IBSi Blogs

The rise of Fintech is a challenge for regulators, as outlined by the IMF earlier this year. Yet legislation isn’t the only area which needs to keep pace with the evolution of finance. As digital services and infrastructure expand, cybersecurity has never been more important.

by Simon Eyre, CISO, Drawbridge

Cyberattacks are on the rise – increasing in both frequency and sophistication – and financial players are a prime target. For instance, research from the Anti-Phishing Working Group, shows the financial sector (including banks) was the most frequently victimised by phishing in Q2 2022, accounting for over a quarter of all phishing attacks. A successful attack of any kind can have catastrophic consequences: in February, cryptocurrency platform Wormhole lost $320 million from an attacker exploiting a signature verification vulnerability.

As finance evolves, it’s imperative that institutions of every size are doing all they can to protect themselves from cybercriminals. But what does that look like in practice? Let’s examine some key actions all companies must take.

Strengthening weak links

You may not be looking for weak links in your security infrastructure – but your adversaries definitely are. A single vulnerability is an open door for criminals.

Businesses must continually search for weak links in their cybersecurity armour – such as through vulnerability management and penetration testing – to identify and strengthen these weaknesses before malicious actors do.

This is especially important as working habits also evolve, with remote and hybrid working established as the norm. These offer many benefits but can also greatly increase risk as employees access systems from numerous locations and devices move on and off networks. In fact, Verizon’s Mobile Security Index report found that 79% of mobile security professionals agreed that recent changes to working practices had adversely affected their organisation’s cybersecurity. This isn’t to say that companies should ban remote working but they need to be aware of their heightened risk and be proactive about managing it.

Educating the team

A crucial part of this risk management involves employee education. Many cyberattacks rely on social engineering techniques like typo-squatting (often used in conjunction with targeted phishing attacks) to impersonate trusted parties and fool employees into providing critical access or even direct funds. Therefore, employees at every level need to know the techniques that are being used against them and be trained in the appropriate cybersecurity response.

The way this education is delivered is also important. A one-off PowerPoint presentation won’t cut it – teams need continuous training and engaging exercises, such as attack simulations, tabletop exercises and quizzes, to ensure that crucial information is taken in.

Creating a cast-iron incident response plan

Part of protecting yourself from the damage of a cyberattack is planning what to do in the event of one.

An incident response plan is a critical part of a firm’s cybersecurity infrastructure, structuring the steps to be taken following an incident. Plans should include key contacts and a division of responsibilities, escalation criteria, details of an incident lifecycle, checklists to help in an emergency and guidance on legal and regulatory requirements. Plans can even include template emails to support communications and companies should draw on knowledge from private resources and industry experts, as well as their government’s resources, to help them create a cast-iron plan.

The road ahead for finance and cybersecurity

Over the coming years, the rate of digital change isn’t set to slow. With BigTech’s eyes on banking, traditional banks innovating to keep up with challengers, the rise of ‘superapps’ and cryptocurrency supporting the emerging metaverse – to name just a few – there’s significant change still yet to occur.

The finance sector’s cybersecurity response must also continue to evolve in order to keep up. Part of this will mean relying more heavily on AI, such as in continuously monitoring networks for threats, although this tech will also be leveraged by cybercriminals. Additionally, it will be crucial for the cybersecurity as a whole to close its skills gap: there is currently an estimated global cybersecurity workforce gap of 3.4 million people.

The future is exciting but without the right protections, it can be dangerous too. If firms are to protect their assets and customers, they must build cybersecurity into the heart of their practices. Reaping the rewards of the FinTech boom means keeping firm control of your security risk.

A low-code application development platform is a visual software development environment that empowers multiple developer personas. It uses visual development tools with drag-and-drop or point-and-click design capabilities, abstracting the code in application design and development, thus providing a simple and intuitive development environment. Low code helps to free up your IT staff to focus on more value-add tasks. It can help enterprises roll out applications with a shorter time to market with high abstraction— Utsav Turray, General Manager – Product Management and Marketing at Newgen Software

What is a low-code platform?

Low code enables enterprises to rapidly develop customized solutions and applications for multiple interfaces like web, mobile, wearable devices, etc., to automate end-to-end customer journeys.

