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Tag: Financial Technology

How Would You Define Fintech and Blockchain to the Lay Business Person?

Posted on by Imarticus Learning

Two of the most common buzzwords that seemed to have taken over the banking industry were Blockchain and fintech. These are terms which have revolutionised banking over the last decade or so and are seen as the future of banking, especially in the hands of the millennials, who have technology at their fingertips.
If you’re working at a financial institution, then there may be situations where you’ve to explain what “Fintech” and “Blockchain” are to a lot of people. Here’s a small guide to help you do so:

Fintech

FinTech is simply a combination of “Finance + Technology.” But obviously, there’s more to that. It is a massive field that covers a wide array of startups, and these can be divided into five categories, with each solving a different unique problem:

  1. Payments
  2. Lending
  3. Cryptocurrency
  4. Banking
  5. Personal finance and wealth management

For each category, FinTech solves a multitude of problems by improving it in either one of two ways:

  • Making it more available for more people
  • Making the product or service easier and cheaper to use.

Fintech basically takes a common problem plaguing a lot of individuals and simplifies the same. By doing so, it allows innovations in the industry to prosper and make finance a much easier sector to work in. Companies are able to transfer their paperwork electronically, saving precious time and money as well.
There are special fintech training and fintech courses available which make it easier for those looking to specialise in this field.

Blockchain

Blockchain, in the simplest of terms, is just about security and fairness. It is a large database which is available to the public and cannot be tampered with. Blockchain stores all important financial data and since it cannot be erased, it just adds another “block” of information.
This block is part of a series of blocks which create a chain or network of digital information. Anytime new information is added, it creates a successive block, which means that all transactions are public and can be viewed.
It also helps banks save money by having one centralised system for all transactions. If anybody tries to tamper with the information, the common code which all parties involved are given,
Thus, Blockchain and fintech are going to play a major role in shaping the financial future of the world. Learning and applying their basic principles to modern banking will serve you in good stead over the long term.

What Problems Can Fintech Innovations Solve That Still Exist in Finance

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One of the biggest disruptors in the financial industry over the last decade or so has been Fintech. Using technology to solve a slew of problems faced by banks has caught on and is here to stay. While FinTech has revolutionized sectors such as personal finance and banking, there are still a few places where its potential hasn’t been utilised.
Here are a few problems Fintech technology can solve:

Increase in Regulations

Ever since the 2008 market crash, policymakers have been forced to lay greater emphasis on safer financing. The financial crisis bought in newer regulations in the hope that it would restore confidence back into the banking industry. With most banks having paid back their regulatory incompliance fines, regulators are starting to ask for innovation in these markets and they need to create a safe environment.

Startups in the FinTech industry should expand beyond their home nations and make international payments possible. The home country regulations can be expensive with a lot of legal fees but innovations in FinTech courses such as Blockchain should be able to solve this issue and make it easier.

Regulatory measures can be a roadblock for many companies looking to grow domestically. By having the freedom of moving abroad, they can expand their horizons and successfully continue their business elsewhere.

Product Distribution

Product information is generally very random and scattered all across the board. Different folders, separate drives, a random excel sheet can all be frustrating to follow up on.

Product distribution lines can be managed in a much simpler manner with the help of FinTech. By having a central record of all transactions, companies can have a centralized repository of their products. By innovating with the front-end and introducing cool searching features, FinTech can be used to eliminate the same for banks that aren’t using this system yet.

Compliance Monitoring

Many banks today have tools for compliance reporting but since there are a lot of complexities involved in regulatory requirements, it just isn’t enough. Compliance violations are becoming harder to find and most of the systems, written in legacy code aren’t cut out for this task.

RegTech, a new field in the financial services has boomed, with over 150 startups present globally. These startups understand data better than anyone else and leverage a lot of data architecture innovations. While still ongoing, this is one of the major problems that Fintech Technology / Financial Technology can solve in today’s world.

