Commenting on the announcement that the OCC intends to design standards that will allow fintech companies to be chartered as special-purpose national banks, Controller of the Currency Thomas Curry said: “More than 85 million young adults in America are entering the financial world with the majority of their financial lives still ahead,” he said. “They want technologies and services that provide better, faster, more accessible products and services, and they are willing to switch providers or use multiple providers to get what they want.”
To get on the radar of this new customer base, credit unions should take advantage of technological innovation to increase focus on efficiency and the end user experience. That does not mean grabbing the latest fad off the market and implementing it with hope to seem “up-to-date”, but rather having a solid core platform in place with the option to allow third parties to utilize the platform to innovate and develop new applications on top of the credit union’s own solutions.
A project to either digitize existing processes or launch new ones will never be the same for every credit union, however, there are several areas that need to be addressed before the implementation phase:
1. Setting up strategic goals and corresponding solutions. Depending on what issues a credit union wants to address via technological upgrade, the process can significantly vary.
2. Considering upgrading core processes first. Consider improving services critical to your members and revenue generation, such as lending.
3. Involvement of the legacy system. IT infrastructure in place is commonly found to be several years old and might not be suitable for current business needs.
4. Choosing a platform. Keeping in mind that high pace of innovation makes it more likely that we’ll witness new services and corresponding customer expectations emerging in the near future, it is worthwhile to consider open APIs (application programming interface) and a Cloud Back Office to keep all components in one place.
5. Finding developers. If the API provider offers a “sandbox”, the developers can test the platform to ensure a seamless operation process for the applications.
6. Reviewing fringe offerings. While traditional banking services – lending and taking deposits – remains at the core of credit union services, the open API enables other options.
Read the whole article and more details on Crowd Valley Blog.
Starting a Fintech company is a challenge in itself especially when it comes down to the regulations and compliances one has to abide by. We are delighted to share that one of Crowd Valley's clients, Yielders, has become the first UK Fintech company to get the Sharia Compliance certification. The service is powered by Crowd Valley's (a Grow VC Group company) finance back office.
Yielders is an equity based crowdfunding platform for property investment. After being compliant with the FCA regulation, it can now operate across Asia, Europe and the Middle East.
Yielders enables the public to invest as little as £100 towards a share of a crowdfunded property. An Ethical Islamic investment is very crucial to the Yielders philosophy. In his statement, Irfan Khan, the Founder of Yielders, said “We are delighted to be the first UK FinTech company to be Sharia certified. While it says much about our business ethos and ethics, it also demonstrates our place as a dynamic player in the UK Islamic finance sector. We are dedicated to what we do and to be recognised as doing so in a responsible and ethical way that will allow us to reach potential investors for whom this is important too.”
We would like to congratulate Yielders on achieving their profound milestone and wish them all the success in their endeavour. The demand for Islamic FinTech is growing globally and Crowd Valley offers back office solutions to build implement those services.
Read more about new finance service at Crowd Valley News.
According to Investopedia, “Fintech is a portmanteau of financial technology that describes an emerging financial services sector in the 21st century”. Originally, the term described technology applied to the back-end of established consumer and trade financial institutions. Since then that definition has expanded significantly to include any technological innovation in the financial sector, including innovations in financial literacy and education, retail banking, investment and even crypto-currencies like bitcoin.
But today as we review the Fintech ecosystem, the term Fintech in itself fails to capture its true impact and significance as a ecosystem bringing together a number of different functions and impact under the umbrella term Fintech. Using the word Fintech is analogous to using the word retailer. It’s too vague to give you (whether consumer or service provider) a real idea of the myriad of different application, efficiency gains, accessibility and profit making possibilities.