Benefits of low code platform

1. Empower IT, Teams, for Optimum Resource Utilization:

Your IT teams spend long hours maintaining systems with periodic updates, compliance checks, and performance measurements. Low code can help you minimize this burden by automating such recurring tasks, allowing IT experts to focus on other important activities.

2. Fulfill Customer Expectations by Responding Quickly

Today’s tech-savvy customers want you to respond quickly to their needs. With these platforms, you can quickly respond to customers’ needs by developing and deploying applications rapidly. Also, you can deliver a personalized customer experience using customizable applications.

3. Enhance Governance and Reduce Shadow IT

Shadow IT is an area of concern for enterprises as it accrues technical debt and affects its overall risk monitoring. Low code offers a collaborative work environment and reduces dependencies on third-party applications. It helps reduce shadow IT through central governance and visibility.

4. Handle Complex Business Needs with Faster Go-to-market

A low code platform with well-designed functional capabilities like drag-and-drop tools helps developers handle a range of complex business and technological needs. These platforms enable faster development of complex business applications in a short period, fostering quick innovation and rapid go-to-market.

What is no code platform?

No code is a tool for nonprofessional developers. Using a no-code platform, anyone in the organization can build and launch applications without coding languages using a visual “what you see is what you get” (WYSIWYG) interface to build an application and intuitive user interface. A no-code platform often uses drag-and-drop functionality to enable development and make it accessible for organization-wide users. No code platforms are mostly directed to serve the needs of business developers who can develop applications with workflows involving fewer work steps, simpler forms, and basic integrations.

Benefits of no code platform

• With no code, organizations can work without IT interference.
• Organizations can make applications in less time and with fewer resources.
• Compared to conventional coding methods, no-code solutions reduce the development time since developers don’t need to hand-code each line of code.
• Functionality and design are more easily changeable than hard coding allows. Developers can also integrate any change easily and enhance functionalities in the applications whenever required; this helps businesses provide a better customer experience.
• No code platforms don’t require similar effort as a conventional coding approach to building applications, thus being cost-effective.

Difference between low code and no code

Working with Newgen, you’ll have access to Newgen’s low-code and no-code intelligent automation capabilities. However, both platforms focus on a visual approach to software development and drag-and-drop interfaces to create applications.

Low code is a Next-gen Rapid Application Development tool for multiple developers, whereas no code is a Self-service application for business users. The primary purpose of low code is the speed of development it offers, whereas, for no code, it’s the ease of use.

If the goal is to develop simple applications that require little to no customization and are based on improving the efficiency of a simple workflow, no code platform should be the ideal choice. An example could be order management, employee onboarding, or scheduling to improve employee efficiency.

Low code, on the other hand, is more suited to enterprise use cases. It is directed towards various personas, including business developers. Low code is more flexible than a no-code platform. An example could be Business Process Automation, Application modernization, Internal applications, and portals. Developers can work with stakeholders in all the stages of the development process, and low code can help them address complex integration scenarios, which gives an organization faster time to market.

Collaborative partnerships can remove barriers to SME borrowing, in turn boosting the global economy. In an already challenging market for businesses of all sizes, SMEs are facing the additional strain of being unable to access the working capital they need to manage cashflow, take advantage of growth opportunities or help them get through quiet periods.

by Martin McCann, CEO, Trade Ledger

The good news for SMEs – and the banks wanting to provide them with a better solution – is that the technology to resolve these pain points already exists. Companies like Trade Ledger provide the technology that lenders need in order to offer businesses fast, easy access to working capital – worthy of a digital economy.  A good example of how that is working in reality is our partnership with HSBC.  Working together, we created a digital solution that cuts the approval process for new receivables finance from up to 2 months, down to within 48 hours.

Utilising the interconnected ecosystem

Even the world’s largest commercial bank cannot do it all in-house, instead seeking agile, enterprise technology partners to fast-track digital transformation strategies and start adding value to customers sooner. We call this collaborative innovation.

Such partnerships are nothing new. Indeed ‘partnership’ seems to be something of a buzzword in the financial services industry today – thanks in part to open banking, but also Covid-19 forcing many to seek alternative solutions quickly in a time of crisis. It is encouraging to see banks, FinTechs and other payment services providers increasingly looking to build partnerships within the financial ecosystem, for the mutual benefit of both organisations as well as their underlying customers. Utilising purpose-built solutions of other providers, financial institutions of all sizes can get new solutions to market more quickly and at lower cost, helping them to remain highly competitive.

