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Monetary Authority of Singapore Backed Conference Discussed Fintech Digital Platforms and Going Cashless

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The world of fintech has inched closer to the mainstream realm over the past couple of years after multiple developments and adoption events. Just recently, this surge in popularity was again put on display when the Monetary Authority of Singapore organized the Afro-Asian Fintech Festival.

The event witnessed mass participation with several big players in the industry also attending the event. Sources have informed us that the festival was a joint collaboration by the Central Bank of Kenya, Huawei, Standard Chartered Bank and Safaricom. 

During the course of the event, panelists touched upon areas of discussion such as next-generation digital platforms, cashless and digital payments, and the relationship between fintech and banks. The theme of the 72-hour long event was “People and Talent Harnesssing: Collaboration in Pursuit of Resilience and Growth Post Covid-19. The general consensus was that digital banking had changed the game with future roadmaps charting out better solutions.

The interdependency of the banking world and fintech was another widely discussed topic. Over the past couple of years, many institutions have partaken one or the other form of fintech to streamline their overall process. Apart from this, fintech also enabled different user demographics to enter the world of digital trading. Participants further talked about the issues that may exist in the intersection of technology and finance.

Some predicted that there may not be widespread network problems in the future but rather smaller fragmented API issues. Head honchos of major fintech companies added that there were plenty of new opportunities within the blossoming world of fintech applications. Chen Zhentao, the Director FSI Southern African Region at Huawei took the side of cashless payments. He said that ditching hard cash would be the perfect way to elevate the financial ecosystem to the next level. A lot of individuals envisioned a digital economy where everything took place on a decentralized network that was safe, fast, and privacy-oriented.

Fintech Will be Catalyst for Innovation and Growth, says OneConnect CEO

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Over the years, the financial world has grown in numerous ways, with the most visible shifts occurring in the way traditional bodies have embraced emerging technology. This has been realized by Fintech organisations as the ideal jumping point for transitioning to a more developmental point of view.

The latest company to recognize the promise of fintech was OneConnect Financial Technology, with its Chief Executive, Ye Wangchun, creating major positive prospects. OneConnect’s head honcho gave his two cents on the rising fintech industry at the fourth annual China Digital Banking Forum.

The general consensus that Fintech developments could go hand in hand with traditional bodies was formed during the discussion. The Forum featured more than 300 industry experts, researchers and media professionals who were tasked with increasing the popularity of the fintech industry. Ye Wangchun told prestigious participants that major banking institutions need to accelerate their digital transformation strategies, which would go a long way towards creating an active trading ecosystem.

Ye believed that the Fintech industry had become a driving force in raising small and large-scale banks. Reports have shown that the rate of adoption by the Fintech industry has increased from 16 percent in 2015 to a total of 64 percent in 2019. China was the market leader in terms of fintech adoption, as the South Asian superpower had fintech tendrils in 84% of all industries. Ye made his statements at a time when OneConnect was making long-term expansions to regions like Malaysia. The company had also acquired a digital banking license from the Hong Kong Monetary Authority.

The CEO of OneConnect confidently claimed that the adoption of fintech was like moving from the production of spare parts to the creation of the entire vehicle. He also called for further involvement of the Internet Finance Association of Small and Medium-Size Banks in order to also monitor the rules and regulations. One of the main agendas of the forum was to bring together the brains of the dignitaries and to find solutions to the current financial situation.

Saudi Aramco Backed Wahed Acquires UK Based Niyah to Boost Digital Asset Ecosystem

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The world of fintech has seen a massive uptick over the past few weeks with several organizations making it a point to launch new products. Most developments in the sector were skewed towards bringing in more users into the industry with the sole aim of increasing mass adoption.

The industry received another boost recently when the United States-based Wahed Incorporated acquired Niyah Limited, a digital banking application catering towards the Muslim community. Wahed’s Saudi Aramco connection also makes it one of the major players in the Asian fintech market.

Wahed officials claimed that the acquisition will pave the way for more offerings that would allow Islamic law compliant financial services to grow and thrive.Niyah’s services became popular in the United Kingdom for its easy to use features that worked hand-in-hand with the Sharia Law. As of now, the financial terms of the deal were kept under wraps with the numbers only being discussed between Niyah and Wahed.

