access to customer data to third-party developers. Banks will be forced to move from a historically ‘closed’ model to an ‘open’ model where customer data now belongs to the customer, and thus data can be moved across institutions. It increases the risk that incumbent banks will become invisible to the end customer.” 

“Open banking will do the same thing to banking that open source did to the software industry. Specifically, starting in 2021, it will spur Innovation, render old business models obsolete, and bring transparency to Banking services. We have a historical precedent. In the 2010s, as open-source became prevalent in software, it significantly accelerated innovation. Agile incumbents and startups that embraced an open mindset were able to capture outsized value. Similarly, in Open Banking, incumbents that survive and thrive in this paradigm will need to become more innovative, data-driven, and cost-efficient. A modern and simplified tech stack will become a prerequisite to competing in an open banking paradigm. While Open Banking is primarily centred around West Europe and Australia at the moment, the repercussions will be quickly felt around the world.” 

Prediction 9: More people will trust in Bitcoin

Bitcoin went legit in 2020, and more conservative investors like JP Morgan who were sceptical of the new digital currency, have shown they see its potential. The main factor behind this transformation: trust.

“Trust” is the only proxy for intrinsic value (or lack thereof) in a money system. Trust in state-dependent central banks has been corroding over time, culminating on the back of Covid; over-leverage has played a principal role in that corrosion. What we are witnessing is an exodus, from fiat state-backed money to state-agnostic assets – be it gold or BTC as a result of trust corrosion between people and their state. BTC’s recent parabolic ride is testimony to trust transition and is one that is set to continue. Said Eleesa Dadiani, Founder and CEO of the Dadiani Syndicate, a firm that brokers the sale of cryptocurrencies and commodities to high net-worth individuals.

Prediction 10: It’s only a matter of time before the Ethereum bubble begins to burst

Ethereum, which peaked in 2020 at $752.61 and has continue to rise in the first weeks of 2021 to $1281.58 is a bubble waiting to burst. When it does, its price will likely drop by a minimum of 50%. That’s according to Jamie Finn, President & Co-Founder of Securitize. “I fully expect we will see $400 ETH again in 2021 as the bubble subsides and people realize that ETH is not BTC and we are not dealing with constrained supply. It’s crucial to remember that we are dealing with two different users for ETH. The first and primary use is speculation, and I think investors will realize that ETH and BTC are two totally different types of currencies with different use cases, and therefore they should decouple so we will see BTC rise whilst ETH withers in comparison. The second for developers is that something has to change for ETH to be a true platform long term, either Gas Fees really decouple from the ETH price, or there is more scale introduced to the network by increased capacity, which should drive down prices. Either way, we should see a drop in the price because it will evolve or be abandoned.”

Surprise! The future awaits

Science Fiction author Karl Shroeder said, “Foresight is not about predicting the future, it’s about minimizing surprise.” In this instance, as we look at what the future holds for Fintech, this quote is highly relevant. Speaking with a selection of the industry’s leaders offers insight into what they’re preparing for based on their informed knowledge of this continually evolving category. At the end of June, I plan to revisit these themes to understand which came true, which didn’t and why.

As a journalist, my editor has taught me that it’s never about my opinion (despite how much I love to share my opinion) but rather to focus on the facts. Since we’re dealing with predictions, I’ll take this as an opportunity to break this rule. Based on my view of the industry, I agree with the entire list. In June, we’ll see if these myself and these experts are correct. But for now, Happy New Year from everyone at The Fintech Times. 

  • Managing Editor, North America at The Fintech Times

Fintech and Tech Talent in the Middle East and Africa: Young and Educated

The Middle East and Africa (MEA) is a diverse territory – home of some of the world’s richest nations with respect to the gross domestic product (GDP) per capita and also some of the world’s poorest. Talent in highly skilled and knowledge-based industries such as fintech, wider tech and digital remains a challenge globally including MEA.

Although relatively newer compared to much of the rest of the global fintech space, MEA as a whole has been developing its fintech sector. At the top of the chain is North America, the world’s biggest fintech market, boasting around 9,000 fintechs (8,775) – more than Europe, Africa and the Middle East put together (7,385) and almost twice as many as the Asia Pacific region (4,765) – according to The Fintech Times Guide to North American Fintech Hotspots. With regards to MEA, in parts of the region such as the Gulf, Israel, South Africa, Kenya, Nigeria, Egypt – to name a few – the fintech sector has been developing and flourishing. This requires the talent – both entrepreneurs who are at the forefront of innovation – as well as employees to fill these highly-skilled roles.

Parts of the Middle East and Africa, in particular the Gulf Cooperation Council (GCC) region such as Dubai, have attracted talent from across the world

Parts of the Middle East and Africa, in particular the Gulf Cooperation Council (GCC) region such as Dubai, have attracted talent from across the world

Parts of the Middle East and Africa (MEA), in particular the Gulf Cooperation Council (GCC) region such as Dubai (pictured), have attracted talent from across the world IMAGE SOURCE GETTY

With respect to the Middle East, the population overall is highly educated, where 70% have achieved secondary level (primary level nearly universal). For example, in the Kingdom of Saudi Arabia they spend 8.8 per cent of its GDP on education, which is double the global average of 4.6 per cent. The population is also young, where around 30% of the population is aged between 15 and 29 – representing around 110 million people –the largest number of young people to transition to adulthood in the region’s history. In terms of young people ages 15 to 24 they are 20% of the populations in Egypt, Iraq, Lebanon, Libya, Morocco, Oman, Sudan, Syria, Tunisia, Yemen, Jordan, Algeria, and Saudi Arabia.

Africa is also a young region. In Africa, according to the US Census Bureau there were approximately 241 million people aged 15 to 29 living in Africa in 2010, which represented approximately 28% of the overall population of the continent; 63% of Africa’s overall population was below the age of 25. Africa is home to 19 of the 20 youngest countries in the world in terms of age of people.

As mentioned as MEA as a whole is diverse – being home to some of the world’s richest countries in the world based on GDP per capita according to the World Bank – notably in the Gulf Cooperation Council (GCC) region with Qatar (+$64,000) and the United Arab Emirates (UAE) (+$43,000), as well as Israel (+$43,000). It is no secret, particularly in the GCC, that its story has attracted people from across the world – both blue collar and highly professionally skilled. The attraction from people across the world has allowed the strong economic development growth of the GCC, which historically has been its oil and gas sector.

