Must-reads and can't-misses from the world of Fintech, curated with Nordic sensibility.


FinTech:
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NORDIC REPORT: w.17

In Nordic fintech this week, a new cyber defence centre in Oslo, new fintech partnerships between legacy banks and contenders, Samsung Pay makes its Nordic debut, and more.

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NORDIC REPORT: w.17

Apr. 28. 2017, 10:37
Norway-based fintech startup Tribe has reportedly received an investment from independent management and technology consultant, BearingPoint. According to Tribe, the new investment will bring it and BearingPoint together and the duo will enter into a long-term partnership to expand each of their service portfolios, reports Crowdfund Insider.
The Nordic financial industry establishes a cyber defence centre in Oslo. The initiative builds on the Norwegian financial industry competence centre FinansCERT, which was established by Finance Norway in 2012 to defend the financial sector against digital attacks by criminal actors. Now the financial institutions in Sweden, Denmark and Finland add resources and expertise to the effort, reports Norway Today.
Secure online identification is necessary for future financial services, indeed all IT services. The Nordics are ahead in the field. Meet Swedish company Verisec, looking to revolutionze the industry, profiled in Väckans Affärer (in Swedish).
Next week, May 3-5, over 300 investors and 450 startups from 60 different countries will come together for Arctic15 in an old cable factory in western Helsinki. They’ve planned some 5,000 one-on-one meetings, and will discuss fintech, foodtech, AI, IoT, and everything in between. Business Insider gives the rundown.
Entrepeneur Morten Lund, who made a fortune on Skype, is launching a new venture in the mortgage credit sector, reports Borsen (in Danish). The digital platform makes it possible for pension funds and insurance companies to place significant amounts in direct loans, the foundation of an alternative form of mortgage credit loan.
Swedish bank Nordea has continued its policy of fintech collaboration by forming a partnership with Stockholm-based payments startup Betalo to expand its mobile offering, reports Computer Weekly. Betalo’s mobile application enables consumers and small businesses to use their bank cards for domestic and international money transfers as well as to pay bills.
Samsung Pay expands its presence to four new markets, including the Nordics and Middle East. The Korean giant’s contactless payment service has stepped foot in the Nordic region with Sweden being its first destination, reports The Tech Portal.
Bokis, a collective of more than 60 Danish banks, has become the first organisation in the country to offer mobile payments using the national debit and credit card Dankort, writes Computer Weekly. The card is linked to the banking collective’s mobile wallet, which was launched in February.
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Chris Skinner
Chairman, Nordic Finance Innovation
The Next Generation of financial services…where is it?

The more I think about it, we have three major Fintech models, each with their own unique blend of thinking.

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The Next Generation of financial services…where is it?

http://www.thefintechbrief.no/wp-content/uploads/2017/01/chris-skinner.jpg
Chris Skinner
Chairman, Nordic Finance Innovation
Apr. 26. 2017, 10:51

I have blogged about how I see leadership in the developing (developed now) economies of China and India, and the new innovation models of emerging economies in Sub-Saharan Africa, but  not quite in the way in which I see them now.

The more I think about it, we have three major Fintech models, each with their own unique blend of thinking. The mainstream Fintech discussions here in Europe and America is how to reboot the antiquated banking system. Due to the implementation of technologies in the 1960s onwards, these economies have a heavily layered structure of year upon year of relentless upgrades and recovery plans. It is these economies that talk about the challenges of legacy systems and core system upgrades, and they recognise that something radical has to be done. Due to the antiquated nature of the infrastructure of these economies – most of which pre-dates the internet – I call them legacy economies. The Fintech in these legacy economies approach things in three ways:

  • Broaden the financial offer to those who have been underserved or unserved in these markets, for example Funding Circle for SMEs and SoFi for students;
  • Remove the inefficiencies inside the banks, such as the cost overheads of the client onboarding processes; and/or
  • Remove the friction in the customer journey by making things far easier, for example Stripe and Square.

All of the Fintech radar ends up being focused upon the incumbent’s existing way of doing things however and, as a consequence, ends of inventing faster horses or horses with bells and whistles.

Then there is the bewildering speed at which China and India have moved towards demonetisation, one through innovation (Ant, Tencent and Baidu) whilst the other is through government mandate (Aadhaar, UPI). Both economies are what Jim O’Neill threw into the BRICs discussion of 2003, although Brazil and Russia have not performed nearly as well economically or technologically as China and India. For these reasons, I see the Fintech in China and India as demonstrating growth economies characteristics.