Another example of innovative collaboration is the way in which we work with Thought Machine, the cloud-native core banking technology provider. Together, with Trade Ledger’s loan origination and management capabilities, we are able to deliver a fully integrated technology stack for commercial lenders and banks. The API-driven data exchange enables a high level of real-time. Banks can now rapidly configure and launch new digital products such as asset-based-lending, invoice and receivables finance, with ease and control.

SME lending to boost the economy

By leveraging open banking APIs and data modelling to build a real-time view of the customer, banks can get a richness and quality of data that removes traditional blockers to extending credit to the mid-market and SME sectors.

I believe there is also a moral obligation for the industry to provide critical global supply chains with access to liquidity in order to fuel a global economic recovery. SMEs play a vital role in the global economy, so the industry must come together to remove the barriers that hold them back – including the inability to access external capital. Innovation happens where capital flows!

Trade is the engine that powers development and competitiveness in the global economy, thereby encouraging fairness, creativity, and productivity. When trade flows in a rules-based system, jobs, wages, and investment accelerate immensely.

By Swati Babel, a cross-border trade finance business specialist, and VP at Triterras

Trade financing supports trade at every level of the global supply chain. Trade finance makes ensuring that buyers get their products and sellers get their money by supplying liquidity, and cash flows, and reducing risks. Simply expressed, trade finance is necessary for the cross-border movement of products and services.

With the Global Trade Finance Market estimated to reach $85.85 billion by 2027, growing at a CAGR of 7.06%, it becomes an integral part of every country’s economy. The world’s vast domestic market and a large pool of skilled workers make trade finance an attractive destination for foreign investors. However, the complex regulatory environment and lack of access to financing restrict the expansion of business operations across various markets.

However, the emergence of FinTech platforms over the years is paving the way to simplify and seamlessly align the trade finance industry. FinTech platforms are providing much-needed solutions for businesses by offering innovative financing products that are tailored to the needs of enterprises. These platforms are helping businesses to overcome the challenges they face in accessing traditional bank financing, and they are playing a key role in promoting economic growth and development. The platforms provide businesses with the financing they need to grow and expand their operations and also help the businesses manage and improve their financial planning.

The role of FinTech platforms in the trade finance industry is to provide an efficient and cost-effective way for businesses to finance their international trade transactions. The platforms offer several advantages over traditional banking products, including:

• Access to capital: Fintech platforms provide businesses with access to capital that they may not be able to obtain through traditional banking channels. This can be particularly helpful for small businesses and startups that may not have the collateral or credit history required by banks. Moreover, Fintech platforms provide businesses with enhanced access to funding, which can be used to finance trade transactions. Another key advantage of fintech platforms is their ability to connect borrowers and lenders from around the world, which gives borrowers greater access to capital. In addition, fintech platforms usually have lower transaction costs than traditional banks.

• Flexibility and Cost Effectiveness: Fintech platforms offer more flexible terms than traditional bank loans, which can be important for businesses that have the irregular cash flow or are expanding into new markets. Fintech platforms offer flexible products and services that can be customized to meet the specific needs of businesses. Fintech platforms offer cost-effective solutions that can help businesses save on costs associated with financing trade transactions. Various fintech platforms have relationships with multiple lenders, which gives them the ability to get customers the best possible terms for loans and can often provide more flexible repayment terms than banks. This means that businesses can choose a repayment schedule that works best for them, instead of being tied into a rigid repayment plan from a bank.

• Agility and Efficiency: Fintech platforms typically offer a faster and more convenient application process than banks. This can be critical for businesses that need to quickly obtain financing for time-sensitive trade transactions. Fintech platforms for trade financing are a lot faster than going through a bank or other financial institution because the process is often much simpler and there is less paperwork involved. Fintech-led events and activities such as the Singapore Fintech Festival also enable an ecosystem of networking and partnerships. Because of these reasons, banks and financial institutions with sufficient capital often team up and participate with the Fintech platforms for lending/co-lending opportunities. Additionally, they also enable businesses to streamline their trade finance operations and improve overall efficiency. Innovative solutions such as AINOCR or Electronic B/L help in digitizing analog data, such as paper documents, bills, etc. These platforms provide valuable data and analytics to help businesses make informed decisions about their trade finance need and help businesses streamline their operations by automating key processes.
• Enhanced security: Fintech platforms often utilize cutting-edge security features, such as blockchain technology, which can provide an additional layer of protection for businesses and their customers. Many platforms use such next-gen technologies to protect borrower information and ensure that transactions are processed securely. This can give borrowers peace of mind when taking out a loan or making a payment.