For instance, in the UAE – home to Dubai and Abu Dhabi – the country’s population comprises of 90 per cent being expatriates – in other words the remaining 10 per cent being only local Emiratis. The UAE is home to nationalities from across the world. For example, there are estimates of 75,000 American citizens who reside there. Overall, the growth of the region has allowed the GCC countries of Saudi Arabia, Bahrain, the UAE, Qatar, Oman and Kuwait to propel themselves as developed economies and enjoy an overall high standard of living.

However, with the various economic development diversification strategies being implemented, the talent pool diversifies in its search. In addition, importantly, as part of the wider strategies a prioritisation of local-born talent is pivotal. This cascades down to the likes of the fintech and wider tech sector – which has seen its growth in a digital transformation world and in particular now in a COVID-19 world. The push to attract talent in the region can be seen such as last year when Dubai launched its own Digital Nomad visa and the UAE as a whole launching its Golden Residency programme permitting for a 10-year residency for individuals who meet the criteria, including holders of doctorate degrees and medical doctors, as well as computer, electronics, programming, electrical and biotechnology engineers, in addition to specialised degrees in artificial intelligence (AI), big data and epidemiology

The pandemic has hit all aspects of the global economy. Despite its challenges so far, there are some bright spots. For example, in the context of MEA, the UAE (which as mentioned earlier with global hubs of Dubai and Abu Dhabi attracting people from across the world), according to the 2021 Salary Guide from Robert Half, a global recruitment consultancy, sees sectors mainly in technology, pharmaceuticals, finance, government and human resources being resilient and offering the biggest wage increases, bonuses and benefits for employees to help retain top talent.

It is worth noting that fintech, even before COVID-19, as part of society’s wider digital transformation, has propelled its importance to help daily life be as virtual, contactless and seamless as possible. Leading digital transformation players in MEA such as the UAE, wider GCC, parts of Africa and Israel have shown its importance even before the pandemic. As a result, the demand for solutions (and consequently the talent to help drive that) is as important now than it ever was. In terms of Israel, the Startup Nation has driven a lot of the world’s wider tech solutions and has been a leader such as in cyber security and wider government adoption to digital – consequently producing both its own local talent and attracting others from across the world.

The Middle East and Africa (MEA) region as a whole is also a source for immigrants who often leave their home countries to find better economic opportunities within MEA and beyond

The Middle East and Africa (MEA) region as a whole is also a source for immigrants who often leave their home countries to find better economic opportunities within MEA and beyond

The Middle East and Africa (MEA) region as a whole is a source for immigrants who often leave their home countries to find better economic opportunities within MEA and beyond IMAGE SOURCE GETTY

Despite the positivity, in parts of the Middle East and in much of Africa, the lack of opportunities remains to be a challenge. In terms of youth employment, Uganda and East Africa, despite having talent in the area, has a youth unemployment rate of around 80 per cent. In terms of poverty, Africa in 2015 had a poverty rate of 41 percent. This has resulted in much of MEA being the source to some of the world’s largest sources of workers – both blue collar and in highly skilled sectors such as fintech. Many immigrate to other more advanced economies in the region such as in the GCC, Israel, Turkey and in parts of Africa such as in South Africa or beyond to Europe, the United States, Canada or Australia – to name a few.

For instance, Nigeria, Ethiopia, Egypt, Ghana and Somalia were the top countries in Africa where their citizens migrated to the USA. This presents not just a problem with emerging economies like the African continent as a whole but even within developed economies like the United States, where in tech for instance the best and brightest would go to tech clusters such as Silicon Valley and San Francisco in California or New York City.

In parts of the Middle East the story of the wider brain drain remains to be a challenge. For instance, in Lebanon, which has had its fair share of challenges even before the COVID-19, has seen some of its best and brightest leave. Back in September, almost 400,000 are said to be considering departing their home country in the context of the ongoing economic and political meltdown. Historically, one of Lebanon’s most noticeable exports has been its people. There are more Lebanese and their descendants living outside the country than within (particularly in Latin America which Brazil alone has 7 million Lebanese descendants).

Next week’s MEA weekend read will be a part two and cover more of the brain drain and remittances sector in the region – stay tuned.

Ayoba Assures Users of Full Privacy and Security Protection in Messaging App

Ayoba, the African messaging app, has reiterated its focus on protecting their users’ privacy and security. The company has reassured its users that it’s not possible for messages in the app to be read by anyone, or shared to any third parties. The app features peer-to-peer private messaging which are end-to-end encrypted. A user’s contacts and location are only available to other users if explicitly shared by the account owner.

Ayoba also points out a unique feature of their app. ‘All the content is curated,’ says Interim CEO Richard Cimardi. ‘We have a team of editors who check every post on our content channels before it goes live. This includes our music and entertainment channels. So it’s 100% family-friendly and safe for our younger users’.

Another unique feature is its availability in 22 languages: English, isiXhosa, isiZulu, French, Arabic, Dari, Pashtu, Hausa, Afrikaans, Igbo, Jula, Kinyarwanda, Luganda, Pidin [Cameroon], Pidgin [Nigeria], Portuguese, Sesotho, Setswana, Swahili, Twi, and Yoruba. Content channels are predominantly English and French, but the app offers content across all the languages as well, in Dari, Pashto, isiZulu, isiXhosa and more.

Ayoba has recently launched an in-app assistant, Aya, to guide new users on how to use an instant messaging app. Aya appears automatically in everyone’s Chats and can run a variety of interactive tutorials for key features within Ayoba.

Free Data for MTN Users

In partnership with MTN, MTN customers are automatically allocated free data to use Ayoba features. Allowances range from 50MB daily to unlimited usage, depending on the country (with the exception of Benin). Free data allocations can be used for all activities available in the app – including messaging, browsing, gaming and listening to music.

