the full picture, this week – 29 November 2019

by | Nov 29, 2019 | All Blog Posts, the full picture this week, Featured

Let us put you in the picture this week, as we round-up and react to the latest news from the financial crime compliance and technology sectors.

This time, we give our reaction to an article that looks at the growth of fintech and why key players are ‘disrupting’ traditional banking.

Elsewhere, The European Central Bank (ECB) welcomes an initiative by European banks to develop a payment system.

These issues, and more from around the globe, give us plenty to dive into for your Full Picture, This Week…

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why fintechs are disrupting traditional banking

Fintechs are growing rapidly. Their range of offerings and number of customers are expanding as they target the pain points that clients experience with traditional banks.

The regulatory environment in Europe has been ripe and open to disruption and digital banking, and a lot of the players that have been successful there are now entering the U.S.

Luvleen Sidhu, co-founder, president and chief strategy officer of BankMobile, spoke recently with Knowledge@Wharton about fintech trends and what to expect in 2020.

Ms Sidhu said:

It’s amazing to me how much fintech has grown, even since the beginning of 2018. I looked at a stat recently – four years ago fintechs [accounted for] probably 5% of the market for personal loans.

 

Today, more than 45% of personal loans are originating through fintechs. It’s clear that a shift has taken place, and fintechs are gaining more momentum.

 

It’s really about fintechs being able to recognise that consumer pain points are still not being addressed, and consumers responding, ‘someone is listening to us. Someone is addressing our frustration. Someone is making this easier for me, more value-additive to me.’ That’s why fintechs have seen the momentum they’re seeing.

the Encompass view

There is no denying that fintech as an industry is growing rapidly, with the advantages being widely seen.

Unhindered by legacy platforms, fintech firms have made their mark on the financial services landscape by offering what customers really want – innovative digital experiences and frictionless customer onboarding. In today’s fast-paced society, consumers want quick and easy options, which these providers can offer.

For traditional banks to compete, they must continue to develop in a way that promotes ease, speed and quality of service for customers in the same way. That said, they do have the advantage that there is still a lot of trust placed in banks by consumers and businesses.

The role of banks in the finance ecosystem, as well as the services they provide, is also changing, so there is still an opportunity for them to respond if they can be swift – and if the big tech companies don’t get in there first!

the Encompass view

There is no denying that fintech as an industry is growing rapidly, with the advantages being widely seen.

Unhindered by legacy platforms, fintech firms have made their mark on the financial services landscape by offering what customers really want – innovative digital experiences and frictionless customer onboarding. In today’s fast-paced society, consumers want quick and easy options, which these providers can offer.

For traditional banks to compete, they must continue to develop in a way that promotes ease, speed and quality of service for customers in the same way. That said, they do have the advantage that there is still a lot of trust placed in banks by consumers and businesses.

The role of banks in the finance ecosystem, as well as the services they provide, is also changing, so there is still an opportunity for them to respond if they can be swift – and if the big tech companies don’t get in there first!

Alex Ford | VP Operations, Encompass

ECB backs EU bank payment system plan

The European Central Bank (ECB) has welcomed an initiative by European banks to develop a rival payment system to challenge the dominance of Visa and Mastercard and the threat from Chinese and US BigTech firms.

Backed by twenty French and German banks, The Pan European Payment System Initiative (PEPSI) would seek to handle all forms of cashless transactions.

the full picture, this week - 29 November 2019 | Benoît Cœuré, European Central Bank | Encompass blogIn a speech to a central bank summit in Brussels, ECB board member Benoît Cœuré said:

The Eurosystem welcomes the strategic initiative of a number of major European banks to create a true pan-European retail payment solution that has the potential to meet the vision of our strategy.

 

The proposed solution would be based on the Sepa credit transfer instant (SCT Inst) scheme, which is in our view the correct approach as it is future-oriented, and it could capitalise from day one on existing powerful and sophisticated infrastructures, such as the Eurosystem’s TIPS.

He called on the banks to develop a clear roadmap “so that we can see tangible actions emerge soon” and hinted at public policy initiatives to drive private sector solutions, for example by imposing legislation obliging payment providers to adopt instant payments within a certain period if a critical mass has not been reached.

Read more.

big tech ‘will replace traditional banks in five years’

the full picture, this week - 22 November 2019 | mobile payments | Encompass blogMore than half of banking professionals think that Google, Apple, Facebook and Amazon (GAFA) would in some way replace banks in the next five years.