Wahed added that the main intention of the deal was to provide its customer base with interest-free financial products such as debit cards and digital bank accounts. The latest movement comes on the back of a $25 million investment into Wahed by Saudi Aramco Entrepreneurship Ventures. Post the announcement, Wahed chief executive Junaid Wahedna said:

“All the money you keep with us will be invested according to your preference. There is no reason why we should not broaden out the scope of our reach to everyone.”

Wahed’s 100,000 strong customer base was excited for new features to be added onto the platform. What makes Wahed stand out is its adherence to the Muslim Shariah Law which prohibits charging the users base with interest. According to reports from within the company, Wahed will allow customers to keep a certain amount of funds on themselves. This was done so that the cash deposits are not used for lending but rather to earn interest. The company added that once the current developments take hold, there are plans to diversify into other communities as well.

Berlin based Solarisbank has plans to dominate European digital sector with help of Samsung

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Digital financial ecosystems have come a long way since being an extremely niche industry a couple of years back. Major organizations like Solarisbank were now on the brink of creating a new financial world where traditional concepts meet the benefits of the digital sphere.

Just recently, Berlin-based Solarisbank revealed that they would be expanding to several European regions by the end of 2021. This growth was synonymous with the growing adoption rate of the digital economy around the world.

Solarisbank chief executive Roland Folz claimed that the move to other countries was an important step in terms of global acceptance.  The organization was also the first bank in Germany to shift toa completely cloud-based system. Solarisbank first shot to fame for its “banking as service” model which drew in some big names from the tech industry.

Samsung remains one of Solarisbank’s largest clients with the South Korean bigwig using the former’s technology for Samsung Pay transfers. The rapid rate of capital movement can be handled by Solarisbank now because of the movement from traditional architecture to Amazon Web Services [AWS].  All of Solarisbank’s core systems were moved to the web hosting service within a year of the company’s launch.

The expansion announcement was considered a major landmark in Solarisbank’s history with Mr. Folz adding:

“We want to grow with our existing partners and ensure that they can spread their business and value proposition across Europe. The ambition level could be higher. The opportunity is there to build a substantial financial powerhouse for any of the big techs out there.”

Samsung’s reach in the global technology sphere contributes to a major portion of Solarisbank’s growth. Statistics showed that there are over 80 million Samsung mobile devices present in Europe, a staggeringly large playing field. Even grabbing a small percentage of this market share would give Solarisbank;’s the major foothold it needs in the continent. This tactic could also help Solarisbank grab a larger piece of the bank account’s pie, a number rising rapidly daily.

 

 

Saudi Arabia and UAE Join Hands to Conduct CBDC Experiment; Participants Include Six Major Banks

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Cryptocurrency developments across the world have captured the attention of several major institutions, with some governments taking the extra steps to adopt virtual currencies. This rapid growth was personified recently when Saudi Arabia and the United Arab Emirates announced a joint central banked digital currency [CBDC] experiment between the two countries.

On Monday, the two countries revealed details about Project Aber which was kick-started in 2018. During the transfer, both parties used a single CBDC issued by the central banks instead of separate currencies that need to be converted.

One of the major reasons why the single CBDC transfer worked is that both the UAE Dirham and the Saudi Riyal are pegged to the United States dollar, creating a common backing. The main idea behind the experiment was to show the rest of the world that the decentralized economy was fast approaching. The experiment used synthetic transactions instead of real money, a transition that is set to be in the pipeline.

According to reports, the difference in monetary policies also features as part of the discussion between Saudi and the UAE. Sources added that future projects include an instant settlement for capital market transactions, use of multiple currencies as well as delivery versus payment. A major advantage of the currency single CBDC setup was that it removed the need for Nostro accounts to be maintained by a separate commercial bank.

The two central banks were not the only participants of the experiment as they were joined by six other commercial institutions. The banks of Riyad, Al Rajhi, and Al Inma in Saudi and Dubai Islamic, First Abu Dhabi, and ENBD in the UAE were the banks that also tested their virtual assets mettle. The aforementioned banks were also brought in to discuss future plans of issuing a CBDC for a specific transfer and then redeeming it at the end.

Security was also discussed during the experiment as it was one of the most important characteristics to bring customers in. All the participants unanimously agreed that transactions need to be resilient no matter what the situation with the transmitter and receiver. If all goes well and good, experiments in the future would include more participants and a much larger transaction ecosystem.