On a daily basis, Crowd Valley (a Grow VC Group company) engages in conversations with clients from a range of different industries, demographics and backgrounds, a number of them unrelated to the conventional financial services space and they all echo a few common themes which can be woven together to define Fintech as one of the following:
According to Chris Skinner, Fintech extends to Regtech for Regulatory Technologies; Wealthtech for Wealth Management Technologies; Insurtech for Insurance Technologies; and so on. On top of that, Fintech has gained subcategories like Lending, Analytics, Digital Identity, Cybersecurity, SME and Student Financing, Payments, Robo-advice, Blockchain Distributed Ledgers, Neobanking, and more. Then there are also some generic technologies around Cloud, the Internet of Things, Artificial Intelligence, Machine Learning, Biometrics and others that are also creating Fintech themes and impacts. These can also be surmised into 3 streams:
But Fintech goes beyond just banking and the diversified financial services space. It’s a means to change the way any business works and the way a business or a person may interact, exchange information and transact with each other. APIs are facilitating this synergy at a breathtaking pace and allow a number of functions or processes to be integrated into single interfaces. With API’s your business’ digital interface could be empowered to provide the latest data on the website.
If this piece struck a chord with you, feel free to get in touch with us at Crowd Valley. We’d be happy to have a discussion about how our API framework and Cloud Back Office could help you.
Read the whole article and more details on Crowd Valley News.
Oliver*, a leading alternative finance blog, interviewed the Chairman and Co-founder of Grow VC Group Jouko Ahvenainen. In the interview Mr. Ahvenainen commented the future outlook of fintech, crowdfunding and data services. They also discussed, how the new US President Trump might have impact on the finance and fintech market.
Some highlights of the interview:
"I would say that FinTech forces are making the world more global. Moreover, as we pointed out in our report, FinTech is creating more complex networks which are more difficult to control by governments."
"Nowadays, traditional finance companies are losing their power while new services are emerging. The difficult question to answer is how long it will take."
"Startup equity crowdfunding alone is not so great business."
"Consumers will eventually ask for more tools to take back control of their data as it is unfair that others own your own data but you. Blockchain is starting to help people in this respect."
Read the the whole interview on Oliver*.
Alessandro Ravanetti (L), Co-Founder and CMO of Crowd Valley, a company part of the Grow VC Group, co-founded and chaired by Jouko Ahvenainen (R), a pioneer in the FinTech Industry.
From $19 million in 2012 to an estimated $3.5 billion in 2016, the real estate crowdfunding sector is amongst the most active of the global alternative finance industry. Some even expect it to represent more than $300 billion by 2025. Impressive as this figure might seem, it is well within reach as real estate crowdfunding only represents a fraction of the global real estate market.
In 2015 for instance, the $1.5 billion of the US digital real estate market accounted for 60% of the activity globally, and this while representing only 0.3% of all real estate transactions in the country. The predominance of the US can be partly explained by the housing crash of 2007 that drove property prices down, followed by the JOBS act that paved the way for the emergence of alternative financing mechanisms to ward off the credit crunch. Naturally, leading real estate crowdfunding platforms are well-placed to benefit from this situation, but upstart firms also have room to grow and many niche segments have yet to be impacted by this shift.
Several trends are expected to drive the growth of the global real estate crowdfunding industry in 2017:
At Crowd Valley (A Grow VC Group company), we have been actively following the global emergence and expansion of real estate crowdfunding. We’ve also assisted many clients in the creation of their own platforms, in all the major markets and across many types of asset classes. Any interested party shouldn’t hesitate to get in touch with us to benefit from our expertise in this growing industry.
Fintech has become an important topic at Mobile World Congress too. This year we saw big finance institutions, startups and also companies from other verticals offer some fintech products. But the products we see in Barcelona are more elements and building blocks, not proper larger solutions. Some areas of fintech are already quite crowded and some other components are largely missing.
Payment products and components were probably the most popular fintech application at the event. Some products are really a full offering to make payments, and some are more enablers, for example, to handle an NFC transaction. A payment can also mean many kinds of things, it can be a physical touch payment with NFC, or it can be a payment inside a mobile app, it can be a money transfer as such or inside social networking, or a mobile device for point-of-sale to collect payments. Generally, this is a very fragmented area at the moment, but it is clear the main global players are Apple and Google, maybe a little Samsung, and we will see if there will be room for other players. The GSMA estimates that more than half a billion mobile money accounts have been opened globally, so it is also a big market.