Financial Inclusion and Fintech Use in the Industry

Posted on by Imarticus Learning

In a bid to liberate the poor and marginalise, the Indian Government has rightly focused on creating jobs. The focus lights are on the fintech startups, the banking sector, digital payments and measures to encourage them in the hope of achieving financial stability and financial inclusion.

Importance of Fintech and Financial Technology

The winning combination of technology and finance working in harmony is now coined fintech and is crucial to all financial transactions by banks, e-commerce sites, NBFCs, payments providers, merchants, and service- providers. Every sector including banking, real estate, governmental measures and subsidies, telecom, insurance and everything in between depends on technology to crunch their numbers, maintain paperless records, KYC compliance, subscriber identification verification and a host of other supportive technological innovations.
Fintech holds immense developmental potential. It creates more jobs through its startups, sandboxes, incubators and newer companies that improve telephony, cloud services, data storage, big- data, and deep-learning capacities across the board. They, in reality, accelerate financial inclusion.

Fintech in Financial Inclusion

Fintech Start -ups have been able to revolutionise the technology backbone of the financial transactions impacting almost all sectors of our economy. Delivering better financial services to the disadvantaged and unbanked has over the last decade been able to take digitalization to the grass-root levels thereby improving financial inclusion.
The government has implemented on its part, many measures backed by fintech courses to improve the lot of the rural poor. Measures like promoting mobile telephony, e-KYC, the opening of basic zero balance savings accounts, encouraging rural banking, delivering of subsidies through Aadhar directly to beneficiaries, self-help-groups, and micro-financing, improving credit counseling centers, the Kisan Credit Card and many more. Using fintech, in little over a decade, the government has also successfully implemented its policies by bringing in internet banking, ATM machines, mobile banking, electronic instantaneous fund transfers, and many such innovative measures.
Notable among the measures for financial inclusion is:

  • Aadhaar card
  • The UPI and cashless transactions
  • Smartphones and mobile telephony
  • Zero-balance Jan-Dhan Yojana bank accounts

Suggested Policies By Fintech Courses
Cybersecurity, regulation of data protection and privacy, proper use of the Aadhar database are required and the need of the hour for financial transactions and digitization. Creditworthiness evaluation, e-KYC, online payments need to be strengthened to fulfill the urgent credit needs of all people rural or urban.
Initiating measures like sandboxes, incubators, and testers to encourage mastering the skills in Fintech is the right way to go, to a country that has no dearth of innovators or technical knowledge. India now needs to adapt and assimilate changes in technology by using strategically the full potential of the fintech advancements.
In conclusion, loopholes and gaps in policies need to be plugged for common good rather than personal vision.

The New Concern with Bitcoin

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Bitcoin has seen massive growth over the past few years or so, mostly due to the ease with which it makes transactions possible. There is no middleman, and it helps eliminate the need for an extra payment for taxes while running a number of transactions.
The blockchain is the fundamental software that bitcoin works on and it is known to be stable and reliable. However, a lot of investors are starting to feel that the “perfection” surrounding bitcoin may not be as flowery. It’s always better to inform and equip yourself with the knowledge surrounding a new investment to be on the safer side.
Here are a few concerns that bitcoin can bring up:

Wallet Vulnerability:

Bitcoin wallets have a real vulnerability towards hack attacks as well as theft. A team of researchers from Edinburgh discovered weak spots in these online wallets that could be exploited. The encrypted wallets are still susceptible to external attacks, and it’s important to be wary of the same.
Scientists were able to intercept any communication between the wallet and PC, thus syphoning off information and even diverting money to different accounts.

Cyber-Attacks and Hacking:

Bitcoin is always at risk of being attacked by cybercriminals. There have been attacks prior, and the value has slumped. The fear of losing a heavy investment online and not knowing about it is also a major fear in the mind of many investors.
Hackers have been trying to get into Bitcoin exchange systems for years now, and in 2014, they ended up being successful after syphoning off close to 850,000 bitcoins. The value of the same today would be a gargantuan $7.2 billion.