They started with nothing and built from the ground up.  Unlike Europe and America, who are adding Fintech to what was there before, China and India began their journey (as have other nations like Poland and Turkey) with not much there before. Their journey began in the late 1990s, with an internet-enabled platform right from the beginning. That is why ICICI bank were on of the first to offer Facebank customer servicing, along with the Turkish banks. Meanwhile, as I blogged the other day, Ant Financial are taking over the mobile payments world. Their vision is based upon being an integrated Facebook, Amazon and PayPal all in one, as are the other Chinese internet giants Tencent and Baidu. These firms were unencumbered by history and legacy, and hence built from a clean vision up, rather than trying to retrofit their ideas into old markets which is actually why Facebook, Amazon and PayPal are segregated.

So the growth economies are notable for an unencumbered vision of leveraging the network, and their unencumbered vision will allow them to go globally without shackles, unlike their American counterparts.

And then we have the innovation economies. These are the economies that are rapidly uplifting from poverty to consumption, and include many of the Sub-Saharan African countries – Nigeria, Ghana, Uganda, Tanzania, Kenya, Mali – as well as Pakistan, Afghanistan and their brethren, the Philippines, Indonesia and much of South America.

I call these the innovation economies, as they’ve had nothing before and pretty much had nothing today, until the mobile network appeared. I’ve blogged about that a lot lately, so don’t want to do it again, except to say that mobile financial inclusion is the most important development since banking first appeared.  Secondly, that the images most people have of these countries in what they call the emerging markets are wrong. That was quite clear from my cut and paste of Bill Gates stakeholder letter for the Bill & Melinda Gates Foundation the other day.

Look at the photo of Mexico City from 1980, and compare it to one from 2011.


MEXICO CITY 1980, 2011 – ©Corbis, Owen Franken, ©Corbis, Keith Dannemiller

You can see a similar transformation in these before-and-after photos of Nairobi and Shanghai.


NAIROBI 1969, 2009 – ©Corbis, Nigel Pavitt, ©Getty Images National Geographic


SHANGHAI 1978, 2012 – ©Corbis, John Heaton, ©Corbis, Dean Conger

In summary, as that covers it for this post, you have the Legacy West, the Growth East and the Innovative Emerging. Something like that anyway and, going back to where I started, if you are looking for the next generation financial system, you definitely will not find it in the Legacy West.  That will show you the next generation of the existing system.  You need to look to the emerging markets specifically, as they are leap-frogging all of us. A great example is that the emerging economies will show us the next digital identity scheme, as this is critical to inclusion.

Watch this space.

 

Republished from The Finanser with Mr. Skinner’s kind permission

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THE SKINNER & KING SESSIONS, PART 1: THE FUTURE OF CASH

Fintech mavens and bestselling authors Brett King and Chris Skinner talk to us about why China and sub-Saharan Africa are the real places to look for fintech innovation, and the value of going...

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THE SKINNER & KING SESSIONS, PART 1: THE FUTURE OF CASH

Apr. 23. 2017, 10:10

 

Fintech mavens and bestselling authors Brett King and Chris Skinner talk to us  about why China and sub-Saharan Africa are the real places to look for fintech innovation, and the value of going cashless in the Nordics.

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HUMANS ARE THE WEAKEST CYBER SECURITY LINK

When it comes to cybersecrity, unfortunately, humans are the suckers. Fortunately, smart people are telling us what to do about it.

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HUMANS ARE THE WEAKEST CYBER SECURITY LINK

Apr. 26. 2017, 10:43

Some very smart people think we should be worried. Techcrunch reports that MIT researchers in a new 50 page report asserts that the most vital economic systems in the U.S. are essentially defenseless, imploring the Trump administration to do something about it instead of just waiting for everything to come crashing down.

Companies are regularly compromised by social engineering schemes, such as phishing and ransomware. CIO explains why humans are the greatest challenge to IT security, what they can do prevent attacks and, if that’s too late, mitigate the damage. The greatest problem is the often blind trust in the security software.

With just 36 percent of advisors in a report from Financial Planning Association saying their teams “fully understand the issues and risks” related to cybersecurity in a study, the question, according to CNBC is: “Can your advisor protect your money from a cyber attack?”.

 

THE SOURCES
TechCrunch: “MIT Team Urges Trump To Secure Electric Grid, Financial Sector From Cyber Threat”
MIT (report): “Keeping America Safe”
IOC: “Humans Are (Still) The Weakest Cybersecurity Link”
Financial Planning Association (report): “Is Your Data Safe”
CNBC: “More Financial Advisors Are Upping Their Cybersecurity, Insurance Ante”

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THINK YOU KNOW YOUR CUSTOMERS?

Banks only know half the story about their customers. To understand more, they have to cram tons of data under the hood, and push the gas pedal hard.

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THINK YOU KNOW YOUR CUSTOMERS?