Abu Dhabi Takes Keen Interest In Tech Investment; Looks For Investors In Israel

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Auliq Ice said, “Rather than trying to reinvent the wheel, build on to that which is already excellent.” Modernization is essential for the growth of society. Mankind’s forefathers have laid down the foundation and the world has been building on it. With digitalization progressing at full speed, the collaboration of finance and technology has been vouched for by many. Abu Dhabi and Israel seem to be taking the digitalization train to aid fintech in their countries.

Abu Dhabi And Israel Work Together Following Amends In Relations

Speaking at a recent financial technology conference in Abu Dhabi, Ibrahim Ajami, the head of Mubadala’s ventures unit, revealed that it was looking for Israeli fund partners as well as technology firms that entail a high-growth rate. The government-owned, global investment company, Mubadala seeks the aforementioned in order to co-invest to bolster the commercial ties between UAE and Israel.

Back in August, the United Arab Emirates signed an agreement with Israel in order to normalize relations. This peace deal was brokered by the United States and was preceded by President Trump. Following this, both regions have been engaging in several activities. With its latest move, Abu Dhabi’s Mubadala intends to open up opportunities with joint funds and joint ventures. Ajami, however, pointed out that the platform was still in its early stages in terms of evaluation.

Prior to Mubadal’s latest move, the platform had co-invested with Israeli investors all across the globe. However, the state-owned investment platform intends to pave the way for closer ties between the two countries. Ajami added,

“We are always excited about Silicon Valley. But we are also looking at Europe, we’re looking at the Middle East, we’re looking at India and we would like to be very active in China.”

The peace deal has certainly benefited both Israel as well as the UAE as it opens up more trade opportunities. Speaking about the peace deal, Avraham Ortal, the Chief Executive of Israel’s second-largest bank, Bank Leumi added,

“Once the peace agreement was signed we thought that being the leader for connecting Israeli companies and Emirati organisations could be our role.”

Earlier this week, the bank reportedly brought in a delegation of executives to Dubai from Israel. While these execs ranged from energy and tech to real estate, Ortal suggested that they were still in the stage of “planting the seed” and that they had a long way to go.

Saudi Arabia Steps Up Fintech Game as Western Union Acquires STC Pay

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New technologies have recently taken the market by storm, with organizations realizing that it’s a simple matter of sinking or swimming. The decentralized economy was one of those fields where innovation and adoption going hand-in-hand.

Just recently, the rising popularity of the fintech industry was put on display when traditional money transferring firm Western Union acquired a 15 percent stake in Saudi Arabian STC Group. The buy-out was calculated to be around $200 million with WU planning to use fintech to expand globally. 

The involvement of traditional organizations in the fintech world was the first step in creating awareness among large banked populations. For holders of large accounts who are usually older and lack the knowledge in fintech, the Western Union acquisition opens doors to new avenues. According to STC Group chairman Mohammed bin Khalid Abdullah Al Faisal, the country aims to fulfill its destiny as a digital enabler.

STC further claimed that its fintech wing-stc pay- was the first licensed fintech company by the Saudi Arabian Monetary Authority. With more than 4.5 million users, WU will be receiving a large chunk of people dealing with the new technology. The creation of awareness will be the most important step in onboarding new users into the field.

Post the acquisition, STC pay was valued at $1.3 billion, making it the first Saudi Arabian fintech unicorn. Coincidentally, the first fintech unicorn is also the country’s first unicorn in the private industry space.

The acquisition process was started by STC back in October when the company wanted investors to look into its technology. Officials from the Saudi government added that the main intention of the deal was to reduce people’s dependency on cash while modernizing the economy of the country at the same time.

Countries like Saudi Arabia are on the verge of creating new opportunities because of the rapid changes brought in by the coronavirus. If STC pay can live up to its name in the middle east, then analysts expect a large fintech boom in the region soon.

UK’s FCA Claims Fintech Firm Lanistar Has Not Received Regulatory Sanction, Company Responds

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The rapid growth of the fintech industry has grabbed the attention of financial regulators all over the planet with the discussion around privacy taking priority. Europe is one of the few regions where the financial ecosystem has been taken over by digital innovation with some players trying to fly under the regulatory radar.

On Wednesday, the United Kingdom Financial Services Authority issued a warning to fintech company Lanistar for launching services without the body’s approval. The FCA stated that organizations will not be allowed to run investment scams under the pretense of nascent technologies.

Lanistar had recently made waves in the fintech space when several digital influencers posted about the fintech firm’s product on their social media handles. Some of these ‘celebrities’ even posted the new Lanistar digital card promo without clearly stating that it was an advertisement. As soon as the FCA got wind of the product, the government watchdog issued the aforementioned notice.