Single Client Mining:

There are certain mining pools which have become strong enough that they can command their own mining ratios, which are significant. This stems from the continued use of the proof-of-work consensus mechanism.
A pool can also use computational power to mine blocks of bitcoins and then hide it from many honest miners. This is called block withholding, and it prevents a new block from being broadcasted throughout the network.
The pool also attempts to find more blocks and the others are left in the lurch. Greedy miners find a new block before other miners and then broadcasting the two blocks they have makes the forked chain extremely long. These miners will always be a step ahead of the others, taking the lion’s share of the rewards.

Spending Double:

While there have been reinforcements to help control double spending. There is still a fear that concerns the risk to bitcoin. It has become stronger against any co-ordinated double spends online.
There are still people who can constitute attacks to help them benefit from twice utilising the same coin in a transaction.
Take, for example, Tom sending Bob x bitcoins for a transaction. Tom also executes a similar transaction at the same time to a certain address that he controls with the same bitcoins, x. While Bob believes Tom has sent the money and doesn’t confirm the same, Tom’s address has been credited, and the transaction doesn’t go towards Bob’s name.
Conclusion:
Then the feature of irreversibility causes the transaction to become invalidated and pointless. Since bitcoin is also unregulated, there ends up being no recourse.
Thus, bitcoin has always been a major source of debate among many financial technology advisors. While the technology behind it is revolutionary, its own identity is still murky without a clear route on its future. If you’re looking to invest in bitcoin, it is highly suggested that you speak to an expert and get all your doubts cleared before moving forth and making any investment.
Get to know more about bitcoin through : https://imarticus.org/Professional-Certificate-Course-FinTech/

Section 7: Why The Government Took This Step Against the RBI

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Recently national media of India reported a somewhat unusual occurrence – the central government, for the very first time in history used Section 7 of the RBI act. This unprecedented move has scholars and analysts are expressing their concerns over its repercussions. Before delving into the reasons for this occurrence, let’s consider what the section 7 of RBI Act is about.
Section 7 of RBI Act
The Reserve Bank of India was established in 1935. RBI operates in accordance with the Reserve Bank of India Act,1934. In general, RBI is an independent institution which takes decisions on its own. The government has a very little role in the decision-making process of the Indian central bank. However, there are some provisions in the RBI Act which enable the government to interfere with the decisions of RBI. These provisions are contained in section 7 of the act.
According to section 7 of the RBI Act, the central government can give directions to the Bank in the consideration of public interest. Subject to any such directions, the general superintendence and direction of the operations and business of the Bank shall be consigned to a Central Board of Directors which may exercise all authorities and do all acts and things which may be executed or done by the Banking courses and tools. 
Clearly, this section authorises the central government to issue directions in public interest to RBI. But It should be noted that since the time of its creation, such an incident has never happened.
Why Section 7 Was Invoked
RBI and government have been at loggerheads for a while now. The government wanted to ease the lending rules for banks under the prompt corrective action (PCA) framework. This move was aimed to reduce the pressure on Micro, Small and Medium Enterprises (MSMEs). But, the bank believed that such a move would result in the undoing of all the clean-up efforts. The dispute over the liquidity of NBFCs was another chapter in this series. The government wanted to increase the liquidity for NBFCs. But, the RBI insisted on keeping the same level since the banking system was maintaining steady borrowing costs. The media reported that government and RBI were having disagreements over huge number other important issues too. Classification of non-performing assets and setting up a payments regulator independent of RBI were some of the other issues that were bones of contention.
While this tension was building up, a court order was issued allowing the government to consider giving directions to RBI under section 7 of RBI Act in a case related to independent power producers. This instantly opened a path for the central government to go around the RBIs opinion and initiate their wishes.
This part of the RBI Act survived the dark days of 1991 and the global crisis of 2008 without being invoked. There are many scholars with an opinion that such an intervention from the government will not only set a lax precedent for further governmental influence, but also worry that the RBI’s decisions have come to be disvalued. They also believe that the autonomy of the Reserve Bank should be kept consistent.
While the government might have made these bold decisions in the belief that the changes requested to the RBI’s modus operandi might have positive impact on businesses and therefore the citizens, the far-reaching consequences of this action are yet to be determined.