Apr. 25. 2017, 15:19

Banks know only half of the story about their customers. Keith Armstrong of Abe.ai (HT Fintech Weekly) tells them how to get to know the rest of it. Mostly, a bank is limited to knowing their customers’ basic demographic information and where they spend their money. The way forward is to collect better data, and then use it better. It’s harder than it sounds.

Customer analytics is the key to growth in banking, writes Jim Marous, editor of The Financial Brand. He has observed how financial marketers can “no longer wait to embrace the power of advanced analytics to gain insights and evaluate opportunities that will improve cross-selling, up-selling and enhance share of wallet”.

In “Why AI Will Become An Essential Business Tool”, Joel Hans on RT Insights provides a really smart explanation of how AIs like IBM’s Watson actually work and analyze data, and talks about just how much data businesses will need under the hood for AI systems to be effective.

 

THE SOURCES
Abe.ai/Medium: How to Really Get to Know Your Bank’s Customers: Collect Better Data”
The Financial Brand: “Customer Analytics Is Key To Growth In Banking”
RT Insights: “Why AI Will BEcome An Essential Business Tool”

 

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HARVARD: BLOCKCHAIN MEANS GOODBYE TO THE FINANCIAL MIDDLEMAN

Top researchers still think blockchain will mean doom to the financial middleman. And the reasons we are so slow to adopt it, will pass.

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HARVARD: BLOCKCHAIN MEANS GOODBYE TO THE FINANCIAL MIDDLEMAN

Apr. 24. 2017, 15:18

Power has been given back to the business owners, who no longer need to rely on the permission of banks and governments to send money electronically.” – Jeremy Epstein to Inc.

Say goodbye to the middleman for your financial transactions. That is the git of the conversation between Marissa Levin of Inc. and blockchain expert Jeremy Epstein. They talk about using blockchain to empower people worldwide to push costly intermediaries to the side by giving them the ability to both authenticate and perform direct, immediate transactions with others. Also, why blockchain hasn’t really caught on yet due to trust issues, stigma and novelty.

“Who controls blockchain?” asks Patrick Murk in Harvard Business Review this week. Well, no one, right? Isn’t that the point? Murk writes that, despite certain attempts to establish some sort of control over blockchain’s governance structure, the power of blockchain remains its ability to shift all its costs and trust to the network itself.

According to Harvard research, Blockchain maximizes transparency and anonymity:

“With blockchain, we can imagine a world in which contracts are embedded in digital code and stored in transparent, shared databases, where they are protected from deletion, tampering, and revision. In this world every agreement, every process, every task, and every payment would have a digital record and signature that could be identified, validated, stored, and shared. Intermediaries like lawyers, brokers, and bankers might no longer be necessary.”

 

THE SOURCES
Inc.: “Will Blockchain Technology Be The Ultimate Disruptor? Harvard Says Yes”
Harvard Business Review: “Who Controls Blockchain?”
Harvard Business Review: “The Truth About Blockchain”

 

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by Nordic Finance Innovation
KLARNA – FROM THREE GUYS IN AN APARTMENT TO 1500 EMPLOYEES

They bagged a legendary board memeber by being cocky. Today, Klarna’s ambitions go way beyond that. Forbes and SvD tell us what’s next.

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by Nordic Finance Innovation

KLARNA – FROM THREE GUYS IN AN APARTMENT TO 1500 EMPLOYEES

Apr. 21. 2017, 08:58

“99% of customers aren’t fraudulent.” -Sebastian Siemiatkowski, CEO of Klarna.

Klarna, the Swedish online-payments unicorn with an emphasis on “buy-now-pay-later” financing, is the single largest Nordic fintech success story so far. Although the company looks to hold off on an IPO until later, according to a feature in Swedish newspaper SvD.

The company is gunning for the $93 billion U.S. market for credit card issuing, an industry that’s dominated by giants such as American Express and Capital One, with PayPal and ambitious startups in close pursuit. In an interview with CEO Sebastian Siemiatkowski at Klarna’s HQ in Stockholm, SvD recounts how the the company went from 3 men to 1500 employees.

Klarna is a fascinating tale of fintech growth. In the article “How Klarna Plans To Replace Your Credit Card”, Forbes gingerly recounts how the once humble online-payments startup bagged Sequioa’s legendary partner Mike Moritz – the Warren Buffett of venture capitalists – as a board member. “Sometimes it’s good to be a little cocky,” Siematkowski says.

 

THE SOURCES
SVD (in Swedish): “Från Tre Grabbar I Lägenhet Till 1500 Anställda”
Forbes: “How Klarna Plans To Replace Your Credit Card”

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THE GREAT RETAIL APOCALYPSE OF 2017

With the economy staging a comeback, why the heck are we having a retail meltdown? Read on for the trends and technologies that are causing it.