Ayoba was awarded the Africa Digital Award for Best Mobile Application in November 2020, in a voting process involving both industry judges and the public. Ayoba offers Group Chat, Status updates, MicroApps and over 100 content channels bringing news, fashion, beauty, sports, education and music listening to the users. Ayoba has also an extensive game selection of more than 120 games currently available.

Ayoba is looking forward to a busy 2021, upgrading the already extensive list of features – including exciting new content in Channels and local MicroApps from across Africa, and also introducing new functionality, including in-app VoIP voice and video calls.

Are You “In the Green”? 10 Million UK Adults Have the Potential Despite COVID-19

Yolt, the smart-thinking money app, has partnered with the Centre for Economics & Business Research (Cebr) to reveal a new category for measuring financial wellbeing: ‘In the Green’, that goes beyond the traditional ‘In the Red’ i.e. being in debt and ‘In the Black’ i.e. living payday to payday.

The research revealed over 9 million people (17% of UK adults) in the UK are already ‘In the Green’. However, an estimated 10.4 million people have not yet established money management habits to bolster their financial security, leaving them exposed to potential ongoing financial shocks.

To be ‘In the Green’, the report outlines criteria, which consider all parts of a person’s financial life, including their financial behaviours, approaches and attitudes. Cebr designed these criteria to be accessible to all income groups, so that being ‘In the Green’ does not necessarily require a high level of income or wealth.

To be ‘In the Green’, someone must meet at least four out of five criteria:

  • Save at least 10% of their income each month – 29% of people in the UK currently do this, 71% do not
  • Have a high awareness of their spending each month – 58% of people in the UK in the currently have a high aware of their spending, 42% do not
  • Review at least half of their ongoing financial commitments (e.g. bills) at least once a year – 46% of people in the UK do this, 54% do not
  • Have savings in excess of 20% of their annual income – 23% of people in the UK have this, 77% do not
  • Have debt worth less than 5% of annual income, excluding mortgage debt and student loan debt – 52% of people in the UK have these low levels of debt, 48% have more

An estimated 10 million people in the UK currently satisfy three out of the five ‘In the Green’ criteria, meaning that with a few small lifestyles changes they could be maximising their financial potential and be ‘In the Green’. Some UK households have already been prompted to make these changes by the pandemic.

The average household saved more than 22% of their disposable income during the first lockdown back in March. There were also reports of higher than average deposits in current accounts and savings accounts as a result. In May, Yolt data revealed there had been an 82% increase in the amount of money put into savings accounts and a 16% increase put into investment portfolios since February. One in four people in the UK plan to continue to save at least 20% of their post-tax income through 2021. However, recent reports have suggested these savings were primarily experienced by higher-income families, particularly those who benefitted from ‘working from home’ related savings.

Perhaps most concerning in the current economic climate is that over 40% of people in the UK do not have a high awareness of their monthly spending and over 50% of people do not review their financial commitments at least once a year.

Pauline van Brakel, Chief Product Officer at Yolt comments: “2020 was an extremely difficult year for UK households and many people faced and are continuing to face financial challenges. While the outlook for 2021 is still uncertain, we know that now more than ever, it is important to focus on how you can maximise your finances so you can weather any unforeseen shocks.

“Our report found that there were numerous things that could be introduced that would further incentivise financial wellness, particularly with regards to savings volumes. This could include introducing higher average savings rates or the introduction of a system comparable to autoenrollment but for personal savings.

“On a personal basis, simple steps such as reviewing all of your bills and subscriptions, keeping a close eye on your monthly spending, using a pre-paid debit card to keep your spending and savings separate, could help you to save a set amount each month. And attempting to reduce any debt you may have can help build a savings buffer for any uncertainty that lies ahead. We know that a large number of people could become ‘In the Green’ with a few lifestyle changes, and in turn protect themselves from future economic shocks.”

Ericsson: Smart Home Privacy and How to Avoid ‘Data Paparazzi’

The paparazzi are known for often taking covert photographs of celebrities and selling them to tabloids or gossip magazines. In a similar vein, could the increasing number of smart, connected devices coming into our lives start acting like covert “data paparazzi”?

In this article, Ericsson, providers of Information and Communication Technology (ICT) to service providers, tells The Fintech Times how to keep your smart home safe and avoid the “data paparazzi” problem.

Today, our devices collect and forward information to all sorts of external parties: our home security alarm provider, our electricity supplier, our fitness watch vendor, our car manufacturer, and so on. Smart assistants listen to our voice commands and take that information to the internet to execute our orders.

But smart devices go beyond the obvious too – they can be anything from a connected toaster to a washing machine, sewing machine, or a toothbrush!

Data from one device may not be a problem, but combining data from several devices could create a pattern that may reveal unwanted information about a user or a business. And with more devices coming into homes, concerns around the way personal data is managed, controlled and used by devices and organisations are increasingly being raised.

Smart Devices and Privacy: The Big Picture

Many of us already interact with at least 3 to 5 devices daily – a smartphone or even two, a smartwatch, a tablet PC, a work laptop, and maybe a smart TV. One estimate is that by 2030, each of us will own 15 connected devices.

Above all, the network infrastructure and devices need to be secure. It’s important for us all that we can trust how our devices operate and handle data. It will also be important to ensure device security through the life cycle of the devices. With the fast growth and wide of range of smart and connected devices from different brands – that come with different user interfaces and functions – it might be cumbersome to keep all devices up to date in terms of firmware and security status, for example, from the day the device is purchased until its recycled. However, this is a key requirement for enabling a secure and trustworthy IoT environment.

GDPR and similar efforts have raised more attention to privacy from the general public. As people become more informed and want to know how their devices and information are used and managed, there will be an increased need for tools that enable identifying, verifying, and controlling the data the devices are collecting and sharing.

The Data Paparazzi Problem

While the saying goes that “all publicity is good publicity”, many celebrities wouldn’t agree. They want to be in control of the information shared about them, to build a relevant public image but avoid revealing private relations, unattractive personal habits, or similar.

The same thinking is behind IoT security; information that’s needed to complete the intended tasks of an IoT device should be made available, while the rest of the information should be kept private. However, for IoT there’s often a more fine-grained approach as the information made available should in many cases only be made available to a restricted group of observers on a need-to-know basis.