FinTech platforms are playing an increasingly important role in the trade finance industry. By providing a digital infrastructure for the entire supply chain, from producers to retailers, they are making it easier for businesses to connect and trade with each other. This is particularly important in the current climate, where businesses are under pressure to move faster and be more agile. FinTech platforms can help them do this by streamlining processes and reducing costs. While credit assessment and due diligence should be carried out manually to avoid Trade-based Money Laundering, however for everything else, Fintech platforms are changing the landscape of Global Trade Finance.

After a summer of bad news for the global economy, we are at a worrying turning point. Rising interest rates, high inflation, and stunted consumer spending have created a complex path ahead for all. The economic fog is even denser than usual, but many would agree with the view that when the going gets tough, fintech gets going.

by Tom Voaden, Strategic Partnerships Lead at BR-DGE

For the Buy Now Pay Later sector, like so many areas of the fintech ecosystem, these economic headwinds will create both challenges and opportunities. Tightening consumer purse strings is an opportunity for BNPL to reinforce its core mission around low fees and choice. In turn, rising consumer demand for alternative payment methods could accelerate merchant adoption of BNPL services at the till. Recent data from Juniper Research predicts that BNPL consumer usage will increase from 360 million today to over 900 million by 2027, perhaps highlighting that the pandemic surge was just an appetiser to a prolonged period of accelerating global adoption for the rest of this decade.

However, in times of recession, customer default rates will need to be monitored closely and there is now an even greater need to safeguard consumers. In this area, firms have an opportunity to be forward-thinking and embrace prioritising innovative consumer protection and controls before regulation comes into play.

BNPL 2.0 = diversification

With an eye on the future, Buy Now Pay Later providers are increasingly looking to diversify their offerings ahead of regulation. Open Banking is one area where the likes of Klarna have focused, and see strong growth opportunities in the future. New ventures such as this can also allow the enablement of new capabilities which combine with and complement their core BNPL offering. Their new business unit “Klarna Kosma”’ claims to process nearly a billion information requests to bank accounts every year. Global expansion is another priority, with leading players looking to make inroads into markets where BNPL penetration has room to grow, such as the US and India.

Beyond this, regulation will lead to greater diversification of the goods and services that BNPL can be used for. The reality is, the more BNPL providers are required to, or decide to secure financial licenses, whilst also carrying out more stringent checks on customers, the more they may have scope to offer higher lending and longer-term payment plans. It is likely that we will see providers focus more on areas such as automotive and medical services post-regulation.

The bottom line here is that BNPL providers see a number of strategic opportunities across the ecosystem to leverage their proposition and ultimately unlock new revenue streams. The intent and appeal of this is clear, but it will be interesting to see in the coming years how this plays out.

Regulation as a driver for BNPL consolidation

In the UK, the sector is in its final sprint to regulation, with the government pledging to publish a consultation on draft legislation towards the end of this year. In preparation for this, many firms will need to increase their resource and focus within legal, compliance and risk to ensure they are playing by the rules. This need will no doubt impact the margins of BNPL providers and could be a catalyst for M&A in the sector.

Across the globe, there are now hundreds of BNPL providers offering various shades of flexible payments. The jury is out on whether this is an overcrowded space, but it is easy to see consolidation becoming the answer when market share and resources are inevitably squeezed. Block’s acquisition of Afterpay earlier this year further shows the appeal of the sector to larger financial institutions. A number of factors are at play here, but it is likely that M&A becomes as common as fundraising rounds for the BNPL sector in the years ahead

Looking to the future

The economic outlook is challenging for businesses and consumers. Forward-thinking and agile, the BNPL sector will need to harness its knowledge and expertise to support consumers at the same time as continuing its impressive growth trajectory. Increasing competition between payment providers will also further drive innovation in the checkout space which many will need to react to. The customer journey has also grown in importance and is just one key area where providers can innovate in order to meaningfully support both consumers and merchants.