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THE GREAT RETAIL APOCALYPSE OF 2017

Apr. 20. 2017, 12:11

In the middle of an economic recovery, shops and malls are going bust in droves. In “The Great Retail Apocalypse”, Derek Thompson and The Atlantic (HT NextDraft) have put together a great report on why malls are dying and find that the reasons go way beyond Amazon:

“So, what the heck is going on? The reality is that overall retail spending continues to grow steadily, if a little meagerly. But several trends—including the rise of e-commerce, the over-supply of malls, and the surprising effects of a restaurant renaissance—have conspired to change the face of American shopping.”

In New York, some of the most sought-after real estate by retailers is not in SoHo, but five miles away in gritty Red Hook, “where e-commerce merchants are vying to lease part of a huge warehouse space, spanning 11 acres, that would allow them to deliver goods the same day they’re ordered online.” The profound reordering of New York’s shopping scene reflects a broad restructuring in the American -and indeed global – retail industry, the New York Times writes in “Is American Retail at a Tiping Point?”.

“E-commerce players, led by the industry giant Amazon, have made it so easy and fast for people to shop online that traditional retailers, shackled by fading real estate and a culture of selling in stores, are struggling to compete. This shift has been building gradually for years. But economists, retail workers and real estate investors say it appears that it has sped up in recent months.”

The catalysts for this shift, of course, is retail technology. Last week, Retail Week asked more than 70 senior retail executives about the opportunities disruptive technologies like artificial intelligence, The Internet of Things, big data and robotics will create for retailers and brands.

THE SOURCES
The Atlantic: “The Great Retail Apocalypse”
The New York Times: “Is American Retail at a Tiping Point?
Retail Week: “Retail Technology And Catalysts Of Change In An Age Of Disruption”

 

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FINANCIAL INSTITUTIONS ALL OVER ‘MIXED REALITY’

‘Mixed Reality’ can change the way we view the world. Banks are getting ready to cash in on just that.

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FINANCIAL INSTITUTIONS ALL OVER ‘MIXED REALITY’

Apr. 19. 2017, 09:30

The financial services sector is positioning itself to make the most of Augmented Reality (AR), reports IT Pro Portal (via Fintech Weekly). For one thing AR can allow traders to live inside the data, so to speak. Several companies have trialled Oculus Rift to create immersive 3D virtual reality environments for analysing data.

Quartz reports that the world of mixed reality is “about to collide with the world of stock trading” as Citigroup brings Microsoft’s HoloLens and augmented  reality to stock trading.

According to Wall Street Journal, Wells Fargo has been making use of Facebook’s Oculus Rift headset to let customers virtually interact with bank tellers.

The Commonwealth Bank of Australia and Halifax in the UK offer ‘home finder’ apps which use AR technology to enable users to view and pull up data on houses for sale as they pass them.

While the VR industry faces a reality check on sales growth, many experts expect more useful tools to come from so-called “mixed reality”. Instead of cutting you off from the real world, it inserts complex digital objects into what you see as the physical space round you and, according to Financial Times, “making sure you do not bump into the furniture.”

 

THE SOURCES
IT Pro Portal: “Augmented Reality In Financial Services”
Market Mogul: “Can Virtual Reality Revolutionise The Financial Services Industry?”
Quartz: “Citigroup Wants To Bring Microsoft’s HoloLens And Augmented Reality To Stock Trading”
W
all Street Journal (paywall): “Banking From An Oculus Rift?”
F
inancial Times: “Mixed Reality Could OVertake Virtual Reality”

 

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YOUR CAR IS YOUR WALLET

Imagine if your car was your wallet. We’ve collected some reports that do.

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YOUR CAR IS YOUR WALLET

Apr. 18. 2017, 13:22

“Smart car wallets are likely to be as indispensable as smartphones are to customers today.” – Doug Brown, FIS, to Forbes.

Forbes imagines driving through toll booths, drive thru restaurants and gas stations without scrambling for your cash and coins. Combine a future of self-driving cars and seamless payments, and it is easy to imagine your car being in perfect sync with your wallet. Madhvi Mavadiya reports from a frontier full of interesting initiatives.

One challenge of using your car as a wallet, is that your car needs to recognize you. The New York Times (HT Forbes) reports on how automakers using facial recognition and other biometric indicators are aiming to personalize the driving experience by having cars “stare back at you”. The applications of having your car recognize you – and the potential pitfalls – are many.

Some pilot programs are already runnig. For instance, software conglomerate SAP has launched a new initiative to promote IoT-connected cars. Its partnership with Hertz, Nokia and Concur Technologies will target corporate travelers, bringing car rentals, navigation and payments into one interconnected solution, Tom’s Guide reports.