User identification, authentication and know-your-customer (KYC) are also becoming very important fintech domains. But there is a bottleneck for many digital finance services - how to make it easy for new customers to start to use the service, log in to the service and authenticate transactions and at the same time guarantee high security and finance regulation requirements. KYC has become so important that for example many banks have paid billions of dollars in fines or settlements in the US, when they have taken customers that have had links to drug or terrorist money. At the same time users expect now an easy process to start to use a digital service.
The FIDO alliance is an interesting initiative for more secure authentication. It has dozens of member companies from big organizations like Google, Microsoft and Amex to smaller startups. The alliance basically develops a framework, with principles and guidelines to implement secure authentication solutions. Actual applications can use many kinds of solutions from physical tokens to biometric components like finger print, face and voice recognition. This is probably an area, where we will see much more new solutions also in mainstream services in the next one to three years.
Samsung, VISA and MasterCard were the big players with fintech solutions at MWC17. They didn’t tell anything significantly new. For example, MasterCard demonstrated how to track the use of your card in a mobile app in real time. It is a nice feature and not all card issuers offer it yet, but at the same time mobile banks (e.g. N26) and some traditional banks (e.g. Chase) have been offering it for a long time. Of course, VISA and MasterCard have a very important role in new payment solutions too, when still many of those are based on credit and debit cards. But they must also innovate, when we see in China how Alipay processes 10 times transactions a peak second than VISA. It is a good reminder their position is not guaranteed.
Identification and payments are still quite simple solutions, if we think the whole finance industry. The critical thing is to get all components to work smoothly together and not only handle the consumer interface, but also a lot of back office functions, transactions between finance institutions, and also corporate services. There were some examples of larger finance solutions too at MWC. Crowd Valley, a cloud based finance back office provider, published its new mobile development tool kit, focused on how to build mobile finance applications by getting all needed back office functions, regulatory and compliance features from their back office. Tag Pay was there again to talk about its mobile banking services, that can be used also with feature phones, especially for developing countries. And then there were some new interesting startups, like Barcelona based Unnax, that offered more solutions for corporates, such as downloading data directly from a bank account to an online loan application and transfering money.
MWC is also getting a fintech event too. One fact seems to be that fintech innovations are more driven by tech people and entrepreneurs than traditional finance people and institutions. Of course, that is similar in many other industries, when someone must disrupt it. A surprising detail was that not so much about blockchain yet in Barcelona, maybe because tech people know it still needs a lot of work although it is promising, when bankers like to talk about it even when they don’t know what it is. My expectation is that next year we see more fintech at MWC, and not only elements but whole frameworks and finance solutions.
This article was first published on Telecom Asia.
Non-performing loans are an area of concern for banks especially in tough economic times. NPL portfolios will impact profitability in two areas: 1) loss of the value of the loan not recovered and 2) ongoing management using labor intensive and manual workflows.
By digitizing the management using Crowd Valley’s back office, we have seen institutions improve portfolio performance nearly overnight by directly addressing:
1. Correct Segmentation and Client Profiling. Higher quality segmentation means you can take better risks.
2. Data consolidation. Collateral data is a good example of how managers of non-performing loan portfolios can better reduce losses.
3. Collaboration. Data collaboration between teams ensures there is no value leakage.
4. Early Warning Triggers. Combining data sources and internal underwriting policies, early warning systems and forward looking models are created to provide portfolio managers with visual insight into portfolio quality.
If you are looking to capitalise on operational efficiencies within the fintech space, get in touch with us at Crowd Valley (a Grow VC Group company) to leverage our industry leading Cloud Back Office.
Read the whole article with more details on Crowd Valley News.
The emergence of startup hubs and FinTech trends like digital currencies and distributed ledger technology are changing the balance of the world’s finance hubs towards more democratic finance services that represent everyone – and that’s a good thing
We are witnessing the shift in the geopolitical environment and how machines can change institutional structures. At the same time, we see a lot of development on a local level that is partly linked to the global development yet partly independent. For example, we see new emerging startup hubs, while FinTech and political decisions like Brexit are changing the balance of the world’s finance hubs.
Startup companies are seen as a driver of economic growth in the midst of these paradigm shifts. Nearly every country wants to have more innovative companies, and Silicon Valley in the US is seen as an example of how companies worth billions can emerge from seemingly nothing. Silicon Valley is still considered to have the most dynamic startup ecosystem, but we’re already seeing examples of some dramatic successes emerge from outside the valley.