As demand amongst consumers has grown, and preferences evolve, it is important the industry works to ensure merchant customers can meet this shift. The opportunity, therefore, lies not only in offering consumers greater payment flexibility and choice at the checkout but also in ensuring merchant checkout innovation moves as fast as customer preference diversifies and changes.

As the BNPL sector matures, it is reasonable to expect that the path ahead will be very different to the recent past.

The metaverse as a concept has permeated much of the media narrative around technology this year, having been catapulted into the public conscience when Facebook changed its name to Meta back in November 2021.

by Jawad Ashraf, CEO and Co-Founder of Virtua

A digital network of interoperable, interactive virtual worlds – this new medium of interconnectivity promises to have as big an impact on society as social media did back in the noughties. Experts, developers and brands are constantly innovating in the space, exploring the myriad of ways in which they can capitalise on the increased scope for audience retention and growth.

A whole new world

The entertainment industry was – perhaps as expected – among the first to jump on the wagon and get ahead of the curve, diversifying their creative strategy across various virtual worlds. Some high-profile examples of this would be Manchester City partnering with Sony to recreate a virtual Etihad Stadium in Decentraland; Spotify Island launching in Roblox; Warner Music Group entering Sandbox, and us at Virtua collaborating with Williams Racing to bring F1 fans a more immersive experience. With this, rhetoric has appeared that implies that the metaverse is essentially an ultra-advanced arena for fans and gamers to wrap themselves further around entertainment channels more so than they’ve ever been able to do before.

However,  all types of institutions and enterprises stepping into the metaverse – including digital real estate agents, fashion retailers, law firms, advertising agencies and educational institutions and advertising agencies. Even some small businesses have been testing out ways in which they can integrate Web3 into their daily operations with staff and clientele. Along with the progressive adoption of blockchain technology in the physical world and the rise of NFTs, we are preparing to see a monumental shift in the way society functions. A hybridised reality, in which the fundamental dynamics of social life are interchangeable between the physical and virtual, is on the horizon.

Implications for financial institutions

For financial institutions, this means engagement with Web3 concepts and the metaverse will soon be unavoidable. It will be a necessity. They should thus prepare themselves to be malleable in their approach to changing tides. Flamboyant PR stunts may not be called for, but they should certainly be familiarising with concepts such as asset programmability, smart contracts and peer-to-peer networking. In the metaverse, users will not only be communicating – but also earning and spending. The revolutionary aspect that comes into play and differentiates Web3 from Web2 is that they will now be able to merge real and virtual assets which the blockchain will grant them total control over. The financial sector will be required to adapt its services with new means of transactional exchange, asset management and identity verification in order to keep up.

Decentralised blockchain technology is resistant in practice to the agency that financial institutions exercise, but this does not mean that banks, financial advisers, brokerage firms and insurance companies won’t have a place in the metaverse. The likes of JPMorgan Chase, Bank of America and HSBC are all already involved in the metaverse. Investors, gamers, NFT collectors and general users will need the variety of services provided by institutions as they look to immerse themselves in this new world.

McKinsey & Co’s ‘Welcome to the Metaverse’ report also highlights that the shift is already occurring. Financial institutions are experimenting with virtual substitutes for telecommuting centres, investment advisory services and employee training within newly developed ‘financial towns.’ Another sector that will unquestionably be in high demand is the insurance industry. Metaverse residents will not only own digital property and NFTs, but also their data – which their avatars will be tethered to. With the blockchain still susceptible to hackers, all of this can still be stolen in the metaverse. Services that offer users cybersecurity policies to protect users from those potentialities will therefore be an imperative component of Web3 security measures. Forming partnerships with these firms will be a priority for Metaverse developers as they seek to provide their users with the comfort and surety that will attract them to their spaces.

Swiss Bank ‘Sygnum’ have also demonstrated the capacity for financial institutions to adopt crypto-native protocols – having already developed, regulated and managed many assets on DeFi (Decentralised Finance) applications using blockchain technology. They’ve recently announced that they will be the first of their kind to open a metaverse hub – due to launch in Decentraland’s equivalent to New York’s Times Square on 27th September.