 

THE SOURCES
Forbes: “Your Car Is Your Wallet: Connected Cars And The Future Of Fintech”
The New York Times: “Soon, Your Car May Be Able To Read Your Expressions”
Tom’s Guide: “How SAP Plans To Smarten Up Your Rental Car”

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THE LAUNDROMAT AND THE FUTURE OF FRAUD

Its been a dramatic week in fraud. Read all about it here, and how big data and machine learning could mean the end of it.

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THE LAUNDROMAT AND THE FUTURE OF FRAUD

Apr. 12. 2017, 09:00

Earlier this week, a case of money laundering known as the Laundromat was uncovered involving a number of global banks. Billions of dollars were moved out of Russia in ‘Global Laundromat’ operation, The Guardian reported.

Could financial fraud such as the Laundromat be avoided by applying machine learning to scan through data? And if yes, why is that not happening? What progress is there on this front, how does it fit in the bigger picture, what are the roadblocks, and what may be the repercussions of adoption? Those are some of the questions posed – and answered well – by George Anadiotis on ZDNet.

Forty years ago, banking fraud might have involved simply forging an account holder’s signature on a withdrawal slip. Now the speed and intricacy of the schemes are mind-boggling. “Using data along with other cutting-edge tools can help organizations make better decisions and step up efforts to monitor fraudulent transactions,” reports an article this week from McKinsey Analytics.

THE SOURCES

The Guardian: “The Global Laundromat: how did it work and who benefited?”

McKinsey: “Applying Analytics In Financial Institutions’ Fight Against Fraud”

ZDNet: “Big Data versus money laundering: Machine learning, applications and regulation in finance”

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REPORT: FINTECH´S GROWING INFLUENCE ON FINANCIAL SERVICES

The latest PwC report on the state of fintech is in!

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REPORT: FINTECH´S GROWING INFLUENCE ON FINANCIAL SERVICES

Apr. 11. 2017, 09:00

“FinTech has had a staggering effect on the market in the past year. Funding for FinTech projects is moving from a venture capitalist dominated eld to a more mainstream investment eld. Financial Institutions and FinTech companies are moving closer together and redrawing the lines that separate them.” These are some of the findings in PwC’s Global FinTech Survey 2017. The executive summary:

  • More than 80% believe business is at risk
  • Financial Institutions are embracing the disruptive nature of FinTech
  • Financial Institutions are learning to partner and integrate
  • Investment in enabling technologies will help narrow the gap
  • Blockchain is moving out of the lab
  • Regulations trigger disruption and innovation

A whopping 61% of industry leaders in the financial sector believes that 40% of their revenue will be lost to fintech firms. Reading what Madhvi Mavadiya has to say about it in Forbes is also worthwhile.

Business Insider focuses on how the financial services establishment has “moved from viewing fintech startups as an amusing aside to seeing them as crucial collaborators”, with a huge proportion hoping to partner with new innovators in the future.

 

THE SOURCES
PwC: “Redrawing The Lines”
Forbes: “Financial Services Could Lose 40% Of Revenue To Fintech”
Business Insider: “Fintech and Financial Services Are Competing Less And Coming Together”

PwC: ‘Fintech and Financial Services are competing less and coming together’

 

 

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THE WECHAT CONUNDRUM – COMING TO A MARKET NEAR YOU

Today, we take onWeChat as China, once known as the land of cheap rip-offs, is offering a glimpse of the commercial future. Financial services everywhere are watching and – perhaps –...

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THE WECHAT CONUNDRUM – COMING TO A MARKET NEAR YOU

Apr. 10. 2017, 18:58

If Chinese users could shower online, they would, and the “super app” WeChat is the holy grail.To understand why WeChat is the cutting edge of mobile technology everyone is watching rather than  Silicon Valley, the wonderful video (source below) by Jonah M. Kessel and Paul Mozur of The New York times is a great place to start.

WeChat, launched by internet giant Tencent in 2011, has 806 million monthly active users. The average user there spends 70 minutes a day on the app, according to a report by KPCB (via AdAge). It blends aspects of Facebook, WhatsApp and Instagram and has an integrated payment system that people use to book and pay for most anything physical and online stores alike. AdAge looks at what WeChat teaches us about the future of social commerce.

Now, WeChat has launched a new bid in Europe and the U.S. to develop its payments offering and win new advertisers. “We needed to make a step closer in serving European brands,” said Tencent Europe director Andrea Ghizzoni, in an interview with Bloomberg.

To understand just how hooked into the WeChat universe people really are, watch the videos made by WeChat and Saatchi & Saatchi in the sources below. They filmed people as they were forced to log off WeChat for twelve hours. Even WeChat is telling people to log off now and then.