Trade show FinTech Connect surveyed 364 respondents from financial institutions and fintechs, finding that 68% saw Brexit as having a ‘negative’ or ‘disastrous’ impact on their businesses.

However, the biggest obstacle for financial services firms was legacy infrastructure – which 85% felt that was ‘significant’ or ‘extremely significant’ in preventing digital transformation.

Stephane Malrait, head of market structure and innovation for financial markets at ING, said:

One of the main goals of digital transformation is to not re-create the next generation of legacy infrastructure, but to focus on customer value creation driven by a component-based architecture which can evolve or be changed over time by simple API integration.

Entrenched executives, under-investment and lack of resources were also seen as ‘significant’ or ‘extremely significant’ by 65%, 64% and 63% of respondents, respectively.

In the case of digital challenger banks, 78% of respondents said regulatory and compliance issues represented the biggest obstacle to growth.

news in brief

the full picture, this week | News! | Encompass blogBanks must balance the use of customer data to personalise products with the potential to ‘freak them out’ in terms of privacy concerns, says an industry tech guru.

Business confidence, growth and sales volumes are all in decline across the UK’s tech sectors, according to KPMG’s quarterly survey. The latest analysis revealed a downturn in new work across the tech sector for the first time since the middle of 2012, due to softer global economic conditions and ongoing domestic political uncertainty.

The Cayman Islands has warned crypto services that they most follow strict AML rules as the jurisdiction gets ready to implement the global standards set out by the Financial Action Task Force (FATF).

Anti-corruption authorities have filed a case against Pakistan’s former President, Asif Zardari, for alleged involvement in a money laundering scandal, according to local media.

Standardised data reporting is the lynchpin for the future of sustainable finance – that’s the take-away in this from Finextra.

The Swiss government has adopted new laws against money laundering so that lawyers, notaries and other advisers are required to comply with due diligence obligations. The AML reforms follow recommendations by the FATF’s 2016 mutual evaluation report. Read more.

Encompass named in RegTech 100 list for 2020

the full picture, this week - 29 November 2019 | RegTech 100 | Encompass BlogEncompass has been named within the RegTech 100 – a list recognising the world’s most innovative technology solution providers.

Now in its third year, the RegTech 100, announced by specialist research firm RegTech Analyst, highlights “regtech companies that every financial institution needs to know about” in the year ahead.

Read more about our inclusion here.

vote for Encompass at the British Bank Awards!

vote for Encompass at the British Bank Awards | Encompass blogWe’re delighted to have been nominated in the ‘RegTech Partner of the Year’ category at the British Bank Awards. Voting is now open, and winners will be decided by financial firms.

To make it to the list of finalists for our category, we need your help! Here’s how to vote:

  • go to the survey here
  • find question two on the survey [‘RegTech Partner of the Year’]
  • enter your winner [Encompass Corporation!]
  • follow the survey steps and fill in the boxes asking why we should win and how you would rate us
  • enter your email address

The survey is quick and easy to complete and voting for the finalists is open until Sunday 12 January 2020, so there’s plenty of time to do your bit to help us claim the award.

reflections on Singapore Fintech Festival 2019

Reflections on Singapore Fintech Festival 2019 | Encompass blogThousands of people turned out for the annual Singapore Fintech Festival (SFF) earlier this month – and it was bigger than ever.

Recognised as the world’s largest fintech gathering, the week-long event brought together professionals representing top global financial institutions, fintech unicorns, policy makers, investors and academia to explore the latest trends in digital finance.

We offer our key takeaways.

webinar – AML regtech roundup 2019

AML Regtech Roundup 2019 | Dr Henry Balani | Encompass webinarsThis year has seen changes to regulation, increased fines for non-compliance and a surge in new technology being developed to help firms with Anti-Money Laundering (AML) compliance.

Dr. Henry Balani, compliance and AML specialist and academic, talks through the changes in AML regtech throughout 2019 and looks ahead to potential trends in 2020. Key learnings include:

  • this year’s changes to AML regulation
  • industry news stories
  • recent research regarding fines and costs of AML compliance
  • advancements in AML technology

Book your place here.

meet the Encompass team

The Encompass team will be out and about across the globe, participating in key industry events.

Digital payments in the UK | Thu 12 December | London

With Strong Customer Authentication due to come into force in September as part of PSD2, this event will provide an opportunity to assess the challenges and opportunities arising from PSD2 implementation. Encompass will be attending the conference which takes place in the context of rapid growth in financial technology – including Open Banking and contactless mobile payments.

View all our upcoming events here.

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