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June 29, 2015

Disruptors at the gate

Posted by Amit Dua (View Profile | View All Posts) at 10:38 AM

A mere five years ago, FinTech was little more than an awkward abbreviation of financial technology. But today it is the most happening space in financial services that's making incumbents sit up and take notice. With investments in FinTech startups quadrupling between 2013 and 2014, a new breed of competition is using technology as the lever to disrupt the traditional financial services marketplace. As of now, most of the activity is still on the edges of the financial ecosystem. But considering the pace and sophistication of innovation, it is not hard to gauge where this movement is headed over the long term.

A mere five years ago, FinTech was little more than an awkward abbreviation of financial technology. But today it is the most happening space in financial services that's making incumbents sit up and take notice. With investments in FinTech startups quadrupling between 2013 and 2014, a new breed of competition is using technology as the lever to disrupt the traditional financial services marketplace. As of now, most of the activity is still on the edges of the financial ecosystem. But considering the pace and sophistication of innovation, it is not hard to gauge where this movement is headed over the long term.

These challengers are bringing a fresh new perspective on how banking products and services should be designed and delivered to a digital audience with markedly different expectations of their service providers. And hence the BAI - Infosys Finacle Global Banking Innovation Awards decided to recognize them with a newly instituted prize, given to the Most Innovative Non-Bank Financial Services Organization.

True enough, the first-ever set of finalists in this award category does not fail to impress.

First off is billion dollar startup and peer-to-peer credit marketplace Lending Club that set out to make credit more affordable and investing more rewarding. The company has since built itself into a position of leadership by efficiently connecting borrowers and investors. For those who have thus far missed the ability to initiate payments from within their emails, there is a new digital bill payment solution called AcceptEmail. Then there is PayItSimple a cloud-based patent protected technology that enables consumers to make purchases through interest-free installment payments on their existing credit cards. For consumers this eliminates the need for lengthy credit application processes or even credit line qualifications while acquirers benefit from higher revenue. High-schoolers are apparently calling it "The Instagram of Money" but MoneythinkMobile is a social application designed to promote healthy financial behavior among teenagers and young adults. The app leverages peer relationships, and the functionality to share photos, emojis, hashtags, likes and comments, to help users manage their spending habits and financial goals. Another app for modifying financial behavior and fostering financial wellness comes from mobile banking service, Moven. The app uses a number of tools like Spending Meter, Instant Receipt and Money Path to help users anticipate expenses and plan finances more efficiently. And finally there is Taxidia from Travelex Currency Services, a platform that allows travel money providers to quickly, securely and accurately fulfill the cash demands of their growing customer base.

The FinTech segment is clearly out to disrupt all conventional rules of banking and in the process raise the innovation threshold for the entire financial services industry. These firms will play a critical role in defining the future of the business. Let's celebrate that by honoring them at this year's BAI - Infosys Finacle Awards. See you there.

Winners and finalists will be recognized by Infosys Finacle and BAI during an awards ceremony at the BAI Retail Delivery Conference & Expo, on Oct. 13th at 3 PM, in Las Vegas, NV, USA.

June 9, 2015

Paying to Win

Posted by Rajashekara V. Maiya (View Profile | View All Posts) at 10:13 AM

Payments were arguably ground zero for non-native technology-led disruption in the banking industry. Having originated there, the movement has since cascaded over to a range of financial activities to include mobile wallets, information aggregation services, personal financial management tools and crowdsourced lending, to name a few.

Payments were arguably ground zero for non-native technology-led disruption in the banking industry. Having originated there, the movement has since cascaded over to a range of financial activities to include mobile wallets, information aggregation services, personal financial management tools and crowdsourced lending, to name a few.

But the action continues unabated in the payments space with disruptive ripples in the form of new players, platforms and/or tools becoming an almost regular feature of the market. Established companies like PayPal and Square are already looking beyond payments for new revenue sources within the financial ecosystem.

Based on all that action, payments have claimed their own category at the prestigious BAI - Infosys Finacle Global Banking Innovation Awards. And the finalists in the first ever installation of Innovation in Payments not only managed to impress but also succeeded in demonstrating the diverse possibilities for innovation in this space.

Take CaixaBank. Rather than launch a payment app that works with other wearable brands, the bank chose to launch a wearable, the Visa bracelet. There is an app, but only to manage the key functionalities of the bracelet. The open loop bracelet carries the customer's encrypted card information and distills the activity of merchant payments and ATM withdrawals down to a single tap. Essentially, in one single stroke, CaixaBank has managed to synthesize two innovations, contactless cards and wearables, into one compelling and practical solution.

Fidor Bank AG chose to focus on the emerging area of virtual currency for its payments innovation. In partnership with Bitcoin.de, the bank offers its Fidor Smart current account holder the ability to trade Bitcoin both quickly and securely. The implementation of the Ripple protocol allows customers to transact globally, within seconds, without being exposed to fraud or market uncertainties. The solution ensures that customers' money always stays in their own bank accounts and even comes with legal protection of up to 100,000 Euro per customer.

The payment innovation from Idea Bank SA is an inventive take on existing technologies to bring deposit and withdrawal services to Small and Medium Enterprise (SME) customers. It has launched a free, secure and multi-functional mobile ATM service that operates out of electric cars manned by trained bank employees. A customer can use a mobile app to book the service to a designated location and can even use it to track the vehicle. All transactions conducted at the mobile ATM are immediately synced to the customer's account.

The frenzy in the payments market shows no signs of being anywhere close to a peak. But even as the tech giants line up their payment offerings to eventually - what a banking leader eloquently described as - 'eat our lunch', the traditional banking sector is responding with innovations that can stand up to the most critical scrutiny. It is therefore only appropriate that we recognize and felicitate these path-breaking innovations against what was the first line of disintermediation in banking.

Winners and finalists will be recognized by Infosys Finacle and BAI during an awards ceremony at the BAI Retail Delivery Conference & Expo, on Oct. 13th at 3 PM, in Las Vegas, NV, USA.

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