Why Global Fintech Startups like DXC, Cardlytics and SOSA are Flocking to Vizag?

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The financial capital of Andhra Pradesh, Vizag, has been in the spotlight of late. With news of global fintech (Financial Technology) start-ups flocking to the city, the city has been in the papers quite a bit. This is of course not an overnight phenomenon. Let’s consider the reasons why Vizag has now become the financial hub for fintech start-ups over the years. Here are some of the reasons why the city is a hotbed for finance companies to open a base there:

Where It All Began
In December 2016, the Andra Pradesh state government launched Fintech Valley Vizag, an initiative to promote the business structure of the state. The programme offered a global Fintech ecosystem to produce growth through industry-enablers, innovations, entrepreneurship and world-class infrastructure. From the very start of the operation, the programme had an ambitious plan to expand as a global Fintech hub.

Initiatives
The Fintech Valley Vizag rolled out numerous initiatives to develop a thriving Fintech ecosystem in the city. A few of them are listed below:

  • The launch of BFSI case repository program: Collaborating with leading banks, insurance companies, capital marketing companies and NBFCs, the valley launched a Hackathon and Innovation Challenge to operationalize the use of case repository.
  • Blockchain Business Conference 2017 – We know that blockchain is considered to be the solution for existing security woes of Fintech sector. Valley conducted a conference regarding this technology to pave a path for new business models by revolutionizing the current expensive systems.
  • Fintech Valley Accelerator Program – This program was conducted to provide a chance to the start-ups of the valley to find success by connecting them with bigger players of the industry. It gave the selected startups an opportunity to access technology resources, mentoring on fundraising and legal guidance.

All these initiatives helped the valley to boost its image as a sustainable fintech ecosystem not just in India but on a global level.

Facilities
Under the Designated Technology Park Scheme, the Valley offers government-backed support facilities at subsidized rates. The Valley welcomes resident fintech courses, fintech start-ups, incubators, accelerators and innovation hubs to use the facility as a co-working space.

The infrastructure facilities of the valley include Millenium Towers with an area of 300,000 square feet, 40 acres for an IT park in Rushikonda and a 600-acre IT park that’s coming up at Kappulapada. The facilities of connectivity in the state are remarkable.

The Andhra Pradesh Fiber Grid Project is under construction which is aiming to bring optical fibre network to all part of the state. This project has been implemented at a cost of ₹333 Crore and it will make Andhra Pradesh the first Indian state to make all its citizens digitally active.

Recent Events
In October 2018, The Valley conducted a 5-day festival named Vizag Fintech Festival. The conference hosted various leading start-ups, corporates, investors and academia from around the world. The fest ended with such success that it was proof of the global recognition to the valley.

The first day of the fest witnessed the Andhra Pradesh government signing pacts with Whub of Hongkong, SOSA of Israel, Singex and Bizforce among others. The launch of Vizag operations of Cadlytics, DXC and First American Corporation was announced later during the fest.

It is clear that the government is making huge efforts to make Vizag a global hub for Financial Technologies. With the current rate of success, we can expect Vizag to turn out as a one in the upcoming years.

