OPEN BANKING: Open banking is also known as “open bank data.” Open banking is a banking practice that provides third-party financial service providers open access to consumer banking, transaction, and other financial data from banks and non-bank financial institutions through the use of application programming interfaces (APIs). Open banking will allow the networking of accounts and data across institutions for use by consumers, financial institutions, and third-party service providers. Open banking is becoming a major source of innovation that is poised to reshape the banking industry.
- Open banking is the system of allowing access and control of consumer banking and financial accounts through third-party applications.
- Open banking has the potential to reshape the competitive landscape and consumer experience of the banking industry.
- Open banking raises the potential for both promising gains and grave risks to consumers as more of their data is shared more widely. source: investopedia.com
PSD2: PSD2 is the legislation that will be applied across the EU and its Member States by 13 January 2018. It is an update from the original directive (PSD) adopted in 2007. The PSD created a single market for payments and the foundation for a Single Euro Payments Area (SEPA). Many new entrants, especially in the tech and fintech area, are outside the scope of the PSD and, therefore, not regulated by the EU. The PSD2 aims to improve security and fraud prevention, but at the same time encourage innovation and competition. In other words, PSD2 paves the way for a Digital Single Market. source: smartdebit.co.uk
OPIN: Open Insurance – The emerging term in the insurance industry, Open Insurance basically refers to providing services and data to partners, communities and startups, in order to create new services, applications and innovative/disruptive business models. From a technical perspective, the main concept of Open Insurance comes from the combination of open API architectures inserted in insurance applications. In this context, access to open APIs permits the sharing of data between different insurers, startups, banks, InsurTechs (insurance startups based on technology, inspired by the Fintech model) and other organizations. This new concept is part of the technological movement that is currently inserted in different moments of the new insurance consumer journey. For example: Today Big Data is able to promote insured risk analysis through digital historical data, providing even more information to insurers. In practice, by adopting open APIs, insurers can experience, collaborate and leverage innovative solutions and business models developed by InsurTechs easily. source: mjvinnovation.com
VOICE TECH: Voice recognition technology is experiencing something of a golden age right now. You can control virtually anything with your voice now, from your lights to your TV to your phone. As these technologies keep improving, their applications in banking grow more promising. Voice tech encompasses a range of technologies that involve recognizing and responding to users’ voices. The potential for these services in the financial industry is immense. You could use your voice to log into your bank, make withdrawals or ask for financial advice. source: 3 Benefits and Drawbacks of Voice Tech for Banks – Finovate
RPA: Robotic Process Automation (RPA) are software robots that identify, learn, and mimic human actions and interactions with a digital system. These bots can be trained or programmed to perform a myriad of mundane and repetitive tasks- cutting costs and promoting efficiency.
Although not exactly a replacement, RPA bots, in a nutshell, allow enterprises to seamlessly automate and execute operations as though a human was executing them across different platforms- this time around, just error-free.
A few practical real-life RPA applications in Fintech:
- Customer On-boarding
- Data-entry, and Transcribing Reports
- Data-Management for Quarterly and Yearly Closing
- Reporting
- Loan Processing
- Running Background Checks
- Processing Insurance Claims
- Customer Support and Complaint Management
source: RPA Guide For Fintech Industry – Data Science Central
ROBO ADVISORS: Robo-advisors (also spelled robo-adviser or roboadvisor) are digital platforms that provide automated, algorithm-driven financial planning services with little to no human supervision. A typical robo-advisor collects information from clients about their financial situation and future goals through an online survey and then uses the data to offer advice and automatically invest client assets. The best robo-advisors offer easy account setup, robust goal planning, account services, portfolio management, and security features, attentive customer service, comprehensive education, and low fees.
KEY TAKEAWAYS
- Robo-advisors (roboadvisors, robo-advisers) are digital platforms that provide automated, algorithm-driven investment services with little to no human supervision.
- Robo-advisors most often automate and optimize passive indexing strategies that follow mean-variance optimization.