The first steps to take

Beyond enhancing convenience for their staff and clients, firms across the sector should firstly be looking toward the marketing opportunities that the metaverse will provide them. As the retail and entertainment industry continues to innovate new means of interaction with their customers and audiences, so too should financial institutions be capitalising. The chance to strengthen their client base through new means of rapport is clear. As television, radio and print adverts were supplemented by social media ads, social media operations are being extended to carefully orchestrated creative initiatives in the metaverse. Despite whatever caution, there may be to incorporate the likes of avatars and virtual offices into their agendas, it is certainly worth considering the option to dedicate an arm of their workforce to focus on a metaverse strategy. It is as big an opportunity for them as it is for any other industry.

While the global payments scene continues to be dynamic, broadly speaking, there are three regional approaches directing the progress of the market in their respective geographies.  In the European Union, the United Kingdom, and South Korea, the regulatory aspect – rules such as PSD2, GDPR and Open Banking regulations – remain highly influential in the changes taking place, especially the creation of financial ecosystems.

In Asia, it is market and consumer forces that are driving payment innovation. This article by Rajashekara V. Maiya, Vice President and Head, Business Consulting Group, Infosys Finacle, discusses the different forces that are driving global payment innovation.

Power is passing into the hands of consumers via their handheld devices, which are today more technologically capable than desktops and laptops. With every individual owning a mobile, maybe even two, in the markets of Asia, “cross-industry relativism” is in full flow – consumers, who can pay for their Amazon purchases in one Paytm click,  want similar levels of payments innovation from their banks.

In North America, where an overall weak payments market infrastructure exists side by side with pockets of excellence, it is the latter that is leading payments evolution. For example, Silicon Valley’s rich financial ecosystem is a driving force that every bank wants to be a part of. The North American approach is the opposite of the European one, with innovators, rather than regulators, in the payments driving seat.

Besides these three approaches, the following factors are shaping payments today:

Trends in the making

• Emerging regulatory or recommendatory payments standards – FDX in the U.S. and Canada, BIAN globally, PSD2 in Europe, CMA in the U.K. and CDR in Australia
• Trending domains, for example, Buy Now Pay Later in North America and Europe; P2P payments in Latin America, Europe, and North America; personal finance and payments aggregators; and cryptocurrency-based money transfer
• Disruptive business models, for example the recently announced Digital Banking Units in India, or other “people-less” branch models, providing a frictionless banking environment
• Banks behaving like Fintechs, and Fintechs behaving like banks to diversify payment and remittance ecosystems
• APIs which provided a strong enablement framework and then evolved an economy of their own
• New technology trends, including green tech, metaverse, big data, artificial intelligence and cloud, making the payments revolution more solid, yet seamless.

Retail payments innovation is crossing over to SMB and corporate segments

It is time to push the boundaries of payments, to give SMB and corporate banking customers the same benefits as retail consumers. For example, how can the QR code, where the rapid growth in subscription (1.5 billion in 2020 predicted to reach 2.2 billion in 2025) fuelled peer-to-peer or person-to-merchant payments,  be extended to drive ease of SMB and corporate payments?

A start for global standards

The shift from ISO 15022 to ISO 20022 is freeing cross-border payments from message type, to allow a broad swathe of remittance transactions. As payments become open, and API-driven, it is morphing from a peripheral service into a  “product” in its own right. What’s more, it is seen as a foundation for innovation, a potential “platform” offered as a cloud-based service with ecosystems built around it. No other banking product offers so much possibility.

A new class of start-ups, namely paytechs, is focusing only on payments innovation. Almost 90 countries are involved in pilot, or advanced POC, projects to build Central Bank Digital Currencies, which will fuel the payments journey by enabling faster, cheaper, safer, transparent and seamless transactions.

While payments are looking up globally, some regions are clearly ahead.

India leads the way

India is taking its success in digital payments forward with its Payments Vision 2025, which seeks to bring about industrialization, internationalization and inclusion in payments, and ensure UPI transactions continue to grow at a 50 percent CAGR over the current base of 6 billion monthly transactions.

Expectations run high with regard to innovations such as ONDC (Open Network for Digital Commerce) and OCEN (Open Credit Enablement Network), which are expected to drive payments to a new level. Both are game-changers, with the potential to disrupt the disruptors. ONDC will democratize digital commerce to bring about a multiplier effect in payments. OCEN will help to close the $1.2 trillion funding gap that cannot be bridged by the mainstream banking industry – think street vendors, micro-industries, and other tiny businesses with no access to formal credit who can now tap a microlending ecosystem. OCEN, which has already got the support of 7 banks, 40 account aggregators, and several Lending Service Providers, will change lending from low trust, high cost, high friction to high trust, low cost and low friction, to set benchmarks in global banking.