According to the FCA statement:

“ This firm [Lanistar] is not authorised by us and is targeting people in the UK. Based upon information we hold, we believe it is carrying on regulated activities which require authorisation. [S]ome firms act without our authorisation and some knowingly run investment scams”.

Lanistar claims to help customers better manage their facilities using their native polymorphic technology and an open banking system. The firm had earlier released statements citing FCA approval which seems to have come under fire after the latest warning. FCA officials have taken a stand that the services do not come under any audit conducted by them.

Founded by entrepreneur Gurhan Kiziloz, Lanistar has made its voice clear during the controversy. Lanistar said that they were aware of the notice and insisted that all of the company’s workings came under the legal prerogative. As of now, the company is set to contact the FCA and provide a clear answer to its user base.

PriceWaterhouseCoopers Moves Away from Fintech Arm LikeZero as Souter Steps In

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Several traditional institutions all over the world have realized that integrating technology with the world of finance was a paramount factor for growth. This mantra has even forced bigwigs such as PriceWaterhouseCoopers to look closely at the way they function, especially in the data industry.

Just recently, PwC revealed that they will be selling LikeZero, the company’s intelligent data capture technology sector. The sale will be conducted via a management buy-out backed by Souter Investments. 

LikeZero worked by providing companies with a deeper look into data architectures, allowing them to make better decisions in the field. Its main clients included banks, financial institutions, and other regulated business analysts. Analysts could make use of LikeZero’s technology to enhance their risk management and contract governance. People also reported using technology for transformation and remediation activities.

The decision to move in different directions comes on the back of regulatory restrictions imposed by the Financial Reporting Council. The FRC had put up a ban on all audit firms selling their own technology to client companies so that they can have a larger choice base. Introduced by the FRC in 2016, the new rules restricted the Big Four firms from providing audit clients with financial technology. Following the decision, LikeZero chief executive Michael Lines said:

” This is a hugely exciting moment for our business. In today’s highly complex, unpredictable and regulated world, the ability for financial institutions to understand and manage their counterparty risk has become a critical function. Events such as Brexit, the cessation of Libor and the implementation of new regulations such as the new margin rules for uncleared over-the-counter derivatives, or indeed the impact of a global pandemic, all make the assessment of risk increasingly challenging.”

Officials from Souter Investments also spoke about how financial technology can create a massive impact on the changing financial landscape. Souter pointed out that scalability was of paramount importance, with the onus falling on LikeZero’s system architecture to make it happen. Companies have realized that it is easier to follow regulations rather than receive all the flak and pushback. This agreement would also allow fintech organizations to provide great products without the fear of it being taken down.

China Refocuses its Fintech Directives as Government Looks to Launch Regulations for Lending Companies

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Over the last few years, the world of fintech has changed, with many traditional institutions taking a keen interest in the industry. As the blockchain sector shed more light on the usability of integrating technology with finance, even state governments stood up to take note of what was happening.

China has been heavily involved in the fintech space for some time now and its premier has made it clear that it aims to move forward all guns blazing. The same Chinese government recently played a role in halting Ant Group’s $38 billion IPO at the last minute as questions arose about the country’s growing lending problem.

Financial lending in China has grown multifold in the past few years with an increasing number of youngsters joining the roster. Young people under the age of 25 start borrowing early in their lives, causing them to fall into the loop of paying interest for the rest of their lives. This sort of unregulated lending and borrowing seems to be the issue that the Chinese government wants to tackle first.

Reports have shown that people in China borrow from a variety of fintech companies, some of which may be shady and reclusive. One 24-year Chinese student spoke about the qualms of borrowing in small sums by pointing out that:

“Now it’s like I’m in a whirlpool. I can only pay it back slowly, one small sum at a time, and after that, I will have no savings. So, the whirlpool makes me keep borrowing more and more.”

Officials within the fintech industry believe that there are two sides to the leading story: it can democratize financial products but at the same time be a risky venture depending on the lender. Ant Group was one of the major companies that grew during the lending boom with that part of the business growing by almost 60 percent in the first six months of this year. Ant’s lending arm also contributes 40 percent to the total revenue of the company.

The only way the industry can grow under the watchful eyes of the Chinese government is to comply with the incoming regulations. Popular economists also claimed that microlending platforms need to be regulated as “they have evolved more like a Ponzi scheme”. Only time will tell what type of lending companies will the government let off scot-free.