The Stalker Problem

Many celebrities might also have to deal with stalkers – individuals who are overly interested in them and may try to gain as much information about them as possible, even using illegal means.

In the IoT space, the same phenomenon could happen to the average Joe. A smart home that doesn’t restrict access to the information it generates, can easily become a lucrative target for an attacker; the information generated by the home can be used to gather different information about the inhabitants, which could later be leveraged to commit a cyber attack. Information about when various appliances are used, such as when doors are opened, lights are switched on/off, energy consumption fluctuates, can be a real treasure trove. This also means that potential attackers might not skip a house just because there’s some security applied, rather the security needs to be good enough that it deters attackers from trying.

Mitigation Strategies

Celebrities tend to take precautions to hinder paparazzi and stalkers from invading their privacy. The same things need to be considered in the IoT world. For example, in smart homes, access to the internal network and the data generated and stored there should be controlled and protected, monitoring should be applied to pick up on suspicious behaviour, and reactive security measures, such as blocking and logging, should be taken when a breach is detected.

What has been normal for celebrities should now also become the standard for anyone in an IoT environment. When it comes to privacy, active measures should be taken to maintain it. While this might sound scary – and without proper actions, it would be – it’s not something that’s difficult to achieve. Rather it’s about having the right mindset and recognising that security needs to be built in and considered more and more in the connected world, even for private citizens.

What to Protect?

IoT is very much about the data generated and consumed by IoT devices. At first, this data may be seen as producing no risk, but even simple data in a certain context may be sensitive. For example:

  • Power consumption data recorded by a smart meter can provide a lot of information about what’s happening in a home. For example, based on the power consumption profile of TVs, switching on the TV will be visible from the data.
  • Any competent smart lock manufacturer will make sure that the communication with the lock is encrypted and its integrity protected. However, this might not be enough; by observing the traffic generated by a smart lock, one could potentially deduce whether the lock has been opened from the inside or the outside and thereby predict if there’s anyone in the house at any given moment
  • It’s inevitable that an electric device will reach the end of its lifetime and will need to be disposed of. If the information stored on the device isn’t properly removed, a hacker who retrieves the device from a bin or second-hand store could dig out data or credentials, as well as information about the services the device has been connected to. This is information that could be used to spy on the owner in a more efficient way, or even control or modify other devices belonging to the owner.

The question shouldn’t be, “what do I need to protect?”, rather, “what don’t I need to protect?”, meaning “what do I actually need to share?”.

How to Avoid Unauthorised Use of Private Data

There’s no silver bullet solution to this problem and the complexity is proportional to the number of devices and services that we as individuals interact with. Applying the best security practices is the responsibility of many entities. Device manufacturers and service providers need to provide secure devices/services, with proper control and maintenance for future proof device security.

But there are some rules of thumb that each of us can follow to minimise security and privacy issues related to our devices. End-user responsibilities include selecting suitable and secure solutions, and installing and configuring them in a secure way. Well-designed products should make this a relatively easy task, but it can also be done with the help of professionals. Furthermore, there are initiatives such as the Finnish Cybersecurity Label providing security labels for IoT devices, which aim to help consumers select products for which security has been verified.

Konsentus Acquires Open Banking Europe from PRETA

Konsentus has announced that it has acquired Open Banking Europe S.A.S. from PRETA. Open Banking Europe S.A.S., a 100% owned subsidiary of Konsentus Limited, will remain a separate operating entity which will continue to be led by John Broxis. The software solutions of Open Banking Europe will be directly integrated into the Konsentus business.

Formed in June 2017, the Open Banking Europe (OBE) initiative has been successful in bringing together market participants to turn regulatory requirements into operational reality. The initiative provides its members with a collaborative environment to identify market issues and problems, championing awareness and creating solutions via guidance, standards and tools.

Konsentus was launched in 2018 to enable the safe and secure exchange of data and funds complying with PSD2 open banking access to accounts. The Directors, Mike Woods and Brendan Jones, recognised the need for a real-time, online solution to protect financial institutions against PSD2 Open Banking fraud. This also presented them with a global opportunity to be a leader in the provision of solutions and services for open banking, finance and data.

Like Konsentus, OBE identified the need for a single, standardised, trusted and machine-readable repository of regulatory data related to third-party providers (TPPs), which led to the set-up of the OBE ‘Regulatory Directory’. The Directory consolidates information from the National Competent Authority registers, making it available in a way that is easy to access and process. It is used by over 500 of the largest financial institutions across Europe to support PSD2 access to account compliance processes.

Through a close co-operation with Konsentus over the coming months, PRETA, a fully owned subsidiary of EBA CLEARING, will strive to ensure a smooth operational handover for all parties involved.

Mike Woods, CEO, Konsentus, stated “Working with PRETA’s Open Banking Europe was an obvious next step to accelerate our European expansion and cement our position as market leader. We are delighted to welcome the clients of PRETA OBE to Konsentus and are proud that over 500 financial institutions, including some of the biggest and most prestigious banks within Europe, will also become Konsentus clients. I am delighted that John Broxis, who was Managing Director of PRETA’s Open Banking Europe initiative, is joining the Konsentus team, which will ensure a smooth transition. In addition, his vast industry expertise will be invaluable in uniting the open banking ecosystem and global community.”

The Open Banking Europe Community will complement the work Konsentus is already doing to support the safe and secure exchange of financial and non-financial information between payment service providers and other market players for the benefit of the wider digital economy.

Giorgio Ferrero, PRETA said, “We identified the need for Open Banking Europe to grow beyond its incubation stage and move to the next level in an accelerated manner. With their global expansion plans, product pipeline and fast-growing partner and customer base, Konsentus is well-placed to pursue the initial ambition for OBE Europe to boost safe and secure Open Banking globally. We are pleased to bring our OBE clients to this thriving environment, where they will continue to be well served by Konsentus and John Broxis, and can benefit from new and innovative Open Banking services on a European and global scale.”

DataVisor Releases Digital Fraud Trends Report 2021

DataVisor, a fraud detection company with solutions powered by transformational AI technology, has released its ‘Digital Fraud Trends Report 2021’, highlighting the key trends seen in the landscape after analysing 128 billion events and more than 2 billion users.