In China, for instance, companies such as Alibaba, Huawei, Xiaomi and WeChat have emerged in recent years and can be considered enormous successes. For example, Alibaba’s payment arm Alipay processes over 100,000 transactions a second during a busy peak, while Visa typically processes under 10,000 transactions a second. Alipay will process 10 times more transactions a second from a handheld than a traditional leading credit card company.
A key paradigm shift here is how we’re already moving beyond the decentralization model. Bitcoin and blockchain have been important buzz words in FinTech for a couple of years – more generally, we talk about digital currencies and distributed ledger technology. Some people say distributed ledger technology (of which blockchain is just one model) will do for finance what TCP/IP did for the Internet – it could change the whole finance world, just as the Internet has changed many businesses and operations since the 1990s. When this starts to happen, we’re no longer looking at decentralized finance services, but distributed financial services that enable real p2p, bypassing some parties (like banks) to authorize and control monetary transactions.
With Asia emerging as a leading economy in the world, several countries and cities in Asia are building their future positions. For example, Singapore and Hong Kong must be active in FinTech to guarantee their positions in global finance in the future. Other counties like Vietnam and Malaysia are doing very active and systematic work to develop their own startup and entrepreneurship ecosystems. It is no longer about trying to emulate Silicon Valley, but developing a comprehensive digital ecosystem with services to facilitate and develop startup services, funding and support for growth companies.
We see financial services playing a fundamental role in enabling this development, but they can also help bring benefits to all people. Currently, banks and other finance institutions are seen as representing an arrogant establishment that exists to make the rich richer. More democratic finance services should represent everyone, enable operation of business and their capitalization from anywhere in the world, while also enabling fairer systems for tax collection and wealth distribution.
Emerging economies, intelligent machines, and the rise of the middle class in emerging markets are shaping the global economy, as well as all local economies. This has also influenced most companies in the world in terms of how they develop future offerings, make their products and reach their target audiences. It is a challenge for politicians to manage this development in a peaceful way, but an important part of the solution must be the promotion of changes that bring benefits to all parties, not only a few. At the same time, the solution is not to stop development, but drive development and wealth distribution.
This article is based on the Grow VC Group Research Report, “Machines, Asia And Fintech – Rise of Globalization and Protectionism as a Consequence.” The article was first published on Disruptive.Asia. The report is available here.
I have to say that Laurent Nizri did a fantastic job putting together the Paris Fintech Forum of 2017 and provoking a wide range of discussions in finance and technology. I had the opportunity to discuss fintech adoption both on stage and privately with executive management, including CEOs and innovation officers of some of the worlds largest financial institutions, as well as the leading lineup of fintech innovators, in domains such as regulatory technology (regtech), blockchain and digital currencies (bitcoin, ethereum). I represented Crowd Valley and our part in the paradigm shift.
The key take away from the first event of its kind in 2017 is that in financial services and technology adoption, the pace of change is now past its tipping point and we need to reset past assumptions and update our vocabulary.
At the end of the day it's simple. We’ve been talking using buzzwords such as ‘crowdfunding’, ‘robo-advisory’, “peer-to-peer lending’ etc. Using hyped up or archaic expressions makes understanding trends happening now unnecessarily difficult and complex. At the same time, there are enormous implications of talking about terminology from 2015 as archaic. The pace is truly astonishing.
Open interfaces are a fact of life..
.. and even beyond that, a force of nature. Specialization, digitalization, modularization, what ever the term used, means a way to serve the client better by plugging in to leading services for the specific use case. Chris Skinner from The Finanser, a thought-leader in his own right, made a distinct observation that ‘b2c’ and ‘b2b’ are effectively redundant terminology, replaced by the concepts of open interfaces, the API economy and the ultimate aim of providing the best possible service to the end client.
Despite understanding the technical architecture, at times at least, I would argue we do not yet fully grasp the implication of specialization and open interfaces and how the entire sector will transform as a function of them. What does it mean for the market once banks are forced to expose services to third party vendors (result of PSD2)? What about when virtually anyone can pull a specific function, such as a KYC check from a specialist vendor? Or a full compliance and vetting workflow or secondary transaction through a single API call or function? All the while more and more people are gaining access to the Internet and becoming computer literate. Soon enough, we are going to find out.
