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Weekly analysis & opinion highlights 28 August 2020

Finovate Blog explores the potential effect of digital behavior on credit scores. For the financial sector, credit score plays an important part, but it can be difficult for the American system to determine each person’s credit risk without a set of universal attributes. One potential solution could come from cryptocurrencies and the potential creation of a history on the blockchain in order to see all transactions. Read more

With the rise of the pandemic, new challenges are ahead for the fintech sector. As pointed out by the MoneyNext Summit, fintechs are going for a leadership position platform, but strategies such as forming collaboration may prove to be more successful. Saka Nuru, head of product marketing for fintech ecosystems and payments at Intuit and Don Ginsel, CEO and founder at Holland FinTech, emphasize the need for fintechs to collaborate, and thus more easily having the opportunity to launch products and scale up. Read more analyzed the potential obstacles for why customers have issues when it comes to fully trusting the fintech industry, mainly raising from data privacy concerns, fear of the unknown, limited regulation and sector scandals. Due to the fact that consumers don’t know exactly how their data will be used, they tend to opt for reputable company names when it comes to financial services. Moreover, with technology moving at a rapid speed and high-profile cases such as Wirecard, fintech has to demonstrate its social and corporate governance credentials. Read more

When it comes to the evolution of technology for the financial services, banks and financial institutions are staying behind. With innovations such as cloud computing, companies can greatly benefit in terms of expanding their commercial benefits. For the banks still opting for a traditional, legacy system, a hybrid approach could be a solution, wherein on-prem and cloud solutions can work together and explore the advantages, such as reducing costs, increasing scalability, and having continuous upgrades. Read more

According to Jordan Blake, vice president of product management at BehavioSec, with new interest for the fintech industry comes further threats in terms of security and trust. Most recently, the FBI alerted that increased levels of fraud are taking place, especially for the mobile finance apps. Numerous users have been victims of cyberattacks, with hackers taking over accounts, passwords and gaining access to private information. As advice, Blake informs that fintechs should make security part of the growth conversation, monitor closely the risks of fraud and friction and also embrace the future of mobility. Read more

In one of his latest articles, Chris Skinner, independent commentator on the financial markets, lays down the perfect recipe for creating a challenger bank. The baseline consists of forming a digital and mobile bank that’s inclusive and open. The other key elements to consider include: stand for something (preferably more than shareholder return and profit), challenge the current thinking when it comes to money and finance, put the customers’ benefits first, innovate, reinvent and don’t evolve and lastly, test whether the bank could succeed in a permanent lockdown. Read more

According to the Fintech Bulletin, the successful combination of macroeconomic trends, regulatory developments and technological advancements could unlock new opportunities for businesses searching to reach customers. Flexible and efficient business models are emerging in order to give companies an advantage and push on the market. New innovations in terms of payment solutions have the potential to offer clients an engaging UX. Read more

Yann Murciano, CEO at Blend Network, an online peer to peer (P2P) property lending platform, discusses the benefits of P2P lendings for investors. Blend Network is an example of a company that provides secure loans against a first-charge on the property, through a simple “Sit, Click & Collect” process provided via their platform. Read more

According to The New York Times, SPAC – (Special Purpose Acquisition Company) deals are on the rise due to mainly 3 reasons: valuations are soaring for popular SPAC targets, SPACs are more than an alternative to traditional IPOs and the flood of money to SPACs provide better terms also for the targets. Read more

Ant Group, an affiliate of Alibaba, is waiting on its listing in Shanghai and Hong Kong. Ant Group will carry out a concurrent initial public offering (IPO) on the Shanghai Stock Exchange’s STARboard and the Hong Kong stock exchange, with no details on the shares’ prices disclosed at the moment. Read more

According to the Wall Street Journal, companies are in the process of finding suitable solutions for monitoring their employees’ data handling. Due to remote working, companies are more volatile now in the face of cyber attacks. Currently, Ohio State University is in the process of implementing enhanced security measures for a small group of employees who handle sensitive information. Read more

AI technology in India is seeing progress from the point of regulators. NITI Aayog is developing an approach towards ensuring responsible usage of AI in India with the support of the Centre for the Fourth Industrial Revolution. The document will present a set of guidelines that companies should adhere to when it comes to implementing AI tech. Read more

New innovations are in store for customers, such as facial recognition systems. Due to the increased percentage of remote work, businesses need to ensure accuracy with the identities of new clients and also verify them before the onboarding process. This procedure is especially important for financial services, where strict fines are in place if the business does not comply with the KYC and AML regulations. Read more

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