The events of 2020 created no shortage of challenges for fraud teams. With quarantines and lockdowns looming for much of the year, millions of consumers turned to digital channels to purchase items and conduct business, opening up new opportunities for fraudsters. Online spending reached more than 18% of total retail sales in the first two quarters of 2020, up from 14% in 2019.

Many businesses shifted to a remote work model, leaving many businesses struggling to cobble together a remote work technology stack, leaving very little time for research, testing, and security best practices. IT departments were left to figure out how to safeguard internal resources via fragmented teams. Good communication became more mission-critical than ever, and call centres, live chats, social media, and email served as important albeit vulnerable vehicles. Bigger emphasis has also been placed on mobile technology for consumers, companies, and employees alike. Mobile is increasingly growing in the market, changing everything from how we bank to how we shop.

With such major changes in a short time span, it’s no surprise that fraudsters were eager to evolve
their attacks and exploit gaps in defences. Using data collected from the previous several months, DataVisor reveals the current fraud landscape and what might come next.

Key Takeaways from the Report Include: 

  • 79-90% of financial fraud attacks are account takeovers,
  • The fraud rate for mobile platforms is 0.5%, compared to the 7.4% rate for desktop.
  • 22 times more events occur via rooted or jailbroken devices, both of which appear to be much more active than non-jailbroken or non-rooted devices.
  • 100% of fraudulent accounts use automation at some point in their lifecycles, making it harder to distinguish between humans and bots.
  • Social platform fraud has shown the steadiest growth, traffic volume shows consistent growth across verticals.

To find out more or read the report in full, click here.

How Digital Wealth Management Firms Approach the MENA Market in Comparison to South East Asia

While the digital wealth management industry is full of competition, there are few local players in the MENA region that provide the services needed. This provides a large gap in the market to local platforms to rise up and provide investment opportunities, as well as educating people with the cash available to invest in these opportunities. 

 Ramzi Khleif is General Manager at StashAway MENA, a wealth management platform that recently launched in the MENA region. With over ten years of experience in industries spanning finance, technology and investment, among many others, Ramzi here offers his views on how digital wealth management firms approach the Middle East and North African Market compared to South East Asia. 

Ramzi Khleif, General Manager at StashAway MENA

Since the launch of digital wealth managers, their fundamental goal and mission has been to simplify wealth management services and to provide opportunities for the financial growth of their clients. Even with the fluctuating markets, the prospects are vast, especially when looking at a mature market such as South East Asia (SEA) and developing markets such as the Middle East and North Africa (MENA). The Assets Management market, of which digital wealth advisors are a part of, is projecting significant growth in the coming years. In SEA market expectations are to exceed the USD 3 trillion mark by 2025, and the MENA region is anticipating a total AuM growth to exceed USD 2 trillion by the same year.

If we look at the industry in both SEA and MENA there are many similarities in terms of the pain points customers typically face, as well as the solutions on offer. However, given that the sector in the MENA region is considered to be at an early stage in comparison to SEA, it is still developing a level of maturity in terms of the acceptance of using such services, as well as the limited number of competitors operating in the market.

The ever-growing landscape of digital wealth managers is opening up healthy competition, there are a few local players in MENA and SEA that provide similar services. However, looking closer at the MENA region and for a Robo-advisor such as StashAway (operating in both markets), traditional banks can be considered as the key competitors. The reason being that banks charge incredibly high fees for unsophisticated services and impersonal products, meaning they reduce the wealth accumulation potential significantly.

In the MENA region, around 45% of the total wealth is in cash, a very high percentage by any standard. This goes to show that there is a huge amount of money sitting idly and not generating any returns for investors. There was a huge gap in the market for local platforms to help facilitate investing cash easily and effectively, without having to look to international platforms, which can result in higher fees.

Not only that, the figure shows that there is a lack of accessible platforms that can help educate people on what the benefits are, and the best way to manage and invest funds. Many might have long term financial goals that they want to achieve such as retirement, purchasing a house or even have funds ready to send their child to higher education. In addition, it is clear that many in MENA are still saving traditionally, parking money into bank accounts as a way of saving, but people need to understand saving is only the first step, and investing is what will enable people to achieve their financial goals.

Robo-advisors tend to use sophisticated investment models that that would otherwise not be available to the average investor, such as the strategy adopted by StashAway – ERAA (Economic Regime-based Asset Allocation) which simply enhances the Modern Portfolio Theory (MPT, a Nobel Prize-winning theory) by addressing external economic forces, which ultimately drives asset class’ returns, volatility, and correlations. ERAA’s three pillars, Economic Regimes Determine Asset Allocation, Risk Shield, and Valuation Gaps, together with deliver a macroeconomic portfolio management strategy that minimises risk and maximises returns for personalised portfolios across any economic environment.

With the opportunity and appetite for the sector in the MENA region and the current size of cash deposits, there is huge growth anticipated. In the coming years, you can expect more players to enter the market who will play a pivotal role in pushing and supporting the Fintech industry as a whole. In addition, the regulations are developing and opening up, making it more accessible to have such models active in the region. Both the Central bank and Dubai Financial Services Authority (DFSA) are exploring new ways to enhance and facilitate such operations. Digital Wealth Management in the region is very much here to stay.

Supply@ME Launches Shariah-Compliant Inventory Monetisation Platform in MENA

[email protected], the fintech platform that provides a unique Inventory Monetisation service to European manufacturing and trading companies, has announced it is authorised to offer SYME’s Shariah-compliant Inventory Monetisation Platform to companies in the Middle East and North Africa (MENA) region.

Further to the announcement on 3 November 2020, in which [email protected] first announced plans to launch a product tailored for the Islamic finance sector, the company has now received approval from the Shariah Scholar Board. SYME is now able to market its dedicated, Shariah-compliant investment product with its fund specialist – which is yet to be announced.

The announcement from the Shariah Scholar Board reads: “An official pronouncement has been released by Sheikh Dr.Mohamed Elgari and Sheikh Yusuf Talal DeLorenzo in their capacity as members of the Shariah scholar board (the “Sharia Scholar Board”) in relation to the inventory monetisation service.