Fintech is ultimately about customer centricity
A recurring framing of the conversation was that technology is being deployed in order to better meet the customer, on the customers terms. Earlier I’ve heard concepts of financial services not ‘being a distraction’, but a ‘part of life’. Or in an investment banking context, how standards and structure introduced can be a tool to empower the deal maker, originator or investor through access to data, information and the right tools.
It's good to be humble in considering the origin of innovation, at the end of the day in todays world still, most people do not switch their banking relationships even when offered a shinier and better experience. The switching cost is not worth it for a marginal improvement, we have to aim for a radically difference experience and level of service if we want to overcome that barrier. And whether upstarts create this experience, or existing institutions through acquisitions, cooperation or competition, it's largely irrelevant to the end user looking for the best service.
Whatever the distinction, the focus is clearly on customer value and whoever ends up introducing new innovation that takes hold, an upstart or an institution, it should be the end user that realizes the benefits with an improved transaction. Framing the discussion around how to use the best in class tools and technology for the customer benefit is a good way to consider fintech in 2017.
A few words on approach
“That’s great, but it could never work in this sector because of [insert excuse here].”
Whatever form it takes, the mentality of fintech and innovation being driven solely by the upstarts (or institutions for that matter) is false and naive. We should be better than this discussion and capable of seeing the benefit of a comprehensive focus on the value delivered to the end user as the ultimate goal. That’s why we’re all working in this market, is it not?
The regulatory aspect is also fascinating. Despite the general consensus now being to work closely with regulatory bodies, one can only speculate what it may indeed mean with the proliferation of digital currencies, computer literacy and increased connectivity. Over 7 billion people and many opportunities for a software developer to build the bank or finance service he or she always dreamed of.
The article is written by Crowd Valley CEO Markus Lampinen and the full version published on Crowd Valley News.
Startup Commons announces at MWC17 its digital startup ecosystem infrastructure goes mobile with fully responsive user interface
Mobile World Congress, Barcelona – February 28 – Startup Commons has released the latest versions of its Digital Ecosystem Infrastructure with full support for mobile front-end services.
Digital Ecosystem Infrastructure (DEI), the core element of the overall Startup Commons Digital Solution, is an ecosystem management software built specifically for startup ecosystems to automate back office functions connected to user facing front office functions - a suite of integrated modules, applications and views that national, regional and local governments and economic development organization use to collect, store, manage, visualize and analyse data from their startup and entrepreneurship ecosystem activities.
“We see increasing demand for our digital startup infrastructure platform, when most of countries, cities and regions plan, how they can better support and develop their growth company and SME ecosystem and also better measure the results and use of money,” commented Óscar Ramírez, Startup Commons CEO today in Barcelona. He continues “Today we announced a support to build mobile front-end services, for example, manage and participate in startup events locally, share and find information and use the local services for entrepreneurs and startups. Mobile services are an important part of startup infrastructure services especially in our fast growing Asian market.”
Ecosystem Explore is module of the DEI to provide "one-stop-shop", of real-time information about ecosystem startups, events, services and support organizations directly from DEI database. To visualize the pulse of startup ecosystem functions by startup development phase, location, type and time to help manage connections between all stakeholders. Now this module can be used also in mobile.
More information on Startup Commons Digital Ecosystem Infrastructure on
About Startup Commons
The Startup Commons Digital solution is designed and built from the ground up to serve startup ecosystems - to automate and connect back office functions like community management, CRM, reporting and analytics to user facing front office functions like events, forums, social networks and communications. Startup Commons customers are, for example, national and regional economic development organizations, universities, corporates and entrepreneurship programs in Europe, Asia and North America. Startup Commons is headquartered in Helsinki, with offices in the US and Asia.
CEO Óscar Ramírez
+34 656 180 880
Est. 2009 Grow VC Group is the global leader of fintech innovations, digital and distributed finance services. Our mission is to make the finance services more effective, transparent and democratic. The Group includes leading fintech companies in their own areas.
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