 

THE SOURCES:
The New York Times: “How China Is Changing The Internet”
AdAge: “What WeChat Teaches About Te Future Of Social Commerce”
Bloomberg: WeChat Expands in Europe in Bid for Global Advertisers, Payments”
Ad Age: “WeChat Made Addicted Users Go Cold Turkey For 12 Hours and Filmed Everything”
See the documentaries here (in Chinese)

 

 

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by Nordic Finance Innovation
THE NORDIC REPORT: w.14

It’s been a quiet week in Nordic Fintech, with some interesting moves and collaborations between incumbents and start-ups.

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by Nordic Finance Innovation

THE NORDIC REPORT: w.14

Apr. 7. 2017, 10:24

At a conference in Oslo, Nordea boss Casper von Koskull promised massive investments in fintech and open banking, according to Dagens Næringsliv (in Norwegian). “Today’s banks are a meshed spaghetti of systems. Getting away from this means unmaking everything we’ve made the past 50 years,” Koskull said.

Meniga, a London-headquartered fintech startup with R&D in Reykjavik and Stockholm that provides digital banking technology to some of the world’s largest banks, has been profiled on TechCrunch.  Its products include a software layer that bridges the gap between a bank’s legacy tech infrastructure and a modern API. According to Breakit (in Swedish), the company has raised SEK70 million in a round where the Swedish state-run venture fund Industrifonden is the main investor.

Klarna is working on a digital wallet to rival banks and fintech apps — here’s everything Business Insider knows so far. ”You will be able to pay bills, and make and follow up your budget. It sounds very much like Tink,” said an insider source to Breakit (in Swedish).

The social stock purchasing app Sprinklebit is launchin in Sweden with Swedbank as partner, reports Dagens Industri (in Swedish). The app was founded by Swedes, and will be exposed to the Swedbank’s 4 million customers in the private market.

The Stockholm Fintech Hub is supporting Sweden and the United Nations Environment Programme to pilot the UN’s 2030 vision for sustainable finance, reports Finextra. “The time and place are right to build this pilot. UNEP need a supportive environment to try out their recommendations, which are exactly aligned with Sweden’s values,” says Matt Argent of the Stockholm Fintech Hub, which is kicking off the Green Digital Financial Centre.

Kreditbörsen (the credit exchange), a part of Sweden-based LendyTech , has launched a peer-to-peer lending service for borrowers and investors, reports Crowdfund Insider. Borrowers are offered a simple process for loan applications with risk-adjusted interest rates.

 

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THE AI BANKING TIPPING POINT

There is no end to the hype over what Artifical Intelligence will do to financial services. And, thank heavens, a lot of great writers helping us to make sense of it all.

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THE AI BANKING TIPPING POINT

Apr. 5. 2017, 18:26

“Is the recent craze over AI just hype? Or have we truly entered a new era of AI-led digital transformation?”

Some financial institutions have been investing in AI for years. Others are finally catching up thanks to advances in big data, open-source software, cloud computing, and faster processing speeds. PwC goes behind the scenes of financial insitutions’ big decisions.

All AI needs now is a magic moment, writes Garham Cooke on Venture Beat: “There’s a huge opportunity to free up human time and focus it on the many areas that require the human touch. Only when we master this combination of strengths will we see a true AI-powered transformation in digital marketing.”

Peter Gleeson of FreeCodeCamp actually has us group spiders, snails and butterflies to make us see how a machine may think about grouping things (“Had there been twenty bugs, there would have been over fifty trillion possible ways of clustering them”). It’s not exactly an easy read, but you come from it knowing much more about about three clustering algorithms that machines can use to quickly make sense of large datasets.

Things have changed that have brought AI out of the hype circles of the past. Artashes Vardanian sums up how cheap computing and accessible data is changing fintech forever, including leveraging better lending and investment decisions, and helping people save.

 

THE SOURCES
PwC Financial Services Institute: “Artificial Intelligence In Financial Services”
Venture Beat: “Why AI Needs A Magic Moment”
FreeCodeCamp/Medium: “How Machines Make Sense of Big Data: An Introduction To Clustering Algorithms”
Medium: “5 Ways How Artifical Intelligence Is Impacting Consumer Fintech”

FROM OUR ARCHIVES
“AI + Banking = True Romance”
“Time To Hire Your First Chief AI Officer”

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THE MILLENNIAL POT OF GOLD

The changing ways in how millennials manage their money is top of mind for many of the largest financial institutions in the world.

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THE MILLENNIAL POT OF GOLD

Apr. 4. 2017, 10:13

“The current thinking among fintech startups is that the millennial generation overspends and doesn’t know how to manage, or even think about, money.” -Ynext

The financial services indudstry is infatuated with millennials – the huge cohort of people born between 1980 and 2000 who “grew up in technology”. A host of fintech startups, and the investors backing them, are counting on millennials for their success, leveraging existing technologies already popular among young adults such as social networks and mobile messaging.