“The functional and the legal structure of the Inventory Monetisaton Investment (“Inventory Monetisation Structure”) has been presented to the Shariah Scholar Board. The Shariah Scholar Board, following a review in compliance with the AAOIFI Shariah standards, hereby approves the Inventory Monetisation Structure as acceptable within the principles of Shariah.”

In receipt of this authorisation, [email protected] has begun working with its local partner iMASS to manage the onboarding of an initial portfolio of MENA region client companies – first announced to the London Stock Exchange on 11 January 2021.

This news comes at a time where the potential for growth of the inventory monetisation asset class is significant, for beneficiaries and investors alike. [email protected] estimates the underserved inventory finance market in the UAE is worth some USD $50bn.

In a speech during UK Islamic Finance Week 2020, the Bank of England’s executive markets director, Andrew Hauser, described Islamic finance as “strikingly well suited to [respond] to some of the biggest challenges we will all face in rebuilding our economy once Covid has passed.”

Earlier this month, [email protected] closed a deal with Lenovo Financial Services META (Middle East, Turkey and Africa) to offer SYME’s inventory monetisation platform to Lenovo’s network of customers in the region.

Alessandro Zamboni, [email protected] Capital plc Chief Executive, said: “I’m thrilled to have the opportunity to deliver our unique inventory monetisation investment product into the growing Islamic finance sector. Indeed, the Bank of England has recently commented that certain key aspects of Islamic finance make it particularly well suited for financing the post-Covid recovery. This resonates strongly with [email protected]’s own mission to help and support business owners to create liquidity from their stock, thereby optimising inventory days, especially during this crucial phase of the economic cycle.

Silent Eight on Putting Best Practice to Work: A Bottom-up Approach to Fighting Global Financial Crime

Financial crime has risen during the pandemic, with criminal
opportunists taking advantage of the unprecedented situation and
disruption caused by COVID-19. With the attacks still coming as
everyone lives are turned upside down, many are wondering how best
to hold back the tide.

Someone who knows a lot about this is Martin
the CEO and co-founder of Silent
a company that uses AI to combat money laundering
and terrorism financing. Here Martin shares his thoughts on how
financial institutions can best combat global financial crime.

Martin Markiewicz, CEO and
Founder, Silent Eight

By any measure, 2020 was a difficult year, with a rising tide of
financial crime adding to the disruption and pain caused by the
global pandemic. Criminals are capitalizing on the impact of
COVID-19, and with many of us forced to abandon our usual routines
in favour of working, learning, shopping and socializing online,
the attack surface continues to balloon in size.

In response, the Financial Action Task Force
has called for more resources to be diverted to
countering the acceleration of money laundering and terrorist
financing activity, highlighting the new threat vectors that have
emerged as a
direct result of the pandemic
. And, unsurprisingly, many
financial institutions are reviewing the tools they have at their
disposal to fight this growing problem.

Firms traditionally try to manage global risks with regional or
data-reliant solutions.  In practice, this means dealing with the
impact of incomplete data that is often from disparate systems. The
situation is further complicated by the fragmented nature of global
anti-financial crime regulation, with rules based on FATF standards
inconsistently applied between nations. This yields differing
approaches to financial crime prevention and sometimes wide
variations in the penalties applied for breaking the law.

Amidst this landscape, the challenge for FIs is how to account
for local nuance while driving global consistency in a
cost-efficient, risk-averse way — all while striving to satisfy
different regulatory requirements from the same compliance
process.  And the criminals we’re up against are savvy. When one
firm gets it right, they just move to the next one and so on as
they hop from institution to institution looking for

How Can We Combat This Scourge?

At Silent Eight we believe it’s through combining leading data
science and technology with the knowledge that already exists
within institutions.  Financial firms already know what they want
to do: they have governance procedures in place, and existing
policies they create and modify.  What can be absent though is an
efficient way of immediately executing them to address changes in
alerted parties.  And to do so efficiently.

In response, firms are increasingly turning to solutions like
our own, which actively learns what investigators are doing on the
ground, how they do it, and why. This empowers institutions to
decide what ideal financial crime compliance looks like for them
and drive best practices up the chain. A continuous learning
approach also helps firms to replicate winning strategies, while
natural language processing (NLP) enables the system to explain its
reasoning in plain English, audited for any future review.

This AI-powered “assisted intelligence” approach to fighting
financial crime puts the power back in the hands of institutions,
providing full auditability, making a virtue of the globalised
nature of financial crime compliance by allowing firms to harness
the best of their international practices, and delivering better,
more efficient tools to help institutions win their battle against
the criminals.

Bottom line, we see this as an “AND” rather than an
“OR”, freeing firms from the need to choose between AI and
human investigators, and between efficiency and de-risking. Only by
using the best of technology AND human capabilities, and by
de-risking AND driving greater efficiencies, can we take the
biggest bite out of financial crime.  And that’s precisely what
we have the privilege of waking up each day to achieve.

The post
Silent Eight on Putting Best Practice to Work: A Bottom-up Approach
to Fighting Global Financial Crime
appeared first on The Fintech Times.

OurPeople: How Cybersafe is Your Small Business?

With working remotely the norm for people all across the country due to the coronavirus pandemic, cybersecurity has become all the more crucial as the threat of an attack has increased dramatically.

Someone who knows about this is Pete Walker,  the  Chief Technology Officer at OurPeople, a mobile communication platform that aims to disrupt the Human Capital Management (HCM) industry. Here Pete shares his thoughts on the challenges of cybersecurity in SMEs.

Pete Walker, Chief Technology Officer at OurPeople

Last year, more than 34% of UK tech firms had to deal with at least one cyber incident. With most businesses back to remote working, employees are once again logging in remotely from their own personal devices – which presents even greater threats to data security.

Across all industries, including fintech, the nature of the threat is evolving. The targets, impact and techniques involved in cyber attacks have changed: attackers seek to access to internal control systems as well as communication; not just steal but alter data to create distrust; and target individual employees – often the chink in a business’ cybersecurity armour – through malicious insiders and phishing.