What next

APAC payments are expected to expand at 22.8 percent CAGR between now and 2026, must faster than North America’s 6.6 percent or Europe’s 12.9 percent¹. One reason is that North America in particular is battling process and technology challenges, an example being the traditional, low trust-high friction lending processes mentioned earlier.  A solution is to build “public good” infrastructures that can serve a variety of purposes, such as India’s UIDAI, whose Aadhaar number facilitates everything from bank account opening to SIM card purchases to direct benefit transfers.

This is especially critical because in theory, the American e-commerce market, estimated at $2 trillion in 2025, is best placed to propel the future growth of real-time payments. The problem is that it lacks the market infrastructure to do it. The U.S. should start building this infrastructure now, to be ready to tap exciting future opportunities in global payments.

Sources:

https://worldpaymentsreport.com/

Unless you’ve had your head in the clouds for the past few years it would be difficult not to notice the pace of adoption of cloud technologies in financial services and the capital markets.

by Alex Walker, VP, Global Network Data Sales, IPC Systems

Perhaps one unforeseen consequence of the global pandemic was that the working world in general, and financial markets, in particular, would not simply resume ‘business as usual’ the moment physical restrictions on entering workplaces were lifted. Just a few years ago the idea of virtual trading floors would have been unthinkable, given the challenge and heavy burden of meeting rigorous security, performance, surveillance, conduct and reporting obligations. However, new cloud technologies not only facilitated efficient remote trading; post-pandemic there has been a seismic shift in mindsets as to what ‘institutional-grade’ operational and business models should look like.

The benefits of using the cloud

Market participants have options when it comes to selecting the cloud configuration that best satisfies their specific and extensive requirements, from security and performance rigour to ease of integration with internal infrastructures and external counterparts. Cloud technologies, in general, offer key benefits that include a pay-as-you-go subscription model, flexibility, scalability, significantly reduced times to market, removal of barriers to entry for new solution offerings, and the ability to respond more quickly to evolving market conditions.

As a pioneer and advocate of new data distribution and communications technologies, we endeavour to understand our clients’ pain points and their key drivers of change in embracing new cloud technologies, innovation, and emerging trends. Our survey this year of 500 professional trading practitioners uncovered that there was a relatively even split of respondents favouring integration with a public cloud over single and multi-party private clouds. We find that smaller firms and retail traders tend to focus more on cost-efficient market access and leveraging the economies of scale offered through shared (public) cloud infrastructures. However, the Tier 1 banks and large financial institutions will more likely lean towards private cloud infrastructures with enhanced, stringent, and rigorous performance and security layers. The solution for the majority of financial firms will be a hybrid of traditional and cloud connections and distribution models.

In terms of front-end trading applications in the cloud, it is still relatively early as far as ‘proof of concept’ and, not least because of the weight of regulatory and compliance obligations, the trading industry remains understandably circumspect about full adoption. That said, we are seeing a steady migration to certain aspects of cloud services, and over time expect order management services – and indeed core matching functionality – to transition increasingly to the cloud.

The foundation of digital innovation

Cloud adoption offers a starting point for firms to completely rethink how they access and manage costly, high-maintenance operational resources such as network and communications infrastructure, data storage, client connectivity, etc. This shifts business mindsets beyond pragmatic ‘build or buy’ decisions to a nimbler ‘as-a-service’ business model.

The ‘as-a-service’ consumption model mitigates the cost and risk of significant direct investment in cloud connectivity and service capabilities – as well as the arguably greater risk of being left behind as new cloud technologies and applications become the standard. Along with the anticipated increase in digital data points, financial institutions will be compelled to embrace the power of the cloud to continue to stay relevant in an increasingly challenging competitive environment, particularly with respect to new, non-bank, cloud-native industry disruptors.

The everyday integration of digital technology into our lives has had a significant impact on workplace cultures and structures. Cloud technologies allow firms to be much more flexible, mobile, and innovative. The success of this approach – in terms of measurable performance and driving more cloud-led business decisions to ongoing innovation – is linked irrevocably to the robustness of a company’s connection between its infrastructure and cloud environment.