According to the people at Ynext Incubator, there is no greater trend amongst fintech startups than businesses specifically targeting millennials. The startups span across all fintech categories.  CB Insights has made a telling graphic on millennial fintech, see the link below (HT Ynext).

Why are millennials so attractive? Because they are financially unstable, according to PWC. Millennials are are better educated than their predecessors, more ethnically diverse, and more economically active. Yet they confront greater difficulties— including economic uncertainty and student debt, making it important for millennials to be on a path towards financial security.

Also, PYMNTS reports that millennials are an underbanked generation which also happens to be broadly distrustful of banks, particularly compared to their much wartmer sentiments about technology products.

So are millennials in fact the foundation of modern technology? Coffeelicious asks the question, and looks at what means for all those non-millennials using financial services today.

 

THE SOURCES
Medium: “Three Crystal Clear Fintech Startup Trends”
CB Insights (graphic): “Millennial Personal Finance”
PWC (report): “Millennials & Financial Literacy  – The Struggle With Personal Finance”
PYMNTS: “Reaching The Great Unbanked Generation”
The Coffeelicious/Medium: “Are Millennials Truly The Foundation of Modern Technology?”

FROM OUR ARCHIVES
Three Reasons Why Millenials Flock To Fintech For Personal Investment

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CAN GOOGLE HELP FINTECH APPS REACH PEOPLE?

Fintech companies with products for the underserved struggle reaching their intended customers. Perhaps Google can help.

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CAN GOOGLE HELP FINTECH APPS REACH PEOPLE?

Apr. 3. 2017, 14:17

“The big vision is to help bridge the gap in the underserved community and bring the best financial tools to help them manage their day-to-day finances” – Ashraf Hassan, Google Play.

Google Play and the Center for Financial Services Innovation aim to improve use of financial health apps for the underbanked through a storefront organized by consumers’ needs and by publishing a guide for app developers, American Banker writes. The partnership helps spread its message to Android app developers, with the much bigger goal of helping to improve consumers’ financial health through a device that is used on the go.

The guide, which was published in a post on the Android Developers blog, is part practical, part philosophical, about how mobile technology can help connect historically underserved consumers with high-quality tools to help them improve their financial health

Gmail users in the U.S. can now send and request payments directly from the mobile app on Android without any additional software. Sending money via the Gmail app now operates the same way as sending an attachment. The feature is now available for users in the U.S. only.

 

THE SOURCES
American Banker: “Could Google Give Fintech Apps A Needed Boost?”
Android Developers blog: “Tips For Building High-Quality And Accessible Financial Services Apps”
Finance Magnates: “Google Turns Gmail on Android into a Mobile Payments App”

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by Nordic Finance Innovation
NORDIC REPORT: w.13

Sweden dominates this week’s roundup of Nordic fintech shoutouts and happenings.

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by Nordic Finance Innovation

NORDIC REPORT: w.13

Mar. 30. 2017, 13:39

Truecaller is a Swedish startup with as many users as Spotify – and it might be profitable even sooner, reports Business Insider via Veckans Affärer (in Swedish). With the phonebook app’s launch of version 8 yesterday, users in India will have access to a peer-to-peer payment service – a highly relevant feature since the Indian state decided to take 86% of the country’s cash out of circulation during the autumn of 2016.

EnterCard, one of Scandinavia’s leading finance companies, is using the FICO Falcon platform to combat card fraud and communicate with its customers. The upgraded solution will be used across Sweden, Norway and Denmark in an effort to protect EnterCard’s customers, reports FX-MM.

Taking a hard line in Brexit negotiations will hurt the U.K. That’s the message from Sweden, one of Britain’s closest allies in the European Union, as Prime Minister Theresa May triggers Article 50 and starts negotiations to leave the bloc after more than four decades of an ambivalent relationship, Yahoo Finance reports.

In Norway, 100 companies have signed on to Telia’s newly released open access innovation platform with “a toolbox for everyone who wishes to access The Internet of Things”. Many of the companies are startups, a token of “lots of innovational force” in Norway, Telia says to Shifter (in Norwegian).

Following Nordea’s threat last week to move its headquarters from Sweden in lieu of a planned fee increase, the bank has been welcomed to Copenhagen by Denmark’s business minister Brian Mikkelsen. “We are obviously ready to welcome companies to Denmark that can create growth and jobs,” Mikkelsen said in comment emailed to Reuters.

Anti-money laundering and blockchain analysis software developer Chainalysis and Danish electronic payments provider Nets have reportedly teamed up to create solutions for Nordic banks that will validate bitcoin transactions and help financial institutions comply with regulations. “We can make risk assessments and analyze block chain activities.. And banks are interested in being able to risk-score customers, so they do not end up being used for money laundering,” Chainalysis CEO Michael Gronager told Reuters.