The Challenges Businesses Face

Ensuring employees have secure access to the right systems and information is a challenge even with everyone together in the office. But with workforces geographically spread and businesses operating without the physical security of their own premises, coordinating and maintaining remote policies is trickier than ever.

Employees are connecting to company networks from home, in many cases using personal laptops to do so. Without workplace cyber defences in place, the highly sensitive material and valuable personal business data employees handle are suddenly at risk. This is exacerbated by most communication shifting to email, which can be targeted through social engineering attacks.

On a human level, many employees will feel isolated after nearly a full year spent on-and-off working from home. Maintaining morale with limited face-to-face contact is not easy. Add in the additional factor of distributed devices with sensitive information on which once belonged to a former employee but current restrictions mean they can’t be returned to the business to be securely wiped. It’s an extremely challenging time for ensuring cybersecurity.

Policies to Protect Data

Developing and implementing a strong data protection policy is crucial when employees are all working with the same IT infrastructure. Without office cyber facilities and firewalls configured to admit static broadband IP to manage cloud services, however, it takes on even greater importance. Not only do these policies need to be in place, but it’s imperative they are understood and adhered to in order to protect against attacks and avoid potential fines for GDPR breaches.

Businesses must ensure different types of data have clear guidelines for where they can be securely stored and processed. Take personal identifiable information (PII) for example – this should never be shared on an internal chat system.

With cloud storage services increasingly popular, strict password policies should be in place to safeguard information and data. At my company OurPeople, we ensure all credentials and PII are stored in a password manager to ensure strong and encrypted protection. Alternatively, single sign-on solutions can also be an effective barrier.

We also require a secure VPN to access our cloud infrastructure – this is a policy all small and medium-sized enterprises (SMEs) can adopt. As a best practice, ensure that detailed logging for this service is turned on and active. Doing so means that – in the event of a cyber attack or suspected breach – businesses can quickly perform forensics to ascertain both the root cause of the incursion and the extent of any damage.

Sometimes, the lack of access to shared office equipment means employees have to use their personal devices for work. In these situations, it’s vital businesses have clear BYOD (bring-your-own-device) policies so there is no ambiguity regarding the types of data and communication devices should and should not be used for.

One essential condition for each business’ BYOD policy needs to be the installation of a centrally-managed anti-malware software on all devices used for work. If possible, mobile device management solutions should also be in place. Together, these policies ensure real-time protection of sensitive information – devices will be safeguarded against malicious software and viruses, can have corrupted data restored and be remotely wiped in the event of a data breach.

How to Support Workers to Keep Them Safe

From a mental health perspective, the most important thing is to retain some level of informal contact with all employees. At OurPeople, daily check-ins are a crucial part of our routine. There are many great benefits to keeping in touch regularly with staff – not least the likelihood that they will feel more motivated to follow security procedures. Ideally, these check-ins will be carried out through secure video-conferencing and chat solution platforms.

Furthermore, with sites and offices remaining closed up and down the UK, arranging for employees to receive on-premise, face-to-face training isn’t currently feasible. Instead, the key is to invest cloud-based training and assessment services – doing so will vastly improve staff security awareness, as well as their understanding of GDPR. However, it shouldn’t be entirely the responsibility of employees to ensure they’re up to speed with these issues – having a third party to audit policies and test a business’ internet-facing assets is a wise move.

Although the cyber threat is changing, the good news is there are policies businesses can quickly put in place to minimise the risks. Clear guidelines for data storage, strict password and BYOD policies are small policies that will protect a company should it fall victim to a cyber attack. One in three SMEs tech businesses were affected last year – failing to prepare is a risk you don’t need to take.

What is Alternative Data? Quandl’s Hamza Khan Explains

Hamza Khan is the head of European Data at Nazdaq’s Quandl, a marketplace for financial, economic and alternative data delivered in modern formats for today’s analysts. Based in Amsterdam, Khan joined Quandl in 2020 and is responsible for leading Quandl’s data strategy and expanding its presence in the European market. 

Here he speaks to The Fintech Times about alternative data, its benefits to investors and how regulation as affected its uptake in Europe

Hamza Khan, Head of European Data, Quandl,

What is Alternative Data?

At its core, it’s a new name for something basic, which is market research. We want to understand which companies are performing well, which products are selling and what consumer trends are taking place. So, for example, is Tesco or Sainsbury’s more popular? Are people using Uber Eats or other delivery services? Are they watching Netflix or Disney? This kind of market research has been going on for decades, but what makes it alternative is that the data is being collected digitally. Market research is traditionally done through surveys asking people what they’re purchasing etc. But by going digital we keep that same level of anonymity but make faster and more accurate. So, for example with PSD2 and user consent, we can see where spending is taking place in real-time, instead of having to wait for surveys to be carried out and analysed.

There’s nothing radical about alternative data. It’s just a faster, more accurate way of collecting market research.

Is this kind of data valuable to investors? 

Absolutely, and that demand stretches across the board. There is a huge amount of demand for the data that’s out there when it comes to companies deciding what products to launch or what companies to invest in.

How does this affect Start-ups?

As I mentioned, what’s different about alternative data is that it’s collected digitally, and start-ups are really at the forefront of this. They’re the ones who are building services on the cloud and putting data first.

We see that a lot of the companies that were start-ups a few years ago, that have maybe now turned into scale-ups or unicorns, have really strong systems in place which enabled them to transform their data into a new source of revenue.

How easy is it to transform these data streams into sources of revenue?

Everyone already has this data, using it for their internal analysis or for their own market research. So, the data is sitting on a server somewhere, and it’s often just a turnkey solution, connecting it to a service like Quandl, to make it into a viable revenue stream.

This is what we call this is bottom-line revenue, where it doesn’t entail a lot of costs, work or any new infrastructure from our suppliers. We try to make it as turnkey and simple as possible.

What demand is there for alternative data?

There’s a lot of demand from investors and companies that want to know what’s happening in the world around them. I think that’s been the case for decades, market research has been happening since the 1920s and 30s. There’s a number of very large companies that are out there that are doing this already, so we took the start-up mentality of how can we do this better, faster and cheaper.

How up to date can these data sets be?