- Robo-advisors are often very inexpensive and require very low opening balances so that nearly everybody can benefit from a robo-advisor if they choose. source: What Is a Robo-Advisor? (investopedia.com)
CROWDFUNDING: Began by President Obama’s JOBS act which encourages the funding of small businesses in the United States, crowdfunding has developed into a huge benefit for startups. By definition crowdfunding is “the practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the Internet”. Thus, crowdfunding has become the champion of small businesses, allowing them to have a chance to succeed by showing their innovate business models to the world. [1]
How to create a successful crowdfunding campaign
Crowdfunding may seem as a childish game, but in reality it’s a way to validate one’s ideas before they become a reality. It involves preparation and readiness to protect the idea and convince others that it’s worth their investments. One of the most important tools to gather an audience that will evaluate the idea is social media. All successful crowdfunding projects have been extremely active on social media, customizing the promotion for each particular channel and reaching a wide scope of people. Some projects even choose to use videos as tools to attract more visitors. As interest in the project grows, one has to keep the communication with investors and interested visitors constant and provide updates. Yes, the investments are the goal of crowdfunding, but the communication with all interested should be kept personal without a every-day mention of money. Thus, one can not only succeed in gathering funding, but also build a customer base from which the product can have its start. [2]
The benefits of crowdfunding
The most obvious benefit of crowdfunding for entrepreneurs is the funding. With so many startups on the market, it is hard to gather the money needed to bring ideas to life. Through crowdfunding, ventures that do not have a company builder like FinLeap behind them, can gain support at the very beginning. Crowdfunding provides a way for innovate ideas to be presented attractively, so it can be launched. Moreover, a crowdfunding platform can help successful entrepreneurs to validate their product which can then help with gathering the Series A funding. It makes validation faster and more scalable. Additionally, a crowdfunding platform allows entrepreneurs to get insights from their future customers and experts in the startup field while building awareness for the idea. [3]
Entrepreneurs, however, are not the only ones benefiting from a good crowdfunding platform. Investors are allowed to take a deep look into their investments before they risk money. On top of that, networking on crowdfunding campaigns allow for investors to have an easy approach to entrepreneurs. It lessens the preparation that goes into investments because of the more personal feel of crowdfunding. [4]
Smart contract: A smart contract is a self-executing computer code that is publicly viewable, tamper-proof, and guaranteed to execute in a predictable manner. The term itself is controversial, but it conjures up a rough idea of what smart contract technology is capable of. The “smart” in smart contracts represents the same great leap forward that it meant when the term “smartphone” was invented. Devices that once barely fit in briefcases now offer the sum total of all available human knowledge in the palm of a user’s hand. And the “contract” part seems uncomplicated at first. While the idea behind contracts is at least as old as Plato’s “The Laws”, the modern contract is a surprisingly recent phenomenon. Smart contracts represent a completely different way of approaching contracts. Instead of having two parties sign duplicate copies of a paper agreement and mutually threaten one another with legal action if the other side doesn’t comply, smart contracts ensure compliance using blockchain technology. In other words, once you “sign” a smart contract, there is no going back on your agreement. The computer code that implements the contract will always execute the way it is programmed, and the result is a new way for public and private agreements to be made between individuals, organizations, and even governments. source:What Are Smart Contracts and How Do They Apply to FinTech? | by Sila Staff | Sila | Medium
Fintech usecases in smart contract: Smart contracts are an exciting development – it makes agreements easy, simple and efficient. Exactly what Fintech aims to be. So where does it fit in? I am no programmer or computer scientist, so these are all hypothetical (I may be getting it very wrong). What do I think will happen? In Fintech itself, I’m seeing integration with big banks allowing mortgage approvals to happen in a day. I’m seeing every app user taking part in smart contracts to control data privacy. I’m seeing smart contracts used as a way to manage personal finances: “If User A saves $100 this month, release flight ticket to Barbados” or “If User B has a huge emergency this month, take out a personal loan of 1% and cover her credit card”. It sounds a lot like AI, right? Which do you think will come first? Or will they happen at the same time? What I’m most excited about is Insurtech combined with Fintech. Imagine not having to wait months to get your money back from a claim? Imagine a smart contract that involves doctors, insurance and the patient – “If patient has pneumonia (note from doctor), release money from insurance directly to hospital and instantly”. Amazing! Imagine not despising your health insurance company? source: What are Smart Contracts and What’s Their Role in Fintech? — Mint Studios (mintcopywritingstudios.com)