Nordea continues to collaborate with startups, and has announced a collaboration with Stockholm-based fintech startup Betalo, an app that lets you use one card to pay bills or send money nationally and internationally. Nordea will market Betalo to its 1,8 million private customers, and Nordea’s cards will be integrated in the app, reports Dagens Industri (in Swedish).

When Mastercard recently released its international ranking of solutions for digital card portfolios, Stockholm-based Payair ranked at the very top, reports Dagens Handel (in Swedish).

Swedish FinTech company Trustly has launched Trustly Direct Debit, a new payment product for recurring purchases including subscriptions services and one-click payments, Bob’s Guide writes.

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THE VIKING INTERNET OF THINGS

The Nordics are huge on the Internet of Things. Here is why that is a bigger deal than we realize.

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THE VIKING INTERNET OF THINGS

Mar. 30. 2017, 07:52

“The Nordics and Baltics is one of the most connected and innovative regions in the world, growing closer by the day through business, trade, investments and not the least, digitalization. And the best part is that we’ve only just started.” -Hans Dahlberg, Telia.

Internet of Things (IoT) is growing rapidly in the Nordics. According to a new report by Telia Company and Arthur D. Little every person on average have close to three connected things – a number expected to double by 2021. This is four times that of the rest of the world.  Connected vehicles, buildings and people are in growth pole position.

Still a bit confused about what the Internet of Things will actually be able to? Well, as Wired argues, when people think about what the next big thing is going to be, they never think big enough. Because the Internet of Things will be far bigger than anyone realizes.

And how smart could it be? Well, pretty smart. Callum McLelland at IoT For All lays out how Artificial Intelligence, Machine Learning and Deep Learning are different and why they’re all essential to the Internet of Things.

 

THE SOURCES
Arthur B Little/Telia (report): “Connected Things”
Wired: “Why The Internet Of Things Is Bigger Than Anyone Realizes”
IoT For All/Medium: “Artificial Intelligence, Machine Learning, and Deep Learning”

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SWEETENING THE BREXIT PILL

Theresa May’s plans for a Brexit that looks on the harder side of “hard”, has bankers and entrepreneurs worried. Though some try to sound upbeat.

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SWEETENING THE BREXIT PILL

Mar. 29. 2017, 07:28

“May’s ministers began telling bankers in the autumn they would not get any special treatment in the Brexit negotiations.” -Reuters

Banks used to have a cosy relationship with Britain’s government. Now, according to an investigative piece by Reuters, they say they are struggling to be heard as the country prepares to leave the EU.

Senior financiers are drawing up ways to protect the UK fintech sector’s interest, Financial Times reports. They are “preparing a fresh round of lobbying for lower taxes and looser regulation to sugar the pill of Brexit and maintain Britain’s appeal in the global competition between financial centres.”

Still, some commentators remain remarkably upbeat about London’s prospects as fintech hub. Cameron Stevens of Prodigy Finance writes on City A.M. that smart regulation will minimize the loss of “passporting” and keep London in position by embracing uncertainty and emerging markets. “Brexit’s true economic dividend will be a revival of self-reliance and liberty”, argues Graeme Leach of Macronomics.

 

THE SOURCES
Reuters: “How Banks Lost The Ear Of Britain’s Government Over Brexit”
Financial Times: City of London Pushes For Lower Taxes To Sweeten Brexit Pill”
City A.M.: “Fintechs Have A Solution Post-Brexit”
City A.M.: “A Revival Of Self-reliance And Liberty”


 

 

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INSURANCE’S MULTIBILLION DOLLAR BET

What’s distinctive about the insurance industry is how these companies intend to collect their data.

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INSURANCE’S MULTIBILLION DOLLAR BET

Mar. 28. 2017, 07:09

The business of property and casualty insurance hasn’t changed much since 1861. But the industry has recently embarked on a radical transformation brought on by digital innovations that are just a few years away from widespread adoption. Bain and Google have identified seven key technologies that have already begun to disrupt the industry.

While the use of AI technologies in insurance has the potential to streamline company operations and reduce consumer prices, it also raises unprecedented new issues related to personal privacy, Insurers are turning to sensors to collect data directly from individuals, including technologies like in-home monitors and wearables, reports Venture Beat: “Do you want your healthcare provider receiving a real-time notification of your late-night snacking? Do you want your auto insurer to know every time you roll through a stop sign? These are no longer hypotheticals.”

 

THE SOURCES
Bain: “Digitalization In Insurance: The Multibillion Dollar Opportunity”
Venture Beat: “AI And Insurance: Exchanging Privacy For A Cheaper Rate”

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