The Flaws of Finance – What You Should Know About

Posted on by Imarticus Learning

 
Financial services have become one of the most sought after career options for today’s business graduates. Over 31% of all graduates from Harvard Business school entered the field last year alone. The main reason for this influx of recent business graduates into the field is because of the high pay that it offers. One can expect to earn at least twice as much as people working other jobs when working in the financial services industry.
The functions served by the world’s financial sector today is four-fold. Number one is the smooth functioning of all payments systems, which are integral to any economy working properly. Number two is to ensure the smooth transfer of money from people who save it to those who need money either through loans or as part of pooled savings such as mutual funds. The third is stabilising the price of financial assets by investing in markets. And finally, the fourth is to use insurance policies and the like to help people manage financial and physical risk.
While the functions mentioned above are important, other services like power, water, security and disaster services are also at the very least, equally as important. In spite of this, people working in other sectors are paid less and receive fewer benefits than those working in the financial services sector.
The financial sector has had a history of treating its customers badly. We just need to consider the number of scams that have risen up in the industry in the last few decades to understand this. More often than not, we see financial establishments sell products with highly convoluted wording to gullible customers who usually don’t realise what they are getting themselves into. The main reason that instances like this keep happening is due to the fact that there is a huge disparity between those who work in the industry and the customer when it comes to information. As such, those that work within the industry, design any product that they sell to customers in such a way that it maximises profit for the financial institution.
Often, it is not easy to distinguish between a banker profiting due to good investments made at the right time using pure skill, and ones who just get lucky. As such this brings into question the capabilities of ex-financial sector professionals who now hold power within the country’s economy and are in charge of various facets of it. Financial institutions have been known to spend billions of dollars on lobbying various governments and the fact these people have the amount of power that they do almost purely due to them having a huge financial advantage which may have been gained either due to luck or taxpayer subsidies doesn’t really seem like the smartest idea.
As we have seen, the financial sector is rife with some pretty serious flaws. Serious regulation is required to make sure this industry works in a more transparent and customer-friendly manner. Governments and elected representatives must be able to look beyond the financial support they enjoy from such institutions and regulate them in a manner beneficial to all those involved and not just themselves.

Master the Skills of Fintech And Be Successful

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Master the Skills of Fintech And Be Successful

FinTech is a financial technology that covers a large group of organisations utilising programming and innovation to give monetary administrations. In FinTech, the majority of candidates will have a software engineering qualification.

Even though the industry is a combination of finance and technology, so when looking for the skills that have to be appropriate for being a part of this FinTech industry, technology comes first.
As the financial industry is progressively encountering changes, experts are on the hunt for skilled and trained people. The following are the overview of skills and capabilities emphatically looked for to work in FinTech.
Communication skills
Regardless of whether you work with merchants, business analysts or IT people, you must have the capacity to clarify parts of your tech venture unmistakably and compactly to your client.
It is imperative to understand that fintech courses aren’t only about developments and advancements, fintech includes more things. New companies need to sell their products and services, and, consequently, they require great managers and client relations experts, who have great communication abilities, having the capacity to clarify the key parts of the product. So you need to master this skill to be successful.
Teamwork abilities
In FinTech, you’ll be working with various individuals at various phases of a venture. You’ll frequently work under strain and to tight due dates to get the work completed, which implies you’ll need a decent association with the colleagues to request to ensure the work gets conveyed on time. So be prepared to work hard on your skills to achieve your objectives.
Problem-solving capacity
Working in FinTech is not an easy job, you’ll continually be searching for approaches to make things work quicker and all the more proficiently. You need to manage data and information and lessen the risk factor constantly. The key thing is having the capacity to know and understand an issue, divide it into its basic components and after that work out how technology can help you out. This is maybe the ability you have to work on
Gain work experience
You can gain work experience through an internship. A practical experience that one can gain over the education will likewise have an upper hand over the individuals who have classroom experience.
So working as an intern will give you much more experience and will boost up your skills.
AI and ML Knowledge
AI and ML stand for artificial intelligence and machine learning respectively. They both are becoming progressively essential in the field of FinTech. Machine Learning and Artificial intelligence specialists are highly looked after by investment banks to enable them to actualize financially effective solutions and show signs of improvement in client experiences.
Cyber security expert
Over the most recent couple of years, there is a huge increment in cyber crimes with finance being the main purpose behind these crimes. For somebody working in FinTech, knowledge about cyber security is a basic piece of the job. In case you’re working as a software designer, understanding and knowledge of cyber security is expected to create secure applications and programming software, so that client data and information are secured.
Knowledge about finance
Meanwhile, focus on building up your insight into the financial sector. Stay up to date with the latest updates in the markets of the finance world. You can upgrade your knowledge by perusing the Financial Times and the Economist, or viewing Bloomberg TV, and also there are so many blogs to read.