Because of the shift towards cloud technologies the speed of data collection processing has increased drastically. We’ve gone from data being released and collected quarterly to monthly to daily to now being collected multiple times a day. And of course, the faster people see data the more value it has.

How detailed can this data get, and does the detail depend on where it was obtained from?

Different sources have different formats, but it’s very important to state that no matter how detailed it gets there’s never any personal information that’s ingested, processed or shared. Frankly, that’s the furthest data point from what we touch – what we want in detail is actionable data related to companies. For example, if you’re able to say that X  amount of money was spent on airlines in July, that detail has some value. If you’re able to say that X amount was spent on airlines on July 1st, that adds more value. If you know that X amount was spent specifically on British Airways on July 1st, that’s even more valuable again. The more detail it has the more value it has.

Do strict European regulations, like GDPR and the FCAs banking regulations, play a part in how data is captured? Does it make it more difficult?

Alternative data and data monetisation originally took place in the US but is now becoming more and more global. I’ve been in the industry for several years and I’ve really seen a change in attitudes. When I spoke to companies in 2017, everyone was hesitant to share data because they weren’t sure about GDPR, it was a new regulation at the time so there was a lot of hesitancy on how to implement it.

When GDPR came in it was actually quite clear, and by 2019 when the regulations were understood people were slightly more accepting of the possibilities and legality of data monetisation – but no one thought it would fly in Europe. In the US people tend to think about data differently than they do in Europe, and so no one thought European companies would do it.

But of course, in 2019 and 2020 it started happening. European companies started monetising data and doing it safely and anonymously with respect to their customers and the regulations. Now there’s a number of European neobanks, start-ups and fintechs who have been monetising data for years now. I think that’s where there’s been a complete shift of the tenor of how people think about European Data. Companies may not be ready to do it, but they want to explore it and find out more. They see some of the biggest names in fintech using this new revenue stream and they want to know about it.

What do you think is the future for datasets, are companies going to get swamped by data?

Well, we think that we can never have too much data. There are so many interesting revenue opportunities available to create safe and manageable data sets. The way people think about data monetisation is always changing, and it’s always being used in new ways, but Data is a diverse way of increasing your revenue streams.

Sift on Data Breaches: The Starting Line for The Fraud Supply Chain

Data breaches have been a hot topic this year, as the Covid-19 pandemic has seen an increase in fraud and other cyber attacks across the board, for both consumers and businesses. 

Tonia Luykx is VP of EMEA Sales at Sift, providers of solutions to help combat payment fraud. Having previously helped roles at Amazon, Dropbox and Google, Tonia is currently focused on building sifts strategic partnerships across the EMEA region.

Here she shares her thoughts on data breaches and the fraud supply chain. 

Tonia Luykx, VP EMEA Sales, Sift

2020 broke sales records for e-commerce and unsurprisingly fraudsters went to work as well. According to Sift’s Q4 2020 Digital Trust & Safety Index, between March and August, physical e-commerce, those businesses that sell physical goods online, saw a 378% jump in account takeover (ATO) fraud. ATO attacks, where fraudsters acquire legitimate user data to take over online accounts, simply don’t happen overnight and can usually be traced to information stolen from a data breach. But how does a data breach fuel ATO? It’s all possible because of the fraud supply chain.

Fraud Supply Chain

First, it’s important to understand that data breaches are a means to an end. Information like usernames or passwords arm bad actors with enough details to execute more sophisticated attacks which combined together create a fraud supply chain. They are interconnected and self-supporting, powered by breaches and pave the way for more complex attacks such as phishing scams and ATO.

 While a data breach on its own might not be enough for cybercriminals to execute immediate attacks, simple credentials, such as an email address, can help fraudsters create phishing schemes. The additional pieces of information taken from small breaches allow fraudsters to personalise content that makes their scams more believable and ultimately convince the target audience to share even more details about themselves or their account.

Coordinating Account Takeovers With Compromised Credentials

Once fraudsters have enough information, they can leverage stolen credentials to break into one or multiple accounts. After all, despite warnings, most individual’s account credentials are not differentiated. A password for one account potentially grants access to many. This opens the door to a variety of opportunities, including exposure to payment information, the ability to open new accounts with similar credentials, and access to post fake or malicious content to victims’ personal networks.

Siphoning Money and Assets Through Payment Fraud

Payment information is the holy grail for fraudsters. Payment fraud typically begins with card testing through the purchase of typically low-value, low-effort items. If successful, criminals know the payment information is valid and usable to purchase goods to keep or resell, or to buy more data on the Dark Web. Sift recently discovered a, notably sophisticated, fraud ring in Russia that tested dozens of credit cards and digital wallets by posting fraudulent content listings on an e-commerce marketplace.

Breaking the Chain

The extent of the fraud supply chain is overwhelming, but not insurmountable. With a playbook of internal and external controls, fraud prevention teams can identify and stop many of these scams.

For security teams, email protection is critical and must lean on a layered approach. Standards like email authentication and domain-based message authentication, reporting and conformance (DMARC) are imperative to protect employees, stakeholders, and customers from unauthorised usage.

Secure email gateways (SEGs) and phishing awareness training also help avoid external threats. For example, fraudsters often play to consumer emotions and fears, a reason why we’ve seen phishing attacks accelerate amid the pandemic. Recent phishing schemes include cybercriminals impersonating health officials and agencies seeking consumer information to facilitate fake virus testing or contact-tracing initiatives.

 There is no solution for managing what users click on, believe and fall for outside of your platform. But when these bad actors show up, you can take control back. Two-factor authentication (2FA) adds friction when someone is trying to gain unauthorised access into an account and notifies users when suspicious account access has been detected.

Businesses dealing with payments can leverage a holding period before funds can be transferred, and review transactions that seem anomalous, like amounts outside of the user’s normal activity or transfers into a new account.

Finally, advanced velocity checks can detect changes in typical user behaviour, whether through purchase volume, changes in device or payment method. These checks account for natural changes in customer behaviour, providing that seamless shopping experience all while preventing fraud.

As data breaches multiply giving more ammunition to cybercriminals, organisations must adapt their security procedures accordingly. It is only then that companies will stand a chance of breaking the chain and thwarting the vicious cycle.